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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
/x/ Annual Report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 1998 or
/ / Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ________ to _________.
Commission file number: 000-22781
Exact name of Registrant as specified in its charter:
FIRST BANK CORPORATE CARD MASTER TRUST
State or other jurisdiction of incorporation or organization: Delaware
I.R.S. Employer Identification No.: 41-1881896
Address of principle executive offices:
4325 17th Avenue S. W.
Fargo, North Dakota 58103
Registrant's telephone number, including area code: (701) 461-3468
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
Asset Backed Certificates, Series 1997-1, issued by First Bank Corporate
Card Master Trust
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___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. /x/
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PART I
Item 1. BUSINESS.
The sole business of First Bank Corporate Card Master Trust (the
"Trust") is to hold the Receivables and to apply the proceeds
thereof to make payments to the Certificateholders, as described in
the Trust's Registration Statement on Form S-1 (File No. 333-01837).
Item 2. PROPERTIES.
Not applicable.
Item 3. LEGAL PROCEEDINGS.
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
As of December 31, 1998, the Trust had three holders of record of the
Series 1997-1 Certificates, computed in accordance with Rule 12g5-1
under the Securities Exchange Act of 1934, as amended.
Item 6. SELECTED FINANCIAL DATA.
Not applicable.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION.
Not applicable.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Not applicable.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
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PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Not applicable.
Item 11. EXECUTIVE COMPENSATION.
Not applicable.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Not applicable.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not applicable.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The Independent Accountants' Servicing Report, delivered pursuant
to Section 3.6 of the Pooling and Servicing Agreement dated as of
February 1, 1997, among U.S. Bank National Association ND
(formerly First Bank of South Dakota (National Association), as
Transferor, FBS Card Services, Inc., as Servicer, and Citibank,
N.A., as Trustee, is filed herewith.
(b) None.
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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 hereunto duly authorized.
FIRST BANK CORPORATE
CARD MASTER TRUST
By U.S. Bank National Association ND
as Originator
Dated: May 21, 1999 By: /s/ David P. Grandstrand
---------------------------
David P. Grandstrand
Senior Vice President
and Treasurer
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EXHIBIT INDEX
ITEM
99.1 The Independent Accountants' Servicing Report, delivered pursuant to
Section 3.6 of the Pooling and Servicing Agreement dated as of
February 1, 1997, among U.S. Bank National Association ND (formerly
First Bank of South Dakota (National Association)), as Transferor,
FBS Card Services, Inc., as Servicer, and Citibank, N.A., as
Trustee, is filed herewith.
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Report of Independent Accountants on
Applying Agreed-Upon Procedures
U.S. Bancorp
Minneapolis, Minnesota
We have performed the procedures enumerated below, which were agreed to by
U.S. Bank National Association ND (formerly First Bank of South Dakota), the
Transferor, and U.S. Bank Corporate Payment Systems, Inc. (formerly FBS Card
Services, Inc.), the Servicer, wholly-owned subsidiaries of U.S. Bancorp,
(collectively known as the "Companies"), pursuant to the Pooling and Servicing
Agreement dated February 1, 1997 and the Supplement dated February 27, 1997
(collectively the "PSA"), solely to assist you with respect to the First Bank
Corporate Card Master Trust Series 1997-1 (the "Trust") and management's
assertion regarding the Annual Servicer's Certificate dated April 1, 1999. This
agreed-upon procedures engagement was performed in accordance with standards
established by the American Institute of Certified Public Accountants. The
sufficiency of the procedures is solely the responsibility of the specified
users of the report. Consequently, we make no representation regarding the
sufficiency of the procedures described below either for the purpose for which
this report has been requested or any other purpose.
Our procedures, with respect to the PSA, were as follows:
SECTION 3.1 - ACCEPTANCE OF APPOINTMENT AND OTHER MATTERS RELATED TO THE
SERVICER
1. Obtained a copy of the December 31, 1998 Monthly Certificateholder
Statement (the "Statement") as evidence that U.S. Bank Corporate
Payment Systems, Inc. is the Servicer.
2. Inquired of Charles W. (Bill) Devens, Vice President, regarding
whether U.S. Bank Corporate Payment Systems, Inc. has procedures for
identifying and accounting for Ineligible Receivables, as defined by
Section 2.4 (d) of the PSA, and for payments received with respect to
Ineligible Receivables, separately from its accounting for Collections
on Receivables retained by the Trust. Bill Devens represented that
U.S. Bank Corporate Payment Systems, Inc. has procedures for
identifying and
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accounting for Ineligible Receivables, as defined by Section 2.4 (d)
of the PSA, and for payments received with respect to Ineligible
Receivables, separately from its accounting for Collections on
Receivables retained by the Trust.
3. Obtained documentation from J.H. Marsh McLennan, U.S. Bancorp's
fidelity bond coverage provider, indicating that U.S. Bank Corporate
Payment Systems, Inc., maintains fidelity bond coverage to insure
against losses resulting from wrongdoing of its officers and employees
servicing charge card receivables.
SECTION 3.2 - SERVICING COMPENSATION
1. Obtained the Statements for January 1998 through December 1998 and
recalculated U.S. Bank Corporate Payment Systems, Inc.'s servicing fee
to be an amount equal to 1/12 of the product of the series servicing
fee rate (1%) and the servicing base amount, and verified that the
servicing fees are allocated pro rata between certificates.
