x |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE
30, 2007
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______________ TO
_______________
|
Maryland
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52-2063921
|
|
(State
or other jurisdiction
of
|
(I.R.S.
Employer
|
|
incorporation
or
organization)
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Identification
No.)
|
65
East 55th
Street, New York, New York
|
10022
|
|
(Address
of principal executive
offices)
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(Zip
Code)
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Class
|
Outstanding
at August
9, 2007
|
|
Common Stock | ||
par value $0.01 per share | 100 |
Page
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||
Part
I. FINANCIAL INFORMATION:
|
||
Item
1(a). Financial Statements
|
||
Balance
Sheets -
|
||
As
of June 30, 2007 and December 31, 2006
|
1
|
|
Statements
of Income -
|
||
For
the three-month and six-month periods ended June 30, 2007 and
2006
|
2
|
|
Statements
of Stockholders’ Equity -
|
||
For
the three-month and six-month periods ended June 30, 2007 and
2006
|
3
|
|
Statements
of Cash Flows -
|
||
For
the six-month periods ended June 30, 2007 and 2006
|
4
|
|
Notes
to the financial statements
|
5
|
|
Item
1(b). National Bank of Canada Summarized Financial
Statements
|
8
|
|
Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations
|
9
|
|
Item
3. Quantitative and Qualitative Disclosures About Market
Risk
|
11
|
|
Item
4. Controls and Procedures
|
11
|
|
Part
II. OTHER INFORMATION:
|
||
Item
6. Exhibits
|
11
|
June
30,
|
December
31,
|
||||||
2007
|
2006
|
||||||
(
in thousands of US dollars )
|
(Unaudited)
|
|
|||||
|
$
|
|
$
|
||||
Assets
|
|||||||
Current
Assets
|
|||||||
Cash
and cash equivalents
|
91,994
|
90,212
|
|||||
Due
from an affiliated company
|
18,730
|
8,801
|
|||||
Promissory
notes - current portion
|
228,477
|
186,718
|
|||||
Prepaid
expenses
|
20
|
34
|
|||||
Accrued
interest on cash equivalents
|
24
|
47
|
|||||
Total
Current Assets
|
339,245
|
285,812
|
|||||
Promissory
notes
|
143,228
|
193,805
|
|||||
Total
assets
|
482,473
|
479,617
|
|||||
Liabilities
|
|||||||
Current
Liabilities
|
|||||||
Due
to the parent company
|
387
|
365
|
|||||
Accounts
payable
|
34
|
44
|
|||||
Total
liabilities
|
421
|
409
|
|||||
Stockholders'
equity
|
|||||||
Capital
stock and Additional paid-in capital
|
476,764
|
476,764
|
|||||
Retained
earnings
|
5,288
|
2,444
|
|||||
Total
stockholders' equity
|
482,052
|
479,208
|
|||||
Total
liabilities and stockholders' equity
|
482,473
|
479,617
|
Three-month
periods ended
|
Six-month
periods ended
|
||||||||||||
(
in thousands of US dollars, except number
|
June
30,
|
June
30,
|
|||||||||||
of
common shares)
|
2007
|
2006
|
2007
|
2006
|
|||||||||
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Revenue
|
|||||||||||||
Interest
income
|
|||||||||||||
Cash
and cash equivalents
|
759
|
491
|
1,701
|
929
|
|||||||||
Promissory
notes
|
7,614
|
7,928
|
14,587
|
16,072
|
|||||||||
Total
revenue
|
8,373
|
8,419
|
16,288
|
17,001
|
|||||||||
Expenses
|
|||||||||||||
Servicing
and advisory fees
|
387
|
406
|
751
|
827
|
|||||||||
Legal
and other professional fees
|
92
|
74
|
153
|
123
|
|||||||||
Total
expenses
