<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended March
31, 1997.
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE AT OF 1934 FOR THE TRANSITION PERIOD FROM
TO .
Commission file number 33-36775
SUMMIT SECURITIES, INC.
(Exact name of registrant as specified in its charter)
IDAHO 82-0438135
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
W. 929 Sprague Avenue, Spokane, WA 99204
(Address of principal executive offices)(Zip Code)
(509)838-3111
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal
year, if changed since last report)
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 / /
Applicable only to issuers involved in bankruptcy proceedings during
the preceding five years: (Not Applicable)
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes / / No / /
Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
10,000 SHARES - Common at April 30, 1997.
<PAGE>
SUMMIT SECURITIES, INC.
Part I - Financial Information: Index to Part I
Item 1: Financial Statements
Condensed Consolidated Balance Sheets --
March 31, 1997 (unaudited)
and September 30, 1996
Condensed Consolidated Statements of Operations--
Three and Six Months Ended March 31, 1997 and
1996 (unaudited)
Condensed Consolidated Statements of Cash Flows
Six Months Ended March 31, 1997 and
1996 (unaudited)
Notes to Condensed Consolidated Financial Statements
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations
<PAGE>
PART I - FINANCIAL INFORMATION
SUMMIT SECURITIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, September 30,
1997 1996
(Unaudited)
<S> <C> <C>
ASSETS
Cash and Cash Equivalents $ 8,161,538 $ 4,461,315
Investments in Affiliated Company 4,522,425 4,522,425
Available-for-Sale Securities,
at Market 1,527,493 269,305
Held-to-Maturity Securities,
at Amortized Cost (Market
value: $8,124,595 and $7,622,194) 8,294,301 7,784,322
Real Estate Contracts and Mortgage
Notes and Other Receivables,
Net of Unrealized Discounts
and Allowance For Losses 100,748,762 91,796,883
Real Estate Held For Sale 2,469,847 1,191,495
Deferred Acquisition Costs 5,901,578 4,862,046
Other Assets, net 1,020,953 2,378,889
------------ ------------
TOTAL ASSETS $132,646,897 $117,266,680
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Annuity Reserves $ 75,987,049 $
62,439,855
Investment Certificates and Accrued
Interest 47,325,027 42,823,871
Debt Payable 86,769 3,850,970
Accounts Payable and Accrued Expenses 1,767,556 1,367,131
Deferred Income Taxes 1,367,441 1,426,079
------------ ------------
TOTAL LIABILITIES 126,533,842 111,907,906
------------ ------------
STOCKHOLDERS' EQUITY:
Common Stock, $10 Par Value:
2,000,000 Shares Authorized:
10,000 Shares Issued and Outstanding 100,000 100,000
Preferred Stock, $10 Par Value:
10,000,000 Shares Authorized:
47,294 and 41,312 Shares Issued and
Outstanding (Liquidation Preference
$4,729,400 and $4,131,170,
respectively) 472,940 413,117
Additional Paid-In Capital 2,775,692 2,269,137
Retained Earnings 2,753,482 2,586,654
Net Unrealized Gains (Losses)
on Investments 10,941 (10,134)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 6,113,055 5,358,774
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $132,646,897 $117,266,680
============ ============
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
SUMMIT SECURITIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
REVENUES:
Interest and Earned Discounts $2,923,662 $2,191,497 $5,665,750 $4,318,113
Annuity Fees and Charges 29,696 7,800 41,696 15,600
Realized Net Gains on Sales of
Investment Securities 583
Realized Net Gains on Sales of
Receivables 64,919 382,138
Real Estate Sales 267,500 414,000 686,800 627,000
Dividend Income 69,671 46,653 121,504 95,276
Fees, Commissions, Service and
Other Income 1,052,304 687,876 1,717,547 1,489,461
--------- --------- --------- ---------
TOTAL REVENUES 4,407,752 3,347,826 8,615,435 6,546,033
--------- --------- --------- ---------
EXPENSES:
Annuity Benefits 1,093,875 902,402 2,109,272 1,763,766
Interest 1,067,611 925,654 2,103,473 1,843,334
Cost of Real Estate Sold 248,900 407,851 666,918 621,201
Provision for Losses on Real
Estate Contracts and Real
Estate Held 241,649 60,373 471,175 280,416
Salaries and Employee Benefits 481,138 439,802 914,547 847,829
Commissions to Agents 1,146,928 383,676 1,505,439 813,038
Other Operating and Underwriting
Expenses 542,399 386,729 1,056,581 784,619
Less Increase in Deferred Acquisition
Costs (710,768) (265,964) (970,271) (683,519)
--------- --------- --------- ---------