SECTION 3.3 - REPRESENTATIONS AND WARRANTIES OF THE SERVICER
1. Obtained a copy of the State of Minnesota and North Dakota
Certificates of Good Standing from Bill Devens, U.S. Bancorp Vice
President, indicating U.S. Bank Corporate Payment Systems, Inc., is
duly incorporated and in good standing under Minnesota and North
Dakota laws, and has full corporate power, authority and legal right
to own its properties and conduct its charge card business and to
execute, deliver and perform its obligations under the PSA.
2. Inquired of Bill Devens, Vice President, whether U.S. Bank Corporate
Payment Systems, Inc. has obtained all licenses and approvals
necessary to service the Receivables as required under federal,
Minnesota, and North Dakota law. Bill Devens represented that U.S.
Bank Corporate Payment Systems, Inc. has obtained the above referenced
licenses and approvals necessary to service the Receivables as
required under federal, Minnesota, and North Dakota law.
3. Compared the names of the signers (Randy Ritterman and Bill Devens) on
the Statements to the Board of Directors' resolutions indicating that
the signers Statements are authorized to act on behalf of the
Companies.
4. Inquired of Bill Devens, Vice President, regarding whether to the best
of his knowledge, there are any proceedings or investigations pending
related to the servicing of Trust Receivables, as defined in Section
1.1 of the PSA. Bill Devens represented that there are no proceedings
or investigations pending related to the servicing of Trust
Receivables, as defined in Section 1.1 of the PSA.
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5. Inquired of Bill Devens, Vice President, regarding whether to the best
of his knowledge, U.S. Bank Corporate Payment Systems, Inc. has not
permitted any rescission or cancellation of any Receivable, as defined
in Section 1.1 of the PSA, except as ordered by a court of competent
jurisdiction or other Governmental Authority. Bill Devens represented
that U.S. Bank Corporate Payment Systems, Inc. has not permitted any
rescission or cancellation of any Receivable, as defined in Section
1.1 of the PSA, except as ordered by a court of competent jurisdiction
or other Governmental Authority.
6. Inquired of Bill Devens, Vice President, regarding whether to the best
of his knowledge, all approvals, authorizations, consents, orders, or
other actions of any person or Governmental Authority required in
connection with the execution and delivery of the PSA by U.S. Bank
Corporate Payment Systems, Inc. were complete. Bill Devens represented
that all approvals, authorizations, consents, orders, or other actions
of any person or Governmental Authority required in connection with
the execution and delivery of the PSA by U.S. Bank Corporate Payment
Systems, Inc. were complete.
7. Inquired of Bill Devens, Vice President, regarding whether to the best
of his knowledge, each Receivable, as defined in Section 1.1 of the
PSA, is payable pursuant to a contract which does not create a lien on
any merchandise purchased thereunder. Bill Devens represented that
each Receivable, as defined in Section 1.1 of the PSA, is payable
pursuant to a contract which does not create a lien on any merchandise
purchased thereunder.
SECTION 3.4 - REPORTS AND RECORDS FOR THE TRUSTEE
1. Inquired of Bill Devens, Vice President, whether upon reasonable prior
notice he can prepare, using the Daily Total System Management
Reports, and make available for inspection by the Trustee a record
setting forth:
(a) the aggregate amount of Collections, all payments paid by
corporate clients as obligors under the Corporate Card Agreement,
processed by the Servicer on the preceding Business day, and
(b) the aggregate amount of Receivables, as defined in Section 1.1 of
the PSA, as of the close of business on the preceding Business
Day.
Bill Devens represented that upon reasonable prior notice he can
prepare, using the Daily Total System Management Reports, and make
available for inspection by the Trustee a record setting forth the
above referenced information.
2. Obtained the Statements for the months of January 1998 through
December 1998 and on a sample basis agreed information from ancillary
systems to the Statements. The results of these procedures are
reported in a separate letter to U.S. Bancorp dated April 1, 1999.
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SECTION 3.5 - ANNUAL SERVICER'S CERTIFICATE
1. Obtained a copy of the Annual Certificate to the Trustee, and rating
agencies for the twelve month period ending December 31, 1998.
SECTION 3.7 - TAX TREATMENT
1. Inquired of Bill Devens, Vice President, whether to the best of his
knowledge, the Companies have not filed a tax return or obtained an
employer identification number on behalf of the Trust. Bill Devens
represented that the Companies have not filed a tax return or obtained
an employer identification number on behalf of the Trust.
SECTION 3.9 - REPORTS TO THE COMMISSION
1. Obtained a copy of the January 1998 through December 1998 Statements
filed with the Securities Exchange Commission as required under the
provisions of the Securities Exchange Act of 1934 and the rules and
regulations of the Securities Exchange Commission thereunder.
SECTION 4.1 - RIGHTS OF CERTIFICATEHOLDERS
1. Obtained copies of the First Bank Corporate Card Master Trust (the
"Trust") Class A 6.40%, Asset Backed Certificates Number R-1 and R-2
and Class B 6.55% Asset Backed Certificate Number R-1 issued February
27, 1997, evidencing that they represent an undivided interest in the
Trust.
SECTION 4.2 - ESTABLISHMENT OF ACCOUNT
1. Obtained a memo from Annette Marsula, Citibank, Senior Trust Officer,
supporting the existence of the Collection and Excess Funding Accounts
in the name of Citibank, the Trustee.
