SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-23972
AMERICAN MORTGAGE INVESTORS TRUST
(Exact name of registrant as specified in its charter)
Massachusetts 13-6972380
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)421-5333
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 [_]
<PAGE>
PART I
Item 1. Financial Statements
AMERICAN MORTGAGE INVESTORS TRUST
Balance Sheets
(Unaudited)
============ ============
June 30, December 31,
1997 1996
------------ ------------
ASSETS
Investments in loans (Note 2) $ 46,609,541 $ 45,049,596
Investment in REMIC and GNMA
Certificates and FHA
Insured Project Loan (Note 3) 12,508,436 12,683,331
Cash and cash equivalents 2,642,073 4,828,561
Organization costs (net of
accumulated amortization
of $40,000 and $35,000,
respectively) 10,000 15,000
Deferred costs 9,549 12,581
Accrued interest receivable 530,926 558,146
------------ ------------
Total assets $ 62,310,525 $ 63,147,215
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and
accrued expenses $ 93,198 $ 99,768
Due to affiliates (Note 4) 1,148,136 886,783
------------ ------------
Total liabilities 1,241,334 986,551
------------ ------------
Commitments (Note 5)
Shareholders' equity:
Shares of beneficial interest;
$.10 par value; 12,500,000
shares authorized; 4,047,098
and 4,010,000 shares issued
and outstanding, respectively 404,711 401,001
Treasury stock; $.10 par value;
206,214 and 169,115 shares,
respectively (20,622) (16,912)
Additional paid-in capital 68,849,569 68,849,567
Accumulated deficit (8,066,393) (6,991,606)
Net unrealized loss on marketable
securities (Note 3) (98,074) (81,386)
------------ ------------
Total shareholders' equity 61,069,191 62,160,664
------------ ------------
Total liabilities and shareholders'
equity $ 62,310,525 $ 63,147,215
============ ============
See Accompanying Notes to Financial Statements
2
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Statements of Operations
(Unaudited)
========================= =========================
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
------------------------- -------------------------
Revenues:
Interest income:
Mortgage loans
(Note 2) $ 784,218 $ 787,882 $ 1,560,730 $ 1,395,634
REMIC and
GNMA
Certificates
and FHA
Insured
Project Loan
(Note 3) 225,791 353,174 486,032 715,338
Temporary
investments 52,350 57,167 96,266 125,253
----------- ----------- ----------- -----------
Total revenues 1,062,359 1,198,223 2,143,028 2,236,225
----------- ----------- ----------- -----------
Expenses:
General and
administrative 71,409 73,058 106,115 106,568
General and
administrative -
related parties
(Note 4) 145,369 152,461 261,168 290,723
Realized (gain)
loss on sale
of REMICs
and GNMAs
and FHA
Insured
Project Loan
(Note 3) 51,776 (740) 61,772 (1,822)
Amortization 2,500 2,500 5,000 5,000
----------- ----------- ----------- -----------
Total expenses 271,054 227,279 434,055 400,469
----------- ----------- ----------- -----------
Net income $ 791,305 $ 970,944 $ 1,708,973 $ 1,835,756
=========== =========== =========== ===========
Net income
per weighted
average share $ .19 $ .24 $ .42 $ .46
=========== =========== =========== ===========
See Accompanying Notes to Financial Statements
3
<PAGE>
<TABLE>
<CAPTION>
AMERICAN MORTGAGE INVESTORS TRUST
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
Net Unrealized Loss
Shares of Beneficial Interest Treasury Stock Additional Accumulated on Securities
Shares Amount Shares Amount Paid-in Capital Deficit Available for Sale Total
------ ------ ------ ------ --------------- ------- ------------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
January 1, 1997 4,010,000 $ 401,001 (169,115) $ (16,912) $ 68,849,567 $ (6,991,606) $ (81,386) $ 62,160,664
Net Income 0 0 0 0 0 1,708,973 0 1,708,973
Distributions 0 0 0 0 0 (2,783,760) 0 (2,783,760)
Purchase of Treasury Stock 0 0 (37,099) (3,710) (701,164) 0 0 (704,874)
Issuance of shares of
beneficial interest 37,098 3,710 0 0 701,166 0 0 704,876
Change in net unrealized
loss on
securities available
for sale (Note 3) 0 0 0 0 0 0 (16,688) (16,688)
--------- --------- -------- --------- ------------ ------------ --------- ------------
Balance at
June 30, 1997 4,047,098 $ 404,711 (206,214) $ (20,622) $ 68,849,569 $ (8,066,393) $ (98,074) $ 61,069,191
========= ========= ======== ========= ============ ============ ========= ============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Statements of Cash Flows
(Unaudited)
==========================
Six Months Ended
June 30,
--------------------------
1997 1996
--------------------------
Cash flows from operating activities:
Net income $ 1,708,973 $ 1,835,756
----------- -----------
Adjustments to reconcile net income
to net cash provided by
operating activities
Amortization expense -
organization costs 5,000 5,000
Amortization expense - loan
premium and origination costs 238,375 238,729
Amortization of REMIC premium 585 11,725
Amortization of REMIC
and GNMA and FHA
Insured Project Loan discount (18,215) (23,493)
(Gain) loss on sale of REMIC
certificates 17,764 (466)
(Gain) loss on sale of GNMAs 927 (784)
(Gain) loss on sale of FHA
Insured Project Loan 43,080 (572)
Changes in operating assets and
liabilities:
Decrease (increase) in accrued
interest receivable 27,220 (192,397)
Increase in due to affiliates 261,353 182,924
Decrease (increase) in accounts
payable and accrued expenses (6,570) 18,953
----------- -----------
Total adjustments 569,519 239,619
----------- -----------
Net cash provided by
operating activities 2,278,492 2,075,375
----------- -----------
Cash flows from investing activities:
Investments in loans (1,888,948) (1,948,746)
Principal repayments of loans 93,660 86,886
Purchase of REMIC Certificates (1,889,817) 0
Purchase of GNMA Certificate (1,981,566) 0
Principal repayment of GNMAs 51,045 46,709
Principal repayments of REMICs 526,166 578,442
Principal repayments of FHA
Insured Project Loan 3,408,238 21,791
Increase in deferred costs 0 (11)
----------- -----------
Net cash used in investing activities (1,681,222) (1,214,929)
----------- -----------
See accompanying notes to financial statements.
