<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
(x) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
( ) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission file number 0-22271
CFI MORTGAGE INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 52-2023491
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
580 Village Blvd, Suite 360, West Palm Beach, Fl 33409
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (561) 687-1595
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at August 14, 1997
Common stock, par value $.01 per share 2,200,000 shares
Transitional Small Business Disclosure Format (Check One):
Yes [ ] No [X] .
<PAGE> 2
CFI MORTGAGE INC. AND SUBSIDIARY
JUNE 30, 1997
(Unaudited)
I N D E X
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I - Financial Information:
Item 1. Financial Statements:
Consolidated Balance Sheets As at
June 30, 1997 (Unaudited) and December 31, 1996 ........ F-2
Consolidated Statements of Operations and Retained Earnings
(Deficit) For the Six and Three Month Periods Ended
June 30, 1997 and 1996 (Unaudited) ..................... F-3
Consolidated Statements of Cash Flows For the Six Month
Periods Ended June 30, 1997 and 1996 (Unaudited) ....... F-4
Consolidated Statement of Changes in Stockholders' Equity
For the Six Months Ended June 30, 1997 (Unaudited) ..... F-5
Notes to Consolidated Financial Statements (Unaudited) ... F-6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ... F-7 to F-11
Part II - Other Information:
Item 1: Legal Proceedings ................................. F-12
Item 2: Changes in Securities ............................. F-12
Item 3: Defaults upon Senior Securities ................... F-12
Item 4: Submission of Matters to a Vote of Security Holders F-12
Item 5: Other Information ................................. F-12
Item 6: Exhibits and Reports on Form 8-K .................. F-12
Signatures ........................................ F-13
</TABLE>
F-1
<PAGE> 3
CFI MORTGAGE INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
A S S E T S
<TABLE>
<CAPTION>
June 30, December 31,
---------- ------------
1997 1996
---------- ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash $3,558,170 $ 644,685
Fees and loans receivable 921,344 882,588
Miscellaneous receivables (net of allowance
for doubtful accounts of $18,000) 145,659 101,468
Property held for sale 207,500 207,500
Investment in 430 Carroll Street Inc. - 175,224
Prepaid expenses and other current assets 146,244 51,293
Loans receivable - related party 73,274 12,949
---------- ----------
Total current assets 5,052,191 2,075,707
---------- ----------
Property and equipment:
Furniture and equipment 546,943 241,641
Automobile 65,240 35,677
---------- ----------
612,183 277,318
Less accumulated depreciation 113,302 90,456
---------- ----------
Total property and equipment 498,881 186,862
---------- ----------
Other assets:
Deferred and refundable income taxes 90,000 -
Deferred offering costs - 120,000
Deposits 67,392 48,249
---------- ----------
Total other assets 157,392 168,249
---------- ----------
$5,708,464 $2,430,818
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Cash overdraft $ 224,324 $ 385,858
Bank loan payable 108,375 133,250
Current maturities of long-term debt 31,987 17,562
Accounts payable, accrued expenses and
other current liabilities 698,748 456,002
---------- ----------
Total current liabilities 1,063,434 992,672
---------- ----------
Long-term liabilities:
Notes payable 60,691 28,772
---------- ----------
Total liabilities 1,124,125 1,021,444
---------- ----------
Commitments and contingencies - -
Stockholders' equity:
Common stock, $1 par value
Authorized, issued and outstanding -
7,500 shares - 7,500
Common stock, $0.01 par value 20,000,000
Authorized, 2,200,000 shares issued
and outstanding 22,000 -
Additional paid-in capital 5,149,633 1,234,673
Retained earnings (deficit) ( 587,294) 167,201
---------- ----------
Total stockholders' equity 4,584,339 1,409,374
---------- ----------
$5,708,464 $2,430,818
========== ==========
</TABLE>
See accompanying notes to financial statements.
