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 March 31, 1998
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 March 31, 1998
--------------------- -----------------------------
No Par Value 31.84 Shares
1
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INTERVEST CORPORATION OF NEW YORK AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, DECEMBER 31,
1998 1997
------------ ------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 4,717,000 $ 15,596,000
Mortgages receivable, including due from
affiliates of $8,250,000 and $6,250,000 86,822,000 74,316,000
(Notes 2, 4 and 5)
Deferred debenture offering costs,
net of accumulated amortization
of $2,899,000 and $2,675,000 (Note 2) . 4,046,000 4,270,000
Other assets (Note 7) 1,446,000 1,389,000
------------ -------------
$ 97,031,000 $ 95,571,000
TOTAL ASSETS ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 118,000 $ 114,000
Mortgage escrow deposits 2,257,000 1,617,000
Subordinated debentures payable (Note 3) 78,000,000 78,000,000
Debenture interest payable at maturity (Note 3) 5,525,000 4,966,000
Deferred mortgage interest and fees 399,000 353,000
------------ ------------
TOTAL LIABILITIES 86,299,000 85,050,000
------------ ------------
Commitments and other matters (Note 6)
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 5,223,000 5,012,000
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 10,732,000 10,521,000
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 97,031,000 $ 95,571,000
============ ============
See notes to financial statements
3
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INTERVEST CORPORATION OF NEW YORK
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS
Three Months Ended
March 31,
--------------------------
1998 1997
----------- -----------
(Unaudited)
REVENUE
Interest income
Affiliates $ 173,000 $ 173,000
Others 2,610,000 2,425,000
---------- ----------
Total 2,783,000 2,598,000
Other income (Note 5) 136,000 123,000
Gain on early repayment of discounted
mortgages receivable (Note 4) 7,000 104,000
---------- ----------
2,926,000 2,825,000
---------- ----------
EXPENSES
Interest 2,130,000 1,992,000
General and administrative (Note 5) 181,000 177,000
Amortization of deferred debenture
offering costs (Note 2) 224,000 305,000
---------- ----------
2,535,000 2,474,000
---------- ----------
Income before income taxes 391,000 351,000
Provision for income taxes (Note 7) 180,000 159,000
---------- ----------
NET INCOME 211,000 192,000
Retained earnings - beginning of period 5,012,000 4,566,000
---------- ----------
RETAINED EARNINGS - END OF PERIOD $5,223,000 $4,758,000
========== ==========
See notes to financial statements
4
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INTERVEST CORPORATION OF NEW YORK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended March 31,
-------------------------------
1998 1997
------------ ------------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 211,000 $ 192,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of discount on mortgages receivable (154,000) (113,000)
Amortization of deferred debenture offering costs 224,000 305,000
Gain on early repayment of discounted mortgages (7,000) (104,000)
Changes in operating assets and liabilities:
Other assets (57,000) (93,000)
Accounts payable and accrued liabilities 4,000 (239,00)
Mortgage escrow deposits 640,000 266,000
Debenture interest payable at maturity 559,000 1,078,000
Deferred mortgage interest and fees 46,000 32,000
------------- -------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,466,000 1,324,000
------------- -------------
INVESTING ACTIVITIES
Collection of mortgages receivable 4,642,000 10,442,000
Mortgages receivable acquired
Properties owned by affiliates (2,000,000)
Properties owned by others (14,987,000) (11,058,000)
------------- -------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (12,345,000) (616,000)
------------- -------------
FINANCING ACTIVITIES
Payment of debenture offering costs (50,000)
Principal payments of subordinated debentures (6,000,000)
------------- -------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 0 (6,050,000)
------------- -------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (10,879,000) (5,342,000)
Cash and cash equivalents at beginning of period 15,596,000 16,911,000
------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,717,000 $ 11,569,000
============= =============
</TABLE>
See notes to financial statements
5
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INTERVEST CORPORATION OF NEW YORK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited with Respect to the Three Month Periods Ended
March 31, 1998 and 1997)
(NOTE 3) - Subordinated Debentures Payable (continued):
- ------------------------------------------
Prime was 8 1/2% on March 31, 1998 and on December 31, 1997. Minimum interest is
9 1/2% and maximum interest is 15% on Series 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, 5/10/96,
10/15/96 and 4/30/97 due October 1, 2005 have maximum interest of 12%.
Payment of interest on an aggregate of $13,770,000 of debentures is deferred
until maturity and such deferred earns interest at prime. Any debenture holder
who has 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 1995, redemption would generally be
at a premium of 1% or 2% if the redemption is prior to 1999.
The debentures are unsecured and subordinated to all present and future senior
indebtedness, as defined.
Maturities of debentures are summarized as follows:
Year Ending December 31, March 31, 1998
------------------------ --------------
1998................................ $ 1,000,000
1999................................ 11,500,000
2000................................ 7,000,000
2001................................ 8,000,000
2002................................ 4,500,000
Thereafter until 2005............... 46,000,000
-----------
Total................................ $78,000,000
===========
(NOTE 4) - Mortgages Receivable:
- --------------------------------
Information as to mortgages receivable is summarized as follows:
March 31, 1998 December 31, 1997
-------------- -----------------
First Mortgages ........................$79,173,000 $68,668,000
Junior Mortgages ........................ 8,534,000 6,534,000
----------- -----------
$87,707,000 $75,202,000
Less Unearned Discount ......................... 885,000 886,000
----------- -----------
Total .......................................... $86,822,000 $74,316,000
=========== ===========
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INTERVEST CORPORATION OF NEW YORK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited with Respect to the Three Month Periods Ended
March 31, 1998 and 1997)
(NOTE 7) - 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.
The provision for income taxes consists of the following components:
Three Months Ended
March 31,
------------------
1998 1997
---- ----
Current taxes:
Federal ............................... $ 106,000 $ 122,000
State and local ....................... 72,000 83,000
Deferred taxes:
Federal ............................... 1,500 (28,000)
State and local ....................... 500 (18,000)
--------- ---------
Total tax provision ................... $ 180,000 $ 159,000
========= =========
Temporary differences exist between financial accounting and tax reporting,
which result in a net deferred asset, included in other assets, as follows:
March 31, 1998 December 31, 1997
-------------- -----------------
Debenture underwriting commissions ............. $ 8,000 $ 9,000
Deferred fees and interest ..................... 48,500 49,500
Discount on mortgages receivable ............... (18,500) (18,500)
-------- --------
Total .......................................... $ 38,000 $ 40,000
======== ========
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>
Three Months Ended
March 31,
------------------
1998 1997
---- ----
<S> <C> <C>
Tax computed based upon the statutory federal tax rate ...... $ 133,000 $ 119,000
State and local income tax, net of federal income tax benefit 48,000 43,000
Non-taxable income .......................................... (1,000) (3,000)
--------- ---------
Total ....................................................... $ 180,000 $ 159,000
========= =========
</TABLE>
12
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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: May 6, 1998 /S/ Lowell S. Dansker
-------------------------------------------------
Lowell S. Dansker, President (Principal Executive
Officer), Treasurer (Principal Financial Officer
and Principal Accounting Officer) and Director
Dated: May 6, 1998 /S/ Lawrence G. Bergman
--------------------------------------------------
Lawrence G. Bergman, Vice President, Secretary and
Director
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