<PAGE> 1
==============================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period 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 001-12212
DRUMMOND FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 95-4426690
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6 Rue Charles-Bonnet, 1206 Geneva, Switzerland
(Address of principal executive offices)
(41 22) 818 2999
(Registrant's telephone number)
Check whether the Registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
--- ---
State the number of shares outstanding of each of the Registrant's classes of
common equity, as of the latest practicable date:
Class Outstanding at May 11, 1998
----- ---------------------------
Common Stock, $0.01 2,718,600
par value
Transitional Small Business Disclosure Format: Yes No X
--- ---
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<PAGE> 2
FORWARD-LOOKING STATEMENTS
Statements in this report, to the extent that they are not based on historical
events, constitute forward-looking statements. Forward-looking statements
include, without limitation, statements regarding the outlook for future
operations, forecasts of future costs and expenditures, the evaluation of
market conditions, the outcome of legal proceedings, the adequacy of reserves,
or other business plans. Investors are cautioned that forward-looking
statements are subject to an inherent risk that actual results may vary
materially from those described herein. Factors that may result in such
variance, in addition to those accompanying the forward-looking statements,
include changes in interest rates, prices, and other economic conditions;
actions by competitors; natural phenomena; actions by government authorities;
uncertainties associated with legal proceedings; technological development;
future decisions by management in response to changing conditions; and
misjudgments in the course of preparing forward-looking statements.
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
DRUMMOND FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 1998
(Unaudited)
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<PAGE> 3
DRUMMOND FINANCIAL CORPORATION
Consolidated Balance Sheets
(Unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
March 31, 1998 June 30, 1997
-------------- -------------
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 1,744 $ 1,625
Finance receivables, net 5,204 8,142
Other receivables 8,307 10,948
Due from affiliates - 541
Investments 15,913 8,035
Investment - at equity 773 917
Deferred debt issuance costs, net of accumulated
amortization 1,184 1,348
Other assets - 4
------------- ------------
$ 33,125 $ 31,560
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued liabilities $ 100 $ 1,788
Interest payable 760 964
Accrued dividends payable 76 149
Note payable 7,000 -
Bonds payable, net of principal amount
of bonds held in treasury 21,515 23,002
------------- ------------
29,451 25,903
------------- ------------
SHAREHOLDERS' EQUITY
Capital stock
Preferred stock, $0.01 par value
5,000,000 shares authorized
3,000,000 shares issued and outstanding 30 30
Additional paid-in capital 5,970 5,9700
------------- ------------
6,000 6,000
------------- ------------
Common stock, $0.01 par value
10,000,000 shares authorized
4,264,000 shares issued and outstanding 43 43
Additional paid-in capital 17,767 17,767
------------- ------------
17,810 17,810
------------- ------------
Deficit (17,080) (15,097)
------------- ------------
6,730 8,713
Less: 1,545,400 common shares held as treasury stock (3,056) (3,056)
------------- ------------
3,674 5,657
------------- ------------
$ 33,125 $ 31,560
============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE> 4
DRUMMOND FINANCIAL CORPORATION
Consolidated Statements of Operations and Deficit
(Unaudited)
(dollars in thousands except per share amounts)
For the Nine For the Nine
Months Ended Months Ended
March 31, 1998 March 31, 1997
-------------- --------------
Revenues
Interest and loan fee income $ 1,022 $ 1,095
Gain (loss) on securities 66 (559)
Other 383 707
------------- -------------
1,471 1,243
Costs and expenses
Interest 1,848 2,776
Recovery of credit losses (176) (673)
General and administrative 1,115 1,436
------------- -------------
2,787 3,539
------------- -------------
Operating loss (1,316) (2,296)
Equity in loss of an investee (924) -
------------- -------------
Loss before income tax expense and
extraordinary gain (2,240) (2,296)
Income tax expense 1 1
------------- -------------
Loss before extraordinary item (2,241) (2,297)
Extraordinary item, extinguishment of debt 485 -
------------- -------------
Net loss (1,756) (2,297)
Accumulated deficit, beginning of period (15,097) (17,113)
Dividends paid and payable (227) -
------------- -------------
Accumulated deficit, end of period $ (17,080) $ (19,410)
============= =============
Loss per share:
Loss before extraordinary item $ (0.91) $ (0.94)
Extraordinary item 0.18 -
------------- -------------
$ (0.73) $ (0.94)
============= =============
Weighted average number of shares
outstanding 2,718,600 2,718,600
============= =============
The accompanying notes are an integral part of these financial statements.
