UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of
report (Date of earliest event reported): May
9,
2008
Commission
File Number 1-13610
PMC
COMMERCIAL TRUST
(Exact
name of registrant as specified in its charter)
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TEXAS
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75-6446078
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(State
or other jurisdiction
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(I.R.S.
Employer Identification No.)
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of
incorporation or organization)
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17950
Preston Road, Suite 600, Dallas, TX 75252
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(972)
349-3200
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(Address
of principal executive offices)
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(Registrant's
telephone number)
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Former
name, former address and former fiscal year, if changed since last report:
NONE
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
| o |
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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| o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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| o |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
2.02. Results of Operations and Financial Condition.
On
May 9,
2008, PMC Commercial Trust issued a press release describing, among other
things, its results of operations for the three months ended March 31, 2008.
A
copy of the press release is attached as Exhibit 99.1 to this report. This
information shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or
incorporated by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, except as shall be expressly set forth by specific
reference in such a filing.
Item
9.01. Financial Statements and Exhibits.
Exhibits:
| 99.1 |
Press
Release dated May 9, 2008.
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SIGNATURE
Pursuant
to the requirements of Section 13 or 15 (d) of the Securities Exchange Act
of
1934, the registrant has duly caused this report to be signed on its behalf
by
the undersigned thereunto duly authorized.
Date:
May
12, 2008
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PMC
COMMERCIAL TRUST
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| By: | /s/ Barry N. Berlin | |
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Barry
N. Berlin, Chief Financial Officer
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Exhibit
99.1
FOR
IMMEDIATE PRESS RELEASE
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FOR:
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PMC
Commercial Trust
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CONTACT:
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Investor
Relations
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17950
Preston Road, Suite 600
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972-349-3235
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||
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Dallas,
TX 75252
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PMC
Commercial Trust Announces First Quarter
Results
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PMC
Commercial Trust
AMEX
(Symbol PCC)
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Dallas,
TX
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May
9, 2008
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PMC
Commercial Trust (AMEX: PCC) announced first quarter results today. Net income
for the first quarter of 2008 was $3,383,000, or $0.31 per share, compared
to
$2,821,000, or $0.26 per share, for the first quarter of 2007. Income from
continuing operations for the first quarter 2008 was $3,045,000, or $0.28 per
share compared to $2,998,000, or $0.28 per share, for the first quarter of
2007.
Financial
Position
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·
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Total
assets were relatively unchanged at approximately $232.2 million
at March
31, 2008 compared to approximately $231.4 million at December 31,
2007 and
decreased from approximately $242.8 million at March 31, 2007, a
decrease
of $10.6 million, or 4.4%.
|
|
·
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Total
serviced loan portfolio decreased to approximately $312.5 million
at March
31, 2008 from approximately $326.4 million at December 31, 2007 and
approximately $377.1 million as of March 31, 2007, a decrease of
$13.9
million, or 4.3% from December 31, 2007, and a decrease of $64.6
million,
or 17.1% from March 31, 2007.
|
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·
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Outstanding
retained loan portfolio increased to approximately $172.9 million
as of
March 31, 2008 from approximately $166.4 million at December 31,
2007 and
approximately $166.3 million as of March 31, 2007, an increase of
$6.5
million, or 3.9% from December 31, 2007, and an increase of $6.6
million,
or 4.0% from March 31, 2007.
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Operating
Results
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·
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Revenues
decreased by $276,000 (4.1%) when comparing the first quarter of
2008 to
the first quarter of 2007 due primarily to a reduction in interest
income
resulting from the decline in interest
rates.
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·
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Revenues
increased by $231,000 (3.7%) when comparing the first quarter of
2008 to
the fourth quarter of 2007 due primarily to (1) an increase in other
income and (2) an increase in income from retained interests in
transferred assets resulting from prepayment fees partially offset
by a
decrease in interest income.
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·
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Expenses
decreased by $263,000 (7.4%) during the first quarter of 2008 compared
to
the first quarter of 2007 due primarily to decreased general and
administrative expenses and interest expense.
|
| · |
In
addition to the changes in continuing operations described above,
our net
income during the first quarter of 2008 included recognition of $331,000
in gains that had previously been deferred. There were no significant
comparable items during the first quarter of
2007.
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Interest
Rate Sensitivity
| · |
Approximately
87% of our loans receivable at March 31, 2008 were based on LIBOR
or the
prime rate.
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| · |
The
90-day LIBOR, on which we base the interest rate we charge to our
borrowers, decreased from 4.73% at January 1, 2008 to 2.70% at April
1,
2008 while the prime rate decreased from 7.25% to 5.25%.
|
| · |
Assuming
LIBOR and the prime rate remain the same or continue to decrease,
our
interest income will decrease unless it is offset with investment
portfolio increases.