|
479
|
480
|
904
|
950
|
|||||||||
Net
income
|
7,894
|
7,939
|
15,384
|
16,051
|
|||||||||
Preferred
stock dividends
|
6,270
|
6,269
|
12,540
|
12,539
|
|||||||||
Income
available to common stockholders
|
1,624
|
1,670
|
2,844
|
3,512
|
|||||||||
Weighted-average
number of common shares outstanding
|
100
|
100
|
100
|
100
|
|||||||||
Earnings
per common share - basic and diluted
|
16
|
17
|
28
|
35
|
Three-month
periods ended
|
Six-month
periods ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
(
in thousands of US dollars )
|
2007
|
2006
|
2007
|
2006
|
|||||||||
|
$
|
|
$
|
|
$
|
$
|
|||||||
Preferred
stock
|
|||||||||||||
Balance,
beginning and end of period
|
3
|
3
|
3
|
3
|
|||||||||
|
|||||||||||||
Common
stock and paid-in capital
|
|||||||||||||
Balance,
beginning and end of period
|
476,761
|
476,761
|
476,761
|
476,761
|
|||||||||
|
|||||||||||||
Retained
earnings
|
|||||||||||||
Balance,
beginning of period
|
3,664
|
4,170
|
2,444
|
2,328
|
|||||||||
Net
income
|
7,894
|
7,939
|
15,384
|
16,051
|
|||||||||
Preferred
stock dividends
|
(6,270
|
)
|
(6,269
|
)
|
(12,540
|
)
|
(12,539
|
)
|
|||||
Balance,
end of period
|
5,288
|
5,840
|
5,288
|
5,840
|
|||||||||
Total
stockholders' equity
|
482,052
|
482,604
|
482,052
|
482,604
|
Six-month
periods ended
|
|||||||
June
30,
|
|||||||
(
in thousands of US dollars )
|
2007
|
2006
|
|||||
|
$
|
|
$
|
||||
OPERATING
ACTIVITIES
|
|||||||
Net
income
|
15,384
|
16,051
|
|||||
Item
not affecting cash resources
|
|||||||
Prepaid
expenses
|
14
|
15
|
|||||
Due
from an affiliated company
|
(9,929
|
)
|
(7,016
|
)
|
|||
Due
to the parent company
|
22
|
4
|
|||||
Accounts
payable
|
(10
|
)
|
(98
|
)
|
|||
Accrued
interest receivable on cash equivalents
|
23
|
2
|
|||||
Net
cash provided by operating activities
|
5,504
|
8,958
|
|||||
FINANCING
ACTIVITIES
|
|||||||
Dividends
|
(12,540
|
)
|
(12,539
|
)
|
|||
Net
cash used in financing activities
|
(12,540
|
)
|
(12,539
|
)
|
|||
INVESTING
ACTIVITIES
|
|||||||
Investment
in promissory notes
|
(191,298
|
)
|
(82,898
|
)
|
|||
Repayments
of promissory notes
|
200,116
|
95,915
|
|||||
Net
cash used in investing activities
|
8,818
|
13,017
|
|||||
Cash
and cash equivalents, beginning of period
|
90,212
|
59,901
|
|||||
Cash
and cash equivalents, end of period
|
91,994
|
69,337
|
Promissory
notes as of December
31, 2006
|
|
$380,523
|
||
Acquisitions |
191,298
|
|||
Principal
repayments
|
(200,116
|
)
|
||
Promissory
notes as of June
30, 2007
|
|
$371,705
|
2007 | $156,590 | |||
2008 | $81,461 | |||
2009 | $26,183 | |||
2010 | $25,221 | |||
2011 |
|
$40,997
|
||
2012 | $22,967 | |||
2013 | $6,372 | |||
2014 | $3,373 | |||
2015 | $8,541 |
· |
100
shares have been authorized and issued to the
Bank.
|
· |
300,000
shares of preferred stock have been authorized and issued as 8.35%
Noncumulative Exchangeable Preferred Stock, Series A (“Series A Preferred
Shares”), non-voting, ranked senior to the common stock and junior to the
Adjustable Rate Cumulative Senior Preferred Shares, with a liquidation
value of $1,000 per share, redeemable at the Company's option on
or after
September 3, 2007, except upon the occurrence of certain changes
in tax
laws in the United States or in Canada, on or after September 3,
2002.
