<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 June 30, 1997
_____________
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, July 18,
1997:
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 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
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CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
BALANCE SHEET
(Unaudited)
June 30, December 31,
1997 1996
ASSETS
CASH $ 48,727 $ 43,762
RECEIVABLES 3,660 -
__________ ________
TOTAL ASSETS $ 52,387 $ 43,762
========== =========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
PAYABLE TO EDWARD D. JONES & CO., L.P.$ 478,504 $ 478,356
ACCRUED EXPENSES 3,500 3,500
__________ _________
TOTAL LIABILITIES 482,004 481,856
__________ _________
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 (730,117) (738,594)
_________ _________
TOTAL STOCKHOLDER'S EQUITY (429,617) (438,094)
__________ _________
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $ 52,387 $ 43,762
========= ==========
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,
1997 1996 1997 1996
REVENUES:
Residual interest
in certificates $11,738 $13,866 $11,738 $ 13,866
_______ _______ _______ _________
EXPENSES:
Professional fees 3,114 3,615 3,114 3,615
Registration, filing and
other fees 147 295 147 345
_______ _______ _______ _________
TOTAL EXPENSES 3,261 3,910 3,261 3,960
INCOME BEFORE INCOME TAXES 8,477 9,956 8,477 9,906
PROVISION FOR (BENEFIT FROM)
INCOME TAXES - - - -
________ _______ _______ ________
NET INCOME $ 8,477 $ 9,956 $ 8,477 $ 9,906
======== ======= ======= ========
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, 1997 and 1996
Common Paid-In Retained
Stock Capital Deficit Total
BALANCE, DECEMBER 31, 1995$ 10 $ 300,490 $(748,488) $(447,988)
NET INCOME - - 9,906 9,906
________ ________ ________ ________
BALANCE, JUNE 30, 1996 $ 10 $ 300,490 $(738,582) $(438,082)
======== ======== ======== ========
BALANCE, DECEMBER 31, 1996 $ 10 $ 300,490 $(738,594) $(438,094)
NET INCOME - - 8,477 8,477
________ ________ _________ ________
BALANCE, JUNE 30, 1997 $ 10 $ 300,490 $(730,117) $(429,617)
======== ======== ========= ========
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,
1997 1996
CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES:
Net income $ 8,477 $ 9,906
Adjustments to reconcile net income to net
cash provided by operating activities -
Increase in payable to Edward D. Jones
& Co., L.P. 148 345
Increase in receivables (3,660) -
_________ _________
Net cash provided by operating activities 4,965 10,251
_________ _________
Net increase in cash 4,965 10,251
CASH, beginning of period 43,762 33,298
_________ _________
CASH, end of period $ 48,727 $43,549
========= =========
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 Form 10-K.
The results of operations for the three and six months ended June
30, 1997, 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 $11,738 and $13,866 was earned during the three
and six months ended June 30, 1997 and June 30, 1996. No series were
issued during these periods.
Expenses for the three months ended June 30, 1997 and June 30,
1996, were $3,261 and $3,910, respectively, and were for professional,
registration, filing and other fees.
The outstanding principal balance and remaining collateral value
relating to series issued by Cornerstone Mortgage Investment Group,
Inc. are $5,819,000 and $5,821,257 as of June 30, 1997.
<PAGE>
CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
Item 1:Legal Proceedings:
There are no pending legal proceedings.
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,
1997.
<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 July 21, 1997
/s/Philip R. Schwab President, Chief Executive
__________________ Officer and Director July 21, 1997
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 July 21, 1997
President, Chief Executive
__________________ Officer and Director July 21, 1997
Philip R. Schwab
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Cornerstone Mortgage Investment Group, Inc. for the
quarter ended June 30, 1997 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000790524
<NAME> CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 48,727
<SECURITIES> 0
<RECEIVABLES> 3,660
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 52,387
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 52,387
<CURRENT-LIABILITIES> 482,004
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0
0
<COMMON> 10
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<SALES> 11,738
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