TOTAL EXPENSES 4,111,732 3,240,523 7,857,134 6,270,684
--------- --------- --------- ---------
Income Before Income Taxes 296,020 107,303 758,301 275,349
Provision for Income Taxes (61,545) 23,581 (130,405) (23,982)
--------- --------- --------- ---------
NET INCOME 234,475 130,884 627,896 251,367
Preferred Stock Dividends (108,161) (78,878) (211,347) (149,874)
--------- --------- --------- ---------
Income Applicable to Common
Shareholder $ 126,314 $ 52,006 $ 416,549 $ 101,493
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
SUMMIT SECURITIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
1997 1996
<S> <C> <C>
CASH PROVIDED BY OPERATING ACTIVITIES $4,352,973 $ 617,480
---------- ----------
INVESTING ACTIVITIES:
Purchase of Subsidiaries Net of Cash
Received (761,739)
Purchase of Available-
for-Sale Securities (1,230,442)
Purchase of Held-to-
Maturity Investments (995,469)
Proceeds from Sale of Available-
for-Sale Securities 999,790
Proceeds from Maturities of Held-to-
Maturity Investments 500,000 500,000
Principal Payments on Real Estate
Contracts and Mortgage Notes
and Other Receivables 4,028,882 8,206,491
Purchase of Real Estate Contracts
and Mortgage Notes and Other
Receivables (25,753,415) (18,108,629)
Proceeds From Real Estate Sales 342,002 105,338
Additions to Real Estate Held (1,390,948) (73,870)
Proceeds from Sale of Receivables 12,495,596
---------- ----------
NET CASH USED BY INVESTING
ACTIVITIES (12,003,794) (9,132,619)
---------- ----------
FINANCING ACTIVITIES:
Receipts from Annuity Products 15,686,395 8,385,682
Withdrawals of Annuity Products (4,198,199) (2,675,888)
Proceeds From Sale of Investment
Certificates 6,439,769 4,199,871
Repayment of Investment Certificates (2,574,252) (2,904,930)
Increase (decrease) in short-term borrowing(3,805,767) 1,861,462
Debt Issuance Costs (302,212) (257,192)
Payment of contingent purchase price
for subsidiary purchased
from related parties (249,721)
Issuance of Preferred Stock 566,378 99,673
Preferred Stock Dividends (211,347) (149,874)
---------- ----------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 11,351,044 8,558,804
---------- ----------
NET INCREASE IN CASH
AND CASH EQUIVALENTS 3,700,223 43,665
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 4,461,315 2,979,362
--------- ----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $8,161,538 $3,023,027
========== ==========
NON CASH INVESTING AND FINANCING
ACTIVITIES OF THE COMPANY:
Assumption of Other Debt Payable in
Conjunction with Purchase of Real
Estate Contracts and Mortgage Notes $ 51,098 $ 26,823
Real Estate Held for Sale and
Development Acquired Through
Foreclosure 821,747 717,511
Loans to Facilitate the Sale of
Real Estate 344,798 521,662
Increase In Assets and Liabilities
Associated with Purchase of
Subsidiaries:
Investments 493,695
Other Assets 268,044
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
SUMMIT SECURITIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited
condensed consolidated financial statements contain all
adjustments necessary to present fairly the financial position
as of March 31, 1997, the results of operations for the three
and six months ended March 31, 1997 and 1996 and changes in cash
flows for the six months ended March 31, 1997 and 1996. The
results of operations for the six month period ended March 31,
1997 and 1996 are not necessarily indicative of the results to
be expected for the full year. As provided for in regulations
promulgated by the Securities and Exchange Commission, all
financial statements included herein are unaudited; however, the
condensed consolidated balance sheet at September 30, 1996 has
been derived from the audited consolidated balance sheet. These
financial statements should be read in conjunction with the
consolidated financial statements including notes thereto
included in the Company's fiscal 1996 Form 10-K.
2. The principal amount of receivables as to which payments were
in arrears more than three months was $3,850,000 at March 31,
1997 and $3,375,000 at September 30, 1996.
3. Summit Securities, Inc. is a wholly-owned subsidiary of
National Summit Corp. The Company files consolidated federal
income tax returns with its parent. The Company is allocated a
current and deferred tax provision from National Summit Corp. as
if the Company filed a separate tax return.
4. Summit Securities, Inc. had no outstanding material legal
proceedings other than normal proceedings associated with
receivable foreclosures.
