| Mortgage Plus Equity and Loan Holdings Corp. | |||
| Proposed Ticker: | MPLS | 6851 Jericho Turnpike, Suite 246 | |
| Exchange: | NASDAQ-Small Cap Market | Syosset, NY 11791 | |
| Industry: | Financial (SIC Code 6162) | (516) 364-2700 | |
| # of Employees: | 103 | ||
| Type of Shares: | Common Shares | Filing Date: | 11/12/97 | |
| U.S. Shares Filed: | 1,100,000 | Filing Price: | $5.00 | |
| Non-U.S. Shares Filed: | 0 | Offering Amount: | $5,500,000 | |
| Primary Shares: | 1,100,000 | Expenses: | - | |
| Secondary Shares: | 0 | Shares Out After: | 5,128,000 |
| Manager | Tier | Phone |
| National Securities Corp. | Lead Manager | (800) 800-9217 |
| Issuer's Law Firm: | Ruskin, Moscov, Evans & Faltischek |
| Bank's Law Firm: | Camhy Karlinsky & Stein |
| Auditor: | Eisner, Richard A. |
| Registrar/Transfer Agent: | Continental Stock Transfer & Trust Co |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $5.97 | $4.08 | $2.59 | Assets: | $11.45 |
| Net Income: | -$0.22 | $0.14 | -$0.03 | Curr Assets: | |
| EPS: | -$0.06 | $0.03 | -$0.01 | Liabilities: | $11.16 |
| Prior EPS: | -$0.16 | -$1.99 | -$0.17 | Curr Liabilities: | |
| Cash Flow/Oper: | -$5.14 | $2.14 | $0.06 | Equity: | $0.29 |
| Cash Flow/Fin: | $5.38 | -$0.13 | -$0.16 | Cash: | $0.33 |
| Cash Flow/Inv: | $0.25 | -$0.13 | |||
| Business Description |
| The company is a full service retail mortgage banking company providing a broad range of residential mortgage products to prime borrowers who qualify for conventional mortgages and borrowers who are classified as sub-prime. From the Company's inception in 1987 until mid-1994, the Company operated as a licensed mortgage broker, principally in New York. Since obtaining its mortgage banking license in New York in 1994, the Company has grown significantly, originating $43.3 million, $58.0 million and $108.2 million of mortgage loans for the years ended December 31, 1994, 1995 and 1996, respectively. For the six months ended June 30, 1997, the Company originated $66.8 million of mortgage loans. This growth has been due primarily to the Company's expansion into additional geographic markets, the Company's focus, since mid-1996, on mortgage products for "B/C" credit-rated borrowers and a substantial increase in loans to FHA/VA borrowers. The Company's "B/C" and FHA/VA loan volume has grown steadily since 1995, with loans to "B/C" borrowers accounting for 40.4%, of the Company's total loan origination volume for the six months ended June 30, 1997, compared to 7.4% for the year ended December 31, 1995, and loans to FHA/VA borrowers accounting for 25.4% of the Company's total loan origination volume for the six months ended June 30, 1997, compared to 9.2% for the year ended December 31, 1995. |
| Competition |
| The mortgage banking business is highly competitive. The Company competes with financial institutions, such as mortgage bankers, commercial banks, savings associations, credit unions, loan brokers and insurance companies in the origination of mortgage loans. Competition can take many forms, including convenience in obtaining a loan, customer service, marketing and distribution channels and interest rates and origination fees charged to borrowers. Competition may be affected by, among other things, fluctuations in interest rates and general economic conditions. Although the Company believes that its competitive advantage lies primarily with the Company's offering of a broad menu of mortgage loan products with competitive features, its emphasis on the quality of its service, and the pricing of its range of products at competitive rates, there can be no assurance that the Company will be able to compete effectively in this industry, which could materially adversely affect the Company's financial conditions and results of operations. In addition, to the extent that market pricing becomes more aggressive, the Company may be unable to achieve its planned level of growth. The Company has become aware that certain large national finance companies and conventional mortgage originators are implementing plans to or have announced their intention to allocate resources to the origination of loans to sub-prime credit-rated borrowers. The entrance of these competitors into the Company's market could have a material adverse effect on the Company's business, financial condition and results of operations. |
| Business Plan |
| The company's growth strategy includes the following elements: (I) Increasing mortgage originations to sub-prime borrowers through recruiting experienced loan officers, increasing telemarketing and direct mail to target audiences; (ii) Expanding the company's operations in the Commonwealth of Puerto Rico through developing strategic alliances with financial institutions and mortgage bankers and brokers; and (iii) Expanding the companys' geographic coverage for mortgage originations generally, through additions to the Branch Network, through developing strategic alliances with financial institutions, mortgage bankers and brokers and possible acquisitions. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used for funding mortgage loans, expanding the Branch Network, expanding mortgage banking operations in Puerto Rico, increasing telemarketing and advertising, upgrading information systems, repaying indebtedness and general corporate purposes. |
| Officer Name | Title | Age |
| Steven M. Latessa | Chief Executive Officer, President and Chairman of the Board of Directors | 42 |
| Cary Wolen | Chief Operating Officer, Secretary, Chief Financial Officer, Treasurer and Director | 35 |
| Additional Underwriter Compensation |
| Warrant to purchase 110,000 shares/units at a nominal price. |