SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
THE SECURITIES EXCHANGE ACT OF 1934
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______________ to ______
Commission file number 0-20897
PACIFICAMERICA MONEY CENTER, INC.
(Exact name of Registrant as specified in its charter)
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Delaware 6162 95-4465729
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
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21031 Ventura Boulevard
Woodland Hills, California 91364
(818) 992-8999
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. YES [X] NO [_].
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 [_] .
The number of shares of common stock of the Registrant outstanding as of
March 15, 1999: 5,168,395 shares.
The aggregate market value of the outstanding common stock of the
Registrant held by non-affiliates of the Registrant, based on the market price
at March 15, 1999 was approximately $2,342,521.
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The following items appearing in the Annual Report on Form 10-K for
PacificAmerica Money Center, Inc. ("PAMM" or the "Company"), as originally filed
April 15, 1999, are hereby amended:
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Company carries interest-sensitive assets on its balance sheet that are
financed by interest-sensitive liabilities. Since the Interval for re-pricing of
the assets and liabilities is not matched, the Company is subject to
interest-rate risk. A sudden, sustained increase or decrease in interest rates
would impact the Company's net interest income, as well as the fair value of its
residual interests in securitizations and interest-only strips.
The following table illustrates the timing of the re-pricing of the
Company's interest-sensitive assets and liabilities as of December 31, 1998.
Management has made certain assumptions in determining the timing of re-pricing
of such assets and liabilities. One of the more significant assumptions is that
all of the Company's loans receivable held for sale will be sold in the first
six months of 1999. In addition, the timing of re-pricing or maturity of the
Company's residual interests in securitizations is based on certain prepayment
and loss assumptions (See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Results of Operations" for further
details).
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INTEREST RATE
SENSITIVITY AS
OF DECEMBER
31, 1998
(DOLLARS IN
THOUSANDS)
DESCRIPTION 1 DAY TO 6 MOS. 1 TO 5 AFTER 5 TOTAL
- ----------- 6 MOS. TO 1 YR. YEARS YEARS
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INTEREST-SENSITIVE
ASSETS:
Cash and Investments $ 41,811 $ 0 $ 0 $ 0 $ 41,811
Loans Receivable 7,494 0 414 2,394 10,302
Loans Held For Sale 74,998 0 0 0 74,998
Interest-Only Strips Receivable 5,969 13,355 83,577 13,727 116,628
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TOTAL INTEREST-SENSITIVE 130,272 13,355 83,991 16,121 243,739
ASSETS
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INTEREST-SENSITIVE LIABILITIES:
Certificates Of Deposit 55,297 72,246 4,785 0 132,328
Savings Accounts 29,692 0 - 0 29,692
Notes Payable 4,028 12,313 36,234 557 53,132
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TOTAL INTEREST-SENSITIVE 89,017 84,559 41,019 557 215,152
LIABILITIES
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41,255 (71,204) 42,972 15,564 28,587
EXCESS OF INTEREST-SENSITIVE ASSETS
OVER INTEREST-SENSITIVE LIABILITIES
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41,255 (29,949) 13,023 28,587 28,587
CUMULATIVE NET INTEREST SENSITIVE GAP
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Significant assumptions are as follows:
Loans Receivable: all variable rate loans are when they reprice and all
fixed rate loans are when they mature.
Loans Held For Sale are assumed to be sold within six months. Interest-Only
Strips Receivable are included based on the present values of the modeled
cash flows.
Certificates of Deposit are included based on when they mature.
Notes Payable related to the Interest-Only Strips Receivable are included
based on the present values of the modeled cash flows. Other notes payable
are based on scheduled maturity.
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Net Interest Income Analysis" and "--Certain
Accounting Considerations."
Item 11. Executive Compensation
Executive Compensation
Summary of Cash and Certain Other Compensation. The Company is a successor
to the Partnership. On June 27, 1996, the Company and the Partnership completed
the Restructuring, as a result of which all of the assets and liabilities of the
Partnership were transferred to the Company. Prior to the Restructuring, the
executive officers of the Company received compensation from the Partnership,
Presidential Management Company, the general partner of the Partnership (the
"General Partner") and/or Pacific Thrift, under various arrangements with those
entities. The following table sets forth certain summary information concerning
compensation paid or accrued by the Company, the Partnership, the General
Partner and Pacific Thrift to or on behalf of the Chief Executive Officer and
each of the Named Executives for the fiscal years ended December 31, 1998, 1997,
and 1996:
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Actual Annual
Compensation
Securities
Underlying All Other
Name and Principal Position Year Salary($)(1) Bonus($) Options(#)(2) Compensation
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Joel R. Schultz(3) 1998 $ 511,834 -0- 100,000 -0-
Chief Executive Officer of 1997 $ 235,000 $1,633,728 30,000 $ 4,750
The Company and Pacific Thrift 1996 $ 450,704 $ 222,750 96,000 $ 4,500
Richard D. Young(4) 1998 $ 443,509 -0- -0- $ 378,039
(Former) President and Chief 1997 $ 235,000 $1,478,050 6,000 $ 4,750
Operating Officer of Pacific 1996 $ 247,583 $ 354,750 100,000 $ 4,500
Thrift, and Senior Executive Vice
President of the Company
Frank Landini(5) 1998 $ 341,333 -0- -0- $ 204,800
(Former) Executive Vice President 1997 $ 163,200 $ 637,008 -0- $ 4,750
- -Wholesale Lending Division of 1996 $ 184,600 $ 207,112 36,000 $ 4,190
Pacific Thrift
Charles J. Siegel, 1998 $ 214,422 -0- -0- -0-
Chief Financial Officer of 1997 $ 201,798 $ 125,000 15,000 $ 4,750
The Company and Pacific Thrift 1996 $ 163,577 $ 51,667 26,000 $ 4,500
Norman A. Markiewicz 1998 $ 155,072 -0- -0- -0-
Executive Vice President 1997 $ 146,707 -0- -0- $ 4,147
of the Company and Pacific Thrift 1996 $ 172,500 -0- 18,000 $ 4,500
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(1) The amounts specified above include automobile allowances and directors'
fees, but do not include life insurance or medical insurance premiums for
benefits in excess of group benefits provided to employees, the aggregate amount
of which do not exceed the lesser of either $50,000 or 10% of the total annual
salary and bonus reported for each of the above named executives in each
reported year.
