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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1998
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Commission file number 33-11459
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CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
- ---------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 43-1432378
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
201 Progress Parkway
Maryland Heights, Missouri 63043
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 515-2000
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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,
November 6, 1998:
COMMON STOCK, $1.00 Par Value - 500 Shares
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CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
INDEX
Page
Number
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet 3
Notes to Balance Sheet 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
Part II. OTHER INFORMATION 6
SIGNATURES 7
2
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
BALANCE SHEET
(UNAUDITED)
<CAPTION>
September 30, December 31,
1998 1997
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<S> <C> <C>
ASSETS
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CASH $500 $500
==== ====
STOCKHOLDER'S EQUITY
--------------------
COMMON STOCK - $1.00 par value, 150,000
shares authorized, 500 shares issued and outstanding $500 $500
==== ====
- ------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
3
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
NOTES TO BALANCE SHEET
(Unaudited)
BASIS OF PRESENTATION
The financial information included herein is unaudited. However, in
the opinion of management, such information includes all adjustments of
a normal recurring nature which are necessary for its fair presentation.
Cornerstone Mortgage Investment Group II, Inc. ("Cornerstone II") is
a Delaware corporation and a wholly-owned subsidiary of Edward D. Jones
& Co., L.P. ("EDJ"), a Missouri limited partnership. Cornerstone II was
incorporated on December 22, 1986, for the limited purpose of
structuring and selling mortgage-backed securities (the "Certificates"),
which are backed by Government National Mortgage Association (GNMA),
Federal Home Loan Mortgage Corporation (FHLMC) and Federal National
Mortgage Association (FNMA) Securities (collectively the "Deposited
Securities").
EDJ absorbed all costs related to the organization of Cornerstone II.
In addition, EDJ paid all offering expenses and assumed all future
revenues and expenses in connection with prior security transactions.
Due to the absence of revenue or expense generating transactions, no
income statement is presented. The balance of stockholder's equity
consists solely of common stock issued on December 30, 1986; therefore,
no statement of stockholder's equity is presented. All funds were
obtained from capital transactions; therefore, no statement of cash
flows is presented.
4
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Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
MANAGEMENT'S FINANCIAL DISCUSSION
No series have been issued since May 29, 1991. Series 25 was
liquidated on January 30, 1998. The net gain from liquidation of Series
25 was $31,735.
The outstanding principal balance and remaining collateral value
relating to series issued by Cornerstone II are $60,982,000 and
$61,728,123 as of September 30, 1998.
5
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PART II. OTHER INFORMATION
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
Item 1: Legal Proceedings:
There are no pending legal proceedings.
Item 2. Changes in Securities:
Series 25 was liquidated on January 30, 1998.
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
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4.1 Deposit Agreement dated as of February 20, 1987, between the
Company, as Depositor, and The Bank of New York, as successor
Custodian (incorporated by reference to Exhibit 2 to the
Current Report on Form 8-K filed on March 6, 1987).
4.2 Trust Agreement dated as of February 20, 1987, between the
Company, as Depositor, and The Bank of New York, as successor
Trustee (incorporated by reference to Exhibit 3 to the Current
Report on Form 8-K filed on March 6, 1987).
4.3 Trust Agreement dated as of February 20, 1987, between the
Company, as Depositor, and The Bank of New York, as successor
Trustee (incorporated by reference to Exhibit 4 to the Current
Report on Form 8-K filed on March 6, 1987).
(b) Reports on Form 8-K
No reports were filed on Form 8-K for the quarter ended September 30, 1998.
6
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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 II, INC.
(Registrant)
/s/John C. Heisler Chairman of the Board,
- ------------------------ Chief Financial Officer,
John C. Heisler Chief Accounting Officer November 6, 1998
/s/Philip R. Schwab President, Chief Executive
- ------------------------ Officer and Director November 6, 1998
Philip R. Schwab
7
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Cornerstone Mortgage Investment Group II, Inc.
for the quarter ended September 30, 1998 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 500
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 500
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 500
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 500
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 500
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
