SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A-1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
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 [ ]
1
<PAGE>
PART I
Item 1. Financial Statements
AMERICAN MORTGAGE INVESTORS TRUST
Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
----------- ------------
(Unaudited) (Audited)
ASSETS
<S> <C> <C>
Investments in loans (Note 2) $ 46,603,187 $ 46,792,853
Investment in REMIC and GNMA
Certificates and FHA
Insured Project Loan (Note 3) 11,602,252 12,495,878
Cash and cash equivalents 2,423,043 1,840,715
Organization costs (net of
accumulated amortization
of $47,500 and $45,000,
respectively) 2,500 5,000
Deferred costs 9,549 9,549
Accrued interest receivable 638,823 501,927
------------ ------------
Total assets $ 61,279,354 $ 61,645,922
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and
accrued expenses $ 51,465 $ 49,123
Due to affiliates (Note 4) 1,323,584 1,210,874
------------ ------------
Total liabilities 1,375,049 1,259,997
------------ ------------
Commitments (Note 5)
Shareholders' equity:
Shares of beneficial interest;
$.10 par value; 12,500,000
shares authorized; 4,109,670
and 4,087,583 shares issued
and outstanding, respectively 410,968 408,759
Treasury stock; $.10 par value;
270,425 and 248,339 shares,
respectively (27,043) (24,834)
Additional paid-in capital 68,849,733 68,849,725
Distribution in excess of net income (9,464,381) (9,021,323)
Accumulated other comprehensive income:
Net unrealized gain on marketable
securities (Note 3) 135,028 173,598
------------ ------------
Total shareholders' equity 59,904,305 60,385,925
------------ ------------
Total liabilities and shareholders'
equity $ 61,279,354 $ 61,645,922
============ ============
</TABLE>
See Accompanying Notes to Financial Statements
2
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1998 1997
-------------------
Revenues:
<S> <C> <C>
Interest income:
Mortgage loans (Note 2) $ 845,699 $ 776,512
REMIC and GNMA
Certificates and FHA Insured
Project Loan (Note 3) 233,385 260,241
Temporary investments 24,423 43,916
--------- ----------
Total revenues 1,103,507 1,080,669
--------- ---------
Expenses:
General and administrative 30,109 34,706
General and administrative -
related parties (Note 4) 110,423 115,799
Realized loss on sale
of REMICs and GNMAs
and FHA Insured
Project Loan (Note 3) 368 9,996
Amortization 2,500 2,500
--------- ----------
Total expenses 143,400 163,001
--------- ----------
Net income $ 960,107 $ 917,668
========= =========
Basic net income
per weighted
average share $ .25 $ .24
========= ===========
</TABLE>
See Accompanying Notes to Financial Statements
3
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Statement of Changes in Shareholders' Equity
(Unaudited)
Net Unrealized
<TABLE>
<CAPTION>
Shares of Gain (Loss) on
Beneficial Interest Treasury Stock Additional Distribution Securities
------------------- ------------------- Paid-in in Excess of Avail-
Shares Amount Shares Amount Capital Net Income able for Sale Total
------ ------ ------ ------ ------- ---------- ------------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at 4,087,583 $ 408,759 (248,339) $(24,834) $68,849,725 $(9,021,323) $173,598 $60,385,925
January 1,
1998
Net Income 0 0 0 0 0 960,107 0 960,107
Distributions 0 0 0 0 0 (1,403,165) 0 (1,403,165)
Purchase of 0 0 (22,086) (2,209) (341,891) 0 0 (344,100)
Treasury
Stock
Issuance of 22,087 2,209 0 0 341,899 0 0 344,108
shares of
beneficial
interest
Change in net 0 0 0 0 0 0 (38,570) (38,570)
unrealized
gain on
securities
available
for sale
------------ ------------ ------------ ------------ ------------- -------------- ----------------- -------------
Balance at 4,109,670 $ 410,968 (270,425) $(27,043) $68,849,733 $(9,464,381) $135,028 $59,904,305
March 31,
1998
============ ============ ============ ============ ============= ============== ================= =============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------
1998 1997
-----------------------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 960,107 $ 917,668
Adjustments to reconcile net income
to net cash provided by
operating activities
Amortization expense -
organization costs 2,500 2,500
Amortization expense - loan
premium and origination costs 125,407 119,207
Amortization of REMIC
and GNMA and FHA
Insured Project Loan discount (10,420) (9,869)
Loss on sale of REMIC
certificates 0 9,406
Loss on sale of GNMAs 368 457
Loss on sale of FHA
Insured Project Loan 0 134
Changes in operating assets and
liabilities:
(Increase) decrease in accrued
interest receivable (136,896) 13,898
Increase in due to affiliates 112,710 115,981
Increase (decrease) in accounts
