FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1995
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 No. 1-10004
TIS MORTGAGE INVESTMENT COMPANY
(Exact name of Registrant as specified in its Charter)
Maryland 94-3067889
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
655 Montgomery Street 94111
San Francisco, California (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (415) 393-8000
__________________________________________________
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 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 Registrant's
classes of Common Stock as of the latest practicable date.
Class of Common Stock Outstanding at August 11, 1995
--------------------- ---------------------------
$.001 Par Value 8,105,880 Shares
<PAGE>
TIS MORTGAGE INVESTMENT COMPANY
Index
Part I. Financial Information
Item 1. Financial Statements (Unaudited) Page Number
Condensed Consolidated Statements of Income
Three months and six months ended
June 30, 1995 and 1994 3
Condensed Consolidated Balance Sheets
June 30, 1995 and December 31, 1994 4
Condensed Consolidated Statements of Cash Flows
Six months ended June 30, 1995 and 1994 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
Part II. Other Information
Item 4. Results of Votes of Security Holders 17
Item 6. Exhibits and Reports on Form 8-K 17
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
<TABLE>
TIS MORTGAGE INVESTMENT COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Amounts in Thousands except Per Share Data)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
---------------------- ----------------------
1995 1994 1995 1994
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MORTGAGE RELATED ASSETS
Interest
Mortgage Certificates, net $3,728 $4,683 $7,566 $10,110
Short-term Investments 21 37 50 60
Residual Interests 558 820 1,490 1,415
Interest Only (IO) Bonds 366 687 790 1,126
Commercial Securitizations 28 0 55 0
Valuation Reserve Reduction 108 0 223 0
Gain (Loss) on Sales of Investments (15) 0 27 0
---------- ---------- ---------- ----------
Income from Mortgage Related Assets 4,794 6,227 10,201 12,711
---------- ---------- ---------- ----------
REAL ESTATE OPERATIONS
Rental and Other Income 402 765
Operating and Maintenance Expenses (147) (253)
Depreciation and Amortization (101) (194)
Interest on Real Estate Notes Payable (148) (283)
Property Taxes (27) (57)
---------- ----------
Income from Real Estate Operations (21) (22)
---------- ----------
INTEREST AND CMO RELATED EXPENSES
Collateralized Mortgage Obligations
Interest 3,953 4,641 8,407 9,821
Administration Fees 45 44 83 85
Deferred Bond Issuance Costs 70 84 135 151
Short-term Debt 135 114 278 227
---------- ---------- ---------- ----------
Total Interest and CMO Related Expenses 4,203 4,883 8,903 10,284
---------- ---------- ---------- ----------
OTHER EXPENSES
Management and Residual Interest Administration Fees 65 47 115 107
General and Administrative 315 318 608 648
---------- ---------- ---------- ----------
Total Other Expenses 380 365 723 755
---------- ---------- ---------- ----------
Net Income $190 $979 $553 $1,672
========== ========== ========== ==========
------------------------------------------------------------------------------------------------------
Net Income per Share Outstanding $0.03 $0.12 $0.07 $0.21
Dividends Declared per Share $0.00 $0.00 $0.00 $0.00
Weighted Average Shares Outstanding 8,106 8,106 8,106 8,106
------------------------------------------------------------------------------------------------------
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
TIS MORTGAGE INVESTMENT COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
<CAPTION>
June 30, December 31,
1995 1994
--------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
ASSETS
Mortgage Related Assets
Mortgage Certificates, net $154,762 $163,817
Residual Interests 5,815 8,675
Interest Only (IO) Bonds 7,728 9,794
Commercial Securitizations 1,125 1,194
Reserve for Loss on Investments (4,595) (4,818)
----------- -----------
Total Real Estate Investments 164,835 178,662
----------- -----------
Operating Real Estate Assets 11,037 395
----------- -----------
Other Assets
Cash and Cash Equivalents 548 1,718
Restricted Cash 2,539 2,920
Accrued Interest and Accounts Receivable 1,880 2,658
Deferred Bond Issuance Costs 2,182 2,317
Other Assets 185 287
----------- -----------
Total Other Assets 7,334 9,900
----------- -----------
Total Assets $183,206 $188,957
=========== ===========
--------------------------------------------------------------------------------
LIABILITIES
Collateralized Mortgage Obligations, net $152,394 $161,894
Payable to Affiliate 31 30
Accounts Payable and Accrued Liabilities 244 252
Accrued Interest Payable 2,082 2,363
Notes Payable on Real Estate 8,040 0
Short-term Debt 6,808 8,325
----------- -----------
Total Liabilities 169,599 172,864
----------- -----------
SHAREHOLDERS' EQUITY
Common Stock, par value $.001 per share;
100,000,000 shares authorized; 8,105,880
shares issued and outstanding 8 8
Additional Paid-in Capital 74,696 74,696
Unrealized Loss on Investments (3,750) (711)
Retained Deficit (57,347) (57,900)
----------- -----------
Total Shareholders' Equity 13,607 16,093
----------- -----------
Total Liabilities and Shareholders' Equity $183,206 $188,957
=========== ===========
--------------------------------------------------------------------------------
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
TIS MORTGAGE INVESTMENT COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Amounts in Thousands)
<CAPTION>
Six Months Ended
June 30,
--------------------------
1995 1994
------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $553 $1,672
Adjustments to Reconcile Net Income to Net Cash
Provided by (Used in) Operating Activities:
Depreciation and Amortization of Operating Real Estate Assets 194 0
Other Depreciation and Amortization 1,039 (207)
Valuation Reserve Provision (223) 0
Gain on Sales of Investments (27) 0
Increase in Accrued Interest and Accounts Receivable 778 4,045
Decrease in Prepaid Expenses 99 84
Increase (Decrease)in Payable to Affiliate 1 (4)
Decrease in Accounts Payable and Accrued Liabilities (8) (154)
Decrease in Accrued Interest Payable (281) (1,057)
----------- -----------
Net Cash Provided by Operating Activities 2,125 4,379
----------- -----------
