SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ___
---------------------------
Commission File Number 33-22976-NY
INTERVEST CORPORATION OF NEW YORK
----------------------------------
(Exact name of Registrant as specified in its charter)
New York 13-3415815
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10 Rockefeller Plaza, New York, New York 10020-1903
-----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 757-7300
-----------------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO .
--- ---
Indicate the number of shares outstanding of each of the Registrant's classes of
Common Stock as of the latest practicable date.
Class of Common Stock Outstanding at June 30, 1996
--------------------- ----------------------------
No Par Value 31.84 Shares
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Results for the three months and for the six months ended June 30, 1996 and 1995
include, in the opinion of management, all adjustments (consisting only of
normal recurring accruals) necessary for a fair presentation of the results for
such interim periods. Results for the three months and for the six months ended
June 30, 1996 and 1995 are not necessarily indicative of the results for the
full years.
2
<PAGE>
INTERVEST CORPORATION OF NEW YORK
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
1996 1995
---------- ------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 8,483,000 $17,670,000
Mortgages receivable, including due from
affiliates of $6,250,000 and $6,250,000
(Notes 2, 4, 5, and 6) 71,057,000 55,146,000
Deferred debenture offering costs,
net of accumulated amortization
of $1,873,000 and $2,343,000 (Note 2) 4,340,000 3,865,000
Other assets (Note 8) 1,241,000 898,000
----------- -----------
TOTAL ASSETS $85,121,000 $77,579,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 103,000 $ 64,000
Mortgage escrow deposits 2,293,000 1,021,000
Mortgage payable (Note 5) 9,000 18,000
Subordinated debentures payable (Note 3) 70,000,000 64,700,000
Debenture interest payable at maturity
(Note 3) 2,725,000 2,132,000
Deferred mortgage interest and fees 353,000 266,000
----------- -----------
TOTAL LIABILITIES 75,483,000 68,201,000
=========== ===========
commitments and other matters (notes 6 and 7)
STOCKHOLDERS' EQUITY
Common stock, no par value;
authorized 200 shares; issued
and outstanding 32 shares 2,000,000 2,000,000
Additional paid-in capital 3,509,000 3,509,000
Retained earnings 4,129,000 3,869,000
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 9,638,000 9,378,000
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $85,121,000 $77,579,000
=========== ===========
See notes to financial statements
3
<PAGE>
INTERVEST CORPORATION OF NEW YORK
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS
<TABLE>
<CAPTION>
Thee Months Ended Six Months Ended
June 30, June 30,
----------------------------- --------------------------------
1996 1995 1996 1995
---------- ---------- ------------ -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
REVENUE
Interest income
Affiliates $ 173,000 $ 268,000 $ 347,000 $ 582,000
Others 2,108,000 1,712,000 4,024,000 3,322,000
---------- ---------- ---------- ----------
Total 2,281,000 1,980,000 4,371,000 3,904,000
Other income (Note 6) 81,000 44,000 137,000 102,000
Gain on early repayment of discounted
mortgages receivable (Note 4) 75,000 64,000 75,000 64,000
---------- ---------- ---------- ----------
2,437,000 2,088,000 4,583,000 4,070,000
---------- ---------- ---------- ----------
EXPENSES
Interest 1,622,000 1,480,000 3,330,000 2,891,000
General and administrative (Note 6) 189,000 125,000 346,000 294,000
Amortization of deferred debenture
offering costs (Note 2) 224,000 174,000 432,000 349,000
---------- ---------- ---------- ----------
2,035,000 1,779,000 4,108,000 3,534,000
---------- ---------- ---------- ----------
Income before income taxes 402,000 309,000 475,000 536,000
Provision for income taxes (Note 8) 183,000 142,000 215,000 246,000
---------- ---------- ---------- ----------
NET INCOME 219,000 167,000 260,000 290,000
Retained earnings - beginning 3,910,000 3,550,000 3,869,000 3,427,000
---------- ---------- ---------- ----------
RETAINED EARNINGS - END $4,129,000 $3,717,000 $4,129,000 $3,717,000
========== ========== ========== ==========
See notes to financial statements
</TABLE>
4
<PAGE>
INTERVEST CORPORATION OF NEW YORK
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended June 30,
------------------------------------
1996 1995
------------- ------------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 260,000 $ 290,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of discount on mortgages receivable (179,000) (125,000)
Amortization of deferred debenture offering costs 431,000 349,000
Gain on early repayment of discounted mortgages (75,000) (64,000)
