<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT
--------------------
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD 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 O-20897
PACIFICAMERICA MONEY CENTER, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
California 95-4465729
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification Number)
</TABLE>
21031 Ventura Boulevard
Woodland Hills, California 91364
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code (818) 992-8999
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 __.
1
<PAGE> 2
PACIFICAMERICA MONEY CENTER
AND SUBSIDIARIES
Consolidated Balance Sheets
Unaudited
December 31, 1995 and June 30, 1996
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
<S> <C> <C>
Assets
Cash & cash equivalents $ 19,539,000 $ 10,489,000
Accounts receivable, net 17,477,000 3,337,000
Interest receivable 909,000 903,000
Loans receivable, net (Note 2) 46,741,000 43,908,000
Loans held for sale 10,012,000 12,577,000
Receivable from related party 369,000 347,000
Excess yield receivable 2,178,000 2,725,000
Real estate acquired in settlement of loans 2,914,000 3,156,000
Property and equipment, net 1,887,000 1,398,000
Goodwill 1,748,000 1,808,000
Other assets 1,694,000 1,909,000
------------ ------------
$105,468,000 $ 82,557,000
============ ============
Liabilities and Capital
Thrift certificates payable
Full-paid certificates 46,404,000 35,881,000
Installment certificates 33,415,000 24,275,000
------------ ------------
Total thrift certificates payable 79,819,000 60,156,000
Accounts payable and accrued expenses 4,078,000 4,018,000
Accrued interest payable 84,000 273,000
Payable to related party 480,000 281,000
Mortgage notes payable 597,000 611,000
Note payable 2,740,000 6,771,000
Note payable to related party 0 600,000
Partnership withdrawals payable 0 1,120,000
------------ ------------
$ 87,798,000 $ 73,830,000
------------ ------------
Capital 17,670,000 8,727,000
------------ ------------
$105,468,000 $ 82,557,000
============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
<PAGE> 3
PACIFICAMERICA MONEY CENTER
AND SUBSIDIARIES
Consolidated Statements of Income
Unaudited
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans receivable 2,446,000 2,191,000 4,724,000 4,577,000
Interest on deposits with banks 66,000 233,000 196,000 459,000
---------- ---------- ----------- -----------
Total interest income 2,512,000 2,424,000 4,920,000 5,036,000
Interest Expense:
Interest on thrift certificates greater than $100,000 0 2,000 0 6,000
Interest on other thrift certificates 1,000,000 1,045,000 2,010,000 2,021,000
Interest on notes payable 190,000 379,000 407,000 804,000
---------- ---------- ----------- -----------
Total interest expense 1,190,000 1,426,000 2,417,000 2,831,000
---------- ---------- ----------- -----------
Net interest income 1,322,000 998,000 2,503,000 2,205,000
Provision for loan losses (469,000) 554,000 256,000 1,000,000
---------- ---------- ----------- -----------
Net interest income afer provision for loan losses 1,791,000 444,000 2,247,000 1,205,000
Noninterest income:
Trustee and reconveyance fees 713,000 738,000 1,570,000 1,523,000
Other income 217,000 285,000 455,000 593,000
Gain on sale of loans 6,084,000 1,818,000 10,796,000 3,333,000
---------- ---------- ----------- -----------
7,014,000 2,841,000 12,821,000 5,449,000
Noninterest expense:
General and administrative 3,167,000 1,729,000 5,252,000 3,143,000
Salaries, employee benefits and personnel services 3,798,000 1,710,000 6,579,000 3,332,000
Amortization of organization costs 212,000 45,000 238,000 73,000
Related party fees 664,000 185,000 1,136,000 359,000
Depreciation and amortization 97,000 123,000 204,000 239,000
