FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 2000 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: 1-13991
AMERICA FIRST MORTGAGE INVESTMENTS, INC.
(Exact name of registrant as specified in its charter)
Maryland 13-3974868
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
399 Park Avenue, 36th Floor, New York, New York 10022
(Address of principal executive offices) (Zip Code)
(212) 935-8760
(Registrant's telephone number, including area code)
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
The number of shares of the Registrant's common stock outstanding on
November 9, 2000, was 8,850,546.
<PAGE> -i-
Part I. Financial Information
Item 1. Financial Statements
AMERICA FIRST MORTGAGE INVESTMENTS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
Sept. 30, 2000
(Unaudited) Dec. 31, 1999
--------------- ---------------
<S> <C> <C>
Assets
Investment in mortgage securities (Note 3) $ 491,597,709 $ 475,719,711
Investment in corporate debt securities (Note 4) 14,606,940 8,020,026
Investment in corporate equity securities (Note 5) 9,256,382 3,130,823
Cash and cash equivalents
Unrestricted 13,981,270 19,895,833
Restricted 772,845 3,709,577
Accrued interest and dividends receivable 3,955,016 2,855,321
Other investments (Note 6) 3,335,834 3,220,346
Goodwill, net 7,438,172 7,587,948
Other assets 3,252,807 244,888
--------------- ---------------
$ 548,196,975 $ 524,384,473
=============== ===============
Liabilities
Repurchase agreements (Note 7) $ 473,390,262 $ 452,101,803
Accrued interest payable 2,398,704 2,778,842
Accounts payable 983,343 595,805
Dividends payable 1,432,037 1,293,410
--------------- ---------------
478,204,346 456,769,860
--------------- ---------------
Stockholders' Equity
Stockholders' Equity
Common stock, $.01 par value; 10,000,000 shares authorized
8,866,346 and 8,978,642 issued and outstanding in 2000 and 1999, respectively 88,663 89,786
Additional paid-in capital 75,273,042 75,831,560
Retained earnings (687,521) (2,877,971)
Accumulated other comprehensive income (4,681,555) (5,428,762)
--------------- ---------------
69,992,629 67,614,613
--------------- ---------------
$ 548,196,975 $ 524,384,473
=============== ===============
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE> - 1 -
AMERICA FIRST MORTGAGE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three For the Three For the Nine For the Nine
Months Ended Months Ended Months Ended Months Ended
Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 2000 Sept. 30, 1999
----------------- --------------- -------------- -------------
<S> <C> <C> <C> <C>
Mortgage securities income $ 8,311,213 $ 6,512,407 $ 24,923,364 $ 17,100,582
Corporate debt securities income 400,671 192,913 897,031 463,628
Dividend income 263,266 74,969 722,316 252,787
Interest income on temporary cash investments 180,957 88,551 473,965 225,545
--------------- --------------- -------------- -------------
Total interest and dividend income 9,156,107 6,868,840 27,016,676 18,042,542
Interest expense on borrowed funds 7,827,807 4,988,735 22,421,158 12,450,582
--------------- --------------- -------------- -------------
Net interest and dividend income 1,328,300 1,880,105 4,595,518 5,591,960
--------------- --------------- -------------- -------------
Income from other investments 316,225 2,343,256 818,587 2,592,078
Net gains on sale of investments 2,648,125 - 2,767,744 54,994
--------------- --------------- -------------- -------------
2,964,350 2,343,256 3,586,331 2,647,072
--------------- --------------- -------------- -------------
General and administrative expenses 994,723 1,052,855 1,968,683 2,297,448
Minority interest - (327) - 4,393
--------------- --------------- -------------- -------------
994,723 1,052,528 1,968,683 2,301,841
--------------- --------------- -------------- -------------
Net income $ 3,297,927 $ 3,170,833 $ 6,213,166 $ 5,937,191
=============== =============== ============== =============
Net income, basic, per share $ .37 $ .35 $ .70 $ .66
=============== =============== ============== =============
Net income, fully diluted, per share $ .37 $ .35 $ .70 $ .66
=============== =============== ============== =============
Weighted average number of shares outstanding 8,870,431 9,057,842 8,894,425 9,056,042
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE> - 2 -
AMERICA FIRST MORTGAGE INVESTMENTS, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED September 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Stockholders' Equity
--------------------------------------------------------------------------------------------------
Accumulated
Treasury Other
Common Stock Paid-in Stock Retained Comprehensive
# of Shares Amount Capital At Cost Earnings Income Total
------------ ------------ ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1999 8,978,642 $ 89,786 $ 75,831,560 $ - $(2,877,971) $(5,428,762) $ 67,614,613
Comprehensive income:
Net income - - - - 6,213,166 - 6,213,166
Net unrealized holding gains
arising during the period - - - - - 789,863 789,863
Less: reclassification
adjustment for net gains included
in net income - - - - - (42,656) (42,656)
------------ ------------ ------------- ------------ ------------ ------------ -------------
Comprehensive income - - - - 6,213,166 747,207 6,960,373
Dividends paid or accrued - - - - (4,022,716) - (4,022,716)
Common stock issued 7,804 78 39,918 - - - 39,996
Purchase of shares for treasury - - - (599,637) - - (599,637)
Retirement of treasury stock (120,100) (1,201) (598,436) 599,637 - - -
------------ ------------ ------------- ------------ ------------ ------------ -------------
Balance at September 30, 2000 8,866,346 $ 88,663 $ 75,273,042 $ - $ (687,521) $ (4,681,555) $ 69,992,629
============ ============ ============= ============ ============ ============ =============
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE> - 3 -
AMERICA FIRST MORTGAGE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Nine For the Nine
Months Ended Months Ended
Sept. 30, 2000 Sept. 30, 1999
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 6,213,166 $ 5,937,191
Adjustments to reconcile net income to net cash
from operating activities:
Net gains on sale of investments (2,767,744) (54,994)
Minority interest - 4,393
Other - 43,298
Amortization 1,497,820 1,152,397
Increase in accrued interest and dividends receivable (1,099,695) (1,195,814)
(Increase) decrease in other assets (2,735,414) 166,336
Increase in accounts payable 387,538 196,159
Increase (decrease) in accrued interest payable (380,138) 795,683
---------------- ---------------
Net cash provided by operating activities 1,115,533 7,044,649
---------------- ---------------
Cash flows from investing activities
Decrease in restricted cash 2,936,732 -
Principal payments on mortgage securities 72,836,203 83,007,057
Proceeds from sale of mortgage securities 5,018,677 -
Proceeds from sale of corporate debt securities 372,500 -
Proceeds from sale of corporate equity securities 1,149,644 1,127,500
Proceeds from sale of other investments 2,595,433 -
Increase in other investments (115,488) (2,124,699)
Purchases of mortgage securities (95,081,513) (274,957,850)
Purchases of corporate debt securities (6,708,750) (3,307,750)
Purchases of corporate equity securities (6,835,392) (2,403,055)
---------------- ---------------
Net cash used in investing activities (23,831,954) (198,658,797)
---------------- ---------------
Cash flows from financing activities
Net borrowings from repurchase agreements 21,288,459 205,494,142
Stock purchased for treasury (599,637) -
Dividends and distributions paid (3,886,964) (6,038,321)
---------------- ---------------
Net cash provided by financing activities 16,801,858 199,455,821
---------------- ---------------
Net (decrease) increase in cash and cash equivalents (5,914,563) 7,841,673
Cash and temporary cash investments at beginning
of period 19,895,833 6,045,955
---------------- ---------------
Cash and temporary cash investments at end of period $ 13,981,270 $ 13,887,628
================ ===============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 22,801,296 $ 12,254,423
Supplemental disclosure of non-cash investing activities:
Goodwill of $150,000 was recorded by the Company in 1999 as a result of the Merger.
