Maryland
|
52-2063921
|
|
(State
or other jurisdiction of
incorporation or organization)
|
(I.R.S.
Employer Identification
No.)
|
65
East 55th
Street, New York, New York
|
10022
|
|
(Address
of principal executive
offices)
|
(Zip
Code)
|
Part I. FINANCIAL INFORMATION: |
Page
|
|
Item 1(a). Financial Statements | ||
Balance Sheets - |
1
|
|
As of June 30, 2006 and December 31, 2005 | ||
Statements of Income - |
2
|
|
For the three-month and six-month periods ended June 30, 2006 and 2005 | ||
Statements of Stockholders’ Equity - |
3
|
|
For the three-month and six-month periods ended June 30, 2006 and 2005 | ||
Statements of Cash Flows - |
4
|
|
For the six-month periods ended June 30, 2006 and 2005 | ||
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 |
12
|
|
Part II. OTHER INFORMATION : | ||
Item 1. Legal Proceedings |
12
|
|
Item 6. Exhibits |
12
|
NB
CAPITAL CORPORATION
|
|||||||
BALANCE
SHEETS
|
|||||||
June
30,
2006
|
December
31,
2005
|
||||||
(
in thousands of US dollars )
|
(Unaudited)
|
||||||
Assets
|
$
|
|
$
|
||||
Current
|
|||||||
Cash
and cash equivalents
|
69,337
|
59,901
|
|||||
Due
from an affiliated company
|
16,696
|
9,680
|
|||||
Promissory
notes - current portion
|
156,300
|
79,840
|
|||||
Prepaid
expenses
|
17
|
32
|
|||||
Accrued
interest on cash equivalents
|
17
|
19
|
|||||
|
242,367
|
149,472
|
|||||
Promissory
notes
|
240,662
|
330,139
|
|||||
483,029
|
479,611
|
||||||
Liabilities
|
|||||||
Current
|
|||||||
Due
to the parent company
|
406
|
402
|
|||||
Accounts
payable
|
19
|
117
|
|||||
425
|
519
|
||||||
Stockholders'
equity
|
|||||||
Capital
stock and Additional paid-in capital
|
476,764
|
476,764
|
|||||
Retained
earnings
|
5,840
|
2,328
|
|||||
482,604
|
479,092
|
||||||
483,029
|
479,611
|
NB
CAPITAL CORPORATION
|
|||||||||||||
STATEMENTS
OF INCOME
|
|||||||||||||
(Unaudited)
|
|||||||||||||
Three-month
periods ended
|
Six-month
periods ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
(
in thousands of US dollars )
|
2006
|
2005
|
2006
|
2005
|
|||||||||
$
|
$
|
$
|
$
|
||||||||||
Revenue
|
|||||||||||||
Interest
income
|
|||||||||||||
Cash
equivalents
|
491
|
270
|
929
|
496
|
|||||||||
Promissory
notes
|
7,928
|
8,709
|
16,072
|
17,371
|
|||||||||
8,419
|
8,979
|
17,001
|
17,867
|
||||||||||
Expenses
|
|||||||||||||
Servicing
and advisory fees
|
406
|
388
|
827
|
801
|
|||||||||
Legal
and other professional fees
|
74
|
92
|
123
|
167
|
|||||||||
480
|
480
|
950
|
968
|
||||||||||
Net
income
|
7,939
|
8,499
|
16,051
|
16,899
|
|||||||||
Preferred
stock dividends
|
6,269
|
6,268
|
12,539
|
12,536
|
|||||||||
Income
available to common stockholders
|
1,670
|
2,231
|
3,512
|
4,363
|
|||||||||
Weighted-average
number of common shares outstanding
|
100
|
100
|
100
|
100
|
|||||||||
Earnings
per common share - basic and diluted
|
17
|
22
|
35
|
44
|
NB
CAPITAL CORPORATION
|
|||||||||||||
STATEMENTS
OF STOCKHOLDERS' EQUITY
|
|||||||||||||
(Unaudited)
|
|||||||||||||
Three-month
periods ended
|
Six-month
periods ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
(
in thousands of US dollars )
|
2006
|
2005
|
2006
|
2005
|
|||||||||
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
|
4,170
|
2,687
|
2,328
|
555
|
|||||||||
Net
income
|
7,939
|
8,499
|
16,051
|
16,899
|
|||||||||
Preferred