-----------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in Short-term Debt (1,517) (2,193)
Increase in Notes Payable on Real Estate 8,040 0
Principal Payments on CMO's (10,658) (85,163)
----------- -----------
Net Cash Used in Financing Activities (4,135) (87,356)
----------- -----------
-----------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTMENT ACTIVITIES
Net Decrease in Restricted Cash 381 12,207
Investment in Real Estate Assets (10,836) 0
Investment in Commercial Securitizations 0 (982)
Principal Reduction in Mortgage Certificates 9,311 69,623
Principal Reduction in Residual Interests 1,148 917
Principal Reduction in IO Bonds 767 1,641
Principal Reduction in Commercial Securitizations 69 0
----------- -----------
Net Cash Provided by Investment Activities 840 83,406
----------- -----------
Net Increase (Decrease) in Cash and Cash Equivalents (1,170) 429
Cash and Cash Equivalents at Beginning of Period 1,718 680
----------- -----------
Cash and Cash Equivalents at End of Period $548 $1,109
=========== ===========
-----------------------------------------------------------------------------------------------
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
TIS MORTGAGE INVESTMENT COMPANY AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 - Basis of Presentation
The accompanying interim condensed consolidated financial statements
do not include all of the information and disclosures generally required
for annual financial statements. They include the accounts of the Company
and its wholly-owned subsidiary and its partnership interests in real
estate assets. All significant intercompany balances and transactions have
been eliminated. In the opinion of management all adjustments considered
necessary for a fair presentation have been made. Operating results for
the quarter and six months ended June 30, 1995 are not necessarily
indicative of the results that may be expected for the entire year. These
condensed consolidated financial statements should be read in conjunction
with the December 31, 1994 consolidated financial statements and notes
thereto.
Note 2 - Summary of Significant Accounting Policies
Overall Methods of Accounting - On May 31, 1990, the Emerging Issues
Task Force of the Financial Accounting Standards Board reached a consensus
(Issue 89-4) for a uniform method of accounting for Residual Interests in
collateralized mortgage obligations ("CMOs"). The consensus, among other
things, required Residual Interests to be classified either as "equity"
(and be accounted for under the Equity Method) or as "nonequity" (and be
accounted for under a level yield method referred to as the Prospective
Method). The methods described in Issue 89-4 are essentially the same as
those used by the Company.
Accounting Change - On December 31, 1993 the Company adopted Financial
Accounting Standards Board Standard No. 115 ("SFAS 115") - Accounting for
Certain Investments in Debt and Equity Securities. In accordance with this
new standard, the Company is required to classify its investments as either
trading investments, available-for-sale investments or held-to-maturity
investments. The Company is not in the business of trading its real estate
investments, however, from time to time the Company may sell an investment
as part of its efforts to adjust its portfolio composition to reflect
changes in economic conditions. Therefore, the Company has classified all
its real estate investments as available-for-sale investments, carried at
fair value in the financial statements. Unrealized holding gains and
losses for unimpaired available-for-sale investments are excluded from
earnings and reported as a net amount in shareholders' equity until
realized.
All of the Company's investments are subject to write down whenever
the yield on the projected cash flows is less than a risk free rate. If
the yield on the projected cash flows is less than a risk free rate, the
decline in value is considered to be "other than temporary" and the
investment is written down to its fair value as the new cost basis. The
amount of the write down is included in the Company's current earnings
(i.e. accounted for as a realized loss). The Emerging Issues Task Force of
the Financial Accounting Standards Board reached a consensus (EITF 93-18)
as to the definition of "other than temporary" impairment. The Company's
accounting policy is consistent with this consensus.
For purposes of applying the impairment provisions of SFAS 115, the
Company considers its investment in each of its Equity Residuals to be a
net cash flow investment (net of CMO Bond interest payments and related CMO
Bond administrative expenses). The Company measures other than temporary
impairment by comparing the yield on the projected net cash flows from the
Equity Residual, (i.e. Mortgage Certificates net of discounts and CMO Bond
Liabilities) to a risk free rate. If the yield on the projected cash flows
from the Equity Residual is less than a risk free rate, the Company records
a reserve to reduce the carrying value to fair value. The fair value is
calculated using the forecasted net cash flows discounted at a risk
adjusted rate. The risk adjusted rate is determined by the Company using
established market transactions for securities having similar
characteristics and backed by collateral of similar rate and term.
Principles of Consolidation - The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiary, TIS
Mortgage Acceptance Corporation ("TISMAC"). The assets of TISMAC are not
available to pay creditors of the Company. The Company has undertaken to
indemnify certain parties who have contracted with TISMAC against certain
losses which they might sustain in carrying out their obligations. In
addition, under generally accepted accounting principles, the Company
consolidates assets and liabilities of Owner Trust Residuals when over 50%
equity interest in the trust is held by the Company. The portion of equity
interest of each such Owner Trust Residual not owned by the Company is
accounted for as minority interest. In addition, the consolidated
financial statements include the accounts underlying its interests in real
estate partnerships.
Mortgage Certificates and CMOs - Mortgage certificates and CMO bonds
of consolidated Owner Trusts are carried at their outstanding principal
balance plus or minus any premium or discount, respectively.
