<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
______________
Commission file number 33-4001
_______
CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
_______________________________________________________________________
(Exact name of registrant as specified in its charter)
DELAWARE 43-1393535
_______________________________________________________________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
201 Progress Parkway
Maryland Heights, Missouri 63043
_______________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 515-2000
__________________
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports,
and (2) has been subject to such filing requirements for the past 90
days.
YES X NO
____ ____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date, April 29,
1996:
COMMON STOCK, $.01 Par Value - 1,000 Shares
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CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
INDEX
Page
Number
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet .........................................3
Statement of Operations ...............................4
Statement of Changes in Stockholder's Equity ..........5
Statement of Changes in Financial Position ............6
Notes to Financial Statements .........................7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ...................8
Part II. OTHER INFORMATION.....................................9
SIGNATURES.....................................................10
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CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
BALANCE SHEET
(Unaudited)
March 31, December 31,
1996 1995
ASSETS
Cash $ 33,298 $ 33,298
_____________ _____________
Total Assets $ 33,298 $ 33,298
============= =============
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Payable to Edward D. Jones & Co., L.P.$ 474,836 $ 474,786
Accrued Expenses 6,500 6,500
_____________ _____________
Total Liabilities 481,336 481,286
_____________ _____________
Stockholder's Equity:
COMMON STOCK - $.01 par value,
1,000 shares authorized, issued
and outstanding 10 10
Paid-in-Capital 300,490 300,490
Retained deficit (748,538) (748,488)
_____________ _____________
Total Stockholder's Equity (448,038) (447,988)
_____________ _____________
Total Liabilities and
Stockholder's Equity $ 33,298 $ 33,298
============= =============
The accompanying notes are an integral part of these financial
statements.
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CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended
March 31, March 31,
1996 1995
Revenues: $ - $ -
______________ ______________
Expenses:
Registration, filing and other fees 50 300
______________ ______________
50 300
______________ ______________
Loss before income taxes (50) (300)
Provision for (benefit from) income
taxes - -
______________ ______________
Net loss $ (50) $ (300)
============== =============
The accompanying notes are an integral part of these financial
statements.
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CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
(Unaudited)
Three Months Ended March 31, 1996 and 1995
Common Paid-In Retained
Stock Capital (Deficit) Total
Balance, December 31, 1994$ 10 $ 300,490 $(759,228) $ (458,728)
Net loss - - (300) (300)
__________ __________ __________
Balance, March 31, 1995 $ 10 $ 300,490 $(759,528) $ (459,028)
======== ======== ======== ========
Balance December 31, 1995 $ 10 $ 300,490 $(748,488) $ (447,988)
Net loss - - (50) (50)
__________ __________ __________
Balance March 31, 1996 $ 10 $ 300,490 $(748,538) $ (448,038)
======== ======== ======== ========
The accompanying notes are an integral part of these financial
statements.
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CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
STATEMENT OF CHANGES IN FINANCIAL POSITION
(Unaudited)
Three Months Ended March 31,
1996 1995
CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES:
Net loss $ (50) $ (300)
Adjustments to reconcile net income
to net cash provided by operating
activities -
Increase in payable to Edward D. Jones
& Co., L.P. 50 300
_____________ _____________
Net cash provided (used) by
operating activities - -
_____________ _____________
Net increase (decrease) in cash - -
CASH, beginning of period 33,298 19,213
_____________ _____________
CASH, end of period $ 33,298 $ 19,213
============ =============
The accompanying notes are an integral part of these financial
statements.
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CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
BASIS OF PRESENTATION
The financial information included herein is unaudited. However,
in the opinion of management, such information includes all
adjustments, consisting solely of normal recurring adjustments which
are necessary for a fair presentation of the results of interim
operations. These interim results should be read in connection with
the annual statement Form 10-K.
The results of operations for the three months ended March 31,
1996, are not necessarily indicative of the results to be expected for
the full year.
FUTURE OPERATIONS
Cornerstone Mortgage Investment Group, Inc. (the "Company" or
"Cornerstone") was incorporated in the state of Delaware on January 9,
1986, as a wholly owned, limited purpose subsidiary of Edward D. Jones
& Co., L.P. ("EDJ"), a Missouri limited partnership. EDJ organized
the Company and currently owns all the issued and outstanding capital
stock of the Company.
Cornerstone was organized for the limited purpose of issuing and
selling secured mortgage bonds (the "Bonds"), which are collateralized
by Government National Mortgage Association (GNMA), Federal Home Loan
Mortgage Corporation (FHLMC) and Federal National Mortgage Association
(FNMA) Certificates.
Due to revisions of the Internal Revenue Code enacted, effective
January 1, 1987, Cornerstone no longer issues bonds. Cornerstone will
continue operations until such time as the Bonds previously issued are
retired or mature.
<PAGE>
CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
MANAGEMENT'S NARRATIVE ANALYSIS
As no series were issued or residual income received during the
three months ended March 31, 1996 or 1995, no revenues were recognized
during these periods.
Expenses for the three months ended March 31, 1996 and March 31,
1995, were $50 and $300, respectively, and were for registration,
filing and other fees.
The outstanding principal balance and remaining collateral value
relating to series issued by Cornerstone Mortgage Investment Group,
Inc. are $6,885,000 and $6,898,184 as of March 31, 1996.
<PAGE>
CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
Item 1:Legal Proceedings:
There are no material pending legal proceedings, other than
routine litigation incidental to the business, to which the
Registrant is party.
Item 2.Changes in Securities:
No change.
Item 3.Default upon Senior Securities:
No default.
Item 4.Submission of Matters to a Vote of Security Holders:
Nothing to report.
Item 5.Other Information:
Nothing to report.
Item 6:Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description of Exhibit
_________ __________________
4.1 Indenture dated as of June 15, 1986, between
the Company and Boatmen's Trust Company of St.
Louis, as Trustee, relating to Secured Mortgage
Bonds (incorporated by reference to Exhibit
4(a) to Registration Statement on Form S-1, as
amended, File No. 33-4001).
4.2 First Supplemental Indenture dated August 28,
1986 (incorporated by reference to Exhibit 1 to
the Current Report on Form 8-K filed on
September 19, 1986).
4.3 Second Supplemental Indenture dated September
26, 1986 (incorporated by reference to Exhibit
1 to the Current Report on Form 8-K filed on
October 6, 1986).
4.4 Third Supplemental Indenture dated October 31,
1986 (incorporated by reference to Exhibit 1 to
the Current Report on Form 8-K filed on
November 12, 1986).
(b) Reports on Form 8-K
No reports were filed on Form 8-K for the quarter ended March 31, 1996.
<PAGE>
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.
CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
(Registrant)
/s/John C. Heisler Chairman of the Board,
____________________ Chief Financial Officer,
John C. Heisler Chief Accounting Officer
and Director May 10, 1996
/s/Philip R. Schwab President, Chief Executive
____________________ Officer and Director May 10, 1996
Philip R. Schwab
<PAGE>
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.
CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
(Registrant)
Chairman of the Board,
___________________ Chief Financial Officer,
John C. Heisler Chief Accounting Officer
and Director May 10, 1996
President, Chief Executive
___________________ Officer and Director May 10, 1996
Philip R. Schwab
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements from Cornerstone Mortgage Investment Group, Inc.
</LEGEND>
<CIK> 0000790524
<NAME> CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
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