FOR IMMEDIATE RELEASE
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July 24, 1998
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POINT WEST CAPITAL CORPORATION
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ANNOUNCES SECOND QUARTER RESULTS
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AND FINANCIAL CONDITION
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SAN FRANCISCO-(July 24, 1998) Point West Capital Corporation (Nasdaq
Symbol: PWCC) today reported a net loss of $85,000 (or a basic loss of ($0.03)
per share based on 3,253,324 weighted average shares of common stock
outstanding) for the quarter ended June 30, 1998, compared to net income of
$232,000 (or basic earnings of $0.07 per share based on 3,538,269 weighted
average shares of common stock outstanding) for the quarter ended June 30, 1997.
The Company also reported a net loss of $165,000 (or a basic loss of ($0.05) per
share based on 3,253,324 weighted average shares of common stock outstanding)
for the six months ended June 30, 1998, compared to net income of $1.3 million
(or basic earnings of $0.35 per share based on 3,794,597 weighted average shares
of common stock outstanding) for the six months ended June 30, 1997. The Company
also reported total comprehensive income for the three and six month periods
ended June 30, 1998 of $2.5 million and $5.5 million, respectively. The Company
reported a book value of $8.23 per share.
The Company's results of operations for the three and six months ended
June 30, 1998 are not comparable to the three and six months ended June 30,
1997, primarily as a result of the volume of assets sold during the first half
of 1997 and the establishment of two new businesses in the second half of 1997.
Ward Rotter, the Company's Chief Financial Officer, commented that we
are pleased to have kept the operating losses under control
while we grow our new businesses and pursue other business opportunities and are
pleased with the condition of our balance sheet.
The Company is a specialty financial services company. During the
second half of 1997, the Company formed and began operating Fourteen Hill
Capital, L.P. ("Fourteen Hill Capital"), an SBA licensed small business
investment company, which focuses on providing capital to telecommunications,
e-commerce and internet related companies and Allegiance Capital, LLC
("Allegiance"), which lends funds to funeral home and cemetery owners.
At June 30, 1998, Fourteen Hill Capital had loans and equity
investments outstanding for which it had originally provided funds in the
aggregate amount of $6.4 million. At June 30, 1998 such loans and investments
were carried on the balance sheet at $15.4 million. The difference between such
carrying value and the original funds provided is reflected as "Comprehensive
Income -- Net Unrealized Investment Gains" in stockholders' equity. At June 30,
1998 such unrealized gains were $8.3 million (net of a $700,000 tax provision),
compared to $2.6 million at December 31, 1997. Any gains or losses for such
investments will be recognized on the income statement, if ever, upon the sale
of such investments.
Allegiance had two loans outstanding at June 30, 1998 in the aggregate
principal amount of $5.9 million, one with a fixed interest rate per annum of
9.4% and the other with a fixed interest rate of 9.8% per annum.
The Company continues to evaluate other strategic business
opportunities. Fourteen Hill Capital and Allegiance are indicative of the types
of business opportunities the Company intends to pursue.
The following is summary balance sheet information as of June 30, 1998:
Cash and cash equivalents.......................................................................$2,354,067
Restricted cash (1).............................................................................$3,700,148
Investment securities..........................................................................$14,846,483
Loans receivable, net of unearned income........................................................$6,575,908
Assets held for sale...............................................................................$74,812
Purchased life insurance policies..............................................................$34,539,544
Non-marketable securities.......................................................................$3,732,148
Total assets...................................................................................$66,880,110
Reserve for equity interest in wholly owned
financing subsidiary.........................................................................$407,324
Long term notes payable........................................................................$38,528,914
Total liabilities..............................................................................$40,099,758
Comprehensive income -- net unrealized
investment gains...........................................................................$8,276,263
Retained deficit..............................................................................$(8,161,517)
Total stockholders' equity.....................................................................$26,780,352
<FN>
(1) Restricted cash is pledged by the Company's wholly owned financing
subsidiary, Dignity Partners Funding Corp. I, to secure the repayment of long
term notes payable.
</FN>
(KEYWORD CALIFORNIA AND INDUSTRY KEYWORD: SPECIALTY FINANCE EARNINGS).
CONTACTS: POINT WEST CAPITAL CORPORATION, SAN FRANCISCO.
Alan B. Perper, 415/394-9467