payable and accrued expenses 2,342 (46,179)
----------- -----------
Total adjustments 96,011 205,535
----------- -----------
Net cash provided by
operating activities 1,056,118 1,123,203
----------- -----------
</TABLE>
5
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Statements of Cash Flows
(continued)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------
1998 1997
-------------------------
Cash flows from investing activities:
<S> <C> <C>
Investments in loans 0 (1,484,076)
Principal repayments of loans 64,259 46,390
Principal repayments of GNMAs 58,136 25,108
Principal repayments of REMICs 806,972 278,514
Principal repayments of FHA
Insured Project Loan 0 11,799
---------- ----------
Net cash provided by (used in)
investing activities 929,367 (1,122,265)
---------- ----------
Cash flows from financing activities:
Distributions to shareholders (1,403,165) (1,403,764)
Proceeds from issuance of shares
of beneficial interest 344,108 358,577
Purchase of Treasury Stock (344,100) 0
---------- ----------
Net cash used in financing
activities (1,403,157) (1,045,187)
---------- ----------
Net increase (decrease) in cash and
cash equivalents 582,328 (1,044,249)
Cash and cash equivalents at
beginning of period 1,840,715 4,828,561
---------- ----------
Cash and cash equivalents at
end of period $2,423,043 $3,784,312
========== ==========
Supplemental schedule of non cash
investing activities:
Decrease in deferred costs $ 0 $ 3,032
Increase in investments
in loans $ 0 $ (3,032)
---------- ----------
$ 0 $ 0
========== ==========
</TABLE>
6
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
March 31, 1998
(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").
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. Since November 30, 1994, 251,588 shares have been 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 March 31, 1998, 270,253 shares have been
redeemed, for an aggregate price of $4,948,969. As of March 31, 1998, the
backlog of shares to be redeemed is 123,704. The Board subsequently adopted a
policy to adjust the redemption price annually to reflect the then net asset
value of a share of the Company's stock. This new policy is effective for
redemptions with respect to quarters ended September 30, 1997 and thereafter.
With respect to the Reinvestment Plan, the Board also adopted a policy to adjust
the reinvestment price at which participants may acquire additional shares under
the Reinvestment Plan to also reflect the then net asset value of a share of the
Company's stock. The change in policy with respect to the reinvestment price was
effective November 30, 1997.
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.
7
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
March 31, 1998
(Unaudited)
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, 1997. 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 March 31, 1998, the results of operations and cash flows
for the three months ended March 31, 1998 and 1997. However, the operating
results for the three months ended March 31, 1998 may not be indicative of the
results for the year.
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, 1997.
In February 1997, the Financial Accounting Standards Board (the "FASB") issued
SFAS No. 128, "Earnings per Share" which is effective for periods ending after
December 15, 1997. This statement requires that the current calculations of
earnings per share be replaced by basic and diluted earnings per share
calculations. The Company has determined that the application of SFAS No. 128
had no effect on its calculation of earnings per share.
Net income per weighted average share is computed based on the net income for
the period, divided by the weighted average number of shares outstanding for the
period. The weighted average number of shares outstanding for the three months
ended March 31, 1998 and 1997 were 3,849,059 and 3,850,321, respectively.
The Company adopted SFAS No. 130, Reporting Comprehensive Income on January 1,
1998. SFAS No. 130 establishes standards for reporting and displaying
comprehensive income and its components in a financial statement that is
displayed with the same prominence as other financial statements.
Reclassification of financial statements for earlier periods, provided for
comparative purposes, is required. The statement also requires the accumulated
balance of other comprehensive income to be displayed
8
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
March 31, 1998
(Unaudited)
separately from retained earnings and additional paid-in capital in the equity
section of the balance sheet. Total comprehensive income for the quarters ended
March 31, 1998 and 1997 was $921,537 and $781,066, respectively.