Changes in operating assets and liabilities:
Other assets (343,000) (267,000)
Accounts payable and accrued liabilities 39,000 (24,000)
Mortgage escrow deposits 1,272,000 474,000
Debenture interest payable at maturity 593,000 (611,000)
Deferred mortgage interest and fees 87,000 28,000
------------ -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,085,000 50,000
------------ -----------
INVESTING ACTIVITIES
Collection of mortgages receivable 7,429,000 6,695,000
Mortgages receivable acquired
Properties owned by others (23,086,000) (9,297,000)
Principal payments of mortgages payable (9,000) (11,000)
Redemption of governmental obligations 985,000
------------ -----------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (15,666,000) (1,628,000)
------------ -----------
FINANCING ACTIVITIES
Proceeds from subordinated debenture offerings ll,000,000 10,000,000
Payment of debenture offering costs (906,000) (915,000)
Principal payments of subordinated debentures (5,700,000) (2,000,000)
------------ -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 4,394,000 7,085,000
------------ -----------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (9,187,000) 5,507,000
Cash and cash equivalents at beginning of period 17,670,000 3,476,000
------------ -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 8,483,000 $ 8,983,000
============ ===========
</TABLE>
See notes to financial statements
5
<PAGE>
INTERVEST CORPORATION OF NEW YORK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited with Respect to the Six Month Periods Ended June 30, 1996 and 1995)
(NOTE 1) - The Company:
Intervest Corporation of New York (the "Company") was formed by Lowell S.
Dansker, Lawrence G. Bergman and Helene D. Bergman for the purpose of engaging
in the real estate business, including the acquisition and purchase of real
estate mortgage loans.
(NOTE 2) - Significant Accounting Policies:
(a) Consolidation Policy:
The financial statements include the accounts of all subsidiaries. Material
intercompany items are eliminated in consolidation.
(b) Unearned discount:
Unearned discount is amortized over the life of the related receivables
using the constant interest method.
(c) Allowance for possible losses:
Mortgages receivable are valued at the lower of cost or net realizable
value, on an individual basis. The Company will recognize an impairment loss if
it determines that the net realizable value of the mortgages receivable is below
cost. This determination is made based upon the mortgagor's continuing
compliance with the terms of the mortgage and management's ability to assess the
operation of the underlying properties and the rental housing market where such
properties are located. For financial reporting purposes mortgages are deemed to
be delinquent when payment of either principal or interest is more than 90 days
past due.
(d) Deferred debenture offering costs:
Costs relating to offerings of debentures are amortized over the terms of
the debentures based on serial maturities. Deferred debenture offering costs
consist primarily of underwriters commissions.
(e) Statement of cash flows:
For purposes of the statement of cash flows, the Company considers all
highly liquid instruments (principally commercial paper) purchased with an
original maturity of three months or less to be cash equivalents. Interest and
income taxes were paid as follows:
Six Months Ended June 30, Interest Income Taxes
------------------------- -------- ------------
1996........................ $2,737,000 $ 88,000
1995........................ 3,503,000 238,000
6
<PAGE>
INTERVEST CORPORATION OF NEW YORK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited with Respect to the Six Month Periods Ended June 30, 1996 and 1995)
(NOTE 2) -- Significant Accounting Policies: (continued)
(f) Concentration of credit risk:
(1) The Company places its temporary cash investments with higher credit-
quality financial institutions and in governmental obligations. Such investments
are generally in excess of the FDIC insurance limit. The Company has not
experienced any losses from such investments.
(2) The Company's mortgage portfolio is composed predominantly of mortgages
on multi-family residential properties in the New York City area, most of which
are subject to applicable rent control and rent stabilization statutes and
regulations. In both cases, any increases in rent are subject to specific
limitations. As such, properties of the nature of those constituting the most
significant portion of the Company's mortgage portfolio are not affected by the
general movement of real estate values in the same manner as other
income-producing properties. The rental housing market in New York City remains
stable and the Company expects that such properties will continue to appreciate
in value with little or no reduction in occupancy rates.