2. Obtained the Interest Funding Account Statements provided to U.S. Bank
Corporate Payment Systems, Inc. by Citibank, indicating the amount
deposited in the Interest Funding Account for January 1998 through
December 1998.
SECTION 4.3 - COLLECTIONS AND ALLOCATIONS
1. Compared the Standard & Poor's and Moody's ratings per Bloomberg to
the ratings required by the PSA and noted that the Company has a
certificate of deposit or commercial paper rating of at least A-1 and
P-1, respectively.
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2. Recalculated whether U.S. Bank Corporate Payment Systems, Inc.
allocated to the Holder of the Exchangeable Transferor Certificate an
amount equal to the product of the Transferor Percentage and the
aggregate amount of Principal Collections and Yield Collections,
respectively, in each Collection Period.
SECTION 8.8 - EXAMINATION OF RECORDS
1. Inquired of Bill Devens, Vice President, whether U.S. Bank Corporate
Payment Systems, Inc.'s procedures clearly and unambiguously identify
each Account in its computer or other records to reflect that the
Receivables arising in the Account have been conveyed to the Trust.
Bill Devens represented that U.S. Bank Corporate Payment Systems,
Inc.'s procedures clearly and unambiguously identify each Account in
its computer or other records to reflect that the Receivables arising
in the Account have been conveyed to the Trust.
2. Inquired of Bill Devens, Vice President, whether, U.S. Bank Corporate
Payment Systems, Inc., prior to sale or transfer to a third party,
examines its computer and other records of any receivable held in
custody, to determine that such receivable is not a Receivable as
defined in Section 1.1. Bill Devens represented that, U.S. Bank
Corporate Payment Systems Inc., prior to sale or transfer to a third
party, examines its computer and other records of any receivable held
in custody, to determine that such receivable is not a Receivable as
defined in Section 1.1.
SUPPLEMENT SECTION 4.5 AND 4.9 - MONTHLY ALLOCATIONS
1. Obtained written instructions provided by the Servicer to the Trustee
for each of the twelve months in the period ended December 31, 1998 to
make withdrawals or allocations from the Collection Account, the
Interest Funding Account and the Principal Funding Account on the
applicable transfer date.
We were not engaged to, and did not, perform an examination, the objective of
which would be the expression of an opinion on management's assertion regarding
compliance with the PSA. Accordingly, we do not express such an opinion. Had we
performed additional procedures, other matters might have come to our attention
that would have been reported to you.
This report is intended solely for the information and use of the specified
users listed above and should not be used by those who have not agreed to the
procedures and taken responsibility for the sufficiency of the procedures for
their purposes.
April 1, 1999
/s/ Ernst & Young LLP
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Report of Independent Accountants on
Applying Agreed-Upon Procedures
U.S. Bancorp
Minneapolis, Minnesota
We have performed the procedures described below, which were agreed to by the
managements of U.S. Bank National Association ND, the Transferor (formerly
First Bank of South Dakota), and U.S. Bank Corporate Payment Systems, Inc.
(formerly FBS Card Services, Inc.), the Servicer, wholly-owned subsidiaries
of U.S. Bancorp, (collectively known as the "Companies"), solely to assist
you in evaluating management's assertions with respect to the monthly
certificateholder's statements (the "Statements") prepared by U.S. Bank
Corporate Payment Systems, Inc., during each of the twelve months in the
corresponding period ended December 31, 1998 pursuant to subsection 3.4 (b)
of the Pooling and Servicing Agreement dated February 1, 1997 and the
Supplement dated February 27, 1997 (collectively, the "PSA"). This
agreed-upon procedures engagement was performed in accordance with standards
established by the American Institute of Certified Public Accountants. The
sufficiency of the procedures is solely the responsibility of the specified
users of the report. Consequently, we make no representation regarding the
sufficiency of the procedures described below either for the purpose for
which this report has been requested or any other purpose.
We performed, on a test basis, the procedures enumerated in the letter dated
April 1, 1999 acknowledged by the Companies, included as Attachment A to this
letter, to each Statement for each of the twelve months in the corresponding
period ended December 31, 1998 prepared by the Companies pursuant to subsection
3.4 (b) of the PSA. As a result of the procedures performed, we noted no
instances where amounts set forth in the Statements were allocated incorrectly
or were not in agreement with the corresponding amounts in the Companies'
servicing records, except as described in Attachment B, Detail of Exceptions, to
this letter.
We were not engaged to, and did not, perform an examination, the objective of
which would be the expression of an opinion on management's assertions.
Accordingly, we do not express such an opinion. Had we performed additional
procedures, other matters might have come to our attention that would have been
reported to you.
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This report is intended solely for the use of the specified users listed above
and should not be used by those who have not agreed to the procedures and taken
responsibility for the sufficiency of the procedures for their purposes.
April 1, 1999
/s/ Ernst & Young LLP
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ATTACHMENT A
April 1, 1999
U.S. Bancorp
Minneapolis, MN
Subsection 3.6 (b) of the Pooling and Servicing Agreement dated February 1, 1997
and the Supplement dated February 27, 1997 (collectively, the "PSA") between
U.S. Bank National Association ND, (formerly First Bank of South Dakota), the
Transferor, and U.S. Bank Corporate Payment Systems, Inc. (formerly U.S. Bank
Corporate Payment Systems), the Servicer, wholly-owned subsidiaries of U.S.
