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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 JUNE 30, 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
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Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date, August 7, 1998:
COMMON STOCK, $1.00 Par Value - 500 Shares
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CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
INDEX
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Page
Number
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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
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
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CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
BALANCE SHEET
(Unaudited)
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June 30, December 31,
1998 1997
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ASSETS
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CASH $ 500 $ 500
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STOCKHOLDERS' EQUITY
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COMMON STOCK - $1.00 par value, 150,000
shares authorized, 500 shares issued and outstanding $ 500 $ 500
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The accompanying notes are an integral part of these financial statements.
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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.
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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 securities were issued during the three or six months ended June 30,
1998 or June 30, 1997.
The outstanding principal balance and remaining collateral value
relating to series issued by Cornerstone II are $66,678,000 and $67,443,618
as of June 30, 1998.
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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
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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).
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(b) Reports on Form 8-K
No reports were filed on Form 8-K for the quarter ended June 30, 1998.
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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)
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/s/ John C. Heisler Chairman of the Board,
----------------------- Chief Financial Officer,
John C. Heisler Chief Accounting Officer August 10, 1998
/s/ Philip R. Schwab President, Chief Executive
----------------------- Officer and Director August 10, 1998
Philip R. Schwab
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<LEGEND>
This schedule contains summary financial information extracted from the financial
statements of Cornerstone Mortgage Investment Group II, Inc. for the quarter
ended June 30, 1998 and is qualified in its entirety by reference to such
financial statements.
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-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
0
0
<COMMON> 500
<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
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