F-2
<PAGE> 4
CFI MORTGAGE INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
For the Six For the Three
Months Ended Months Ended
June 30, June 30,
----------------------- -----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
Commissions and fees $3,712,983 $3,560,340 $2,038,492 $1,947,017
Interest 14,789 3,062 13,377 1,261
---------- ---------- ---------- ----------
Total revenues 3,727,772 3,563,402 2,051,869 1,948,278
---------- ---------- ---------- ----------
Expenses:
Selling 1,744,301 1,624,469 1,071,501 887,477
General and administrative 2,107,900 1,783,438 1,194,048 930,612
Interest 544,842 416,374 360,609 243,855
---------- ---------- ---------- ----------
Total expenses 4,397,043 3,824,281 2,626,158 2,061,944
---------- ---------- ---------- ----------
Loss before credit for income taxes ( 669,271) ( 260,879) ( 574,289) ( 113,666)
---------- ---------- ---------- ----------
Credit for income taxes:
Current ( 68,000) - ( 68,000) -
Deferred ( 22,000) - ( 22,000) -
---------- ---------- ---------- -------
Total credit for income taxes ( 90,000) - ( 90,000) -
---------- ---------- ---------- -------
Net loss ( 579,271) ( 260,879) ( 484,289) ( 113,666)
Retained earnings (deficit)
at beginning of period 167,201 ( 144,025) ( 103,005) ( 291,238)
Less: Dividend (Note 3) ( 175,224) ( - ) ( - ) ( - )
---------- ---------- ---------- ----------
Deficit at end of period ($ 587,294) ($ 404,904) ($ 587,294) ($ 404,904)
========== ========== ========== ==========
Pro Forma Information:
Pro forma net loss:
Historical net loss ($ 579,271) ($ 260,579) ($ 484,289) ($ 113,666)
Pro forma credit for
income taxes ( 152,757) ( 86,971) ( 122,433) ( 37,436)
---------- ---------- ---------- ----------
Pro forma net loss ($ 426,514) ($ 173,608) ($ 361,856) ($ 76,230)
========== ========== ========== ==========
Pro forma per share data:
Pro forma net loss per share ($0.31) ($0.14) ($0.24) ($0.06)
========== ========== ========== ==========
Pro forma weighted average
shares outstanding 1,366,667 1,200,000 1,533,333 1,200,000
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE> 5
CFI MORTGAGE INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Six
Months Ended
June 30,
---------------------------
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss ($ 579,271) (260,879)
----------- -----------
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 22,846 14,693
Deferred and refundable income taxes (90,000) --
Increase (decrease) in cash flows as
a result of changes in asset and
liability account balances:
Fees and loans receivable (38,756) 21,139
Miscellaneous receivables (44,191) 6,957
Prepaid expenses (94,951) (13,436)
Deposits (19,143) (21,716)
Accounts payable, accrued expenses
and other current liabilities 242,746 190,963
----------- -----------
Total adjustments (21,449) 198,600
----------- -----------
Net cash used in operating activities (600,720) (62,279)
----------- -----------
Cash flows from investing activities:
Expenditures for property and equipment (334,865) (66,468)
Increase in loans receivable-related party (60,325) --
----------- -----------
Net cash used in investing activities (395,190) (66,468)
----------- -----------
Cash flows from financing activities:
Cash overdraft (161,534) 167,009
Decrease in bank loan payable (24,875) --
Increase in note payable 46,344 20,171
Proceeds from issuance of common stock 4,049,460 --
Decrease in due to officers -- (227,053)
----------- -----------
Net cash provided by (used in ) financing activities 3,909,395 (39,873)
----------- -----------
Net increase (decrease) in cash 2,913,485 (168,620)
Cash at beginning of period 644,685 563,327
----------- -----------
Cash at end of period $ 3,558,170 $ 394,707
=========== ===========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period:
Income taxes $ -- $ --
=========== ===========
Interest $ 566,705 $ 417,677
=========== ===========
Supplemental Schedules of Non-Cash Investing
and Financial Activities:
Dividend made by transfer of investment
in 430 Carroll Street Inc. $ 175,224 $ --
=========== ===========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE> 6
CFI MORTGAGE INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional Retained
Paid-In Earnings