Bancorp, (collectively known as the "Companies"), states that on or before April
30 of each calendar year, the Servicer shall cause a firm of nationally
recognized independent accountants to furnish a report to the Trustee, the
Servicer, and each Rating Agency that they have compared the mathematical
calculations of certain amounts for the monthly certificates delivered pursuant
to subsection 3.4 (b) of the PSA (the "Statement") with the computer reports of
the Servicer. For each of the twelve months in the year-ended December 31,
1998, we will perform the below agreed-upon procedures on a test basis to
satisfy the requirements of subsection 3.6 (b) of the Agreement. You are
responsible for the sufficiency (nature, timing, and extent) of the below
procedures and we are responsible for carrying out the procedures and reporting
the findings in accordance with Statements on Standards for Attestation
Engagements No. 4.
SERIES 1997-1
1. Obtain a copy of the Statements provided to Citibank, from Charles W.
(Bill) Devens, Vice President, for each month for the year-ended December
1998. Agree the name of the officers, Randy L. Ritterman and Charles W.
Devens, signing the Statements to a U.S. Bancorp Board of Directors
authorization indicating they are authorized to act on behalf of U.S. Bank
Corporate Payment Systems, Inc.
2. Compare the information contained in the January 1998 through December 1998
Statements to Exhibit C of the Agreement.
3. Agreed the mathematical calculations of each amount included in the
January 1998 through December 1998 Statements by comparing the amounts
listed on the Statements to the Companies computer reports which were
the source of the amounts by performing the following:
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Page 1 For Item A) 1., compare the amount of the distribution to
Class A Monthly Principal for Collections processed for the
Collection Period for the Determination Date to the Payment
to Class A Certificateholders as stated on the spreadsheets
used by U.S. Bank Corporate Payment Systems, Inc. to
summarized information from Total System Reports, the
general ledger, and LIBOR index information (the "Settlement
Statement"), divided by the Amount of Class A Bonds
($394,800,000) for each Determination Date.
Page 1 For Item A) 2., compare the amount of the distribution to
Class B Monthly Principal for Collections processed for the
Collection Period for the Determination Date to the Payment
to Class B Certificateholders as stated on the Settlement
Statement divided by the Amount of Class B Bonds
($6,300,000) for each Determination Date.
Page 1 For Item A) 3., compare the amount of the distribution to
Collateral Monthly Principal for Collections processed for
the Collection Period for the Determination Date to the
Payment to Collateral Certificateholders as stated on the
Settlement Statement divided by the Amount of CIA Bonds
($18,900,000) for each Determination Date.
Page 1 For Item A) 4., compare the amount of the distribution to
Class A Monthly Interest for Collections processed for the
Collection Period for the Determination Date to the Interest
Funding Account Payment to Class A Investors as stated on
the Settlement Statement divided by the Amount of Class A
Bonds ($394,800,000) for each Determination Date.
Page 1 For Item A) 5., compare the amount of the distribution to
Class A Deficiency for Collections processed for the
Collection Period for the Determination Date to the Interest
Funding Account Class A Deficiency Amount as stated on the
Settlement Statement divided by the Amount of Class A Bonds
($394,800,000) for each Determination Date.
Page 1 For Item A) 6., compare the amount of the distribution to
Class A Additional Interest for Collections processed for
the Collection Period for the Determination Date to Class A
Additional Interest as stated on the Form of Payment and
Notification Letter (Trustee Statement), provided by the
Servicer to the Trustee monthly,
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divided by the Amount of Class A Bonds ($394,800,000) for
each Determination Date.
Page 1 For Item A) 7., compare the amount of the distribution to
Class B Monthly Interest for Collections processed for the
Collection Period for the Determination Date to the Interest
Funding Account Payment to Class B Investors divided by the
Amount of Class B Bonds ($6,300,000) for each Determination
Date.
Page 1 For Item A) 8., compare the amount of the distribution to
Class B Deficiency for Collections processed for the
Collection Period for the Determination Date to the Interest
Funding Account Class B Deficiency Amount as stated on the
Settlement Statement divided by the Amount of Class B Bonds
($6,300,000) for each Determination Date.
Page 1 For Item A) 9., compare the amount of the distribution to
Class B Additional Interest for Collections processed for
the Collection Period for the Determination Date to Class B
Additional Interest as stated on the Trustee Statement
divided by the Amount of Class B Bonds ($6,300,000) for each
Determination Date.
Page 1 For Item A) 10., compare the amount of the distribution to
Collateral Monthly Interest for Collections processed for
the Collection Period for the Determination Date to the
Settlement Statement by adding the Collateral Monthly
Interest Distributed and Amount Withdrawn from Spread
Account to Fund Shortfalls divided by 1,000 divided by the
amount of CIA Bonds ($18,900,000).
Page 1 For Item A) 11., compare the amount of the distribution to
Accrued and unpaid Collateral Monthly Interest for the
Collection Period for the Determination Date to the Amount
of unpaid interest due to CIA Holder on the Settlement
Statement divided by the amount of CIA Bonds ($18,900,000).
Page 1 For Item B.) 1.(a), recalculated the aggregate amount of
Principal Collections allocated to the Class A Certificates
for the related Collection Period by multiplying the
Principal Component of Collections by the Class A Floating
Percentage which is the Beginning Class A Adjusted Invested
Amount divided by the Beginning Trust Component plus the
Beginning Excess Funding Account Balance or the Beginning
Adjusted Invested Amount plus
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the Transferor Amount, whichever is greater, as stated on
the Settlement Statement.