(NOTE 3) -- Subordinated Debentures Payable:
The Company's Registered Floating Rate Redeemable Debentures consist of the
following:
<TABLE>
June 30, December 31,
1996 1995
-------- ------------
<S> <C> <C>
Series 1989, interest at 2% above prime........................ .$ - 0 - $ 1,200,000
Series 10/4/89, interest at 1% above prime...................... 2,000,000 4,000,000
Series 3/28/90, interest at 1% above prime...................... 2,000,000 4,000,000
Series 5/13/91, interest at 2% above prime...................... 6,000,000 6,000,000
Series 2/20/92, interest at 2% above prime...................... 4,500,000 4,500,000
Series 6/29/92, interest at 2% above prime...................... 7,000,000 7,000,000
Series 9/13/93, interest at 2% above prime...................... 8,000,000 8,000,000
Series 1/28/94, interest at 1% above prime...................... - 0 - 500,000
Series 1/28/94, interest at 2% above prime...................... 4,500,000 4,500,000
Series 10/28/94, interest at 1% above prime..................... 500,000 500,000
Series 10/28/94, interest at 2% above prime..................... 4,500,000 4,500,000
Series 5/12/95, interest at 1% above prime...................... 1,000,000 1,000,000
Series 5/12/95, interest at 2% above prime...................... 9,000,000 9,000,000
Series 10/19/95, interest at 1% above prime..................... 1,000,000 1,000,000
Series 10/19/95, interest at 2% above prime..................... 9,000,000 9,000,000
Series 5/10/96, interest at 1% above prime...................... 1,000,000
Series 5/10/96, interest at 2% above prime...................... 10,000,000
----------- -----------
$70,000,000 $64,700,000
=========== ===========
</TABLE>
"Prime" refers to the prime rate of Chemical Bank.
7
<PAGE>
INTERVEST CORPORATION OF NEW YORK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited with Respect to the Six Month Periods Ended June 30, 1996 and 1995)
(NOTE 3) -- Subordinated Debentures Payable: (continued)
Prime was 8 1/4% on June 30, 1996 and 8 1/2% on December 31, 1995. Minimum
interest is 9 1/2% and maximum interest is 15% on Series 10/4/89, 3/28/90 and
5/13/91. Series 2/20/92 has minimum interest of 8% and maximum interest of 14%,
Series 6/29/92 has maximum interest of 14% and Series 9/13/93, 1/28/94,
10/28/94, 5/12/95, 10/19/95 and 5/10/96 have maximum interest of 12%.
At June 30, 1996 payment of interest on an aggregate of $15,640,000 of
debentures is deferred until maturity and earns interest at prime. Generally
debenture holders who have deferred receipt of interest may at any time elect to
receive the deferred interest and subsequently receive regular payments of
interest.
The debentures may be redeemed, in whole or in part, at any time at the option
of the Company. For debentures issued after 1994, redemption would generally be
at a premium of 1% or 2% if the redemption is prior to 1998.
The debentures are unsecured and subordinate to all present and future senior
indebtedness, as defined.
Maturities of debentures are summarized as follows:
Year Ending December 31, June 30, 1996
------------------------ -------------
1996....................................................... $ - 0 -
1997....................................................... 3,500,000
1998....................................................... 4,000,000
1999....................................................... 10,500,000
2000....................................................... 7,000,000
Thereafter until 2005...................................... 45,000,000
-----------
Total.................................................. $70,000,000
===========
(NOTE 4) -- Mortgages Receivable:
Information as to mortgages receivable is summarized as follows:
June 30, 1996 December 31, 1995
------------- -----------------
First Mortgages......................... $64,970,000 $48,685,000
Junior Mortgages........................ 6,894,000 6,906,000
Wraparound Mortgages.................... 325,000 329,000
----------- -----------
72,189,000 55,920,000
Less Unearned Discount.................. 1,132,000 774,000
----------- -----------
Total............................... $71,057,000 $55,146,000
=========== ===========
8
<PAGE>
INTERVEST CORPORATION OF NEW YORK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited with Respect to the Six Month Periods Ended June 30, 1996 and 1995)
(NOTE 4) -- Mortgages Receivable: (continued)
Interest rates on certain mortgages are equivalent to the prime rate of Chemical
Bank plus 2% with a floor of from 10 1/2% to 11 1/2% and a ceiling of 14%.
