ITEM 1. BUSINESS
CBT Corporation ("CBT"), is a multi-bank holding corporation, registered under the Bank Holding Company Act of 1956 ("the Act"), as amended. It was organized under the laws of the Commonwealth of Kentucky in March 1983. CBT maintains its principal headquarters in Paducah, Kentucky. It is the parent company of four banks, the Bank of Marshall County ("BMC"), Citizens Bank & Trust Company ("Citizens"), Graves County Bank ("GCB"), and Pennyrile Citizens Bank and Trust Company ("PCB"), and one federal savings bank, United Commonwealth Bank, FSB ("UCB"). Fidelity Credit Corporation ("FCC"), a consumer finance company, is a wholly-owned subsidiary of Citizens. United Commonwealth Service Corporation ("UCSC"), which provides brokerage services to customers, is a wholly-owned subsidiary of UCB. CBT provides financial services primarily in western Kentucky through its 18 bank locations, with the consumer finance company having 27 locations throughout Kentucky. At December 31, 1996, CBT had total consolidated assets of $960.6 million, total loans net of unearned interest of $687.2 million and total stockholders' equity of $110.2 million. CBT had 442 full-time equivalent employees at December 31, 1996.
CBT offers its products through direct mail as well as through its 45 locations. To meet the data processing needs of its banks, CBT uses the services of a third party vendor.
CBT has acquired banks and branches over the last three years as a part of an overall strategy to expand its base of business. The Corporation will continue to pursue appropriate acquisition opportunities.
CITIZENS BANK & TRUST COMPANY OF PADUCAH
Citizens was authorized to commence business in 1888 and conducts a general banking business encompassing most of the services, both commercial and consumer, which banks may lawfully provide, including the acceptance of demand, savings, and time deposits; the making of commercial, consumer, mortgage and credit card loans; personal and corporate trust services, safe deposit facilities, and correspondent banking services. Additional services include providing brokerage services through a strategic alliance with J C Bradford & Co., a Nashville, Tennessee-based regional brokerage firm. While primarily serving customers in the Paducah and McCracken County area, Citizens' market area also includes several other counties in western Kentucky and nearby southern Illinois. At December 31, 1996 before intercompany eliminations, Citizens had total assets of approximately $613.9 million.
Citizens conducts business in its principal office at 333 Broadway, Paducah, Kentucky and in 5 branch locations located within McCracken County.
Citizens is also the sole shareholder of Fidelity Credit Corporation, described on the following page.
FIDELITY CREDIT CORPORATION
FCC, a Kentucky corporation, engages in the business of making consumer loans, both secured and unsecured. FCC operates under the Consumer Loan Act and Industrial Loan Act of Kentucky. In addition to its corporate office in Paducah, FCC operates 27 offices throughout Kentucky. Two new FCC offices were opened in 1996.
FCC's operations are primarily financed by short and long-term borrowings from two regional institutions. In 1996, Citizens provided a portion of FCC's short term funding. CBT guaranteed a portion of FCC's borrowings from the regional institutions. At December 31, 1996, before intercompany eliminations, FCC had total assets of approximately $33.5 million.
PENNYRILE CITIZENS BANK AND TRUST COMPANY
PCB, organized in 1976, is a full-service commercial bank which provides services similar to that of Citizens. PCB's principal office is located at 2800 Fort Campbell Boulevard in Hopkinsville and has three additional branches located within Christian County. At December 31, 1996, before intercompany eliminations, PCB had total assets of approximately $74.4 million.
BANK OF MARSHALL COUNTY
BMC, organized in 1903, is a full service commercial bank which provides services similar to that of Citizens. BMC's principal office is located in Benton, Kentucky and it has two branches located in Draffenville and Gilbertsville, Kentucky. At December 31, 1996, before intercompany eliminations, BMC had total assets of approximately $156.9 million.
GRAVES COUNTY BANK
GCB, organized in 1898, is a full service commercial bank which provides services similar to that of Citizens. GCB has four locations in Graves County, Kentucky and maintains its main office in Mayfield, Kentucky. At December 31, 1996 GCB had assets, before inter-company eliminations, of $46.3 million.
UNITED COMMONWEALTH BANK, F.S.B.
UCB, located in Murray, Kentucky, is a federal savings bank chartered on September 8, 1992 and opened on September 14, 1992. UCB provides the full range of banking activities typically associated with a commercial bank. In the fourth quarter of 1995, UCB formed UCSC, a wholly-owned subsidiary, for the purposes of providing brokerage services to customers through the J. C. Bradford alliance. At December 31, 1996, UCB had assets, before intercompany eliminations, of $52.2 million.
SUPERVISION AND REGULATION
BANK HOLDING COMPANIES AND SAVINGS AND LOAN HOLDING COMPANIES As a registered bank holding company, CBT is regulated under the Act and is subject to supervision and regular inspection by the Board of Governors of the Federal Reserve System ("Federal Reserve Board"). The Act requires, among other things, the prior approval of the Federal Reserve Board in any case where CBT proposes to (i) acquire all or substantially all of the assets of any bank, (ii) acquire direct or indirect ownership or control of more than 5 percent of the voting shares of any bank or (iii) merge or consolidate with any bank holding company.
Under the Act, CBT is prohibited, with certain exceptions, from acquiring direct or indirect ownership or control of more than 5% of any class of voting shares of any non-banking corporation. Further, CBT may not engage in any business other than managing and controlling banks or furnishing certain specified services to subsidiaries, and may not acquire voting control of non-banking corporations except those corporations engaged in businesses or furnishing services which the Federal Reserve Board deems to be so closely related to banking as "to be a proper incident thereto." The Federal Reserve Board has determined that a number of activities meet this standard including making and servicing loans; performing certain fiduciary functions; leasing real and personal property; underwriting and dealing in government obligations and certain money market instruments; underwriting and dealing, to a limited extent, in corporate debt obligations and other securities that banks may not deal in; providing foreign exchange advisory and transactional services; and owning, controlling or operating a savings association, if the savings association engages only in deposit-taking activities and lending and other activities that are permissible for bank holding companies. The Board, from time to time, may revise the list of permitted activities.
Bank holding companies and their subsidiary banks are also subject to the provisions of the Community Reinvestment Act of 1977, as amended ("CRA"). Under the CRA, each subsidiary bank's record in meeting the credit needs of the community served by the bank, including low- and moderate-income neighborhoods, is annually assessed by that bank's primary regulatory authority. When a bank holding company applies for approval to acquire a bank or other bank holding company, the Federal Reserve Board will review the assessment of each subsidiary bank of the applicant bank holding company, and such records may be the basis for denying the application.