Amortization of Premiums and Discounts - Premiums and discounts
related to mortgage certificates and CMOs are amortized to income using the
interest method over the stated maturity of the mortgage certificates or
CMOs.
Residual Interests and Interest Only (IO) Bonds - Residual Interests
held in bond form and Corporate Real Estate Mortgage Investment Conduit
("REMIC") Residual Interests, regardless of percentage ownership, are
Nonequity Residual Interests and, along with IO Bonds, are accounted for
under the Prospective method. Under this method, assets are carried at
cost and income is amortized over their estimated lives based on a method
which provides a constant yield. At the end of each quarter, the yield
over the remaining life of the asset is recalculated based on expected
future cash flows using current interest rates and mortgage prepayment
speeds. This new yield is then used to calculate the subsequent quarter's
financial statement income. Owner Trust Residuals are accounted for under
the equity method.
Restricted Cash - Restricted cash represents the cash balances of CMOs
in which the Company holds a Residual Interest and whose assets and
liabilities are consolidated with those of the Company. This cash is not
available to the Company or its creditors.
Income Taxes - The Company has elected to be taxed as a REIT under the
Internal Revenue Code of 1986, as amended. As a REIT, the Company must
distribute at least 95% of its taxable income to its shareholders. No
provision has been made for income taxes in the accompanying consolidated
financial statements as the Company is not subject to federal income taxes.
The loss reported in the accompanying financial statements may be greater
or less than the taxable loss because some income and expense items are
reported in different periods for income tax purposes. Over the life of a
Residual Interest or IO Bond, total taxable income will equal total
financial statement income. However, the timing of income recognition may
differ between the two from year to year.
Net Income Per Share - Net income per share is based upon the weighted
average number of shares of Common Stock outstanding.
Statement of Cash Flows - For purposes of the statement of cash flows,
the Company considers only highly liquid debt instruments with original
maturities of three months or less to be cash equivalents.
Reclassifications - Certain reclassifications have been made to the
prior year financial statements to conform to the June 30, 1995
presentation. Such reclassifications do not affect net income as reported.
Note 3 - Mortgage Certificates
Information is presented in the table below as of June 30, 1995 and
December 31, 1994 with respect to the fair value of the mortgage
certificates collateralizing those CMO Bonds where the residual interests
are accounted for under the equity method and the Company owns more than a
50% interest in the trust. See the CMO Collateral chart in note 4 for
additional information on the mortgage collateral. The Company is not able
to sell the mortgage collateral, and therefore realize any gain, until the
CMO Bonds which are collateralized by the mortgages mature or are called in
accordance with the underlying bond indenture.
<TABLE>
MORTGAGE CERTIFICATES
(In thousands)
<CAPTION>
June 30, 1995
Principal Amount of Fair Value of Cost Less
Residual Series Mortgage Certificates Mortgage Certificates Unamortized Discount
---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CMOT 28 $97,873 $100,932 $96,194
TMAC 1986-1 23,519 24,335 23,517
TISMAC 1989-1 35,786 38,951 35,051
---------------------------------------------------------------------------------------------
$157,178 $164,218 $154,762
=============================================================================================
December 31, 1994
CMOT 28 $103,378 $101,472 $101,604
TMAC 1986-1 25,496 24,998 24,206
TISMAC 1989-1 38,805 40,781 38,007
---------------------------------------------------------------------------------------------
$167,679 $167,251 $163,817
=============================================================================================
</TABLE>
<PAGE>
Note 4 - Residual Interests
Residual Interests are classified as either equity or nonequity.
Presented below is a schedule of the nonequity residual interests and
unconsolidated equity residual interests.
<TABLE>
NONEQUITY RESIDUAL INTERESTS
(In thousands)
<CAPTION>
Book Value
----------------------------
Purchase June 30, December 31,
Residual Series Price 1995 1994
----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nonequity Residual Interests
----------------------------
DBLU $ 5,169 $ 44 $ 65
FNMA 88-22 10,387 1,083 1,753
PB-4 10,523 1,723 2,593
CMSC I 8,642 104 104
PB-7 3,994 0 487
FHLMC 21 5,361 6 6
ML-38 1,306 530 478
OXFORD 3F 1,382 0 0
FHLMC 25 4,934 6 6
LFR-9 2,589 154 187
DBLS 2,424 349 482
BT 88-1 1,537 451 382
RYLAND 62 3,039 562 573
CMSC 88-2 2,554 0 525
PB-5 16,112 803 1,034
----------------------------------------------------------------------------------------
5,815 8,675
----------------------------------------------------------------------------------------
Unconsolidated Equity Residual Interests
----------------------------------------
TMAC 1986-2 67 0 0
TMAC 1987-3 165 0 0
----------------------------------------------------------------------------------------
Total Residual Interests $5,815 $8,675
========================================================================================
</TABLE>
During the six months ended June 30, 1995, the Company sold its
investment in Pru-Bache CMO Trust 7 and Collateralized Mortgage Securities
Corp. Series 1988-2 for $760,000 resulting in a gain of $27,000. As
described in Note 8, certain nonequity residual interests were sold in July
1995.