During the nine months ended September 30, 2000, the Company issued 7,804 shares of its common stock
to its non-employee directors in partial payment of the annual retainer paid by the Company
to such directors. The aggregate value of such common stock issued was $39,996.
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE> - 4 -
AMERICA FIRST MORTGAGE INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
(UNAUDITED)
1. Organization
America First Mortgage Investments, Inc. (the Company) was incorporated in
Maryland on July 24, 1997. The Company began operations on April 10, 1998
when it merged with three partnerships: America First Participating/Preferred
Equity Mortgage Fund Limited Partnership (Prep Fund 1), America First Prep
Fund 2 Limited Partnership (Prep Fund 2), America First Prep Fund 2 Pension
Series Limited Partnership (Pension Fund).
The Company has entered into an advisory agreement with America First Mortgage
Advisory Company (the Advisor) which provides advisory services in connection
with the conduct of the Company's business activities.
2. Summary of Significant Accounting Policies
A) Basis of Presentation
The accompanying interim unaudited financial statements have been prepared
according 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 according to such
rules and regulations, although management believes that the disclosures
are adequate to make the information presented not misleading. The
financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1999. In the opinion of
management, all normal and recurring adjustments necessary to present
fairly the financial position at September 30, 2000 and results of
operations for all periods presented have been made. The results of
operations for the three and nine-month periods ended September 30, 2000
are not necessarily indicative of the results to be expected for the
full year.
The accompanying 2000 financial statements include the
accounts of the Company and the accompanying 1999 consolidated financial
statements include the accounts of the Company and its subsidiaries,
Pension Fund and Pension Fund's general partner, America First Capital
Associates Limited Partnership Six (AFCA 6). All significant intercompany
transactions and accounts have been eliminated in consolidation. Pension
Fund and AFCA 6 were liquidated and dissolved under the terms of their
respective partnership agreements during December 1999. In addition, as
more fully discussed in Note 6, the Company has an investment in a
corporation and investments in three real estate limited partnerships, none
of which are controlled by the Company. These investments are accounted
for under the equity method.
The financial statements are prepared on the accrual basis of accounting
in accordance with generally accepted accounting principles.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
B) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and highly liquid
investments with original maturities of three months or less. The
carrying amount of cash equivalents approximates their fair value.
Restricted cash represents amounts held with certain lending
institutions with which the Company has repurchase agreements. Such
amounts may be used to make principal payments on the related
repurchase agreements.
<PAGE> - 5 -
C) Mortgage Securities, Corporate Debt Securities and Corporate Equity
Securities
Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities" (SFAS 115), requires
the Company to classify its investments in mortgage securities,
corporate debt securities and corporate equity securities (collectively
referred to as investment securities) as either held-to-maturity,
available-for-sale or trading.
Although the Company generally intends to hold most of its mortgage
securities until maturity, it may, from time to time, sell any of its
mortgage securities as part of its overall management of its business.
In order to be prepared to respond to potential future opportunities in the
market, to sell mortgage securities in order to optimize the portfolio's
total return and to retain its ability to respond to economic conditions
that require the Company to sell assets in order to maintain an appropriate
level of liquidity, the Company has classified all its mortgage securities
as available-for-sale. Likewise, the Company has classified all its
corporate equity securities as available-for-sale. Mortgage securities and
corporate equity securities classified as available-for-sale are reported
at fair value, with unrealized gains and losses excluded from earnings and
reported in other comprehensive income. Corporate debt securities are
classified as held-to-maturity and are carried at amortized cost.
Unrealized losses on investment securities that are considered
other-than-temporary, as measured by the amount of decline in fair value
attributable to factors other than temporary, are recognized in income and
the cost basis of the investment security is adjusted.
Other-than-temporary unrealized losses on mortgage securities are based on
management's assessment of various factors affecting the expected cash flow
from such securities, including an other-than-temporary deterioration of
the credit quality of the underlying mortgages and/or the credit protection
available to the related mortgage pool.
Gains or losses on the sale of investment securities are based on the
specific identification method.
Interest income is accrued based on the outstanding principal amount of
the investment securities and their contractual terms. Premiums and
discounts associated with the purchase of the investment securities are
amortized into interest income over the lives of the securities using the
effective yield method based on, among other things, anticipated estimated
prepayments. Such calculations are periodically adjusted for actual
prepayment activity.
