FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[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
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 0-20832
DEGEORGE FINANCIAL CORPORATION
(FORMERLY MILES HOMES, INC.)
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(Exact name of registrant as specified in its charter)
DELAWARE 41-1625724
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
99 REALTY DRIVE, CHESHIRE, CONNECTICUT 06410
- -------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(203) 699-3400
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(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 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
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Shares of Common Stock outstanding as of May 9, 1997: 10,810,193
DEGEORGE FINANCIAL CORPORATION
INDEX TO FORM 10-Q
PART I. FINANCIAL INFORMATION PAGE NO.
ITEM 1. FINANCIAL STATEMENTS:
Consolidated Balance Sheets as of March 31, 3
1997 and December 31, 1996
Consolidated Statements of Operations for the 4
three months ended March 31, 1997 and 1996
Consolidated Statements of Cash Flows for the 5
three months ended March 31, 1997 and 1996
Notes to Consolidated Financial Statements 6-10
ITEM 2. Management's Discussion and Analysis of Financial 11-14
Condition and Results of Operations
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 15
2
DEGEORGE FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
($ IN THOUSANDS)
(Unaudited)
March 31, December 31,
1997 1996
----------- ------------
ASSETS
Cash and cash equivalents $ 3,264 $ 3,737
Notes receivable, net 28,820 26,726
Receivable from related parties 1,070 1,047
Inventory 7,526 7,833
Prepaid expenses and other assets 3,084 4,158
Deposits 18,596 19,249
Mortgage servicing rights 4,371 5,982
Senior Bond collateral fund 3,029 3,008
Real estate owned 7,559 6,576
Property, plant and equipment, net 12,469 12,191
Property held for sale, net 369 417
Assets of discontinued operations 2,019 2,549
Deferred income taxes 336 336
Intangible assets, net 1,893 2,006
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Total assets $ 94,405 $ 95,815
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 10,764 $ 7,053
Accrued construction costs and unearned
revenue on sold notes receivable 26,186 28,857
Accrued expenses 5,473 4,399
Customer deposits 846 821
12% Senior notes 43,772 43,738
Notes payable 4,156 3,527
Capital lease obligations 810 925
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Total liabilities 92,007 89,320
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Commitments and contingencies (Note 8)
Stockholders' equity:
Common Stock; par value $.10, 25,000,000 shares
authorized, 10,810,193 shares outstanding 1,081 1,081
Paid in capital 47,384 47,384
Accumulated deficit (46,067) (41,970)
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Total stockholders' equity 2,398 6,495
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Total liabilities and stockholders' equity $ 94,405 $ 95,815
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See accompanying notes to consolidated financial statements
3
DEGEORGE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDING MARCH 31, 1997 AND 1996
($ IN THOUSANDS EXCEPT PER SHARE DATA)
(Unaudited)
1997 1996
---- ----
Net housing revenue $ 15,986 $ 9,587
Financial services revenue 744 841
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Total revenue 16,730 10,428
Costs and expenses:
Cost of sales 11,290 6,900
Selling 3,895 2,577
General & administrative 3,865 3,708
Provision for credit losses 163 359
Interest expense 1,587 1,593
Other (income) expense 27 (468)
--------- ---------
--------- ---------
Income (loss) from continuing operations
before income taxes (4,097) (4,241)
Income tax benefit (provision) -- --
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Income (loss) from continuing operations (4,097) (4,241)
Discontinued operations-Patwil Homes, Inc.