Expenses on real estate acquired in settlement of loans 195,000 (136,000) 255,000 25,000
Net loss (gain) on sales of real estate acquired
in settlement of loans (66,000) 249,000 39,000 326,000
---------- ---------- ----------- -----------
8,067,000 3,905,000 13,703,000 7,497,000
---------- ---------- ----------- -----------
Net income (loss) before tax provision 738,000 (620,000) 1,365,000 (843,000)
---------- ---------- ----------- -----------
Tax provision 727,000 (84,000) 1,075,000 (514,000)
---------- ---------- ----------- -----------
Net income (loss) 11,000 (536,000) 290,000 (329,000)
========== ========== =========== ===========
Weighted average shares of Common Stock
and equivalents outstanding 1,811,819 1,811,819
---------- -----------
Earnings per share $ .01 $ .16
========== ===========
</TABLE>
See accompanying Notes to Consolidated Financial Statements and Management's
discussion and Analysis of Financial Condition and Results of Operations
<PAGE> 4
PACIFICAMERICA MONEY CENTER
AND SUBSIDIARIES
Statement of Computation of
Weighted Average Shares Outstanding
Unaudited
<TABLE>
<S> <C>
Number of shares outstanding 1,806,072
Assumptions:
Subscriber warrants exercised 64,925
Incentive stock options exercised 228,200
Less: Treasury stock repurchases
Subscriber Warrants:
64,925 shares exercised at $12.50
per share and repurchased at $12.75
per share (63,652)
Incentive stock options:
228,200 shares exercised at $12.50
per share and repurchased at $12.75
per share (223,726)
---------
Weighted average shares outstanding 1,811,819
=========
</TABLE>
<PAGE> 5
PACIFICAMERICA MONEY CENTER
AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
Six months ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
6-30-96 6-30-95
<S> <C> <C>
Adjustments to reconcile net income (loss)
to net cash used in operating
activities:
Net income 290,000 (329,000)
Depreciation & Amortization 442,000 312,000
Provision for loan losses 256,000 1,000,000
Net (gain) loss on sales of real estate
acquired in settlement of loans 39,000 326,000
(Increase) decrease in asset accounts:
Accounts Receivable (14,140,000) (4,844,000)
Interest receivable (6,000) 566,000
Excess yield receivable 547,000 (917,000)
Goodwill 60,000 98,000
Other assets (294,000) (671,000)
Increase (decrease) in liability accounts:
Accounts payable and accrued expenses (530,000) (665,000)
Net cash used in operating ------------ ------------
activities (13,336,000) (5,124,000)
------------ ------------
Cash flows from investing activities:
(Increase) Decrease in Loans Receivable (524,000) 8,317,000
(Increase) Decrease in Prop & Equip (640,000) (454,000)
Decrease in Mortgages Payable on Other
Real Estate (14,000) (1,000,000)
Decrease in Other Real Estate 203,000 2,004,000
------------ ------------
Net cash provided by (used in) investing (975,000) 8,867,000
activities ------------ ------------
Cash flow from financing activities:
Withdrawal of Partnership Shares (1,120,000) 0
Increase (Decrease) in Thrift Certificates 19,663,000 (4,753,000)
Decrease in Line of Credit (4,031,000) (4,778,000)
Proceeds from issuance of stock 8,849,000 0
------------ ------------
Net cash provided by (used in) financing 23,361,000 (9,531,000)
activities ------------ ------------
Net decrease in Cash and Cash Equivalents 9,050,000 (5,788,000)
Cash and Cash Equivalents at Year End 10,489,000 19,628,000
------------ ------------
Cash and Cash Equivalents at June 30, 19,539,000 13,840,000
=========== ===========
</TABLE>
See accompanying Notes to Consolidated Financial Statements and Management's
discussion and Analysis of Financial Condition and Results of Operations
<PAGE> 6
PACIFICAMERICA MONEY CENTER, INC.