Shares Amount Capital (Deficit)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance at December 31, 1997 7,500 $ 7,500 $ 1,234,673 $ 167,201
Distribution by transferring 40%
of stock interest of investment
in 430 Carroll Street Inc. to
stockholders at March 26, 1997 -- -- -- (175,224)
Issuance of common stock
on May 30, 1997 as a result
of a public offering less
expenses of the offering of
$1,070,540 1,000,000 10,000 3,919,460 --
Effect on exchange of shares
of existing shareholders of
CFI Mortgage Corporation for
shares of CFI Mortgage Inc. 1,192,500 4,500 (4,500) --
Net Loss for the six months
ended June 30, 1997 -- -- -- (579,271)
----------- ----------- ----------- -----------
Balance at June 30, 1997 2,200,000 $ 22,000 $ 5,149,633 ($ 587,294)
=========== =========== =========== ===========
</TABLE>
F-5
<PAGE> 7
CFI MORTGAGE INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
(Unaudited)
NOTE 1 - The accompanying financial statements have been prepared without
audit pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. These statements
include all adjustments, consisting only of normal recurring
accruals, which are, in the opinion of management considered neces-
sary for a fair presentation of financial position and results of
operations.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
NOTE 2 - The results of operations of CFI Mortgage Inc. and its wholly-owned
subsidiary, CFI Mortgage Corporation (collectively the "Company")
for the six and three month periods ended June 30, 1997 and 1996 are
not necessarily indicative of the results to be expected for the
full year.
NOTE 3 - On March 26, 1997, a dividend of CFI Mortgage Corporation's ("CFI")
undistributed subchapter "S" earnings in the amount of $175,224 was
made by the transfer of title of the 40% investment in 430 Carroll
Street Inc. to CFI's two stockholders who are the sons of the Chief
Executive Officer.
NOTE 4 - In 1997, the Company's subsidiary changed its name from CFI Mortgage
Corp. to Bankers Direct Mortgage Corporation.
F-6
<PAGE> 8
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
General
Through its wholly-owned operating subsidiary, CFI Mortgage, Inc. is a
rapidly growing mortgage banker engaged in originating, purchasing and
selling conventional as well as government-guaranteed, non-conforming
and B & C sub-prime loans on one-to-four family residential units
through its retail, wholesale and consumer finance divisions. CFI
common shares are publicly traded on the NASBAQ small cap market
system under the symbol CFIM.
Upon the completion of the Company's initial public offering,
management quickly proceeded to act upon the initiatives described in
the prospectus. In addition, management took steps to capitalize on
the opportunities that currently exist in regard to non-conforming
production. Substantial efforts have been expended in regard to
recruitment of seasoned production management personnel. Production
personnel have been added in both retail and wholesale divisions with
management and commissioned personnel being added. The natural delay
in the origination of applications and the resulting loan closing
volume and the recognition of the revenue negatively impacted the
second quarter results.
Subsequent to the end of the quarter, the Company agreed to acquire
the assets of CT Mortgage Corporation, an established non-conforming
wholesale lender with offices in Orlando, Tampa and Knoxville,
Tennessee. In addition, the Company opened its first Non-Florida
retail region with a branch in Boulder, Colorado.
A significant result of the public offering was the Company's ability
to negotiate a favorable warehouse funding with the execution of a
$50,000,000 facility with Bank One, Texas, NA. The facility provides
attractive pricing for both conforming and non-conforming products.
Support personnel increased with management's decision to implement
operational changes to improve secondary market execution, to lower
funding costs, and to staff for the expected increases in volume from
the production related efforts.
Efforts to improve technology to allow for enhanced communication and
more effective movement of loan data are underway with completion
scheduled for the end of the third quarter. The cost reductions
associated with this effort are expected to be realized late in the
fourth quarter.