Income (loss) from operations -- 312
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Net income (loss) $ (4,097) $ (3,929)
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---------- ---------
Earnings per common share:
Income (loss) from continuing operations (0.38) (0.39)
Income (loss) from discontinued operations -- 0.03
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Net income (loss) $ (0.38) $ (0.36)
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Weighted average number of common shares outstanding 10,810,193 10,810,193
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--------- --------
See accompanying notes to consolidated financial statements
4
DEGEORGE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDING MARCH 31, 1997 AND 1996
($ IN THOUSANDS)
(Unaudited)
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (4,097) $ (3,929)
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Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 4,329 2,458
Provision for credit losses 163 359
Provision for sales promotions and incentives 372 698
Loss (gain) on sale of property, plant and equipment -- (156)
Loss (gain) from discontinued operations 53 (312)
Decrease (increase) in other operating assets (Note 6) (27,584) (27,720)
Increase (decrease) in other operating liabilities (Note 6) 2,139 3,749
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Total adjustments (20,528) (20,924)
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Net cash provided (used) by operating activities of:
Continuing operations (24,625) (24,853)
Discontinued operations 477 (722)
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Net cash provided (used) by operating activities (24,148) (25,575)
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CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of property, plant and equipment -- 5,333
Purchase of property, plant and equipment (487) (2,295)
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Net cash provided (used) by investing activities (487) 3,038
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sales of construction loans receivable,
net of discounting and holdback 23,648 24,036
Principal payments on notes payable - other (44) --
Borrowings on notes payable - other 673 36
Principal payments on capital leases (115) (170)
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Net cash provided (used) by financing activities 24,162 23,902
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Net change in cash and cash equivalents (473) 1,365
Cash and cash equivalents - beginning of the year 3,737 2,838
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Cash and cash equivalents - end of the year $ 3,264 $ 4,203
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Supplemental disclosures of cash flow information:
Interest paid $ 206 $ 133
Income taxes paid (refunded), net $ 29 $ (33)
See accompanying notes to consolidated financial statements
5
DEGEORGE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 -- BASIS OF PRESENTATION:
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-Q instructions and in the opinion of
management, contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of March 31,
1997, the results of operations for the three months ended March 31, 1997 and
1996 and cash flows for the three months ended March 31, 1997 and 1996. The
results of operations for the three months ended March 31, 1997 are not
necessarily indicative of the results to be expected for the full year.
These results have been determined on the basis of generally accepted
accounting principles and practices applied consistently with those used in
the preparation of the Company's 1996 Annual Report on Form 10-K.
DeGeorge Financial Corporation (the "Company") is a holding company whose
significant assets are its investment in its wholly owned operating
subsidiaries DeGeorge Home Alliance, Inc. ("DeGeorge"), and its wholly owned
subsidiary, Plymouth Capital Company, Inc. ("Plymouth Capital"); DeGeorge
Homes of Florida, Inc. ("DeGeorge/Florida") and DeGeorge Homes of New
England, Inc. ("DeGeorge/New England"). Pursuant to a vote of a majority of
its stockholders at the Annual Meeting of Stockholders on November 7, 1996,
the name of the Company was changed to DeGeorge Financial Corporation from
Miles Homes, Inc. DeGeorge, formerly Miles Homes Services, Inc., changed its
name on October 29, 1996. The combined assets, liabilities, earnings and
equity of DeGeorge, Plymouth Capital, DeGeorge/Florida and DeGeorge/New
England are substantially equivalent to the assets, liabilities, earnings and
equity of the Company on a consolidated basis. Accordingly, separate
financial statements and other disclosures concerning DeGeorge, Plymouth
Capital, DeGeorge/Florida and DeGeorge/New England are not deemed to be
material to investors. During 1996, the Company essentially completed the
phase out of operations for its wholly owned subsidiary, Patwil Homes, Inc.
("Patwil Homes"). See "Note 9 - Discontinued Operations".
Certain information and footnote disclosures normally included in
financial statements presented in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that
the accompanying consolidated financial statements be read in conjunction
with the financial statements and notes thereto incorporated by reference in
the Company's Annual Report on Form 10-K.
Certain reclassifications have been made to the financial statements for
the three months ended March 31, 1996 to conform to the presentation for the
three months ended March 31, 1997.