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<PAGE> 5
DRUMMOND FINANCIAL CORPORATION
Consolidated Statements of Operations and Deficit
(Unaudited)
(dollars in thousands except per share amounts)
For the Three For the Three
Months Ended Months Ended
March 31, 1998 March 31, 1997
-------------- --------------
Revenues
Interest and loan fee income $ 367 $ 235
Gain on securities 172 5
Other 162 100
------------- -------------
701 340
Costs and expenses
Interest 603 916
Provision for credit losses - 1,031
General and administrative 498 596
------------- -------------
1,101 2,543
------------- -------------
Operating loss (400) (2,203)
Income tax expense - -
------------- -------------
Loss before extraordinary item (400) (2,203)
Extraordinary item, extinguishment of debt - -
------------- -------------
Net loss (400) (2,203)
Accumulated deficit, beginning of period (16,604) (17,207)
Dividends payable (76) -
------------- -------------
Accumulated deficit, end of period $ (17,080) $ (19,410)
============= =============
Loss per share:
Loss before extraordinary item $ (0.18) $ (0.84)
Extraordinary item - -
------------- -------------
$ (0.18) $ (0.84)
============= =============
Weighted average number of shares
outstanding 2,718,600 2,718,600
============= =============
The accompanying notes are an integral part of these financial statements.
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<PAGE> 6
DRUMMOND FINANCIAL CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
(dollars in thousands)
For the Nine For the Nine
Months Ended Months Ended
March 31, 1998 March 31, 1997
-------------- --------------
Operating activities:
Net loss $ (1,756) $ (2,297)
Adjustments to reconcile net loss to
net cash used by operating activities:
Equity in loss of an investee 924 -
Extraordinary gain on extinguishment
of debt (485) -
Provision for credit losses (176) (673)
(Gain) loss on investments (66) 559
Other 105 (107)
------------- -------------
(1,454) (2,518)
Changes in non-cash working capital:
Accounts receivable 3,080 (88)
Interest receivable 599 114
Commitment fees (4) (111)
Other assets 4 -
Interest payable (151) (929)
Accounts payable and accrued
liabilities (1,939) (560)
------------- -------------
135 (4,092)
Purchase of trading securities (9,970) (22,028)
Proceeds from sales of trading
securities 5,074 13,210
------------- -------------
(4,761) (12,910)
Investing activities:
Advances on loan receivables (5,000) (1,100)
Payments received on loan receivables 7,579 3,261
Net increase in notes receivable (3,407) -
------------- -------------
(828) 2,161
Financing activities:
Purchase of treasury bonds (992) -
Increase in note payable 7,000 -
Dividend (300) -
------------- -------------
5,708 -
Net change in cash and cash equivalents 119 (10,749)
Cash and cash equivalents,
beginning of period 1,625 14,478
------------- -------------
Cash and cash equivalents,
end of period $ 1,744 $ 3,729
============= =============
Cash paid during the period for:
Interest expenses $ 2,052 $ 3,557
Income taxes $ 1 $ 1
The accompanying notes are an integral part of these financial statements.
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<PAGE> 7
DRUMMOND FINANCIAL CORPORATION
Notes to Consolidated Financial Statements
March 31, 1998
(Unaudited)
Note 1. Basis of Presentation
- ------------------------------
In accordance with Item 310 of Regulation S-B promulgated by the U.S.
Securities and Exchange Commission, the consolidated financial statements and
accompanying notes thereto have been condensed and therefore do not contain
all disclosure required by generally accepted accounting principles. These
consolidated financial statements and accompanying notes thereto should be
read in conjunction with Drummond Financial Corporation's (the "Corporation")
audited consolidated financial statements and notes thereto contained in the
Corporation's Form 10-KSB Annual Report for the fiscal year ended June 30,
1997. All dollar amounts are rounded to the nearest thousand.
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly the
Corporation's financial position as of March 31, 1998, and the results of its
operations and changes in its financial position for the periods ended March
31, 1997 and 1998, respectively. All adjustments were of a normal recurring
nature. Results for interim periods are not necessarily indicative of those
to be expected for the full year.
