-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mh3+gCuMHbvO4ivuKIHUryW4Nc4jp6ShJm6gXM2+NiC49eDHxp+bNqSYSFW6/83T aL2IWEJuPNnPeuL1dk1BTQ== 0000019617-99-000186.txt : 19991115 0000019617-99-000186.hdr.sgml : 19991115 ACCESSION NUMBER: 0000019617-99-000186 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHASE PREFERRED CAPITAL CORP CENTRAL INDEX KEY: 0001018450 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 133899576 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12151 FILM NUMBER: 99748885 BUSINESS ADDRESS: STREET 1: 270 PK AVE 41ST FL CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2122706000 10-Q 1 REIT 10-Q FOR 3RD QUARTER DATED SEPTEMBER 30, 1999 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended: September 30, 1999 Commission File Number: 1-12151 ------- CHASE PREFERRED CAPITAL CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 13-3899576 ------------------------------- ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 270 PARK AVENUE, NEW YORK, NEW YORK 10017 - --------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 270-6000 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 | | Common Stock, $171,500,000 Par Value 1 ------------------------------------------------------------------------ Number of shares outstanding of each of the issuer's classes of common stock on September 30, 1999. ================================================================================ FORM 10-Q INDEX PART I PAGE - ------ ---- Item 1. Financial Statements - Chase Preferred Capital Corporation: Balance Sheet at September 30, 1999 and December 31, 1998. 3 Statement of Income for the Three Months Ended September 30, 1999 and 1998. 4 Statement of Income for the Nine Months Ended September 30, 1999 and 1998. 5 Statement of Changes in Stockholders' Equity for the Nine Months Ended September 30, 1999 and 1998. 6 Statement of Cash Flows for the Nine Months Ended September 30, 1999 and 1998. 7 Notes to Financial Statements. 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk 18 PART II - ------- Item 4. Submission of Matters to a Vote of Security Holders 21 Item 6. Exhibits and Current Reports on Form 8-K. 21 ================================================================================ -2- Part I Item 1. CHASE PREFERRED CAPITAL CORPORATION BALANCE SHEET (in thousands, except share data) (Unaudited) SEPTEMBER 30, 1999 DECEMBER 31, 1998 (UNAUDITED) ASSETS: Residential Mortgage Loans $ 1,024,714 $ 944,012 Commercial Mortgage Loans 62,139 77,356 -------------- ------------- 1,086,853 1,021,368 Less: Allowance for Loan Losses (4,928) (4,120) -------------- ------------- 1,081,925 1,017,248 Cash 7,805 25,215 Due from Affiliates 22,851 71,140 Accrued Interest Receivable 6,336 7,703 -------------- ------------- TOTAL ASSETS $ 1,118,917 $ 1,121,306 ============== ============= LIABILITIES: Accounts Payable $ 47 432 -------------- ------------- TOTAL LIABILITIES 47 432 -------------- ------------- STOCKHOLDERS' EQUITY: Preferred Stock, par value $25 per share; 50,000,000 shares authorized, 22,000,000 issued and outstanding 550,000 550,000 Common stock, par value $171,750,000 per share; one share authorized, issued and outstanding 171,750 171,750 Capital Surplus 382,005 381,637 Retained Earnings 15,115 17,487 -------------- ------------- TOTAL STOCKHOLDERS' EQUITY 1,118,870 1,120,874 -------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,118,917 $ 1,121,306 ============== ============= The Notes to Financial Statements are an integral part of these Statements. -3- Part I Item 1. (continued) CHASE PREFERRED CAPITAL CORPORATION STATEMENT OF INCOME Three Months Ended September 30, (in thousands) (Unaudited) 1999 1998 INTEREST INCOME: Residential Mortgage Loans $ 15,823 $ 17,011 Commercial Mortgage Loans 1,300 1,746 Overnight Investments 968 1,371 -------------- ------------- 18,091 20,128 Less: Servicing Fees (657) (670) -------------- ------------- Net Interest Income 17,434 19,458 -------------- ------------- NON INTEREST EXPENSE: Advisory Fees 62 63 Other Administrative Expenses 58 93 -------------- ------------- Total Noninterest Expense 120 156 -------------- ------------- NET INCOME $ 17,314 $ 19,302 ============== ============= NET INCOME APPLICABLE TO COMMON SHARE $ 6,177 $ 8,164 ============== ============= NET INCOME PER COMMON SHARE $ 6,177 $ 8,164 ============== ============= The Notes to Financial Statements are an integral part of these Statements. -4- Part I Item 1. (continued) CHASE PREFERRED CAPITAL CORPORATION STATEMENT OF INCOME Nine Months Ended September 30, (in thousands) (Unaudited) 1999 1998 INTEREST INCOME: Residential Mortgage Loans $ 46,363 $ 47,209 Commercial Mortgage Loans 4,756 6,073 Overnight Investments 3,749 5,902 -------------- ------------- 54,868 59,184 Less: Servicing Fees (1,930) (1,828) -------------- ------------- Net Interest Income 52,938 57,356 -------------- ------------- NON INTEREST EXPENSE: Advisory Fees 188 188 Other Administrative Expenses 241 308 -------------- ------------- Total Noninterest Expense 429 496 -------------- ------------- NET INCOME $ 52,509 $ 56,860 ============== ============= NET INCOME APPLICABLE TO COMMON SHARE $ 19,097 $ 23,447 ============== ============= NET INCOME PER COMMON SHARE $ 19,097 $ 23,447 ============== ============= The Notes to Financial Statements are an integral part of these Statements. -5- Part I Item 1. (continued) CHASE PREFERRED CAPITAL CORPORATION STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY Nine Months Ended September 30, (in thousands) (Unaudited) 1999 1998 PREFERRED STOCK: Balance at Beginning of Year $ 550,000 $ 550,000 -------------- ------------- Balance at End of Period 550,000 550,000 ============== ============= COMMON STOCK: Balance at Beginning of Year 171,750 171,750 -------------- ------------- Balance at End of Period 171,750 171,750 ============== ============= ADDITIONAL PAID IN CAPITAL: Balance at Beginning of Year 381,637 381,637 Refund for unused organizational costs 368 0 -------------- ------------- Balance at End of Period 382,005 381,637 ============== ============= RETAINED EARNINGS: Balance at Beginning of Year 17,487 16,543 Net Income 52,509 56,860 Common Dividends (21,469) (22,965) Preferred Dividends (33,412) (33,413) -------------- ------------- Balance at End of Period 15,115 17,025 ============== ============= TOTAL STOCKHOLDERS' EQUITY $ 1,118,870 $ 1,120,412 ============== ============= The Notes to Financial Statements are an integral part of these Statements. -6- Part I ITEM 1. (continued) CHASE PREFERRED CAPITAL CORPORATION STATEMENT