6
NOTE 2 -- NOTES RECEIVABLE:
Notes receivable at March 31, 1997 and December 31, 1996 are as follows
(in thousands):
MARCH 31, DECEMBER 31,
1997 1996
--------- ------------
Contractual value of notes receivable $39,556 $37,137
Less: unearned income (9,193) (8,757)
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Total 30,363 28,380
Less:
Allowance for sales promotions
and incentives (699) (878)
Allowance for credit losses (671) (675)
Deferred loan processing fees, net (173) (101)
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Notes receivable, net $28,820 $26,726
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NOTE 3 -- SALE AND SERVICING OF NOTES RECEIVABLE:
Amounts owed to the Company under the holdback provisions of the
Construction Loan Purchase and Servicing Agreement entered into with a
mortgage financing company on April 14, 1995 (the "Construction Loan
Agreement") are included in deposits, which are stated net of estimated
credit losses on construction loans sold at March 31, 1997 and December 31,
1996, as follows (in thousands):
MARCH 31, DECEMBER 31,
1997 1996
--------- ------------
Holdback $21,529 $22,370
Allowance for estimated credit losses (3,303) (3,542)
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Net holdback (included in deposits) $18,226 $18,828
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Mortgage servicing rights at March 31, 1997 and December 31, 1996 are as
follows (in thousands):
MARCH 31, DECEMBER 31,
1997 1996
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Balance, beginning of year $5,982 $ 3,036
Internally originated 2,314 13,557
Amortization (3,925) (10,611)
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Mortgage servicing rights $4,371 $ 5,982
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NOTE 4 -- INVENTORY:
Inventory at March 31, 1997 and December 31, 1996 is as follows (in
thousands):
MARCH 31, DECEMBER 31,
1997 1996
--------- ------------
Raw materials $2,385 $4,241
Construction in progress and
model homes 5,141 3,592
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Inventory $7,526 $7,833
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------ ------
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NOTE 5 -- INCOME TAXES:
Significant components of deferred income taxes at March 31, 1997 and
December 31, 1996 are as follows (in thousands):
MARCH 31, DECEMBER 31,
1997 1996
--------- ------------
Credit and refinancing allowances $ 2,378 $ 2,544
Goodwill 1,793 1,832
Net operating loss carryforward 8,722 7,012
Other, net 2,776 2,649
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Total gross deferred tax assets 15,669 14,037
Less: valuation allowance (15,333) (13,701)
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Deferred income taxes $ 336 $ 336
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At March 31, 1997 and December 31, 1996, the Company had net operating
loss carryforwards for federal income tax purposes of $21.8 million and $17.5
million, respectively, which will fully expire by the year 2012.
Income tax benefit (provision) for the three months ended March 31, 1997
and 1996 are as follows (in thousands):
THREE MONTHS ENDED
MARCH 31
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1997 1996
---- ----
Statutory U.S. tax rate $1,387 $1,336
State taxes, net of federal income tax benefit 245 236
Valuation allowance (1,632) (1,572)
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Income tax benefit (provision) $ -0- $ -0-
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During the quarter ended March 31, 1997 the Company did not record a tax
provision or benefit. The first quarter net loss of $4.1 million resulted in
an increase in net operating loss carryforwards and a corresponding increase
in the valuation reserve of $1.6 million.
NOTE 6 -- CONSOLIDATED STATEMENTS OF CASH FLOWS:
Changes in other operating assets and liabilities in the Consolidated
Statements of Cash Flows are as follows (in thousands):
THREE MONTHS ENDED
MARCH 31
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1997 1996
---- ----
Decrease (increase) in:
Notes receivable, net $(26,277) $(17,431)
Receivable from related parties (23) (39)
Inventory 307 (1,136)
Prepaid expenses and other assets 1,074 (5,934)
Deposits 653 (32)
Mortgage servicing rights (2,314) (2,091)
Senior Bond collateral fund (21) --
Real estate owned (983) (1,057)
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Total decrease (increase) in
other operating assets $(27,584) $(27,720)
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8
Increase (decrease) in:
Accounts payable and accrued expenses $ 4,785 $ (6)
Accrued construction costs and unearned
revenue on sold notes receivable (2,671) 3,108
Customer deposits 25 11
Payable to related parties -- 636
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Total increase (decrease) in
other operating liabilities $2,139 $3,749
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NOTE 7 -- SUMMARIZED FINANCIAL INFORMATION:
Summarized financial information of DeGeorge as of March 31, 1997 and
December 31, 1996 and for the three months ended March 31, 1997 and 1996 is
as follows (in thousands):
MARCH 31, DECEMBER 31,
1997 1996
--------- ------------
Total assets $ 99,210 $100,743
Total liabilities 90,877 88,083
Total assets include intercompany receivables of $24.7 million and $25.2
million, respectively, at March 31, 1997 and December 31, 1996.