The Company adopted SFAS No. 131, Disclosures about Segments of an Enterprise
and Related Information on January 1, 1998. SFAS No. 131 establishes standards
for reporting information about operating segments in annual and interim
financial statements. Operating segments are defined as components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. Categories required to be
reported as well as reconciled to the financial statements are segment profit or
loss, certain specific revenue and expense items, and segment assets. The
Company operates in one segment, investment in mortgages or mortgage backed
securities.
9
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
March 31, 1998
(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 $46,837,304.
Information relating to investments in Originated Mortgages and Additional Loans
as of March 31, 1998 and December 31, 1997 is as follows:
<TABLE>
<CAPTION>
Date of
Invest-
ment/ Amounts Advanced Total
Final ----------------------------------- Amounts Out
Matu Total Advanced -standing
Descrip -rity Mortgage Additional Amounts Amounts and Loan
Property -tion Date Loans Loans Advanced Unadvanced Unadvanced Balance
- - -------- ------ ------- --------- ---------- -------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
The Cove 308 12/93 $ 6,800,000 $ 840,500 $ 7,640,500 $ 0 $ 7,724,710 $7,450,009
Apts. Apt 1/29
Houston, Units (D)
TX (A)
Oxford on 405 12/93 9,350,000 1,156,000 10,506,000 0 10,621,790 10,244,076
Greenridge Apt. 1/29
Apts. Units (D)
Houston,
TX (A)
Town & 330 4/94 9,348,000 1,039,000 10,387,000 0 10,387,000 10,135,677
Country IV Apt. 5/29
Apts. Units (E)
Urbana,
IL (B)
Columbiana 204 4/94 8,276,895 563,000 8,839,895 406,105 9,246,000 8,824,939
Lakes Apts. Apt. 11/35
Columbia, Units (F)
SC (C)
Stony Brook 125 12/95 8,500,000 763,909 9,263,909 0 9,263,909 9,239,747
Village II Apt. 6/37
Apts. Units (F)
East Haven,
CT (G)
----------- ---------- ----------- -------- ----------- -----------
Total $42,274,895 $4,362,409 $46,637,304 $406,105 $47,243,409 $45,894,448
=========== ========== =========== ======== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Interest
Accum Balance Earned Less
Origi- -ulated at Balance at by the 1998 Net
nation Amor- Mar. 31, December Company Amor- Interest
Costs tization 1998 (H) 31, 1997 for 1998 tization Earned
----- -------- --------- -------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
The Cove $ 444,215 $ 434,329 $7,459,895 $7,498,346 $149,201 $25,242 $123,959
Apts.
Houston,
TX (A)
Oxford on 610,814 597,324 10,257,566 10,310,443 274,674 34,715 239,959
Greenridge
Apts.
Houston,
TX (A)
Town & 603,895 459,443 10,280,129 10,327,840 204,834 29,074 175,760
Country IV
Apts.
Urbana,
IL (B)
Columbiana 532,835 219,415 9,138,359 9,158,473 166,147 14,076 152,071
Lakes Apts.
Columbia,
SC (C)
Stony Brook 413,492 186,001 9,467,238 9,497,751 176,250 22,300 153,950
Village II
Apts.
East Haven,
CT (G)
---------- ---------- ----------- ----------- -------- -------- --------
Total $2,605,251 $1,896,512 $46,603,187 $46,792,853 $971,106 $125,407 $845,699
========== ========== =========== =========== ======== ======== ========
</TABLE>
10
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
March 31, 1998
(Unaudited)
(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% were guaranteed by the developer until December 1996.
(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. Payments at the rate of 9.167% were guaranteed
by the developer until June 1997.
(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. Payments at the rate of
8.678% are guaranteed by the developer until December 1998.
(D) The Originated Mortgages have terms of 35 years, subject to mandatory
prepayment at any time after 10 years and upon one year's notice.
(E) 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.
(F) 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.
(G) 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.
(H) Aggregate cost for federal income tax purposes is $45,707,370.