OF CASH FLOWS Nine Months Ended September 30, (in thousands) (Unaudited) 1999 1998 OPERATING ACTIVITIES: Net Income $ 52,509 $ 56,860 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Receivable for Loan Payment Collected in Subsequent Month (43,903) 16,618 Amortization of Deferred Costs 3,175 1,653 Net Change In: Due From Affiliates 48,289 (8,020) Accrued Interest Receivable 3,068 1,889 Accounts Payable (17) 0 Due to Affiliates 0 54 ---------- ---------- Net Cash Provided by Operating Activities 63,121 69,054 ---------- ---------- INVESTING ACTIVITIES: Purchase of Mortgage Loans (479,563) (484,783) Acquired Reserve 808 822 Principal Payments Received 454,806 414,453 Purchase of Accrued Interest Receivable (1,701) (2,145) Sale of Loans (Net of Reserves) 0 1,146 --------- ---------- Net Cash Used by Investing Activities (25,650) (70,507) --------- ---------- FINANCING ACTIVITIES: Dividends Paid (54,881) (56,378) --------- ---------- Net Cash Used by Financing Activities (54,881) (56,378) --------- ---------- NET DECREASE IN CASH (17,410) (57,831) CASH AT BEGINNING OF PERIOD 25,215 93,919 --------- ---------- CASH AT END OF PERIOD $ 7,805 $ 36,088 ========= ========== The Notes to Financial Statements are an integral part of these Statements. -7- Part I Item 1. (continued) NOTES TO FINANCIAL STATEMENTS ----------------------------- NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION - ----------------------------------------------- Chase Preferred Capital Corporation (the "Company") is a Delaware corporation incorporated on June 28, 1996. The Company is a wholly-owned subsidiary of The Chase Manhattan Bank (the "Bank"), a banking corporation organized under the laws of the State of New York. The Company began operating in 1996, upon completion of an initial public offering of 22,000,000 shares of its 8.10% Cumulative Preferred Stock, Series A, $25 par value per share (the "Series A Preferred Shares"), which are currently traded on the New York Stock Exchange. The Company used the proceeds of that offering (after payment of offering expenses), together with capital invested by the Bank, to purchase a portfolio of residential and commercial mortgage loans ("Mortgage Loans") at their estimated fair values. The Mortgage Loans were recorded in the accompanying financial statements at the Bank's historical cost basis, which approximated their estimated fair values. On December 29, 1998, the Bank, as sole common stockholder, approved an amendment to the Company's Certificate of Incorporation that reduced the Company's authorized Common Stock from 5,000,000 shares to one share and recapitalized the outstanding Common Stock from 572,500 shares having a par value of $300 per share ($171,750,000 in the aggregate) to one share having a par value of $171,750,000. All references to numbers of shares of common stock, per common share amounts and common stock par values have been restated to reflect the effects of the amendment. The unaudited financial statements of the Company are prepared in accordance with generally accepted accounting principles for interim financial information. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial position and the results of operations for the interim period presented have been included. Certain amounts in the statement of cash flows have been reclassified to conform to the current presentation. For further discussion of the Company's accounting policies, reference is made to Note 2 of the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (the "1998 Annual Report"). NOTE 2 - RELATED PARTY TRANSACTIONS - ----------------------------------- The Company has entered into an Advisory Agreement (the "Agreement") with the Bank (the "Advisor") requiring an annual payment of $250,000. The Advisor provides advice to the Board of Directors and manages the operations of the Company in accordance with the parameters established in the Agreement. The Agreement has an initial term of five years commencing on September 18, 1996 and automatically renews for an additional five years unless the Company delivers a notice of nonrenewal to the Advisor as defined in the Agreement. The Company also entered into two servicing agreements with the Bank for the servicing of the commercial and residential mortgage loans. (The Bank in its role as servicer under the terms of the servicing agreements is herein referred to as the "Servicer"). Pursuant to each servicing agreement, the Servicer performs the actual servicing of the Mortgage Loans held by the Company in accordance with normal industry practice. The Servicing Agreements can be terminated by the Company without cause with at least thirty days notice to the Servicer. The servicing fee is 0.25% of the outstanding principal balance for the residential mortgage loans and ranges from 0.08% - 0.30% of the outstanding principal balance for the commercial mortgage loans depending upon the outstanding principal amount. The Bank has entered into sub-servicing agreements ("Sub-Agreements") with Chase Manhattan Mortgage Corporation ("CMMC"), a wholly-owned subsidiary of Chase Manhattan Bank USA, National Association, an indirect wholly-owned subsidiary of The Chase Manhattan Corporation ("CMC"). -8- Part I Item 1. (Continued) For the quarters ended September 30, 1999 and 1998, aggregate advisory and servicing fees totaled approximately $719,000 and $733,000, respectively. For the nine months ended September 30, 1999 and 1998, aggregate advisory and servicing fees totaled approximately $2,118,000 and $2,016,000, respectively. In its capacity as Sub-Servicer, CMMC owed the Company approximately $22,851,000 and $71,140,000 at September 30, 1999 and December 31, 1998, respectively, primarily consisting of mortgage loan payments received on behalf of the Company. Pursuant to the terms of the Servicing Agreement and Subservicing Agreements, the Company receives mortgage loan payments collected by the Servicer (and sub-servicer) in the month immediately following their collection. The Company maintains its cash in an overnight deposit account with the Bank and earns a market rate of interest. Interest income on these deposits for the quarters ended September 30, 1999 and 1998 amounted to approximately $968,000 and $1,371,000, respectively. Interest income on these deposits for the nine months ended September 30, 1999 and 1998 amounted to approximately $3,749,000 and $5,902,000, respectively. NOTE 3 - FAIR VALUE OF FINANCIAL INSTRUMENTS - -------------------------------------------- For further discussion on the methodology for determining the fair value of the Mortgage Loans, reference is made to Note 7 of the Company's 1998 Annual Report. Mortgage Loans: The book value and fair value of Mortgage Loans at September 30, 1999 and December 31, 1998 are as follows (in thousands):