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the "Interstate Banking Act") has removed state law barriers to interstate bank acquisitions and, effective June 1, 1997, will permit the consolidation of interstate banking operations. Under the Interstate Banking Act, adequately capitalized and managed bank holding companies may now acquire banks in any state, subject to CRA compliance, compliance with federal and state antitrust laws and deposit concentration limits, and subject to any state laws restricting the acquisition of a bank that has not been in existence for a minimum time period (up to five years). In addition, the Interstate Banking Act also permits any bank that is controlled by a bank holding company to act as agent for any affiliated financial institution in deposit and loan transactions, regardless of whether the institutions are located in the same or different states. The Interstate Banking Act's interstate branching provisions will become operative on June 1, 1997, although any state can, prior to that time, adopt legislation to accelerate interstate branching or prohibit it completely. Effective June 1, 1997, subject to the receipt of prior regulatory approval, the interstate branching provisions and implementing Kentucky legislation will permit Kentucky banks to merge across state lines, provided the acquired bank has been in existence for at least five years and a 15% deposit concentration limit is not exceeded.
Under Federal Reserve Board policy, a bank holding company is expected to act as a source of financial strength to each of its subsidiary banks and to commit resources, including capital funds during periods of financial stress, to support each such bank. Although this "source of strength" policy has been challenged in litigation, the Federal Reserve Board continues to take the position that it has the authority to enforce it. Consistent with its "source of strength" policy for subsidiary banks, the Federal Reserve Board has stated that, as a matter of prudent banking, a bank holding company generally should not maintain a rate of cash dividends unless its net income available to common shareholders has been sufficient to fund fully the dividends, and the prospective rate of earnings retention appears to be consistent with the company's capital needs, asset quality and overall financial condition.
SUBSIDIARY BANKS CBT's subsidiary banks are subject to supervision and examination by applicable federal and state banking agencies. UCB is also subject to supervision and examination by the Office of Thrift Supervision ("OTS"). All of the subsidiary banks are insured by, and therefore subject to regulations of, the Federal Deposit Insurance Corporation ("FDIC"), and are also subject to requirements and restrictions under federal and state law, including requirements to maintain reserves against deposits, restrictions on the types and amounts of loans that may be granted and the interest that may be charged thereon, and limitations on the types of investments that may be made and the types of services that may be offered. Numerous consumer laws and regulations also affect the operations of the bank subsidiaries including, among others, disclosure requirements, anti-discrimination provisions, and substantive contractual limitations with respect to deposit accounts. The banking agencies, together with the Departments of Justice and Housing and Urban Development, have announced that they intend to enforce more rigorously compliance with community reinvestment, anti-discrimination and other fair lending laws and regulations. In addition to the impact of regulation, commercial banks are affected significantly by the actions of the Federal Reserve Board as it attempts to control money supply and credit availability in order to influence the economy.
The FDIC, in the case of CBT's commercial bank subsidiaries, and the FDIC or OTS, in the case of UCB, have the authority to prohibit any such institution from engaging in an unsafe or unsound practice in conducting its business. The payment of dividends, depending upon the financial condition of the institution in question, could be deemed to constitute such an unsafe or unsound practice, and the regulatory agencies have indicated their view that it generally would be an unsafe and unsound practice to pay dividends except out of current operating earnings. The ability of the institutions to pay dividends in the future is presently, and could be further influenced, among other things, by applicable capital guidelines or by bank regulatory and supervisory policies.
The ability of a banking institution to make funds available to its parent company is also subject to restrictions imposed by federal law. Generally, no bank subsidiary may extend credit to the parent company on terms and under circumstances which are not substantially the same as comparable extensions of credit to non-affiliates. No extension of credit may be made to the parent company which is in excess of 10 percent of the capital stock and surplus of such bank subsidiary or in excess of 20 percent of the capital and surplus of such bank subsidiary as to aggregate extensions of credit to the parent company and its subsidiaries. In certain circumstances, federal regulatory authorities may impose more restrictive limitations. Such extensions of credit, with limited exceptions, must be fully secured by collateral.
CBT's bank subsidiaries are also subject to the "cross-guarantee" provisions of federal law which provide that if one depository institution subsidiary of a multi-bank holding company fails or requires FDIC assistance, the FDIC may assess a commonly controlled depository institution for the actual or estimated losses suffered by the FDIC. Such liability could have a material adverse effect upon the financial condition of any assessed bank and its parent company. While the FDIC's claim is junior to the claims of depositors, holders of secured liabilities, general creditors and subordinated creditors, it is superior to the claims of shareholders and affiliates.
The federal banking agencies possess broad powers to take corrective action as deemed appropriate for an insured depository institution and its holding company. The extent of these powers depends upon whether the institution in question is considered "well capitalized", "adequately capitalized", "undercapitalized" or "critically undercapitalized". At December 31, 1996, all of the subsidiaries exceeded the required ratios for classification as "well capitalized." Generally, as an institution is deemed to be less well capitalized, the scope and severity of the agencies' powers increase. The agencies' corrective powers can include, among other things, requiring an insured financial institution to adopt a capital restoration plan which cannot be approved unless guaranteed by the institution's parent holding company; placing limits on asset growth and restrictions on activities; placing restrictions on transactions with affiliates; restricting the interest rate the institution may pay on deposits; prohibiting the institution from accepting deposits from correspondent banks; prohibiting the payment of principal or interest on subordinated debt; prohibiting the holding company from making capital distributions without prior regulatory approval; and, ultimately, appointing a receiver for the institution. Business activities may also be influenced by an institution's capital classification. For instance, only a "well capitalized" depository institution may accept brokered deposits without regulatory approval and an "adequately capitalized" depository institution may accept brokered deposits only with prior regulatory approval. For additional information about capital for CBT and its principal subsidiaries, see Note 10 on page 43 of this document.
NON-BANK SUBSIDIARIES Fidelity Credit Corporation is subject to regulatory restrictions imposed by federal and state regulatory agencies, with respect to consumer and other laws.