11
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
March 31, 1998
(Unaudited)
NOTE 3 - Investment in REMIC and GNMA Certificates and FHA Insured Project Loan
Information relating to investments in REMIC and GNMA Certificates and FHA
Insured Project Loan as of March 31, 1998 and December 31, 1997 is as follows:
<TABLE>
<CAPTION>
Original
Date Purchase
Purchased Price Premium
/Final Stated Including Principal at (Discount) at
Certificate Payment Interest Prem/ March March
Seller Number Date Rate (Disc) 31, 1998 31, 1998
- - ------ --------- ------- ------ --------- --------- --------
GNMA Certificates
<S> <C> <C> <C> <C> <C> <C>
Bear Stearns 0355540 7/27/94 7.125% $ 2,407,102 $ 2,582,854 $(238,914)
3/15/29
Malone Mortgage 0382486 7/28/94 8.500% 2,197,130 2,165,254 (8,119)
8/15/29
Goldman Sachs 0328502 7/29/94 8.250% 3,928,615 3,694,220 (3,461)
7/15/29
SunCoast Capital Group, Ltd. G22412(6) 6/23/97 7.000% 1,981,566 1,939,802 (12,730)
4/20/27
REMIC Certificates
Bear Stearns FNMA 8/27/93 6.500% 10,160,938 0 0
1992-17G(1) Sold (1)
Bear Stearns FHLMC 10/26/93 4.850% 4,838,600 0 0
G-024C Sold
Meridan Capital Markets FHLMC 10/25/94 5.750% 1,721,291 0 0
1292ZA 6/15/97
Meridan Capital Markets FNMA 10/25/94 5.250% 258,357 0 0
1992-153A 9/25/97
Meridan Capital Markets FHLMC 10/27/94 6.500% 742,538 0 0
1580A 9/15/98(5)
Meridan Capital Markets FHLMC 11/9/94 7.350% 269,658 0 0
1258C 5/15/04(2)
SunCoast Capital Group, Ltd. FHLMC 3/30/97 7.000% 507,288 0 0
17218(4) 2/1/98 (6)
SunCoast Capital Group, Ltd. FHLMC 5/30/97 6.500% 251,967 0 0
17161(4) 2/1/98 (7)
SunCoast Capital Group, Ltd. FHLMC 6/23/97 7.000% 147,437 0 0
17125(4) 4/20/27 (8)
SunCoast Capital Group, Ltd. FNMA 6/30/97 7.500% 983,125 1,000,000 (16,875)
1997-42V(4) 10/18/09
FHA Insured Loan Project
Donaldson, Lufkin & Jenrette 092-11005 1/3/95 8.600% 3,374,679 0 0
4/1/19(3)
----------- ----------- ---------
Total $33,770,291 $11,382,130 $(280,099)
=========== =========== =========
</TABLE>
<TABLE>
<CAPTION>
Loan
Accumulated Origination Unrealized
Amortization Costs at Gain (Loss) Balance at Balance at
at March March at March March December
Seller 31, 1998 31, 1998 31, 1998 31, 1998 31, 1997
- - ------ -------- -------- -------- ----------- -----------
GNMA Certificates
<S> <C> <C> <C> <C> <C>
Bear Stearns $74,034 $ 79,907 $88,402 $2,586,283 $2,604,394
Malone Mortgage 2,627 73,539 18,226 2,251,527 2,253,185
Goldman Sachs 1,218 125,822 (7,557) 3,810,242 3,833,576
SunCoast Capital Group, Ltd. 5,745 0 22,594 1,955,411 1,982,055
REMIC Certificates
Bear Stearns 0 0 0 0 0
Bear Stearns 0 0 0 0 0
Meridan Capital Markets 0 0 0 0 0
Meridan Capital Markets 0 0 0 0 0
Meridan Capital Markets 0 0 0 0 0
Meridan Capital Markets 0 0 0 0 0
SunCoast Capital Group, Ltd. 0 0 0 0 473,051
SunCoast Capital Group, Ltd. 0 0 0 0 198,075
SunCoast Capital Group, Ltd. 0 0 0 0 148,495
SunCoast Capital Group, Ltd. 2,301 0 13,363 998,789 1,003,047
FHA Insured Loan Project
Donaldson, Lufkin & Jenrette 0 0 0 0 0
------- -------- -------- ----------- -----------
Total $85,925 $279,268 $135,028 $11,602,252 $12,495,878
======= ======== ======== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Interest
Earned
by the 1998 Amor- Net
Company tization/ Interest
Seller for 1998 (Accretion) Earned
- - ------ ---------- ------------ ------
<S> <C> <C> <C>
GNMA Certificates
Bear Stearns $ 46,003 $ 5,053 $ 51,056
Malone Mortgage 45,997 179 46,176
Goldman Sachs 76,324 83 76,407
SunCoast Capital Group, Ltd. 34,255 4,338 38,593
REMIC Certificates
Bear Stearns 0 0 0
Bear Stearns 0 0 0
Meridan Capital Markets 0 0 0
Meridan Capital Markets 0 0 0
Meridan Capital Markets 0 0 0
Meridan Capital Markets 0 0 0
SunCoast Capital Group, Ltd. 767 0 767
