UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2005
Commission File Number 000-24051
UNITED PANAM FINANCIAL CORP.
(Exact name of Registrant as specified in its charter)
| California | 94-3211687 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
3990 Westerly Place, Suite 200
Newport Beach, CA 92660
(Address of principal executive offices) (Zip Code)
(949) 224-1917
(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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
The number of shares outstanding of the Registrant’s Common Stock as of April 16, 2005 was 16,562,681 shares.
UNITED PANAM FINANCIAL CORP.
FORM 10-Q
MARCH 31, 2005
| Page | ||||
| PART I. |
FINANCIAL INFORMATION |
|||
| Item 1. |
Financial Statements (unaudited) |
|||
| Consolidated Statements of Financial Condition as of March 31, 2005 and December 31, 2004 |
1 | |||
| Consolidated Statements of Operations for the three months ended March 31, 2005 and March 31, 2004 |
2 | |||
| 3 | ||||
| Consolidated Statements of Cash Flows for the three months ended March 31, 2005 and March 31, 2004 |
4 | |||
| 5 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
16 | ||
| Item 3. |
31 | |||
| Item 4. |
31 | |||
| PART II. |
OTHER INFORMATION |
|||
| Item 1. |
33 | |||
| Item 2. |
33 | |||
| Item 3. |
33 | |||
| Item 4. |
33 | |||
| Item 5. |
33 | |||
| Item 6. |
34 | |||
PART I. FINANCIAL INFORMATION
| Item 1. | Financial Statements. |
United PanAm Financial Corp. and Subsidiaries
Consolidated Statements of Financial Condition
(Unaudited)
| (Dollars in thousands) | March 31, 2005 |
December 31, 2004 |
||||||
| Assets |
||||||||
| Cash and due from banks |
$ | 4,555 | $ | 4,237 | ||||
| Short term investments |
13,899 | — | ||||||
| Cash and cash equivalents |
18,454 | 4,237 | ||||||
| Restricted cash |
45,872 | 36,729 | ||||||
| Securities available for sale, at fair value |
444,251 | 788,090 | ||||||
| Loans |
542,625 | 499,343 | ||||||
| Allowance for loan losses |
(24,980 | ) | (25,593 | ) | ||||
| Loans, net |
517,645 | 473,750 | ||||||
| Premises and equipment, net |
3,544 | 3,519 | ||||||
| Accrued interest receivable |
6,851 | 6,901 | ||||||
| Other assets |
24,967 | 29,601 | ||||||
| Assets of discontinued operations |
92 | 72,080 | ||||||
| Total assets |
$ | 1,061,676 | $ | 1,414,907 | ||||
| Liabilities and Shareholders’ Equity |
||||||||
| Warehouse line of credit |
$ | 189,016 | $ | 101,776 | ||||
| Securitization notes payable |
292,961 | 352,564 | ||||||
| Repurchase agreements |
431,780 | 745,295 | ||||||
| Accrued expenses and other liabilities |
6,801 | 8,793 | ||||||
| Junior subordinated debentures/trust preferred securities |
10,310 | 10,310 | ||||||
| Liabilities of discontinued operations—deposits held for sale |
— | 71,916 | ||||||
| Total liabilities |
930,868 | 1,290,654 | ||||||
| Common stock (no par value): |
||||||||
| Authorized, 30,000,000 shares |
||||||||
| Issued and outstanding, 16,560,681 at March 31, 2005 and 16,526,358 at December 31, 2004 |
70,686 | 70,332 | ||||||
| Retained earnings |
59,807 | 53,517 | ||||||
| Unrealized gain on securities available for sale, net |
315 | 404 | ||||||
| Total shareholders’ equity |
130,808 | 124,253 | ||||||
| Total liabilities and shareholders’ equity |
$ | 1,061,676 | $ | 1,414,907 | ||||
See notes to consolidated financial statements
1
United PanAm Financial Corp. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
| Three Months Ended March 31, | |||||||
| (In thousands, except per share data) | 2005 |
2004 (As Restated) | |||||
| Interest Income |
|||||||
| Loans |
$ | 34,666 | $ | 26,349 | |||
| Short term investments |
4,407 | 4,204 | |||||
| Total interest income |
39,073 | 30,553 | |||||
| Interest Expense |
|||||||
| Securitized borrowings |
2,898 | — | |||||
| Warehouse credit lines |
1,374 | — | |||||
| Repurchase agreements |
3,547 | 2,859 | |||||
| Deposits |
— | 3,217 | |||||
| Junior subordinated debentures |
143 | 120 | |||||
| Total interest expense |
7,962 | 6,196 | |||||
| Net interest income |
31,111 | 24,357 | |||||
| Provision for loan losses |
5,713 | 5,859 | |||||
| Net interest income after provision for loan losses |
25,398 | 18,498 | |||||
| Non-interest Income |
|||||||
| Services charges and fees |
— | 140 | |||||