AND SUBSIDIARIES
Notes to Consolidated Unaudited Financial Statements
1) The unaudited financial information furnished herein, in the opinion
of management, reflects all adjustments (all of which are of a normal
recurring nature) which are necessary to fairly state the
Corporation's financial position, its cash flows and the results of
its operations. The Corporation presumes that users of the interim
financial information herein have read or have access to the audited
financial statements and Management's Discussion and Analysis of
Financial Condition and Results of Operations for the preceding fiscal
year and that the adequacy of additional disclosure needed for a fair
presentation, except in regard to material contingencies, may be
determined in that context. Accordingly, footnote and other
disclosures which would substantially duplicate the disclosure
contained in the organization's most recent annual report has been
omitted. The interim financial information herein is not necessarily
representative of operations for a full year for various reasons
including changes in interest rates, volume of loans originated and
loans paid off.
2) Restructuring plan and initial public offering
See "Management's Discussion and Analysis of Financial Condition
and Results of Operations".
3) Earnings per share
Earnings per share was computed by dividing net income by the
weighted average number of shares of common stock and common stock
equivalents outstanding during the period. Common stock equivalents
are options and warrants that are freely exercisable into common
stock at less than market exercise prices. Common stock equivalents
are not included in the weighted average number of shares when the
inclusion would increase the earnings per share.
4) Loans Receivable
The following is a summary of Loans Receivable:
<TABLE>
<CAPTION>
@ 6-30-96 @ 12-31-95
<S> <C> <C>
Interest bearing loans $ 51,438,000 $49,023,000
Deferred loan fees, net (822,000) (886,000)
Allowance for loan losses (3,875,000) (4,229,000)
------------- -----------
Total $ 46,741,000 $43,908,000
============= ===========
</TABLE>
The following is a summary of Allowance for Loan Losses:
<TABLE>
<S> <C>
Balance at 12-31-95 $ 4,229,000
Additions to reserve 256,000
Charge offs/recoveries (610,000)
--------------
Balance at 6-30-96 $ 3,875,000
=============
</TABLE>
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
BACKGROUND
On June 27, 1996, PacificAmerica Money Center, Inc. (the
"Corporation") and Presidential Mortgage Company, a California limited
partnership (the "Partnership") completed a Restructuring Plan dated May 1,
1996 (the "Restructuring"), whereby all of the assets and liabilities of the
Partnership were transferred to the Corporation in exchange for common stock of
the Corporation (the "Common Stock"). The Common Stock was distributed to the
partners of the Partnership, pro rata in accordance with their capital accounts
in the Partnership. In accordance with the terms of the Restructuring Plan,
the consent of a majority of limited partners to the Restructuring Plan was
solicited pursuant to a Proxy Statement/Prospectus dated May 14, 1996, and the
consent of approximately 75% of all limited partners was obtained by June 17,
1996, the expiration of the solicitation period. Every limited partner was
given the right to elect to receive cash in lieu of shares of the Corporation
(the "Cash Out Option"), in an amount equal to $10 per share times the number
of shares that would have been received by that partner based on his capital
account in the Partnership. Pursuant to the Restructuring Plan, 603,234 shares
of Common Stock were issued to partners of the Partnership for their interests
in the Partnership and $2,855,600.00 was paid by the Corporation to partners
electing the Cash Out Option.
Also pursuant to the terms of the Restructuring Plan, Presidential
Management Company, the general partner of the Partnership (the "General
Partner") purchased 563,333 warrants ("General Partner Warrants") for a
purchase price of $385,000. The General Partner Warrants are each exercisable
for one share of Common Stock at a purchase price of $15.00 per share from June
27, 1996 until December 27, 1997. The General Partner Warrants are
nontransferable, except to and between partners of the General Partner.
Concurrently with the solicitation of consent pursuant to the Proxy
Statement/Prospectus dated May 14, 1996, all partners of the Partnership,
together with all partners of the General Partner, and all officers, directors,
proposed directors and employees of the Partnership, all of its subsidiaries
and the Corporation, were given the right to purchase additional shares of
Common Stock (the "Rights Offering") at a purchase price of $10 per share. A
total of 324,628 shares were subscribed for and issued in the Rights Offering.