SunCoast Capital Group, Ltd. 869 0 869
SunCoast Capital Group, Ltd. 0 0 0
SunCoast Capital Group, Ltd. 18,750 767 19,517
FHA Insured Loan Project
Donaldson, Lufkin & Jenrette 0 0 0
-------- ------- --------
$222,965 $10,420 $233,385
======== ======= ========
</TABLE>
12
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
March 31, 1998
(Unaudited)
(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 both November 4, 1993 and
February 1, 1994, the Company sold $200,000 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, 1997, 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.
(2) The stated final payment date was May 15, 2004. The actual final payment
amounting to $7,099 was received on April 15, 1997.
(3) The stated final payment date was April 1, 2019. The actual final payment
amounting to $3,392,445 was received on May 23, 1997.
(4) 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).
(5) The stated final payment date was September 25, 1998. The actual final
payment amounting to $17,952 was received on November 15, 1997.
(6) The stated final payment date was February 1, 1998. The actual final payment
amounting to $131,188 was received on February 20, 1998.
13
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
March 31, 1998
(Unaudited)
(7) The stated final payment date was February 1, 1998. The actual final payment
amounting to $184,818 was received on February 20, 1998.
(8) The stated final payment date was April 20, 2027. The actual final payment
amounting to $145,942 was received January 22, 1998.
14
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
March 31, 1998
(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 March 31, 1998 and
December 31, 1997 are as follows:
<TABLE>
<CAPTION>
Gross Gross Gross Gross
Amortized Unrealized Unrealized Amortized Unrealized Unrealized Fair
Cost at Gain at (Loss) at Fair Value Cost at Gain at (Loss) at Value of
March March March at March December December December December
Security 31, 1998 31, 1998 31, 1998 31, 1998 31, 1997 31, 1997 31, 1997 31, 1997
- - -------- ----------- -------- ------- ----------- ----------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fannie Mae REMICs $ 985,426 $ 13,363 $ 0 $ 998,789 $ 984,659 $ 18,388 $ 0 $ 1,003,047
Federal Home Loan 0 0 0 0 806,972 12,649 0 819,621
REMICs
Ginnie Mae Certificates 10,481,798 129,222 (7,557) 10,603,463 10,530,649 146,012 (3,451) 10,673,210
----------- -------- ------- ----------- ----------- -------- -------- -----------
$11,467,224 $142,585 $(7,557) $11,602,252 $12,322,280 $177,049 $ (3,451) $12,495,878
=========== ======== ======= =========== =========== ======== ======== ===========
</TABLE>
15
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
March 31, 1998
(Unaudited)
The change in the unrealized loss for the three months ended March 31, 1998 and
the year ended December 31, 1997 were as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized loss at January 1, 1997 $ (81,386)
Sale of securities during the year ended
December 31, 1997 included in
unrealized loss at December 31, 1996 15,647
Unrealized gain on securities
purchased during the twelve months
ended December 31, 1997 53,925
Unrealized gain on securities held at
December 31, 1997 and 1996 185,412
---------
Unrealized gain at December 31, 1997 $ 173,598
Sale of securities during the three months
ended March 31, 1998 included in
unrealized gain at December 31, 1997 13,235
Unrealized loss on securities held at
March 31, 1998 and December 31, 1997 (51,805)
---------
Unrealized gain at March 31, 1998 $ 135,028
=========
</TABLE>
For the three months ended March 31, 1998, there were losses of $368 (including
acquisition fees and expenses) on principal repayments of REMICs and GNMAs.