GOVERNMENTAL POLICIES
The operations of financial institutions may be affected by legislative changes. For example, Congress is presently considering various administrative and legislative proposals, including proposals to consolidate the bank regulatory agencies and to amend various consumer protection laws. In addition, Congress is considering various issues relating to the separation of banking and commerce including, for example, the repeal of the Glass Stegall Act.
Financial institutions' operations also may be affected by the policies of various regulatory authorities. In particular, bank holding companies and their subsidiaries are affected by the credit policies of the Federal Reserve Board. An important function of the Federal Reserve Board is to regulate the national supply of bank credit. Among instruments of monetary policy used by the Federal Reserve Board to implement its objectives are: open market operations in U.S. Government securities; changes in the discount rate on bank borrowings; and changes in reserve requirements on bank deposits.
These instruments of monetary policy are used in varying combinations to influence the overall level of bank loans, investments and deposits, the interest rates charged on loans and paid for deposits, the price of the dollar in foreign exchange markets, and the level of inflation. The monetary policies of the Federal Reserve Board have had a significant effect on the operating results of banking institutions in the past and are expected to continue to do so in the future. It is not possible to predict the nature of future changes in monetary and fiscal policies, or the effect that they may have on CBT's business and earnings.
COMPETITION
Bank holding companies and their subsidiaries are subject to intense competition from various financial institutions and other companies or firms that engage in similar activities. CBT's banking subsidiaries compete for deposits with other commercial banks, savings banks, savings associations, insurance companies, credit unions and issuers of commercial paper and other securities, such as shares in money market funds. In making loans, the Banks compete with other commercial banks, savings banks, savings associations, consumer finance companies, credit unions, leasing companies and other lenders. In providing trust services, brokerage services and money management services, CBT competes with other commercial banks, trust companies, brokerage houses, mutual fund managers and insurance companies. Many such competitors have substantial resources and operations which are national or international in scope.
STATISTICAL INFORMATION
Specific financial information required to be included under Item I of this Form 10-K is incorporated herein by reference to the Annual Report to Shareholders for the fiscal year ended December 31, 1996, and listed below along with a page reference where the information can be found in the Annual Report to Shareholders:
ANNUAL REPORT DESCRIPTION OF FINANCIAL INFORMATION REQUIRED REFERENCE PAGE
Three Year Average Balance and Net Interest Analysis 24
Analysis of Changes in Net Interest Income 23
Carrying Value of Investment Securities 37
Carrying Value of Securities Available for Sale 37
Maturity Distribution of Securities Available for Sale 38
Loan Portfolio 26
Contractual Loan Maturities and Interest Sensitivity 28
Non-performing Assets 27
Impact of Non-accrual Loans on Interest Income 38
Allowance for Loan Losses 38
Average Deposits and Rates Paid 24
Maturity of Time Deposits of $100,000 or More 28
Return on Equity and Assets 22
Short-Term Borrowings 40
ITEM 2.

ITEM 2. PROPERTIES
The executive and administrative offices of CBT and the main office of Citizens consists of six floors of the ten story building known as Citizens Bank Building, which is located in downtown Paducah, Kentucky with a street address of 333 Broadway. Citizens owns the Citizens Bank Building and properties on which all its branches are located. PCB, GCB, and BMC own their main respective office and land. All other branch locations of Citizens and CBT subsidiaries as well as the main office of UCB are owned by CBT. BMC owns a building adjacent to its main office that houses the deposit operations function for CBT. Because of the nature of FCC's business, it generally maintains offices with a limited square footage, often in strip shopping centers. For these reasons and to give it maximum flexibility, FCC leases all of its locations under short term leases (generally three to five years) with annual aggregate lease payments of approximately $330,000.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
In the ordinary course of operations, CBT's subsidiaries are defendants in various legal proceedings. In the opinion of management, there is no proceeding pending, or, to the knowledge of management, threatened in which an adverse decision could result in a material adverse change in the business or consolidated financial position of CBT or its subsidiaries.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
At March 24, 1997, CBT had issued and outstanding 7,867,517 shares of common stock. The approximate number of record holders as of March 24, 1997 was 1,470
CBT Corporation common stock is traded on the NASDAQ National Market under the symbol CBTC.
The following table summarizes transactions in common stock and cash dividends declared in 1996 and 1995. The trading price information reflects the range of actual closing sales prices for CBT Corporation common stock as reported by NASDAQ.
Market Value -------------------- Cash Low High Dividends -------------------------------- 1st Quarter 1996 $21.50 $24.50 $ .12 2nd Quarter 1996 $21.50 $24.25 $ .12 3rd Quarter 1996 $20.00 $23.50 $ .13 4th Quarter 1996 $20.00 $28.00 $ .13
1st Quarter 1995 $21.00 $24.75 $ .11 2nd Quarter 1995 $19.75 $24.00 $ .11 3rd Quarter 1995 $19.25 $24.25 $ .12 4th Quarter 1995 $20.00 $23.00 $ .12
CBT Corporation has not engaged in the purchase or sale of any unregistered securities during 1996.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
The information required by this item appears on page 22 of the Annual Report to Shareholders for the fiscal year ended December 31, 1996, under the caption "Selected Financial Data" and is incorporated herein by reference.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required by this item appears on pages 13-21 of the Annual Report to Shareholders for the fiscal year ended December 31, 1996, under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" and is incorporated herein by reference.
RECENT ACCOUNTING ANNOUNCEMENTS The Financial Accounting Standards Board has approved a financial accounting standard effective for fiscal years ending after December 15, 1997 which establishes standards for computing and presenting earnings per share and also establishes standards with respect to disclosure of information about an entity's capital structure. The Corporation is required to adopt the provisions in the first quarter of 1997 and does not expect the adoption thereof to have a material effect on the Corporation's results of operations.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item, Report of Independent Public Accountants and Consolidated Financial Statements and related notes appear on page 29-47 of the Annual Report to Shareholders for the fiscal year ended December 31, 1996, and is incorporated herein by reference. The Selected Quarterly Financial Data, found in Note 18 on page 45 of the Annual Report to shareholders for fiscal year ended December 31, 1996, is also incorporated herein by reference.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 10 appears under the heading "PROPOSAL ONE ELECTION OF DIRECTORS" on pages 3-5 of the Proxy Statement of CBT Corporation for the 1997 Annual Meeting of Stockholders dated March 12, 1997 ("Proxy Statement"), under the sub-heading "Executive Officers" on pages 8-9 of the Proxy Statement and under the sub-heading "Section 16(a) Beneficial Ownership Reporting Compliance" on page 3, all of which is incorporated herein by reference.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
Information required by this item is contained on page 5 of the Proxy Statement under the sub-heading "Compensation of Directors" and on pages 6-10 under the heading "EXECUTIVE COMPENSATION" of the Proxy Statement and is incorporated herein by reference.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required by this item is contained on page 1 under the heading "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS" and pages 2-3 under the heading "BENEFICIAL OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS OF COMMON STOCK OF THE CORPORATION" of the Proxy Statement and is incorporated herein by reference.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by this item is contained on page 10 under the sub-heading "Compensation Committee Interlocks and Insider Participations" and on page 15 under the heading "TRANSACTIONS WITH EXECUTIVE OFFICERS AND DIRECTORS" of the Proxy Statement and is incorporated herein by reference.
