Source Capital Profits Down Slightly for Quarter

Source Capital Corporation reported net income of $251,557 or $.19 per basic share for the quarter ended June 30, 2000, a two percent decrease from the second quarter of 1999, when net income was $256,411 or 19 cents a share.

Thanks to a stronger first quarter however, net income for first six months as a whole was $542,246 or 41 cents a basic share, a 10% increase over net income of $490,970 or $.36 per share for the first six months of 1999. Fully diluted earnings per share rose 16 percent, from 31 cents a share for the first six months of 1999 to 36 cents a share for the first six months of 2000.

Loans outstanding at June 30, 2000 increased 26% to $55.6 million from $44.1 million outstanding a year earlier. Leases, however, declined 19% from $16.6 million in 1999 to $13.5 million at June 30, 2000, due primarily to the sale of $3.9 million of leases between June 30, 1999 to June 30, 2000. A tightening of underwriting standards undertaken by the company also contributed.

D. Michael Jones, Soure Capital president and CEO, acknowledged “very disappointing” income performance by its leasing operations, primarily caused by the need to write down or write off several leases in the second quarter. Loans and leases more than 90 days delinquent as to principal or interest equaled 3.97% of loans and leases outstanding at June 30, 2000.

At the close of markets Friday, Source Capital(Nasdaq:SOCC) stock was trading at $5.31 a share, off just over six cents a share and still six cents above its 52-week low of $5.25 a share, achieved on Feb. 23. The stock’s 52-week high came in August of 1999, when shares sold for as high as $7.