Interest rates on the balance of the mortgages range from 6% to 16%. Certain
mortgages have been discounted utilizing rates ranging from 12% to 18%.
During 1996 and 1995 certain mortgages were paid in full prior to their maturity
date. This resulted in the recognition of a gain, which represents the balance
of the unamortized discount applicable to these mortgages.
Maturities of mortgages receivable during the next five years are summarized as
follows:
Year Ending December 31, June 30, 1996
------------------------ -------------
1996....................................................... $ 4,288,000
1997....................................................... 23,014,000
1998....................................................... 3,112,000
1999....................................................... 12,494,000
2000....................................................... 2,839,000
Thereafter until 2015...................................... 26,442,000
-----------
Total.................................................. $72,189,000
===========
The Company evaluates its portfolio of mortgage loans on an individual basis,
comparing the amount at which the investment is carried to its estimated net
realizable value. At the respective balance sheet dates, no allowances were
required.
(NOTE 5) -- Mortgage Payable
The mortgage payable relates to the Company's wraparound mortgage receivable,
bears interest at 8.5% and is self liquidating.
(NOTE 6) -- Related Party Transactions:
During the first half of 1995, affiliates sold to unrelated third parties,
properties subject to mortgages held by the Company. In connection with those
sales, the Company's mortgages in the original aggregate amount of $5,008,000,
were refinanced and the Company received new first mortgages totaling
$7,535,000.
Other income includes $5,000 and $26,000 from affiliates for the six months
ended June 30, 1996 and 1995, respectively.
9
<PAGE>
INTERVEST CORPORATION OF NEW YORK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited with Respect to the Six Month Periods Ended June 30, 1996 and 1995)
(NOTE 6) - Related Party Transactions: (continued)
The Company utilizes personnel and other facilities of affiliated entities and
is charged service fees for general and administrative expenses for placing
mortgages, servicing mortgages, and distributing debenture interest checks. Such
fees amounted to $133,000 and $171,000 for the six months ended June 30, 1996
and 1995, respectively. Management believes these service fees are reasonable.
(NOTE 7) - Commitments:
(a) Office lease:
The Company has a lease for office space which terminates on September 30, 2004.
In addition to minimum rent the Company is required to pay its proportionate
share of increases in the building's real estate taxes and costs of operation
and maintenance.
Future minimum rents under the lease are as follows:
Year Ending December 31 June 30, 1996
----------------------- -------------
1996................................................ $ 76,167
1997................................................. 157,976
1998................................................. 174,902
1999................................................. 174,902
2000................................................. 179,133
Thereafter........................................... 719,355
----------
Total.............................................. $1,482,435
==========
The Company shares this space with affiliates and receives 50% of the actual
rent expense incurred for the use of this space from an affiliate.
(b) Employment agreement:
Effective as of July 1, 1995, the Company entered into an employment agreement
with its Executive Vice President for a term of ten years at an annual salary of
$125,000, which is subject to increase annually by six percent or by the
percentage increase in the consumer price index, if higher. In the event of the
executive's death or disability, one-half of this amount will continue to be
paid for a term as defined in the agreement.
(NOTE 8) - Income Taxes:
The Company has provided for income taxes in the periods presented based on the
federal, state and city tax rates in effect for these periods.
