<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
20549
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
Commission File Number 0-9086
For Quarter Ended August 31, 1996
Bankers Building Land Trust
-----------------------------------------------------
(Exact name of Registrant as specified in its charter)
Illinois 36-6067489
- --------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
AMCORE Bank N.A., 501 Seventh Street
Rockford, Illinois 61104, Trustee
-------------------------------------------------------
(Address of principal executive offices)
815-968-2241
------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has 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
Page 1 of 8
<PAGE> 2
PART I - ITEM 1
BANKERS BUILDING LAND TRUST
BALANCE SHEETS
as of August 31, 1996 and May 31, 1996
<TABLE>
<CAPTION>
August 31, May 31,
ASSETS 1996 1996
----------- -----------
(Unaudited)
<S> <C> <C>
Cash $ 84,697 $ 149,955
Land subject to operating lease 4,250,000 4,250,000
--------- ---------
Total assets $4,334,691 $4,399,995
========= =========
LIABILITIES and EQUITY
Due to certificate holders $ 68,750 $ 48,750
Deferred rental fees - 68,750
Advance from lessee 8,596 11,995
Accrued legal fees 6,851 20,000
--------- ---------
84,197 149,495
--------- ---------
Certificates of beneficial interest,
5,000 units issued and outstanding 4,250,000 4,250,000
Retained earnings 500 500
--------- ---------
4,250,500 4,250,500
--------- ---------
Total liabilities and equity $4,334,697 $4,399,995
========= =========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
Page 2 of 8
<PAGE> 3
BANKERS BUILDING LAND TRUST
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
for the three-month periods ended
August 31, 1996 and 1995
(Unaudited)
----
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Operating revenues:
Rent $68,750 $68,750
Servicing fees 1,987 1,987
------- -------
Total operating revenues 70,737 70,737
------- -------
Operating expenses:
Trustee fees and expenses paid 1,987 1,987
------- -------
Net income 68,750 68,750
------- -------
Retained earnings, beginning of period 500 500
------- -------
69,250 69,250
------- -------
Distributions to certificate holders 68,750 68,750
------- -------
Retained earnings, end of period $ 500 $ 500
======= =======
</TABLE>
The accompanying notes are an integral
part of the financial statements.
Page 3 of 8
<PAGE> 4
BANKERS BUILDING LAND TRUST
STATEMENTS OF CASH FLOWS
for the three months ended
August 31, 1996 and 1995
(Unaudited)
----
<TABLE>
<CAPTION>
1996 1995
--------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 68,750 $ 68,750
Adjustments to reconcile net income to
net cash used by operating activities:
Changes in assets and liabilities:
(Decrease) in advance from lessee (3,399) (3,552)
Increase in due to certificate holders 20,000 344
(Decrease) in deferred rental income (68,750) -
(Decrease) in accrued legal fees (13,149) -
-------- --------
Net cash used by operating activities 3,452 65,542
Cash flows from financing activities:
Distributions to certificate holders (68,750) (68,750)
-------- --------
Net change in cash (65,298) (3,208)
Cash balance, beginning of period 149,995 79,335
-------- --------
Cash balance, end of period $ 84,697 $ 76,127
======== ========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
Page 4 of 8
<PAGE> 5
BANKERS BUILDING LAND TRUST
NOTE TO FINANCIAL STATEMENTS
1. The balance sheet as of August 31, 1996, the statements of operations
for the three-month period ended August 31, 1996 and 1995, and the
statements of cash flows for the three-month period ended August 31,
1996 and 1995, have been prepared without audit. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results
of operations, and cash flows for all periods presented have been made.
The May 31, 1996 balance sheet was derived from audited financial
statements, but does not include all disclosures required by generally
accepted accounting principles.
Certain footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been omitted. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto
included in the May 31, 1996 annual report. The results of operations
for the period ended August 31, 1996 are not necessarily indicative of
the operating results for the full year.
2. During the second quarter of 1995, the trustee was informed that the
lessee of the land had filed for reorganization under Chapter 11 of the
Bankruptcy Code on September 22, 1995. The trustee filed a Report on
8-K with the SEC on October 6, 1995 regarding this matter. During the
third quarter, the trustee was informed that the lessee failed timely to
pay the Cook County, Illinois collector the real estate taxes of
$780,385 (including penalties as of December 1, 1995). The trustee
delivered notice to the lessee and its lender that such failure to pay
the real estate taxes constitutes a default under the lease. The
trustee filed a Report on 8-K with the SEC on December 19, 1995,
regarding this matter. Subsequently, the trustee was informed that the
real estate taxes had been paid in full on February 7, 1996.
During the fourth quarter, a report on Form 8-K was filed April 23,
1996 notifying the SEC of suspension of the notice of the lease
termination.