For every five shares subscribed for in the Rights Offering, a subscriber also
received one warrant ("Subscriber Warrants"). A total of 64,925 Subscriber
Warrants were issued in connection with the Rights Offering, each exercisable
from June 27, 1996 until June 27, 1998, for one share of Common Stock at a
purchase price of $12.50 per share.
Pursuant to a Prospectus dated June 24, 1996, the Corporation also
conducted a public offering of additional shares of Common Stock at $10 per
share (the "Public Offering"). A total of 878,210 shares were issued in the
Public Offering, including 114,549 shares in connection with the exercise of an
over-allotment option by the underwriter of the Public Offering
The Corporation issued a total of 1,806,072 shares of Common Stock in
connection with the Restructuring Plan, the Rights Offering and the Public
Offering. The shares of Common Stock were listed for trading on the Nasdaq
National Market under the symbol "PAMM." Trading in the stock commenced on
June 25, 1996.
Concurrently with the closing of the Restructuring, the Rights
Offering and the Public Offering on June 27, 1996, the Partnership filed
certificates of dissolution and liquidation with the California Secretary of
State.
The Restructuring has been accounted for as a change in legal
organization but not in the enterprise formerly engaged in by the Partnership.
Therefore, the financial statements of the Corporation give effect to the
Restructuring as a recapitalization of the Partnership into the Corporation.
References to the Corporation in this Management's Discussion and Analysis of
Financial Condition and Results of Operations refer to the financial condition
and results of operations of the Partnership on a consolidated basis for all
periods prior to June 27, 1996.
The unaudited interim consolidated financial statements should be read
in conjunction with the historical consolidated financial statements and the
related notes thereto of the Partnership filed with its Annual Report on Form
10-K for the year ended December 31, 1995.
FINANCIAL CONDITION
Total consolidated assets increased $22.9 million (27.7%) to $105.5
million at June 30, 1996 from $82.6 million at December 31, 1995. The
increase resulted primarily from a $14.2 million increase (430.3%) in accounts
receivable and a $9.0 million increase (85.7%) in cash and cash equivalents.
Accounts receivable increased by $14.2 million (430.3%), to $17.5 million at
June 30, 1996 from $3.3 million at December 31, 1995, due to loan sales made
in June, for which payment was received in early July 1996. The $9.0 million
2
<PAGE> 8
(85.7%) increase in cash and cash equivalents, to $19.5 million at June 30,
1996 from $10.5 million at December 31, 1995, was due primarily to a net
increase of $5.2 million in cash proceeds from the $19.6 million of additional
thrift certificates issued, partially offset by the $14.2 million increase in
accounts receivable, and the receipt of net cash proceeds of $3.8 million from
the sale of Common Stock in the Public Offering and the Rights Offering, after
use of $5.0 million of proceeds to pay debts and expenses. Loans receivable
increased by $2.8 million (6.4%), to $46.7 million at June 30, 1996 from $43.9
million at December 31, 1995, reflecting an increase in origination of
portfolio loans by Pacific Thrift and Loan Company ("Pacific Thrift"), the
Corporation's primary operating subsidiary. The increase in loans receivable
was offset by a decrease in loans held for sale, which decreased by $2.6
million (20.6%), to $10.0 million at June 30, 1996 from $12.6 million at
December 31, 1995. Excess yield receivable decreased $.5 million (18.5%) to
$2.2 million from $2.7 million, due primarily to payments received from the
purchaser of loans sold from September 1994 through December 1995 with a
retained servicing released fee. Since December 1995, the terms of loan sales
have been changed to replace the servicing released fee with premiums
recognized immediately upon sale. Real estate acquired in settlement of loans
("OREO") decreased by $.3 million (9.4%), to $2.9 million at June 30, 1996,
from $3.2 million at December 31, 1995.