Subsequent to the end of the quarter, the Company has established a
second wholly-owned subsidiary, Direct Mortgage Partners, Inc., within
which the Company will continue the development of the non-conforming
production channel with the establishment of Regional Wholesale
production offices. The retail franchise will continue to develop
under the Bankers Direct Mortgage Corporation subsidiary. The
separation of these channels will allow for greater brand recognition.
F-7
<PAGE> 9
Results of Operations
Comparison for The Six Months Ended June 30, 1997 and 1996:
Revenues increased $164,000 (4.6%) to $3,728,000 for the six months
ended June 30, 1997 compared to $3,564,000 for the comparable prior
year period. The increase is due to greater fee income per loan
produced.
Selling expenses increased $120,000 (7.4%) to $1,744,000 for the six
months ended June 30, 1997 compared to $1,624,000 for the comparable
prior year period. Commissions and benefits accounted for a
significant portion of the increase, which was directly related to the
increased revenues. Advertising, telephone, travel and entertainment
also contributed to the higher selling expenses. Selling expenses as a
percentage of revenues was relatively constant: 46.8% in 1997 and
45.6% in 1996.
General and administrative expenses increased $324,000 (18.2%) to
$2,108,000 for the six months ended June 30, 1997 compared to
$1,784,000 for the comparable prior year period. Salaries and benefits
rose over $300,000. The non-commissioned support staff increased from
56 to 91 between June 30, 1996 and June 30, 1997, an increase of 63%.
The Company added senior management personnel with experience in the
revised operational structure that the Company now utilizes. As a
percentage of revenues, general and administrative expenses increased
to 56.5% in 1997 from 50.0% in 1996.
Interest expense increased $128,000 (30.7%) to $545,000 for the six
months ended June 30, 1997 compared to $417,000 for the comparable
prior period. The purchase facilities had greater usage during 1997,
the average cost of borrowings increased due to the introduction of
subprime loans, and the aggregation of loans for a longer period of
time by the Company. Management anticipates that the new warehouse
facility, as described in the "Liquidity and Capital Resources"
section, will provide greatly improved spreads in future months
spreads in future months as the facility is utilized.
Loss before taxes increased $408,000 (156.3%) to $669,000 for the six
months ended June 30, 1997 as compared to $261,000 for the comparable
prior year period as a result of the factors discussed above. The
second quarter loss was significantly attributable to the increase in
general and administrative expenses and interest expense. These costs
were impacted by the upfront and ongoing costs of operational changes
to improve secondary marketing execution and to lower the cost of
borrowings from warehouse banks. The first quarter loss was primarily
the result of the seasonality of home sales in Florida. Home sales
typically decline in the first quarter of the year due in the part of
Florida homestead laws, which reduce a purchaser's taxes results in
many home purchasers buying before year end. The increased demand at
year end tends to drive up administrative costs in the first quarter.
The credit for taxes increased $90,000 due to the Company terminating
its S corporation status thereby recording a deferred tax asset of
$22,000 and an $68,000 tax benefit from the loss subsequent to the
termination.
F-8
<PAGE> 10
Comparison for The Three Months Ended June 30, 1997 and 1996:
Revenues increased $104,000 (5.3%) to $2,052,000 for the three months
ended June 30, 1997 compared to $1,948,000 for the comparable prior
year period. The increase is due to greater fee income per loan
produced, while the number of loans produced remained relatively
constant.
Selling expenses increased $184,000 (20.7%) to $1,071,000 for the
three months ended June 30, 1997 compared to $887,000 for the
comparable prior year period. Commissions and benefits accounted for
over half of the increase and was related to the increased revenues.
The Company also added senior management personnel. Advertising,
telephone, travel and entertainment also contributed to the higher
selling expenses. Selling expenses as a percentage of revenues
increased to 52.2% in 1997 from 45.6% in 1996.
General and administrative expenses increased $263,000 (28.2%) to
$1,194,000 for the three months ended June 30, 1997 compared to
$931,000 for the comparable prior year period. Salaries and benefits
rose over $260,000. The non-commissioned support staff increased from
56 to 91 between June 30, 1996 and June 30, 1997, an increase of 63%.
