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
For Quarter Ended: March 31, 1996
Commission File Numbers: 2-97573, 33-12626 and 33-19023
NATIONAL MORTGAGE ACCEPTANCE CORPORATION
(Exact name of registrant as specified in its charter)
Virginia 54-1294217
(State or other Jurisdiction (I.R.S. Employer
of incorporation) Identification number)
823 East Main Street, Richmond, Virginia
(Address of principal executive offices)
23219
(Zip Code)
(804) 775-7904
(Registrant's telephone number, including area code)
Indicate by checkmark 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
of time 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 A Common Stock: 730 shares
Class B Common Stock: 1,665 shares
<PAGE>
Part I: FINANCIAL INFORMATION
March 31, 1996
Item 1. Financial Statements
Attached as Appendix A.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Attached as Appendix B.
Part II: OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults on Senior Securities - None
Item 4. Submission of Matters to Vote of Security Holders -
Information regarding election of directors by the registrant's voting
shareholders previously reported in registrant's report on Form 10-K for
its year ending December 31, 1995, as filed March 28, 1996.
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K - None
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.
NATIONAL MORTGAGE ACCEPTANCE CORPORATION
(Registrant)
By:
______________________________________________
John Thomas West, IV
Secretary/Treasurer
Principal financial officer and duly authorized officer
Date: May 8, 1996
<PAGE>
EXHIBIT INDEX
2. Not Applicable.
4.1 Indenture dated as of May 1, 1985 ("Indenture") between NMAC
and Texas Commerce Bank National Association as trustee
("Trustee"), previously filed as Exhibit 4.1 to Amendment No. 1 to
NMAC's Registration Statement on Form S-11, Registration No.
2-97573 and incorporated by reference.
4.2 General Supplement relating to Subsequent Series dated as of
January 1, 1987, previously filed as Exhibit to NMAC's Form 8-K filed
on February 10, 1985, and incorporated by reference.
4.3 Series Supplement to the Indenture, dated as of July 1, 1985,
relating to Series 1985-A Bonds, previously filed as Exhibit 4 to
NMAC's Form 8-K filed on July 23, 1985, and incorporated by
reference.
4.4 Series Supplement to the Indenture, dated as of January 20, 1987,
relating to Series B Bonds, previously filed as Exhibit 4.3 to NMAC's
Form 8-K filed on February 10, 1987, and incorporated by reference.
4.5 Series Supplement to the Indenture, dated as of March 20, 1987,
relating to Series C Bonds, previously filed as Exhibit 4.3 to NMAC's
Form 8-K filed on April 8, 1987, and incorporated by reference.
4.6 Series Supplement to the Indenture, dated as of October 30, 1987,
relating to Series D Bonds, previously filed as Exhibit 4.3 to NMAC's
form 8-K filed on November 12, 1987, and incorporated by reference.
4.7 Form of Second General Supplement to Indenture relating to
Subsequent Series previously filed as Exhibit 4.4 to NMAC's
Post-Effective Amendment No. 1 on Form S-3 to S-11 Registration
No. 33-19023 and incorporated by reference.
11. Not applicable. Information in Appendix A.
15. Not applicable.
18. Not applicable.
19. Not applicable.
20. Not applicable.
23. Not applicable.
24. Not applicable.
25. Not applicable.
28. Not applicable.
<PAGE>
Statements of Financial Condition
NATIONAL MORTGAGE ACCEPTANCE CORPORATION
March 31, 1996 December 31, 1995
(unaudited)
ASSETS
Cash 2,668 8,586
Trading securities, at market value 233,609 235,292
Restricted cash and investments -
Series 1985-A working capital reserve 841,012 828,314
Loans receivable from affiliates 19,492,970 21,242,798
Accrued interest receivable
from affiliates 548,240 1,194,907
Other assets 19,455 23,763
TOTAL ASSETS 21,137,954 23,533,660
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Bonds payable 19,492,970 21,242,798
Accrued interest payable 548,240 1,194,907
Other liabilities, principally to a 869,707 864,405
TOTAL LIABILITIES 20,910,917 23,302,110
SHAREHOLDERS' EQUITY
Common stock; $1 par value:
Class A (without right to dividend)-
authorized 7,500 shares, issued and
outstanding 730 shares 730 730
Class B (non-voting)-- authorized
7,500 shares, issued and outstanding
1,665 shares 1,665 1,665
Paid-in capital 182,565 182,565
Retained earnings 42,077 46,590
SHAREHOLDERS' EQUITY 227,037 231,550
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 21,137,954 23,533,660
The accompanying notes are an integral part of these financial
statements.