Page 1 For Item B.) 1.(b), recalculated the aggregate amount of
Principal Collections allocated to the Class B Certificates
for the related Collection Period by multiplying the
Principal Component of Collections by the Class B Floating
Percentage which is the Beginning Class B Invested Amount
divided by the Beginning Trust Component plus the Beginning
Excess Funding Account Balance or the Beginning Adjusted
Invested Amount plus the Transferor Amount, whichever is
greater, as stated on the Settlement Statement .
Page 1 For Item B.) 1. (c), recalculated the aggregate amount of
Principal Collections allocated to Collateral Investor
Interest for the related Collection Period by multiplying
the Principal Component of Collections by the Collateral
Floating Percentage which is the Beginning Collateral
Invested Amount divided by the Beginning Trust Component
plus the Beginning Excess Funding Account Balance or the
Beginning Adjusted Invested Amount plus the Transferor
Amount, whichever is greater, as stated on the Settlement
Statement.
Page 1 For Item B.) 2. (a), compare the amount of the Trust
Principal Component as of the end of the related Collection
Period to the General Ledger by multiplying the Ending
Receivables Balance by one minus the Yield Factor (2.00%).
Page 1 For Item B.) 2. (b), recalculated the amount of the Series
1997-1 Invested Amount for the Collection Period by adding
the ending Class A, B and Collateral Invested Amounts on the
Settlement Statement as of the end of the related Transfer
Date.
Page 1 For Item B.) 2. (c), compare the amount of the Series 1997-1
Adjusted Invested Amount for the Collection Period by adding
the ending Class A, B and Collateral Invested Amounts to the
Settlement Statement as of the end of the related Transfer
Date.
Page 2 For Item B.) 2. (d), compare the amount of the Series 1997-1
Class A Invested Amount to the Beginning Class A Adjusted
Invested Amount on the Settlement Statement as of the end
of the related Transfer Date.
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Page 2 For Item B.) 2. (e), compare the amount of the Series 1997-1
Class A Adjusted Invested Amount to the Ending Class A
Adjusted Invested Amount on the Settlement Statement as of
the end of the related Transfer Date.
Page 2 For Item B.) 2. (f), compare the amount of the Series 1997-1
Class B Invested Amount to the Ending Class B Invested
Amount on the Settlement Statement as of the end of the
related Transfer Date.
Page 2 For Item B.) 2. (g), compare the amount of the Collateral
Invested Amount to the Ending Collateral Invested Amount on
the Settlement Statement as of the end of the related
Transfer Date.
Page 2 For Item B.) 2. (h), compare the amount of the Floating
Allocation Percentage with respect to the related Collection
Period to the summation of the Class A, B and Collateral
Floating Percentage, (items B. 2. (i), (j) and (k) on the
Statement).
Page 2 For Item B.) 2. (i), compare the amount of the Class A
Floating Percentage with respect to the related Collection
Period to the Settlement Statement by dividing the Beginning
Class A Adjusted Investment Amount by the sum of the
Beginning Trust Principal Component and the Excess Funding
Account Beginning Balance or the Beginning Adjusted
Investment Amount and the Transferor Amount, whichever is
greater.
Page 2 For Item B.) 2. (j), compare the amount of the Class B
Floating Percentage with respect to the related Collection
Period to the Settlement Statement by dividing the Beginning
Class B Adjusted Investment Amount by the sum of the
Beginning Trust Principal Component and the Excess Funding
Account Beginning Balance or the Beginning Adjusted
Investment Amount and the Transferor Amount, whichever is
greater.
Page 2 For Item B.) 2. (k), compare the amount of the Collateral
Floating Percentage with respect to the related Collection
Period to the Settlement Statement by dividing the Beginning
Collateral Investment Amount by the sum of the Beginning
Trust Principal Component and the Excess Funding Account
Beginning Balance or the Beginning Adjusted Investment
Amount and the Transferor Amount, whichever is greater.
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Page 2 For Item B.) 2. (l), the amount of the Fixed Allocation
Percentage with respect to the related Collection Period is
not applicable because the Collection Periods reviewed do
not fall into the Accumulation or Early Amortization Period
as indicted on the Settlement Statement.
Page 2 For Item B.) 2. (m), the amount of the Class A Fixed
Percentage with respect to the related Collection Period is
not applicable because the Collection Periods reviewed do
not fall into the Accumulation or Early Amortization Period
as indicted on the Settlement Statement.
Page 2 For Item B.) 2. (n), the amount of the Class B Fixed
Percentage with respect to the related Collection Period is
not applicable because the Collection Periods reviewed do
not fall into the Accumulation or Early Amortization Period
as indicted on the Settlement Statement.
Page 2 For Item B.) 2. (o), the amount of the Collateral Fixed
Percentage with respect to the related Collection Period is
not applicable because the Collection Periods reviewed do
not fall into the Accumulation or Early Amortization Period
as indicted on the Settlement Statement.
Page 2 For Item B.) 3., compared the aggregate amount of
outstanding balances in the Accounts which were delinquent
as of the end of the last day of the related Collection
Period to the Settlement Statement for the Aggregate Account
Balance and Percentage of Total Receivables for (a) 30-59
days, (b) 60-89 days, (c) 90-119 days, (d) 120-149 days
and the Total.