THREE MONTHS ENDED
MARCH 31
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1997 1996
---- ----
Net revenue $16,730 $9,724
Net income (loss) (4,040) (3,897)
NOTE 8 -- COMMITMENTS AND CONTINGENCIES:
There has been no significant change in the status of lawsuits or
commitments described in Note 13 to the Consolidated Financial Statements
contained in the Company's 1996 Annual Report on Form 10-K.
NOTE 9 -- DISCONTINUED OPERATIONS:
Summarized below are the assets of discontinued operations (in
thousands):
MARCH 31, DECEMBER 31,
1997 1996
--------- ------------
Cash $ 468 $ 695
Notes receivable 85 182
Inventory 210 357
Prepaid expenses and other assets 106 124
Costs of uncompleted contracts in
excess of related billings 349 349
Assets held for sale, net 801 842
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Assets of discontinued
operations $2,019 $2,549
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9
Condensed income (loss) from discontinued operations for the three
months ended March 31, 1997 and 1996 is as follows (in thousands):
THREE MONTHS ENDED
MARCH 31
------------------
1997 1996
---- ----
Net revenues $ 171 $ 3,010
Cost of sales (150) (2,698)
Selling, general and administrative expenses (74) --
Discontinued operations - income (loss) $ (53) $ 312
Loss from discontinued operations for the quarter ended March 31,
1997 is reflected in other (income) expense.
NOTE 10 -- SIGNIFICANT TRANSACTIONS:
In March 1997, the tangible net worth covenant in the Construction Loan
Agreement (the "Covenant") was amended to reflect the Company's present and
anticipated financial condition. The amendment revised the Covenant for all
periods retroactive to the date of the Construction Loan Agreement. The Company
is currently in compliance with the revised Covenant.
NOTE 11 -- SUBSEQUENT EVENTS:
On January 12, 1997, the Company entered into a contractual agreement to
sell its owned distribution facility in Owatonna, Minnesota for $1.1 million
in cash, part of which will be used to retire a capital lease with an
outstanding principal balance of $810,000. The sale closing occurred on
April 18, 1997 and resulted in a gain of $182,000.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
OVERVIEW
The following discussion makes various comparisons relevant to the
results of operations of the Company for the quarters ended March 31,
1997 and 1996 with regard to continuing and discontinued operations.
Discontinued operations relate to the phase out of operations for
Patwil Homes, which was essentially completed during 1996. Loss from
discontinued operations during 1997 is included in other (income)
expense.
REVENUE
Total revenue from continuing operations for the quarter ended March
31, 1997 increased by $6.3 million, or 60.4%, to $16.7 million from
$10.4 million for the same period in 1996. Net housing revenue
increased to $16.0 million for the first quarter of 1997 from $9.6
million for the quarter ended March 31, 1996, an increase of $6.4
million, or 66.7%. The first quarter revenue increase was primarily
attributable to the significant increase in initial shipment volume
activity for standard orders, which nearly doubled in the first
quarter of 1997 over the similar period in 1996 (195 in 1997 versus 99
in 1996). Sales of turnkey homes also increased, contributing an
additional $2.0 million to net housing revenue during the first
quarter of 1997, an increase of $1.3 million over the $700,000
recorded in the first quarter of 1996.
Financial services revenue for the first quarter of 1997 decreased
slightly, to $700,000, from $800,000 for the quarter ended March 31,
1996, reflecting a decrease in interest income on a reduced portfolio
of customer loan accounts attributable to sales of accounts to the
mortgage financing company pursuant to the Construction Loan Agreement.
