<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 June 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>
June 30,
1996
----------------
(Unaudited)
<S> <C>
ASSETS
Investments in mortgage loans $142,905
Accrued interest receivable 828
Deferred bond issuance costs 286
Other assets 258
---------------
$144,277
===============
LIABILITIES AND INTEREST OF EQUITY HOLDER
Bonds Payable $137,178
Accrued interest payable 784
Accounts payable 49
---------------
$138,011
----------------
Interest of equity holder
Contribution of equity holder 6,186
Accumulated earnings 80
---------------
$144,277
===============
</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.)
STATEMENT OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended Inception To
June 30, June 30,
1996 1996
---------------- --------------
<S> <C> <C>
Revenue
Interest income $ 2,667 $ 4,470
Interest expense 2,340 4,203
---------------- --------------
Net interest income 327 267
---------------- --------------
Provision for loan losses 175 175
Net interest income after
provision for loan losses 152 92
General and administrative expense 6 12
---------------- --------------
Net income (loss) $ 146 $ 80
================ ==============
</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
(Unaudited)
<TABLE>
<CAPTION>
Inception to
June 30,
1996
------------
<S> <C>
Cash flows from operating activities:
Net Income $ 80
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Amortization (973)
Provision for loan losses 175
Increase in accrued interest receivable (828)
Increase in accrued interest payable 784
Change in other assets and other liabilities 2,947
----------
Net cash provided by operating activities 2,185
----------
Cash flows from investing activities:
Investment in mortgage loans (154,555)
Principal reductions in investments in mortgage loans 9,102
----------
Net cash used in investing activities (145,453)
----------
Cash flows from financing activities:
Issuance proceeds 146,931
Repayment of bonds payable (9,850)
Contribution of equity holder 6,186
----------
Net cash provided by financing activities 143,267
----------
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 $ 4,087
==========
</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
June 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 period ended June 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 the issuance
were distributed to the Company and the Trust issued the Investor Certificate to
the Company.
QUARTER ENDED JUNE 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 June 30, 1996
totaled $146,000 Revenue for the quarter, which consisted principally of
interest earned on investments in mortgage loans, was $2.7 million. Interest
expense for the quarter ended June 30, 1996 was $2.3 million.
SIX MONTHS ENDED JUNE 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 six months ended June 30, 1996
was $80,000 Revenue for the first half of 1996, which consisted principally of
interest earned on investments in mortgage loans, was $4.5 million. Interest
expense for the first half of 1996 was $4.2 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 will 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 August 14, 1996.
CWM MORTGAGE TRUST 1996-1
By: /s/ Carmella L. Grahn
----------------------
Carmella L. Grahn
Its Authorized Officer
8
<PAGE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 143,908
<ALLOWANCES> 175
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 144,277
<CURRENT-LIABILITIES> 0
<BONDS> 137,178
0
0
<COMMON> 0
<OTHER-SE> 6,266
<TOTAL-LIABILITY-AND-EQUITY> 144,277
<SALES> 0
<TOTAL-REVENUES> 327<F1>
<CGS> 0
<TOTAL-COSTS> 66
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 175
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 80
<INCOME-TAX> 0
<INCOME-CONTINUING> 80
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 80
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>INCLUDES 2,340 OF INTEREST EXPENSE RELATED TO MORTGAGE LOAN ACTIVITIES.
</FN>
</TABLE>