PART IV ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following consolidated financial statements of the registrant and report of independent public accountants are included in the Annual Report to Shareholders for the fiscal year ended December 31, 1996, on the pages indicated and are incorporated herein by reference.
(1) Financial Statements: DESCRIPTION PAGE
Report of Independent Public Accountants 29 Consolidated Statements of Income 30 Consolidated Balance Sheets 31 Consolidated Statements of Stockholders' Equity 32 Consolidated Statements of Cash Flows 33 Notes to Consolidated Financial Statements 34-47
(2) Financial Statements Schedules:
Schedules are omitted because the information is not applicable.
(3) Exhibits:
The Exhibit Index on page 13 incorporated herein by reference. The management contracts and compensatory plans or arrangements required to be filed as exhibits to this Form 10-K pursuant to Item 14(c) are noted by asterisk in the Exhibit Index.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the fourth quarter of 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned, thereunto duly authorized on March 26, 1997.
CBT CORPORATION
/s/ William J. Jones William J. Jones President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 26, 1997.
/s/ William J. Jones President and Chief Executive Officer William J. Jones (Principal Executive Officer)
/s/ John E. Sircy Executive Vice President and John E. Sircy Chief Operating Officer (Principal Financial and Accounting Officer)
/s/ Irving P. Bright, Jr. Irving P. Bright, Jr. Director
/s/ John L. Burman John L. Burman Director
/s/ Patrick J. Cvengros Patrick J. Cvengros Director
/s/ William H. Dyer William H. Dyer Director
/s/ Louis A. Haas Louis A. Haas Director
/s/ Joe Tom Haltom Joe Tom Haltom Director
/s/ Kerry B. Harvey Kerry B. Harvey Director
/s/ F. Donald Higdon F. Donald Higdon Director
/s/ Ted S. Kinsey Ted S. Kinsey Director
- --------------------- Louis M. Michelson Director
/s/ Bill B. Morgan Bill B. Morgan Director
- --------------------- Louis D. Myre, M.D. Director
/s/ David M. Paxton David M. Paxton Director
/s/ Robert P. Petter Robert P. Petter Director
/s/ Joseph A. Powell Joseph A. Powell Director
/s/ William A. Usher William A. Usher Director
EXHIBIT INDEX
NUMBER DESCRIPTION PAGE
3(a), 4(b) Articles of Incorporation of CBT Corporation, as amended are incorporated by reference to Exhibit 4(a), of Amended Form 10-Q of CBT Corporation dated September 6, 1994.
3(b), 4(b) Articles of Amendment to the Articles of Incorporation of CBT Corporation are incorporated by reference to Exhibit 4(b) of Form 10-Q of CBT Corporation dated June 30, 1995.
3(c), 4(c) By-Laws of CBT Corporation are incorporated by reference to Exhibit 3, to the Registration Statement of Form S-14 of CBT Corporation (Registration No. 2-83583).
10(a) **Form of Severance Protection Agreement between CBT Corporation and certain executive officers is incorporated by reference to Exhibit 10 of Form 10-Q of CBT Corporation dated September 30, 1996.
10(b) **CBT Corporation 1986 Stock Option Plan is incorporated by reference to Exhibit 4 of Registration Statement on Form S-8 of CBT Corporation (Registration No. 33-28512).
10(c) **CBT Corporation 1993 Stock Option Plan is incorporated by reference to Form 10-Q of CBT Corporation dated March 31, 1993.
10(d) **Salary Continuance Agreement is incorporated by reference to Exhibit 10(c) of the Form 10-K of CBT Corporation for the year ended December 31, 1990.
10(e) **Description of Incentive Compensation Plan.
13 Portions of the Annual Report to Security Holders 28-63
21 Subsidiaries of the Registrant 64-65
23 Consent of Independent Public Accountants 66-67
27 Financial Data Schedule 68-69
** Denotes management contracts or compensatory plans or arrangements required to be filed as exhibits to this Form 10-K.


ITEM 1. BUSINESS
Not applicable in reliance on the Relief Letters.
ITEM 2.

ITEM 2. PROPERTIES
Not applicable in reliance on the Relief Letters.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
There were no material pending legal proceedings relating to the Trust Fund to which any of the Trust Fund, the Trustee, the Master Servicer or the Company was a party or of which any of their respective properties was the subject during the fiscal year covered by this Report, nor is the Company aware of any such proceedings contemplated by governmental authorities.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of Certificateholders, and no Certificateholder consent was solicited during the fiscal year covered by this Report.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) There is no established public trading market for the Certificates.
(b) At December 31, 1996, there were four holders of record of the Certificates.
(c) Not applicable. (Information as to distributions to Certificateholders is provided in the Registrant's monthly filings on Form 8-K.)
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
Not applicable in reliance on the Relief Letters.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Not applicable in reliance on the Relief Letters.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Not applicable in reliance on the Relief Letters.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Not applicable in reliance on the Relief Letters.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
Not applicable. See the Relief Letter.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Not applicable in reliance on the Relief Letters.
(b) Not applicable in reliance on the Relief Letters.
(c) Not applicable in reliance on the Relief Letters.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Not applicable in reliance on the Relief Letters.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) Pursuant to the Pooling and Servicing Agreement, the Master Servicer is required to deliver an annual statement as to compliance with the provisions of the Pooling and Servicing Agreement and certain other matters (the "Annual Statement of the Master Servicer"). The Master Servicer is also required to cause a firm of independent public accountants to deliver an annual report as to compliance with the servicing provisions of the Pooling and Servicing Agreement (the "Annual Report of the Firm of Accountants"). The Annual Statement of the Master Servicer is included as Exhibit 99.1 to this Report. The Annual Report of the Firm of Accountants is required to be delivered not later than 120 days after the end of the Master Servicer's fiscal year. The Registrant hereby undertakes to file the Annual Report of the Firm of Accountants as an Exhibit to a Form 10-K/A amending this Form 10-K promptly following the date on which such report becomes available.