Total liabilities increased $14.0 million (19.0%) to $87.8 million at
June 30, 1996 from $73.8 million at December 31, 1995. The increase resulted
primarily from a $19.6 million (32.6%) increase in thrift certificates
payable, to $79.8 million at June 30, 1996 from $60.2 million at December 31,
1995. Payables to related party increased by $.2 million (66.7%) to $.5
million at June 30, 1996 from $.3 million at December 31, 1995 due to the
accrual of fees payable to the Partnership's General Partner, which may not
be paid under the terms of the bank loan assumed by the Corporation without
the consent of Fleet Bank. N.A. No additional fees to the General Partner
will be accrued after June 27, 1996.
Total capital increased by $9.0 million (103.4%) to $17.7 million at
June 30, 1996 from $8.7 million at December 31, 1995, due to the increase in
capital as a result of the sale of Common Stock in the Public Offering and the
Rights Offering and net income of $.3 million reported for the six months ended
June 30, 1996.
RESULTS OF OPERATIONS
GENERAL
The Corporation reported net income after tax provision of $11,000, or
$.01 per share, for the quarter ended June 30, 1996 and $.3 million, or $.16
per share, for the six months ended June 30, 1996. Expenses for the quarter
and for the six months ended June 30, 1996 included non-recurring expenses
of $.6 million for the quarter and $.7 million for the six months related to
the completion of the Restructuring, and also included management fees
payable to the General Partner of the Partnership of $.7 million for the
quarter and $1.1 million for the six months ended June 30, 1996, which will
not recur after the Restructuring. Income for the six months ended
June 30, 1996 also included a $.6 million reversal of reserves for loan
loss due to the sale of $3.8 million in "piggyback" loans by Pacific Thrift.
For the comparable periods of 1995, the Partnership reported a net
loss of $.5 million for the quarter and a net loss of $.3 million for the six
months ended June 30, 1995, after recognizing a tax benefit of $.1 million for
the quarter and $.5 million for the six months ended June 30, 1995, from net
operating loss carryforwards of Pacific Thrift.
3
<PAGE> 9
INTEREST INCOME
Total interest income increased by $.1 million (4.2%) to $2.5 million
for the quarter ended June 30, 1996 from $2.4 million for the quarter ended
June 30, 1995, but decreased by $.1 million (2.0%), to $4.9 million for the six
months ended June 30, 1996 compared to $5.0 million for the six months ended
June 30, 1995. These minor variations in interest income resulted from
differences in the holding period on loans originated for sale during each of
the periods, which affected the yield on loans held for sale pending the sale
date of such loans. Interest on investments also declined by $.1 million
(50.0%), to $.1 million for the quarter ended June 30, 1996 from $.2 million
for the quarter ended June 30, 1995, and by $.3 million (60.0%) to $.2 million
for the six months ended June 30, 1996, from $.5 million for the six months
ended June 30, 1995, due to a decline in average investments and a decrease in
interest rates on investments. Total interest expense decreased by $.2 million
(14.3%) for the quarter ended June 30, 1996 and by $.4 million (14.3%) for the
six months ended June 30, 1996, to $1.2 million for the quarter and $2.4
million for the six months ended June 30, 1996 from $1.4 million for the
quarter and $2.8 million for the six months ended June 30, 1995, due primarily
to a decrease of $.2 million (50.0%) per quarter in interest payments on the
bank loan. Net interest income before provision for loan losses increased by
$.3 million (30.0%) for the quarter and by $.3 million (13.6%) for the six
months ended June 30, 1996, to $1.3 million for the quarter and $2.5 million
for the six months ended June 30, 1996, from $1.0 million and $2.2 million for
the comparable periods of 1995, due primarily to a decline in interest expense.