<PAGE>
Certain characteristics of the Company's residual interests are presented
in the following tables:
<TABLE>
CMO COLLATERAL
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
CMO Collateral Data (100% of Issue)
-------------------------------------------------------------------------------
Weighted June 30, 1995 Current Weighted
Average Collateral Weighted Average
Residual Pass- Principal Average Remaining
Residual Interest Type of Through Balance Coupon Months to
Series Type Collateral Rate ($000) Rate Maturity
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Equity Residual Interests
-------------------------
CMOT 28 Fixed FNMA 8.50% $97,873 9.10% 259.4
TMAC 1986-1 Fixed FHLMC 9.00% 23,519 10.00% 248.0
TISMAC 1989-1 Fixed GNMA I 10.00% 35,786 10.50% 281.9
TMAC 1986-2 Fixed FHLMC 9.50% 10,637 10.10% 236.0
TMAC 1987-3 Fixed FHLMC 9.08% 26,323 9.80% 240.0
Nonequity Residual Interests
----------------------------
DBLU Variable GNMA I 10.00% 57,694 10.50% 267.0
FNMA 88-22 Variable FNMA 9.50% 24,137 10.10% 275.3
PB-4 Variable GNMA I 10.00% 39,147 10.50% 272.1
CMSC I Fixed FNMA 9.50% 53,347 10.10% 243.2
FHLMC 21 Fixed FHLMC 9.50% 112,458 10.20% 273.8
ML-38 Fixed FNMA 9.50% 23,388 10.20% 276.5
OXFORD 3F Fixed FHLMC 8.50% 69,795 9.10% 255.0
FHLMC 25 Fixed FHLMC 9.50% 64,177 10.30% 271.8
LFR-9 Fixed FNMA 9.50% 16,643 10.20% 275.0
DBLS Fixed FNMA 10.00% 40,142 10.60% 268.0
BT 88-1 Fixed GNMA 9.00% 32,459 9.50% 261.0
RYLAND 62 Fixed GNMA 10.00% 29,325 10.50% 269.4
PB-5 Fixed FNMA 9.50% 23,159 10.10% 265.8
=================================================================================================================
</TABLE>
<PAGE>
<TABLE>
EQUITY RESIDUAL INTERESTS
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
CMO Bond Data (100% of Issue)
-----------------------------------------------------------------
Name of Issuer TIS Initial June 30, 1995
and Series/ TIS Purchase Principal Principal
CMO Issue Purchase TIS % Price Bond Balance Balance Bond Stated
Date Date Ownership ($000) Class ($000) ($000) Coupon Maturity
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1) Collateralized Aug 31, 1988 98.000% $4,810 A $275,000 $ 0 8.00% Jun 1, 2006
Mortgage Aug 8, 1990 2.000% 47 B 77,200 0 8.50% Jun 1, 2008
Obligation -------- ------ C 108,300 21,609 8.50% Dec 1, 2010
(CMOT 28) 100.000% $4,857 Z 39,500 77,112 8.45% Jun 1, 2017
May 29, 1987 -------- ------ -------- --------
$500,000 $98,721
-------------------------------------------------------------------------------------------------------------------------
2) TMAC 1986-1 Dec 27, 1988 16.964% $442 1-A $ 98,500 $ 0 7.92% Nov 20, 2010
Nov 6, 1986 Jan 6, 1989 23.214% 607 1-B 50,000 22,351 8.89% Feb 20, 2018
Jan 11, 1989 20.536% 538 1-C 41,750 0 8.95% Feb 20, 2013
Jun 18, 1993 39.286% 108 1-D(Z) 9,750 2,170 8.95% Feb 20, 2018
-------- ------ -------- --------
100.000% $1,695 $200,000 $24,521
-------------------------------------------------------------------------------------------------------------------------
3) TIS Mortgage Jun 29, 1989 100.000% $1,302 1-A $ 10,100 $ 0 10.00% Mar 1, 2016
Acceptance Corp. 1-B 29,030 2,039 10.00% Nov 1, 2017
Series 1989-1 1-C 14,260 14,260 10.00% Aug 1, 2018
(TISMAC 89-1) 1-D 18,887 18,887 10.00% Jul 1, 2019
June 29, 1989 1-E 63,590 0 10.00% Jun 1, 2016
1-F 63,533 0 10.00% Jul 1, 2019
R 600 600 Residual Bond Jul 1, 2019
-------- --------
$200,000 $35,786
-------------------------------------------------------------------------------------------------------------------------
4) TMAC 1986-2 Jun 18, 1993 44.990% $67 2-A $ 72,600 $ 7,723 LIBOR+.60% Mar 20, 2018
Dec 10, 1986 2-B 27,400 2,915 25.11987% - Mar 20, 2018
-------- -------- (2.00959) x LIBOR
$100,000 $10,638
-------------------------------------------------------------------------------------------------------------------------
5) TMAC 1987-3 Jun 18, 1993 44.767% $165 3-A $ 55,070 $ 944 LIBOR+.60% Apr 20, 2013
Mar 30, 1987 3-B 72,135 0 7.50% Apr 20, 2009
3-C 18,535 0 8.31% Jan 20, 2011
3-D 39,765 5,592 8.58% Jul 20, 2013
3-E(Z) 9,495 19,787 9.00% Apr 20, 2018
-------- --------
$195,000 $26,323
-------------------------------------------------------------------------------------------------------------------------
Total $195,989
Less Residual Bond 600
-------------------------------------------------------------------------------------------------------------------------
Total Collateralized Mortgage Obligations $195,389
=========================================================================================================================
</TABLE>
<PAGE>
<TABLE>
NONEQUITY RESIDUAL INTERESTS
VARIABLE RATE RESIDUALS
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
CMO Bond Data (100% of Issue)
--------------------------------------------------------------------------
Name of Issuer TIS Initial June 30, 1995