Page 2 For Item B.) 4. (a), compare the amount of the Investor
Default Amount for the related Collection Period to the
summation of Class A, B and Collateral Investor Default
Amounts, (items B. 4. (b), (c) and (d) on the Statement).
Page 2 For Item B.) 4. (b), recalculated the amount of the Class A
Investor Default Amount for the related Collection Period
Settlement Statement by multiplying the Defaulted Receivable
and the Class A Floating Percentage.
</TABLE>
6
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Page 2 For Item B.) 4. (c), compare the amount of the Class B
Investor Default Amount for the related Collection Period to
the Settlement Statement by multiplying the Defaulted
Receivable and the Class B Floating Percentage.
Page 2 For Item B.) 4. (d), compare the amount of the Collateral
Investor Default Amount for the related Collection Period to
the Settlement Statement by multiplying the Defaulted
Receivable and the Collateral Floating Percentage.
Page 3 For Item B.) 5.(a), compare the amount of the Aggregate
Class A Investor Charge-Offs for the related Collection
Period to the Class A Required Amount on the Settlement
Statement.
Page 3 For Item B.) 5.(b), compare the amount of Class A Charge-
Offs per $1,000 of original Certificate Principal Balance
for the related Collection Period to the Class A Required
Amount on the Settlement Statement divided by the amount of
Class A Bonds ($394,800,000).
Page 3 For Item B.) 5.(c), compare the amount of the Aggregate
Class B Investor Charge-Offs for the related Collection
Period to the Class B Investor Charge-Offs amount on the
Settlement Statement.
Page 3 For Item B.) 5.(d), compare the amount of Class B Charge-
Offs per $1,000 of original Certificate Principal Balance
for the related Collection Period to the Class B Investor
Charge-Off Amount on the Settlement Statement divided by the
amount of Class B Bonds ($6,300,000).
Page 3 For Item B.) 5.(e), compare the amount of the Aggregate
Collateral Investor Charge-Offs for the related Collection
Period to the Collateral Investor Charge-Offs Amount on the
Settlement Statement.
Page 3 For Item B.) 5.(f), compare the amount of the Collateral
Charge-Offs per $1,000 of original Certificate Principal
Balance for the related Collection Period to the Collateral
Charge-Offs Amount on the Settlement Statement divided by
the amount of Collateral Invested Amount Bonds
($18,900,000).
</TABLE>
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Page 3 For Item B.) 5.(g), compare the amount of the Aggregate
Class A Investor Charge-Offs reimbursed on the related
Transfer Date to the Reimbursed Investor Charge-Offs on the
Settlement Statement.
Page 3 For Item B.) 5.(h), compare the amount of the Class A
Investor Charge-Offs reimbursed for the related Collection
Period to item 5.(g) divided by the amount of Class A Bonds
($394,800,000).
Page 3 For Item B.) 5.(i), compare the amount of the Aggregate
Class B Investor Charge-Offs reimbursed for the related
Collection Period to the Reimbursed Class B Investor Charge-
Offs on the Settlement Statement.
Page 3 For Item B.) 5.(j), compare the amount of the Class B
Investor Charge-Offs reimbursed per $1,000 of the original
Certificate Principal Balance for the related Collection
Period to the amount of the Reimbursed Class B Investor
Charge-Offs.
Page 3 For Item B.) 5.(k), compare the amount of the Aggregate
Collateral Investor Charge-Offs reimbursed for the related
Transfer Date to the Reimbursed Collateral Investor Charge-
Offs on the Settlement Statement.
Page 3 For Item B.) 5.(l), compare the amount of the Collateral
Investor Charge-Offs reimbursed per $1,000 of original
Certificate Principal Balance for the related Collection
Period to item 5. (k) divided by the amount of Collateral
Invested Amount Bonds ($18,900,000).
Page 3 For Item B.) 6. (a), compare the amount of the Class A
Monthly Servicing Fee for the related Collection Period to
the Settlement Statement by multiplying the Initial Class A
Investment Amount and the Net Servicing Fee Rate of 1%
divided by 12.
Page 3 For Item B.) 6. (b), compare the amount of the Class B
Monthly Servicing Fee for the related Collection Period to
the Settlement Statement by multiplying the Initial Class B
Investment Amount and the Net Servicing Fee Rate of 1%
divided by 12.
Page 3 For Item B.) 6. (c), compare the amount of the Collateral
Monthly Servicing Fee for the related Collection Period to
the Settlement Statement by multiplying the Initial
Collateral Investment Amount and the Net Servicing Fee Rate
of 1% divided by 12.
</TABLE>
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Page 3 For Item B.) 7. (a), compare the amount of the Reallocated
Collateral Principal Collections for the related Collection
Period to the Settlement Statement.
Page 3 For Item B.) 7. (b), compare the amount of the Reallocated
Class B Principal Collections for the related Collection
Period to the Settlement Statement.
Page 3 For Item B.) 7. (c), compare the amount of the Collateral
Invested Amount as of the Distribution Date to the Ending
Collateral Invested Amount, item B. 2. (g) on the Settlement
Statement.
Page 3 For Item B.) 7. (d), compare the amount of the Class B
Invested Amount as of the Distribution Date to the Ending
Class B Invested Amount, item B. 2. (f) on the Settlement
Statement.