PROVISION FOR LOAN LOSSES
The provision for loan losses decreased by $1.0 million (200.0%), to
($.5 million) for the quarter ended June 30, 1996 from $.5 million for the
quarter ended June 30, 1995, due primarily to a $.6 million reversal of
reserves at Pacific Thrift in connection with a sale of $3.8 million of
"piggyback" loans, and a $.2 million decrease in reserves on the loan portfolio
previously held directly by the Partnership (the "Presidential Portfolio").
The provision for loan losses decreased by $.7 million (70.0%), to $.3 million
for the six months ended June 30, 1996 from $1.0 million for the six months
ended June 30, 1996, due primarily to the decrease in reserves on the
Presidential Portfolio. The Presidential Portfolio consists of loans
originated prior to 1990, the balance of which is being gradually reduced
through payoffs, sales and foreclosures, to a total balance of $7.1 million at
June 30, 1996 from $9.1 million at December 31, 1995. Because of the age of
the Presidential Portfolio, the reserves on it as a percentage of its total
balance are substantially higher than the loans held by Pacific Thrift, a
majority of which were originated after 1994. Even after the reduction in the
provision for loan losses for the quarter and the six months ended June 30,
1996, the reserves on the remaining Presidential Portfolio were higher as a
percentage of the total balance of those loans at June 30, 1996 (35%) than at
December 31, 1995 (30%). The total allowance for loan losses was $3.8 million
at June 30, 1996, compared to $4.2 at December 31, 1995.
The adequacy of the allowance for loan losses is based on a variety of
factors, including loan classifications and underlying loan collateral values,
and is not directly proportional to the level of nonperforming loans. The
ratio of nonaccrual loans past due 90 days or more ($1.2 million) to total
loans ($51.4 million) was 2.4% at June 30, 1996, compared to 1.6% ($.8 million
nonaccrual to $49.0 million total loans) at December 31, 1995.
NONINTEREST INCOME
Total noninterest income increased by $4.2 million (150.0%) for the
quarter, to $7.0 million for the quarter ended June 30, 1996 from $2.8 million
for the quarter ended June 30, 1995, and increased by $7.4 million (137.0%) for
the six months ended June 30, 1996, to $12.8 million for the six months ended
June 30, 1996 from $5.4 million for the six months ended June 30, 1995.
The primary source of noninterest income is gains on sale of loans
originated for sale, which increased $4.3 million (238.9%) for the quarter and
$7.5 million (227.3%) for the six months ended June 30, 1996, to $6.1 million
4
<PAGE> 10
for the quarter and $10.8 million for the six months ended June 30, 1996,
compared to $1.8 million for the quarter and $3.3 million for the six months
ended June 30, 1995.
Trustee and reconveyance fees remained substantially unchanged at $.7
million for the quarter ended June 30, 1996 compared to the quarter ended June
30, 1995, and increased by $.1 million (6.7%), to $1.6 million for the six
months ended June 30, 1996 compared to $1.5 million for the six months ended
June 30, 1995.
NONINTEREST EXPENSE
Noninterest expense increased by $4.2 million (107.7%) for the quarter
and by $6.2 million (82.7%) for the six months ended June 30, 1996, to $8.1
million for the quarter and $13.7 million for the six months ended June 30,
1996, from $3.9 million for the quarter and $7.5 million for the six months
ended June 30, 1995. General and administrative expenses increased
$1.5 million (88.2%) for the quarter and $2.1 million (67.7%) for the six
months ended June 30, 1996, to $3.2 million for the quarter and $5.2 million
for the six months ended June 30, 1996, compared to $1.7 million for the
quarter and $3.1 million for the six months ended June 30, 1995. Salaries,
employee benefits and personnel services increased $2.1 million (123.5%) for
the quarter and $3.3 million (100%) for the six months ended June 30, 1996, to
$3.8 million for the quarter and $6.6 million for the six months ended June 30,
1996, compared to $1.7 million for the quarter and 3.3 million for the six
months ended June 30, 1995, due to the increase in loan volume, the
corresponding increase in loan representative commissions, and the hiring of
additional support personnel to handle the increased loan volume. Related
party fees increased $.5 million (250%) for the quarter and $.7 million
(175.0%) for the six months ended June 30, 1996, reflecting an increase in fees
payable to the Partnership's general partner under the partnership agreement of
the Partnership due to increased loan volume and fees based on net income. As
a result of the completion of the Restructuring, no additional fees of this
nature will be incurred after June 27, 1996.
