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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

                                        (Mark One)
[x]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2005

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: 1-12109
 

DELTA FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
  
11-3336165
(State or other jurisdiction of
  
(I.R.S. Employer
incorporation or organization)
  
Identification No.)

1000 Woodbury Road, Suite 200, Woodbury, New York 11797

(Address of registrant’s principal executive offices including ZIP Code)

(516) 364 - 8500

(Registrant’s telephone number, including area code)

No Change

(Former name, former address and former fiscal year, if changed since last report)

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 [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ]  No [ x ]

As of May 4, 2005, 20,310,386 shares of the Registrant’s common stock, par value $0.01 per share, were outstanding.

INDEX TO FORM 10-Q


 
Page No.
PART I - FINANCIAL INFORMATION
  
     
Item 1.
Financial Statements
  
     
 
Consolidated Balance Sheets as of March 31, 2005 (unaudited) and December 31, 2004
1
     
 
Consolidated Statements of Operations for the three months ended
  
 
March 31, 2005 and 2004 (unaudited)
2
     
   
 
ended March 31, 2005 (unaudited)
3
     
 
Consolidated Statements of Cash Flows for the three months ended
  
 
March 31, 2005 and 2004 (unaudited)
4
     
 
5
     
Item 2.
18
     
Item 3.
44
     
Item 4.
48
     
PART II - OTHER INFORMATION
  
     
Item 1.
48
     
Item 2.
50
     
Item 3.
50
     
Item 4.
50
     
Item 5.
50
     
Item 6.
50
     
51





PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements.

DELTA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except for share data)

   
March 31,
2005
  
    December 31,      2004
  
   
(Unaudited)
      
Assets:
          
Cash and cash equivalents
  
$
7,281
  
$
5,187
  
               
Mortgage loans held for investment, net of discounts and deferred
   origination fees
    
2,933,994
    
2,351,272
  
        Less: Allowance for loan losses
    
(16,808
)
  
(10,278
)
     Mortgage loans held for investment, net
    
2,917,186
    
2,340,994
  
               
Trustee receivable
    
44,332
    
30,197
  
Accrued interest receivable
    
15,402
    
12,280
  
Excess cashflow certificates
    
14,059
    
14,933
  
Equipment, net
    
4,928
    
4,298
  
Accounts receivable
    
9,164
    
6,453
  
Prepaid and other assets
    
31,532
    
26,125
  
Deferred tax asset
    
51,089
    
50,326
  
     Total assets
  
$
3,094,973
  
$
2,490,793
  
               
Liabilities and Stockholders’ Equity
              
Liabilities:
              
Bank payable
  
$
1,589
  
$
1,110
  
Warehouse financing
   
118,693
    
135,653
  
Financing on mortgage loans held for investment, net
    
2,845,031
    
2,236,215
  
Other borrowings
    
2,941
    
3,330
  
Accrued interest payable
    
5,828
    
4,282
  
Accounts payable and other liabilities
    
27,751
    
23,023
  
     Total liabilities
    
3,001,833
    
2,403,613
  
               
Stockholders’ Equity:
              
Common stock, $.01 par value. Authorized 49,000,000 shares;
  20,425,787 and 20,403,187 shares issued and 20,308,987 and  20,286,387 shares outstanding at
  March 31, 2005 and December 31, 2004, respectively
    
204
    
204
  
Additional paid-in capital
    
119,565
    
119,451
  
Accumulated deficit
    
(27,906
)
  
(28,950
)
Accumulated other comprehensive income (loss), net of taxes
    
2,595
    
(2,207
)
Treasury stock, at cost (116,800 shares)
    
(1,318
)
  
(1,318
)
     Total stockholders’ equity
    
93,140
    
87,180
  
Total liabilities and stockholders’ equity
  
$
3,094,973
  
$
2,490,793
  
               
See accompanying notes to consolidated financial statements.

1

DELTA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands, except share and per share data)

   
Three Months Ended March 31,
  
   
2005
  
2004
  
           
Interest income
  
$
54,876
  
$
7,284
  
Interest expense
    
27,783
    
1,913
  
     Net interest income
    
27,093
    
5,371
  
Provision for loan losses
    
6,864
    
432
  
     Net interest income after provision for loan losses
    
20,229
    
4,939
  
               
Non-interest income:
              
     Net gain on sale of mortgage loans
    
5,328
    
7,740
  
     Other income
    
2,815
    
96
  
    Total non-interest income
    
8,143
    
7,836
  
               
Non-interest expense:
              
     Payroll and related costs
    
15,154
    
11,559
  
     General and administrative
    
9,795
    
6,129
  
     (Gain) loss on derivative instruments
    
(16
)
  
4,724
  
    Total non-interest expense
    
24,933
    
22,412
  
               
Income (loss) before income tax expense (benefit)
    
3,439
    
(9,637
)
     Provision for income tax expense (benefit)
    
1,380
    
(3,722
)
Net income (loss)
  
$
2,059
  
$
(5,915
)
               
Other Comprehensive Income (Loss):
              
     Net unrealized holding gains on derivatives arising during the period, net of tax
    
4,802
    
--
  
     Other comprehensive income (loss)
  
$
6,861
  
$
(5,915
)