5. Certain amounts in the prior years' condensed consolidated
financial statements have been reclassified to conform with the
current years' presentation. These reclassifications had no
effect on net income or retained earnings as previously
presented.
6. In November 1996, Summit and Old Standard Life Insurance
Company (OSL) participated as two of the four co-sellers in a
receivable securitization sponsored by Metropolitan Asset
Funding, Inc., an affiliated company. Approximately $126.7
million of receivables, with $11.2 million from Summit and OSL,
were sold in the securitization with proceeds, after costs, of
approximately $121.1 million, with $10.8 million allocated to
Summit and OSL. With an amortized carrying value of
approximately $10.5 million in the receivables sold in the
securitization, Summit and OSL recorded approximately $.3
million in pre-tax gains from their portion of the sale.
Metropolitan Asset Funding, Inc. sold in a public offering
approximately $113.4 million in varying classes of mortgage pass-
through certificates. In addition to the certificates sold in
the public offering, approximately $13.3 million in subordinate
class certificates and residual class certificates were returned
to the various co-sellers of the collateral included in the
securitization. Summit and OSL received approximately $9.6
million, after costs, from the securitization and also received
approximately $1.2 million in subordinate class and residual
class certificates.
7. In 1995, the Company acquired OSL from Metropolitan Mortgage &
Securities Co., Inc. (Metropolitan), an affiliated company
through common control. In connection with the purchase, the
Company agreed to pay a contingent purchase price consideration
to Metropolitan based upon the earnings of OSL. During the
quarter ended March 31, 1997, the Company paid approximately
$250,000 of contingent purchase price to Metropolitan. Due to
the affiliated nature of these companies, the payment was
recorded as if it was a dividend to Metropolitan.
8. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the dates of the financial statements and the
reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
<PAGE>
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The discussions may contain some forward-looking statements. A
forward-looking statement may contain words such as "will continue to
be," "will be," "continue to," "expect to," "anticipates that," "to
be," or "can impact." Management cautions that forward-looking
statements are subject to risks and uncertainties that could cause
the Company's actual results to differ materially from those
projected in forward-looking statements.
Significant Transactions:
In November 1996, Summit and OSL participated as two of the four
co-sellers in a receivable securitization sponsored by Metropolitan
Asset Funding, Inc., an affiliated company. Approximately $126.7
million of receivables, with $11.2 million from Summit and OSL, were
sold in the securitization with proceeds, after costs, of
approximately $121.1 million, with $10.8 million allocated to Summit
and OSL. With an amortized carrying value of approximately $10.5
million in the receivables sold in the securitization, Summit and OSL
recorded approximately $.3 million in pre-tax gains from their
portion of the sale. Metropolitan Asset Funding, Inc. sold in a
public offering approximately $113.4 million in varying classes of
mortgage pass-through certificates. In addition to the certificates
sold in the public offering, approximately $13.3 million in support
class certificates and residual class certificates were returned to
the various co-sellers of the collateral included in the
securitization. Summit and OSL received approximately $9.6 million,
after costs, from the securitization and also received approximately
$1.2 million in support class and residual class certificates.
On January 31, 1995, the Company consummated an agreement with
Metropolitan Mortgage & Securities Co., Inc. (Metropolitan), the
Company's former parent company, whereby it acquired Metropolitan
Investment Securities, Inc. (MIS) effective January 31, 1995, at a
purchase price of $288,950, which approximated the book value of MIS
at date of purchase. On May 31, 1995, the Company consummated an
agreement with Metropolitan, whereby it acquired OSL effective May
31, 1995, at a purchase price of $2,722,000, which approximated the
current book value of OSL at date of purchase, with future
contingency payments bases on the earnings of OSL. The purchase
price plus estimated future contingency payments approximate the
actuarial appraised valuation of OSL. During the three months ended
March 31, 1997, the Company paid approximately $250,000 contingent
consideration to Metropolitan.
On December 28, 1995, Summit and ILA Financial Services Inc.
(ILA) completed a purchase/sale transaction whereby 100% of the
outstanding common stock of Arizona Life (AZL), an insurance company
domiciled in Arizona, was sold to a wholly owned subsidiary of
Summit. The cash purchase price was approximately $1,234,000, which
approximated the book value of AZL at the date of purchase. AZL
holds licenses to engage in insurance sales in seven states and the
purchase price included approximately $268,000 in value assigned to
these state licenses. AZL is in the business of acquiring
receivables using funds derived from the sale of annuities and funds
derived from receivable cash flows. At date of purchase, AZL had no
outstanding insurance business or other liabilities. The addition of
AZL had no affect on total assets or liabilities of Summit.