and Series/ TIS Purchase Principal Principal
CMO Issue Purchase TIS % Price Bond Balance Balance Bond Bond Stated
Date Date Ownership ($000) Class ($000) ($000) Coupon Cap Maturity
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1) Drexel Aug 30, 1988 20.267% $5,169 U-1 $135,000 $17,550 9.3% Jun 1, 2017
Burnham U-2 40,000 40,000 10% Sep 1, 2018
Lambert CMO U-3F 87,500 0 LIBOR+.95% 14.25% Sep 1, 2018
Trust Series U U-4AV 10,000 0 Zero Coupon Jun 1, 2015
(DBLU) U-5AV 27,500 0 Zero Coupon Sep 1, 2018
Aug 30, 1988 U-6 750 144 Residual Bond Sep 1, 2018
-------- -------
$300,750 $57,694
----------------------------------------------------------------------------------------------------------------------------------
2) FNMA Series Aug 30, 1988 40.000% $10,387 22-A $146,140 $17,637 COFI+1.25% 13.00% Aug 25,2018
1988-22 22-B 53,820 6,495 Zero Coupon Aug 25,2018
(FNMA 88-22) 22-R 40 5 Residual Bond Aug 25,2018
-------- -------
Aug 30, 1988 $200,000 $24,137
----------------------------------------------------------------------------------------------------------------------------------
3) Prue Bache Aug 29, 1988 33.571% $10,523 4-A $160,440 $29,933 COFI+1.25% 13.00% Sep 1, 2018
CMO Trust 4 4-B 49,420 9,220 Zero Coupon Sep 1, 2018
(PB-4) R 140 27 Residual Bond Sep 1, 2018
-------- -------
Aug 29, 1988 $210,000 $39,180
==================================================================================================================================
</TABLE>
<TABLE>
FIXED RATE RESIDUALS
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
CMO Bond Data (100% of Issue)
-----------------------------------------------------------------
Name of Issuer TIS Initial June 30, 1995
and Series/ TIS Purchase Principal Principal
CMO Issue Purchase TIS % Price Bond Balance Balance Bond Stated
Date Date Ownership ($000) Class ($000) ($000) Coupon Maturity
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1) Collateralized Dec 21, 1988 44.000% $4,462 I-1 $291,000 $ 0 7.95% Feb 1, 2009
Mortgage Mar 23, 1989 44.000% 4,180 I-2 194,000 23,101 9.45% May 1, 2013
Securities Corp. Subtotal ------- ------ I-3(Z) 15,000 32,415 9.45% Feb 1, 2017
88.000% $8,642 -------- -------
Series I (CMSC I) $500,000 $55,516
Jan 28, 1987
-------------------------------------------------------------------------------------------------------------------------
2) Federal Home Jan 5, 1989 62.500% $5,361 21-A $ 140,645 $ 0 8.90% Jan 15, 1998
Loan Mortgage 21-B 216,267 0 8.90% Feb 15, 2004
Corporation 21-C 101,503 0 9.10% Jan 15, 2006
Series 21 21-D 93,376 0 9.25% Jun 15, 2007
(FHLMC 21) 21-E 122,951 0 9.35% Feb 15, 2009
Nov 30, 1988 21-F 240,408 0 9.45% Sep 15, 2011
21-Z 84,750 112,447 9.50% Jan 15, 2020
R 100 11 Residual Bond Jan 15, 2020
---------- --------
$1,000,000 $112,458
-------------------------------------------------------------------------------------------------------------------------
<PAGE>
FIXED RATE RESIDUALS (Continued)
-------------------------------------------------------------------------------------------------------------------------
3) Merrill Lynch Jan 6, 1989 100.000% $1,306 A $ 51,810 $ 0 9.05% Oct 27, 2012
Series 38 B 36,200 0 9.45% Dec 27, 2016
(ML-38) C 7,400 6,938 9.45% Aug 27, 2017
Nov 30, 1988 D 16,400 16,400 9.45% Nov 27, 2018
E 31,610 0 9.10% Mar 27, 2016
F 18,580 0 9.15% Sep 27, 2017
G 38,000 0 9.40% Nov 27, 2018
H 50 50 Residual Bond Nov 27, 2018
-------- -------
$200,050 $23,388
-------------------------------------------------------------------------------------------------------------------------
4) Oxford Feb 29, 1989 100.000% $1,382 F-1 $ 51,600 $ 0 7.19% Nov 20, 2001
CMO Trust III F-2 112,000 0 7.98% Oct 20, 2010
Series F F-3 15,000 0 8.32% Jul 20, 2011
(OXFORD 3F) F-4 83,500 0 8.45% Oct 20, 2014
May 28, 1987 F-5 90,000 21,813 8.45% May 20, 2017
F-6 48,000 48,000 8.45% Jun 20, 2018
-------- --------
$400,100 $69,813
-------------------------------------------------------------------------------------------------------------------------
5) Federal Home Jun 22, 1989 55.000% $4,934 25-A $105,923 $ 0 9.00% Nov 15, 2018
Loan Mortgage 25-B 51,002 0 9.50% Nov 15, 2005
Corporation 25-C 53,028 0 9.50% Mar 15, 2011
Series 25 25-D 46,414 0 9.50% Feb 15, 2014
(FHLMC 25) 25-E 50,936 0 9.50% May 15, 2016
Dec 1, 1988 25-F 76,167 20,224 9.50% Dec 15, 2018
25-G 43,940 43,940 9.50% Feb 15, 2020
25-H 72,490 0 7.90% Feb 15, 2020
R 100 13 Residual Bond Feb 15, 2020
-------- --------
$500,000 $64,177
-------------------------------------------------------------------------------------------------------------------------
6) L F Rothschild Nov 7, 1990 100.000% $2,589 A $ 11,000 $ 0 Zero Coupon Jan 1, 2019
Trust 9 B 22,000 0 Zero Coupon Jan 1, 2019
(LFR-9) C 54,000 10,530 Zero Coupon Jan 1, 2019
Dec 2, 1988 D 32,850 6,086 Zero Coupon Jan 1, 2019
E 30,000 0 Zero Coupon Jan 1, 2019