(2) Not applicable.
(3) The required exhibits are as follows:
Exhibit 3(i): Copy of Company's Certificate of Incorporation (Filed as an Exhibit to Registration Statement on Form S-3 (File No. 333-11095)).
Exhibit 3(ii): Copy of Company's By-laws (Filed as an Exhibit to Registration Statement on Form S-3 (File No. 333-11095)).
Exhibit 4: Pooling and Servicing Agreement (Filed as part of the Registrant's Current Report on Form 8-K dated November 1, 1996).
Exhibit 99.1: Annual Statement of the Master Servicer.
(b) Current Reports on Form 8-K filed during the quarter ending December 31, 1996:
Date Items Reported ---- --------------
December 26, 1996 Certificateholders Report
(c) See subparagraph (a)(3) above.
(d) Not applicable. See the Relief Letter.
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
No such annual report, proxy statement, form of proxy or other soliciting material has been sent to Certificateholders. See the Relief Letter.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
CWABS, INC., ASSET-BACKED CERTIFICATES, SERIES 1996-1
By: The Bank of New York, as Trustee*
By: /s/Leslie Gaskill ---------------------- Name: Leslie Gaskill Title: Assistant Treasurer
Date: March 26, 1997
- -------------------- * This Report is being filed by the Trustee on behalf of the Trust Fund. The Trust Fund does not have any officers or directors.
EXHIBIT INDEX
Sequential Exhibit Document Page Number - ------- -------- ---------
3(i) Company's Certificate of Incorporation (Filed as an Exhibit to Registration Statement on Form S-3 (File No. 333-11095)) . . . . . . . . . . . . . . . . . . . . . . *
3(ii) Company's By-laws (Filed as an Exhibit to Registration Statement on Form S-3 (File No. 333- 11095)) . . . . . . . . . . . . . . . . . . . . . . . . . . *
4 Pooling and Servicing Agreement (Filed as part of the Company's Current Report on Form 8-K dated November 1, 1996) . . . . . . . . . . . . . . . . . . . . . *
99.1 Annual Statement of the Master Servicer . . . . . . . . . . 9
- -------------------- * Incorporated herein by reference.
EXHIBIT 99.1
COUNTRYWIDE HOME LOANS, INC.
OFFICERS' CERTIFICATE ANNUAL STATEMENT OF THE MASTER SERVICER
CWABS, INC.
ASSET-BACKED CERTIFICATES, SERIES 1996-1
The undersigned do hereby certify that they are each an officer of Countrywide Home Loans, Inc. (the "Master Servicer") and do hereby further certify pursuant to Section 3.17 of the Pooling and Servicing Agreement for the above-captioned Series (the "Agreement") that:
(i) A review of the activities of the Master Servicer during the preceding calendar year and of the performance of the Master Servicer under the Agreement has been made under our supervision; and
(ii) To the best of our knowledge, based on such review, the Master Servicer has fulfilled all its obligations under the Agreement throughout such year.
/s/ Kevin W. Bartlett Dated: March 26, 1997 - ------------------------- -------------------- KEVIN W. BARTLETT MANAGING DIRECTOR, SECONDARY MARKETING
/s/ David M. Walker Dated: March 26, 1997 - ------------------- -------------------- DAVID M. WALKER EXECUTIVE VICE PRESIDENT


Item 1. Business
Brown-Benchmark Properties Limited Partnership (the "Partnership") is a Delaware limited partnership formed on June 1, 1987. The Partnership was formed to develop and operate three residential multifamily communities ("Properties") in Ohio. See Item 2, Properties, herein. The offering proceeds raised from the sale of the Assignee Units (the "Units") and moderate leverage enabled the Partnership to acquire the land and develop the three Properties. Construction was completed at all three Properties by September of 1989.
The Partnership's objectives are to (i) preserve and protect Unitholders' capital; (ii) obtain capital appreciation through increases in the value of the Properties; and (iii) provide quarterly cash distributions to Unitholders, a portion of which may be sheltered from taxation, from income generated by the Properties's rental income.
The General Partners of the Partnership are Brown-Benchmark AGP, Inc., a Maryland corporation (the "Administrative General Partner"), and Benchmark Equities, Inc., an Ohio corporation (the "Development General Partner").
Pursuant to the Registration Statement, a minimum of 320,000 Units and a maximum of 500,000 Units were registered under the Securities and Exchange Act of 1933, as amended. On February 19, 1988, the minimum offering of $8,000,000 was subscribed and investors holding 320,000 Units were recognized on the books of the Partnership, and on March 23, 1988, the Partnership completed the maximum offering of $12,500,000 with the recognition on the books of the Partnership of investors purchasing the remaining 180,000 Units.
Each of the Partnership's three Properties was constructed by an affiliate of the Development General Partner under the terms of a guaranteed fixed-price development agreement. The Partnership's investment in real estate at December 31, 1996 was $24,445,462 before depreciation charges, of which approximately 60% was funded by permanent loans.
The Partnership's residential apartment communities face competition with similar properties in their locations. The competition is based on the proximity of the Properties to area employers and commercial and retail facilities. In addition, consideration has been given to the comparability of quality, amenities, rental rates and unit sizes. The Partnership's annual report discusses operations and current leasing information at the properties and is incorporated by reference in Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K, herein.
Pursuant to the terms of a Property Management Agreement with the Partnership, each of the Properties is managed by Benchmark Properties, Inc., the Property Manager. The Property Management Agreements are renewable on a year-to-year basis and may be terminated by the Partnership upon 60 days notice without cause. The Property Manager receives a Property Management Fee of 4.5% of gross monthly operating revenues of each Property. Under the terms of the Property Management Agreements, the Property Manager is responsible for performing, or paying others to perform on its behalf, all leasing-related and other property management services for the Properties. The management and administration of the Partnership is performed by the General Partners or an affiliate thereof. See Note 5, "Related Party Transactions," in Item 8. Financial Statements and Supplementary Data, herein.
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Item 2.