On February 21, 1997, OSL entered into a reinsurance agreement
with Western United Life Assurance (WULA), a subsidiary of
Metropolitan, whereby OSL agreed to reinsure 75% of certain single
premium deferred annuity contracts underwritten by WULA. The amount
of deferred annuity contracts coinsured by OSL totaled approximately
$8.2 million at March 31, 1997.
Financial Condition and Liquidity:
At March 31, 1997, the Company had cash and cash equivalents of
approximately $8.2 million as compared to $7.6 million at December
31, 1996 and $4.5 million at September 30, 1996. Management
anticipates that cash, cash equivalents and liquidity provided by
other investments are adequate to meet planned asset additions,
required debt retirements or other business requirements during the
next twelve months. At March 31, 1997, the Company's receivable
portfolio totaled $100.7 million as compared to $88.3 million at
December 31, 1996 and $91.8 million at September 30, 1996. Real
estate held for sale and development, acquired through receivable
foreclosures and direct purchases, totaled $2.5 million at March 31,
1997 as compared to $2.4 million at December 31, 1996 and $1.2
million at September 31, 1996. Total assets were $132.6 million at
March 31, 1997 as compared to $118.6 million at December 31, 1996 and
$117.3 million at September 30, 1996.
At March 31, 1997, the Company had outstanding insurance annuity
reserve liabilities of $76.0 million as compared to $64.6 million at
December 31, 1996 and $62.4 million at September 30, 1996. The
Company had outstanding investment certificate liabilities of $47.3
million at March 31, 1997 as compared to $ 45.1 million at December
31, 1996 and $42.8 million at September 30, 1996. Total liabilities
were $126.5 million at March 31, 1997 as compared to $112.5 million
at December 31, 1996 and $111.9 million at September 30, 1996. Total
stockholders' equity was $6.1 million or 4.6% of total assets at
March 31, 1997 compared to $6.1 or 5.1% of total assets at December
31, 1996 and $5.4 million or 4.6% of total assets at September 30,
1996.
Sales of Investment Certificates, net of repayments, and
Preferred Stock generated approximately $4.4 million in net cash flow
during the six months ended March 31, 1997, while sales of insurance
annuity products, net of withdrawals, generated approximately $11.5
million in net cash flow during the same period. Sales and
maturities of investments, along with sales of real estate and sales
and principal payments on receivables added additional cash flow of
approximately $17.4 million during the six month period ended March
31, 1997. The cash flows from these sources along with cash of $4.4
million provided by operating activities were used to invest
approximately $25.8 million in receivables, approximately $2.2
million in securities investments, approximately $1.4 million for the
acquisition of real estate held for sale and development and fund
the repayment of approximately $3.8 million in short-term broker
borrowings. At March 31, 1997, the Company had cash and cash
equivalents of approximately $8.2 million.
Results of Operations:
Net income was $628,000 on revenues of approximately $8.6
million for the six months ended March 31, 1997. For the similar
period in the prior year, the Company reported net income of $251,000
on revenues of approximately $6.5 million.
Net income for the comparative six month periods has
significantly increased as result of improvements from (1) an
increased spread between interest sensitive income and interest
sensitive expense, due principally to the increased investment in the
receivable portfolio, (2) an increase in overall gains from the sale
of investments, receivables and real estate, (3) an increase in fees,
commissions and service revenues, and (4) a reduced effective income
tax rate due primarily to the effects of the dividend exclusion
benefits and the small life insurance company tax benefits; which
were only partially offset by (1) an increase in other operating
expenses and (2) an increase in the provision for loss on receivables
and other real estate assets.
For the six months ended March 31, 1997, the net interest spread
was $1,495,000, while in the prior year's period the spread was
$727,000. The increase of $768,000 is the result of additional
investments in the receivable portfolio coupled with a slight
decrease in the weighted average interest rate on the outstanding
Investment Certificates issued by the Company and the lower cost of
insurance annuity funds generated by OSL.
During the six months ended March 31, 1997, the Company realized
gains on the sale of real estate of $19,900 and gains on the sale of
receivables of $382,100 for a total of $402,000. In the prior
year's period, the Company realized gains from the sales of
investments, real estate and receivables of $5,800. The current
year's gain on the sale of receivables is primarily from Summit's and
OSL's participation as co-sellers in a securitization sponsored by
Metropolitan Asset Funding, Inc.