SEPTEMBER 30, 1999 DECEMBER 31, 1998 Carrying Estimated Carrying Estimated VALUE FAIR VALUE VALUE FAIR VALUE -------- ---------- -------- ---------- Residential Mortgage Loans $ 1,024,714 $ 1,036,139 $ 944,012 $ 957,395 Commercial Mortgage Loans 62,139 65,894 77,356 82,763 Allowance for Loan Losses (4,928) (4,928) (4,120) (4,120) -------------- ------------- ------------- -------------- Mortgage Loans, net of allowance for loan losses $ 1,081,925 $ 1,097,105 $ 1,017,248 $ 1,036,038
Assets and Liabilities in Which Fair Value Approximates Carrying Value: The fair values of certain financial assets and liabilities carried at cost, including cash, due from affiliates, accrued interest receivable, accounts payable and due to affiliates, are considered to approximate their respective carrying value due to their short-term nature and negligible credit losses. -9- Part I Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ================================================================================ CHASE PREFERRED CAPITAL CORPORATION FINANCIAL HIGHLIGHTS (in thousands, except per share, unit and ratio data) (Unaudited) 1999 1998 ---------------------------------------------- ------- Nine Months Ended THIRD SECOND FIRST THIRD SEPTEMBER 30, -------------------------- QUARTER QUARTER QUARTER QUARTER 1999 1998 ------- ------- ------- ------- --------------------------
INCOME STATEMENT: Interest Income $ 18,091 $ 18,852 $ 17,925 $ 20,128 $ 54,868 $ 59,184 Net Interest Income 17,434 18,213 17,291 19,458 52,938 57,356 Net Income 17,314 18,048 17,147 19,302 52,509 56,860 Net Income Applicable to Common Share $ 6,177 6,910 6,010 8,164 19,097 23,447 Income Per Common Share (a) $ 6,177 $ 6,910 $ 6,010 $ 8,164 $ 19,097 $ 23,447 BALANCE SHEET: Mortgage Loans $ 1,086,853 $ 1,059,016 $ 1,027,272 $ 1,035,541 $ 1,086,853 $ 1,035,541 Total Assets 1,118,917 1,119,627 1,118,712 1,123,700 1,118,917 1,123,700 Preferred Stock Outstanding 550,000 550,000 550,000 550,000 550,000 550,000 Total Stockholders' Equity $ 1,118,870 $ 1,119,225 $ 1,118,324 $ 1,120,412 $ 1,118,870 $ 1,120,412 OTHER DATA: Dividends Paid on Preferred Shares $ 11,137 11,138 $ 11,137 $ 11,138 $ 33,412 $ 33,413 Dividends Paid on Common Shares $ 6,900 $ 6,009 $ 8,560 $ 7,400 $ 21,469 $ 22,965 Number of Preferred Shares Outstanding 22,000,000 22,000,000 22,000,000 22,000,000 22,000,000 22,000,000 Number of Common Shares Outstanding (a) 1 1 1 1 1 1 Average Yield on Mortgage Loans 6.7% 6.9% 7.1% 7.6% 6.9% 7.6% - ------------------------------------------------------------------------------------------------------------------------------------
- ---------- (a) All common and per share amounts have been restated to reflect the change, effected on December 29, 1998, of the Company's outstanding Common Stock from 572,500 shares, par value $300 per share, to one share, par value $171,750,000 per share. -10- Part I Item 2. (continued) Certain forward-looking statements contained in this Form 10-Q are subject to risks and uncertainties. The Company's actual results may differ materially from those included in these forward-looking statements. Reference is made to the Company's reports filed with the Securities and Exchange Commission, in particular the 1998 Annual Report, for a discussion of factors that may cause such differences to occur. - -------------------------------------------------------------------------------- OVERVIEW - -------------------------------------------------------------------------------- The Company is a real estate investment trust ("REIT") under the Internal Revenue Code of 1986 (the "Code"). The principal business of the Company is to acquire, hold and manage assets that qualify as REIT real estate assets under the Code and that will generate net income for distribution to stockholders. To date, the Company has acquired the following types of assets: (i) Mortgage Loans acquired from the Bank or from affiliates of the Bank as whole loans secured by first mortgages or deeds of trust on single-family (one- to four-unit) residential real estate properties or on commercial real estate properties and (ii) securities that qualify as real estate assets under Section 856(c)(6)(B) of the Code that are rated by at least one nationally recognized statistical rating organization and that represent interests in or obligations backed by pools of mortgage loans ("Mortgage-Backed Securities"). Mortgage loans underlying the Mortgage-Backed Securities are secured by single-family residential, multifamily or commercial real estate properties located in the United States. The Company began operations in 1996 upon completion of an initial public offering of 22,000,000 Series A Preferred Shares. The Series A Preferred Shares are traded on the New York Stock Exchange. The Company's Common Stock is held solely by the Bank. POSSIBLE FUTURE DEVELOPMENTS The Company is currently evaluating a proposal (the "Expansion Proposal") pursuant to which the Company may acquire additional assets qualifying as REIT real estate assets under the Code. If the Expansion Proposal is implemented, it is currently anticipated that the additional assets acquired by the Company would consist of (i) additional loans acquired from the Bank and its affiliates consisting of loans secured by manufactured housing units ("MHLS") and residential second mortgages ("2ND mortgages") and (ii) loans made by the Company to the Bank or its affiliates secured by home equity lines of credit ("HELOCs") pledged by the borrower to the Company. The MHLS, 2ND mortgages and HELOCs subject to the Expansion Proposal would be serviced by CMMC on behalf of the Company. If the Expansion Proposal is implemented, the Company will continue to acquire Mortgage Loans in accordance with the policies and contractual terms currently in effect with respect to those Mortgage Loans. The Company's Board of Directors has determined that the Expansion Proposal will only be effected if approved by the Company's Independent Directors, and after receipt of regulatory approval and receipt of confirmations by the rating agencies rating the Series A Preferred Shares that implementation of the proposal will not adversely affect their ratings of the Series A Preferred Shares. Accordingly, there is no assurance that the Expansion Proposal will be implemented. However, if the Expansion Proposal is approved, it is