LIQUIDITY AND CAPITAL RESOURCES
The primary source of the Corporation's liquidity is the cash and cash
equivalents maintained by Pacific Thrift in connection with its deposit-taking
and lending activities. At June 30, 1996, cash and cash equivalent assets
totalled $19.5 million, compared with $10.5 million at December 31, 1995,
primarily due to the cash proceeds received by the Corporation on June 27, 1996
in connection with the sale of Common Stock in the Public Offering and the
Rights Offering. Pacific Thrift also held an account receivable of $14.1
million for loans sold as of June 30, 1996 which was paid in early July 1996.
Pacific Thrift is subject to certain leverage and risk-based capital
adequacy standards applicable to FDIC-insured institutions. At June 30, 1996,
Pacific Thrift met the FDIC regulatory definition of "well capitalized."
However, because Pacific Thrift is currently subject to a Memorandum of
Understanding requiring it to maintain a certain capital level (which it
currently meets), Pacific Thrift is classified by the FDIC as "adequately
capitalized." See the Partnership's Annual Report on Form 10-K for the year
ended December 31, 1995, Item 1. "Business - Supervision and Regulation --
Regulatory Actions."
At June 30, 1996, the Corporation had no material outstanding
commitments to fund loans. Certificates of deposit which are scheduled to
mature in one year or less from June 30, 1996 totalled $44.4 million. Based
upon historical experience, management believes that a significant portion of
such deposits will be renewed and will remain with Pacific Thrift.
As indicated in the Statements of Cash Flows, the Corporation used
$13.3 million in cash from operating activities from January 1, 1996 through
June 30, 1996. This includes a deduction from cash for the $14.1 million
increase in accounts receivable, which was primarily due to loans sold at June
30, 1996, and which was paid in early July 1996.
The Corporation used $1.0 million in investing activities for the six
months ended June 30, 1996, primarily due to a net increase of $.5 million in
loans receivable and a net increase of $.6 million in property and equipment.
The Corporation realized $23.4 million from financing activities for
the six months ended June 30, 1996, primarily reflecting an increase of $19.6
million in thrift certificates and the realization of $8.8 million in proceeds
from the sale of Common Stock in the Public Offering and the Rights Offering,
offset by uses of $4.0 million to pay down the bank debt and $1.1 million to
pay former limited partners of the Partnership whose capital withdrawal
requests had been approved prior to June 1993.
5
<PAGE> 11
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There has been no change in the legal actions described in the Annual
Report on Form 10-K, except as previously described in the Partnership's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The terms of the Restructuring were submitted to the vote by written
consent of limited partners of the Partnership between May 14, 1996 and June
17, 1996. Limited partners holding the following percentages of the total
capital contributions of all limited partners (excluding any capital
contributions of the General Partner) voted for, against or abstain on the
Restructuring: 74.6% for, 1.2% against and 0.7% abstain. Limited partners
holding the remaining 23.5% of the total capital contributions did not vote on
the Restructuring. The terms of the Restructuring are described in Part I,
Item 2 above.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits. None.
(b) Reports on Form 8-K. None.
6
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Partnership has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on August __, 1996.
PACIFICAMERICA MONEY CENTER, INC.
(Registrant)
August __, 1996 JOEL R. SCHULTZ
---------------
Joel R. Schultz,
President
August __, 1996 CHARLES J. SIEGEL
-----------------
Charles J. Siegel,
Chief Financial and Accounting Officer
7
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