5
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Statements of Cash Flows
(continued)
(Unaudited)
==========================
Six Months Ended
June 30,
--------------------------
1997 1996
--------------------------
Cash flows from financing activities:
Increase in due to affiliates 0 50,000
Distributions to shareholders (2,783,760) (2,777,012)
Proceeds from issuance of shares
of beneficial interest 704,876 724,599
Purchase of Treasury Stock (704,874) (724,584)
Increase in offering costs 0 (50,000)
----------- -----------
Net cash used in financing
activities (2,783,758) (2,776,997)
----------- -----------
Net decrease in cash and
cash equivalents (2,186,488) (1,916,551)
Cash and cash equivalents at
beginning of period 4,828,561 6,242,945
----------- -----------
Cash and cash equivalents at
end of period $ 2,642,073 $ 4,326,394
=========== ===========
Supplemental schedule of non cash
investing activities:
Decrease in deferred costs $ 3,032 $ 22,659
Increase in investments
in loans (3,032) (22,659)
----------- -----------
$ 0 $ 0
=========== ===========
See Accompanying Notes to Financial Statements
6
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 1 - General
American Mortgage Investors Trust (the "Company") was formed on June 11, 1991 as
a Massachusetts business trust for the primary purpose of investing in
government-insured mortgages and guaranteed mortgage-backed certificates. The
Company is electing to be treated as a real estate investment trust ("REIT")
under the Internal Revenue Code of 1986, as amended.
The Company issued 10,000 shares of beneficial interest at $20 per share in
exchange for $200,000 cash from Related AMI Associates, Inc., the current
advisor to the Company (the "Advisor").
On March 29, 1993, the Company commenced a public offering (the "Offering")
through Related Equities Corporation, (the "Dealer Manager") an affiliate of the
Advisor, and other broker-dealers on a "best efforts" basis, for up to
10,000,000 of its shares of beneficial interest at an initial offering price of
$20 per share. The Offering terminated as of November 30, 1994. As of November
30, 1994, a total of 3,809,601 shares had been sold to the public, either
through the Offering or the Company's dividend reinvestment plan (the
"Reinvestment Plan"), representing Gross Proceeds (the "Gross Proceeds") of
$76,192,021 (before volume discounts of $40,575). Pursuant to the Redemption
Plan which became effective November 30, 1994, the Company is required to redeem
eligible shares presented for redemption for cash to the extent it has
sufficient net proceeds from the sale of shares under the Reinvestment Plan.
After November 30, 1994, 189,016 shares were sold through the Reinvestment Plan,
the proceeds of which are restricted for use in connection with the Redemption
Plan and are not included in gross proceeds. Pursuant to the Redemption Plan as
of June 30, 1997, 206,042 shares were redeemed for an aggregate price of
$3,911,227. Of such redemptions, 16,931 shares were redeemed from proceeds from
the Reinvestment Plan before the termination of the Offering and therefore, the
proceeds available for future investment have been reduced by $319,987. As of
June 30, 1997 the backlog of shares to be redeemed is 155,187. The Board of
Trustees has implemented the provisions of the Redemption Plan which permit the
original $19 per share to be reduced each quarter to reflect any return of
principal received by shareholders. The current amount of principal which has
been distributed to shareholders is $1.53 per share and, therefore, the current
redemption price will be $17.47 per share ($19 per share less $1.53 per share).
The Board has also adopted a policy to reassess the redemption price
periodically. Subject to future reconsideration of such policy by the Board, the
redemption price will not be reduced below the Company's net asset value per
share. In addition, during the Offering, the Advisor received 38,481 restricted
shares (including 717 from the Reinvestment Plan) in addition to the 10,000
shares purchased, which the Advisor has valued at $14.75 per share, pursuant to
the terms of the Offering. As a result of the shares being redeemed the Advisor
was required to return 172 shares as of June 30, 1997.
The Company has invested principally in two types of mortgage investments
("Mortgage Investments"): (i) new mortgage loans originated by or on behalf of
the Company or by other lenders
7
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 1 - General(continued)
and sold to the Company prior to the loans being fully funded and (ii) Ginnie
Mae mortgage-backed securities and pass-through certificates ("Originated
Mortgages") and existing mortgage loans that it acquires ("Acquired Mortgages")
on multifamily residential rental properties ("Developments"). No more than 7%
of the Net Proceeds may be invested in non-interest bearing uninsured loans made
directly to developers or sponsors of Developments (or the general partners or
other principals of the owner of the Developments) with respect to which the
Company holds a mortgage ("Additional Loans"). As of June 30, 1997, of the total
Net Proceeds available for investment, 84.9% had been invested in Originated
Mortgages (including 6.32% in Additional Loans) and 15.1% had been invested in
Acquired Mortgages.
The Company also invests in REMICs and in CMOs or participations therein that
are backed by single family and/or multifamily mortgage loans insured by FHA or
mortgage certificates guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac. Due
to the complexity of the REMIC structure and the uncertainty of future economic
and other factors that affect interest rates and mortgage prepayments, it is not
possible to predict the effect of future events upon the yield to maturity or
the market value of the REMIC and GNMA Certificates upon sale or other
disposition or whether the Company, if it chose to, would be able to reinvest
proceeds from prepayments at favorable rates relative to the coupon rate.
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosures of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principals. Actual results could
differ from those estimates.
The unaudited financial statements have been prepared on the same basis as the
audited financial statements included in the Company's Form 10-K for the year
ended December 31, 1996. In the opinion of the Advisor, the accompanying
unaudited financial statements contain all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the financial position
of the Company as of June 30, 1997, the results of operations for the three and
six months ended June 30, 1997 and 1996 and its cash flows for the six months
ended June 30, 1997 and 1996. However, the operating results for the six months
ended June 30, 1997 may not be indicative of the results for the year.
8
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 1 - General(continued)
Certain information and note disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. It is suggested that these financial statements be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996.
Certain prior year amounts have been reclassified to conform with current year
presentation.
9
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 2 - Investments in Loans
The Company originally funded five Originated Mortgages (excluding GNMAs-see
Note 3), five noninterest bearing Additional Loans and two additional
loan-bridge loans in the aggregate amount of $46,260,148.