stock dividends
|
(6,269
|
)
|
(6,268
|
)
|
(12,539
|
)
|
(12,536
|
)
|
|||||
Balance,
end of period
|
5,840
|
4,918
|
5,840
|
4,918
|
|||||||||
TOTAL
STOCKHOLDERS' EQUITY
|
482,604
|
481,682
|
482,604
|
481,682
|
NB
CAPITAL CORPORATION
|
|||||||
STATEMENTS
OF CASH FLOWS
|
|||||||
(Unaudited)
|
|||||||
Six-month
periods ended
|
|||||||
June
30,
|
|||||||
(
in thousands of US dollars )
|
2006
|
2005
|
|||||
OPERATING
ACTIVITIES
|
|||||||
$
|
$
|
||||||
Net
income
|
16,051
|
16,899
|
|||||
Items
not affecting cash resources
|
|||||||
Prepaid
expenses
|
15
|
14
|
|||||
Due
from an affiliated company
|
(7,016
|
)
|
(2,277
|
)
|
|||
Due
to the parent company
|
4
|
(26
|
)
|
||||
Accounts
payable
|
(98
|
)
|
15
|
||||
Accrued
interest receivable on cash equivalents
|
2
|
16
|
|||||
|
|||||||
Net
cash provided by operating activities
|
8,958
|
14,641
|
|||||
FINANCING
ACTIVITIES
|
|||||||
Dividends
|
(12,539
|
)
|
(12,536
|
)
|
|||
Net
cash used in financing activities
|
(12,539
|
)
|
(12,536
|
)
|
|||
INVESTING
ACTIVITIES
|
|||||||
Investment
in promissory notes
|
(82,898
|
)
|
(73,038
|
)
|
|||
Repayments
of promissory notes
|
95,915
|
82,638
|
|||||
Net
cash provided by investing activities
|
13,017
|
9,600
|
|||||
Cash
and cash equivalents, beginning of period
|
59,901
|
58,327
|
|||||
Cash
and cash equivalents, end of period
|
69,337
|
70,032
|
Promissory notes as of December 31, 2005 |
$
409,979
|
|
Acquisitions |
82,898
|
|
Principal repayments |
(95,915
|
) |
Promissory notes as of June 30, 2006 |
$ 396,962
|
2006 |
$
54,757
|
2011 |
$56,041
|
|
2007 |
$146,792
|
|
2012 |
$31,848
|
2008 |
$ 22,198
|
|
2013 |
$
7,445
|
2009 |
$ 30,982
|
2014 |
$ 4,029
|
|
2010 |
$ 34,281
|
2015 |
$
8,589
|
· |
100
shares have been authorized and issued to the
Bank.
|
· |
300,000
shares of preferred stock have been authorized and issued as 8.35%
Non-cumulative 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% Non-cumulative 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.
|
(unaudited) |
Quarter ended April 30
|
Six
months ended April 30
|
|||||||||||||||||
2006
|
2005
|
% Change |
2006
|
2005
|
% Change |
||||||||||||||
Operating
results
|
|||||||||||||||||||
(millions
of Canadian dollars)
|
|||||||||||||||||||
Total
revenues
|
|
$949
|
|
$900
|
5
|
|
$1,928
|
|
$1,883
|
2
|
|||||||||
Net
income
|
214
|
202
|
6
|
431
|
441
|
(2
|
)
|
||||||||||||
Return
on common shareholders' equity
|
|||||||||||||||||||
20.4 | % | 19.9 | % | 20.2 | % | 21.8 | % | ||||||||||||
Per
common share
|
|||||||||||||||||||
Earnings
- basic
|
|
$1.29
|
|
$1.17
|
10
|
|
$2.57
|
|
$2.56
|
-
|
|||||||||
Earnings
- diluted
|
|
$1.26
|
|
$1.15
|
10
|
|
$2.52
|
|
$2.52
|
-
|
|||||||||
Dividends
paid
|
0.48
|
0.42
|
14
|
0.96
|
0.84
|
14
|
|||||||||||||
Book
value
|
25.77
|
24.19
|
7
|
||||||||||||||||
Stock
trading range
|
|||||||||||||||||||
High
|
65.60
|
55.24
|
65.60
|
55.24
|
|||||||||||||||
Low
|
61.35
|
48.72
|
58.35
|
46.39
|
|||||||||||||||
Close
|
62.34
|
52.41
|
62.34
|
52.41
|
|||||||||||||||
Financial
position
|
April
30
|
October
31
|
|||||||||||||||||
(millions
of Canadian dollars)
|
2006
|
2005
|
|||||||||||||||||
Cash
resources and securities
|
53,752
|
50,389
|
7
|
||||||||||||||||
Loans
and acceptances
|
51,099
|
50,360
|
1
|
||||||||||||||||