COST OF SALES
Cost of sales from continuing operations, which includes cost of
materials, warehousing, material handling, shipping and construction
monitoring, increased $4.4 million, to $11.3 million for the three
months ended March 31, 1997, as compared to $6.9 million for the
similar period in 1996. The increase in cost of sales is directly
attributable to the increase in initial shipments to customers. As a
percentage of net housing revenue, cost of sales for the first quarter
was down slightly (70.6% in 1997 as compared to 72.0% in 1996). The
reduction in cost of sales as a percentage of net housing revenue in
the first quarter reflects the reduced impact of fixed infrastructure
costs on net housing revenue, which is presently recognized as
shipments are made.
SELLING EXPENSES
Selling expenses from continuing operations during the first quarter
increased by $1.3 million, to $3.9 million in 1997 from $2.6 million
in 1996. The largest component of this increase is reflected in the
recognition of $1.1 million of direct response advertising costs,
including the write-off of $700,000 of production costs that were
included in prepaid
11
expenses and other assets at December 31, 1996. These costs relate
to the Company's initial and subsequent airings of its long-form
television information commercial ("infomercial"), which began
airing in January 1997. Other components of the comparative first
quarter increase were $200,000 of short-form television advertising
in new market areas that will be accessible through local product
fulfillment and $200,000 of commissions paid to sales
representatives attributable to increased first quarter shipments.
Increases in selling expenses were offset by $200,000 of reduced
recruitment costs and savings achieved through the elimination of
reimbursed expenses to sales representatives.
At March 31, 1997 and 1996, respectively, DeGeorge had 173 and 130
full-time sales representatives.
GENERAL AND ADMINISTRATIVE
General and administrative expenses from continuing operations were
$3.9 million and $3.7 million, respectively, for the three months
ended March 31, 1997 and 1996. The $200,000 increase in the first
quarter is principally attributable to increased costs incurred in
connection with processing and servicing increased initial shipments
to customers.
INTEREST EXPENSE
Interest expense for the first quarters of 1997 and 1996 was
essentially unchanged at $1.6 million for both periods, of which $1.3
million related to interest costs on the 12% Senior Notes due 2001.
OTHER (INCOME) EXPENSE
Other income decreased by $500,000 during comparative first quarters
for 1997 and 1996, $200,000 of which relates to costs associated with
the remarketing of real estate owned during 1997. Other expense in
the first quarter of 1997 also reflects the loss from discontinued
operations (less than $100,000 for 1997), which was reported
separately in 1996. In addition, during 1996, the Company recorded
$200,000 of gain on sales of fixed assets, principally from the sale
of the Company's former corporate offices in Plymouth, Minnesota.
INCOME TAXES
On January 1, 1993, the Company adopted FAS 109 which provides for the
recognition of deferred tax assets and liabilities based on expected
future tax consequences of events that have been recognized in the
Company's financial statements. As of December 31, 1996, the Company
had accumulated a gross deferred tax asset of $14.0 million, against
which the Company had recorded a valuation allowance of $13.7 million,
resulting in the recognition of deferred income taxes of $300,000.
During the quarter ended March 31, 1997, the Company did not record a
tax provision or tax benefit. The first quarter net loss of
$4.1 million resulted in an increase in net operating loss
carryforwards and a corresponding increase in the valuation reserve
of $1.6 million.
The Company presently has a September 30 fiscal year end for tax
reporting purposes. The Company has requested and the Internal
Revenue Service has approved a change in the tax year end to December
31. At March 31, 1997 and December 31, 1996, the
12
Company had net operating loss carryforwards for federal income tax
purposes of $21.8 million and $17.5 million, respectively, which
will fully expire by the year 2012.
NET LOSS
Loss from continuing operations for the quarter ended March 31, 1997
was $4.1 million or $0.38 per share, as compared to a loss of $4.2
million, or $0.39 per share, for the first quarter of 1996. During
the first quarter of 1996, income from discontinued operations of
$300,000 was recorded, reducing net loss to $3.9 million, or $0.36 per
share. In the first quarter of 1997, the Company recorded a charge of
less than $100,000 from discontinued operations, which amount is
included in other (income) expense.