Information relating to investments in Originated Mortgages (excluding GNMAs-see
Note 3) and Additional Loans as of June 30, 1997 and December 31, 1996 are as
follows:
Investments in loans - January 1, 1996 $39,497,133
Additions:
Columbiana Originated Mortgage 8,683,000
Columbiana Originated Mortgage -
unadvanced (666,872)
--------
Columbiana total advanced 8,016,128
Columbiana advanced prior
to 1996 (7,552,100)
----------
Columbiana-advanced in 1996 464,028
Columbiana - loan origination
costs 5,395
Stonybrook Originated Mortgage 8,500,000
Stonybrook Originated Mortgage -
unadvanced (2,205,337)
----------
Stonybrook total advanced 6,294,663
Stonybrook advanced prior to 1996 (610,209)
----------
Stonybrook-advanced in 1996 5,684,454
Stonybrook - loan origination
costs 53,023
----------
45,704,033
----------
Deductions:
Amortization of Additional Loans (372,916)
Amortization of loan origination costs (104,426)
Collection of principal - Cove (46,706)
- Oxford (64,222)
- Town and Country (66,167)
-----------
(654,437)
-----------
(continued)
10
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 2 - Investments in Loans(continued)
Investments in loans - December 31, 1996 $45,049,596
Additions:
Columbiana Originated Mortgage 8,683,000
Columbiana Originated Mortgage -
unadvanced (406,105)
----------
Columbiana total advanced 8,276,895
Columbiana advanced prior
to 1997 (8,016,128)
----------
Columbiana-advanced in 1997 260,767
Columbiana - loan origination
costs 3,032
Stonybrook Originated Mortgage 8,500,000
Stonybrook Originated Mortgage -
unadvanced (577,156)
----------
Stonybrook total advanced 7,922,844
Stonybrook advanced prior
to 1997 (6,294,663)
----------
Stonybrook-advanced in 1997 1,628,181
-----------
46,941,576
-----------
Deductions:
Amortization of Additional Loans (186,458)
Amortization of loan origination costs (51,917)
Collection of principal - Cove (24,719)
- Oxford (33,988)
- Town and Country (34,953)
-----------
(332,035)
-----------
Investments in loans - June 30, 1997 $46,609,541
===========
11
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
NOTE 2 - Investments in Loans (continued)
Information relating to investments in Originated Mortgages (excluding GNMAs -
see Note 3) and Additional Loans as of June 30, 1997 and December 31, 1996 is as
follows:
<TABLE>
<CAPTION>
Date of
Invest- Amounts Advanced Total
ment/ ------------------------------------------------- Amounts
Final Total Advanced
Maturity Equity Bridge Mortgage Amounts Amounts and
Property Description Date Loans Loans Loans Advanced Unadvanced Unadvanced
- - -------- ----------- ---- ----- ----- ----- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
The Cove Apts 308 Dec. 93 $ 840,500 $ 84,210 $ 6,800,000 $ 7,724,710 $ 0 $ 7,724,710
Houston, Apartment Jan. 29 (D)
TX (A) Units (E)
Oxford on 405 Dec. 93 1,156,000 115,790 9,350,000 10,621,790 0 10,621,790
Greenridge Apartment Jan. 29 (D)
Apts Units (E)
Houston,
TX (A)
Town & 330 Apr. 94 1,039,000 None 9,348,000 10,387,000 0 10,387,000
Country IV Apartment May 29
Apts Units (F)
Urbana,
IL (B)
Columbiana 204 Apr. 94 563,000 None 8,276,895 8,839,895 406,105 9,246,000
Lakes Apts Apartment Nov. 35
Columbia, Units (G)
SC (C)
Stony Brook 125 Dec. 95 763,909 None 7,922,844 8,686,753 577,156 9,263,909
Village II Apts. Apartment June 37
East Haven, Units (G)
CT (H)
---------------------------------------------------------------------------------
Total $ 4,362,409 $ 200,000 $41,697,739 $46,260,148 $ 983,261 $47,243,409
=================================================================================
<CAPTION>
Interest
Earned
Loan Final Balance Final Balance by the Net
Outstanding Origination Accumulated At June At December Company Less 1997 Interest
Property Loan Balance Costs Amortization 30, 1997 31, 1996(I) for 1997 Amortization Earned
- - -------- ------------ ----- ------------ -------- ----------- -------- ------------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
The Cove Apts $ 7,488,895 $ 444,215 $ 358,536 $ 7,574,574 $ 7,649,877 $ 300,334 $ 50,584 $ 249,750
Houston,
TX (A)
Oxford on 10,297,543 610,814 493,090 10,415,267 10,518,823 424,556 69,568 354,988
Greenridge
Apts
Houston,
TX (A)
Town & 10,190,576 603,895 372,157 10,422,314 10,515,510 409,133 58,243 350,890
Country IV
Apts
Urbana,
IL (B)
Columbiana 8,839,895 532,835 177,189 9,195,541 8,959,892 352,728 28,150 324,578
Lakes Apts
Columbia,
SC (C)
Stony Brook 8,686,753 413,491 98,399 9,001,845 7,405,494 312,354 31,830 280,524
Village II Apts.
East Haven,
CT (H)
-------------------------------------------------------------------------------------------------------------
Total $45,503,662 $ 2,605,250 $ 1,499,371 $46,609,541 $45,049,596 $ 1,799,105 $ 238,375 $ 1,560,730
=============================================================================================================
</TABLE>
(A) The interest rates for The Cove and Oxford are 7.625%-9.129% during the
permanent loan period. In addition to the interest rate during the
permanent loan period the Company will be entitled to 30% of the cash flow
remaining after payment of 9.129% interest and accrued interest, if any.
Payments at the rate of 9.129% are guaranteed by the developer for three
years after closing of the loans.
(B) The interest rates for Town and Country are 7.375%-9.167% during the
permanent loan period. In addition to the interest rate during the
permanent loan period, the Company will be entitled to 30% of the cash flow
remaining after payment of 9.167% interest.
(C) The interest rates for Columbiana are 7.9%-8.678% during the permanent loan
period and 7.4% during the construction period. In addition to the interest
rate during the permanent loan period, the Company will be entitled to 25%
of the cash flow remaining after payment of 8.678% interest.
(D) Bridge loans were repaid in full on April 7, 1994.
(E) The Originated Mortgages have terms of 35 years, subject to mandatory
prepayment at any time after 10 years and upon one year's notice.
(F) The Originated Mortgage has a term of 35 years, subject to mandatory
prepayment at any time after 12 years and upon one year's notice.
(G) The Originated Mortgage has a term of 40 years, subject to mandatory
prepayment at any time after 10 years and upon one year's notice.
(H) The interest rates for Stony Brook are 7.75%-9.128% during the permanent
loan period and 8.625% during the construction period. In addition to the
interest rate during the permanent loan period, the Company will be
entitled to 40% of the cash flow remaining after payment of 9.128%
interest.
(I) Aggregate cost for federal income tax purposes is $45,707,370.
12
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 3 - Investment in REMIC and GNMA Certificates and FHA Insured Project Loan
Originated Mortgages
GNMA Certificates
The Company used a portion of the Net Proceeds of its Offering to purchase four
Ginnie Mae Guaranteed FHA Insured Project Loan Backed Certificates from
unaffiliated third parties. The full amount of the purchase price of each of the
GNMA Certificates was allocated as a permanent Originated Mortgage. The table
set forth below outlines pertinent information relating to the GNMA
Certificates.
Acquired Mortgages
REMIC Certificates
The Company used a portion of the Net Proceeds of its Offering to purchase ten
REMIC Certificates from unaffiliated third parties. Except as set forth in the
notes to the table, each of the REMIC Certificates was purchased as a permanent
Acquired Mortgage. The table set forth below outlines pertinent information
relating to the REMIC Certificates.
FHA Insured Project Loan
The Company used a portion of the Net Proceeds of its Offering to purchase a FHA
Insured Project Loan from an unaffiliated third party. The full amount of the
purchase price was allocated as a permanent Acquired Mortgage. The table set
forth below outlines pertinent information relating to the FHA Insured Project
Loan.