R 150 150 Residual Bond Jan 1, 2019
-------- -------
$150,000 $16,766
-------------------------------------------------------------------------------------------------------------------------
7) Drexel Burnham Apr 16, 1991 33.328% $2,424 S-1 $ 96,500 $ 0 8.50% Apr 1, 2011
Lambert S-2 75,000 40,732 9.00% Aug 1, 2018
Series S S-3 68,500 0 9.00% Feb 1, 2014
(DBLS) S-4(Z) 10,000 0 9.50% Aug 1, 2018
June 30, 1988 S-5 625 102 Residual Bond Aug 1, 2018
-------- -------
$250,625 $40,834
-------------------------------------------------------------------------------------------------------------------------
8) Bankers Trust May 29, 1991 99.990% $1,537 1-A $ 9,722 $ 0 7.35% Jan 1, 2013
Series 1988-1 1-B 8,017 0 8.50% Apr 1, 2014
(BT 88-1) 1-C 34,769 16,316 8.75% Apr 1, 2018
Feb 16, 1988 1-D 47,492 17,647 8.63% Apr 1, 2018
-------- -------
$100,000 $33,963
-------------------------------------------------------------------------------------------------------------------------
<PAGE>
FIXED RATE RESIDUALS (Continued)
-------------------------------------------------------------------------------------------------------------------------
9) Ryland May 29, 1991 42.000% $3,039 62-A $ 58,355 $19,801 8.85% May 1, 2018
Acceptance 62-B 31,365 0 9.00% Jul 1, 2009
Corp 4 62-C 6,000 0 8.85% Dec 1, 2009
Series 62 62-D 12,880 0 7.50% Feb 1, 2011
(RYLAND 62) 62-E 32,000 0 9.05% Nov 1, 2012
Jan 28, 1988 62-F 9,400 9,491 8.00% Mar 1, 2018
62-R 200 32 Residual Bond Mar 1, 2018
-------- -------
$150,200 $29,324
-------------------------------------------------------------------------------------------------------------------------
10) Prue Bache Sept 29, 1988 100.000% $16,112 5-A $ 30,130 $ 0 9.00% Aug 1, 2005
CMO Trust 5 5-B 45,830 0 LIBOR+0.5% Oct 1, 2012
(PB-5) 5-C 21,250 0 7.05% Oct 1, 2014
Sept 29, 1988 5-D 28,640 0 7.75% Nov 1, 2016
5-E 34,229 23,167 8.25% Oct 1, 2018
5-F 6,181 0 Zero Coupon Oct 1, 2018
5-G 6,980 0 Zero Coupon Oct 1, 2018
5-H 26,026 0 LIBOR+1.00% Oct 1, 2018
R 800 0 Residual Bond Oct 1, 2018
-------- -------
$200,066 $23,167
=========================================================================================================================
</TABLE>
Note 5 - IO and PO Bonds
IO Bonds include both regular IO Bonds and Inverse IO Bonds.
Presented below is a schedule of the Company's IO Bonds.
<TABLE>
INTEREST ONLY (IO) BONDS
------------------------
(In thousands)
<CAPTION>
Book Value
--------------------------
Name and Issuer Purchase June 30, December 31,
and Series Price 1995 1994
------------------------------------------------------------------------------
<S> <C> <C> <C>
FNMA SMBS Trust 7 Class 2 IO $9,541 $1,799 $2,564
Pru Home Mtg Corp Series 1992-7 4,776 942 1,350
Sears Mtg Sec Corp Series 1992-6 2,611 444 651
Bear Stearns Mtg Sec Series 1992-1 2,720 270 363
FNMA SMBS Trust 4 Class 2 IO 2,909 490 738
FNMA Series 1992-123 Class S 8,203 2,042 2,221
FHLMC Series 1993-1483 Class SA 3,071 1,274 1,407
FHLMC-G Series 24 Class SK 998 467 500
------------------------------------------------------------------------------
$7,728 $9,794
==============================================================================
</TABLE>
<PAGE>
The Company currently holds no PO Bonds nor does it have commitments
to purchase additional IO or PO Bonds. As described in Note 8, certain IO
Bonds were sold in July 1995. Certain characteristics of the Company's IO
Bonds are on the following table:
<TABLE>
INTEREST ONLY BONDS
<CAPTION>
-------------------------------------------------------------------------------------------------------------
Collateral Data (% of IO held by TIS)
---------------------------------------------------------------
Weighted June 30, 1995 Current Weighted
Name of Issuer TIS Average Collateral Weighted Average
and Series/ TIS Purchase Pass Principal Average Remaining
CMO Issue Purchase Price Type of Through Balance Coupon Months to
Date Date ($000) Collateral Rate to IO ($000) Rate Maturity
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1) FNMA SMBS Feb 21, 1992 $4,576 FNMA 8.500% $7,124 9.17% 248.0
Trust 7 Mar 16, 1992 4,965
Class 2 IO ------
April 1, 1987 $9,541
-------------------------------------------------------------------------------------------------------------
2) Prudential Mar 27, 1992 $4,776 NON 0.5548% $64,908 8.80% 312.0
Home Mortgage AGENCY
Corporation
Series 1992-7
March 1, 1992
-------------------------------------------------------------------------------------------------------------
3) Sears Mar 30, 1992 $2,611 NON 0.0183% $74,799 8.396% 309.0
Mortgage AGENCY
Securities
Corporation
Series 1992-6
March 25, 1992
-------------------------------------------------------------------------------------------------------------
4) Bear Stearns May 28, 1992 $2,720 NON 0.4424% $8,248 9.54% 249.0
Mortgage AGENCY
Securities, Inc.
