SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT IF 1934
Date of Report (Date of earliest event reported): February 8, 2001
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SOURCE CAPITAL CORPORATION
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(Exact name of registrant as specified in its charter)
Washington 0-12199 91-0853890
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(State or other (Commission (IRS Employer
Jurisdiction File Number) Identification No.)
of incorporation)
1825 N. Hutchinson Rd., Spokane, Washington 99212
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (509) 928-0908
ITEM 5. OTHER EVENTS
See the following press release wherein Source Capital
Corporation announced earnings for the year ended December 31,
2000, the declaration of a $.22 per share cash dividend, and
other significant developments.
News Release
Source Capital Corporation Contact Person:
1825 N. Hutchinson Rd. Lester L. Clark
P.O. Box 141146 Chief Financial Officer
Spokane, Washington 99214-1146 509-928-0908
www.sourcecapital.com
SOURCE CAPITAL DECLARES DIVIDEND,
EARNS $1,010,217 OR $.77 PER BASIC SHARE IN 2000
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Spokane, Wa - February 8, 2001 -- Source Capital Corporation (NASDAQ
SMALL CAP: SOCC), a commercial lender, today reported the Board of Directors
approved the payment on March 2, 2001 of a $.22 per share cash dividend to the
shareholders of record on February 19, 2001.
The Company recorded net income of $1,010,217 or $.67 per diluted
common share for the year ended December 31, 2000, a 4% decrease from net income
of $1,055,443 or $.66 per fully diluted common share for the year ended December
31, 1999.
Net income for the quarter ended December 31, 2000, was $211,577 or
$.15 per diluted common share, an 18% decrease from net income of $259,315 or
$.16 per fully diluted common share for the fourth quarter of 1999.
Real estate loans outstanding at December 31, 2000 increased 8% to
$46.1 million from $42.8 million a year earlier. While real estate loans
outstanding exceed the amount outstanding a year ago, the Company experienced
significant early loan pay downs in the fourth quarter of 2000 causing an 18%
decline of loans outstanding from the beginning of the quarter to December 31,
2000. The decline in loans outstanding during the fourth quarter was a
significant contribution to reduced fourth quarter earnings.
Leases outstanding declined 12% from $14.2 million at December 31, 1999
to $12.5 million at December 31, 2000. The decline in lease receivables during
the year 2000 is the result of the imposition of tighter credit standards and
increases in required lease rates during the year, culminating in the
discontinuance of approving any lease applications received from lease brokers
after November 1, 2000.
Loans and leases past due as to principal or interest more than ninety
days equaled 2.4% of net loans and leases outstanding. Other real estate owned
and repossessed equipment totaled approximately $679,000 at December 31, 2000,
as compared to $805,000 at September 30, 2000 and $594,000 at the end of the
prior year.
On February 1, 2001, one of two banks that provide a line of credit to
fund the Company's real estate lending operations informed the Company that it
had made a business decision to exit the mortgage warehouse lending business.
This decision encompasses all companies for which the bank has previously
provided credit facilities to fund new real estate loan originations, including
the Company. The Company's existing line of credit matures on April 30, 2001 and
the bank has indicated that it will seek to obtain approval of an extension of
the time for
Source Capital Corporation news page 2
an additional six month period which would expire on November 1, 2001, in order
to allow the Company time to seek alternative lines of credit from other
financial institutions. The Company has not yet had any discussions with other
potential lenders and consequently the Company is not able to determine at this
time whether such alternative lines of credit can be obtained.
Any trend or forward-looking information included in this press release
is subject to numerous possible risks and uncertainties. These include, but are
not limited to: the possibility of adverse economic developments which may,
among other things, increase default and delinquency risks in Source Capital's
loan and lease portfolios; shifts in interest rates which may result in lower
interest rate margins; changes in accounting policies; changes in the monetary
and fiscal policies of the federal government; changes in the regulatory and
competitive environment, and other risks. Source Capital Corporation's future
results may differ materially from historical results as well as from any trend
or forward-looking information included in this release. This news release
should be read in conjunction with Source Capital's annual report on form 10-KSB
for the fiscal year ended December 31,1999, its form 10-QSB report for the
quarter ended September 30, 2000, and other Source Capital Corporation filings
with the Securities and Exchange Commission.