(2) All options shown in this column are exercisable at a price equal to the
fair market value of the options on the date of grant.
(3) Salary amounts for 1996 include payments prior to the effective date of the
Restructuring for providing legal services in connection with loan accounts
prior to June 27, 1996. Bonus amount for 1997 includes the value of 10,007
shares of Common Stock paid by the Company in lieu of a portion of the cash
bonus earned under an employment agreement based on the fair market value of the
shares on the date paid. See "--Employment Agreements." Bonus amounts for each
of 1996 and 1997 include amounts earned for the year reported but paid in the
following year.
(4) Mr. Richard Young resigned his positions with the Company and all of its
subsidiaries on January 11, 1999. Bonus amount for 1997 includes the value of
22,766 shares of Common Stock paid by the Company in lieu of a portion of the
cash bonus earned under an employment agreement, based on the fair market value
of the shares on the date paid, plus a $174,102 promissory note payable in two
semi-annual installments six months and one year after issuance, bearing
interest at the Bank of America prime rate. See "--Employment Agreements." Bonus
amounts for each of 1996 and 1997 include amounts earned for the year reported
but paid in the following year. Bonus amount for 1996 consists of a bonus of
$107,000 paid in 1996 for the period prior to the Restructuring, a special
discretionary bonus of $25,000 paid after the Restructuring and a bonus of
$222,750 accrued for in 1996 under an employment agreement entered into
effective as of the closing date of the Restructuring Date and paid in 1997.
Other compensation for 1998 represent the accrual for the execution by Mr. Young
on January 11, 1999 of severance of his employment agreement with the Company.
(5) Mr. Landini resigned his position with Pacific Thrift on October 27, 1998.
His salary included a severance payment of $200,000, representing six months
salary. Bonus amount for 1997 consisted of a bonus of $637,008 accrued for 1997,
of which 75% was paid in January 1998 and 25% is due to be paid in January 2000
under his employment agreement. Bonus amount for 1996 consists of a bonus of
$182,112 accrued for 1996, of which 75% was paid in January 1997 and 25% is due
to be paid in January 1999 under his employment agreement, and a special
discretionary bonus of $25,000 paid after the Restructuring. Other compensation
for 1998 represents severance payments made to Mr. Landini. See "-- Employment
Agreements."
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Item 8. Financial Statements and Supplementary Data
Schedule II of the Consolidating Schedule - Operations for the Year Ended
December 31, 1998, is hereby replaced with the amended Schedule II appearing
below:
Schedule
Consolidating Schedule- Operations
PacificAmerica Money Center, Inc.
and Subsidiaries
Schedule II
Consolidating Schedule - Operations
Year Ended December 31, 1998
(Continued)
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Pacific- Pacific Pacific- Pacific- Reclassifying and
America Thrift America America Eliminating Entries
Money and Loan Money Securities, -------------------
Center Inc. Company Centers, Inc. Inc. Dr Cr Consolidated
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Noninterest expense
Salaries and employee benefits 1,194,000 32,597,000 375,000 -- -- -- 34,166,000
General and administrative expenses 2,574,000 24,871,000 277,000 -- -- 71,000 27,651,000
Occupancy expense 749,000 2,141,000 57,000 -- -- -- 2,947,000
Operations of other real estate -- 153,000 (29,000) -- -- -- 124,000
Depreciation and amortization 31,000 941,000 2,000 -- -- -- 974,000
Restructuring charge 896,000 2,576,000 64,000 -- -- -- 3,536,000
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Total noninterest expense 5,444,000 63,279,000 746,000 -- -- 71,000 69,398,000
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Income (loss) before income taxes (33,686,000) (8,663,000) (901,000) -- 3,913,000 11,685,000 (35,478,000)
Income tax expense (benefit) (9,198,000) (2,471,000) 679,000 -- -- -- (10,990,000)
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Net loss $(24,488,000) $ (6,192,000) $(1,580,000) $ -- $3,913,000 $11,685,000 $(24,488,000)
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See report of independent certified public accountants and notes to consolidated
financial statements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 the
registrant has duly caused this Amendment to the Annual Report on Form 10-K for
the year ended December 31, 1998 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Los Angeles, State of California, on
May 6, 1999.
PACIFICAMERICA MONEY CENTER, INC.
By: /S/ JOEL R. SCHULTZ
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Joel R. Schultz, Chief Executive Officer