Series 1992-1
May 1, 1992
-------------------------------------------------------------------------------------------------------------
5) FNMA SMBS June 18, 1992 $2,909 FNMA 9.500% $1,941 10.09% 244.0
Trust 4
Class 2 IO
March 2, 1987
-------------------------------------------------------------------------------------------------------------
6) FNMA July 30, 1992 $8,203 FNMA 49.58 - $5,536 8.95% 314.0
Series 1992-123 (5.67 x
Class S LIBOR)
July 25, 1992
-------------------------------------------------------------------------------------------------------------
7) FHLMC Mar 30, 1993 $3,071 FHLMC 22.000% $5,400 8.53% 319.0
Series 1993-1483
Class S A
March 30, 1993
-------------------------------------------------------------------------------------------------------------
8) FHLMC-G Nov 30, 1993 $998 GNMA 8.0 % - $10,000 7.52% 333.0
Series 24 LIBOR
Class S K
October 12, 1993
=============================================================================================================
</TABLE>
Note 6 - Operating Real Estate Assets and Notes Payable on Real Estate
During the six months ended June 30, 1995, the Company acquired two
multifamily housing properties in California's Central Valley. The
purchase price of these properties was $10,305,000 and existing secured
debt totaling $8,089,000 was assumed. The debt has a variable interest
rate which, at June 30, 1995, averaged 7.408%. Required monthly payments
of principal and interest total $58,620. At June 30, 1995 the carrying
value of operating real estate assets in thousands consisted of:
<TABLE>
<S> <C>
Land $ 1,401
Buildings and Improvements 9,589
Personal Property 306
Deposits for Real Estate Purchases 596
Other Real Estate Assets 355
-------
Total 12,247
Less Accumulated Depreciation (1,210)
-------
Net $11,037
=======
</TABLE>
Note 7 - Short-Term Debt
Short-term debt is due within 360 days after the end of the quarter.
At June 30, 1995 the Company owed $6,808,000 under one repurchase
agreement. All of the borrowings had initial terms of one month, are
renewed on a month-to-month basis and have a floating rate of interest
which is tied to the one month LIBOR rate. The weighted average interest
rate of these borrowings at June 30, 1995 was 6.92%. The debt was
collateralized by some of the Company's Nonequity Residual Interests and IO
Bonds whose fair values approximated $12,800,000.
Note 8 - Subsequent Events
On July 19, 1995 the Company purchased a 120 unit multifamily
condominium apartment complex in Fresno, California and also purchased
approximately 9.75 acres of adjoining land which is zoned and platted for
future development as part of that complex. The aggregate purchase price
was $9,000,000 for the apartments and $1,000,000 for the land. The assets
were acquired for cash, subject to the assumption of a first mortgage loan
of approximately $6,086,000. In connection with this transaction, the
Company sold certain of its nonequity residual interests and IO Bonds for
$6,850,000. The amortized cost of these investments on the date of sale
was approximately $8,600,000 resulting in a loss of $1,750,000 which will
be recognized in the 3rd quarter of 1995. At June 30, 1995, the carrying
value of these investments was $8,292,000 with an unrealized loss of
$372,000 reflected in shareholders' equity. In addition, $3,410,000 of
short-term debt was repaid.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The Company primarily invests in the Residual Interests of CMOs and
other mortgage-related assets. The mortgage collateral underlying the CMOs
in the Company's portfolio of Residual Interests are mortgage-backed
certificates issued by the Government National Mortgage Association (GNMA),
the Federal National Mortgage Association (FNMA) and the Federal Home Loan
Mortgage Corporation (FHLMC). In addition the Company invests in
multifamily housing properties.
The Company is not in the business of selling its real estate
investments and therefore purchases these assets with the intention of
holding them to term. However, from time to time the Company may sell an
asset as part of the Company's ongoing effort to adjust its portfolio
composition to reflect changes in economic conditions. The Company may
also occasionally acquire real estate assets which are available for sale
before their term. It may also utilize hedging strategies with certain
mortgage-related assets and other instruments which would not be held to
term.
The Company's net income is sensitive to changes in mortgage
prepayments and interest rates. The Company attempts to reduce the
prepayment and interest rate risks by purchasing mortgage-related assets
which have characteristics and yields that complement the characteristics
and yields of existing assets.
RESULTS OF OPERATIONS
The Company had net income of $190,000, or $0.03 per share, and
$553,000, or $0.07 per share, for the quarter and six months ended June 30,
1995, respectively. This compares to net income of $979,000, or $0.12 per
share, and $1,672,000, or $0.21 per share, respectively, for the quarter
and six months ended June 30, 1994. The Company did not pay a dividend in
the first quarter of either year.
Because of the decline in the 30-year home mortgage rate from from
9.2% at January 1, 1995 to 7.5% at June 30, 1995, the value of the
company's portfolio of available-for-sale investments declined during the
first six months of 1995 as a result of these unfavorable changes in
interest rates and increased prepayment speeds resulting in a charge to
equity of $2,809,000. However, these investments continue to earn at an
interest rate above the risk-free rate so that no permanent impairment of
value was required to be recognized.
During the six months ended June 30, 1995 the Company sold its
ownership in two of its Residual Interests - Prudential Bache CMO Trust 7
and Collateralized Mortgage Securities Corp. Series 1988-2. These sales
were for a total of $748,000 and generated a gain of $26,600. Also during
the quarter the Company acquired two multifamily housing properties in
California's Central Valley for $10,305,000. The Company assumed debt of
$8,089,000 in conjunction with these acquisitions. Subsequent to the end
of the period, the Company acquired an additional multifamily apartment
complex together with adjoining buildable land for $10,000,000. In this
transaction, the Company assumed a first mortgage loan of approximately
$6,086,000.