13
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 3 - Investment in REMIC and GNMA Certificates and FHA Insured Project Loan
(continued)
Information relating to investments in REMIC and GNMA Certificates and FHA
Insured Project Loan as of June 30, 1997 and December 31, 1996:
Investments in REMIC and GNMA
Certificates and FHA Insured
Project Loan - January 1, 1996 $ 19,327,518
Additions:
Amortization of Discounts 43,376
------------
19,370,894
------------
Deductions:
Principal Repayments (Sales) of GNMA
Certificates (95,396)
Principal Repayments (Sales) of REMIC
Certificates (1,149,123)
Principal Repayments (Sales) of
FHA Insured Project Loan (44,598)
Proceeds from sale of REMIC Certificates (4,940,625)
Loss on Sale of REMIC Certificates (408,692)
Loss on Sale of GNMA Certificates (5,689)
Loss on Sale of FHA Insured Project Loan (1,594)
Amortization of Premiums (19,523)
------------
(6,665,240)
------------
Amortized Cost at December 31, 1996
(including unrealized loss of $59,063
at December 31, 1995) 12,705,654
Change in net unrealized loss on securities
available for sale (22,323)
------------
Carrying value at December 31, 1996 $ 12,683,331
(continued)
14
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 3 - Investment in REMIC and GNMA Certificates and FHA Insured Project Loan
(continued)
Additions:
Purchase of GNMA Certificate 1,981,566
Purchase of REMIC Certificates 1,889,817
Amortization of Discounts 18,215
------------
16,572,929
------------
Deductions:
Principal Repayments (Sales) of GNMA
Certificates (51,045)
Principal Repayments (Sales) of REMIC
Certificates (526,166)
Principal Repayments (Sales) of
FHA Insured Project Loan (3,408,238)
Loss on Sale of REMIC Certificates (17,764)
Loss on Sale of GNMA Certificates (927)
Loss on Sale of FHA Insured Project Loan (43,080)
Amortization of Premiums (585)
------------
(4,047,805)
------------
Amortized Cost at June 30, 1997
(including unrealized loss of $81,386
at December 31, 1996) 12,525,124
Change in net unrealized loss on securities
available for sale (16,688)
------------
Carrying value at June 30, 1997 $ 12,508,436
============
15
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
NOTE 3 - Investment in REMIC and GNMA Certificates and FHA Insured Project Loan
(continued)
Information relating to investments in REMIC and GNMA Certificates and FHA
Insured Project Loan as of June 30, 1997 and December 31, 1996 is as follows:
<TABLE>
<CAPTION>
Date Original Loan
Purchased Purchase Premium Accumulated Origination
/Final Stated Price Principal (Discount) Amortization Costs
Certificate Payment Interest Including at June at June at June at June
Seller Number Date Rate Prem/(Disc) 30, 1997 30, 1997 30, 1997 30, 1997
- - ------ ------ --------- -------- ----------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GNMA Certificates
Bear Stearns 0355540 7/27/94 7.125% $ 2,407,102 $ 2,598,656 $ (240,376) $ 59,247 $ 80,396
3/15/29
Malone Mortgage 0382486 7/28/94 8.500% 2,197,130 2,174,724 (8,155) 2,099 73,861
8/15/29
Goldman Sachs 0328502 7/29/94 8.250% 3,928,615 3,749,109 (3,513) 984 127,691
7/15/17
SunCoast Capital G22412(7) 6/23/97 7.000% 1,981,566 1,994,353 (13,083) 0 0
Group, Ltd. 4/20/27
REMIC Certificates
Bear Stearns FNMA 8/27/93 6.500% 10,160,938 0 0 0 0
1992-17G(1) Sold(1)
Bear Stearns FHLMC 10/26/93 4.850% 4,838,600 0 0 0 0
G-024C(2) Sold(3)
Meridan Capital FHLMC 10/25/94 5.750% 1,721,291 0 0 0 0
Markets 1292ZA(3) 6/15/97(4)
Meridan Capital FNMA 10/25/94 5.250% 258,357 19,918 (423) 423 665
Markets 1992-153A(3) 9/25/97
Meridan Capital FHLMC 10/27/94 6.500% 742,538 97,404 (670) 670 3,298
Markets 1580A(3) 9/15/98
Meridan Capital FHLMC 11/9/94 7.350% 269,658 0 0 0 0
Markets 1258C(3) 5/15/04(5)
SunCoast Capital FHLMC 5/30/97 7.000% 507,288 505,000 2,288 (457) 0
Group, Ltd. 17218(7) 2/1/98
SunCoast Capital FHLMC 5/30/97 6.500% 251,967 251,456 511 (128) 0
Group, Ltd. 17161(7) 2/1/98
SunCoast Capital FHLMC 6/23/97 7.000% 147,437 146,932 505 0 0
Group, Ltd. 17125(7) 1/1/98
SunCoast Capital FNMA 6/30/97 7.500% 983,125 1,000,000 (16,875) 0 0
Group, Ltd. 1997-42V(7) 4/18/26
FHA Insured Project Loan
Donaldson, Lufkin 092-11005 1/3/95 8.600% 3,374,679 0 0 0 0
& Jenrette 4/1/19(6) ----------- ----------- ---------- -------- ---------
Total $33,770,291 $12,537,552 $ (279,791) $ 62,838 $ 285,911
=========== =========== ========== ======== =========
<CAPTION>
Interest
Unrealized Final Final Earned
Gain(Loss) Balance Balance by the Net
at June at June at Dec. Company 1997 Interest
Seller 30, 1997 30, 1997 31, 1996 for 1997 Amortization Earned
- - ------ -------- -------- -------- -------- ------------ ------
<S> <C> <C> <C> <C> <C> <C>
GNMA Certificates
Bear Stearns $ 32,314 $ 2,530,237 $ 2,526,991 $ 92,747 $ 10,177 $ 102,924
Malone Mortgage (14,796) 2,227,733 2,227,043 92,533 360 92,893
Goldman Sachs (54,867) 3,819,404 3,802,730 155,252 169 155,421
SunCoast Capital (54,557) 1,926,713 0 4,449 0 4,449
Group, Ltd.
REMIC Certificates
Bear Stearns 0 0 0 0 0 0
Bear Stearns 0 0 0 0 0 0
Meridan Capital 0 0 338,033 3,848 0 3,848
Markets
Meridan Capital (754) 19,829 61,081 973 0 973
Markets
Meridan Capital (3,351) 97,351 214,816 4,774 0 4,774
Markets
Meridan Capital 0 0 28,779 266 0 266
Markets
SunCoast Capital (410) 506,421 0 6 (457) (451)
Group, Ltd.
SunCoast Capital (1,562) 250,277 0 44 (128) (84)
Group, Ltd.
SunCoast Capital (91) 147,346 0 228 0 228
Group, Ltd.
SunCoast Capital 0 983,125 0 208 0 208
Group, Ltd.