| Loan related charges and fees |
116 | 312 | |||||
| Gain on sale of securities |
1,648 | — | |||||
| Other income |
44 | 439 | |||||
| Total non-interest income |
1,808 | 891 | |||||
| Non-interest Expense |
|||||||
| Compensation and benefits |
9,529 | 7,592 | |||||
| Occupancy |
945 | 1,237 | |||||
| Other |
5,536 | 3,517 | |||||
| Total non-interest expense |
16,010 | 12,346 | |||||
| Income from continuing operations before income taxes |
11,196 | 7,043 | |||||
| Income taxes |
4,574 | 2,840 | |||||
| Income from continuing operations |
6,622 | 4,203 | |||||
| Income (loss) from discontinued operations, net of tax |
(332 | ) | 428 | ||||
| Net Income |
$ | 6,290 | $ | 4,631 | |||
| Earnings per share-basic: |
|||||||
| Continuing operations |
$ | 0.40 | $ | 0.26 | |||
| Discontinued operations |
(0.02 | ) | 0.03 | ||||
| Net income |
$ | 0.38 | $ | 0.29 | |||
| Weighted average shares outstanding |
16,538 | 15,868 | |||||
| Earnings per share-diluted: |
|||||||
| Continuing operations |
$ | 0.36 | $ | 0.24 | |||
| Discontinued operations |
(0.02 | ) | 0.02 | ||||
| Net Income |
$ | 0.34 | $ | 0.26 | |||
| Weighted average shares outstanding |
18,385 | 17,796 | |||||
See notes to consolidated financial statements
2
United PanAm Financial Corp. and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
| Three Months Ended March 31, | |||||||
| (In thousands) | 2005 |
2004 (As Restated) | |||||
| Net income |
$ | 6,290 | $ | 4,631 | |||
| Other comprehensive income, net of tax |
|||||||
| Unrealized gain (loss) on securities |
(89 | ) | 348 | ||||
| Comprehensive income |
$ | 6,201 | $ | 4,979 | |||
See notes to consolidated financial statements
3
United PanAm Financial Corp. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended March 31, |
||||||||
| (Dollars in thousands) | 2005 |
2004 (As Restated) |
||||||
| Cash Flows from Operating Activities |
||||||||
| Income from continuing operations |
$ | 6,622 | $ | 4,203 | ||||
| Adjustments to reconcile income from continuing operations to net cash provided by operating activities: |
||||||||
| Net gain on sales of securities available for sale |
(1,648 | ) | — | |||||
| Provision for loan losses |
5,713 | 5,859 | ||||||
| Accretion of discount on loans |
(4,174 | ) | (2,254 | ) | ||||
| Depreciation and amortization |
359 | 323 | ||||||
| (Increase) decrease in accrued interest receivable |
50 | (10 | ) | |||||
| Decrease in other assets |
4,686 | 1,996 | ||||||
| Amortization of premiums/discounts on securities |
39 | 506 | ||||||
| Decrease in accrued expenses and other liabilities |
(1,992 | ) | (1,142 | ) | ||||
| Net cash provided by operating activities of continuing operations |
9,655 | 9,481 | ||||||
| Income (loss) from discontinued operations |
(332 | ) | 428 | |||||
| Net cash provided by operating activities |
9,323 | 9,909 | ||||||
| Cash Flows from Investing Activities |
||||||||
| Purchase of securities available for sale |
— | (265,254 | ) | |||||
| Proceeds from maturities of investment securities available for sale |
24,744 | 119,932 | ||||||
| Proceeds from sale of investment securities available for sale |
330,563 | 231,929 | ||||||
| Purchases, net of repayments, of non-mortgage loans |
(45,434 | ) | (41,247 | ) | ||||
| Change in assets of discontinued operations |
49,921 | 3,526 | ||||||
| Purchase of premises and equipment |
(384 | ) | (425 | ) | ||||
| Proceeds from redemption of FHLB stock |
12,067 | — | ||||||
| Net cash provided by investing activities |
371,477 | 48,461 | ||||||
| Cash Flows from Financing Activities |
||||||||
| Net increase (decrease) in deposits |
(71,916 | ) | 27,641 | |||||
| Repayment from repurchase agreements |
(313,515 | ) | (47,669 | ) | ||||
| Proceeds from warehouse line |
87,240 | — | ||||||
| Payments on securitization notes payable |
(59,603 | ) | — | |||||
| Increase in restricted cash |
(9,143 | ) | — | |||||
| Proceeds from exercise of stock options |
354 | 132 | ||||||
| Net cash used in financing activities |
(366,583 | ) | (19,896 | ) | ||||
| Net increase in cash and cash equivalents |
14,217 | 38,474 | ||||||
| Cash and cash equivalents at beginning of period |
4,237 | 14,209 | ||||||
| Cash and cash equivalents at end of period |
$ | 18,454 | $ | 52,683 | ||||