The Company added senior management personnel with experience in the
revised operational structure that the Company now utilizes. As a
percentage of revenues, general and administrative increased to 58.2%
in 1997 from 47.8% in 1996.
Interest expense increased $117,000 (48.0%) to $361,000 for the three
months ended June 30, 1997 compared to $244,000 for the comparable
prior period. The purchase facilities had greater usage during 1997,
the average cost of borrowings increased due to the introduction of
subprime loans, and the aggregation of loans for a longer period of
time by the Company. Management anticipates that the new warehouse
facility, as described in the "Liquidity and Capital Resources"
section, will provide greatly improved spreads in future months as the
facility is utilized.
Loss before taxes increased $460,000 (403.5%) to $574,000 for the
three months ended June 30, 1997 as compared to a loss before taxes of
$114,000 for the comparable prior year period as a result of the
factors discussed above. The loss was significantly attributable to
the increase in general and administrative expenses and interest
expense. These costs were impacted by the upfront and ongoing costs of
operational changes to improve secondary marketing execution and to
lower the cost of borrowings from warehouse banks.
The credit for taxes increased $90,000 due to the Company terminating
its S corporation status thereby recording a deferred tax asset of
$22,000 and a $68,000 tax benefit from the loss subsequent to the
termination.
F-9
<PAGE> 11
Financial Condition
June 30, 1997 Compared to December 31, 1996:
Cash in banks, net of overdrafts, increased $3,075,000 to $3,334,000
at June 30, 1997 from $259,000 at December 31, 1996. The net cash
proceeds from the offering were $4,049,000 including the $120,000
refund of deferred offering costs previously paid by the Company in
1996. Capital expenditures for property and equipment during this
period were $335,000. These additions related to the purchase of
computer technology and the expansion of the retail division.
Accounts payable and other current liabilities increased $243,000
(53.3%) to $699,000 at June 30, 1997 from $456,000 at December 31,
1996. The principal increases were for accounts payable and accruals
related to fee income and payroll.
Liquidity and Capital Resources
Currently, the Company's cash requirements include the funding of (i)
mortgage originations and purchases pending their sale, (ii) ongoing
administrative and other operating expenses, and (iii) new retail
locations. The Company has relied upon a few lenders to provide the
primary credit facilities for its loan originations and purchases.
At June 30, 1997, the Company has aggregate lines of credit of
$21,000,000 from five financial institutions ranging from $2,000,000
to $8,000,000. The utilized and outstanding portions of the lines of
credit at June 30, 1997 were $12,436,000, the largest of which is
$7,923,000. The Company was also $436,000 over its $2,000,000 line of
credit with a bank. (The overage was corrected subsequent to June
30th.) At June 30, 1997, the unused purchase facilities aggregated
$9,000,000 with interest rates ranging from 9.5% to the rate on the
purchased loan.
On June 30, 1997, CFI entered into another credit agreement with a
financial institution for a $50,000,000 line of credit to finance
mortgage originations and purchases. The line is collateralized by
mortgage loans held for sale by the Company. Management anticipates
that this new warehouse facility will provide greatly improved spreads
in future months as the facility is utilized.
For the six months ended June 30, 1997, cash used in operating
activities was $601,000, which corresponds to the $579,000 net loss
for the period. The loss was financed by the Offering proceeds and the
use of purchase facilities. The cash proceeds from the Offering have
been $4,049,000 and will be used (i) to fund mortgage loans, (ii) to
expand the Company's retail, subprime, and consumer finance division,
(iii) for marketing services and (iv) to purchase new technology and
infrastructure. The Company anticipates that the cash proceeds from
the Offering, together with funds available under its purchase
agreements, will be sufficient to fund its operations for the next
twelve months if the Company's future operations are consistent with
management's expectations. The Company may need additional financing
thereafter. There can be no assurance that the Company will be able to
obtain financing on a favorable or timely basis. The type, timing and
terms of financing selected by the Company will depend on its cash
needs, the availability of other financing sources and the prevailing
conditions in the financial markets.