Item 2. Properties
The Partnership owns land and improvements as described below:
Name and Location
Woodhills West Carrollton, Montgomery Co. Ohio
Oakbrook Reynoldsburg, Franklin, Ohio
Deerfield Union Township (Greater Cincinnati area) Clermont County, Ohio
Description of Properties
Approximately 15 acres as a 186- unit multifamily community, consisting of 12 one-story villas, 54 two-story town-houses, 5 three-story garden-style buildings containing 120 units, a swimming pool, volleyball court, and a clubhouse.
Approximately 22 acres as a 181- unit multifamily community, consisting of 20 one-story villas, 81 two-story townhouses, 5 two-story garden-style buildings containing 80 units, a swimming pool, volleyball court and a clubhouse.
Approximately 19 acres as a 223- unit multifamily community, consisting of 32 one- and two- story apartment buildings, a swimming pool, volleyball court and a clubhouse.
Gross Investment in Property
$7,529,007
$7,444,410
$9,472,045
Rental Income
$1,152,226
$1,150,988
$1,426,445
For additional information on the Properties, reference is made to Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, herein.
Item 3.

Item 3. Legal Proceedings
The Partnership is not subject to any material pending legal proceedings.
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to the security holders for a vote during the last quarter of the fiscal year covered by this report.
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
PART II
Item 5.

Item 5. Market for Registrant's Common Equity and Related Partner Matters
An established public trading market for the Units does not exist and the Partnership does not anticipate that a public market will develop. Transfer of Units by an investor and purchase of Units by the Partnership may be accommodated under certain terms and conditions. The Partnership Agreement imposes certain limitations on the transfer of Units and may restrict, delay or prohibit a transfer primarily if:
o the transfer of Units would result in 50% or more of all Units having been transferred by assignment or otherwise within a 12-month period;
o such a transfer would be a violation of any federal or state securities laws that may cause the Partnership to be classified other than as a partnership for federal income tax purposes;
o such transfers would cause the Partnership to be treated as a "publicly traded partnership" under Securities 7704 and 469(k) of the Internal Revenue Code; and
o the transfer of Units would cause a technical termination of the Partnership within meaning of Section 708(b)(1)(A) of the Internal Revenue Code.
As of December 31, 1996, there were 534 holders of 500,000 Units of the registrant. See Item 12, Security Ownership of Certain Beneficial Owners and Management, herein.
Distributions of cash to the investors during the year ended December 31, 1996 were $510,243 of which 98% was allocated to Unitholders and 2% to the General Partners. Annual distributions of cash to investors during the four year period ended December 31, 1995 were $446,464, of which 98% was allocated to Unitholders and 2% to the General Partners. See Item 8, Financial Statements and Supplementary Data, herein.
Item 6.

Item 6. Selected Financial Data
Revenues and net loss information furnished below is for the five years ended December 31, 1996:
The above selected financial data should be read in conjunction with the financial statements and accompanying notes in Item 8, Financial Statements and Supplementary Data, herein.
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Item 7.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources
The Partnership's liquidity is largely dependent on its ability to maintain reasonably high occupancy levels, achieve rental rate increases as the respective markets allow and control operating expenses. The Partnership currently has sufficient liquid assets from its rental revenues to satisfy its anticipated operating expenditures and debt service obligations.
In 1994 the Properties generated cash flow which yielded 3.5% on invested capital and the payout to the investors remained constant at 3.5% in all four quarters of 1994. Operating cash flow generated through the first half of 1995 was sufficient to maintain this distribution level while funding the final exterior painting costs, approximately $67,000. During the second half of 1995, operating cash flow increased, generating an annualized yield on invested capital of approximately 5.25%. As a result, the Properties' 1995 total overall cash flow represented a yield of approximately 4.2% on invested capital. Due to this improved operating trend, the General Partners increased the fourth quarter, 1995 distribution rate to 4.0%. In 1996, the Properties generated cash flow which yielded 4.35% on invested capital and the General Partners maintained a 4.0% payout to investors in 1996. The fourth quarter 1996 distribution to partners was made on February 12, 1997. Preliminary review of next years' operating budget suggests Partnership cash flow should produce a yield of approximately 6% on invested capital. The General Partners will review Partnership reserves and working capital requirements with respect to distribution levels during 1997 and expect a 4% distribution rate to remain in place through the first half of the year before increasing in the second half of the year.
The General Partners have a commitment to refinance the first mortgage loans on all three properties effective June 1, 1997. The amount of the new loans will be sufficient to retire the existing loans, pay the costs and fees associated with the refinancing, and generate approximately $200,000 in excess proceeds. The interest rate on the new loans will be 7.7%. As a result of the refinancing, the annual debt service payments of all three properties will decrease by a total of approximately $164,000. The General Partners intend to use the excess proceeds from the refinancing to perform capital improvements in 1997 and 1998. The Partnership does not anticipate any other significant capital improvements or repair costs in 1997 that might adversely impact upon its liquidity. The Properties remain in good condition.
Results of Operations
Rental revenues increased $132,342, or 3.7%, for the year ended December 31, 1996 as compared to the year ended December 31, 1995. This increase resulted from higher rental revenues at each of the three communities. Collectively, the Properties' aggregate occupancy level of 93% in 1996 was virtually unchanged from the 1995 average of 93.3%. Rental rates increased on unit types at each property as the respective markets allowed. The average rental rate for the portfolio increased from $538 in 1995 to $561 in 1996, representing an increase of 4.3%.
Rental revenues increased $104,858, or 3.0% for the year ended December 31, 1995 as compared to the year ended December 31, 1994. This increase resulted from higher rental revenues at each of the three communities. The Properties averaged a 93.3% aggregate occupancy level during 1995, approximately 1% higher than the 1994 average of 92.4%. Rental rates increased marginally on selected unit types at each property. The average rental rate for the portfolio increased from $524 in 1994 to $538 in 1995, representing an increase of 2.7%.
Management was again diligent in its efforts to control operating expenditures at each of the three communities. Total operating expenses, excluding interest charges, depreciation and amortization costs, increased by 4.0% in 1996 compared to 1995. The majority of the increase was due to higher maintenance and repair expenses because of more apartment turnovers in 1996. Controllable operating expenses for the communities remained stable. Operating expenses, excluding interest charges, depreciation and amortization costs, rose less than 1.0% from 1994 to 1995.