The Manager oversees the operations of the Company pursuant to a
management agreement. For the quarter ended June 30, 1995, the Company
incurred management fees of $42,671 and Residual Interest Administration
Fees of $21,500. This compares to management fees of $21,764 and Residual
Interest Administrative Fees of $25,000 for the second quarter of 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company uses cash flow from operations to provide working capital
to support its operations and for the payment of dividends to its
stockholders, and uses its other capital resources for the purchase of
Residual Interests, mortgage instruments, multifamily residential
properties and other mortgage-related assets.
The Company currently has agreements with an investment banking firm
to borrow funds under repurchase agreements. At June 30, 1995 the Company
had borrowings outstanding under these agreements totaling $6,808,000.
This debt was collateralized by some of the Company's Nonequity Residual
Interests and IO Bonds whose fair values approximated $12,800,000. The
Company other borrowings are notes payable secured by multifamily housing
properties as described in note 6.
The Company has no committed lines of credit. Management of the
Company believes that cash flows from operations and the availability of
repurchase agreements are sufficient to enable the Company to meet its
current and anticipated future liquidity requirements including payment of
dividends to its stockholders, which must equal at least 95% of the
Company's taxable income in order for the Company to qualify as a REIT.
DIVIDEND REINVESTMENT PLAN
The Company has a Dividend Reinvestment and Share Purchase Plan
designed to enable shareholders to have their dividends from the Company
automatically invested in additional shares of the Company. Mellon
Securities Trust Company, which is unaffiliated with the Company, acts as
the Plan Administrator. The purpose of the Plan is to provide shareholders
with a convenient and economical way of investing dividends in additional
shares of the Company's Common Stock. These shares will be purchased on
the open market or, at the direction of the Company's Board of Directors,
directly from the Company at a 3% discount from the open market price. The
Company has registered 1,000,000 Common shares for possible issuance under
the Plan. The impact on liquidity from the Dividend Reinvestment and Share
Purchase Plan, if any, is expected to be immaterial.
<PAGE>
PART II - OTHER INFORMATION
---------------------------
ITEM 1. Legal Proceedings
-----------------
Not Applicable
ITEM 2. Changes in Securities
---------------------
Not Applicable
ITEM 3. Defaults Upon Senior Securities
-------------------------------
Not Applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Registrant's Annual Meeting of Stockholders was held on June 7,
1995.
With respect to the election of two directors to serve for three
years, 6,472,469 shares were voted in favor of each nominee, and
the votes of 494,946 shares were withheld.
Registrant's 1995 Stock Option Plan was approved by vote of
5,960,487 shares in favor and 838,811 against, with 123,117
abstaining.
The appointment of Arthur Andersen LLP as the Company's
independent accountants for the fiscal year ending December 31,
1995 was approved by vote of 6,890,531 shares in favor, 42,000
shares against, and 34,884 shares abstaining.
A motion to adjourn the meeting until July 28, 1995 to allow
additional votes to be received on a proposal to approve possible
compensation of Registrant's manager, TIS Financial Services,
Inc., in the form of stock, was approved by vote of 1,954,274
shares in favor, 1,046,471 shares against, with 103,487 shares
abstaining and 3,863,183 shares cast as broker non-votes. (The
Board of Directors of Registrant subsequently withdrew this
proposal from consideration by Registrant's stockholders.)
ITEM 5. Other Information
-----------------
Not Applicable
ITEM 6. Exhibits and Reports on Form 8-K
--------------------------------
On January 20, 1995, the Company filed a report on Form 8-K
containing a press release dated December 29, 1994 regarding
its agreement to acquire four multifamily housing properties
in California's Central Valley.
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.
TIS MORTGAGE INVESTMENT COMPANY
Date: August 11, 1995 By: /s/ Lorraine O. Legg
----------------- -------------------------------
Lorraine O. Legg, President and
Chief Executive Officer
(Principal Executive Officer)
Date: August 11, 1995 By: /s/ John E. Castello
----------------- -------------------------------
John E. Castello, Executive Vice
President and Chief Financial
Officer
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1995 AND THE CONDENSED
CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 3,087
<SECURITIES> 164,835
<RECEIVABLES> 1,880
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 172,169
<PP&E> 12,247
<DEPRECIATION> 1,210
<TOTAL-ASSETS> 183,206
<CURRENT-LIABILITIES> 17,205
<BONDS> 152,394
<COMMON> 8
0
0
<OTHER-SE> 13,599
<TOTAL-LIABILITY-AND-EQUITY> 183,206
<SALES> 0
<TOTAL-REVENUES> 10,966
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,227
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,186
<INCOME-PRETAX> 553
<INCOME-TAX> 0
<INCOME-CONTINUING> 553
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 553
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1995 AND THE CONDENSED
CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 2,975
<SECURITIES> 172,400
<RECEIVABLES> 1,951
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 179,868
<PP&E> 12,114
<DEPRECIATION> 1,124
<TOTAL-ASSETS> 190,858
<CURRENT-LIABILITIES> 18,747
<BONDS> 156,629
<COMMON> 8
0
0
<OTHER-SE> 15,474
<TOTAL-LIABILITY-AND-EQUITY> 190,858
<SALES> 0
<TOTAL-REVENUES> 5,770
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 572
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,835
<INCOME-PRETAX> 363
<INCOME-TAX> 0
<INCOME-CONTINUING> 363
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 363
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