In the current year's period, the Company received approximately
$121,500 in dividends from its investments in affiliated companies
compared to approximately $95,300 in the prior year's period. In the
current year's period, approximately $102,500 were dividends on its
preferred stock investment in Metropolitan, its former parent, and
$19,000 were dividends on its common stock investment in Consumers
Group Holding Company, Inc. In the prior year $95,300 were from
dividends on its preferred stock investment in Metropolitan.
Commencing January 31, 1995, with the purchase of MIS and the
creation of a property development subsidiary, the Company began to
generate significant fee revenues along with increased operating
expenses associated with these revenues. Additionally, commencing
May 28, 1995, with the purchase of OSL, and December 28, 1995, with
the purchase of AZL, and February 21, 1997, with a new reinsurance
agreement with WULA, the Company began to incur significant operating
expense relative to its insurance operations. During the six months
ended March 31, 1997, the Company generated approximately $1.7
million of fee revenues while incurring $2.5 million in salaries,
commissions and other operating expenses less increases in deferred
acquisition costs. In the prior year, the Company realized $1.5
million of fee revenues offset by $1.8 million of other costs. This
increased net cost, of approximately $500,000, is primarily the
result of costs associated with its insurance operations which were
only partially offset by an increase in fees generated by its
property development subsidiary.
In conjunction with increased investments in its receivable
portfolio, along with the valuation of foreclosed real estate, the
Company provided for loss on receivables and real estate assets of
$471,000 in the current year's period as compared to $280,000 in the
prior year's period.
In comparing the three months ended March 31, 1997 with the
prior year's similar period, net income was $234,000 on revenues of
$4.4 million as compared to net income of $131,000 on revenues of
approximately $3.3 million.
Net income for the comparative three month periods has increased
as result of improvements from (1) an increased spread between
interest sensitive income and interest sensitive expense, due
principally to the increased investment in the receivable portfolio,
(2) an increase in overall gains from the sale of receivables and
real estate, (3) an increase in fees, commissions and service income,
and (4) an increase in dividends received from affiliated company
investments; all of which were only partially offset by (1) a net
increase in expenses, including salaries, commissions and other
operating expenses and (2) an increase in the provision for loss on
receivables and other real estate assets.
For the three months ended March 31, 1997, the net interest
spread was $792,000 compared to $371,000 in the prior year's similar
period. The increase of $421,000 was primarily the result of
additional investments in the receivable portfolio coupled with a
slight decrease in the weighted average cost of funds on Investment
Certificates issued by the Company and the lower cost of insurance
annuity funds generated by the insurance subsidiaries.
During the three months ended March 31, 1997, the Company
realized gains on the sale of real estate of $18,600 and gains on the
sale of receivables of $64,900 for a total of $83,500. In the prior
year, the Company realized gains on the sale of real estate of $6,100
and had no sales of receivables.
During the three months ended March 1997, the Company received
approximately $70,000 in dividends from its investments in affiliated
companies compared to $47,000 in the prior year's period. The
current year increase was primarily the result of $19,000 in
dividends on its stock investment in Consumers Group Holding Company,
Inc.
During the three months ended March 31, 1997, the Company
generated approximately $1.1 million of fee revenues while incurring
$1.5 million in salaries, commissions and other operating expenses
less increases in deferred acquisition costs. In the prior year's
period, the Company realized $700,000 of fee revenues offset by
$940,000 of other costs.
In conjunction with increased investments in its receivable
portfolio, along with the valuation of foreclosed real estate, the
Company provided for loss on receivables and real estate assets of
$242,000 during the three months ended March 31, 1997 as compared to
$60,000 in the prior year's period.
New Accounting Rules:
In June 1996, Statement of Financial Accounting Standards No.
125 (SFAS 125), "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities" was issued. SFAS 125
provides accounting and reporting standards based on a consistent
application of a financial-components approach that focuses on
control. Under this approach, after a transfer of financial assets,
an entity recognizes the financial and servicing assets it controls
and the liabilities it has incurred, derecognizes financial assets
when control has been surrendered and derecognizes liabilities when
extinguished. This statement provides consistent standards for
distinguishing transfers of financial assets that are sales from
transfers that are secured borrowings. SFAS 125 is effective for
transfers and servicing of financial assets and extinguishments of
liabilities occurring after December 31, 1996. The Company applied
this new standard effective January 1, 1997, and it did not have a
material effect on the Company's financial position, results of
operations or cash flows.