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Results of Operations (continued)
Due to the larger increase in rental revenues versus expenses (excluding interest charges, depreciation and amortization costs) during 1996, the net operating income of the Properties increased $70,515, or approximately 3.4%, when compared to 1995 and $96,809, or approximately 4.9%, when comparing 1995 to 1994.
Capital improvements during 1996 totaled $117,569 and consisted primarily of replacement of carpets, vinyl flooring, compressors and approximately $25,000 of roof repairs at the Woodhills property. Similar improvements to the properties during 1995 were $73,397 and in 1994 were $70,164. The General Partners are formulating a capital improvement program for use of the $200,000 of excess refinancing proceeds in 1997 and 1998.
Payments of principal and interest on the permanent loan were $1,476,045 during 1996 and $1,472,593 in 1995 and 1994 and included principal reductions of $185,236, $169,349 and $154,827 respectively.
The average occupancy level experienced at the Oakbrook property in Columbus, Ohio, has remained very stable and was 95% in 1996, 96% in 1995 and 95% in 1994. The average rental rates increased from $524 in 1995 to $551 in 1996. As a result of the increase in rental rates, revenues received at the property during 1996 increased $29,664 when compared to 1995. While the Columbus rental market remains competitive, our excellent location and curb appeal should assist management in maintaining high occupancy levels throughout 1997. In addition to maintaining cost controls, management's focus in 1997 will be to achieve a 3% rental rate increase and to maintain occupancy at or above 95%.
At the Woodhills property in Dayton, Ohio, the average occupancy level in 1996 was 92%, 1.0% higher than during 1995 and 3.0% higher than 1994. In addition, rental rates at the community increased from $528 in 1995 to $552 in 1996. As a result of the increase in occupancy and rental rates, revenues increased $61,888. While the rental market surrounding the property remains competitive, management is optimistic that the positive trends in occupancy can be maintained. Preliminary review of the 1997 operating budget suggests occupancy levels will increase slightly to 93%.
Deerfield, our Cincinnati, Ohio property, experienced a slight decrease in its annual average occupancy level in 1996 which was 92% compared to 94% in 1995 and 93% in 1994. However, the effective rental rates at the property increased from $547 in 1995 to $576 in 1996. Revenues, as a result, increased $40,792 during 1996 when compared to 1995. Management's goal in 1997 is to increase average occupancy to 95% while implementing rental rate increases of approximately 2.5%.
Item 8.

Item 8. Financial Statements and Supplementary Data
The financial statements, included on pages 5 through 15 of the 1996 Annual Report are incorporated herein by reference.
Item 9.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
PART III
Item 10.

Item 10. Directors and Executive Officers of the Registrant
The General Partners of the Partnership are Brown-Benchmark AGP, Inc., the Administrative General Partner, and Benchmark Equities, Inc., the Development General Partner. The Partnership's principal executive offices are located at 225 East Redwood Street, Baltimore, Maryland 21202, telephone (410) 727-4083. The General Partners have primary responsibility for overseeing the performance of those who contract with the Partnership, as well as making decisions with respect to the financing, sale and liquidation of the Partnership's assets. The General Partners are responsible for all reports to and communications with investors and others, all distributions and allocations to investors, the administration of the Partnership's business and all filings with the Securities and Exchange Commission and other federal or state regulatory authorities. The Partnership's limited partnership agreement provides for the removal of a General Partner and the election of successor general partners by investors holding a majority of the Units.
The directors and executive officers of the Partnership are as follows:
The Development General Partner
Benchmark Equities, Inc., the Development General Partner, is an Ohio corporation. Affiliated companies of the Development General Partner include its parent, Benchmark Communities, Inc., formerly known as "Vindale Corporation," which was organized in 1946, and since 1978 has concentrated on the development, construction and marketing of residential developments, Benchmark Homes, Inc., the general contractor for the properties and Benchmark Properties, Inc., the property manager at the properties.
The Development General Partner and its Affiliates were engaged in all aspects of the building and real estate development process, including manufacturing the industrialized housing components in their plant, developing the site, constructing the components on-site, landscaping and paving the site, marketing the completed housing units and financing.
The following individuals are the directors and principal officers of Benchmark Equities, Inc.:
Daniel P. Riedel, age 57, has been the Chairman, President and Director of Benchmark Equities, Inc. since its inception in 1987. His responsibilities include administration, marketing, finance and planning. His background includes 28 years in manufacturing, land development and marketing. Mr. Riedel has been an officer or director of Benchmark Communities, Inc. for 22 years and has held management positions for his entire 32 year career with Benchmark Communities, Inc. He graduated Cum Laude from Michigan State University in 1961, majoring in Industrial Management.
Edward L. Patch, age 42, has been the Treasurer, Secretary and Director of Benchmark Equities, Inc. and Vice President of Operations and Treasurer of Benchmark Communities, Inc. since 1990. His responsibilities include finance and operations. He was President of Benchmark Capital from 1989 to 1990. Prior to joining Benchmark Capital, Mr. Patch was Treasurer of Oberer Development Co. Enterprises from 1985 to 1989, Treasurer of C. H. Huber Enterprises from 1981 to 1985 and the Controller of the W. B. Marvin Manufacturing Co. Mr. Patch graduated from Wright State University with a degree in Business Administration and is a Certified Public Accountant.
The Administrative General Partner
Brown-Benchmark AGP, Inc., the Administrative General Partner, is a Maryland corporation and is wholly owned by Alex. Brown Realty, Inc. The Administrative General Partner is responsible for administering the business of the Partnership including providing clerical services, investor communications services and reports, and for making all reports and filings to regulatory authorities. The Administrative General Partner is reimbursed for such services to the Partnership on a cost basis.
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Item 10. Directors and Executive Officers of the Registrant (continued)
The Administrative General Partner (continued)
The following individuals are the directors and principal officers of Brown-Benchmark AGP, Inc.:
John M. Prugh, age 48, has been a Director and President of the Administrative General Partner since 1987 and of Alex. Brown Realty, Inc. and Armata Financial Corp. since 1984. Mr. Prugh graduated from Gettysburg College in 1970, and was designated a Certified Property Manager by the Institute of Real Estate Management in 1979. He has worked in property management for H. G. Smithy Co., in Washington, D.C., and Dreyfuss Bros., Inc. in Bethesda, Maryland. Since 1977, Mr. Prugh has been involved in managing, administering, developing and selling real estate investment projects sponsored by Alex. Brown Realty, Inc. and its subsidiaries.