Source Capital Corporation is a commercial financial services company
specializing in commercial real estate lending and equipment leasing. The
Company is headquartered in Spokane, Washington with lending offices in Phoenix,
Portland, Seattle and Spokane.
Source Capital Corporation news page 3
SOURCE CAPITAL CORPORATION
CONSOLIDATED SUMMARY INCOME STATEMENTS
QUARTER ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
2000 1999 2000 1999
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Finance income:
Interest $ 2,187,057 $ 1,682,766 $ 8,368,672 $ 6,596,089
Lease finance income 587,623 639,552 2,411,029 2,675,086
Interest expense (1,256,154) (1,004,544) (4,996,562) (4,091,394)
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Net financing revenue 1,518,526 1,317,774 5,783,139 5,179,781
Gain on sale of investments,
leases, and real estate -- 102,171 184,553 400,443
Provision for loan and lease losses (416,556) (154,741) (1,249,603) (578,353)
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Income before operating expenses 1,101,970 1,265,204 4,718,089 5,001,871
Operating expenses:
Employee compensation
and benefits 479,095 554,167 2,024,301 2,100,567
Other expenses 365,016 313,722 1,333,798 1,289,069
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Total non-interest expenses 844,111 867,889 3,358,099 3,389,636
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Income before income taxes and
extraordinary item 257,859 397,315 1,359,990 1,612,235
Income tax provision 134,030 138,000 504,413 559,007
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Income before extraordinary item 123,829 259,315 855,577 1,053,228
Extraordinary item - gain on
extinguishment of subordinated
debentures (net of tax) 87,748 -- 154,640 2,215
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Net income $ 211,577 $ 259,315 $ 1,010,217 $ 1,055,443
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Earnings per common share - basic
Income before extraordinary item .10 .19 .65 .78
Extraordinary item .06 .00 .12 .00
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Net income per share basic $ .16 $ .19 $ .77 $ .78
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Earnings per common share diluted:
Income before extraordinary item .10 .16 .59 .66
Extraordinary item .05 .00 .08 .00
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Net income per share assuming dilution $ .15 $ .16 $ .67 $ .66
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Weighted average common shares outstanding:
Basic 1,302,715 1,359,705 1,320,231 1,359,221
Assuming dilution 1,885,809 2,119,757 1,952,115 2,116,244
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Source Capital Corporation news page 4
SOURCE CAPITAL CORPORATION
Consolidated Summary Balance Sheets December 31, December 31,
2000 1999
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ASSETS
Loans and leases receivable, net $58,550,791 $57,058,253
Accrued interest receivable 594,065 326,190
Cash and cash equivalents 644,476 590,630
Investment securities 152,467 195,684
Other real estate and equipment owned 679,027 594,366
Other assets 766,124 1,141,887
Deferred income taxes 989,500 1,206,560
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Total assets $62,376,450 $61,113,570
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LIABILITIES
Notes payable to bank $39,792,517 $36,781,267
Long-term debt 3,064,940 3,103,269
Accounts payable and accrued expenses 874,551 879,209
Customer deposits 554,913 723,005
Convertible subordinated debentures 4,000,000 5,950,000
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Total liabilities 42,286,921 45,436,750
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STOCKHOLDERS' EQUITY 14,089,529 13,676,820
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Total liabilities and stockholders'
Equity $62,376,450 $61,113,570
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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 hereunto duly authorized.
Source Capital Corporation
(Registrant)
Date February 09, 2001 By /s/ Lester L. Clark
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Lester L. Clark, Vice President,
Treasurer and Secretary (Principal
Accounting and Financial Officer)