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): August
8, 2008
Commission
File Number 1-13610
PMC
COMMERCIAL TRUST
(Exact
name of registrant as specified in its charter)
|
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.)
|
|
|
of
incorporation or organization)
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||
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17950
Preston Road, Suite 600, Dallas, TX 75252
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(972)
349-3200
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|
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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)
|
| o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
| 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
August
8, 2008, PMC Commercial Trust issued a press release describing, among other
things, its results of operations for the three and six months ended June 30,
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 August 8, 2008.
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:
August 11, 2008
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PMC
COMMERCIAL TRUST
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||
| |
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| By: | /s/ Barry N. Berlin | |
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Barry
N. Berlin, Chief Financial Officer
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||
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
|
|
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 Second Quarter and Year-to-Date
Results
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PMC
Commercial Trust
AMEX
(Symbol PCC)
|
Dallas,
TX
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August
8, 2008
|
PMC
Commercial Trust (AMEX: PCC) announced second quarter and year-to-date results
today.
Second
Quarter Results
Income
from continuing operations decreased to $3,105,000 ($0.29 per share) during
the
three months ended June 30, 2008 from $3,387,000 ($0.32 per share) during the
three months ended June 30, 2007. Significant changes when comparing the periods
included:
|
·
|
a
decrease in interest income of $679,000 and interest expense of $466,000
due primarily to decreases in variable interest
rates;
|
|
·
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a
decrease in other income of $222,000 due primarily to decreased prepayment
fees on our loans receivable; and
|
|
·
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an
increase in income from our retained interests in transferred assets
of
$200,000 primarily due to an increase in unanticipated prepayment
fees.
|
For
the
three months ended June 30, 2008, net income decreased to $3,529,000, or $0.33
per share, compared to $4,169,000, or $0.39 per share, for the three months
ended June 30, 2007. In addition to the changes described above, discontinued
operations during the quarter ended June 30, 2008 included net gains on sales
of
real estate of $424,000 compared to net gains on sales of real estate of
$1,252,000 offset by net losses of $470,000 during the quarter ended June 30,
2007.
Year-to-Date
Results
Income
from continuing operations decreased to $6,150,000 ($0.57 per share) during
the
six months ended June 30, 2008 from $6,385,000 ($0.59 per share) during the
six
months ended June 30, 2007. Significant changes when comparing the periods
included:
| · |
a
decrease in interest income of $969,000 and interest expense of $580,000
due primarily to decreases in variable interest rates;
|
| · |
a
decrease in other income of $226,000 due primarily to decreased prepayment
fee income on our loans receivable and premium income;
and
|
| · |
an
increase in income from our retained interests in transferred assets
of
$218,000 primarily due to an increase in unanticipated prepayment
fees.
|
For
the
six months ended June 30, 2008, net income remained relatively constant at
$6,912,000, or $0.64 per share, compared to $6,990,000, or $0.65 per share,
for
the six months ended June 30, 2007.
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PMC
COMMERCIAL TRUST
|
Earnings
Press Release
|
August
8, 2008
|
Financial
Position
|
·
|
Total
assets were approximately $236.9 million at June 30, 2008 compared
to
approximately $231.4 million at December 31, 2007 and approximately
$240.0
million at June 30, 2007. This represents an increase of $5.5 million,
or
2.4% from December 31, 2007, and a decrease of $3.1 million, or 1.3%
from
June 30, 2007.
|
|
·
|
Total
serviced loan portfolio was approximately $298.4 million at June
30, 2008
compared to approximately $326.4 million at December 31, 2007 and
approximately $367.5 million as of June 30, 2007. This represents
a
decrease of $28.0 million, or 8.6% from December 31, 2007, and a
decrease
of $69.1 million, or 18.8% from June 30,
2007.
|
|
·
|
Outstanding
retained loan portfolio was approximately $193.5 million as of June
30,
2008 compared to approximately $166.4 million at December 31, 2007
and
approximately $169.5 million as of June 30, 2007. This represents
an
increase of $27.1 million, or 16.3% from December 31, 2007, and an
increase of $24.0 million, or 14.2% from June 30, 2007.
|
|
·
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In
accordance with generally accepted accounting principles, commencing
in
June 2008, we consolidated one of our special purpose entities. In
addition, the structured notes payable of a qualified special purpose
entity were repaid during June 2008. As a result, approximately $21.4
million of loans previously included within our securitized portfolio
are
now included in our retained
portfolio.
|
Interest
Rate Sensitivity
| · |
Approximately
78% of our loans receivable at June 30, 2008 were based on LIBOR
or the
prime rate.