10
<PAGE>
INTERVEST CORPORATION OF NEW YORK
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited with Respect to the Six Month Periods Ended June 30, 1996 and 1995)
(NOTE 8) - Income Taxes (continued)
The provision for income taxes consists of the following components:
Six Months Ended
June 30,
------------------------
1996 1995
-------- ----------
Current taxes:
Federal.......................................... $113,000 $121,000
State and local.................................. 78,000 87,000
Deferred taxes:
Federal.......................................... 14,000 22,000
State and local.................................. 10,000 16,000
-------- ---------
Total tax provision.............................. $215,000 $246,000
======== ========
Temporary differences exist between financial accounting and tax reporting,
which result in a net deferred asset, included in other assets, as follows:
June 30, 1996 December 31, 1995
------------- -----------------
Debenture underwriting commissions.............. $ 26,000 $ 32,000
Deferred fees.................................. 60,000 68,000
Discount on mortgages receivable............... (59,000) (49,000)
-------- --------
Total..................................... $ 27,000 $ 51,000
======== ========
The amounts of income taxes provided varied from the amounts which would be
"expected" to be provided at the statutory federal income tax rates in effect
for the following reasons:
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------
1996 1995
-------- --------
<S> <C> <C>
Tax computed based upon the statutory federal tax rate............... $161,000 $182,000
State and local income tax, net of federal income tax benefit........ 61,000 68,000
Non-taxable income .................................................. (7,000) (4,000)
-------- --------
Total........................................................... $215,000 $246,000
======== ========
</TABLE>
11
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
LIQUIDITY AND CAPITAL RESOURCES:
The Company is engaged in the real estate business, including the origination
and purchase of real estate mortgage loans, consisting of first mortgages,
junior mortgages and wraparound mortgage loans. The Company's current investment
policy emphasizes the investment in mortgage loans on income producing
properties. The majority of the Company's loans are expected to mature within
approximately five years.
The Company's liquidity is managed to ensure that sufficient funds are available
to meet maturities of borrowings or to make other investments, taking into
account anticipated cash flows and available sources of funds. The Company's
principal sources of funds have consisted of borrowings (principally through the
issuance of its subordinated debentures), mortgage repayments and cash flow from
ongoing operations. Total stockholder's equity at June 30, 1996 was $9,638,000,
compared with $9,378,000 at December 31, 1995. The Company considers its current
liquidity and additional sources of funds sufficient to satisfy its outstanding
commitments and its maturing liabilities.
RESULTS OF OPERATIONS:
Three Months Ended June 30, 1996 and 1995
For the three months ended June 30, 1996 interest income was $2,281,000 as
compared to $1,980,000 for the same period a year ago. The increase of $301,000
resulted mainly from an increase in mortgages receivable.
Interest expense for the 1996 period was $1,622,000 as compared to $1,480,000
for the 1995 period. The increase of $142,000 resulted mainly from an increase
in long-term obligations, offset in part by a decrease in interest rates during
the 1996 period.
General and administrative expenses for the 1996 period was $189,000 as compared
to $125,000 for 1995. The increase of $64,000 resulted mainly from the payment
of an officer's salary and increased advertising expenses.
The provision for income taxes are $183,000 and $142,000 for three months ended
June 30, 1996 and 1995, respectively. These provisions represent 46% of pretax
income for each period.
Six Months Ended June 30, 1996 and 1995
For the six months ended June 30, 1996 interest income was $4,371,000 as
compared to $3,904,000 for the same period a year ago. The increase of $467,000
resulted mainly from an increase in mortgages receivable.
Interest expense for the 1996 period was $3,330,000 as compared to $2,891,000
for the 1995 period. The increase of $439,000 resulted mainly from an increase
in long-term obligations, offset in part by a decrease in interest rates during
the 1996 period.
General and administrative expenses for the 1996 period was $346,000 as compared
to $294,000 for 1995. The increase of $52,000 resulted mainly from the payment
of an officer's salary and increased advertising expenses, offset in part by a
decrease in placement fees for mortgages receivable.
12
<PAGE>
The provision for income taxes are $215,000 and $246,000 for six months ended
June 30, 1996 and 1995, respectively. These provisions represent 45% and 46% of
pretax income for each period.
Since the Company intends to continue to expand its asset base, including its
mortgage portfolio, it is anticipated that its interest income will continue to
grow. To the extent that such growth is funded in reliance upon long-term
obligations, such as the Debentures, interest expense will likewise increase.
Such increase will depend upon the principal amounts of the additional assets or
liabilities, as well as interest rates.
Since the Company is engaged in the real estate business, its results of
operations are affected by general economic trends in real estate markets, as
well as by trends in the general economy and the movement of interest rates.
Since the properties underlying the Company's mortgages are concentrated in the
New York City area, the economic condition in that area can also have an impact
on the Company's operations.