F-10
<PAGE> 12
Liquidity and Capital Resources (Continued)
For the six months ended June 30, 1996, cash used in operating
activities was $62,000. This deficit was financed by cash on hand and
an increase in accounts payable of $191,000.
The mortgage banking industry is generally subject to seasonal trends.
These trends reflect the general pattern of resales of homes, which
sales typically peak during the spring and summer seasons and decline
from January through March. In addition, the primary home market in
Florida tends to increase during the fourth quarter, while the second
home market increases from October through April. Refinancing tends to
be less seasonal and more closely related to changes in interest
rates.
Risk Factors
Except for historical information contained herein, certain matters
discussed in this Form 10-QSB are "forward-looking statements" as
defined in the Private Securities Litigation Reform Act (PSLRA) of
1995, which involve risk and uncertainties that exist in the Company's
operations and business environment, and are subject to changes based
on various important factors. The Company wishes to take advantage of
the "safe harbor" provisions of the PSLRA by cautioning readers that
numerous important factors discussed below, among others, in some
cases have caused, and in the future could cause the Company's actual
results to differ materially from those expressed in any
forward-looking statements made by, or on behalf of, the Company. The
following include some, but not all, of the factors or uncertainties
that could cause actual results to differ from projections:
- A general economic slowdown.
- The unanticipated expenses of assimilating newly-acquired business
into the Company's business structure; as well as, the impact of
unusual expenses from ongoing evaluations of business strategies,
asset valuations, acquisitions, divestitures and organizational
structures.
- Unpredictable delays or difficulties in the development of new
product programs.
- Rapid or unforeseen escalation of the cost of regulatory
compliance and/or litigation, including but not limited to,
environmental compliance, licenses, adoption of new, or changes in
accounting policies and practices and the application of such
policies and practices.
- The effects of changes in monetary and fiscal policies, laws and
regulations, other activities of governments, agencies and similar
organization, and social and economic conditions, unforeseen
inflationary pressures and monetary fluctuation; the ability or
inability of the Company to hedge against fluctuations in interest
rates.
- The ability or inability of the Company to continue its current
practices relating to mortgage loans held for sale.
- Increased competition within the Company's markets.
The Company believes that it has the product offerings, facilities,
personnel and competitive and financial resources for continued
business success. However, future revenues, costs, margins and profits
are all influenced by a number of factors, as discussed above.
F-11
<PAGE> 13
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Not applicable.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
27 Financial Data Schedule.
F-12
<PAGE> 14
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 thereunto duly authorized.
CFI Mortgage Inc.
------------------------------------------
(Registrant)
Date: August 19, 1997 /s/Vincent C. Castoro
------------------------------------------
Vincent C. Castoro
Chief Executive Officer
Date: August 19, 1997 /s/Vincent J. Castoro
------------------------------------------
Vincent J. Castoro
President
F-13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED BALANCE SHEETS, AND CONSOLIDATED STATEMENTS OF INCOME OF THE
COMPANY IN THE COMPANY'S FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 3,558,170
<SECURITIES> 0
<RECEIVABLES> 942,995
<ALLOWANCES> 21,651
<INVENTORY> 0
<CURRENT-ASSETS> 5,052,191
<PP&E> 612,183
<DEPRECIATION> 113,302
<TOTAL-ASSETS> 5,708,464
<CURRENT-LIABILITIES> 1,063,434
<BONDS> 60,691
0
0
<COMMON> 5,171,633
<OTHER-SE> (587,294)
<TOTAL-LIABILITY-AND-EQUITY> 5,708,464
<SALES> 0
<TOTAL-REVENUES> 3,727,772
<CGS> 0
<TOTAL-COSTS> 3,852,201
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 544,842
<INCOME-PRETAX> (669,271)
<INCOME-TAX> (90,000)
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</TABLE>