|
| · |
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 2.79% at July
1,
2008 while the prime rate decreased from 7.25% to 5.00%.
|
Originations
and Prepayments
| · |
During
the first half of 2008, we funded approximately $28.1 million of
loans.
|
| · |
We
anticipate that 2008 aggregate loan fundings for the second half
of 2008
will be approximately $10 million to $15 million.
|
| · |
Principal
prepayments on our retained portfolio were $16.5 million during the
first
half of 2008 compared to $18.3 million during the first half of 2007.
|
| · |
Prepayments
of our serviced portfolio were $48.4 million during the first half
of 2008
compared to $42.4 million during the first half of 2007.
|
| · |
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).
|
| · |
We
anticipate predominantly originating SBA 7(a) loans since the government
guaranteed portion (approximately 75% to 85%) can be more easily
leveraged
in an active secondary market.
|
| · |
Our
$45 million revolving credit facility, which matures December 31,
2009,
had $22.6 million outstanding at June 30,
2008.
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Dividends
| · |
A
regular quarterly dividend on our common shares of beneficial interest
of
$0.20 per share was paid on April 7, 2008 to shareholders of record
on
March 31, 2008.
|
| · |
A
regular quarterly dividend on our common shares of beneficial interest
of
$0.225 per share was paid on July 9, 2008 to shareholders of record
on
June 30, 2008.
|
| · |
We
anticipate a continuation of the $0.225 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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2
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PMC
COMMERCIAL TRUST
|
Earnings
Press Release
|
August
8, 2008
|
Lance
B.
Rosemore, Chairman of the Board of Trust Managers, stated, “We continue to
operate successfully in a troubled economic environment. We have remained
profitable through this economic downturn and challenging liquidity market.
We
continue to have solid earnings and our portfolio quality remains
strong.
‘Loans
originated during the first half of 2008 were approximately $28.1 million (up
from $23.4 million in the first half of 2007) and included approximately $23.6
million of non-SBA 7(a) loans. Because of the liquidity crisis in capital
markets, we are presently only committing to SBA 7(a) loans. Until we see an
increased ability to obtain leverage or our prepayments provide additional
liquidity, we will continue originating primarily SBA 7(a) loans.
‘At
our
last quarterly Board meeting, we increased our dividend to $0.225 per share
and
anticipate continuation at this level through the remainder of the year. If
deemed appropriate, a special dividend may be declared at year-end.
‘We
will
continue with our attention to disciplined underwriting and overhead controls,
and would like to thank our employees for their performance and shareholders
for
their continued support in this difficult economic environment.”
The
following tables contain comparative selected financial data:
FINANCIAL
POSITION INFORMATION
(In
thousands)
|
June
30,
|
December
31,
|
June
30,
|
||||||||
|
|
2008
|
2007
|
2007
|
|||||||
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Loans
receivable, net
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$
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193,004
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$
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165,969
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$
|
169,020
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||||
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Retained
interests in transferred assets
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$
|
33,463
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$
|
48,616
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$
|
53,399
|
||||
|
Total
assets
|
$
|
236,854
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$
|
231,420
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$
|
240,006
|
||||
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Debt
|
$
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68,862
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$
|
62,953
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$
|
68,093
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||||
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Total
beneficiaries' equity
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$
|
157,837
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$
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156,354
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$
|
157,996
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||||
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Shares
outstanding
|
10,782
|
10,765
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10,765