Peter E. Bancroft, age 44, has been the Director and Vice President of the Administrative General Partner since its inception in 1987. He has also been a Senior Vice President of Alex. Brown Realty, Inc. and Armata Financial Corp. since 1983. Mr. Bancroft graduated from Amherst College in 1974, attended the University of Edinburgh, and received a J.D. degree from the University of Virginia School of Law in 1979. Prior to joining Alex. Brown Realty, Inc. in 1983, Mr. Bancroft held legal positions with Venable, Baetjer and Howard and T. Rowe Price Associates, Inc.
Terry F. Hall, age 50, has been the Secretary of the Administrative General Partner and a Vice President and Secretary of, and Legal Counsel for, Alex. Brown Realty, Inc. since 1989. Mr. Hall graduated from the University of Nebraska-Lincoln in 1968, and received a J.D. degree from the University of Pennsylvania Law School in 1973. Prior to joining Alex. Brown Realty, Inc. in 1989, Mr. Hall was a Partner at the law firm of Venable, Baetjer and Howard from 1981 to 1986 and an associate at the same firm from 1973 to 1981.
Timothy M. Gisriel, age 40, has been the Treasurer of the Administrative General Partner and of Alex. Brown Realty, Inc. and Armata Financial Corp. since 1990. He was Controller of Alex. Brown Realty, Inc. and Armata Financial Corp. from 1984 through 1990. Mr. Gisriel graduated from Loyola College in 1978 and received his Masters of Business Administration degree from the Robert G. Merrick School of Business, University of Baltimore. Prior to joining Alex. Brown Realty, Inc. in 1984, Mr. Gisriel was an audit supervisor in the Baltimore office of Coopers & Lybrand. He is a Maryland Certified Public Accountant.
There is no family relationship among the officers and directors of the Development General Partner or the Administrative General Partner.
Item 11.

Item 11. Executive Compensation
The officers and directors of the Administrative General Partner and the Development General Partner received no compensation from the Partnership.
The General Partners are entitled to receive a share of cash distributions and a share of profits and losses as described in the Agreement of Limited Partnership. (See Note 9. "Partners' Capital" in Item 8. Financial Statements and Supplementary Data, herein.)
For a discussion of compensation and fees to which the General Partners are entitled, see Item 13, Certain Relationships and Related Transactions, herein.
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management
No person is known to the Partnership to own beneficially more than 5% of the outstanding assignee units of limited partnership interest of the Partnership.
The Assignor Limited Partner, Brown-Benchmark Holding Co., Inc. an affiliate of the Administrative General Partner, holds 40 Units representing a beneficial interest in limited partnership interests in the Partnership. The Units held by the Assignor Limited Partner have all rights attributable to such Units under the Limited Partnership Agreement except that these Units of assigned limited partnership interests are nonvoting.
The General Partners each have a 1% interest in the Partnership as General Partners, but hold no Units of assigned limited partnership interests.
There are no arrangements, known to the Partnership, the operation of which may at a subsequent date result in a change of control of the registrant.
Item 13.

Item 13. Certain Relationships and Related Transactions
The General Partners and their affiliates have and are permitted to engage in transactions with the Partnership. For a summarization of fees paid during 1996, 1995 and 1994, and to be paid to the General Partners and their affiliates at December 31, 1996, see Note 5. "Related Party Transactions" in Item 8. Financial Statements and Supplementary Data, herein.
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
PART IV
Item 14.

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. and 2. Index of Financial Statements and Financial Statement Schedule
The following financial statements of Brown-Benchmark Properties Limited Partnership, included in the 1996 Annual Report of the registrant to its partners are incorporated by reference in Item 8:
Balance Sheets Statements of Operations Statements of Partners' Capital Statements of Cash Flows Notes to Financial Statements
The following financial statement schedule of Brown-Benchmark Properties Limited Partnership is included in Item 14(d):
Schedule III. Real Estate and Accumulated Depreciation
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
3. Exhibits:
(3,4)Limited Partnership Agreement pages 1 through 41 of Exhibit A to the Partnership's Registration Statement on Form S-11 (File No. 33-15480) incorporated herein by reference.
(13) Annual Report for 1996.
(23) Consent of Independent Auditors
(b) Reports on Form 8-K: None.
Consent of Independent Auditors
The Partners Brown-Benchmark Properties Limited Partnership
We consent to the incorporation by reference in this Annual Report (Form 10K) of Brown- Benchmark Properties Limited Partnership of our report dated January 29, 1997 included in the 1996 Annual Report of Brown-Benchmark Properties Limited Partnership
Our audits also included the financial statement schedule of Brown-Benchmark Properties Limited Partnership listed in item 14(a). This schedule is the responsibility of the Partnership's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
Ernst & Young, LLP
January 29,1997
- -12-
AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS $24,445,462 AT DECEMBER 31, 1996.
SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS FOR INFORMATION CONCERNING TRANSACTIONS WITH AFFILIATES.
SEE NOTE 6 OF NOTES TO THE FINANCIAL STATEMENTS FOR INFORMATION REGARDING MORTGAGE LOAN AGREEMENTS, COLLATERALIZED BY THE LAND, BUILDINGS AND IMPROVEMENTS.
- -13-
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
DATE: 3/19/97 BY: /s/ John M. Prugh John M. Prugh President and Director Administrative General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934 as amended, this report has been signed by the following in the capacities and on the dates indicated.
DATE: 3/19/97 By: /s/ John M. Prugh John M. Prugh President and Director Brown-Benchmark AGP, Inc. Administrative General Partner
DATE: 3/19/97 By: /s/ Peter E. Bancroft Peter E. Bancroft Vice President and Director Brown-Benchmark AGP, Inc. Administrative General Partner
DATE: 3/19/97 By: /s/ Terry F. Hall Terry F. Hall Secretary Brown-Benchmark AGP, Inc. Administrative General Partner
DATE: 3/19/97 By: /s/ Timothy M. Gisriel Timothy M. Gisriel Treasurer Brown-Benchmark AGP, Inc. Administrative General Partner
DATE: 3/17/97 By: /s/ Daniel P. Riedel Daniel P. Riedel Chairman, President and Director Benchmark Equities, Inc. Development General Partner
DATE: 3/17/97 By: /s/ Edward L. Patch Edward L. Patch Secretary, Treasurer and Director Benchmark Equities, Inc. Development General Partner