Certain reclassifications have been made to the prior period's financial
statements to conform to the current period's presentation.
While the Corporation reported net income in fiscal 1997 principally as a
result of an extraordinary gain on early extinguishment of debt, the
Corporation had an accumulated deficit of $15.1 million as at June 30, 1997.
The Corporation now focuses on investment and merchant banking activities
while de-emphasizing asset-based commercial lending. However, there is no
assurance that such business strategies will improve future cash flow.
Note 2. Bonds Payable
- ----------------------
The Corporation did not make its semi-annual Bond interest payment due on
January 25, 1998. The Corporation made the payment on February 13, 1998,
which is within the 30 day cure period provided for under the terms of the
Bond indenture.
Note 3. Adoption of Accounting Standard Regarding Impaired Loans
- -----------------------------------------------------------------
Under the provisions of the Financial Accounting Standards Board ("FASB")
Statement No. 114, "Accounting by Creditors for Impairment of a Loan", when a
loan is impaired as defined in the statement, a lender shall measure
impairment at the present value of expected future cash flows discounted at
the loan's effective interest rate, or as a practical expedient, based on a
loan's observable market price or the fair value of the collateral if the loan
is collateral dependent. The Corporation has adopted a measurement method on
a loan-by-loan basis. By definition, the
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<PAGE> 8
Corporation's non-performing loans are impaired. A specific reserve is
established for each impaired loan equal to the amount by which the
Corporation's recorded investment in the loan exceeds the net present value of
the loan determined in accordance with FASB Statement No. 114.
The Corporation continued to apply FASB Statement No. 5, "Accounting for
Contingencies", to provide an allowance on a pool of unimpaired loans.
As of March 31, 1998, the Corporation had identified impaired finance
receivables with a recorded investment totaling $2.1 million and had
established a specific allowance for credit losses totaling $2.1 million in
connection therewith. Finance receivables, which are also referred to as
recorded investment in loans, include the outstanding loan balance (net of any
charge-offs), any accrued interest, deferred loan fees and reimbursable costs.
The activity with regard to the allowance for credit losses during the nine
months ended March 31, 1998 is as follows:
Nine Months
-----------
(in thousands)
Balance, beginning of period $ 3,293
Decrease in provision (176)
Charge-offs (961)
-----------
Balance, end of period $ 2,156
===========
Consisted of:
Specific allowance under FASB Statement No. 114 $ 2,100
General allowance under FASB Statement No. 5 56
-----------
$ 2,156
===========
The following table summarizes the calculation of net finance receivables as
at March 31, 1998:
(in thousands)
Finance receivables, gross $ 7,360
Less allowance for credit losses (2,156)
-----------
Finance receivables, net $ 5,204
===========
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<PAGE> 9
The following table summarizes the Corporation's specific reserve for credit
losses prepared in accordance with FASB Statement No. 114 as at March 31,
1998:
<TABLE>
<CAPTION>
Total future
expected cash Total related Net Specific
# of Recorded collections, net costs expected to Present reserve under
loans investment of related costs(1) be incurred(1)(2) Value FASB No. 114
----- ---------- ------------------ ----------------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
IMPAIRED LOANS
Future cash flows:
Bankruptcy and
ceased to operate 1 $ 2,100 $ - $ - $ - $ 2,100
UNIMPAIRED LOANS 1 5,260 56(3)
--- -------- --------
Grand total 2 $ 7,360 $ 2,156
=== ======== ========
</TABLE>
- -------------
Notes:
1. The estimate of expected cash flows represents the Corporation's best
estimate based on reasonable and supportable assumptions and projections.
2. These amounts represent future costs to be incurred in connection with the
sale of collateral and/or the collection of the loans, and are subtracted from
the net future expected cash collections.
3. The general reserve is determined in accordance with FASB Statement No. 5
on a pool of unimpaired loans.
