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Previous: FIRST ESSEX BANCORP INC, 10-Q, 1996-11-14 |
Next: ML EQ REAL ESTATE PORTFOLIO L P, 10-Q, 1996-11-14 |
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to _________
Commission File Number 33-11061
CWM MORTGAGE TRUST 1996-1
(Exact name of registrant as specified in its charter)
================================================================================
DELAWARE NONE
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
c/o Wilmington Trust Company 19890
Rodney Square North, Wilmington, Delaware (Zip Code)
(Address of principal executive offices)
================================================================================
Registrant's telephone number, including area code (800) 669-2300
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
requirements for the past 90 days. Yes X No.
------ -----
<PAGE>
PART I
FINANCIAL INFORMATION
Item I. Financial Statements (in thousands)
CWM Mortgage Trust 1996-1
(Beneficial interest wholly owned by
CWM Mortgage Obligations II, Inc.)
BALANCE SHEET
<TABLE>
<CAPTION>
September 30,
1996
-------------
(Unaudited)
<S> <C>
ASSETS
Investments in mortgage loans $138,127
Accrued interest receivable 804
Deferred bond issuance costs 275
Other assets 425
--------
$139,631
========
LIABILITIES AND INTEREST OF EQUITY HOLDER
Bonds payable $132,463
Accrued interest payable 773
Accounts payable 49
--------
$133,285
--------
Interest of equity holder
Contribution of equity holder 6,186
Accumulated earnings 160
--------
$139,631
========
</TABLE>
The accompanying notes are an integral part of this statement.
2
<PAGE>
CWM Mortgage Trust 1996-1
(Beneficial interest wholly owned by
CWM Mortgage Obligations II, Inc.)
STATEMENTS OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended Inception To
September 30, September 30,
1996 1996
------------- -------------
<S> <C> <C>
Revenue
Interest income $2,539 $7,009
Interest expense 2,388 6,590
------ ------
Net interest income 151 419
------ ------
Provision for loan losses 65 240
------ ------
Net interest income after provision for loan losses 86 179
General and administrative expense 6 19
------ ------
Net income $ 80 $ 160
====== ======
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
CWM Mortgage Trust 1996-1
(Beneficial interest wholly owned by
CWM Mortgage Obligations II, Inc.)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Inception to
September 30,
1996
-------------
<S> <C>
Cash flows from operating activities:
Net Income $ 160
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Amortization <45>
Provision for loan losses 240
Increase in accrued interest receivable (804)
Increase in accrued interest payable 773
Change in other assets and other liabilities 1,843
---------
Net cash provided by operating activities 2,167
---------
Cash flows from investing activities:
Investments in mortgage loans (154,555)
Principal reductions in investments in mortgage loans 13,902
---------
Net cash used in investing activities (140,653)
---------
Cash flows from financing activities:
Issuance proceeds 146,152
Repayment of bonds payable (13,852)
Contribution of equity holder 6,187
---------
Net cash provided by financing activities 138,486
---------
Net increase in cash $ -
Cash at the beginning of the period -
---------
Cash at the end of the period $ -
=========
Supplemental cash flow information:
Cash paid for interest $ 5,882
=========
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE>
CWM Mortgage Trust 1996-1
(Beneficial interest wholly owned by
CWM Mortgage Obligations II, Inc.)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the quarter ended September 30, 1996 are not necessarily
indicative of the results that may be expected for the period ending December
31, 1996.
NOTE B - INCOME TAXES
Because CWM Mortgage Holdings, Inc. is treated as the owner of the assets held
by the Trust for federal income tax purposes, CWM Mortgage Trust 1996-1 is not
subject to federal taxation on its earnings.
5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
CWM Mortgage Trust 1996-1 (the "Trust") is a statutory business trust
established under the laws of the State of Delaware by an amended and restated
deposit trust agreement dated as of January 29, 1996 for the sole purpose of
issuing Collateralized Mortgage Obligations, Series 1996-1 (the "Bonds") and an
Investor Certificate (the "Investor Certificate") representing 100% of the
equity interest in the Trust. The depositor and holder of the Investor
Certificate is CWM Mortgage Obligations II, Inc. (the "Company"), a Delaware
corporation and wholly owned subsidiary of CWM Mortgage Holdings, Inc., also a
Delaware corporation, which intends to operate so as to continue to qualify as a
real estate investment trust. The owner trustee of the Trust is Wilmington
Trust Company. The Bonds, the Investor Certificate and the collateral are
described in detail in the Prospectus Supplement, dated January 29, 1996,
previously filed with the Securities and Exchange Commission pursuant to Rule
424 under the Securities Act of 1933.
Following establishment of the Trust, the Company contributed to the Trust
$154.6 million of conventional mortgage loans secured by deeds of trust on
single family residences. On January 29, 1996, the Trust issued the Bonds in
the aggregate principal amount of $148.5 million. The net proceeds of such
issuance were distributed to the Company and the Trust issued the Investor
Certificate to the Company.
QUARTER ENDED SEPTEMBER 30, 1996
- --------------------------------
Since the Trust issued the Bonds during this calendar year, no comparison
can be made to prior year data. The net income for the quarter ended September
30, 1996 totaled $80,000. Revenue for the quarter, which consisted principally
of interest earned on investments in mortgage loans, was $2.5 million. Interest
expense for the quarter ended September 30, 1996 was $2.4 million.
NINE MONTHS ENDED SEPTEMBER 30, 1996
- ------------------------------------
Since the Trust issued the Bonds during this calendar year, no comparison can
be made to prior year data. Net income for the nine months ended September 30,
1996 was $160,000. Revenue for the first half of 1996, which consisted
principally of interest earned on investments in mortgage loans, was $7.0
million. Interest expense for the nine months ended September 30, 1996 was $6.6
million.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The principal and interest collections from the investments in mortgage
loans are expected to be adequate to make payments of principal and interest on
the Bonds and to meet administrative expenses incurred in connection therewith.
INFLATION
- ---------
Interest rates normally increase during periods of high inflation. High
levels of interest rates generally tend to decrease the rate at which existing
investments in mortgage loans prepay. A decrease in the rate of prepayments may
lengthen the estimated average life of the Bonds. In addition, as the rate of
prepayments decrease, the amortization of original issue discount and bond issue
costs also decrease resulting in a lower effective rate on the bonds.
6
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
Exhibits
--------
27 Financial Data Schedule
Reports on Form 8-K
-------------------
None
7
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, in the City of
Pasadena, State of California, on November 13, 1996.
CWM MORTGAGE TRUST 1996-1
By: /s/ James P. Gross
------------------
James P. Gross
Its Authorized Officer
8
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 139,171
<ALLOWANCES> 240
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 139,631
<CURRENT-LIABILITIES> 0
<BONDS> 133,236
0
0
<COMMON> 0
<OTHER-SE> 6,346
<TOTAL-LIABILITY-AND-EQUITY> 139,631
<SALES> 0
<TOTAL-REVENUES> 419<F1>
<CGS> 0
<TOTAL-COSTS> 19
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 240
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 160
<INCOME-TAX> 0
<INCOME-CONTINUING> 160
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 160
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>INCLUDES 6,590 OF INTEREST EXPENSE RELATED TO MORTGAGE LOAN ACTIVITIES.
</FN>
</TABLE>
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