The number of instances of prepayment of mortgage loans tends to increase during
periods of declining interest rates and tends to decrease during periods of
increasing interest rates. Certain of the Company's mortgages include prepayment
provisions, and others prohibit prepayment of indebtedness entirely. In any
event, the Company believes that it would be able to reinvest the proceeds of
any prepayments of mortgage loans in comparable mortgages so that prepayments
would not have any materially adverse effect on the Company's business.
The rental housing market in New York City remains stable and the Company
expects that such properties will continue to appreciate in value with little or
no reduction in occupancy rates. The Company's mortgage portfolio is composed
predominantly of mortgages on multi-family residential properties, most of which
are subject to applicable rent control and rent stabilization statutes and
regulations. In both cases, any increases in rent are subject to specific
limitations. As such, properties of the nature of those constituting the most
significant portion of the Company's mortgage portfolio are not affected by the
general movement of real estate values in the same manner as other
income-producing properties.
BUSINESS:
The Company is engaged in the real estate business and has historically invested
primarily in real estate mortgage loans secured by income producing real
property. It is anticipated that a substantial portion of the loans to be made
by the Company will be loans with terms of approximately five years. Such
transactions typically require an understanding of the underlying real estate
transaction and rapid processing and funding as a principal basis for competing
in the making of these loans. The Company does not finance new construction.
At June 30, 1996, 58% of the outstanding principal amount of the Company's loans
(net of discounts) were secured by properties located in the greater New York
metropolitan area. The balance of the Company's loans are secured by properties
located in Florida, Georgia, New Jersey, upstate New York, Pennsylvania and
Virginia.
Certain of the Company's real estate mortgage loans bear interest at a fixed
rate. The balance of such loans bear interest at fluctuating rates. Interest on
the loans is usually payable monthly.
The Company may also, from time to time, acquire interests in real property,
including fee interests.
13
<PAGE>
INVESTMENT POLICY-OPERATIONS:
The Company's current investment policy related to mortgages emphasizes
investments in short-term real estate mortgages secured by income producing real
property, located primarily in the greater New York metropolitan area.
The properties to be mortgaged are personally inspected by management and
mortgage loans are made only on those properties where management is
knowledgeable as to operating income and expense. The Company generally relies
upon its management in connection with the valuation of properties. From time to
time, however, it may engage independent appraisers and other agents to assist
in determining the value of income-producing properties underlying mortgages, in
which case the costs associated with such services are generally paid by the
mortgagor.
CURRENT LOAN STATUS:
At June 30, 1996, the Company had 51 real estate mortgage loans in its
portfolio, totaling $72,189,000 (face amount) in aggregate principal amount.
Interest rates on the mortgage portfolio range between 6% and 16% per annum.
Certain mortgages have been discounted utilizing rates between 12% and 18% per
annum.
Certain information concerning the Company's mortgage loans outstanding at June
30, 1996 is set forth below:
<TABLE>
<CAPTION>
Carrying
Amount of
Mortgage No. of
Loans Prior Liens Loans
----------- ----------- ------
<S> <C> <C> <C>
First Mortgage Loans................................ $63,905,000 $ - 0 - 44
Junior Mortgages.................................... 6,827,000 15,374,000 6
Wraparound Mortgages................................ 325,000 9,000 1
----------- ----------- --
$71,057,000 $15,383,000 51
=========== =========== ==
</TABLE>
The historical cost of the mortgage loans which originated in connection with
the sale of real estate includes a discount to reflect an appropriate market
interest rate at the date of origination.
14
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8K
Exhibits -- The following exhibit is filed herewith
Exhibit 27 -- Financial Data Schedule
15
<PAGE>
SIGNATURES
PURSUANT to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INTERVEST CORPORATION OF NEW YORK
(Registrant)
Dated: August 6, 1996 /s/ LOWELL S. DANSKER
-------------------------------------------------
Lowell S. Dansker, President (Principal Executive
Officer), Treasurer (Principal Financial Officer
and Principal Accounting Officer) and Director
Dated: August 6 , 1996 /s/ LAWRENCE G. BERGMAN
-------------------------------------------------
Lawrence G. Bergman, Vice President, Secretary
and Director
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(THIS SCHEDULE CONATAINS INFORMATION EXTRACTED FROM FORM 10-Q AT JUNE 30, 1996,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.)
</LEGEND>
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<S> <C>
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
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0
0
<COMMON> 2,000
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