3. Subsequent to the quarter end and in connection with the bankruptcy of
the lessee of the land, the ownership of the building located on the
land owned by the Trust has been transferred to the lessee's lender in
satisfaction of the lessee's mortgage. In addition, the Trust has
entered into an agreement with the lessee's lender to sell as one entity
the land owned by the Trust and the building now owned by the lessee's
lender. In consideration for entering into the agreement, the Trust
received $250,000 from the lessee's lender.
Page 5 of 8
<PAGE> 6
BANKERS BUILDING LAND TRUST
FINANCIAL REPORT
(COMPILED)
AUGUST 31, 1996
<PAGE> 7
CONTENTS
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANT'S REPORT F-1
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
Balance sheet F-2
Statements of operations and retained earnings F-3
Statements of each flows F-4
Notes to financial statements F-5-F-6
- --------------------------------------------------------------------------------
<PAGE> 8
[McGLADREY & PULLEN, LLP LETTERHEAD]
INDEPENDENT ACCOUNTANT'S REPORT
To the Trustee
Bankers Building Land Trust
Rockford, Illinois
We have compiled the accompanying balance sheet of Bankers Building Land Trust
as of August 31, 1996, and the related statements of operations and retained
earnings and cash flows for the three months ended August 31, 1996, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting information that is the representation
of management in the form of financial statements. We have not audited or
reviewed the accompanying 1996 financial statements and, accordingly, do not
express an opinion or any other form of assurance on them.
The statements of operations and retained earnings and cash flows for the three
months ended August 31, 1995 of Bankers Building Land Trust were compiled by
other accountants whose report, dated October 10, 1995, stated that they did
not express an opinion or any other form of assurance on those statements.
As further discussed in Note 4, the Trust has entered into an agreement with
the lessee's lender, resulting from the bankruptcy of the lessee, to sell the
land owned by the Trust together with the building located on the land.
McGladrey & Pullen, LLP
Rockford, Illinois
October 2, 1996
F-1
<PAGE> 9
BANKERS BUILDING LAND TRUST
BALANCE SHEETS
August 31, 1996
See Accountant's Report
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
ASSETS
<S> <C>
Cash $ 84,697
Land subject to operating lease 4,250,000
-------------
TOTAL ASSETS $ 4,334,697
=============
LIABILITIES AND EQUITY
Due to certificate holders $ 68,750
Advance from lessee 8,596
Accrued legal fees 6,851
-------------
84,197
Certificates of beneficial interest
5,000 units issued and outstanding 4,250,000
Retained earnings 500
-------------
4,250,500
-------------
TOTAL LIABILITIES AND EQUITY $ 4,334,697
=============
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE> 10
BANKERS BUILDING LAND TRUST
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
Three Months Ended August 31, 1996 and 1995
See Accountant's Report
<TABLE>
<CAPTION>
1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C>
Operating Revenues:
Rent $ 68,750 $ 68,750
Servicing fees 1,987 1,987
----------------------------
TOTAL OPERATING REVENUES 70,737 70,737
Operating Expenses:
Trustee fees and other expenses 1,987 1,987
----------------------------
NET INCOME 68,750 68,750
----------------------------
Retained earnings, beginning of period 500 500
Distributions to certificate holders 68,750 68,750
----------------------------
Retained earnings, end of period $ 500 $ 500
============================
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE> 11
BANKERS BUILDING LAND TRUST
STATEMENTS OF CASH FLOWS
Three Months Ended August 31, 1996 and 1995
See Accountant's Report
<TABLE>
<CAPTION>
1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 68,750 $ 68,750
Adjustments to reconcile net income to
net cash provided by operating activities:
Increase in due to certificate holders 20,000 344
(Decrease) in deferred rental income (68,750)
(Decrease) in advance from lessee (3,399) (3,552)
(Decrease) in accrued legal fees (13,149) -
-------------------------------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 3,452 65,542
-------------------------------------
Cash Flows From Financing Activities
Distributions to certificate holders, NET CASH
(USED IN) FINANCING ACTIVITIES (68,750) (68,750)
-------------------------------------
(Decrease) in cash (65,298) (3,208)
Cash:
Beginning of period 149,995 79,335
-------------------------------------
End of period $ 84,697 $ 76,127
=====================================
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE> 12
BANKERS BUILDING LAND TRUST
NOTES TO FINANCIAL STATEMENTS
SEE ACCOUNTANT'S REPORT
- -------------------------------------------------------------------------------
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of business: Bankers Building Land Trust is a trust organized under the
laws of the State of Illinois which is engaged in the single business activity
of holding title to certain land in Chicago, Illinois, collecting rent from the
lease of said land and disbursing the net proceeds to the holders of beneficial
interest certificates.