Page 4 For Item B.) 8. (a), compare the amount of the Aggregate
Yield Collections (including Net Interchange) processed
during the related Collection Period allocated in respect of
the Class A Investor Certificate to the Settlement Statement
by multiplying the Yield Collections by the Class A Floating
Percentage, defined in item B. 2. (i) on the Statement.
Page 4 For Item B.) 8. (b), compare the amount of the Aggregate
Yield Collections (including Net Interchange) processed
during the related Collection Period allocated in respect of
the Class B Investor Certificate to the Settlement Statement
by multiplying the Yield Collections by the Class B Floating
Percentage, defined in item B. 2. (j) on the Statement.
Page 4 For Item B.) 8. (c), compare the amount of the Aggregate
Yield Collections (including Net Interchange) processed
during the related Collection Period allocated in respect of
the Collateral Investor Certificate to the Settlement
Statement by multiplying the Yield Collections by the
Collateral Floating Percentage, defined in item B. 2. (k) on
the Statement.
Page 4 For Item B.) 9. (a), compare the amount of the Principal
Funding Account Amount on the related Transfer Date to the
Principal Funding Account ending balance on the Settlement
Statement.
</TABLE>
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Page 4 For Item B.) 9. (b), compare the amount of the Deficit
Controlled Accumulation Amount with respect to the related
Collection Period to the Deficit Controlled Accumulation
Amount on the Settlement Statement.
Page 4 For Item B.) 9. (c), compare the amount of the Principal
Funding Investment Proceeds deposited in the Collection
Account on the related Transfer Date to the Principal
Funding Investment Proceeds on the Settlement Statement.
Page 4 For Item B.) 9. (d), compare the amount of the Reserve Draw
Amount deposited in the Collection Account on the related
Transfer Date to the Reserve Draw Amount on the Settlement
Statement.
Page 4 For Item B.) 10., compare the amount of the Reserve Draw
Amount on the related Transfer Date to the Reserve Draw
Amount on the Settlement Statement.
Page 4 For Item B.) 11., compare the amount of the
Overconcentration Draw Amount on the related Transfer Date
to the Overconcentration Draw Amount on the Settlement
Statement.
Page 4 For Item B.) 12. (a), recalculated the amount of the Class A
Available Funds on deposit in the Collection Account on the
related Transfer Date to the Class A Available funds on the
Settlement Statement which is Yield Collections minus
Servicer Interchange multiplied by the sum of the Class A
Floating Percentage, Reserve Draw Amount, Interest and
Earnings included in Class A Available Funds, and Principal
Funding Investment Proceeds.
Page 4 For Item B.) 12. (a), compare the amount of the Class B
Available Funds on deposit in the Collection Account on the
related Transfer Date to the Class B Available funds on the
Settlement Statement which is Yield Collections minus
Servicer Interchange multiplied by the Class B Floating
Percentage.
Page 4 For Item B.) 12. (a), compare the amount of the Collateral
Available Funds on deposit in the Collection Account on the
related Transfer Date to the Collateral Available funds on
the Settlement Statement which is Yield Collections minus
Servicer Interchange multiplied by the Collateral Floating
Percentage.
</TABLE>
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Page 4 For Item B.) 13. (a), compare the amount of the Portfolio
Yield for the related Collection Period to the Portfolio
Yield on the Settlement Statement which is Yield Component
of Collections plus Interest and Earnings on funds on
deposit in Excess Funding Account times Floating Allocation
Percentage plus Principal Funding Investment Proceeds,
Reserve Draw Amount, and Overconcentration Draw Amount,
minus Investor Default Amount allocable to Series 1997-1
divided by the Ending Class B Invested Amount, and the
Ending Collateral Invested Amount, multiplied by 12.
Page 4 For Item B.) 13. (b), compare the amount of the Base Rate
for the related Collection Period to the Base Rate on the
Settlement Statement which is the sum of Class A, B and
Collateral Monthly Interest and Class A, B and Collateral
Servicing Fee divided by the sum of the Ending Class A
Invested Amount, the Ending Class B Invested Amount, and the
Ending Collateral Invested Amount, multiplied by 12.
Page 4 For Item B.) 14., recalculated the amount of the Monthly
Payment Rate for the related Collection Period by dividing
collections from the Settlement Statement by the Ending
Receiveables balance for the prior month from the Settlement
Statement.
Page 4 For Item B.) 15., recalculated the amount of the Principal
Payment Rate for the related Collection Period by dividing
the Principal Component of Collections by the Ending Trust
Principal Component for the prior month from the Settlement
Statement.
Page 4 For Item B.) 16. compare the amount of the Gross Losses as a
Percentage of Charge Volume and Fees for the related
Collection Period to the Settlement Statement by dividing
the Gross Defaulted Receivables by Gross Charge Volume and
Fees multiplied by the Monthly Payment Rate, item B. 14. on
the Statement, multiplied by 12.
</TABLE>
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Page 4 For Item B.) 17., compare the amount of the Minimum
Transferor's Percentage for the related Collection Period to
the product of the maximum aggregate adjustments / Gross
Charge Volume & Fees over past 12 months, the Dilution
Horizon Percentage, Gross Charge Volume & Fees / Ending
Receivables, and Stressed Trust Dilution Factor Balance
divided by 2, rounded up, and multiplied by 2 if greater
than .01 as stated on the Settlement Statement.