currently expected to be implemented in the first half of 2000. CONSIDERATIONS RELATING TO AFFILIATE TRANSACTIONS The Bank administers the day-to-day activities of the Company in its role as Advisor under the Agreement. CMMC sub-services the Company's Mortgage Loans on behalf of the Servicer under each of the Servicing Agreements. The Bank and its affiliates may have interests that are not identical to those of the Company. Consequently, conflicts of interest may arise with respect to transactions, including without limitation, future acquisitions of assets from the Bank or its affiliates; servicing of those assets, particularly with respect to assets that become classified or placed in nonaccrual status or which have been, more than once during the preceding twelve months, more than 30 days past due in the payment of principal and interest; future dispositions of assets to CMC or any of its nonbank subsidiaries; the modification of the Agreement or the Servicing Agreements; and the entry into additional agreements with CMC, the Bank or their affiliates (including agreements contemplated by the Expansion Proposal). -11- Part I Item 2. (continued) The Company intends that any agreements and transactions between the Company, on the one hand, and CMC, the Bank or their affiliates, on the other hand (including any agreements and transactions contemplated by the Expansion Proposal), will be fair to all parties and consistent with market terms. The requirement in the Certificate of Designation establishing the Series A Preferred Shares that certain actions of the Company be approved by a majority of the Independent Directors (as defined in the Certificate of Designation) is also intended to ensure fair dealing between the Company and CMC, the Bank and their respective affiliates. However, there can be no assurance that those agreements or transactions will be on terms as favorable to the Company as those that could have been obtained from unaffiliated third parties. RESULTS OF OPERATIONS For the quarters ended September 30, 1999 and 1998, the Company reported net interest income of approximately $17,434,000 and $19,458,000, respectively. Interest income from residential and commercial mortgage loans was approximately $15,823,000 and $1,300,000, respectively, for the quarter ended September 30, 1999 and approximately $17,011,000 and $1,746,000, respectively, for the quarter ended September 30, 1998. The total average yield for the quarters ended September 30, 1999 and 1998 was 6.7% and 7.6%, respectively. After deduction of approximately $63,000 and $57,000 in advisory fees and other administrative expenses, respectively, the Company reported net income of approximately $17,314,000 for the quarter ended September 30, 1999. This compared to net income of approximately $19,302,000 for the quarter ended September 30, 1998, after deducting approximately $63,000 and $93,000 in advisory fees and other administrative expenses, respectively. The lower results for the third quarter of 1999 when compared to the third quarter of 1998 are primarily due to the lower yield on mortgage loans during the quarter ended September 30, 1999. The Company reported basic earnings per share of $6,177,000 and $8,164,000 for the quarters ended September 30, 1999 and 1998, respectively. The lower results for the third quarter of 1999 when compared to the third quarter of 1998 reflect the impact of lower yield on mortgage loans during the quarter ended September 30, 1999. For the nine months ended September 30, 1999 and 1998, the Company reported net interest income of approximately $52,938,000 and $57,356,000, respectively. Interest income from residential and commercial mortgage loans was approximately $46,363,000 and $4,756,000, respectively, for the nine months ended September 30, 1999 and approximately $47,209,000 and $6,073,000, respectively, for the nine months ended September 30, 1998. The total average yield on the Mortgage Loans for the nine months ended September 30, 1999 and 1998 was 6.9% and 7.6%, respectively. After deduction of approximately $188,000 and $241,000 in advisory fees and other administrative expenses, respectively, the Company reported net income of approximately $52,509,000 for the nine months ended September 30, 1999. This is compared to net income of approximately $56,860,000 for the nine months ended September 30, 1998, after deducting approximately $188,000 and $308,000 in advisory fees and other administrative expenses, respectively. The Company reported basic earnings per share of $19,097,000 and $23,447,000 for the nine months ended September 30, 1999 and 1998, respectively. The lower results for the 9 months ended 1999 when compared with the same period in 1998 reflect the impact of the lower yield on mortgage loans during the nine months ended September 30, 1999. The Company paid $11,137,000 and $11,138,000 for the quarters ended September 30, 1999 and 1998, respectively, and $33,412,000 and $33,413,000 for the nine months ended September 30, 1999 and 1998, respectively, in dividends on the Series A Preferred Shares. As of this date, all dividend payments on Series A Preferred Shares are current. For the nine months ended September 30, 1999, the Company paid Common Stock dividends of approximately $21,469,000. Dividends on the Common Stock are paid to the Bank when, as and if declared by the Board of Directors of the Company out of funds legally available therefor. The Company expects to pay Common Stock dividends at least annually in amounts necessary to continue to preserve its status as a REIT. -12- Part I Item 2. (continued) MORTGAGE LOANS At September 30, 1999, mortgage loans consisted of both residential and commercial mortgage loans. At that date, residential mortgage loans in the portfolio consisted of treasury and prime rate adjustable mortgages ("ARMs"); one-year and six-month ARMs; three-year, five-year, seven-year, and ten-year fixed rate loans with an automatic conversion to one-year ARMs; three-year fixed rate loans with an automatic conversion to three-year and six-month ARMs; and fixed rate loans. The commercial mortgage loans consist of fixed and variable rate loans, a majority of which have balloon payments. The Company's initial portfolio of Mortgage Loans was 90% residential and 10% commercial. Over time, as commercial mortgage loans have matured or prepaid, they have been replaced with residential mortgage loans. At September 30, 1999, 94.3% of the Company's portfolio was comprised of residential mortgage loans, with the balance consisting of commercial mortgage loans, and, as