Dividend income is recognized based on the ex-dividend date.
D) Credit Risk
The Company limits its exposure to credit losses on its investment
portfolio by requiring that at least 70% of its investment portfolio
consist of mortgage securities or mortgage loans that are:
(i) insured or guaranteed as to principal and interest by an agency of
the U.S. government, such as the Government National Mortgage Association
(GNMA), the Federal National Mortgage Association (FNMA), or the Federal
Home Loan Mortgage Corporation (FHLMC), (ii) rated in one of the two
highest rating categories by either Standard & Poor's or Moody's, or
(iii) considered to be of equivalent credit quality as determined by the
Advisor and approved by the Company's investment committee. The remainder
of the Company's assets may be: (i) mortgage assets rated at least
investment grade or considered to be of equivalent credit quality by the
Advisor with approval from the Company's investment committee; (ii) direct
investment (mezzanine or equity) in multifamily projects collateralizing
mortgage loans owned by the Company; (iii) investments in limited
partnerships, equities, real estate investment trusts or closed-end funds
owning a portfolio of mortgage and/or real estate assets; or (iv) other
corporate debt or corporate equity securities or government fixed-income
instruments that provide increased call protection relative to the
Company's securities. Corporate debt that is rated below investment grade
will be limited to less than 5% of the Company's total assets. As of
September 30, 2000, and December 31, 1999, approximately 79% of the
Company's total assets consisted of mortgage securities insured or
guaranteed by the U.S. government or an agency thereof. At September 30,
2000, management determined no allowance for credit losses was necessary.
<PAGE> - 6 -
E) Other Investments
Other investments consist of: (i) non-voting preferred stock of a
corporation owning interests in real estate limited partnerships, and
(ii) investments in unconsolidated limited partnerships owning real estate.
F) Net income per Share
Net income per share is based on the weighted average number of common
shares and common equivalent shares (e.g., stock options), if dilutive,
outstanding during the period. Basic net income per share is computed by
dividing net income available to shareholders by the weighted average
number of common shares outstanding during the period. Diluted net
income per share is computed by dividing the diluted net income available
to common shareholders by the weighted average number of common shares and
common equivalent shares outstanding during the period. The common
equivalent shares are calculated using the treasury stock method which
assumes that all dilutive common stock equivalents are exercised and the
funds generated by the exercise are used to buy back outstanding common
stock at the average market price during the reported period.
As more fully discussed in Note 8, options to purchase 520,000 and
300,000 shares of common stock were granted on April 6, 1998, and August
13, 1999, respectively. During the quarter ended September 30, 2000, the
average price of the Company's stock was greater than the exercise price
of the options granted on August 13, 1999. As such, exercise of such
options under the treasury stock method is dilutive. Accordingly, these
dilutive securities were considered in fully diluted earnings per share.
For the quarter ended September 30, 1999, the average price of the Company's
stock was less than the exercise price; therefore exercise of such options
under the treasury stock method would be anti-dilutive. Accordingly, for
the quarter ended September 30, 1999, these potentially dilutive securities
were not considered in fully diluted earnings per share. With regard to
the options granted on April 6, 1998, the exercise price is greater than
the average stock price during the quarters ended September 30, 2000, and
September 30, 1999; therefore, exercise of such options under the treasury
stock method would be anti-dilutive. Accordingly, these potentially
dilutive securities were not considered in fully diluted earnings per
share.
The following table sets forth the reconciliation of the weighted average
shares outstanding for the calculation of basic earnings per share to the
weighted average shares outstanding for the calculation of fully diluted
earnings per share for each period presented (unaudited):
<TABLE>
<CAPTION>
For the Three For the Three For the Nine For the Nine
Months Ended Months Ended Months Ended Months Ended
Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 2000 Sept. 30, 1999
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Weighted average shares outstanding for
basic earnings per share 8,870,431 9,057,842 8,894,425 9,056,042
Add effect of assumed shares issued under
treasury stock method for stock options 24,602 - 15,865 -
Weighted average shares outstanding for -------------- --------------- ------------- --------------
diluted earnings per share 8,895,033 9,087,842 8,910,290 9,056,042
============== =============== ============= ==============
</TABLE>
G) Comprehensive Income
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" requires the Company to display and report
comprehensive income, which includes all changes in Stockholders' Equity
with the exception of additional investments by or dividends to
shareholders. Comprehensive income for the Company includes net income and
the change in net unrealized holding gains (losses) on investments.
<PAGE> - 7 -
Comprehensive income for the three and nine months ended September 30,
2000, and 1999 was as follows:
<TABLE>
<CAPTION>
For the Three For the Three For the Nine For the Nine
Months Ended Months Ended Months Ended Months Ended
Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 2000 Sept. 30, 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
--------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Net income $ 3,297,927 $ 3,170,833 $ 6,213,166 $ 5,937,191
Other comprehensive income (loss)
Unrealized holding gains (losses)
Net unrealized holding gains (losses) arising
during the period 3,165,750 (1,447,339) 789,863 (2,995,955)
Less: reclassification adjustment for net gains
included in net income (121,652) - (42,656) -
--------------- ---------------- -------------- --------------
Change in net unrealized holding gains (losses) 3,044,098 (1,447,339) 747,207 (2,995,955)
--------------- ---------------- -------------- --------------
Comprehensive income $ 6,342,025 $ 1,723,494 $ 6,960,373 $ 2,941,236
=============== ================ ============== ==============
</TABLE>
H) Federal Income Taxes
The Company has elected to be taxed as a real estate investment trust
(REIT) under the provisions of the Internal Revenue Code and the
corresponding provisions of state law. As such, no provision for income
taxes has been made in the accompanying consolidated financial statements.
I) New Accounting Pronouncement
In June, 1998, the Financial Accounting Standards Board issued Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities " (FAS 133). Certain provisions of FAS 133 were amended
by Financial Accounting Standards No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities" (FAS 138) in June,
2000. The statements provide new accounting and reporting standards for the
use of derivative instruments. Adoption of the statements is required by
the Company effective January 1, 2001. Management intends to adopt the
statements as required in fiscal 2001. Management believes that the impact
of such adoption will not be material to the financial statements. Although
the Company has not historically used such derivative instruments, it is not
precluded from doing so. In the future, management anticipates using such
derivative instruments only as hedges to manage interest rate risk.