FHA Insured Project Loan
Donaldson, Lufkin 0 0 3,483,858 113,074 7,509 120,583
& Jenrette ---------- ----------- ----------- ---------- ---------- ----------
Total $ (98,074) $12,508,436 $12,683,331 $ 468,402 $ 17,630 $ 486,032
========== =========== =========== ========== ========== ==========
</TABLE>
16
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 3 - Investment in REMIC and GNMA Certificates and FHA Insured Project Loan
(continued)
(1) On October 15, 1993 the Company allocated $5,000,000 of the principal face
value as an Acquired Mortgage based on the expectation that a majority of the
investment would be held for at least two years. Based on such allocation,
compensation was paid to the Advisor. The Advisor has undertaken to reimburse
the Company for any compensation paid to it which is attributable to the portion
of any REMIC Certificate which is sold to support the Company's distribution
policy (the "Advisor's Reimbursement Undertaking"). On November 4, 1993 and
February 1, 1994, the Company sold $200,000 and $200,000 respectively, of the
REMIC Certificate and the Advisor has reimbursed the Company for the fees
previously paid and the trading loss incurred with respect to the portions of
the REMIC Certificate which were sold. On March 30, 1995, the Company sold
$4,500,000 of the temporary portion at the discounted price of 90.9375% or
$4,092,188. The realized loss on this sale was $447,472. Also on August 15,
1996, the Company sold the remaining balance of the temporary and permanent
portions of the REMIC Certificate which totaled $5,100,000. The realized loss on
this sale was $328,895.
The REMIC Certificate represented beneficial ownership interest in Fannie Mae
REMIC Trust 1992-17. The assets of the trust consisted primarily of interests in
a separate trust which held Fannie Mae Guaranteed Pass-Through Certificates (the
"MBS Certificates"), each of which represented a beneficial interest in a pool
of first lien, fixed-rate residential mortgage loans (the "Mortgage Loans").
The Company was entitled to monthly interest payments on the outstanding
principal amount of the REMIC Certificate.
(2) Represented an FHLMC Mortgage Participation Certificate. On May 4, 1994 the
Company allocated $2,419,300 of the principal face value as an Acquired Mortgage
based on the expectation that a majority of the investment would be held for at
least two years. Based upon such allocation, compensation was paid to the
Advisor. On May 5, 1994 the Company sold $1,000,000 of the permanent portion of
the Mortgage Participation Certificate and on October 11, 1994 the Company sold
the remaining balance of the temporary and permanent portions of the Mortgage
Participation Certificate which totaled $3,838,600. Pursuant to the Advisor's
Reimbursement Undertaking, the Advisor has reimbursed the Company for the fees
previously paid and the trading loss incurred with respect to the permanent
investment portion of the
17
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 3 - Investment in REMIC and GNMA Certificates and FHA Insured Project Loan
(continued)
certificate which was sold. A loss of $297,836 was recorded on these sales in
1994.
(3) Purchased as a permanent investment using a portion of the proceeds from the
sale of FHLMC REMIC Certificate #G-024C. See (2) above.
(4) The stated final payment date was June 15, 1997. The actual final payment
amounting to $40,553 was received on June 16, 1997.
(5) The stated final payment date was May 15, 2004. The actual final payment
amounting to $7,099 was received on April 15, 1997.
(6) The stated final payment date was April 1, 2019. The actual final payment
amounting to $3,392,445 was received on May 23, 1997.
(7) Purchased as a permanent investment using the proceeds from the final
payment received from the FHA Insured Project Loan (See (6) above) and a portion
of the proceeds from the sale of Fannie Mae REMIC Certificate #1992-17G (see (1)
above).
18
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 3 - Investment in REMIC and GNMA Certificates and FHA Insured Project Loan
(continued)
The amortized cost, unrealized gain (loss) and fair value for the investment in
REMIC and GNMA Certificates and FHA Insured Project Loan at June 30, 1997 and
December 31, 1996 are as follows:
<TABLE>
<CAPTION>
Unrealized Unrealized
Amortized Gain Fair Amortized Gain Fair
Cost at (Loss) at Value at Cost at (Loss) at Value at
June June June December December December
Security 30, 1997 30, 1997 30, 1997 31, 1996 31, 1996 31, 1996
- - ---------- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FHA Insured
Project Loan $ 0 $ 0 $ 0 $ 3,443,808 $ 40,050 $ 3,483,858
Fannie Mae
REMICs 1,003,708 (754) 1,002,954 63,467 (2,386) 61,081
Federal
Home Loan
REMICs 1,006,809 (5,414) 1,001,395 601,749 (20,121) 581,628
Ginnie Mae
Certificates 10,595,993 (91,906) 10,504,087 8,655,693 (98,929) 8,556,764
------------ ------------ ------------ ------------ ------------ ------------
$ 12,606,510 $ (98,074) $ 12,508,436 $ 12,764,717 $ (81,386) $ 12,683,331
============ ============ ============ ============ ============ ============
</TABLE>
19
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 3 - Investment in REMIC and GNMA Certificates and FHA Insured Project Loan
(continued)
The change in the unrealized loss for the six months ended June 30, 1997 and the
year ended December 31, 1996 were as follows:
Unrealized loss at December 31, 1995 $ (59,063)
Sale of securities during the year
ended December 31, 1996 included in
unrealized loss at December 31, 1995 248,254
Unrealized loss on securities held
at December 31, 1996 and 1995 (270,577)
---------
Unrealized loss at December 31, 1996 (81,386)
Sale of securities during the six months
ended June 30, 1997 included in
unrealized loss at December 31, 1996 20,565
Unrealized loss on securities held at
June 30, 1997 and December 31, 1996 (37,253)
---------
Unrealized loss at June 30, 1997 $ (98,074)
=========
For the six months ended June 30, 1997, there were losses of $61,772 (including
acquisition fees and expenses) on principal repayments of REMICs, GNMAs and the
FHA Insured Project Loan.
Note 4 - Related Party Transactions
The Company has entered into an agreement with the Advisor pursuant to which the
Advisor receives compensation consisting primarily of (i) compensation in
connection with the organization and start-up of the Company and the Company's
investment in the Mortgage Investments; (ii) asset management fees calculated as
a percentage of total assets invested by the Company which totaled $89,776 and
$91,928 for the three months ended June 30, 1997 and 1996, and $179,245 and
$180,190 for the six months ended June 30, 1997 and 1996, respectively, such
amounts are included in due to affiliates; (iii) a subordinated incentive fee
based on the economic gain on the sale of Mortgage Investments; (iv) an amount,
payable in shares of the Company which, after issuance, will equal 1% of all
shares of the Company issued during the offering period or pursuant to the
Company's Reinvestment Plan as compensation for services rendered. During the
Offering the Advisor received 38,481 shares, in addition to the 10,000 shares
purchased, however as a result of the shares being redeemed the Advisor was
required to return 172 shares. (As of June 30, 1997 and December 31, 1996
20
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 4 - Related Party Transactions(contined)
shares received by the Advisor totaled 38,309 at a total value of $565,058
($14.75 per share)); (v) acquisition expense allowance and acquisition fees
calculated as a percentage of the Gross Proceeds applicable to the origination
of Originated Mortgages and related Additional Loans and the acquisition of
Acquired Mortgages and Additional Loan; (acquisition fees and acquisition
expense allowance incurred approximated $2,545,000 and $761,000 at June 30, 1997
and December 31, 1996, of which $2,545,000 and $725,000 at June 30, 1997 and
$2,545,000 and $722,000 at December 31, 1996 have been capitalized and included
in Investment in loans and Investment in REMIC and GNMA Certificates and FHA
Insured Project Loan) and (vi) certain other fees. In addition to the costs,
fees and expenses discussed above, the Company will reimburse affiliates of the
Advisor for certain administrative and other cost incurred on behalf of the
Company. The costs and expenses incurred for the three months ended June 30,
1997 and 1996 were $55,593 and $60,533, and the costs and expenses incurred for
the six months ended June 30, 1997 and 1996 were $81,923 and $110,533,
respectively.