commercial loans continue to prepay or mature, the proportion of the Company's portfolio consisting of commercial loans is expected to decrease. For the quarters ended September 30, 1999 and 1998, the Company purchased Mortgage Loans having an outstanding principal balance of approximately $126,829,000 and $174,316,000, respectively, from affiliates of the Bank. In addition, for the quarters ended September 30, 1999 and 1998, the Company received approximately $118,240,000 and $153,105,000, respectively, of principal payments on its portfolio from the Servicer (and Sub-Servicer). For the nine months ended September 30, 1999 and 1998, the Company purchased Mortgage Loans having an outstanding principal balance of approximately $479,563,000 and $484,783,000, respectively, from affiliates of the Bank. In addition, for the nine months ended September 30, 1999 and 1998, the Company received approximately $454,806,000 and $414,453,000, respectively, of principal payments on its portfolio from the Servicer (and Sub-Servicer). The following table reflects the composition of interest-earning assets as a percentage of total interest-earning assets: Interest-Earning Asset Mix At September 30, 1999 At December 31, 1998 (in thousands) Amount Percent Amount Percent - ---------------------------------------------------------------------------------------
Residential Mortgage Loans $ 1,024,714 94.3% $ 944,012 92.4% Commercial Mortgage Loans 62,139 5.7% 77,356 7.6% ------------- -------- ------------ ------- TOTAL INTEREST-EARNING ASSETS $ 1,086,853 100% $ 1,021,368 100% ============= ======== ============ ======= - ---------------------------------------------------------------------------------------
For a further discussion on the Company's acquisition and disposition policies for Mortgage Loans, reference is made to Note 2 of the Company's 1998 Annual Report. At September 30, 1999 and December 31, 1998, there were no nonaccruing residential mortgage loans. For the quarter and nine months ended September 30, 1999, there were no sales of nonaccruing loans. ALLOWANCE FOR LOAN LOSSES The allowance for loan losses is available to absorb potential credit losses from the entire Mortgage Loan portfolio. The Company deems its allowance for loan losses as of September 30, 1999 to be adequate. Although the Company considers that it has sufficient reserves to absorb losses that currently may exist in the portfolio, but are not yet identifiable, the precise loss content is subject to continuing review based on quality indicators, industry and geographic concentrations, changes in business conditions, and other external factors such as competition, and legal and regulatory requirements. The Company will continue to reassess the adequacy of the allowance for loan losses. -13- Part I Item 2. (continued) The accompanying table reflects the activity in the Company's allowance for loan losses for the periods indicated: Three Months Ended Nine Months Ended Allowance for Loan Losses Sept. 30, 1999 Sept. 30, 1998 Sept. 30, 1999 Sept. 30, 1998 (in Thousands) - ----------------------------------------------------------------------------------------------------------------------
Total Allowance at Beginning of Period $ 4,715 $ 3,555 $ 4,120 $ 3,468 Acquired Allowance 213 295 808 822 Provision for Losses 0 0 0 0 Charge-Offs 0 0 0 (78) Recoveries 0 0 0 0 Sale of Loans 0 0 0 (362) ---------- ---------- ----------- ----------- Total Allowance at End of Period $ 4,928 $ 3,850 $ 4,928 $ 3,850 ========== ========== =========== =========== - ----------------------------------------------------------------------------------------------------------------------
At September 30, 1999 and 1998, the Company's allowance for loan losses as a percentage of total loans was .45% and .37%, respectively. INTEREST RATE RISK The Company's income currently consists primarily of interest payments on Mortgage Loans. Currently, the Company does not use any derivative products to manage its interest rate risk. If there is a decline in market interest rates, the Company may experience a reduction in interest income on its Mortgage Loans (and, if the Expansion Proposal is implemented, on the additional assets acquired pursuant to that proposal) and a corresponding decrease in funds available to be distributed to its shareholders. The reduction in interest income may result from downward adjustments of the indices upon which the interest rates on adjustable rate loans are based and from prepayments of loans with fixed interest rates, resulting in reinvestment of the proceeds in lower-yielding loans. There can be no assurance that an interest rate environment in which there is a significant decline in interest rates over an extended period of time would not adversely affect the Company's ability to pay dividends on the Series A Preferred Shares. SIGNIFICANT CONCENTRATION OF CREDIT RISK Concentration of credit risk arises when a number of borrowers engage in similar business activities, or activities in the same geographical region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Concentration of credit risk indicates the relative sensitivity of the Company's performance to both positive and negative developments affecting a particular industry. The Company's balance sheet exposure to geographic concentrations directly affects the credit risk of the Mortgage Loans within the portfolio. The following table shows the Mortgage Loan portfolio by geographical area as of September 30, 1999 and December 31, 1998: Geographical Breakout September 30, 1999 December 31, 1998 (in thousands) Amount Percent Amount Percent - -----------------------------------------------------------------------------------------------------------------------
Residential Mortgage Loans: California $ 388,298 35.7% $ 372,200 36.4% Colorado 83,330 7.7% 63,278 6.2% Other States (no State has more than 5% of total loans) 553,086 50.9% 508,534 49.8% ------------ ----- ------------ ----- Total Residential Mortgage Loans 1,024,714 94.3% 944,012 92.4% ------------ ----- ------------ ----- Commercial Mortgage Loans: New York Metropolitan Tri-State Area 58,534 5.4% 73,523 7.2% Other States (no State has more than .24% of total loans) 3,605 .3% 3,833 0.4% ------------ ------ ------------ ----- Total Commercial Mortgage Loans 62,139 5.7% 77,356 7.6% ------------ ------ ------------ ----- TOTAL $ 1,086,853 100% $ 1,021,368 100% ============ ====== ============= ====