Management does not anticipate entering into derivatives for speculative or
trading purposes.
3. Mortgage Securities
The following table presents the Company's mortgage securities as of September
30, 2000 and December 31, 1999:
<TABLE>
<CAPTION>
September 30, 2000
(Unaudited) December 31, 1999
----------------- -----------------
<S> <C> <C>
FNMA Certificates $ 387,862,235 $ 359,891,164
GNMA Certificates 33,776,589 43,678,897
FHLMC Certificates 9,812,599 13,220,884
Commercial mortgage-backed securities 17,136,960 16,650,544
Private label CMOs 43,009,326 42,278,222
----------------- -----------------
$ 491,597,709 $ 475,719,711
================= =================
</TABLE>
At September 30, 2000, and December 31, 1999, mortgage securities consisted of
pools of adjustable-rate mortgage securities with carrying values of
$461,717,719 and $444,140,267, respectively, and fixed-rate mortgage
securities with carrying values of $29,879,990 and $31,579,444, respectively.
<PAGE> - 8 -
The Federal National Mortgage Association (FNMA) Certificates are backed by
first mortgage loans on pools of single-family properties. The FNMA
Certificates are debt securities issued by FNMA and are guaranteed by FNMA as
to the full and timely payment of principal and interest on the underlying
loans.
The Government National Mortgage Association (GNMA) Certificates are backed by
first mortgage loans on multifamily residential properties and pools of
single-family properties. The GNMA Certificates are debt securities issued
by a private mortgage lender and are guaranteed by GNMA as to the full and
timely payment of principal and interest on the underlying loans.
The Federal Home Loan Mortgage Corporation (FHLMC) Certificates are backed by
first mortgage loans on pools of single-family properties. The FHLMC
Certificates are debt securities issued by FHLMC and are guaranteed by FHLMC
as to the full and timely payment of principal and interest on the underlying
loans.
The commercial mortgage securities are rated AA or A by Standard and Poor's.
The private label CMOs (collateralized mortgage obligations) are rated AAA by
Standard and Poor's.
At September 30, 2000, and December 31, 1999, all mortgage securities were
classified as available-for-sale and as such are carried at their fair value.
The following table presents the amortized cost, gross unrealized gains, gross
unrealized losses and fair value of mortgage securities as of September 30,
2000, and December 31, 1999, respectively:
<TABLE>
<CAPTION>
As of
September 30, 2000 As of
(Unaudited) December 31, 1999
----------------- ------------------
<S> <C> <C>
Amortized cost $ 496,577,725 $ 481,176,498
Gross unrealized gains 640,759 461,675
Gross unrealized losses (5,620,775) (5,918,462)
----------------- ------------------
Fair value $ 491,597,709 $ 475,719,711
================= ==================
</TABLE>
4. Corporate Debt Securities
Corporate debt securities are classified as held-to-maturity. The following
table presents the amortized cost, gross unrealized gains, gross unrealized
losses and fair value of the corporate debt securities as of September 30,
2000, and December 31, 1999:
<TABLE>
<CAPTION>
As of
September 30, 2000 As of
(Unaudited) December 31, 1999
------------------ ------------------
<S> <C> <C>
Amortized cost $ 14,606,940 $ 8,020,026
Gross unrealized gains 99,905 92,211
Gross unrealized losses (1,551,345) (174,487)
------------------ ------------------
Fair value $ 13,155,500 $ 7,937,750
================== ==================
</TABLE>
<PAGE> - 9 -
5. Corporate Equity Securities
Corporate equity securities are classified as available-for-sale. The
following table presents the cost, gross unrealized gains, gross unrealized
losses and fair value of the corporate equity securities as of September 30,
2000, and December 31, 1999:
<TABLE>
<CAPTION>
As of
September 30, 2000 As of
(Unaudited) December 31, 1999
------------------ ------------------
<S> <C> <C>
Cost $ 8,957,921 $ 3,102,798
Gross unrealized gains 703,609 224,865
Gross unrealized losses (405,148) (196,840)
------------------ -------------------
Fair value $ 9,256,382 $ 3,130,823
================== ==================
</TABLE>
6. Other Investments
Other investments consisted of the following as of
September 30, 2000 and December 31, 1999:
<TABLE>
<CAPTION>
As of
September 30, 2000 As of
(Unaudited) December 31, 1999
------------------ -----------------
<S> <C> <C>
Investment in Retirement Centers Corporation $ 2,505,468 $ 2,389,980
Investment in and advances to
unconsolidated real estate limited partnerships 830,366 830,366
------------------ -----------------
Total $ 3,335,834 $ 3,220,346
================== =================
</TABLE>
The Company's investment in Retirement Centers Corporation (RCC) represents a
95% ownership interest in such corporation. The Company owns 100% of the
non-voting preferred stock of RCC and a third party owns 100% of the common
stock. The Company accounts for its investment in RCC on the equity method.
As of September 30, 2000, RCC owned (i) a limited partnership interest in a
real estate limited partnership which operates an assisted living center
located in Salt Lake City, Utah, and (ii) a 127-unit apartment property
located in Omaha, Nebraska, which was acquired on January 12, 2000. As of
December 31, 1999, RCC's investments consisted of (i) its interest in the real
estate limited partnership referenced above and (ii) cash which was utilized
to acquire the apartment property on January 12, 2000.
Investments in and advances to unconsolidated real estate limited partnerships
consist of investments in or advances made to limited partnerships which own
properties. These investments are not insured or guaranteed but rather are
collateralized by the underlying value of the real estate owned by such
limited partnerships. They are accounted for under the equity method of
accounting. Certain of the investments have a zero carrying value and, as
such, earnings are recorded only to the extent distributions are received.