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<PAGE> 10
PART I. FINANCIAL INFORMATION
------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the financial condition and results
of operations of Drummond Financial Corporation (the "Corporation") for the
nine months and quarter ended March 31, 1998 should be read in conjunction
with the unaudited consolidated financial statements and related notes
included elsewhere herein.
Results of Operations - Nine Months Ended March 31, 1998
- --------------------------------------------------------
Revenues for the nine months ended March 31, 1998 increased to $1.5 million
from $1.2 million in the comparative period of 1997. Revenues from interest
and loan fees decreased to $1.0 million in the nine months ended March 31,
1998 from $1.1 million in the nine months ended March 31, 1997. The
Corporation's loans generally earn interest at the prime rate charged by a
major U.S. bank (the "Bank") plus 2% to 7%. The Bank's prime rate was 8.50%
during the nine months ended March 31, 1998. During the nine months ended
March 31, 1997, the Bank's prime rate increased to 8.50% from 8.25% in late
March 1997. In the nine months ended March 31, 1998, the Corporation
recognized a $66,000 gain on securities, compared to a loss on securities of
$0.6 million in the comparative period of 1997. Revenues from other
activities decreased to $0.4 million for the nine months ended March 31, 1998
from $0.7 million for the comparative period of 1997.
Costs and expenses decreased to $2.8 million for the nine months ended March
31, 1998 from $3.5 million in the comparative period of 1997. General and
administrative expenses decreased to $1.1 million for the nine months ended
March 31, 1998 from $1.4 million for the comparative period of 1997, primarily
as a result of reduced legal fees and loan collection costs. In the nine
months ended March 31, 1998, the Corporation reported a recovery of credit
losses of $0.2 million, compared to $0.7 million for the comparative period of
1997.
Interest expense decreased to $1.8 million for the nine months ended March 31,
1998 from $2.8 million for the comparative period of 1997, primarily as a
result of a reduction in the principal amount outstanding of the Corporation's
15 Year Variable Rate Bonds (the "Bonds"). For the nine months ended March
31, 1998, interest was accrued at the rate of approximately 8.50% per annum,
compared to approximately 8.25% per annum for the nine months ended March 31,
1997.
No income tax provision was recognized for the nine months ended March 31,
1998 and 1997, respectively, except for the payment of a minimum tax of
$1,000. The Corporation has deferred tax benefits with respect to net
operating loss carry-forwards which have not been recognized as there is no
assurance that they will be realized.
In the nine months ended March 31, 1998, the Corporation reported a loss of
$0.9 million as a result of equity accounting for its 30% interest in the
common shares of ICHOR Corporation ("Ichor"), a company quoted on the NASDAQ
SmallCap Market.
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<PAGE> 11
For the nine months ended March 31, 1998, the Corporation recognized a net
loss of $1.8 million or $0.73 per share, compared to $2.3 million or $0.94 per
share in the comparative period of 1997. The Corporation's results of
operations for the nine months ended March 31, 1998 included $0.5 million of
extraordinary gains on the extinguishment of debt. The net loss in the
current period was primarily attributable to the decrease in the recovery of
credit losses, the Corporation's equity interest in the loss of Ichor and
reduced revenues from other activities, which were partially offset by reduced
interest expense and the extraordinary gain on debt extinguishment.
Results of Operations - Three Months Ended March 31, 1998
- ---------------------------------------------------------
Revenues for the three months ended March 31, 1998 increased to $0.7 million
from $0.3 million in the comparative period of 1997. Revenues from interest
and loan fees increased to $0.4 million in the three months ended March 31,
1998 from $0.2 million in the comparative period of 1997. The Corporation's
loans generally earn interest at the prime rate charged by the Bank plus 2% to
7%. The Bank's prime rate was 8.50% during the three months ended March 31,
1998. During the three months ended March 31, 1997, the Bank's prime rate
increased to 8.50% from 8.25% in late March 1997. In the three months ended
March 31, 1998, the Corporation recognized a $0.2 million gain on securities,
compared to $5,000 in the comparative period of 1997. Revenues from other
activities increased to $0.2 million for the three months ended March 31, 1998
from $0.1 million in the comparative period of 1997.
