SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-Q
/X/ Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended March 31, 1996
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COMMISSION FILE NUMBER 33-13668
(S-11 Registration Number)
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HOLCO MORTGAGE ACCEPTANCE CORPORATION-I
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
220 WEST COLFAX STREET
SUITE 200
SOUTH BEND, IN 46601
(Address of principal executive offices)
38-2733561
(IRS Employer Identification Number)
(219) 284-3789
(Registrant's Telephone Number, including Area Code)
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 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 outstanding of each class of Registrant's Common Stock was
563,750 shares of common stock, par value $.01 as of March 1, 1996.
HOLCO MORTGAGE ACCEPTANCE CORPORATION-I
BALANCE SHEETS
March 31,
1996 December 31,
(Unaudited) 1995
----------- ------------
ASSETS
CASH ......................................... $ 1,000 $ 1,000
INTEREST RECEIVABLE .......................... 71,773 72,938
INVESTMENTS:
Insured GNMA mortgages, at cost ............ 9,504,737 9,492,787
Funds held by Trustee ...................... 89,686 86,334
----------- -----------
Net Investments ............................ 9,667,196 9,653,059
ORGANIZATION COSTS, at amortized cost ........ 0 0
COLLATERALIZED MORTGAGE BOND OFFERING
COSTS, net of accumulated
amortization of $1,048,546 ................. 2,976 12,159
----------- -----------
Total Assets ............................... $ 9,670,172 $ 9,665,218
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES:
COLLATERALIZED MORTGAGE BONDS .............. 8,880,000 8,900,000
ACCOUNTS PAYABLE ........................... 39,913 39,023
INTEREST PAYABLE ........................... 138,565 138,878
----------- -----------
Total Liabilities ....................... $ 9,058,478 $ 9,077,901
STOCKHOLDERS' EQUITY:
COMMON STOCK, $0.01 par value;
authorized 700,000 shares; issued
and outstanding 563,750 shares ........... $ 5,638 $ 5,638
ADDITIONAL PAID-IN CAPITAL ................. 2,862,878 2,862,878
RETAINED EARNINGS .......................... (2,256,822) (2,281,199)
----------- -----------
Total Stockholders' Equity .............. $ 611,694 $ 587,317
----------- -----------
Total Liabilities &
Stockholders' Equity .................. $ 9,670,172 $ 9,665,218
=========== ===========
See Notes to Financial Statements.
HOLCO MORTGAGE ACCEPTANCE CORPORATION-I
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Month Period Ended March 31, 1996
For the Three
Months Ended
March 31,
1996 1995
-------- --------
INCOME:
INTEREST INCOME ........................................... $215,759 $217,871
INTEREST INCOME - MORTGAGE DISCOUNT ....................... 33,995 22,058
-------- --------
Total Income ........................................... $249,754 $239,929
-------- --------
EXPENSES:
INTEREST EXPENSE .......................................... $208,125 $209,961
INTEREST EXPENSE - AMORTIZATION OF
BOND OFFERING COSTS ..................................... 9,183 6,279
MANAGEMENT FEE ............................................ 1,542 1,542
AMORTIZATION OF ORGANIZATION COSTS ........................ 0 0
-------- --------
Total Expenses ......................................... $218,850 $217,782
-------- --------
NET INCOME BEFORE PROVISION
FOR STATE INCOME TAXES .................................... $ 30,904 $ 22,147
PROVISION FOR STATE TAXES ................................... 890 890
-------- --------
Net Income ............................................. $ 30,014 $ 21,257
======== ========
Net Income per share (563,750
shares outstanding) .................................. $ 0.05 $ 0.04
======== ========
See Notes to Financial Statements.
HOLCO MORTGAGE ACCEPTANCE CORPORATION-I
STATEMENTS OF CASH FLOW
(Unaudited)
For the Three
Months Ended
March 31,
--------------------
1996 1995
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Cash flows from operating activities:
Net income for the period ..................................... $ 30,014 $ 21,257
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of net GMNA certificate
discount .................................................. (33,995) (22,058)
Accretion of collateralized mortgage
obligation bond interest .................................. 0 0
Amortization of collateralized mortgage
obligation bond offering costs ............................ 9,183 6,279
Amortization of organization costs .......................... 0 0
Decrease (increase) in:
Interest Receivable ....................................... 1,165 151
Increase (decrease) in:
Accounts payable .......................................... 890 (2,667)
Interest payable .......................................... (313) (297)
--------- --------
Cash flows provided by operating activities ................... 6,944 2,665
--------- --------
Cash flows from investing activities:
Principal payments on GNMA certificates ........................ 22,045 20,096
--------- --------
Cash flows from financing activities:
Redemption of collateralized mortgage
obligation bonds ............................................. (20,000) (19,000)
Dividend payments to stockholders .............................. (5,637) (11,275)
--------- --------
Cash flows used in financing activities ........................ (25,637) (30,275)
--------- --------
Increase (decrease) in cash and cash
equivalents .................................................. 3,352 (7,514)
Cash and cash equivalents, beginning ............................. 87,334 88,971
--------- --------
Cash and cash equivalents, ending ................................ 90,686 81,457
========= ========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest ................................................... 208,438 210,258
State income taxes ......................................... 0 3,560
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
Note 1. In the opinion of the Corporation, the accompanying unaudited
financial statements contain all adjustments necessary to present
fairly the financial position as of March 31, 1996 and the results of
operations and changes in financial position for the three months then
ended.