Such investments have not been reduced below zero through recognition of
allocated investment losses since the Company has no legal obligation to
provide additional cash support to the underlying property partnerships as it
is not the general partner, nor has it indicated any commitment to provide
this support. At December 31, 1999, the Company had investments in four such
limited partnerships. However, on September 26, 2000, the Company sold its
interest in one of the limited partnerships. Such sale contributed
approximately $2,100,000 ($2,600,000 less an incentive fee of approximately
$519,000 (see Note 9)), to the Company's net income for the quarter and nine
months ended September 30, 2000.
7. Repurchase Agreements
As of September 30, 2000, the Company had outstanding balances of $473,390,262
under 54 repurchase agreements with a weighted average borrowing rate of 6.58%
<PAGE> - 10 -
and a weighted average remaining maturity of 2.6 months. As of September 30,
2000, approximately 98.5% of the Company's borrowings were fixed-rate term
repurchase agreements with original maturities that range from one to twelve
months. As of December 31, 1999, the Company had outstanding balances of
$452,101,803 under 38 repurchase agreements with a weighted average borrowing
rate of 5.72%.
At September 30, 2000, the repurchase agreements had the following remaining
maturities:
<TABLE>
<CAPTION>
<S> <C>
Within 30 days $155,153,892
30 to 90 days 170,046,446
90 days to one year 148,189,924
-------------
$473,390,262
=============
</TABLE>
The repurchase agreements are collateralized by the Company's mortgage
securities and corporate debt securities with an aggregate current face value
of approximately $495 million and corporate equity securities with a current
market value of approximately $9.3 million. The repurchase agreements bear
interest at rates that are LIBOR based.
8. Stockholders' Equity
1997 Stock Option Plan
---------------------
The Company has a 1997 Stock Option Plan (the Plan) which authorizes the
granting of options to purchase an aggregate of up to 1,000,000 shares of the
Company's common stock, but not more than 10% of the total outstanding shares
of the Company's common stock. The Plan authorizes the Board of Directors, or
a committee of the Board of Directors, to grant Incentive Stock Options (ISOs)
as defined under section 422 of the Internal Revenue Code, Non-Qualified Stock
Options (NQSOs) and Dividend Equivalent Rights (DERs) to eligible persons,
other than non-employee directors. Non-employee directors are eligible to
receive grants of NQSOs with DERs pursuant to the provisions of the Plan. The
exercise price for any options granted to eligible persons under the Plan
shall not be less than the fair market value of the common stock on the day of
the grant. The options expire if not exercised ten years after the date
granted.
On April 6, 1998, 500,000 ISOs were granted to buy common shares at an
exercise price of $9.375 per share (the 1998 Grant). In addition, 20,000
NQSOs were issued at an exercise price of $9.375 per share. On August 13,
1999, 300,000 ISOs were granted to buy common shares at an exercise price of
$4.875 per share (the 1999 Grant). Prior to the 1998 Grant, no other options
were outstanding. As of September 30, 2000 and December 31, 1999,
respectively, 525,000 and 325,000 ISOs were vested and exercisable. As of
September 30, 2000 and December 31, 1999, 20,000 NQSOs were vested and
exercisable. As of September 30, 2000, no options had been exercised.
In addition to the options granted on April 6, 1998, 500,000 and 5,000 DERs
were also granted on the ISOs and NQSOs, respectively, based on the provisions
of the Plan. No DERs were granted on the ISOs granted on August 13, 1999.
DERs on ISOs vest on the same basis as the options. DERs on NQSOs became
fully vested in April, 1999. Payments are made on vested DERs only. Vested
DERs are paid only to the extent of ordinary income and not on returns of
capital. Dividends paid on ISOs are charged to stockholders' equity when
declared and dividends paid on NQSOs are charged to earnings when declared.
For the three and nine months ended September 30, 2000, the Company recorded
charges of $58,125 and $163,125, respectively, to stockholders' equity
(included in dividends paid or accrued) associated with the DERs on ISOs and
charges of $775 and $2,875, respectively, to earnings associated with DERs on
NQSOs. For the three and nine months ended September 30, 1999, the Company
recorded charges of $35,000 and $82,500, respectively, to stockholders'
equity (included in dividends paid or accrued) associated with DERs on ISOs
and charges of $1,400 and $3,300, respectively, to earnings associated with
DERs on NQSOs.
<PAGE> - 11 -
The options and related DERs issued were accounted for under the provisions of
SFAS 123, "Accounting for Stock Based Compensation". Because the ISOs were
not issued to officers who are direct employees of the Company, ISOs granted
were accounted for under the option value method as variable grants and a
periodic charge will be recognized based on the vesting schedule. The charge
for options which vested immediately with the 1998 Grant was included as
capitalized transaction costs in connection with the Merger. Until fixed and
determinable, management estimates the value of the ISOs granted as of each
balance sheet date using a Black-Scholes valuation model, as adjusted for the
discounted value of dividends not to be received under the unvested DERs. In
the absence of comparable historical market information for the Company,
management originally utilized assumptions consistent with activity of a
comparable peer group of companies including an estimated option life, a
volatility rate, a risk-free rate and a current dividend yield (or 0% if the
related DERs are issued). For the three and nine months ended September 30,
2000, as part of operations, the Company reflected earnings charges of $14,344
and $167,019, respectively, representing the value of ISOs/DERs granted over
their vesting period. For the nine months ended September 30, 1999, as part
of operations, the Company reflected an earnings charge of $117,798,
representing the value of the ISOs/DERs granted over their vesting period.
NQSOs granted were accounted for using the intrinsic method and, accordingly,
no earnings charge was reflected since the exercise price was equal to the
fair market value of the common stock at the date of the grant.
Dividends/Distributions
-----------------------
The Company declared the following dividends and distributions during 2000 and
1999:
<TABLE>
<CAPTION>
Amount per
Declaration Date Record Date Payment Date Share
---------------- ------------ ------------ -----------
<S> <C> <C> <C>
During 2000:
March 17, 2000 April 14, 2000 May 17, 2000 $ .140
June 14, 2000 June 30, 2000 August 17, 2000 $ .140
September 18, 2000 October 16, 2000 November 17, 2000 $ .155
During 1999:
March 24, 1999 April 5, 1999 May 17, 1999 $ .265 (1)
June 14, 1999 June 30, 1999 August 17, 1999 $ .125
September 21, 1999 September 30, 1999 November 17, 1999 $ .140
(1) As part of the Merger transaction, the Company made quarterly distributions of
$.265 per common share ($1.06 per common share per year) in the first year
following the Merger (i.e. through the first quarter of 1999.)
