FIRST INVESTORS FINANCIAL SERVICES GROUP INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended January 31, 2003

	OR

o	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 0-26686

First Investors Financial Services Group, Inc.

(Exact Name of Registrant as Specified in its Charter)

Texas		76-0465087
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

675 Bering Drive, Suite 710 Houston, Texas		77057
(Address of Principal Executive Offices)		(Zip Code)

(713) 977-2600
(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 ý No o.

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Shares Outstanding At February 28, 2003
Common Stock - $.001 Par Value		5,026,269

FIRST INVESTORS FINANCIAL SERVICES GROUP, INC.

AND SUBSIDIARIES

FORM 10-Q

JANUARY 31, 2003

Part I	Financial Information

	Item 1.	Financial Statements

		Consolidated Balance Sheets as of April 30, 2002 and January 31, 2003

		Consolidated Statements of Operations for the Three Months and Nine Months Ended January 31, 2002 and 2003

		Consolidated Statement of Shareholders’ Equity and Comprehensive Income for the Nine Months Ended January 31, 2003

		Consolidated Statements of Cash Flows for the Nine Months Ended January 31, 2002 and 2003

		Notes to Unaudited Consolidated Financial Statements

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk

Part II	Other Information

	Item 6.	Exhibits and Reports On Form 8-K

Signatures

Certifications

FIRST INVESTORS FINANCIAL SERVICES GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS — APRIL 30, 2002 AND JANUARY 31, 2003

	April 30, 2002			January 31, 2003
	(Audited)			(Unaudited)
ASSETS
Receivables Held for Investment, net	$	215,242,832		$	229,193,670
Receivables Acquired for Investment, net	9,019,906			3,725,323
Cash and Short-Term Investments, including restricted cash of $23,409,146 and $23,217,830	23,994,873			24,559,416
Accrued Interest Receivable	3,309,916			3,412,961
Assets Held for Sale	1,314,919			1,153,184
Other Assets:
Funds held under reinsurance agreement	3,434,907			3,951,640
Deferred financing costs and other assets, net of accumulated amortization and depreciation of $4,468,636 and $5,042,115	4,543,743			5,006,822
Current income taxes receivable	1,403,472			936,312
Deferred income taxes receivable	529,646			495,907
Interest rate derivative positions	3,119,200			4,710,552
Total assets	$	265,913,414		$	277,145,787

LIABILITIES AND SHAREHOLDERS’ EQUITY
Debt:
Warehouse credit facilities	$	31,213,433		$	131,231,981
Term Notes	183,259,784			100,303,596
Acquisition term facility	3,670,765			60,487
Working capital facility	11,798,520			9,990,074
Other borrowings	525,000			746,280
Other Liabilities:
Accounts payable and accrued liabilities	2,041,980			1,331,870
Interest rate derivative positions	5,885,940			6,214,682
Total liabilities	238,395,422			249,878,970

Commitments and Contingencies
Minority Interest	931,558			1,060,482
Shareholders’ Equity:
Common stock, $0.001 par value, 10,000,000 shares authorized, 5,566,669 shares issued; 5,396,669 outstanding at April 30, 2002 and 5,026,269 outstanding at January 31, 2003	5,567			5,567
Additional paid-in capital	18,678,675			18,678,675
Retained earnings	10,149,078			10,401,693
Accumulated other comprehensive loss – unrealized derivative gains (losses), net of taxes	(1,731,886		)	(1,103,735		)
Less, treasury stock, at cost, 170,000 and 540,400 shares	(515,000		)	(1,775,865		)
Total shareholders’ equity	26,586,434			26,206,335
Total liabilities and shareholders’ equity	$	265,913,414		$	277,145,787

The accompanying notes are an integral part of these consolidated financial statements.

FIRST INVESTORS FINANCIAL SERVICES GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months and Nine Months Ended January 31, 2002 and 2003

(Unaudited)

	For the Three Months Ended January 31,						For the Nine Months Ended January 31,
	2002			2003			2002			2003

Interest Income	$	9,094,845		$	8,415,164		$	29,177,483		$	25,071,690
Interest Expense	2,817,377			2,486,052			10,543,402			8,061,621
Net interest income	6,277,468			5,929,112			18,634,081			17,010,069
Provision for Credit Losses	2,474,025			2,814,888			6,177,825			7,453,438
Loss on Receivables Acquired for Investment	1,260,000			—			1,260,000			—
Net Interest Income After Provision for Credit Losses	2,543,443			3,114,224			11,196,256			9,556,631
Other Income:
Late fees and other	408,715			499,093			1,391,901			1,181,523
Servicing income	—			222,024			—			222,024
Unrealized loss on interest rate derivative positions	(9,981		)	(40,482		)	(109,917		)	(162,920		)
Total other income	398,734			680,635			1,281,984			1,240,627
Operating Expenses:
Salaries and benefits	2,063,247			2,101,398

FORM 10-Q

TABLE OF CONTENTS

CONSOLIDATED BALANCE SHEETS — APRIL 30, 2002 AND JANUARY 31, 2003