In order to minimize the possible adverse effects of the Company's investment
and distribution policy of attempting to maintain stable distributions to
shareholders during the offering and acquisition stages, the Company has made
the following undertakings: (a) the Advisor has agreed not to retain acquisition
fees or loan disposition fees with respect to any portion of REMICs or CMOs
which are sold pursuant to the distribution policy; such fees totaled $96,112 as
of June 30, 1997 and December 31, 1996; (b) the Advisor has agreed to contribute
to the Company funds equal to the amount by which all trading losses exceed the
gains resulting from the sale of REMICs and CMOs investments to supplement the
distribution policy; such funds totaled $97,221 as of June 30, 1997 and December
31, 1996; and (c) the Company has agreed to limit the total amount which can be
returned to investors from the early sale of investments to support the
distributions policy to less than 3% of the Gross Proceeds. As of June 30, 1997,
the aggregate amount of disposition proceeds used to support distributions
equaled 2.44% of the Gross Proceeds resulting in approximately $428,000 being
available to support future distributions if necessary.
21
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 5 - Subsequent Event
On August 14, 1997, a distribution of $1,388,505 and $17,464 was paid to the
Investors and the Advisor, respectively, representing the 1997 second quarter
distribution. The distribution will be funded from cash collections of debt
service payments and interest income through approximately the distribution
date, August 14, 1997.
22
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
The Company issued 10,000 shares of beneficial interest at $20 per share in
exchange for $200,000 cash from Related AMI Associates, Inc., the Advisor to the
Company. As of November 30, 1994, the Company had received $76,192,021 (before
volume discounts of $40,575) in Gross Proceeds from the sale of 3,738,613 shares
pursuant to the Offering and 70,988 shares through the Reinvestment Plan
resulting in Net Proceeds available for investment of approximately $69,334,743
after volume discounts, payments of sales commissions and organization and
offering expenses. Pursuant to the Redemption Plan, which became effective
November 30, 1994, the Company is required to redeem eligible shares presented
for redemption for cash to the extent it has sufficient net proceeds from the
sale of shares under the Reinvestment Plan. After November 30, 1994, 189,016
shares were sold through the Reinvestment Plan, the proceeds of which are
restricted for use in connection with the Redemption Plan and are not included
in gross proceeds. Pursuant to the Redemption Plan as of June 30, 1997, the
Company redeemed 206,042 shares for an aggregate price of $3,911,227. Of such
redemptions, 16,931 shares were redeemed from proceeds from the Reinvestment
Plan before the termination of the Offering and therefore, the proceeds
available for future investment have been reduced by $319,987. As of June 30,
1997 the backlog of shares to be redeemed is 155,187. The Board of Trustees has
implemented the provisions of the Redemption Plan which permit the original $19
per share to be reduced each quarter to reflect any return of principal received
by shareholders. The current amount of principal which has been distributed to
shareholders is $1.53 per share and, therefore, the current redemption price
will be $17.47 per share ($19 per share less $1.53 per share). The Board has
also adopted a policy to reassess the redemption price periodically. Subject to
future reconsideration of such policy by the Board, the redemption price will
not be reduced below the Company's net asset value per share. During the
Offering, the Advisor had received 38,481 shares pursuant to the terms of the
Offering and Reinvestment Plan in addition to the 10,000 shares purchased. As a
result of the shares being redeemed the Advisor was required to return 172
shares as of June 30, 1997.
During the six months ended June 30, 1997, cash and cash equivalents decreased
approximately $2,186,000 due to investments in loans ($1,889,000), purchase of
REMIC Certificates and GNMA Certificate ($3,871,000) and distributions to
shareholders ($2,784,000) which exceeded cash provided by operating activities
($2,278,000) and principal repayments of loans, GNMAs, REMICs and FHA Insured
Project Loan ($4,079,000). Included in the adjustments to reconcile the net
income to cash provided by operating activities is net amortization in the
amount of $226,000.
The Company has utilized the Net proceeds of the Offering primarily to make or
invest in Originated Mortgages and Acquired Mortgages. The Company has also
invested in uninsured Additional Loans made directly to the developers or
sponsors of De-
23
<PAGE>
velopments provided that not more than an aggregate of 7% of the Net Proceeds
raised in the Offering were invested in Additional Loans. As of June 30, 1997,
of the total Net Proceeds available for investment, 84.9% had been invested in
Originated Mortgages (including 6.32% in Additional Loans) and 15.1% in Acquired
Mortgages.
As of June 30, 1997, the Company had funded five Originated Mortgages (excluding
GNMAs-see below) in an aggregate amount of $41,697,739 and five non-interest
bearing Additional Loans in the aggregate amount of $4,362,409 in connection
with the permanent financing provided on five Developments.
In 1993, the Company made investments in two REMIC Certificates in the aggregate
amount of $14,999,538, which were sold during 1993, 1994, 1995 and 1996. In
1994, the Company acquired (i) three Ginnie Mae Guaranteed FHA Insured Project
Loan Backed Certificates in the aggregate amount of $8,532,847 and (ii) three
FHLMC REMIC Certificates two of which matured during 1997 and one Fannie Mae
Mortgage Guaranteed REMIC Certificate in the aggregate amount of $2,991,844. In
1995, the company acquired a FHA Insured Project Loan in the aggregate amount of
$3,374,679 which matured in 1997. In 1997, the Company acquired (i) three FHLMC
REMIC certificates and one Fannie Mae Mortgage Guaranteed REMIC Certificate in
the aggregate amount of $1,889,817 (ii) a portion of one Ginnie Mae Guaranteed
Single Family Pool Certificate in the amount of $1,981,566. Net unrealized
losses on REMIC and GNMA investments included in shareholders' equity pursuant
to Statement of Financial Accounting Standards No. 115 aggregated $98,074 at
June 30, 1997. This represents an increase in the unrealized loss of $16,688
from December 31, 1996 of which a decrease of $20,565 is attributable to the
sale of securities (which resulted in a realized loss of $61,772) and an
increase of $37,253 is attributable to a decrease in market prices for the
investments held at June 30, 1997 and December 31, 1996. As of August 5, 1997,
the unrealized loss was approximately $20,000.