These Series A Preferred Shares are traded on the New York Stock
Exchange
in the form of Depository Shares, each Depository Share representing
a
one-fortieth interest therein.
|
· |
Each
Series A Preferred Share is exchangeable, upon the occurrence of
certain
events, for one newly issued 8.45% Noncumulative First Preferred
Share,
Series Z, of the Bank.
|
· |
1,000
shares of preferred stock have been authorized (110 issued) as Adjustable
Rate Cumulative Senior Preferred Shares, non-voting, ranked senior
to the
common stock and to the Series A Preferred Shares with a liquidation
value
of $3,000 per share, redeemable at the Company's option at any time
and
retractable at the holder's option on December 30, 2007 and every
ten-year
anniversary thereof.
|
Quarter
ended April 30
|
Six
months ended April 30
|
||||||||||||||||||
%
|
%
|
||||||||||||||||||
(unaudited)
|
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||
Operating
results
|
|||||||||||||||||||
(millions
of Canadian dollars)
|
|||||||||||||||||||
Total
revenues
|
|
$1,022
|
|
$941
|
9
|
|
$2,011
|
|
$1,912
|
5
|
|||||||||
Net
income
|
233
|
214
|
9
|
473
|
431
|
10
|
|||||||||||||
Return
on common shareholders' equity
|
20.3
|
%
|
20.4
|
%
|
20.5
|
%
|
20.2
|
%
|
|||||||||||
Per
common share
|
|||||||||||||||||||
Earnings
- basic
|
|
$1.42
|
|
$1.29
|
10
|
|
$2.87
|
|
$2.57
|
12
|
|||||||||
Earnings
- diluted
|
1.40
|
1.26
|
11
|
2.83
|
2.52
|
12
|
|||||||||||||
Dividends
declared
|
0.54
|
0.48
|
13
|
1.08
|
0.96
|
13
|
|||||||||||||
Book
value
|
28.92
|
25.77
|
12
|
||||||||||||||||
Stock
trading range
|
|||||||||||||||||||
High
|
65.87
|
65.60
|
66.59
|
65.60
|
|||||||||||||||
Low
|
61.96
|
61.35
|
61.36
|
58.35
|
|||||||||||||||
Close
|
61.96
|
62.34
|
61.96
|
62.34
|
|||||||||||||||
Financial
position
|
April
30
|
October
31
|
|||||||||||||||||
(millions
of Canadian dollars)
|
2007
|
2006
|
|||||||||||||||||
Cash
resources and securities
|
71,507
|
57,149
|
25
|
||||||||||||||||
Loans
and acceptances
|
53,246
|
50,488
|
5
|
||||||||||||||||
Other
assets
|
11,927
|
9,248
|
29
|
||||||||||||||||
Total
assets
|
|
$136,680
|
|
$116,885
|
17
|
||||||||||||||
Deposits
|
76,791
|
71,989
|
7
|
||||||||||||||||
Other
liabilities
|
52,034
|
38,083
|
|||||||||||||||||
Subordinated
debentures
|
1,935
|
1,449
|
34
|
||||||||||||||||
Non-controlling
interest
|
908
|
576
|
|||||||||||||||||
Preferres
shares
|
400
|
400
|
|||||||||||||||||
Common
shares
|
1,576
|
1,566
|
|||||||||||||||||
Retained
earnings
|
3,036
|
2,822
|
|||||||||||||||||
Total
liabilities and shareholder's equity
|
|
$136,680
|
|
$116,885
|
|||||||||||||||
Capital
ratios - BIS
|
|||||||||||||||||||
Tier
1
|
9.3
|
%
|
9.9
|
%
|
|||||||||||||||
Total
|
13.3
|
%
|
14.0
|
%(1)
|
|||||||||||||||
Impaired
loans, net of specific and general allowances
|
(198
|
)
|
(192
|
)
|
|||||||||||||||
as
a % of loans and acceptances
|
(0.4
|
)%
|
(0.4
|
)%
|
|||||||||||||||
Assets
under administration/management
|
243,004
|
228,749
|
(1) |
Taking
into account the issuances of $500 million of subordinated debentures
on
November 2, 2006.
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Exhibit
No.
|
Description | |
11
|
Computation
of Earnings Per Share
|
|
31.1
|
Certification
of Chairman and President pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1
|
Written Statement of Chairman and President Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) | |
32.2
|
Written Statement of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) |
NB CAPITAL CORPORATION | ||
|
|
|
Date : August 9, 2007 | /s/ Donna Goral | |
Donna
Goral
Chairman
of the Board and President
|
Date : August 9, 2007 | /s/ Jean Dagenais | |
Jean
Dagenais
Chief
Financial Officer
|
||