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|||||||
3
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PMC
COMMERCIAL TRUST
|
Earnings
Press Release
|
August
8, 2008
|
RESULTS
OF OPERATIONS
(Dollars
in thousands, except per share information)
|
Six
Months Ended June 30,
|
Three
Months Ended June 30,
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||||||||||||||||||
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2008
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2007
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Inc
(Dec) %
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2008
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2007
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Inc
(Dec) %
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||||||||||||||
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Income:
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|||||||||||||||||||
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Interest
income
|
$
|
7,285
|
$
|
8,254
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(12
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%)
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$
|
3,519
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$
|
4,198
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(16
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%)
|
|||||||
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Income
from retained interests in transferred assets
|
4,196
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3,978
|
5
|
%
|
2,277
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2,077
|
10
|
%
|
|||||||||||
|
Other
income
|
1,155
|
1,381
|
(16
|
%)
|
418
|
640
|
(35
|
%)
|
|||||||||||
|
Total
income
|
12,636
|
13,613
|
(7
|
%)
|
6,214
|
6,915
|
(10
|
%)
|
|||||||||||
|
Expenses:
|
|||||||||||||||||||
|
Interest
|
2,165
|
2,745
|
(21
|
%)
|
954
|
1,420
|
(33
|
%)
|
|||||||||||
|
Salaries
and related benefits
|
2,591
|
2,381
|
9
|
%
|
1,352
|
1,214
|
11
|
%
|
|||||||||||
|
General
and administrative
|
1,123
|
1,296
|
(13
|
%)
|
654
|
580
|
13
|
%
|
|||||||||||
|
Impairments
and provisions
|
389
|
414
|
(6
|
%)
|
35
|
86
|
(59
|
%)
|
|||||||||||
|
Total
expenses
|
6,268
|
6,836
|
(8
|
%)
|
2,995
|
3,300
|
(9
|
%)
|
|||||||||||
|
Income
before income tax provision, minority interest,
and
discontinued operations
|
6,368
|
6,777
|
(6
|
%)
|
3,219
|
3,615
|
(11
|
%)
|
|||||||||||
|
Income
tax provision
|
(173
|
)
|
(347
|
)
|
(50
|
%)
|
(91
|
)
|
(205
|
)
|
(56
|
%)
|
|||||||
|
Minority
interest (preferred stock dividend of subsidiary)
|
(45
|
)
|
(45
|
)
|
-
|
(23
|
)
|
(23
|
)
|
-
|
|||||||||
|
Income
from continuing operations
|
6,150
|
6,385
|
(4
|
%)
|
3,105
|
3,387
|
(8
|
%)
|
|||||||||||
|
Discontinued
operations
|
762
|
605
|
26
|
%
|
424
|
782
|
(46
|
%)
|
|||||||||||
|
Net
income
|
$
|
6,912
|
$
|
6,990
|
(1
|
%)
|
$
|
3,529
|
$
|
4,169
|
(15
|
%)
|
|||||||
|
Basic
weighted average shares outstanding
|
10,766
|
10,755
|
10,767
|
10,756
|
|||||||||||||||
|
Basic
and diluted earnings per share:
|
|||||||||||||||||||
|
Income
from continuing operations
|
$
|
0.57
|
$
|
0.59
|
$
|
0.29
|
$
|
0.32
|
|||||||||||
|
Discontinued
operations
|
0.07
|
0.06
|
0.04
|
0.07
|
|||||||||||||||
|
Net
income
|
$
|
0.64
|
$
|
0.65
|
$
|
0.33
|
$
|
0.39
|
|||||||||||
4
|
PMC
COMMERCIAL TRUST
|
Earnings
Press Release
|
August
8, 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:
|
Six
Months Ended
|
|
Three
Months Ended
|
|
||||||||||
|
|
|
June
30,
|
|
June
30,
|
|
||||||||
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
||||
|
|
|
(In
thousands)
|
|||||||||||
|
Net
income
|
$
|
6,912
|
$
|
6,990
|
$
|
3,529
|
$
|
4,169
|
|||||
|
Book/tax
difference on depreciation
|
(30
|
)
|
(25
|
)
|
(15
|
)
|
(14
|
)
|
|||||
|
Book/tax
difference on property sales
|
(762
|
)
|
693
|
(424
|
)
|
274
|
|||||||
|
Book/tax
difference on Retained Interests, net
|
148
|
568
|
(204
|
)
|
275
|
||||||||
|
Impairment
losses
|
-
|
233
|
-
|
-
|
|||||||||
|
Dividend
distribution from taxable REIT subsidiary
|
2,000
|
-
|
2,000
|
-
|
|||||||||
|
Book/tax
difference on rent and related receivables
|
-
|
(1,152
|
)
|
-
|
(1,391
|
)
|
|||||||
|
Book/tax
difference on amortization and accretion
|
(140
|
)
|
(147
|
)
|
(93
|
)
|
(73
|
)
|
|||||
|
Asset
valuation
|
16
|
(301
|
)
|
(54
|
)
|
1
|
|||||||
|
Other
book/tax differences, net
|
45
|
175
|
(23
|
)
|
(89
|
)
|
|||||||
|
8,189
|
7,034
|
4,716
|
3,152
|
||||||||||
|
Less:
taxable REIT subsidiaries net income, net of tax
|
(278
|
)
|
(566
|
)
|
(146
|
)
|
(322
|
)
|
|||||
|
REIT
taxable income
|
$
|
7,911
|
$
|
6,468
|
$
|
4,570
|
$
|
2,830
|
|||||
|
Distributions
declared
|
$
|
4,579
|
$
|
6,456
|
$
|
2,426
|
$
|
3,230
|
|||||
|
Common
shares outstanding
|
10,766
|
10,755
|
10,767
|
10,756
|
|||||||||
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