The yield on the REMIC and GNMA Certificates will depend, in part, upon the rate
and timing of principal prepayments on the underlying mortgages in the asset
pool. Generally, as market interest rates decrease, mortgage prepayment rates
increase and the market value of interest rate sensitive obligations like the
REMIC and GNMA Certificates increases. As market interest rates increase,
mortgage prepayment rates tend to decrease and the market value of interest rate
sensitive obligations like the REMICs and GNMAs tends to decrease. The effect of
prepayments on yield is greater the earlier a prepayment of principal is
received.
24
<PAGE>
Due to the complexity of the REMIC structure and the uncertainty of future
economic and other factors that affect interest rates and mortgage prepayments,
it is not possible to predict the effect of future events upon the yield to
maturity or the market value of the REMIC and GNMA Certificates upon any sale or
other disposition or whether the Company, if it chose to, would be able to
reinvest proceeds from prepayments at favorable rates relative to the coupon
rate.
The Company intends to continue to invest the Net Proceeds (including the
portion of reinvested dividends not used for the Redemption Plan), if any, in
Mortgage Investments. Unadvanced amounts will be invested in temporary
investments. The Company expects that cash generated from the Company's
investments will be sufficient to pay all of the Company's expenses in the
foreseeable future.
The Company's liquidity is based primarily on interest received from permanent
Mortgage Investments and interest on unadvanced amounts from Originated
Mortgages. In order to qualify as a REIT under the Internal Revenue Code, as
amended, the Company must distribute at least 95% of its taxable income.
For a description of the Company's investment in Originated Mortgages, REMIC and
GNMA Certificates and FHA Insured Project Loan see Notes 2 and 3 of Notes to
Financial Statements.
Results of Operations
Results of operations for the three and six months ended June 30, 1997 and 1996
consisted primarily of interest income of approximately $784,000 and $788,000
and $1,561,000 and $1,396,000 earned on Originated Mortgages (excluding GNMAs),
respectively, approximately $226,000 and $353,000 and $486,000 and $715,000
earned from investments in REMIC and GNMA Certificates and FHA Insured Project
Loan, respectively, and approximately $52,000 and $57,000 and $96,000 and
$125,000 earned from temporary investments, respectively, less administrative
expenses. The total of the annual operating expenses of the Company may not
exceed the greater of (i) 2% of the Average Invested Assets of the Company or
(ii) 25% of the Company's Net Income, unless such excess is approved by the
Independent Trustees. On an annualized basis there was no excess for the six
months ended June 30, 1997 and 1996.
Interest income from Originated Mortgages (excluding GNMAs) increased
approximately $165,000 for the six months ended June 30, 1997 as compared to
1996 primarily due to the additional
25
<PAGE>
advances on the Stonybrook and Columbiana Originated Mortgages since June 30,
1996. The increase for the six months was partially offest by the receipt of
construction yield maintenance interest relating to Stonybrook in the second
quarter of 1996.
Interest income from REMIC and GNMA Certificates and FHA Insured Project Loan
decreased approximately $127,000 and $229,000 for the three and six months ended
June 30, 1997, respectively, as compared to 1996 primarily due to the sale of
one REMIC in August 1996 and the repayment of the FHA Insured Project Loan in
May 1997.
Interest income from temporary investments decreased approximately $29,000 for
the six months ended June 30, 1997 as compared to 1996 primarily due to a
decrease in uninvested proceeds earning interest in the first quarter 1997.
General and administrative-related parties decreased approximately $30,000 for
the six months ended June 30, 1997 as compared to 1996 primarily due to a
decrease in reimbursements to affiliates of the Advisor for certain
administrative and other costs incurred on behalf of the Company.
The increase in realized loss on sale of REMICs and GNMAs and FHA Insured
Project Loan of approximately $53,000 and $64,000 for the three and six months
ended June 30, 1997, respectively, as compared to 1996 is primarily due to the
repayment of the FHA Insured Project Loan in May 1997.
Distribution Policy
The Company has adopted a policy of attempting to maintain stable distributions
to shareholders during the offering and acquisition stages of the Company. In
order to accomplish this result, it has disposed of, and may be required to
continue to dispose of a portion of the CMOs and REMICs during this period. The
effect of this policy has been the following: (a) a portion of the distributions
have constituted, and will continue to constitute, a return of capital; (b)
earlier investors' returns from an investment in the Company will be greater
than later investors' returns; and (c) there will be a decrease in funds
remaining to be invested in Mortgage Investments.
In order to minimize the possible adverse effects of the investment and
distribution policy described above, the Company has made the following
undertakings: (a) the Advisor has agreed not
26
<PAGE>
to retain acquisition fees or loan disposition fees with respect to any portion
of REMICs or CMOs which are sold pursuant to the distribution policy; such fees
totaled $96,112 as of June 30, 1997 and December 31, 1996; (b) the Advisor has
agreed to contribute to the Company funds equal to the amount by which all
trading losses exceed the gains resulting from the sale of REMIC and CMO
investments to supplement the distribution policy; such funds totaled $97,221 as
of June 30, 1997 and December 31, 1996; and (c) the Company has agreed to limit
the total amount which can be returned to investors from the early sale of
investments to support the distributions policy to less than 3% of the Gross
Proceeds. During the six months ended June 30, 1997, no investments were sold in
order to support the distribution policy.
Of the total distributions of $2,783,760 and $2,777,012 made for the six months
ended June 30, 1997 and 1996, $1,074,787 ($.27 per share or 39%) and $941,256
($.24 per share or 34%) represents a return of capital determined in accordance
with generally accepted accounting principles. As of June 30, 1997, the
aggregate amount of the distributions made since the commencement of the
Offering representing a return of capital, in accordance with generally accepted
accounting principles, totaled $8,057,802 ($1.99 per share or 42%). The portion
of the distributions which constitute a return of capital may be significant
during the acquisition stage in order to maintain level distributions to
shareholders. However, as described above, the aggregate amount of the
disposition proceeds used for distributions cannot in the aggregate exceed 3% of
the Gross Proceeds. As of June 30, 1997, the aggregate amount of disposition
proceeds used to support distributions equaled 2.44% of the Gross Proceeds
resulting in approximately $428,000 being available to support future
distributions if necessary.
Management expects that cash flow from operations combined with the balance of
the disposition proceeds above will be sufficient to fund the Company's
operating expenses and to make distributions.
27
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3, 4 Amended and Restated Declaration of Trust, dated as of March 29,
1993, as amended as of July 1, 1993 as previously filed as an Exhibit to
Post-Effective Amendment No. 1 dated November 9, 1993.