-14- Part I Item 2. (continued) At September 30, 1999, approximately 35.7% of the Company's total Mortgage Loan portfolio consisted of loans secured by residential real estate properties located in California. Consequently, these residential mortgage loans may be subject to a greater risk of default than other comparable residential mortgage loans in the event of adverse economic, political or business developments and natural hazards (earthquakes, for example) in California that may affect the ability of residential property owners in California to make payments of principal and interest on the underlying mortgages. In addition, at such date, a substantial majority of the commercial mortgage properties underlying the Company's commercial mortgage loans were located in the New York metropolitan tri-state area. Substantially all of these mortgaged properties were, at the time of their origination, at least 70% occupied by the borrowers or their affiliates. Consequently, these commercial mortgage loans may be subject to greater risk of default than other comparable commercial mortgage loans in the event of adverse economic, political or business developments in the New York metropolitan tri-state areas that may affect the ability of businesses in that area to make payments of principal and interest on the underlying mortgages. LIQUIDITY RISK MANAGEMENT The objective of liquidity management is to ensure the availability of sufficient cash flows to meet all of the Company's financial commitments and to capitalize on opportunities for the Company's business expansion. In managing liquidity, the Company takes into account various legal limitations placed on a REIT. The Company's principal current liquidity needs are to maintain the current portfolio size through the acquisition of additional Mortgage Loans as Mortgage Loans currently in the portfolio mature, prepay or are sold, and to pay dividends on the Series A Preferred Shares. The acquisition of additional Mortgage Loans is intended to be funded with the proceeds obtained from the sale or repayment of principal balances of Mortgage Loans by individual borrowers. The Company currently anticipates that, if the Expansion Proposal is approved, the initial purchase by the Company of the portfolio of additional assets contemplated by that proposal (and any subsequent purchases intended to increase the size of that portfolio of additional assets) will be fully funded through additional investments by the Bank. Subsequent purchases to maintain the size of the portfolio acquired pursuant to the Expansion Proposal will be funded with proceeds obtained by the Company as the acquired assets mature, are prepaid by the borrowers or are sold by the Company. The Company does not have and does not anticipate having any material capital expenditures. For further discussion on liquidity risk management, reference is made to page 10 of the Company's 1998 Annual Report. OPERATIONAL RISK YEAR 2000. As noted above, the Company is a wholly-owned subsidiary of the Bank, which is itself a wholly-owned subsidiary of CMC. The Company has no employees. In accordance with agreements between the Company and the Bank, the Bank manages all of the Company's operations, including the servicing of all of the Company's Mortgage Loans. Year 2000 efforts for the Company are likewise being coordinated, managed and monitored as part of the Year 2000 efforts of CMC by CMC's Year 2000 Enterprise Program Office. The Program Office, which reports directly to CMC's Executive Committee, together with 34 business area project offices, coordinates, manages and monitors all aspects of CMC's Year 2000 effort on a global basis, both technical- and business-related. In addition, a Year 2000 Core Team, consisting of senior managers from CMC's internal audit, technology risk and control, financial management and control, the technology infrastructure division, legal and the Program Office, provides independent oversight of the process. The Core Team, which also reports directly to CMC's Executive Committee, is charged with identifying key risks and ensuring necessary management attention for timely resolution of project issues. On January 1, 1999, CMC established a Year 2000 Business Risk Council, comprised of approximately 20 senior business leaders - line managers, risk managers and representatives of key staff functions - to identify potential Year 2000 business risks and to coordinate planning and readiness efforts, contingency plans for Year 2000 and the establishment of a Year 2000 command center structure and rapid response teams. -15- Part I Item 2. (continued) CMC's Year 2000 Program is tracked against a well-defined set of milestones. CMC completed its inventory and assessment phases in 1997, identifying affected hardware and software, prioritizing tasks and establishing implementation plans. Approximately 3,900 business applications (approximately 1,000 of which are provided by third-party vendors, were identified by CMC as requiring Year 2000 remediation. As of September 30, 1999, CMC's software applications currently in operation have been remediated and tested for Year 2000 compliance. CMC's information technology teams are now managing systems changes to ensure that CMC's applications remain Year 2000 compliant. CMC has also imposed a "freeze" on technology changes from October 1, 1999 through the end of January 2000. The freeze is intended to ensure that CMC's technology environment will be highly stable at year-end. Due diligence efforts of external Year 2000 risks are continuing. This includes due diligence on settlement counterparties (such as correspondents, sub-custodians and investment advisors) and customers. In addition, stress testing, on at least a monthly basis, of CMC's market-sensitive portfolios is being performed. The stress test scenarios continue to be updated as more information about worldwide Year 2000 readiness becomes available. CMC continues to evaluate potential Year 2000 impacts upon its funding capability and has taken actions to incorporate such risks into its capital and liquidity planning in order to meet anticipated funding needs at year end. The results of CMC's due diligence and other assessment efforts are utilized by CMC to help it manage its Year 2000 business risks. Under the auspices of CMC's Year 2000 Business Risk Council, contingency plans have been developed, refined and tested. Approximately 250 different risk scenarios have been identified across all geographies and CMC businesses, resulting in the development of approximately 1,400 individual Year 2000 contingency plans. These plans include identification of possible alternative methods by which to provide service, alternative locations for