SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended: Commission file number:
December 31, 1998 333-21707
Chevy Chase Auto Receivables Trust 1997-3
____________________________________________________
(Exact name of registrant as specified in charter)
Maryland 52-0897004
________________________________ ________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Chevy Chase Bank, F.S.B.
8401 Connecticut Avenue
Chevy Chase, Maryland 20815
________________________________________ __________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (301) 986-7000
________________
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant has (1) 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
_____ _____
The Registrant has no voting stock or class of common stock
outstanding as of the date of this report.
Introductory Note
Chevy Chase Bank, F.S.B. (the "Bank")is the seller and servicer under the
Pooling and Servicing Agreement (" Agreement"), dated as of September 1, 1997,
by and between the Bank and First Bank National Association,
as the trustee. The Certificates listed on page 1 hereof will be referred to
collectively herein as the "Certificates". The Certificates do not represent
obligations of or interests in the Bank.
By letter dated August 7, 1995, the Bank has requested an exemption
from certain reporting and information requirements under the
Exchange Act. Pending resolution of such request, the Bank intends
to provide information in a manner consistent with such application.
Accordingly, certain items of Form 10-K are designated below as
"Not Applicable", and with respect to the remaining items the Bank is
providing the information set forth below.
Part I
Item 1 Business
Not Applicable
Item 2 Properties
See the Annual Report filed pursuant to Item 14 Below.
Item 3 Legal Proceedings
None
Item 4 Submission Of Matters To A Vote Of Security Holders
None
Page 2
Part II
Item 5 Market For Registrant's Common Equity
And Related Stockholder Matters
Each of the Certificates, representing investors' interests
in the Trust, are represented by a single certificate
registered in the name of Cede & Co., the nominee of
The Depository Trust Company. Accordingly, Cede & Co.
is the sole holder of record of the Certificates, which it
held on behalf of approximately 15 brokers, dealers,
banks and other direct participants in the DTC system at
December 31, 1998.
To the best knowledge of the Registrant, there is no
established public trading market for the Certificates.
Item 6 Selected Financial Data
Not Applicable
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations
Not Applicable
Item 8 Financial Statements and Supplementary Data
Not Applicable
Item 9 Changes In And Disagreements With Accountants
On Accounting and Financial Disclosure
None
Part III
Item 10 Directors and Executive Officers of the Registrant
Not Applicable
Item 11 Executive Compensation
Not Applicable
Page 3
Item 12 Security Ownership Of Certain Beneficial Owners
and Management
Each of the Certificates, representing investor's interests in the
Trust, are represented by a single certificate registered in the
name of Cede & Co., the nominee of the Depository Trust
Company("DTC"), and an investor holding an interest in the Trust
is not entitled to receive a Certificate representing such interest
except in certain limited circumstances. Accordingly, Cede & Co.
is the sole holder of record of the Certificates, which it held on
behalf of approximately 15 brokers, dealers, banks and other
direct participants in the DTC system at December 31, 1998.
Such direct participants may hold Certificates for their own
accounts or for the accounts of their customers. The following
table sets forth, with respect to each of the Certificates, the
identity of each direct DTC participant that holds positions in
such Certificate in excess of 5% of the outstanding principal
amount thereof at December 31, 1998.
$ 202,030,907 6.20% Auto Receivables Backed Certificates
Aggregate Amount of Percent
Name Certificates Held of Class
Bank of New York 36,129,000 17.88%
Bankers Trust Company 50,360,000 24.93%
Boston Safe Deposit & Trust Co. 17,440,000 8.63%
Citibank, N.A. 17,500,000 8.66%
PNC Bank, National Association 11,950,000 5.91%
State Street Bank and Trust Co. 28,620,000 14.17%
Chase Manhattan Bank 11,100,000 5.49%
The address of each of the above participants is:
C/O The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004
Item 13 Certain Relationships and Related Transactions
None
Page 4
Part IV
Item 14 Exhibits, Financial Statement Schedules and Reports
On Form 10-K
(a) The following documents are filed as part of this Report:
i) Summary of annual distributions on the Certificates to
Certificateholders for the year ended December 31, 1998
ii) Annual Accountant's Report dated November 18, 1998
and related Report of Management dated November 18, 1998
relating to sufficiency of accounting controls.
