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AMERICA FIRST FINANCIAL FUND ANNOUNCES CHARGE TO EARNINGS

 SAN FRANCISCO, Calif., Sept. 14 /PRNewswire/ -- America First Financial Fund 1987-A (NASDAQ: AFFFZ) announced today that its EurekaBank subsidiary will record a charge to earnings of approximately $21 million which will result in a net loss for the third quarter of approximately $16 million. This charge to earnings relates to interest rate swap contracts arranged predominantly in 1988, 1990 and 1991 which were intended to hedge yields on fixed rate mortgages funded by variable rate liabilities. The sustained decline in interest rates in the general economy and the resultant prepayment of mortgage loans associated with interest rate swaps caused EurekaBank to establish a liability based on the estimated fair value of swaps that are no longer effective as hedges.
 EurekaBank and America First Eureka Holdings have elected the early implementation of Financial Accounting Standard No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The Fund believes that early compliance with this new pronouncement and the above charge relating to uncovered interest rate swap contracts will result in a better picture of the company's current financial position and future operating results.
 "The currently $1.60 per B.U.C. annual dividend will not be reduced as a result of this charge," said Stephen T. McLin, chairman of the EurekaBank board and president and chief executive officer of America First Eureka Holdings. "Even after this charge, we expect to show a small profit in 1993. EurekaBank's pro-forma tangible capital at Sept. 30, 1993, will be more than $80 million in excess of regulatory requirements, or 5.3 percent against a requirement of 1.5 percent, with core capital and risk-based capital $40 million and $30 million, respectively, in excess of requirements. Our credit quality continues to be quite high despite the difficult California economy and we expect to have a good earnings year in 1994 with a balance sheet and net interest margin that are more representative of the current interest rate environment."
 -0- 9/14/93
 /CONTACT: Stephen McLin of America First Eureka Holdings, 415-982-3800/
 (AFFFZ)


CO: America First Financial Fund 1987-A; EurekaBank; America First
 Eureka Holdings ST: California, Nebraska IN: FIN SU:


MC -- DV005 -- 1939 09/14/93 16:54 EDT
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Publication:PR Newswire
Date:Sep 14, 1993
Words:363
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