</TABLE>
Stock Repurchase Plan
---------------------
In connection with the Company's 400,000 share repurchase program, the Company
purchased and retired 120,100 shares during the nine months ended September
30, 2000, at an aggregate cost of $599,637 (7,600 shares at an aggregate cost
of $41,185 for the three months ended September 30, 2000). Since implementing
the stock repurchase program during the fourth quarter of 1999, through
September 30, 2000, the Company has purchased and retired 204,700 shares at an
aggregate cost of $1,011,845.
9. Related Party Transactions
The Advisor manages the operations and investments of the Company and performs
administrative services for the Company. In turn, the Advisor receives a
management fee payable monthly in arrears in an amount equal to 1.10% per
annum of the first $300 million of Stockholders' Equity of the Company, plus
.80% per annum of the portion of Stockholders' Equity of the Company above
$300 million. The Company also pays the Advisor, as incentive compensation
<PAGE> - 12 -
for each fiscal quarter, an amount equal to 20% of the dollar amount by which
the annualized Return on Equity for such fiscal quarter exceeds the amount
necessary to provide an annualized Return on Equity equal to the Ten-Year U.S.
Treasury Rate plus 1%. For the three and nine months ended September 30,
2000, the Advisor earned a base management fee of $183,572 and $545,919,
respectively, and incentive compensation of $544,985 and $670,214,
respectively. Approximately $519,000 of the incentive fee earned for the
quarter and nine months ended September 30, 2000, was attributable to the sale
of the Company's limited partnership interest as described in Note 6. For the
three and nine months ended September 30, 1999, the Advisor earned a base
management fee of $190,760 and $573,546, respectively, and incentive
compensation of $498,543 and $633,150, respectively. Approximately $435,000
of the incentive fee for the quarter and nine months ended September 30, 1999
was attributable to the sale of undivided interests in the net assets of four
real estate limited partnerships.
America First Properties Management Company L.L.C., (the Manager), provides
property management services for certain of the multifamily properties in
which the Company has an interest. The Manager receives a management fee
equal to a stated percentage of the gross revenues generated by the properties
under management, ranging from 3.5% to 5% of gross revenues. Such fees paid
by the Company for the three and nine months ended September 30, 2000,
amounted to $96,774 and $288,340, respectively. Such fees paid by the Company
for the three and nine months ended September 30, 1999, amounted to $85,014
and $252,459, respectively.
<PAGE> - 13 -
Item 2.
AMERICA FIRST MORTGAGE INVESTMENTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion should be read in conjunction with all of the
financial statements and notes included in Item 1 of this report as well as
the Company's Annual Report on Form 10-K for the year ended December 31, 1999.
General
The Company was incorporated in Maryland on July 24, 1997. The Company began
operations on April 10, 1998 when it merged with three partnerships: America
First Participating/Preferred Equity Mortgage Fund Limited Partnership ("Prep
Fund 1"), America First Prep Fund 2 Limited Partnership ("Prep Fund 2"),
America First Prep Fund 2 Pension Series Limited Partnership ("Pension Fund").
America First Mortgage Advisory Corporation (the "Advisor") provides advisory
services to the Company in connection with the conduct of the Company's
business activities. The Company's principal investment strategy includes
leveraged investing in adjustable rate mortgage securities and mortgage
loans. Since commencing operations and through September 30, 2000, the Company
purchased mortgage securities with a face value at the time of purchase of
approximately $658.1 million (mortgage securities with a face value of
approximately $87 million were purchased during the nine months ended September
30, 2000).
The Company has elected to be treated as a real estate investment trust
("REIT") for federal income tax purposes beginning with its 1998 taxable year
and, as such, anticipates distributing annually at least 95% of its taxable
income, subject to certain adjustments. Generally, cash for such
distributions is expected to be largely generated from the Company's
operations, although the Company may borrow funds to make distributions. The
Company declared the following dividends during 2000:
<TABLE>
<CAPTION>
Amount per
Declaration Date Record Date Payment Date Share
---------------- ------------ ------------ -----------
<S> <C> <C> <C>
March 17, 2000 April 14, 2000 May 17, 2000 $ .140
June 14, 2000 June 30, 2000 August 17, 2000 $ .140
September 18, 2000 October 16, 2000 November 17, 2000 $ .155
</TABLE>
The Company's operations for any period may be affected by a number of factors
including the investment assets held, general economic conditions affecting
underlying borrowers and, most significantly, factors which affect the
interest rate market. Interest rates are highly sensitive to many factors,
including governmental monetary and tax policies, domestic and international
economic and political considerations, and other factors beyond the control of
the Company.
Due to the on-going implementation of the Company's investment strategy, the
currently reported financial information is not necessarily indicative of the
Company's future operating results or financial condition.
Liquidity and Capital Resources
The Company's principal sources of capital consist of borrowings under
repurchase agreements, principal payments received on its portfolio of
mortgage securities and cash provided by operations. Principal uses of cash
include the acquisition of investment securities, the payment of operating
expenses and the payment of dividends to shareholders.
During the nine months ended September 30, 2000, the Company acquired $108.6
million of mortgage securities, corporate debt securities and corporate equity
securities. Financing for these acquisitions was provided primarily through
the utilization of repurchase agreements, supplemented by cash flow from
operations of $8.4 million. Net borrowings under repurchase agreements
totaled $21.3 million during the nine months ended September 30, 2000. The
Company also received principal payments of $72.8 million on its mortgage
<PAGE> - 14 -
securities during the nine months ended September 30, 2000. Other sources of
funds during the nine months ended September 30, 2000, consisted of $5
million, $1.1 million and $0.4 million in proceeds received from the sale of
mortgage securities, corporate equity securities and corporate debt
securities, respectively. The Company also received $2.6 million in proceeds
from the sale of its limited partnership interest in a real estate limited
partnership. Other uses of funds during the nine months ended September 30,
2000, consisted of $3.9 million for dividend payments and $0.6 million for the
acquisition of 120,100 shares of its own common stock pursuant to a stock
repurchase program implemented in the fourth quarter of 1999.