<PAGE>
Statements of Operations and Retained Earnings
NATIONAL MORTGAGE ACCEPTANCE CORPORATION
Three Months Ended
March 31,
1996 1995
(unaudited)
REVENUES
Interest on loans $ 548,240 $ 883,947
Other interest 5,003 2,402
Management fees 20,301 25,825
Net unrealized securities
trading gains (6,564) 5,781
566,980 917,955
COSTS AND EXPENSES
Interest on bonds 548,240 883,947
Management fees 20,301 25,825
Other 2,952 2,941
571,493 912,713
NET LOSS
BEFORE INCOME TAXES (4,513) 5,242
INCOME TAX EXPENSE (BENEFIT) 0 1,055
NET LOSS (4,513) 4,187
RETAINED EARNINGS AT
BEGINNING OF PERIOD 46,590 34,186
RETAINED EARNINGS AT
END OF PERIOD $ 42,077 $ 38,373
LOSS PER SHARE $ (1.88) $ 1.75
The accompanying notes are an integral part of these financial
statements.
<PAGE>
Statements of Cash Flows
NATIONAL MORTGAGE ACCEPTANCE CORPORATION
Three Months Ended Three Months Ended
March 31, 1996 March 31, 1995
(unaudited)
Cash flows from operating activities:
Net income (loss) $ (4,513) $ 4,187
Adjustments to reconcile net
income (loss) to net cash provided by (used for)
operating activities:
Net unrealized securities trading 6564 (5,781)
Cash and related investments
restricted - Series 1985-A Working
Capital Reserve (12,698) (11,354)
Accrued interest receivable
from affiliates 646,667 843,300
Decrease in accrued interest payable
(646,667) (844,767)
Interest added to Class A-4 and C-5
bonds payable (See Note B) 0 107,532
Trading securities (4,881) 7,708
Other assets 4,308 10,392
Other liabilities, principally
to affiliates 5,302 (5,732)
Total adjustments (1,405) 101,298
Net cash provided by (used for)
operating activities (5,918) 105,485
Cash flows from investing activities:
Payments received on loans to
affiliates 1,749,828 3,660,705
Cash flows from financing activities:
Payments on bonds payable (1,749,828) (3,766,770)
Net decrease in cash (5,918) (580)
Cash at beginning of period 8,586 7,174
Cash at end of period $ 2,668 $ 6,594
The accompanying notes are an integral part of these financial
statements.
<PAGE>
APPENDIX A (4/4)
NOTES TO FINANCIAL STATEMENTS
NATIONAL MORTGAGE ACCEPTANCE CORPORATION
March 31, 1996
NOTE A (Unaudited)
These financial statements should be read in conjunction with the
financial statements and notes thereto in National Mortgage Acceptance
Corporation's ("NMAC") Annual Report for the year ended December
31, 1995. The financial statements for the three months ended March
31, 1996, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the results of
operations, financial position, and cash flows for the interim periods.
These amounts are not necessarily indicative of results for a full year.
NOTE B (Unaudited)
The remaining Series C bonds were retired on October 20, 1995.
<PAGE>
APPENDIX B
TO FORM 10-Q
Management's Discussion and Analysis of Financial Condition and
Results of Operations
NATIONAL MORTGAGE ACCEPTANCE CORPORATION
March 31, 1996
During the first quarter ended March 31, 1996. National Mortgage
Acceptance Corporation ("NMAC") did not issue any new series of its
TIMCO (Thrift Industry Mortgage Collateralized Obligation) or
Mortgage Collateralized Obligation Bonds.
During the three (3) month period ending March 31, 1996, NMAC
revenues were $566,980, which consisted primarily of i) interest on
loans receivable under funding agreements between NMAC and the
participating borrowers for NMAC's TIMCO Bonds, Series 1985-A
(FHLMC Certificates) (the "Series 1985-A Bonds) and ii) Management
Fees received for the on-going administration of three outstanding
Bonds Series (Series 1985-A, Series B (FHLMC Certificates), and
Series D (GNMACertificates). Future revenues are expected to be
provided from interest payments on funding agreements for the Series
A Bonds, from one or more subsequent series of NMAC's Bonds, when
and if issued, from mortgage collateral acquired by NMAC and pledged
to secure any subsequent series of NMAC's Bonds, and from amounts
received in excess of costs incurred by NMAC in the issuance of
subsequent series of NMAC's Bonds.
NMAC has caused an election to be made under the Internal
Revenue Code of 1986, as amended (the "Code"), to have the Trust
Estates for the Series B Bonds and the Series D Bonds taxed as separate
real estate mortgage investment conduits (each, a "REMIC"), in which
the Series B Bonds and the SeriesD Bonds are "regular interests," as
defined in the Code, with respect to the related REMIC. Other than
its on-going fees for administration of the Series B and the Series D
Bond REMICs, NMAC has no future economic benefit in the
segregated asset pool comprising either the Series B Bond REMIC or
the Series D Bond REMIC. The "residual interest" in each of the Series
B Bond and Series D Bond REMICs was sold by NMAC for cash in
1987. Accordingly, neither the collateral for the Series B Bonds or the
Series D Bonds nor the Series B Bonds or Series D Bonds are recorded
as assets or liabilities, respectively, of NMAC. The interest income on
the collateral for, and the related interest expense on, the Series B
Bonds will be recorded only within the Series B Bond REMIC and the
interest income on the collateral for, and the related interest expense on,
the Series D Bonds will be recorded only within the Series D Bond
REMIC. Neither the interest income nor the related interest expense on
either of these REMIC Series will have an impact on NMAC's financial
statements.
