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, 1997
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
P.O. Box 1854
Richmond, Virginia
(Address of principal executive offices)
23218
(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
Part I: FINANCIAL INFORMATION
March 31, 1997
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, 1996, as
filed March 26, 1997.
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: ______________________________________________
Randall B. Saufley
Secretary/Treasurer
Principal financial officer and duly authorized
officer
Date: May 12, 1997
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.
Statement of Financial Condition
NATIONAL MORTGAGE ACCEPTANCE CORPORATION Appendix A (1/4)
March 31, 1997 December 31, 1996
(unaudited)
ASSETS
Cash 5,221 3,229
Trading securities, at market value 241,997 236,711
Restricted cash and investments -
Series 1985-A working capital reserve 54,222 53,665
Loans receivable from affiliates 15,560,603 17,328,606
Accrued interest receivable
from affiliates 437,642 974,734
Other assets 12,783 20,751
TOTAL ASSETS 16,312,468 18,617,696
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Bonds payable 15,560,603 17,328,606
Accrued interest payable 437,642 974,734
Other liabilities, principally to
affiliates 83,856 86,016
TOTAL LIABILITIES 16,082,101 18,389,356
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 45,407 43,380
SHAREHOLDERS' EQUITY 230,367 228,340
TOTAL LIABILITIES AND
SHAREHOLDERS' 16,312,468 18,617,696
The accompanying notes are an integral part of these financial statements.
Statements of Operations and Retained Earnings Appendix A (2/4)
NATIONAL MORTGAGE ACCEPTANCE CORPORATION
Three Months Ended
March 31,
1997 1996
(unaudited)
REVENUES
Interest on loans $437,642 $548,240
Other interest 2,584 5,003
Management fees 16,244 20,301
Net unrealized securities
Trading gains 2,755 (6,564)
459,225 566,980
COSTS AND EXPENSES
Interest on bonds 437,642 548,240
Management fees 16,244 20,301
Other 3,312 2,952
457,198 571,493
NET INCOME (LOSS)
BEFORE INCOME TAXES 2,027 (4,513)
INCOME TAX EXPENSE (BENEFIT) 0 0
NET INCOME (LOSS) 2,027 (4,513)
RETAINED EARNINGS AT
BEGINNING OF PERIOD 43,380 46,590
RETAINED EARNINGS AT
END OF PERIOD $ 45,407 $ 42,077
EARNINGS (LOSS) PER SHARE $ 0.85 $ (1.88)
The accompanying notes are an integral part
of these financial statements
Statements of Cash Flows Appendix A (3/4)
NATIONAL MORTGAGE ACCEPTANCE CORPORATION
Three Months Ended Three Months Ended
March 31, 1997 March 31, 1996
(unaudited)
Cash flows from operating activities:
Net income (loss) $ 2,027 $ (4,513)
Adjustments to reconcile net
income to net cash provided by (used for)
operating activities:
Net unrealized securities trading (2,755) 6,564
Cash and related investments
restricted - Series 1985-A
Working capital reserve (557) (12,698)
Accrued interest receivable
from affiliates 537,092 646,667
Decrease in accrued interest payable (537,092) (646,667)
Trading securities (2,531) (4,881)
Other assets 7,968 4,308
Other liabilities, principally
to affiliates (2,160) 5,302
Total adjustments (35) (1,405)
Net cash provided by (used for)
operating activities 1,992 (5,918)
Cash flows from investing activities:
Payments received on loans to
affiliates 1,768,003 1,749,828
Cash flows from financing activities:
Payments on bonds payable (1,768,003) (1,749,828)
Net increase (decrease) in cash 1,992 (5,918)
Cash at beginning of period 3,229 8,586
Cash at end of period $ 5,221 $ 2,668
The accompanying notes are an integral part of these financial
statemen
APPENDIX A (4/4)
NOTES TO FINANCIAL STATEMENTS
NATIONAL MORTGAGE ACCEPTANCE CORPORATION
March 31, 1997
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, 1996. The financial
statements for the three months ended March 31, 1997, 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.
APPENDIX B
TO FORM 10-Q
Management's Discussion and Analysis of Financial Condition and Results of
Operations
NATIONAL MORTGAGE ACCEPTANCE CORPORATION
March 31, 1997
During the first quarter ended March 31, 1997, 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, 1997, NMAC revenues
were
$459,225 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 two
outstanding Bonds Series; Series 1985-A Bonds, (FHLMC Certificates), and
Series D Bonds (GNMA Certificates). Future revenues are expected to be
provided from interest payments on funding agreements for the Series A Bonds.
NMAC has caused an election to be made under the Internal Revenue Code of
1986
, as amended (the "Code"), to have the Trust Estate for the Series D Bonds taxed
as a separate real estate mortgage investment conduit (a "REMIC"), in which the
Series D Bonds are "regular interests," as defined in the Code, with respect
to the REMIC. Other than its on-going fees for administration of the Series
D Bond REMIC, NMAC has no future economic benefit in the segregated asset pool
comprising of the Series D Bond REMIC. The "residual interest" in the Series D
Bond REMICs was sold by NMAC for cash in 1987. Accordingly, neither the
collateral for the Series D Bonds nor the 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 D Bonds will
be recorded only within the Series D Bond REMIC. Neither the interest income
nor the related interest expense on REMIC 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 1985-A Bonds.
Consequently, NMAC anticipates that it will have no additional cash
requirements with respect to any of its outstanding Bonds.
NMAC believes sufficient liquidity and capital resources exist to pay all
amounts due on the Series 1985-A Bonds 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 D 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 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 D REMIC Bonds.
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 for NMAC.
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 has contracted with Asset Investors, Inc. (formerly Financial Asset
Management Corporation and M.D.C. Consulting, Inc.). Amounts due Asset
Investors, Inc. 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 gross amount payable by such holders
to NMAC.
On November 12, 1996 Craigie Incorporated purchased from the Federal
Deposit
Insurance Corporation ("FDIC") the stock of three of the affiliates who
participated in the Series 1985-A Bonds. The affiliates were Atlantic
Financing Corporation, Security Federal Financing Corporation and Mountain
Financial Corporation.
As of March 31, 1997, NMAC's assets were $ 16,312,468 including $ 247,218
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.
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<PERIOD-END> MAR-31-1997
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<RECEIVABLES> 15,998,245
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