A summary of the Trust's significant accounting policies follows:
Accounting estimates: The preparation of financial statements requires
management to make estimates and assumptions that affect the reported amounts
in the financial statements and the accompanying notes. Actual results could
differ from those estimates.
Financial instruments: The Trust has no financial instruments for which the
carrying value differs materially from the fair value.
Land valuation: The land has been valued at its cost to the parties that
established the Trust in 1926 based upon information obtained from the
records of the Cook County Recorder.
Reclassification: Certain items have been reclassified in the 1995 financial
statements to be consistent with the presentation of the 1996 financial
statements.
NOTE 2. LEASE
The Trust is the lessor of approximately 22,300 square feet of land located on
the southwest corner of Clark and West Adams Streets in the central business
district of the City of Chicago. The lease commenced on June 1, 1926
and expires on May 31, 2025. The annual rental, payable in quarterly
installments for the leased property is $275,000 plus fees and expenses of the
trustee.
The following is a schedule by years of minimum future rentals on the lease as
of August 31, 1996:
<TABLE>
<CAPTION>
Year Ending August 31:
----------------------------
<S> <C>
1997 $ 275,000
1998 275,000
1999 275,000
2000 275,000
2001 275,000
Later years 6,531,250
----------------
Total minimum future rentals $ 7,906,250
================
</TABLE>
F-5
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
SEE ACCOUNTANT'S REPORT
- -------------------------------------------------------------------------------
NOTE 2. LEASE (CONTINUED)
The lessee of the land has declared bankruptcy. The outcome of how these
bankruptcy proceedings will affect this lease cannot be determined, other than
that under the terms of the lease, the ownership of the building situated on
the land, in the event of uncured default, will revert to the Trust.
NOTE 3. INCOME TAXES
The Trust is considered a partnership for income tax purposes. The Trust has
been deemed to have made an election out of the partnership's provisions of the
Internal Revenue Code. Therefore, no partnership income tax returns are filed
on behalf of the trust. Distributions to certificate holders are taxable to
the certificate holders, and reported by means of an information return.
Accordingly, no provision for income taxes has been made in the financial
statements.
NOTE 4. SUBSEQUENT EVENT
In connection with the bankruptcy of the lessee of the land, ownership of the
building located on the land owned by the Trust has been transferred to the
lessee's lender in satisfaction of the lessee's mortgage. In addition, the
Trust has entered into an agreement with the lessee's lender to sell as one
entity the land owned by the Trust and the building now owned by the lessee's
lender. In consideration for entering into the agreement, the Trust received
$250,000 from the lessee's lender.
F-6
<PAGE> 14
PART I - ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Due to the passive nature of the Registrant's activities, which generally
include only the collection of rent and the disbursements of these proceeds
less expenses to the certificate holders of the Registrant, there has been no
material variation in the Registrant's financial condition or results of
operations.
However, the lessee of the property owned by the Trust has filed for
reorganization under Chapter 11 of the Bankruptcy Code. The trustee will
take steps to protect the rights of the Trust, including future collection of
rent. The payment of distributions to the certificate holders is dependent
upon the collection of unpaid rent.
In addition, the trustee delivered notice to the lessee and its lender that the
failure to pay delinquent real estate taxes constitutes a default under the
lease. The default was rectified on February 7, 1996.
Page 6 of 8
<PAGE> 15
PART II - ITEM 6
Exhibits and reports on Form 8-K
(a) Exhibits - None.
(b) During the first quarter, a report on Form 8-K was filed August 7, 1996
notifying the SEC of the change in accountants.
Subsequent to the quarter end, a report on Form 8-K was filed September
20, 1996 notifying the SEC of transfer of the building in satisfaction
of the lessee's mortgage. In addition, the Trust entered into an
agreement with the lessee's lender to sell the land and the building as
one entity.
Page 7 of 8
<PAGE> 16
SIGNATURES
Pursuant to the requirements of Date
-----------------------------
the Securities Exchange Act of Bankers Building Land Trust
1934, the Registrant has duly By AMCORE Bank N.A., Trustee
-------------------------------
caused this report to be signed
on its behalf by the undersigned, By /s/ Patricia N. Fong
-------------------------------
Patricia N. Fong
thereunto duly authorized. Vice President
and Trust Officer
Page 8 of 8
<PAGE> 17
SIGNATURES
Pursuant to the requirements of Date
-----------------------------
the Securities Exchange Act of Bankers Building Land Trust
1934, the Registrant has duly By AMCORE Bank N.A., Trustee
-------------------------------
caused this report to be signed
on its behalf by the undersigned, By
-------------------------------
Patricia N. Fong
thereunto duly authorized. Vice President
and Trust Officer
Page 8 of 8
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1996
<PERIOD-END> AUG-31-1996
<CASH> 84,697
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,334,697
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,334,697
<SALES> 0
<TOTAL-REVENUES> 70,737
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 68,750
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