Page 5 For Item 1., recalculated the amount of the Investor
Percentage of Principal Collections for the related
Collection Period by multiplying the Principal Component of
Collections from the Settlement Statement by the Floating
Allocation Percentage at item B. 2. (h) on the Statement.
Page 5 For Item 2., recalculated the amount of the Investor
Percentage of Yield Collections for the related Collection
Period by multiplying the Yield Component and Interest
Earnings on Funds in Excess Funding Account on the
Settlement Statement by the Floating Allocation Percentage
at item B.2. (h) on the Statement.
Page 5 For Item 3., compare the amount of the Investor Percentage
of Net Interchange for the related Collection Period to the
Settlement Statement by multiplying the Net Interchange from
the Settlement Statement by the Floating Allocation
Percentage at item B. 2. (h) on the Statement.
Page 5 For Item 4., compare the amount of the Servicer Interchange
for the related Collection Period to the Servicer
Interchange Amount on the Settlement Statement.
Page 5 For Item 5., compare the amount of the aggregate amount of
funds on deposit in Collection Account allocable to Series
1997-1 Certificates to the Settlement Statement by adding
Collections and Net Interchange.
Page 5 For Item 6., compare the amount of the Funds in Principal
Funding Account allocable to Series 1997-1 Certificates for
the related Collection Period to the Settlement Statement.
</TABLE>
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Page 5 For Item 7., compare the amount of the aggregate amount of
funds paid in accordance with the Loan Agreement pursuant to
Section 4.11 by adding the Collateral Monthly Interest
Funded and Amounts due Collateral Interest Holder on the
Settlement Statement.
Page 5 For Item 8., compare the amount of the Required Collateral
Invested Amount over the Collateral Invested Amount for the
related Collection Period to the Settlement Statement.
Page 5 For Item 9., compare the amount of the Collateral Invested
Amount for the related Collection Period to item B. 2. (g)
on the Statement.
Page 5 For Item 10. (i), compare the amount of Monthly Interest,
Deficiency Amounts, and Additional Interest payable to the
Class A Certificateholders for the related Collection Period
to the Settlement Statement.
Page 5 For Item 10. (ii), compare the amount of Monthly Interest,
Deficiency Amounts, and Additional Interest payable to the
Class B Certificateholders for the related Collection Period
to the Settlement Statement.
Page 5 For Item 10. (iii), compare the amount of Monthly Interest,
Deficiency Amounts, and Additional Interest payable to the
Collateral Interest Holder for the related Collection Period
to the Settlement Statement.
Page 5 For Item 11. (i), compare the amount of Principal payable to
the Class A Certificateholders for the related Collection
Period to the Settlement Statement.
Page 5 For Item 11. (ii), compare the amount of Principal payable
to the Class B Certificateholders for the related Collection
Period to the Settlement Statement.
Page 5 For Item 11. (iii), compare the amount of Principal payable
to the Collateral Interest Holder for the related Collection
Period to the Settlement Statement.
</TABLE>
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Page 5 For Item 12. (i), compare the amount of all amounts payable
to the Class A Certificateholders for the related Collection
Period from the summation of item 10. (i) and 11. (i) on the
Statement.
Page 5 For Item 12. (ii), compare the amount of all amounts payable
to the Class B Certificateholders for the related Collection
Period from the summation of item 10. (ii) and 11. (ii) on
the Statement.
Page 5 For Item 12.) (iii), compare the amount of all amounts
payable to the Collateral Interest Holder for the related
Collection Period from the summation of item 10. (iii) and
11. (iii) on the Statement.
Page 5 For Item 13.), compare the status of an Early Amortization
Event to the Settlement Statement.
</TABLE>
Very truly yours,
Ernst & Young LLP
Acknowledgments:
/s/ Charles W. Devens
Charles W. Devens
U.S. Bancorp
/s/David P.Grandstrand
David P. Grandstrand
U.S. Bancorp
14
<PAGE>
Attachment B
Detail of Exceptions
<TABLE>
<CAPTION>
AS AS
STATEMENT DATE(s) PROCEDURE DESCRIPTION CALCULATED REPORTED
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
March 1998 Page 1, Trust Principal Component as of the end of $631,360,777 $622,601,300
Item B.) 2.(a) the related Collection Period per the
Settlement Statements was reported
incorrectly.
January through Page 2, Delinquent accounts up to 29 days are not N/A N/A
December 1998 Item B.) 3 included in the Monthly Servicing
Certificates but are required according to the
PSA Agreement.
January and Page 4, Returned check fees per the Total System
February 1998 Item B.) 16 Reports were not included in the calculation
of Gross Charge Volumes and Fees in the
Settlement Statements.
- January 1998 $502,806,850 $502,804,315
- February 1998 $524,864,374 $524,861,659
June, October and Page 4, Gross Charge Volume and Fees per the
December of 1998 Item B.) 16 Settlement Statements did not agree to the
Total System Reports.
- June 1998 $542,047,224 $542,047,269
- October 1998 $546,113,455 $546,116,170
- December 1998 $529,161,793 $529,164,508
January through PSA Section Aggregate receivable balances are not N/A N/A
December 1998 3.4(b)(xii) included in the Monthly Certificateholder
Statements.
January through PSA, Exhibit C, Excess Funding Account Balances are not N/A N/A
December 1998 #23 included in the Monthly Certificateholder
Statements.
</TABLE>