The Company's borrowings under repurchase agreements totaled $473.4 million at
September 30, 2000, and had a weighted average borrowing rate of 6.58% as of
such date. At September 30, 2000, the repurchase agreements had balances of
between $0.6 million and $58.6 million. Approximately 98.5% these arrangements
have original terms to maturity ranging from one month to twelve months and
annual interest rates based on LIBOR. To date, the Company has not had any
significant margin calls on its repurchase agreements that were related to a
decrease in the value of its collateral.
In connection with the Company's 400,000 share repurchase program, the Company
purchased and retired 120,100 shares during the nine months ended September
30, 2000, at an aggregate cost of $599,637. Since implementing the stock
repurchase program during the fourth quarter of 1999, through September 30,
2000, the Company has purchased and retired 204,700 shares at an aggregate
cost of $1,011,845.
The Company believes it has adequate financial resources to meet its
obligations as they come due and fund committed dividends as well as to
actively pursue its investment policy.
Results of Operations
Three Month Period Ended September 30, 2000 Compared to 1999
During the three months ended September 30, 2000, total interest and dividend
income for the Company increased $2.3 million (33%) as compared to total
interest and dividend income for the three months ended September 30, 1999.
This increase is primarily the result of a 20% increase in the Company's
average interest earning assets from $442 million to $529 million for the
respective periods in 1999 and 2000. Also contributing to the increase was an
increase in the annualized yield on the Company's average interest earning
assets to 6.92% for the three months ended September 30, 2000, up from 6.22%
for the comparable period in 1999.
The Company's interest expense increased $2.8 million (57%) for the three
months ended September 30, 2000 compared to the comparable period in 1999.
Such increase is primarily due to a 24% increase in average amount of funds
borrowed from $383 million to $473 million for the respective periods in 1999
and 2000. In addition, the Company's interest cost on such borrowed funds
increased to an average of 6.62% for the three months ended September 30, 2000
up from 5.21% for the three months ended September 30, 1999.
As a result of the narrowing of the Company's interest rate margin, net
interest and dividend income decreased by 29% from $1,880,105 for the quarter
ended September 30, 1999 to $1,328,300 for the quarter ended September 30,
2000.
Income from other investments, excluding a gain of approximately $2.3 million
(excluding the related incentive fee) realized during the quarter ended
September 30, 1999 in conjunction with the sale of RCC's undivided interests
in the net assets of four limited partnerships, increased approximately
$232,000 for the three months ended September 30, 2000 compared to the
comparable period in 1999. This increase resulted from higher income realized
on the Company's real estate investments.
During the quarter ended September 30, 2000, the Company realized a net gain
of $2,648,125 on the sale of investments. Approximately $2.6 million of such
gain resulted from the Company's September 26, 2000, sale of its limited
partnership interest in one of its real estate limited partnerships. The
remaining net gain of approximately $53,000 is primarily attributable to the
sale of corporate equity securities.
General and administrative expenses for the Company for the three months ended
<PAGE> - 15 -
September 30, 2000 decreased $58,000 as compared to the three months ended
September 30, 1999. Such decrease consisted of: (i) a decrease of $30,000 due
to expenses incurred in 1999 by a consolidated subsidiary which was liquidated
in December 1999; (ii) a $74,000 decrease attributable primarily to decreases
in various servicing, filing fees and printing costs; partially offset by
(iii) a $46,000 increase in incentive compensation payable to the Advisor by
the Company.
Nine Month Period Ended September 30, 2000 Compared to 1999
During the nine months ended September 30, 2000, total interest and dividend
income for the Company increased $9 million (50%) as compared to total
interest and dividend income for the nine months ended September 30, 1999.
This increase is primarily the result of a 47% increase in the Company's
average interest earning assets from $354 million to $522 million for the
respective periods in 1999 and 2000. Also contributing to the increase was an
increase in the annualized yield on the Company's average interest earning
assets to 6.91% for the nine months ended September 30, 2000, up from 6.79%
for the comparable period in 1999.
The Company's interest expense increased $10 million (80%) for the nine months
ended September 30, 2000 compared to the comparable period in 1999. Such
increase is primarily due to a 58% increase in average amount of funds
borrowed from $293 million to $463 million for the respective periods in 1999
and 2000. In addition, the Company's interest cost on such borrowed funds
increased to an average of 6.46% for the nine months ended September 30, 2000
up from 5.67% for the nine months ended September 30, 1999.
As a result of the narrowing of the Company's interest rate margin, net
interest and dividend income decreased by 18% from $5,591,960 for the nine
months ended September 30, 1999 to $4,595,518 for the nine months ended
September 30, 2000.
Income from other investments, excluding a gain of approximately $2.3 million
(excluding the related incentive fee) realized during the third quarter of
1999 in conjunction with the sale of RCC's undivided interests in the net
assets of four limited partnerships, increased approximately $486,000 for the
nine months ended September 30, 2000 compared to the comparable period in
1999. This increase resulted from higher income realized on the Company's
real estate investments.
During the nine months ended September 30, 2000, the Company realized a net
gain of $2,767,744 on the sale of investments. Approximately $2.6 million of
such gain resulted from the Company's September 26, 2000, sale of its limited
partnership interest in one of its real estate limited partnerships. During
the nine months ended September 30, 2000, the Company also sold corporate debt
securities and corporate equity securities for a gain of approximately
$365,000 which was partially offset by a loss of approximately $192,000 on the
sale of numerous small pools of fixed-rate mortgage securities. This compares
to a gain of approximately $55,000 realized on the sale of corporate equity
securities and a number of small pools of fixed-rate mortgage securities
during the nine months ended September 30, 1999.