Amendment No. 2 to Amended and Restated Declaration of Trust, dated as
of April 5, 1994 as previously filed as an Exhibit to Annual Report on Form
10-K for the year ended December 31, 1993.
10(a) Escrow Agreement, dated as of April 16, 1993 and amended as of
August 25, 1993 as previously filed as an Exhibit to Post-Effective
Amendment No. 1 dated November 9, 1993.
10(b) Advisory Services Agreement, dated as of March 29, 1993, as
amended as of October 26, 1993 as previously filed as an Exhibit to
Post-Effective Amendment No. 1 dated November 9, 1993.
Amendment to Advisory Services Agreement, dated as of December 31,
1993 as previously filed as an Exhibit to Annual Report on Form 10-K for
the year ended December 31, 1993. Third Amendment to Advisory Services
Agreement, dated as of March 29, 1994 as previously filed as an Exhibit to
Annual Report on Form 10-K for the year ended December 31, 1993.
10(c) TRI Capital Corporation Mortgage Note in the principal amount of
$9,350,000 dated December 16, 1993 as previously filed as an Exhibit to
Current Report on Form 8-K dated December 16, 1993.
28
<PAGE>
Item 6. Exhibits and Reports on Form 8-K(continued)
(a) Exhibits (continued)
10(d) Equity Loan Note in the principal amount of $1,156,000 dated
December 16, 1993 as previously filed as an Exhibit to Current Report on
Form 8-K dated December 16, 1993.
10(e) Bridge Loan Note in the principal amount of $115,790, dated
December 16, 1993 as previously filed as an Exhibit to Current Report on
Form 8-K dated December 16, 1993.
10(f) Subordinated Promissory Note by Oxford Apartments, L.C., dated
December 16, 1993 as previously filed as an Exhibit to Current Report on
Form 8-K dated December 16, 1993.
10(g) Limited Operating Guaranty between Al L. Bradley, Jr., Tim L.
Myers, Allied Realty Services, Ltd. and American Mortgage Investors Trust,
dated December 16, 1993 as previously filed as an Exhibit to Current Report
on Form 8-K dated December 16, 1993.
10(h) TRI Capital Corporation Mortgage Note in the principal amount of
$6,800,000, dated December 16, 1993 as previously filed as an Exhibit to
Current Report on Form 8-K dated December 16, 1993.
10(i) Equity Loan Note in the principal amount of $840,500, dated
December 16, 1993 as previously filed as an Exhibit to Current Report on
Form 8-K dated December 16, 1993.
10(j) Bridge Loan Note in the principal amount of $84,210, dated
December 16, 1993 as previously filed as an Exhibit to Current Report of
Form 8-K dated December 1, 1993.
10(k) Subordinated Promissory Note by Cove Apartments, L.C., dated
December 16, 1993 as previously filed as an Exhibit to Current Report on
Form 8-K dated December 16, 1993.
10(l) Limited Operating Guaranty between Al L. Bradley, Jr., Tim L.
Myers, Allied Realty Services, Ltd. and American Mortgage Investors Trust,
dated December 16, 1993 as previously filed as an Exhibit to Current Report
on Form 8-K dated December 16, 1993.
10(m) Cambridge Realty Capital LTD Mortgage Note in the principal
amount of $9,348,000, dated April 5, 1994 as previously filed as an Exhibit
to Current Report on Form 8-K dated April 21, 1994.
29
<PAGE>
Item 6. Exhibits and Reports on Form 8-K(continued)
(a) Exhibits (continued)
10(n) Equity Loan Note in the principal amount of $1,039,000, dated
April 5, 1994 as previously filed as an Exhibit to Current Report on Form
8-K dated April 21, 1994.
10(o) Subordinated Promissory Note by Town and Country IV Apartments,
L.C., dated April 5, 1994 as previously filed as an Exhibit to Current
Report on Form 8-K dated April 21, 1994.
10(p) Limited Operating Guaranty between Leonard E. Wineburgh, Arnold
H. Dwinn and the Company, dated April 5, 1994 as previously filed as an
Exhibit to Current Report on Form 8-K dated April 21, 1994.
10(q) American Capital Resource, Inc. Mortgage Note in the principal
amount of $8,683,000 dated April 5, 1994 as previously filed as an Exhibit
to Current Report on Form 8-K dated April 28, 1994.
10(r) Equity Loan Note in the principal amount of $563,000 dated April
5, 1994 as previously filed as an Exhibit to Current Report on Form 8-K
dated April 28, 1994.
10(s) Subordinated Promissory Note by Columbiana Lakes Apartments,
L.C., dated April 5, 1994 as previously filed as an Exhibit to Current
Report on Form 8-K dated April 28, 1994.
10(t) Limited Operating Guaranty between Anderson G. Wise, Ronald P.
Curry and the Company, dated April 5, 1994 as previously filed as an
Exhibit to Current Report on Form 8-K dated April 28, 1994.
10(u) Rockport Mortgage Corporation Mortgage Note is the principal
amount of $8,500,000 dated December 15, 1995, as previously filed as an
Exhibit to Current Report on Form 8-K dated December 15, 1995.
10(v) Equity Loan Note in the principal amount of $1,039,000 dated
December 15, 1995, as previously filed as an Exhibit to Current report on
Form 8-K dated December 15, 1995.
10(w) Subordinated Promissory Note by SCI-ROEV East Haven Land Limited
Partnership, dated December 15, 1995, as previously filed as an Exhibit to
Current Report on Form 8-K dated December 15, 1995.
30
<PAGE>
Item 6. Exhibits and Reports on Form 8-K(continued)
(a) Exhibits (continued)
10(x) Limited Operating Guaranty between SCI Real Estate Development,
Ltd., and Euro General East haven, Inc., and the Company dated December 15,
1995, as previously filed as an Exhibit to Current Report in Form 8-K dated
December 15, 1995.
27 Financial Data Schedule (filed herewith).
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter.
31
<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.
AMERICAN MORTGAGE INVESTORS TRUST
(Registrant)
Date: August 18, 1997
By: /s/ Alan P. Hirmes
----------------------
Alan P. Hirmes
Senior Vice President and
Chief Financial Officer
Date: August 18, 1997
By: /s/ Richard A. Palermo
----------------------
Richard A. Palermo
Treasurer and
Chief Accounting Officer
32
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted from the financial
statements for American Mortgage Investors Trust and is qualified in its
entirety by reference to such financial statements
</LEGEND>
<CIK> 0000878774
<NAME> AMERICAN MORTGAGE INVESTORS TRUST
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,642,073
<SECURITIES> 12,508,436
<RECEIVABLES> 47,140,467
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 62,310,525
<CURRENT-LIABILITIES> 1,241,334
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 61,069,191
<TOTAL-LIABILITY-AND-EQUITY> 62,310,525
<SALES> 0
<TOTAL-REVENUES> 2,143,028
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 434,055
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,708,973
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,708,973
<EPS-PRIMARY> .42
<EPS-DILUTED> 0
</TABLE>