QUARTERLY RESULTS
Results of operations for the first quarter of 1997 over 1996 reflects
an increase in net housing revenue of $6.4 million and a corresponding
increase in gross margin of $1.9 million. The net housing revenue and
margin increases are primarily attributable to the increase in initial
shipment volume of standard units to customers, which rose to 195
units in 1997 as compared to 99 units in 1996. Sales of turnkey homes
also contributed $1.3 million to the increase in first quarter
revenue. The increased first quarter margin was offset principally by
$1.3 million of charges to selling expenses, including $700,000 of
previously capitalized production costs that were incurred in the
development phase of the infomercial. Also included in the first
quarter 1997 selling charges were media costs related to initial and
subsequent airings of the infomercial and costs incurred in connection
with distributing 20,000 fulfillment kits (consisting of a videotape
and informational material) to infomercial viewers who responded to
the infomercial offer.
During the latter part of 1996, DeGeorge revised its field sales
compensation structure, revamped its recruitment process, completed
its name changeover and established a first quarter 1997 media
schedule. The changes to the field sales compensation structure and
recruitment processes were designed to attract and retain a high
calibre force of sales professionals. The implementation of these
changes resulted in a turnover of previous sales representatives and
an interruption in the flow of orders during the first quarter, though
leads generated during the quarter were up 33.4% over the first
quarter of 1996. In addition, extensive sales orientation and
training of new sales representatives continued throughout the quarter
and the flow of gross orders resumed in April 1997, exceeding the
volume of orders received in April 1996. During the first quarter of
1997, gross orders were 612 as compared to 1,147 for the similar
period in 1996 resulting in a reduction in the inventory of active
orders to 664 at March 31, 1997 as compared to 1,372 at March 31,
1996. Although the first quarter order flow and quarter end inventory
of active orders are down from 1996, management believes that the
conversion rate of orders in process could exceed prior years'
performance, in large measure due to the standardization of DeGeorge
product offerings and order packets, which greatly simplified the order
process and increased the potential for a shortened approval and
fulfillment process.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1997, cash and cash equivalents were $3.3 million as
compared to $3.7 million at December 31, 1996. Since April 1995,
the Company has been selling its construction loans to a mortgage
financing company pursuant to the Construction Loan Agreement, under
which the Company may, at its discretion and subject to certain
13
criteria, sell all of its construction loans. These loans are sold
at face value, discounted to provide a return of 11/2% over prime
(10% at March 31, 1997). The Construction Loan Agreement also
established a deposit account for retention of a portion of the
proceeds from the sale of construction loans as security for credit
losses. The balance of deposits at March 31, 1997 and December 31,
1996 was $21.5 million and $22.3 million, respectively. Deposits
are reflected in the financial statements net of provision for
estimated credit losses ($3.3 million and $3.5 million at March 31,
1997 and December 31, 1996, respectively) on construction loans sold.
During the three months ended March 31, 1997, the Company sold $24.5
million, net face value ($26.2 million gross sales less $1.7 million
of repurchased accounts), of construction loans pursuant to the
Construction Loan Agreement. Net proceeds to the Company for the
first quarter were $23.1 million, after discounting of $2.2 million
and net return of deposits of $800,000 (retainage on sales of $3.2
million less returns of $4.0 million relative to loan payoffs).
As of March 31, 1997, the Company was servicing $182.3 million, face
value, of previously sold construction loans. The agreement is
cancelable by either party upon six months written notice.
14
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION:
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: none
(b) Reports on Form 8-K:
There have been no reports on Form 8-K since the filing of
the Company's 1996 Annual Report on Form 10-K.
15
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.
DEGEORGE FINANCIAL CORPORATION
(Registrant)
Dated: May 9, 1997
By: /S/ SALVATORE A. BUCCI
-----------------------
Salvatore A. Bucci
Senior Vice President and
Chief Financial Officer
16