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PMC
COMMERCIAL TRUST
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Earnings
Press Release
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May
9, 2008
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Originations
and Prepayments
| · |
During
the first quarter of 2008, we originated approximately $17.1 million
of
loans.
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| · |
We
anticipate that 2008 aggregate loan originations will be approximately
$40
million to $50 million.
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| · |
During
April 2008 we funded approximately $8.9 million of
loans.
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| · |
Principal
prepayments on our retained portfolio were $9.0 million during the
first
quarter of 2008 compared to $10.4 million during the first quarter
of
2007.
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| · |
Prepayments
of our serviced portfolio were $28.5 million during the first quarter
of
2008 compared to $23.9 million during the first quarter of 2007.
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| · |
We
believe that high levels of prepayment activity will continue during
the
remainder of 2008, however, the credit market disruptions may have
a
moderating effect.
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Liquidity
| · |
Our
conduit facility matured on May 2, 2008. We used our revolving credit
facility to pay off the balance outstanding under the conduit facility
(approximately $22.0 million).
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| · |
We
are assessing ways to increase our availability of
leverage.
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| · |
We
are emphasizing SBA 7(a) lending since the government guaranteed
portion
(approximately 75%) can be more easily leveraged in an active secondary
market.
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Dividends
| · |
A
regular quarterly dividend on our common stock of $0.20 per share
was paid
on April 7, 2008 to shareholders of record on March 31, 2008.
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| · |
We
anticipate a continuation of the $0.20 per share quarterly dividend
for
the remainder of 2008. A special dividend may be declared at year-end,
if
deemed appropriate.
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Dr.
Andrew S. Rosemore, Chairman of the Board, stated, “We are pleased to report
solid earnings in the first quarter through extraordinary efforts by our staff
in a very difficult economic environment. The major factors that have an impact
on our operations are liquidity, interest rates, portfolio quality and overhead.
By careful attention to the interaction of these factors, we have achieved
a
reasonable level of financial stability and progress towards maximizing
shareholder value.
‘The
conduit facility matured on May 2, 2008 and we utilized the revolving credit
facility to pay off the balance. The credit markets remain extremely illiquid
making it difficult to increase availability under our revolving credit facility
at this time. The result has been a shift in our primary marketing focus towards
making SBA 7(a) loans. Until we are able to increase our credit facility or
the
market for securitizations is priced at reasonable levels and more accessible,
the volume of non-7(a) lending in the near-term will be at reduced
levels.
‘Approximately
87% of our retained portfolio is floating-rate based on LIBOR or the prime
rate.
Therefore, the recent significant drop in interest rates considerably reduces
our interest income. Both LIBOR and the prime rate are approximately 300 basis
points below levels from a year ago. Each 100 basis point drop in rates reduces
our annual net income by approximately $950,000.
‘We
continue to emphasize portfolio quality which is evident through our continued
low level of problem loans. Additionally, we have been and will continue to
be
cost conscious and are reviewing expenses on a continuous basis.”
2
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PMC
COMMERCIAL TRUST
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Earnings
Press Release
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May
9, 2008
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The
following tables contain comparative selected financial data:
FINANCIAL
POSITION INFORMATION
(In
thousands)
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March
31,
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December
31,
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March
31,
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||||||||
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2008
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2007
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2007
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|||||||
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Loans
receivable, net
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$
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172,262
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$
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165,969
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$
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165,725
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||||
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Retained
interests in transferred assets
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$
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47,862
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$
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48,616
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$
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54,813
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||||
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Total
assets
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$
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232,217
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$
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231,420
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$
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242,879
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||||
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Debt
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$
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64,481
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$
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62,953
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$
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69,100
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||||
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Total
beneficiaries' equity
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$
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157,771
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$
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156,354
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$
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156,975
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||||
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Shares
outstanding
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10,765
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10,765
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10,754
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|||||||
3
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PMC
COMMERCIAL TRUST
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Earnings
Press Release
|
May
9, 2008
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|
Three
Months Ended
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||||||||||
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March
31,
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December
31,
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March
31,
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||||||||
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2008
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2007
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2007
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||||||||
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(In
thousands, except per share
information)
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||||||||||
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Revenues:
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||||||||||
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Interest
income
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$
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3,766
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$
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4,056
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$
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4,056
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||||
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Income
from retained interests in transferred assets
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1,919
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1,789
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1,901
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|||||||
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Other
income
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737
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346
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741
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Total
revenues
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6,422
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6,191
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6,698
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Expenses:
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||||||||||
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Interest
expense
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1,211
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1,312
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1,325
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|||||||
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Salaries
and related benefits
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1,239
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1,484
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1,167
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|||||||
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General
and administrative expenses