In February 1997, Statement of Financial Accounting Standards
No. 128 (SFAS 128), "Earnings per Share" was issued. SFAS 128
establishes standards for computing and presenting earnings per share
(EPS) and simplifies the existing standards. This standard replaces
the presentation of primary EPS with a presentation of basic EPS. It
also requires the dual presentation of basic and diluted EPS on the
face of the income statement for all entities with complex capital
structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation. SFAS 128 is effective
for financial statements issued for periods ending after December 15,
1997, including interim periods and requires restatement of all prior-
period EPS data presented. The Company does not believe that the
application of this standard will have a material effect on the
presentation of its earnings per share disclosures.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material legal proceedings or actions pending or
threatened against Summit Securities, Inc., or to which its property
is subject.
Item 2. Changes in Securities
N/A
Item 3. Defaults Upon Senior Securities
N/A
Item 4. Submission of Matters to a Vote of Security Holders
A. On March 26, 1997, the annual meeting of stockholders was
convened.
B. The meeting included the election of the following directors:
Tom Turner
Philip Sandifur
Greg Gordon
Robert Potter
The vote was unanimous. There are no other directors of the Company
whose term of office continued after the meeting.
C. There were no other matters voted upon at the meeting.
D. N/A
Item 5. Other Information
N/A
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3. Articles of Incorporation of the Company.
(Exhibit 3(a) to (Registration No. 33-36775).
3(b). Bylaws of the Company. (Exhibit 3(b) to
Registration No. 33-36775).
4(a). Indenture dated as of November 15, 1990
between Summit and West One Bank, Idaho, N.A., Trustee.
(Exhibit 4(a) to Registration No. 33-36775).
4(b). Amendment to Indenture dated as of November
15, 1990 between Summit and West One Bank, Idaho, N.A.,
Trustee. (Exhibit 4(b) to Registration No. 33-36775).
4(c). Tri-Party Agreement dated as of April 24,
1996 between West One Bank, First Trust and Summit,
appointing First Trust as successor Trustee. (Exhibit
4.c to Registration No. 333-19787).
4(d). Statement of Rights, Designations and
Preferences of Variable Rate Cumulative Preferred Stock
Series S-1. (Exhibit 4.c to Registration No. 33-57619)
4(e). Statement of Rights, Designations and
Preferences of Variable Rate Cumulative Preferred Stock
Series S-2. (Exhibit 4.c to Registration No. 333-115)
4(f). Statement of Rights, Designations and
Preferences of Variable Rate Cumulative Preferred Stock
Series S-RP. (Exhibit 4.f to Registration No. 333-
19787)
10(a). Receivable Management, Acquisition and
Service Agreement between Summit Securities, Inc. and
Metropolitan Mortgage & Securities Co., Inc. dated
September 9, 1994.
(Exhibit 10.(a) to Registration No. 33-57619).
10(b). Receivable Management, Acquisition and
Service Agreement between Old Standard Life Insurance
Company and Metropolitan Mortgage & Securities Co.,
Inc. dated December 31, 1994. (Exhibit 10(b) to
Registration No. 33-57619).
10(c). Receivable Management, Acquisition and
Service Agreement between Arizona Life Insurance
Company and Metropolitan Mortgage & Securities Co.,
Inc. dated October 10, 1996. (Exhibit 10(d) to
Registration No. 333-19787)
11. Statement Re Computation of Earnings Per Common
Share. (See Financial Statements.)
*27. Financial Data Schedule
*Filed herewith
(b) There have been no reports on Form 8-K filed during the
quarter for which this report is filed.
<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.
SUMMIT SECURITIES, INC.
(Registrant)
/S/TOM TURNER
Date: May 20, 1997 ____________________________________
Tom Turner
President/Director
/S/ STEVE CROOKS
Date: May 20, 1997
Steve Crooks
Principal Accounting Officer
Principal Financial Officer
<TABLE> <S> <C>
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<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 8,162
<SECURITIES> 14,344
<RECEIVABLES> 101,842
<ALLOWANCES> 1,093
<INVENTORY> 0
<CURRENT-ASSETS> 0
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<DEPRECIATION> 0
<TOTAL-ASSETS> 132,647
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<COMMON> 100
0
473
<OTHER-SE> 5,540
<TOTAL-LIABILITY-AND-EQUITY> 132,647
<SALES> 0
<TOTAL-REVENUES> 8,615
<CGS> 0
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<LOSS-PROVISION> 471
<INTEREST-EXPENSE> 2,103
<INCOME-PRETAX> 758
<INCOME-TAX> 130
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