<PAGE> 1
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 MARCH 31, 1998 Commission file number 33-11459
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CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
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(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, April 30, 1997:
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>
March 31, December 31,
1998 1997
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ASSETS
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<S> <C> <C>
CASH $500 $500
==== ====
<CAPTION>
STOCKHOLDER'S EQUITY
--------------------
<S> <C> <C>
COMMON STOCK - $1.00 par value, 150,000
shares authorized, 500 issued and outstanding $500 $500
==== ====
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The accompanying notes are an integral part of these financial statements.
</TABLE>
3
<PAGE> 4
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.,
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").
All costs related to the organization of Cornerstone II were absorbed
by Edward D. Jones & Co. In addition, Edward D. Jones & Co. 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
<PAGE> 5
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
MANAGEMENT'S FINANCIAL DISCUSSION
No securities were issued during the three months ended March 31, 1998
or March 31, 1997.
The outstanding principal balance and remaining collateral value
relating to series issued by Cornerstone Mortgage Investment Group II, Inc.
are $73,183,500 and $73,660,076 as of March 31, 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:
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
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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
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 March 31, 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 May 12, 1998
/s/ Philip R. Schwab President, Chief Executive
----------------------- Officer and Director May 12, 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 March 31, 1998 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<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>