Other
assets
|
6,332
|
6,849
|
(8
|
)
|
|||||||||||||||
Total
assets
|
|
$111,183
|
|
$107,598
|
3
|
||||||||||||||
Deposits
|
70,118
|
61,977
|
13
|
||||||||||||||||
Other
liabilities
|
34,377
|
39,435
|
(13
|
)
|
|||||||||||||||
Subordinated
debentures
|
1,599
|
1,102
|
45
|
||||||||||||||||
Non-controlling
interest
|
517
|
487
|
6
|
||||||||||||||||
Preferred
shares
|
400
|
400
|
-
|
||||||||||||||||
Common
shares
|
1,558
|
1,565
|
(0
|
)
|
|||||||||||||||
Retained
earnings
|
2,614
|
2,632
|
(1
|
)
|
|||||||||||||||
Total
liabilities and shareholder's equity
|
|
$111,183
|
|
$107,598
|
3
|
||||||||||||||
Capital
ratios - BIS
|
|||||||||||||||||||
Tier
1
|
9,1
|
%
|
9.6
|
%
|
|
||||||||||||||
Total
|
12,2 |
%
|
12.8 |
%(1)
|
|||||||||||||||
Impaired
loans, net of specific and general allowances
|
(197
|
)
|
(191
|
)
|
|||||||||||||||
as
a %
of loans and acceptances
|
(0.4
|
)%
|
(0.4
|
)%
|
|
||||||||||||||
Assets
under administration/management
|
228,946
|
221,132
|
|||||||||||||||||
(1)
Taking
into account the issuance of $500 million of subordinated debentures
on
November 2, 2005.
|
10.46
|
Mortgage
Loan Assignment Agreement (2006 February Series 1 Loan) dated as
of
February 22, 2006 among NB Finance, Ltd., NB Capital Corporation
and
National Bank of Canada
|
10.47
|
Mortgage
Loan Assignment Agreement (2006 February Series 2 Loan) dated as of
February 22, 2006 among NB Finance, Ltd., NB Capital Corporation
and
National Bank of Canada
|
10.48
|
Mortgage
Loan Assignment Agreement (2006 February Series 3 Loan) dated as
of February 22, 2006 among NB Finance, Ltd., NB Capital Corporation
and
National Bank of Canada
|
10.49
|
Mortgage
Loan Assignment Agreement (2006 February Series 4 Loan) dated as
of
February 22, 2006 among NB Finance, Ltd., NB Capital Corporation
and
National Bank of Canada
|
10.50
|
Mortgage
Loan Assignment Agreement (2006 February Series 5 Loan) dated as
of
February 22, 2006 among NB Finance, Ltd., NB Capital Corporation
and
National Bank of Canada
|
10.51
|
Mortgage
Loan Assignment Agreement (2006 February Series 6 Loan) dated as
of
February 22, 2006 among NB Finance, Ltd., NB Capital Corporation
and
National Bank of Canada
|
10.52
|
Promissory
Note representing $27,922,152.04 dated as of March 14, 2006 executed
by NB
Finance, Ltd. in favor of NB Capital
Corporation
|
10.53
|
Promissory
Note representing $7,923,538.76 dated as of March 14, 2006 executed
by NB
Finance, Ltd. in favor of NB Capital
Corporation
|
10.54
|
Promissory
Note representing $13,785,881.20 dated as of March 14, 2006 executed
by NB
Finance, Ltd. in favor of NB Capital
Corporation
|
10.55
|
Promissory
Note representing $7,080,309.99 dated as of March 14, 2006 executed
by NB
Finance, Ltd. in favor of NB Capital
Corporation
|
10.56
|
Promissory
Note representing $9,621,169.92 dated as of March 14, 2006 executed
by NB
Finance, Ltd. in favor of NB Capital
Corporation
|
10.57
|
Promissory
Note representing $16,565,147.29 dated as of March 14, 2006 executed
by NB
Finance, Ltd. in favor of NB Capital
Corporation
|
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: July 26, 2006 | /s/ Donna Goral | |
Donna Goral |
||
Chairman of the Board and President |
|
|
|
Date: July 26, 2006 | /s/ Jean Dagenais | |
Jean Dagenais |
||
Chief Financial Officer |