-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EWekw5e4/BucVvAva0ZR1+E0PZ+LPvGc6eK24r7794BNWSR+l1M+BRgtvGbM68Xm P0UKsv3S8smAoAjgwgLeIQ== 0000950146-98-000861.txt : 19980528 0000950146-98-000861.hdr.sgml : 19980528 ACCESSION NUMBER: 0000950146-98-000861 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MORTGAGE INVESTORS TRUST CENTRAL INDEX KEY: 0000878774 STANDARD INDUSTRIAL CLASSIFICATION: 6798 IRS NUMBER: 136972380 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-23972 FILM NUMBER: 98623333 BUSINESS ADDRESS: STREET 1: 625 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2124215333 MAIL ADDRESS: STREET 1: 625 MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 10-Q 1 QUARTERLY REPORT 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 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 PART I Item 1. Financial Statements AMERICAN MORTGAGE INVESTORS TRUST Balance Sheets
March 31, December 31, 1998 1997 ----------- ------------ (Unaudited) (Audited) ASSETS 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 ============ ============
See Accompanying Notes to Financial Statements 2 AMERICAN MORTGAGE INVESTORS TRUST Statements of Operations (Unaudited)
Three Months Ended March 31, ------------------- 1998 1997 ------------------- Revenues: 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 $ .23 $ .24 ========= ===========
See Accompanying Notes to Financial Statements 3 AMERICAN MORTGAGE INVESTORS TRUST Statement of Changes in Shareholders' Equity (Unaudited) Net Unrealized
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 ------ ------ ------ ------ ------- ---------- ------------- ----- 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 ============ ============ ============ ============ ============= ============== ================= =============
See accompanying notes to financial statements. 4 AMERICAN MORTGAGE INVESTORS TRUST Statements of Cash Flows (Unaudited)
Three Months Ended March 31, ----------------------------- 1998 1997 ----------------------------- Cash flows from operating activities: 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 ----------- -----------
5 AMERICAN MORTGAGE INVESTORS TRUST Statements of Cash Flows (continued) (Unaudited)
Three Months Ended March 31, ------------------------- 1998 1997 ------------------------- Cash flows from investing activities: 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 ========== ==========
6 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 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 4,097,400 and 3,843,212, 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 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 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:
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 - - -------- ------ ------- --------- ---------- -------- ---------- ---------- ------- 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 =========== ========== =========== ======== =========== ===========
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 ----- -------- --------- -------- -------- -------- ------ 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 ========== ========== =========== =========== ======== ======== ========
10 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 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:
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 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) =========== =========== =========
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 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 ======= ======== ======== =========== ===========
Interest Earned by the 1998 Amor- Net Company tization/ Interest Seller for 1998 (Accretion) Earned - - ------ ---------- ------------ ------ 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 ======== ======= ========
12 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 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 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:
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 - - -------- ----------- -------- ------- ----------- ----------- -------- -------- ----------- 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 =========== ======== ======= =========== =========== ======== ======== ===========
15 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:
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 =========
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 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 $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 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 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 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 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 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 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 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 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 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 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: May 15, 1998 By: /s/ John B. Roche ----------------- John B. Roche Senior Vice President and Chief Financial and Accounting Officer EX-27 2 FDS ART. 5 FDS FOR 1ST QUARTER
5 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 0000878774 American Mortgage Investors Trust 1 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 2,423,043 11,602,252 47,242,010 0 0 0 0 0 61,279,354 1,375,049 0 0 0 0 59,904,305 61,279,354 0 1,103,507 0 0 143,400 0 0 960,107 0 0 0 0 0 960,107 .23 0
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