Costs and expenses decreased to $1.1 million for the three months ended March
31, 1998 from $2.5 million in the comparative period in 1997. General and
administrative expenses decreased to $0.5 million for the three months ended
March 31, 1998 from $0.6 million for the comparative period of 1997, primarily
as a result of reduced legal fees and loan collection costs. In the three
months ended March 31, 1997, the Corporation reported credit losses of $1.0
million.
Interest expense decreased to $0.6 million for the three months ended March
31, 1998 from $0.9 million for the comparative period of 1997, primarily as a
result of a reduction in the principal amount outstanding of the Bonds. For
the three months ended March 31, 1998, interest was accrued at the rate of
approximately 8.50% per annum, compared to approximately 8.25% per annum for
the three months ended March 31, 1997.
For the three months ended March 31, 1998, the Corporation recognized a net
loss of $0.4 million or $0.18 per share, compared to $2.2 million or $0.84 per
share in the comparative period of 1997.
Liquidity and Capital Resources
- -------------------------------
The Corporation's cash and cash equivalents at March 31, 1998 were $1.7
million, which represents an increase of $0.1 million from June 30, 1997.
Cash used by operations for the nine months ended March 31, 1998 was $4.8
million, compared to $12.9 million for the comparative period of 1997. The
Corporation received cash of $0.1 million from operating activities before any
activities in trading securities in the nine months ended March 31, 1998,
compared to using cash of $4.1 million in the comparative period of 1997. A
decrease in
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<PAGE> 12
accounts receivable provided cash of $3.1 million in the nine months ended
March 31, 1998, compared to an increase in accounts receivable using cash of
$88,000 in the comparative period of 1997. A decrease in accounts payable and
accrued liabilities used cash of $1.9 million in the nine months ended March
31, 1998, compared to $0.6 million in the nine months ended March 31, 1997. A
decrease in interest receivable provided cash of $0.6 million and $0.1 million
in the nine months ended March 31, 1998 and 1997, respectively. In the nine
months ended March 31, 1998, a decrease in interest payable used cash of $0.2
million, compared to $0.9 million in the comparative period of 1997.
Net purchases of trading securities used cash of $4.9 million in the nine
months ended March 31, 1998, compared to $8.8 million in the nine months ended
March 31, 1997.
Cash used by investing activities was $0.8 million during the nine months
ended March 31, 1998, compared to cash provided by investing activities of
$2.2 million during the comparative period of 1997. Collections on loan
receivables provided cash of $7.6 million in the nine months ended March 31,
1998, compared to $3.3 million in the comparative period of 1997, primarily as
a result of the repayment in full of six loans during the nine months ended
March 31, 1998. During the nine months ended March 31, 1998, one new loan in
the aggregate principal amount of $5.0 million with a term of one year was
advanced. The Corporation's net finance receivables at March 31, 1998 were
$5.2 million, compared to $8.6 million at March 31, 1997.
Financing activities for the nine months ended March 31, 1998 provided cash of
$5.7 million. During the nine months ended March 31, 1998, the Corporation
used cash of $1.0 million to purchase $1.5 million in aggregate principal
amount of the Bonds. As at March 31, 1998, the Corporation had $45.0 million
in principal amount of the Bonds issued, of which approximately $23.5 million
was repurchased and held by the Corporation in treasury.
The Corporation did not make its semi-annual interest payment on the Bonds,
due January 25, 1998, until February 13, 1998, which was within the 30 day
cure period provided for under the terms of the indenture governing the
Corporation's Bonds (the "Bond Indenture"). The next regularly scheduled
interest payment date is July 25, 1998. As of the date hereof, the
Corporation is in compliance with the terms of the Bond Indenture.
During the nine months ended March 31, 1998, the Corporation entered into an
Arrangement Agreement with MFC Bancorp Ltd. ("MFC") and Drummond Financial
(B.C.) Ltd. pursuant to which the parties effected a Plan of Arrangement to
exchange all of the outstanding Bonds, other than Bonds held in treasury by
the Corporation, for 8% convertible subordinated bonds of MFC (the "MFC
Bonds"). Approval of the holders of the Bonds and approval of the Supreme
Court of British Columbia was obtained during the period in respect of the
Plan of Arrangement and the arrangement set forth in the Plan of Arrangement
was effected on March 31, 1998. On the effective date of the arrangement,
each principal amount of the Bonds was automatically exchanged for an amount
of MFC Bonds provided for under the terms of the Plan of Arrangement.