Note 2. The results of operations for the three month period ended March 31,
1996 is not necessarily indicative of the results to be expected for
the full year.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
The Corporation's results of operations depend primarily on the amount
of interest paid on the Multifamily GNMA Certificates securing the Bonds, the
incidence of prepayments of principal made on the mortgage loans underlying such
Multifamily GNMA Certificates, the amount of earnings from re-investment of
distributions on such Multifamily GNMA Certificates and the amount of the
Corporation's expenses, including, among other things, interest payments on the
Bonds and the operating expenses of the Corporation. Substantially all of the
Corporation's expenses are interest payments due on the Bonds, management fees,
audit, legal, trustee and other related expenses, state and local taxes,
reporting requirement fees and costs of maintaining the Corporation's corporate
qualifications. It is anticipated that scheduled distributions of principal of
and interest on the Multifamily GNMA Certificates pledged as collateral for the
Bonds, together with the re-investment earnings thereon, will provide sufficient
funds to make timely payment of all amounts due on the Bonds in accordance with
their terms and to pay all of the operating expenses of the Corporation.
The Corporation's primary sources of funds with respect to the Bonds
are payments of principal of and interest on the Multifamily GNMA Certificates
pledged to secure the Bonds and re-investment earnings thereon. The Corporation
anticipates that it will have sufficient liquidity and capital resources to pay
all other expenses of the Corporation. The Corporation does not have any
significant source of funds other than distributions on the Multifamily GNMA
Certificates pledged to secure the Bonds and re-investment earnings thereon.
Virtually all of the assets and liabilities of the Corporation are monetary in
nature. Because the Bonds are secured by Multifamily GNMA Certificates which pay
interest at specified rates, and because payments on the Bonds are at specified
rates of interest, inflationary pressures are not expected to affect the ability
of the Corporation to meet its obligations as they become due.
The Corporation expects that scheduled distributions of principal of
and interest on the Multifamily GNMA Certificates pledged to secure the Bonds,
together with the re-investment earnings thereon, will at all times exceed the
aggregate of the amounts due as payments of principal of and interest on the
Bonds and operating expenses of the Corporation.
Because the amount of interest income that the Corporation receives on
the Multifamily GNMA Certificates, together with the re-investment earnings on
distributions of principal of and interest on the Multifamily GNMA Certificates,
may in some periods be less than the sum of the Corporation's interest expense
on the Bonds and operating expenses for such periods, the Corporation's ratio of
earnings to fixed charges for such periods may be less than one to one. Any such
income shortfalls will not, however, be cash flow shortfalls because principal
and interest payments on the Multifamily GNMA Certificates, together with
re-investment income thereon, will be available in sufficient amounts to meet
interest income shortfalls and to make required principal payments on the Bonds.
In addition, the amortization of issuance costs of the Bonds will reduce the
Corporation's ratio of earnings to fixed charges but will not affect the amount
of cash available to meet fixed charges.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) The following documents are filed as part of this Form 10-Q and
incorporated herein by this reference:
4.1- Specimen certificate representing Pass-Through Equity
Residual Certificates of the Registrant.*
4.2- Specimens of the Series A, B and C Collateralized Mortgage
Obligation Bonds.*
4.3 - Trust Indenture dated as of August 26, 1987.*
4.4- Form of Guaranty Agreement between the servicer and GNMA with
respect to Project Loan Securities under the GNMA I Program.**
28 - Form 10-K of registrant.***
* - Each of the foregoing was filed as an
Exhibit with Post Effective Amendment No.
1 on Form S-11 (Registration No. 33-13668)
filed on September 10, 1987.
** - The foregoing was filed as an Exhibit to
the Registration Statement on Form S-11,
No. 33-13668 on April 22, 1987.
*** - The foregoing was filed by the registrant
on March 28, 1996.
(b) No reports on Form 8-K have been filed during the fiscal quarter
for which this Form 10-Q is being filed.
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.
HOLCO MORTGAGE ACCEPTANCE CORPORATION-I
(Registrant)
Date: May 14, 1996 /s/ John T. Phair
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JOHN T. PHAIR
(VICE PRESIDENT, TREASURER
AND DIRECTOR)
CHIEF ACCOUNTING OFFICER
Date: May 14, 1996 /s/ Kevin C. Horton
--------------------------------
KEVIN C. HORTON
(VICE PRESIDENT, SECRETARY
AND DIRECTOR)