operations, increased staff support to service customers, as well as ways for CMC to maintain critical services in the event of environmental infrastructure outages. CMC's Year 2000 program is now focused almost entirely on final preparations for the event. Year 2000 command centers have been created; problem tracking and reporting tools designed; key operational and service performance measures identified for tracking; "wellness checks" of facilities, services, and systems have been planned; and training of "rapid response teams" is in process. Three dress rehearsals have been scheduled for the fourth quarter of 1999. The first dress rehearsal, scheduled for October 15, 1999, tested command center connectivity and processes. The second dress rehearsal, scheduled for October 29 and 30, 1999, tested CMC's Year 2000 tracking, monitoring and communications processes. These dress rehearsals were successful in identifying areas for improved communication and more efficient decision making at the event. The third dress rehearsal, scheduled for early December 1999, is intended to refine business status reporting and test back-up command center infrastructure and processes. The Year 2000 command center structure will become operational in late December and will continue in place until a stable operating environment is achieved. CMC continues to estimate that full year 1999 Year 2000 costs will be approximately $158 million. CMC's expectations about completion of its Year 2000 remediation and testing efforts, the anticipated costs to complete the project and the anticipated business, operational and financial risks to CMC and its subsidiaries, including the Company, are subject to a number of uncertainties. CMC's estimates as to the cost to prepare for the Year 2000 are based on numerous assumptions regarding future events, including, among others, continued availability of trained personnel, expectations regarding third party modification plans and the nature and amount of testing that may be required. The operations or financial results of CMC and its subsidiaries, including the Company, could be materially adversely affected if vendors, service providers, customers or securities exchanges are unable to successfully implement their Year 2000 plans and continue operations; if CMC is unsuccessful in identifying or fixing all Year 2000 problems in its critical operations; or if CMC is unable to retain the staff or third party consultants necessary to implement its technology plans at currently projected costs and timetables. -16- Part I Item 2. (continued) OTHER MATTERS As of September 30,1999 the Company believed that it was in full compliance with the REIT tax rules and that it will continue to qualify as a REIT under the provisions of the Code. The Company calculates that: o its Qualified REIT Assets, as defined in the Code, are 100% of its total assets, as compared to the federal tax requirement that at least 75% of its total assets must be Qualified REIT assets. o 93% of its revenues qualify for the 75% source of income test and 100% of its revenues qualify for the 95% source of income test under the REIT rules. o none of its revenues were subject to the 30% income limitation under the REIT rules. The Company also met all REIT requirements regarding the ownership of its Common Stock and the Series A Preferred Shares and anticipates meeting the 1999 annual distribution and administrative requirements. -17- Part I ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ---------------------------------------------------------- For information regarding interest rate risk, see the Interest Rate Risk section on page 14. CHASE PREFERRED CAPITAL CORPORATION AVERAGE BALANCE SHEET Three Months Ended September 30, (in thousands, except per share data) (Unaudited) 1999 1998 BALANCE INTEREST RATE BALANCE INTEREST RATE ------- -------- ---- ------- -------- ---- (Annualized) (Annualized)
ASSETS: Residential Mortgage Loans $ 958,689 $ 15,823 6.6% $ 896,559 $ 17,011 7.6% Commercial Mortgage Loans 63,307 1,300 8.2% 84,232 1,746 8.3% CASH 64,570 968 6.0% 89,123 1,371 6.2% ------------- -------- ---- ----------- ---------- ---- TOTAL INTEREST-EARNING ASSETS 1,086,566 18,091 6.7% 1,069,914 20,128 7.5% ------------- -------- ---- ----------- ---------- ---- Allowance for Loan Losses (4,738) (3,577) Due from Affiliates 38,727 56,219 Accrued Interest Receivable 6,415 6,551 ------------- ----------- TOTAL ASSETS $ 1,126,970 $ 1,129,107 ============= =========== LIABILITIES: Accounts Payable $ 5,048 $ 2,924 Due to Affiliates 0 3,941 ------------- ----------- TOTAL LIABILITIES 5,048 6,865 ------------- ----------- STOCKHOLDERS' EQUITY: Preferred Stock, Par Value $25 Per Share; 50,000,000 Shares Authorized, 22,000,000 Issued and Outstanding 550,000 550,000 Common Stock, Par Value $171,750,000 Per Share; One Share Authorized, Issued and Outstanding 171,750 171,750 Capital Surplus 381,641 381,637 RETAINED EARNINGS 18,531 18,855 ------------- ----------- TOTAL STOCKHOLDERS' EQUITY 1,121,922 1,122,242 ------------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' $ 1,126,970 $ 1,129,107 ============= =========== EQUITY
-18- CHASE PREFERRED CAPITAL CORPORATION AVERAGE BALANCE SHEET Nine Months Ended September 30, (in thousands, except per share data) (Unaudited) 1999 1998 BALANCE INTEREST RATE BALANCE INTEREST RATE ------- -------- ---- ------- -------- ---- (Annualized) (Annualized) ASSETS: Residential Mortgage Loans $ 918,038 $ 46,363 6.7% $ 847,840 $ 47,209 7.4% Commercial Mortgage Loans 70,440 4,756 9.0% 89,524 6,073 9.0% Cash 85,371 3,749 5.9% 145,318 5,902 5.4% ------------- ---------- ---- ------------ --------- ---- TOTAL INTEREST-EARNING ASSETS 1,073,849 54,868 6.8% 1,082,682 59,184 7.3% ------------- ---------- ---- ------------ --------- ---- Allowance for Loan Losses (4,439) (3,541) Due from Affiliates 50,559 46,356 Accrued Interest Receivable 6,936 6,255 ------------- ------------ TOTAL ASSETS $ 1,126,905 $ 1,131,752 ============= ============ LIABILITIES: Accounts Payable $ 4,470 $ 3,315 Due to Affiliates 1 3,570 ------------- ------------ TOTAL LIABILITIES 4,471 6,885 ------------- ------------ STOCKHOLDERS' EQUITY: Preferred Stock, Par Value $25 Per Share; 50,000,000 Shares Authorized, 22,000,000 Issued and Outstanding 550,000 550,000 Common Stock, Par Value $171,750,000 Per Share; One Share Authorized, Issued and Outstanding 171,750 171,750 Capital Surplus 381,638 381,637 Retained Earnings 19,046 21,480 ------------- ------------ TOTAL STOCKHOLDERS' EQUITY 1,122,434 1,124,867 ------------- ------------ TOTAL LIABILITIES AND STOCKHOLDERS' $ 1,126,905 $ 1,131,752 ============= ============= EQUITY
