<PAGE>
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 June 30, 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, August 5, 1996:
COMMON STOCK, $.01 Par Value - 1,000 Shares
<PAGE>
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 Cash Flows............................ 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
<PAGE>
CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
BALANCE SHEET
(Unaudited)
June 30, December 31,
1996 1995
ASSETS
Cash $43,549 $33,298
___________ __________
TOTAL ASSETS $43,549 $33,298
=========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Payable to Edward D. Jones & Co., L.P. $475,131 $474,786
Accrued Expenses 6,500 6,500
__________ __________
TOTAL LIABILITIES 481,631 481,286
__________ __________
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 (738,582) (748,488)
___________ __________
TOTAL STOCKHOLDER'S EQUITY (438,082) (447,988)
___________ __________
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $43,549 $33,298
=========== ==========
The accompanying notes are an integral part of these financial
statements.
<PAGE>
CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
Revenues:
Residual income $13,866 $18,305 $13,866 $18,305
_________ _________ _______ _______
13,866 18,305 13,866 18,305
_________ _________ ________ _______
Expenses:
Professional fees 3,615 7,220 3,615 7,220
Registration, filing
and other fees 295 45 345 345
_________ _________ ________ _______
3,910 7,265 3,960 7,565
__________ _________ ________ _______
Income (loss) before
income taxes 9,956 11,040 9,906 10,740
Provision for
(benefit from)
income taxes - - - -
__________ _________ ________ _______
Net income (loss) $9,956 $11,040 $9,906 $10,740
========== ========= ======== =======
The accompanying notes are an integral part of these financial statements.
<PAGE>
CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
(Unaudited)
Six Months Ended June 30,1996 and 1995
Common Paid-In Retained
Stock Capital (Deficit) Total
Balance December 31, 1994 $10 $300,490 $(759,228) $(458,728)
Net income - - 10,740 10,740
__________ __________ __________ __________
Balance June 30, 1995 $10 $300,490 $(748,488) $(447,988)
========== ========== ========== ==========
Balance December 31, 1995 $10 $300,490 $(748,488) $(447,988)
Net loss - - 9,906 9,906
__________ __________ __________ __________
Balance June 30, 1996 $10 $300,490 $(738,582) $(438,082)
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
1996 1995
CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES:
Net income (loss) $ 9,906 10,740
Adjustments to reconcile net income to net
cash provided by operating activities -
Increase in accrued residual receivable - (1,745)
Increase in payable to Edward D. Jones
& Co., L.P. 345 345
Increase in accrued expenses - 3,00
__________ __________
Net cash provided by operating
activities 10,251 12,340
__________ __________
Net increase in cash - 12,340
CASH, beginning of period 33,298 19,213
__________ __________
CASH, end of period $ 43,549 $ 31,553
========== ==========
The accompanying notes are an integral part of these financial
statements.
<PAGE>
CORNERSTONE MORGAGE 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 and six months ended June 30, 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 FINANCIAL DISCUSSION
Residual income of $13,866 and $18,305 were earned during the three and six
months ended June 30, 1996 and June 30, 1995. No series were issued during
these periods.
Expenses for the three months ended June 30, 1996 and June 30, 1995, were
$3,910 and $7,265, respectively, and were for trustee, accounting
registration, filing and other fees. Expenses for the six months ended June
30, 1996 and 1995, were $3,960 and $7,565, respectively. These expenses
represented professional, registration and filing fees.
The outstanding principal balance and remaining collateral value relating to
series issued by Cornerstone Mortgage Investment Group, Inc. are $6,748,000
and $6,751,991 as of June 30, 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 June 30, 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 August 7, 1996
/s/ Philip R. Schwab President, Chief Executive
_______________________ Officer and Director August 7, 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 August 7, 1996
President, Chief Executive
_______________________ Officer and Director August 7, 1996
Philip R. Schwab
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements from Cornerstone Mortgage Investment Group, Inc. for
the quarter ended June 30, 1996 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000890524
<NAME> CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 43,549
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
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<CURRENT-ASSETS> 43,549
<PP&E> 0
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<TOTAL-ASSETS> 43,549
<CURRENT-LIABILITIES> 481,631
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0
0
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<SALES> 13,866
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