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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 20 2004
FRANKLIN CREDIT MANAGEMENT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
75-2243266
(I.R.S. employer identification no.)
0-17771
Commission file number)
Six Harrison Street
New York, New York
(Address of principal executive
offices)
10013
(Zip code)
Registrant's telephone number, including area code: (212) 925-8745
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 9.01 Financial Statements and Exhibits
On October 20, 2004, Franklin Credit Management Corporation (the "Company"), a
Delware Corporation, issued a press release entitled, "Franklin Credit Announces
Purchase of $99 Million Subprime Mortgage Portfolio. " A copy of the Company's
press release is attached as Exhibit 99.1.
Exhibit No. Description
99.1 Press Release, dated October 20, 2004, entitled "Franklin Credit
announces purchase of $99 Million subprime mortgage portfolio."
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FRANKLIN CREDIT MANAGEMENT CORPORATION
By: /s/ Thomas J. Axon
Thomas J. Axon
Chairman
October 20, 2004
Exhibit 99.1
For Immediate Release
Contact: Alan Joseph, CFO
Franklin Credit Management Corp.
(212) 925-8745 ext. 169
ajoseph@franklincredit.com
FRANKLIN CREDIT ANNOUNCES PURCHASE OF $99 MILLION SUBPRIME MORTGAGE PORTFOLIO
NEW YORK, New York (October 20, 2004) - Franklin Credit Management Corp. (OTC
BB: FCSC), a specialty financial services company that acquires, manages and
sells subprime residential mortgage assets, today announced the purchase of a
mixed pool of performing, subperforming, and nonperforming mortgage loans (and
related servicing rights) with a face value totaling approximately $99.3
million. The loans, which are secured by single-family residences, were
purchased from Master Financial Corporation, N.A.
Master Financial Corporation is a national mortgage banking company that is
headquartered in Orange,CA.
The purchase of the mortgage pool was funded by an extension of the Company's
Senior Debt facility with Sky Financial Bank ("Sky Financial") pursuant to the
Company's Master Credit and Security Agreement with Sky Financial. The new
Senior Debt bears interest at a rate initially equal to 5.5% adjusted monthly as
provided in the Master Credit Agreement.
"We are very pleased to announce the closing of this bulk purchase of subprime
mortgage loans," stated Jeffrey Johnson, Chief Executive Officer of Franklin
Credit Management Corp. "On a pro forma basis, the purchase expands our Net
Notes Receivable portfolio by more than 12.6%, to approximately $732 million as
of June 30, 2004. We expect the acquisition of this mortgage pool to be
accretive to net income and earnings per share in the twelve months following
the closing of the transaction."
About Franklin Credit Management Corp.
Franklin Credit Management Corporation ("FCMC", and together with its
wholly-owned subsidiaries, the "Company") is a specialty consumer finance and
asset management company primarily engaged in the acquisition, origination,
servicing and resolution of performing, sub-performing and non-performing
residential mortgage loans and residential real estate. The Company acquires
these mortgages from a variety of mortgage bankers, banks, and other specialty
finance companies. These loans are generally purchased in pools at discounts
from their aggregate contractual balances, from sellers in the financial
services industry. Real estate is acquired in foreclosure or otherwise and is
also generally acquired at a discount relative to the appraised value of the
asset. The Company conducts its business from its executive and main office in
New York City and through its website www.franklincredit.com. Its common stock
trades on the OTC Bulletin Board under the symbol "FCSC".
Statements contained herein that are not historical fact may be forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
that are subject to a variety of risks and uncertainties. There are a number of
important factors that could cause actual results to differ materially from
those projected or suggested in forward-looking statements made by the Company.
These factors include, but are not limited to: (i) unanticipated changes in the
U.S. economy, including changes in business conditions such as interest rates,
and changes in the level of growth in the finance and housing markets; (ii) the
status of relations between the Company and its sole Senior Debt Lender and the
Senior Debt Lender"s willingness to extend additional credit to the Company;
(iii) the availability for purchases of additional loans; (iv) the status of
relations between the Company and its sources for loan purchases; (v)
unanticipated difficulties in collections under loans in the Company's
portfolio; and (vi)other risks detailed from time to time in the Company's SEC
reports. Additional factors that would cause actual results to differ materially
from those projected or suggested or suggested in any forward-looking statements
are contained in the Company's filings with the Securities and Exchange
Commission, including, but not limited to, those factors discussed under the
caption "Real Estate Risk" in the Company's Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q, which the Company urges investors to consider.
The Company undertakes no obligation to publicly release the revisions to such
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrences of unanticipated events,
except as other wise required by securities and other applicable laws. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The Company undertakes no obligation to
release publicly the results on any events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
For further information, please contact:
Alan Joseph, CFO of Franklin Credit Management Corp. at 212-925-8745 (Ext. 169)