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 $89,963 and
$89,469 for the three months ended March 31, 1998 and 1997, 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
16
<PAGE>
AMERICAN MORTGAGE INVESTORS TRUST
Notes to Financial Statements
March 31, 1998
(Unaudited)
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 March 31, 1998 and December 31, 1997, 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 Loans; (acquisition fees and acquisition expense allowance
approximated $2,545,000 and $725,000 at both March 31, 1998 and December 31,
1997); 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 March 31, 1998 and 1997
were $20,460 and $26,330, 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 March 31, 1998 and December 31, 1997; (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 March 31,
1998 and December 31, 1997; 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
March 31, 1998, the aggregate amount of disposition proceeds used to support
distributions equaled 2.44% of the Gross Proceeds, resulting in approximately
17
<PAGE>
$428,000 being available to support future distributions if necessary.
Note 5 - Subsequent Event
On May 15, 1998, a distribution of $1,371,611 and $17,272 was paid to the
Investors and the Advisor, respectively, representing the 1998 first quarter
distribution. The distribution was funded from cash collections of debt service
payments and interest income through approximately the distribution date, May
15, 1998.
18
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
The Company has completed the offering and acquisition stage and 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 Developments.
Not more than an aggregate of 7% of the Net Proceeds raised in the Offering may
be invested in Additional Loans. As of March 31, 1998, 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 permitted by the provisions of the Redemption Plan, the Board of Trustees
implemented the following change to the calculation of the redemption price for
the quarter ended June 30, 1997: the original $19 per share redemption price was
reduced to reflect any return of principal received by shareholders. As of June
30, 1997, the amount of principal which had been distributed to shareholders was
$1.53 per share and, therefore, the redemption price was $17.47 per share ($19
per share less $1.53 per share) for redemptions which occurred in October 1997
for the quarter ended June 30, 1997. The Board subsequently adopted a policy to
adjust the redemption price each quarter to reflect the then net asset value of
a share of the Company's stock. This new policy is effective for redemptions
with respect to quarters ended September 30, 1997 and thereafter. As of March
31, 1998, the backlog of shares to be redeemed is 123,704. With respect to the
Reinvestment Plan, the Board also adopted a policy to adjust the reinvestment
price at which participants may acquire additional shares under the Reinvestment
Plan to also reflect the then net assets value of a share of the Company's
stock. The change in policy with respect to the reinvestment price is effective
November 30, 1997.
During the three months ended March 31, 1998, cash and cash equivalents
increased approximately $582,000 due to principal repayments of loans, GNMAs and
REMICs ($929,000) and cash provided by operating activities ($1,056,000) which
exceeded distributions to shareholders ($1,403,000). Included in the adjustments
to reconcile the net income to cash provided by operating activities is net
amortization in the amount of $117,000.
19
<PAGE>
For a description of the Company's investments in Originated Mortgages, REMIC
and GNMA Certificates (see Notes 2 and 3 of Notes to Financial Statements).
Net unrealized gains on REMIC and GNMA investments included in shareholders'
equity pursuant to Statement of Financial Accounting Standards No. 115
aggregated $135,028 at March 31, 1998. This represents a decrease of $38,570 in
the unrealized gain for the three months ended March 31, 1998, of which an
increase of $13,235 is attributable to the sale of securities (which resulted in
a realized loss of $368) and a decrease of $51,805 is attributable to a decrease
in market prices for the investments held at March 31, 1998 and December 31,
1997. As of May 12, 1998, the unrealized gain was approximately $159,000.
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. 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 expects to use its reinvestment dividend to redeem shares through
its Redemption Plan and does not expect to have reinvested dividends available
for investment. 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
20
<PAGE>
as a REIT under the Internal Revenue Code, as amended, the Company must, among
other things, distribute at least 95% of its taxable income.