-19- CHASE PREFERRED CAPITAL CORPORATION QUARTERLY FINANCIAL INFORMATION (in thousands, except per share data) (Unaudited) 1999 1998 -------------------------------------- ------------------------------------------------- THIRD SECOND FIRST FOURTH THIRD SECOND FIRST QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
INTEREST INCOME: Residential Mortgage Loans $ 15,823 $ 15,209 $ 15,331 $ 17,221 $ 17,011 $ 14,446 $ 15,752 Commercial Mortgage Loans 1,300 1,730 1,726 1,836 1,746 2,141 2,186 Overnight Investments 968 1,913 868 1,187 1,371 2,668 1,863 ---------- ---------- ---------- ---------- ---------- --------- --------- 18,091 18,852 17,925 20,244 20,128 19,255 19,801 Less: Servicing Fees (657) (639) (634) (421) (670) (559) (599) ---------- ---------- ---------- ---------- --------- --------- --------- Net Interest Income 17,434 18,213 17,291 19,823 19,458 18,696 19,202 ---------- ---------- ---------- ---------- --------- --------- --------- NON INTEREST EXPENSE: Advisory Fees 63 63 63 63 63 62 63 Other Administrative Expenses 57 102 81 61 93 92 123 ---------- ---------- ---------- --------- --------- --------- --------- Total Noninterest Expense 120 165 144 124 156 154 186 ---------- ---------- ---------- --------- --------- --------- --------- NET INCOME $ 17,314 $ 18,048 $ 17,147 $ 19,699 $ 19,302 $ 18,542 $ 19,016 ========== ========== =========== ========== ========== ========= ========= NET INCOME APPLICABLE TO COMMON SHARE $ 6,177 $ 6,910 $ 6,010 $ 8,562 $ 8,164 $ 7,404 $ 7,879 ========== ========== =========== ========== ========== ========= ========= NET INCOME PER COMMON SHARE(a) $ 6,177 $ 6,910 $ 6,010 $ 8,562 $ 8,164 $ 7,404 $ 7,879 ========== ========== =========== ========== ========== ========= =========
- ---------- (a) All per share amounts have been restated to reflect the change, effected on December 29, 1998, of the Company's outstanding Common Stock from 572,500 shares, par value $300 per share, to one share, par value $171,750,000 per share. -20- PART II - OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- On September 17, 1999, the Bank, the sole holder of the Company's Common Stock, by written consent, elected the following persons as directors of the Company to serve until their respective successors shall have been elected and qualified: Richard J. Boyle, Dina Dublon, Thomas Jacob, William C. Langley, Louis M. Morrell, Joseph L. Sclafani and Robert S. Strong. ITEM 6. Exhibits and Current Reports on Form 8-K ---------------------------------------- (A) Exhibits: 11 - Computation of net income per share. 12(a) - Computation of ratio of earnings to fixed charges. 12(b) - Computation of ratio of earnings to fixed charges and preferred stock dividend requirements. 27 - Financial Data Schedule. (B) Reports on Form 8-K: None -21- SIGNATURE Pursuant to the requirements 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. CHASE PREFERRED CAPITAL CORPORATION ----------------------------------- (Registrant) DATE: November 12, 1999 By /s/ Louis M. Morrell ----------------- --------------------------------- Louis M. Morrell Treasurer EX-11 2 EXHIBIT 11 Part II Item 6. (continued) EXHIBIT 11 CHASE PREFERRED CAPITAL CORPORATION Computation of net income per common share ------------------------------------------ (in thousands, except share and per share amounts) (Unaudited) Net income for basic earnings per share are computed by subtracting from the applicable earnings the dividend requirements on preferred stock to arrive at earnings applicable to common stock and dividing this amount by the weighted average number of shares of common stock outstanding during the period. Three Months Ended Nine Months Ended SEPTEMBER 30, SEPTEMBER 30, ------------------------------ ---------------------------- 1999 1998 1999 1998 =========================================================================================================================
Earnings: Net Income $ 17,314 $ 19,302 $ 52,509 $ 56,860 Less: Preferred Stock Dividend Requirements 11,137 11,138 33,412 33,413 ----------- ----------- ----------- ----------- Net Income Applicable to Common Stock $ 6,177 $ 8,164 $ 19,097 $ 23,447 ----------- ----------- ----------- ----------- Shares: Weighted Average Number of Common Shares Outstanding (a) 1 1 1 1 Net Income Per Share: (a) $ 6,177 $ 8,164 $ 19,097 $ 23,447 =========== =========== =========== =========== =========================================================================================================================
- ---------- (a) All common and per share amounts have been restated to reflect the change, effected on December 29, 1998, of the Company's outstanding Common Stock from 572,500 shares, par value $300 per share, to one share, par value $171,750,000 per share. -22- EX-12.(A) 3 EXHIBIT 12(A) Part II Item 6. (continued) EXHIBIT 12(a) CHASE PREFERRED CAPITAL CORPORATION computation of ratio of earnings to fixed charges ------------------------------------------------- (in thousands, except ratio) (Unaudited) Nine Months Ended September 30, 1999 ------------------ Net income $ 52,509 ----------- Fixed charges: Advisory fees 188 Total fixed charges 188 Earnings before fixed charges $ 52,697 =========== Fixed charges, as above $ 188 =========== Ratio of earnings to fixed charges 280.30 =========== -23- EX-12.(B) 4 EXHIBIT 12(B) Part II Item 6. (continued) EXHIBIT 12(b) CHASE PREFERRED CAPITAL CORPORATION Computation of ratio of earnings to fixed charges ------------------------------------------------- and preferred stock dividend requirements ----------------------------------------- (in thousands, except ratio) (Unaudited) Nine Months Ended September 30, 1999 ------------------ Net income $ 52,509 ----------- Fixed charges: Advisory fees 188 Total fixed charges 188 Earnings before fixed charges $ 52,697 =========== Fixed charges, as above $ 188 Preferred stock dividend requirements 33,412 ----------- Fixed charges including preferred stock dividends $ 33,600 =========== Ratio of earnings to fixed charges and preferred stock dividend requirements 1.57 -24- EX-27 5 EXHIBIT 27 FINANCIAL DATA SCHEDULE
9 0001018450 CHASE PREFERRED CAPITAL CORPORATION 1,000 UNITED STATES DOLLAR 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 1 7,805 0 0 0 0 0 0 1,086,853 4,928 1,118,917 0 47 0 0 0 550,000 171,750 397,120 1,118,917 51,119 0 3,749 54,868 0 1,930 52,938 0 0 429 52,509 52,509 0 0 52,509 19,097 19,097 6.9 0 0 0 0 4,928 0 0 4,928 0 0 0
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