Interest on NMAC's outstanding Series 1985-A Bonds was the
major source of costs and expenses for the period. Cash flow from
payments on the loans receivable securing the Series 1985-A Bonds are
anticipated to provide cash sufficient to make all required payments on
the related series of Bonds. Consequently, NMAC anticipates that it
will have no additional cash requirements with respect to any of its
outstanding Bonds.
<PAGE>
NMAC believes sufficient liquidity and capital resources exist to
pay all amounts due on the Series 1985-A and all other expenses of
NMAC. Furthermore, because each Series of Bonds is secured
by collateral paying interest at specified or determinable maximum
rates and payments on each Series of Bonds are designed not to exceed
payments received on the collateral for the related Series, inflationary
pressures have not affected, and are not expected to affect, significantly
the ability of NMAC to meet its obligations as they become due.
NMAC has no salaried employees and has entered into management
and administrative service agreements with Craigie Incorporated
("Craigie"), an affiliate of NMAC, pursuant to which Craigie
provides NMAC with administrative, accounting and clerical services,
office space and the use of the service mark "TIMCO" for the
registrant's Bonds. Under these agreements, Craigie receives fees from
NMAC in connection with each funding agreement executed between
NMAC and the participating borrowers and with respect to the residual
interests with respect to the registrant's Series B and SeriesD Bonds.
Fees paid to NMAC by participating borrowers with respect to its
Series A Bonds and the holders of the residual interest with respect to
its Series B and Series D Bonds are expected by NMAC to be sufficient
to provide for all on-going costs and expenses with respect to the
outstanding Series of its Bonds. NMAC therefore anticipates that it
will have no additional cash or liquidity requirements with respect to its
obligations under any outstanding Series of its Bonds. Payments under
the management and administrative services agreements between
NMAC and Craigie are not expected to exceed the amount received by
NMAC as on-going fees paid to it by participating borrowers under
their funding agreements and/or holders of the residual interest with
respect to the Series B REMIC. Texas Commerce Bank National
Association, trustee for all outstanding Series of NMAC's Bonds, also
holds funds in expense reserve accounts established under the Series
Supplements for certain of NMAC's outstanding Bonds to provide for
future expenses of the Trustee with respect to the related Series
Supplement if other funds are insufficient therefore. Such amounts are
held under the respective Series Supplements and are not recorded in
the financial statements.
The Series 1985-A Working Capital Reserve, established by NMAC
with respect to its Series 1985-A Bonds, is funded by the Series 1985-A
participating borrowers from their funding agreements. These amounts
are available solely to pay any fees, charges, taxes, assessments,
impositions or other expenses of NMAC, other than bond
administration expenses, in connection with the Series 1985-A
Bonds. The Series 1985-A Working Capital Reserve is not available to
pay expenses or claims of NMAC other than with respect to the Series
1985-A Bonds, is not pledged to secure the Series 1985-A Bonds and is
not pledged to secure any other Series of NMAC's Bonds.
With respect to certain of its administration duties for the Series D
REMIC, NMAC hascontracted with Financial Asset Management
Corporation ("FAMC") (formerly M.D.C. Consulting, Inc.). Amounts
due FAMC for services rendered are paid from amounts received by
NMAC for administrative services from holders of the Series D REMIC
residual interest and are less than the grossamount payable by such
holders to NMAC.
As of March 31, 1996, NMAC's assets were $21,137,954 including
$236,277 in unrestricted cash and trading securities. This cash balance,
plus interest earnings from the investment thereof, is available to pay
NMAC's annual operating expenses, and, if and to the extent necessary,
amounts in connection with the outstanding Bonds of NMAC.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 2,688
<SECURITIES> 1,074,621
<RECEIVABLES> 20,041,210
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 19,455
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 21,137,954
<CURRENT-LIABILITIES> 1,417,947
<BONDS> 19,492,970
0
0
<COMMON> 184,960
<OTHER-SE> 42,077
<TOTAL-LIABILITY-AND-EQUITY> 21,137,954
<SALES> 0
<TOTAL-REVENUES> 566,980
<CGS> 0
<TOTAL-COSTS> 571,493
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 548,240
<INCOME-PRETAX> (4,513)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,513)
<EPS-PRIMARY> (1.88)
<EPS-DILUTED> 0
</TABLE>