Results of Operations
Results of operations for the three months ended March 31, 1998, primarily
consist of interest income from Originated Mortgages, REMIC certificates and
temporary investments less administrative expenses, realized losses on sale of
REMICs and GNMAs and amortization expenses. Results of operations for the three
months ended March 31, 1997, primarily consists of interest income from
Originated Mortgages, REMIC certificates, a FHA Insured Project Loan and
temporary investments less administrative expenses, realized losses on sale of
REMICs and GNMAs, and a FHA Insured Project Loan and amortization 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 such excess for the three months
ended March 31, 1998 and 1997.
Interest income from Originated Mortgages (excluding GNMAs) increased
approximately $69,000 for the three months ended March 31, 1998 as compared to
the corresponding period in 1997, primarily due to the additional advances on
the Stonybrook Originated Mortgage since March 31, 1997 and the receipt of cash
flow interest in 1998 for Oxford.
Interest income from REMIC and GNMA Certificates and FHA Insured Project Loan
decreased approximately $27,000 for the three months ended March 31, 1998 as
compared to the corresponding period in 1997 primarily due to the repayment of
the FHA Insured Project Loan in May 1997, partially offset by the purchase of
two REMICs in May 1997 and two REMICs and one GNMA in June 1997.
Interest income from temporary investments decreased approximately $19,000 for
the three months ended March 31, 1998 as compared to the corresponding period in
1997, primarily due to a decrease in temporarily invested proceeds earning
interest in 1998.
Realized loss on sale of REMICs and GNMAs and FHA Insured Project Loan decreased
approximately $10,000 for the three
21
<PAGE>
months ended March 31, 1998 as compared to the corresponding period in 1997
primarily due to the repayment of four REMICs in 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. The Company has completed the
offering and acquisition stage and therefore, the Board reviewed and changed the
current distribution policy. Beginning in 1998, the Company has change its
distribution policy. The new policy calls for quarterly distributions which more
closely reflect collections of interest payments.
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 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 March 31,
1998 and December 31, 1997; (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 March 31, 1998 and
December 31, 1997; 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 three
months ended March 31, 1998, no investments were sold in order to support the
distribution policy.
Of the total distributions of $1,403,165 and $1,403,764 made for the three
months ended March 31, 1998 and 1997, $443,058 ($.12 per share or 32%) and
$486,096 ($.13 per share or 35%) represents a return of capital determined in
accordance with generally accepted accounting principles. As of March 31, 1998,
the aggregate
22
<PAGE>
amount of the distributions made since the commencement of the Offering
representing a return of capital, in accordance with generally accepted
accounting principles, totaled $9,455,790. The portion of the distributions
which constitutes a return of capital was 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
March 31, 1998, 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 continue to make distributions as determined by the Board
on a quarterly basis.
Year 2000 Compliance
As the year 2000 approaches, an issue has emerged regarding how existing
application software programs and operating systems can accommodate this date
value. Failure to adequately address this issue could have potentially serious
repercussions. The Advisor is in the process of working with the Company's
service providers to prepare for the year 2000. Based on information currently
available, the Company does not expect that it will incur significant operating
expenses or be required to incur material costs to be year 2000 compliant.
23
<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.
24
<PAGE>
Item 6. Exhibits and Reports on Form 8-K (continued)
(a) Exhibits (continued)
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.
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.
25
<PAGE>
Item 6. Exhibits and Reports on Form 8-K (continued)
(a) Exhibits (continued)
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.
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.
26
<PAGE>
Item 6. Exhibits and Reports on Form 8-K (continued)
(a) Exhibits (continued)
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.
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.
27
<PAGE>
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.
AMERICAN MORTGAGE INVESTORS TRUST
(Registrant)
Date: June 9, 1998
By: /s/ John B. Roche
-----------------
John B. Roche
Senior Vice President and
Chief Financial and Accounting Officer
<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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,423,043
<SECURITIES> 11,602,252
<RECEIVABLES> 47,242,010
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 61,279,354
<CURRENT-LIABILITIES> 1,375,049
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 59,904,305
<TOTAL-LIABILITY-AND-EQUITY> 61,279,354
<SALES> 0
<TOTAL-REVENUES> 1,103,507
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 143,400
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 960,107
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 960,107
<EPS-PRIMARY> .25
<EPS-DILUTED> 0
</TABLE>