General and administrative expenses for the Company for the nine months ended
September 30, 2000 decreased $329,000 (14%) as compared to the nine months
ended September 30, 1999. Approximately $112,000 of such decrease is due to
expenses incurred in 1999 by a consolidated subsidiary which was liquidated in
December 1999. The remaining decrease of $217,000 is primarily attributable
to decreases in various servicing, filing fees and printing costs.
Other Matters
The Company at all times intends to conduct its business so as to not become
regulated as an investment company under the Investment Company Act of 1940.
If the Company were to become regulated as an investment company, then, among
other things, the Company's ability to use leverage would be substantially
reduced. The Investment Company Act exempts entities that are "primarily
engaged in the business of purchasing or otherwise acquiring mortgages and
other liens on and interests in real estate" (i.e. "Qualifying Interests").
Under the current interpretation of the staff of the SEC, in order to qualify
for this exemption, the Company must maintain at least 55% of its assets
directly in Qualifying Interests. In addition, unless certain mortgage
securities represent an undivided interest in the entire pool backing such
mortgage securities (i.e. "whole pool" mortgage securities), such mortgage
securities may be treated as securities separate from the underlying mortgage
<PAGE> - 16 -
loan, thus, may not be considered Qualifying Interests for purposes of the 55%
exemption requirement. Accordingly, the Company monitors its compliance with
this requirement in order to maintain its exempt status. As of September 30,
2000, the Company determined that it is in and has maintained compliance with
this requirement.
Forward Looking Statements
When used in this Form 10-Q, in future SEC filings or in press releases or
other written or oral communications, the words or phrases "will likely
result", "are expected to", "will continue", "is anticipated", "estimate",
"project" or similar expressions are intended to identify "forward looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. The Company cautions that such forward looking statements
speak only as of the date made and that various factors including regional
and national economic conditions, changes in levels of market interest
rates, credit and other risks of lending and investment activities, and
competitive and regulatory factors could affect the Company's financial
performance and could cause actual results for future periods to differ
materially from those anticipated or projected.
The Company does not undertake and specifically disclaims any obligation to
update any forward-looking statements to reflect events or circumstances after
the date of such statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There have been no material changes in the Company's market risk since
December 31, 1999.
<PAGE> - 17 -
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
2.1 Agreement and Plan of Merger by and among the Registrant,
America First Participating/Preferred Equity Mortgage Fund
Limited Partnership, America First Prep Fund 2 Limited
Partnership, America First Prep Fund 2 Pension Series
Limited Partnership and certain other parties, dated as of
July 29, 1997 (incorporated herein by reference to Exhibit
2.1 of the Registration Statement on Form S-4 dated
February 12, 1998, filed by the Registrant pursuant to the
Securities Act of 1933 (Commission File No. 333-46179)).
3.1 Amended and Restated Articles of Incorporation of the
Registrant (incorporated herein by reference to Form 8-K
dated April 10, 1998, filed by the Registrant pursuant to
the Securities Exchange Act of 1934 (Commission File No.
1-13991)).
3.2 Amended and Restated Bylaws of the Registrant (incorporated
herein by reference to Form 8-K dated April 10, 1998,
filed by the Registrant pursuant to the Securities Exchange
Act of 1934 (Commission File No. 1-13991)).
4.1 Specimen of Common Stock Certificate of the Company.
(incorporated herein by reference to Exhibit 4.1 of the
Registration Statement on Form S-4 dated February 12, 1998,
filed by the Registrant pursuant to the Securities Act of
1933 (Commission File No. 333-46179)).
10.1 Advisory Agreement, dated April 9, 1998, by and between
the Company and the Advisor (incorporated herein by
reference to Form 8-K dated April 10, 1998 filed by
the Company pursuant to the Securities Exchange Act of
1934 (Commission File No. 1-13991)).
10.2 Employment Agreement of Stewart Zimmerman (incorporated
herein by reference to Exhibit 10.2 of the Registration
Statement on Form S-4 dated February 12, 1998, filed by
the Company pursuant to the Securities Act of 1933
(Commission File No. 333-46179)).
10.3 Employment Agreement of William S. Gorin (incorporated
herein by reference to Exhibit 10.3 of the Registration
Statement on Form S-4 dated February 12, 1998, filed by
the Company pursuant to the Securities Act of 1933
(Commission File No. 333-46179)).
10.4 Employment Agreement of Ronald A. Freydberg (incorporated
herein by reference to Exhibit 10.4 of the Registration
Statement on Form S-4 dated February 12, 1998, filed by
the Company pursuant to the Securities Act of 1933
(Commission File No. 333-46179)).
10.5 Addendum to Employment Agreement of Stewart Zimmerman
(incorporated herein by reference to Form 10-Q dated
March 31, 2000, filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934
(Commission File No. 1-13991)).
10.6 Addendum to Employment Agreement of William S. Gorin
(incorporated herein by reference to Form 10-Q dated
March 31, 2000, filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934
(Commission File No. 1-13991)).
10.7 Addendum to Employment Agreement of Ronald A. Freydberg
(incorporated herein by reference to Form 10-Q dated
March 31, 2000, filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934
(Commission File No. 1-13991)).
<PAGE> - 18 -
10.8 Amended and Restated 1997 Stock Option Plan of the Company
(incorporated herein by reference to Form 10-K dated
December 31, 1999, filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934
(Commission File No. 1-13991)).
10.9 Form of Dividend Reinvestment Plan (incorporated herein by
reference to Appendix C of the Registration Statement on
Form S-4 dated February 12, 1998, filed by the Registrant
pursuant to the Securities Act of 1933 (Commission File No.
333-46179)).
27. Financial Data Schedule
(b) Reports on Form 8-K
The Registrant did not file any reports on Form 8-K during
the quarter for which this report is filed.
<PAGE> - 19 -
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.
Dated: November 11, 2000 AMERICA FIRST MORTGAGE INVESTMENTS, INC.
By /s/ Stewart Zimmerman
Stewart Zimmerman
President and Chief Executive Officer
By /s/ Gary Thompson
Gary Thompson
Authorized Officer and Chief Financial Officer
<PAGE> - 20 -