During the nine months ended March 31, 1998, the Corporation proceeded to
collect and/or settle and restructure the non-performing loans in its
portfolio. The Corporation anticipates that its cash
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<PAGE> 13
and investments on hand, and its expected loan interest and principal
collections, will be sufficient to service the Corporation's debt costs and
cover the day-to-day general and administrative expenses of the Corporation
during the short-term.
Finance Receivables
- -------------------
The Corporation's loan portfolio at March 31, 1998 aggregated $7.4 million in
finance receivables (principal plus interest and reimbursable costs less
unamortized commitment fees) due from two borrowers, compared to an aggregate
of $11.9 million in finance receivables due from seven borrowers at March 31,
1997. During the nine months ended March 31, 1998, the Corporation advanced
one new loan in the aggregate principal amount of $5.0 million and loans to
six borrowers, with finance receivables totaling $7.6 million, were repaid in
full.
At March 31, 1998, the Corporation's loan to Heartland, Inc., who had finance
receivables totaling $2.1 million, had been classified as non-performing and
the borrower had filed a petition for bankruptcy and had ceased to operate.
The Corporation designates finance receivables as non-performing when interest
and/or principal payments are contractually delinquent for more than 90 days,
or earlier if the Corporation has material evidence of the borrower's
inability to meet its commitments under the loan agreement (e.g., the borrower
files for bankruptcy protection).
The Corporation maintains an allowance for credit losses against which amounts
deemed uncollectible are charged off and subsequent recoveries, if any, are
credited. See Note 3 to the consolidated financial statements included
elsewhere herein regarding the allowance for credit losses for the nine months
ended March 31, 1998.
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<PAGE> 14
PART II. OTHER INFORMATION
---------------------------
ITEM 1. LEGAL PROCEEDINGS
Reference is made to the Corporation's annual report on Form 10-KSB for the
year ended June 30, 1997 for information concerning certain legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Corporation held its annual meeting of shareholders (the "Meeting") on
January 16, 1998. At the Meeting, the following directors were elected:
Abstentions and
Votes FOR Votes WITHHELD Broker Non-Votes
--------- -------------- ----------------
Michael J. Smith 2,048,305 29,900 -
Roy Zanatta 2,048,305 29,900 -
Oq-Hyun Chin 2,048,305 29,900 -
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit
Number Description
- ------- -----------
27 Article 5 - Financial Data Schedule for the 3rd Quarter 1998
Form 10-QSB.
(b) Reports on Form 8-K
None.
-14-
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: May 11, 1998
DRUMMOND FINANCIAL CORPORATION
By: /s/ Michael J. Smith
---------------------------------------------
Michael J. Smith, President, Chief
Executive Officer and Chief Financial Officer
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<PAGE> 16
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
27 Article 5 - Financial Data Schedule for the 3rd Quarter 1998
Form 10-QSB.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES INCLUDED IN THIS FORM 10-QSB AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 1,744
<SECURITIES> 15,913
<RECEIVABLES> 5,204
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 33,125
<CURRENT-LIABILITIES> 0
<BONDS> 21,515
0
30
<COMMON> 43
<OTHER-SE> 3,601
<TOTAL-LIABILITY-AND-EQUITY> 33,125
<SALES> 0
<TOTAL-REVENUES> 1,471
<CGS> 0
<TOTAL-COSTS> 2,787
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (176)
<INTEREST-EXPENSE> 1,848
<INCOME-PRETAX> (2,240)
<INCOME-TAX> 1
<INCOME-CONTINUING> (2,241)
<DISCONTINUED> 0
<EXTRAORDINARY> 485
<CHANGES> 0
<NET-INCOME> (1,756)
<EPS-PRIMARY> (0.73)
<EPS-DILUTED> (0.73)
</TABLE>