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469
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838
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716
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|||||||
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Impairments
and provisions
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354
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344
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328
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|||||||
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Total
expenses
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3,273
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3,978
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3,536
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|||||||
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Income
before income tax provision, minority interest,
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||||||||||
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and
discontinued operations
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3,149
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2,213
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3,162
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|||||||
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Income
tax expense
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(82
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)
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(23
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)
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(142
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)
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||||
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Minority
interest (preferred stock dividend of subsidiary)
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(22
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)
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(23
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)
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(22
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)
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||||
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Income
from continuing operations
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3,045
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2,167
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2,998
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|||||||
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Discontinued
operations
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338
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481
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(177
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)
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||||||
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Net
income
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$
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3,383
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$
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2,648
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$
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2,821
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||||
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Basic
weighted average shares outstanding
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10,765
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10,765
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10,754
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|||||||
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Basic
and diluted earnings per share:
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||||||||||
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Income
from continuing operations
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$
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0.28
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$
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0.20
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$
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0.28
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||||
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Discontinued
operations
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0.03
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0.04
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(0.02
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)
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||||||
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Net
income
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$
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0.31
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$
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0.24
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$
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0.26
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||||
4
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PMC
COMMERCIAL TRUST
|
Earnings
Press Release
|
May
9, 2008
|
REAL ESTATE INVESTMENT TRUST (“REIT”) TAXABLE INCOME
REIT
taxable income is presented to assist investors in analyzing our performance
and
is a measure that is presented quarterly in our consolidated financial
statements and is one of the factors utilized by our Board of Trust Managers
in
determining the level of dividends to be paid to our shareholders.
The
following reconciles net income to REIT taxable income:
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Three
Months Ended
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|||||||
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March
31,
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|||||||
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2008
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2007
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||||||
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(In
thousands)
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|||||||
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Net
income
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$
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3,383
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$
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2,821
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|||
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Tax
depreciation
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(15
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)
|
(11
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)
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|||
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Book/tax
difference on property sales
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(338
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)
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419
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||||
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Book/tax
difference on Retained Interests, net
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352
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294
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|||||
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Impairment
losses
|
-
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233
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|||||
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Book/tax
difference on rent and related receivables
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-
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239
|
|||||
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Book/tax
difference on amortization and accretion
|
(47
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)
|
(74
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)
|
|||
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Asset
valuation
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70
|
(302
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)
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||||
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Other
book/tax differences, net
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66
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264
|
|||||
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3,471
|
3,883
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||||||
|
Less:
taxable REIT subsidiaries net income, net of tax
|
(133
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)
|
(244
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)
|
|||
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REIT
taxable income
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$
|
3,338
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$
|
3,639
|
|||
|
Distributions
declared
|
$
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2,153
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$
|
3,226
|
|||
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Common
shares outstanding
|
10,765
|
10,754
|
|||||
CERTAIN
MATTERS DISCUSSED IN THIS PRESS RELEASE ARE "FORWARD-LOOKING STATEMENTS"
INTENDED TO QUALIFY FOR THE SAFE HARBORS FROM LIABILITY ESTABLISHED BY THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE FORWARD-LOOKING
STATEMENTS CAN GENERALLY BE IDENTIFIED AS SUCH BECAUSE THE CONTEXT OF THE
STATEMENT WILL INCLUDE WORDS SUCH AS THE COMPANY "EXPECTS," "ANTICIPATES" OR
WORDS OF SIMILAR IMPORT. SIMILARLY, STATEMENTS THAT DESCRIBE THE COMPANY'S
FUTURE PLANS, OBJECTIVES OR GOALS ARE ALSO FORWARD-LOOKING STATEMENTS. SUCH
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES,
INCLUDING THE FINANCIAL PERFORMANCE OF THE COMPANY, REAL ESTATE CONDITIONS
AND
MARKET VALUATIONS OF ITS STOCK, WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE CURRENTLY ANTICIPATED. ALTHOUGH THE COMPANY BELIEVES
THE
EXPECTATIONS REFLECTED IN ANY FORWARD-LOOKING STATEMENTS ARE BASED ON REASONABLE
ASSUMPTIONS, THE COMPANY CAN GIVE NO ASSURANCE THAT ITS EXPECTATIONS WILL BE
ATTAINED. SHAREHOLDERS, POTENTIAL INVESTORS AND OTHER READERS ARE URGED TO
CONSIDER THESE FACTORS CAREFULLY IN EVALUATING THE FORWARD-LOOKING STATEMENTS.
THE FORWARD-LOOKING STATEMENTS MADE HEREIN ARE ONLY MADE AS OF THE DATE OF
THIS
PRESS RELEASE AND THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY UPDATE SUCH
FORWARD-LOOKING STATEMENTS TO REFLECT SUBSEQUENT EVENTS OR
CIRCUMSTANCES.
5