No proxy soliciting material has been distributed by
the Trust.
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.
Chevy Chase Auto Receivables Trust 1997-3
By: Chevy Chase Bank, F.S.B.
Originator of the Trust and Servicer
Date: 03/31/99 By: _________________________________________
Joel A. Friedman
Senior Vice President
and Controller
Page 5
ANNUAL REPORT
Chevy Chase Auto Receivables Trust 1997-3
$ 202,030,907 6.20% Auto Receivables Backed Certificates
For the Year Ended December 31, 1998
PRINCIPAL INTEREST NET NET 30 + DELQ.
DIST DIST LOSSES LOSS % DELQ. %
____________ ___________ ___________ ________ ____________ _______
Jan-98 4,632,701 935,104 367,571 2.40% 14,793,267 8.05%
Feb-98 6,128,569 911,169 1,238,237 8.35% 13,257,256 7.45%
Mar-98 6,279,429 879,505 1,353,322 9.43% 11,299,773 6.56%
Apr-98 6,924,687 847,061 1,580,541 11.44% 11,343,934 6.84%
May-98 5,981,829 811,283 849,711 6.39% 11,031,579 6.91%
Jun-98 5,189,727 780,377 767,667 5.97% 11,341,479 7.35%
Jul-98 5,042,204 753,564 230,450 1.86% 11,974,427 8.05%
Aug-98 4,936,984 727,512 431,293 3.60% 12,218,363 8.50%
Sep-98 6,010,131 702,004 861,177 7.52% 12,052,027 8.77%
Oct-98 5,137,754 670,952 697,749 6.35% 11,422,721 8.66%
Nov-98 5,067,091 644,407 720,824 6.83% 11,337,328 8.96%
Dec-98 5,014,743 618,227 663,145 6.56% 11,072,804 9.13%
____________ ___________ ___________
Totals 66,345,847 9,281,165 9,761,687
** The date represents the month of the Distribution date, the
information is from activity of the previous month.
MANAGEMENT'S REPORT ON THE EFFECTIVENESS OF THE INTERNAL
CONTROL STRUCTURE RELATIVE TO THE SERVICING OF
AUTOMOBILE LOAN RECEIVABLES
The management of the Bank is responsible for establishing and maintaining
the internal control structure. In fulfilling this responsibility,
estimates and judgments by management are required to assess the expected
benefits and related costs of control procedures. The objectives of an
internal control structure are to provide management with reasonable, but
not absolute, assurance that assets are safeguarded against loss from
unauthorized use or disposition, and that transactions are executed in
accordance with management's authorization and recorded properly to permit
the preparation of financial statements in accordance with generally
accepted accounting principles.
We have performed an evaluation of the effectiveness of the Bank's
internal control structure based on the criteria established in Internal
Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission ("COSO") relative to the servicing
of automobile loan receivables owned by Chevy Chase Auto Receivables Trusts
Series 1995-1, 1995-2, 1996-1, 1996-2, 1997-1, 1997-2, 1997-3 and 1997-4
(collectively referred to as the "Trusts" herein) as of September 30, 1998,
and we have determined that the Bank maintained an effective internal
control structure over financial reporting relative to the servicing of
automobile loan receivables owned by the Trusts as of September 30, 1998.
However, there are inherent limitations in the effectiveness of any internal
control structure, including the possibility of human error and the
circumvention or overriding of controls. Accordingly, even an effective
internal control structure can provide only reasonable assurance with
respect to reliability of financial statements and safeguarding and
management of assets. Furthermore, the effectiveness of any internal
control structure can change with changes in circumstances.
Kevin B. Cashen Larry C. Cain
Senior Vice President Senior Vice President
George P. Clancy, Jr. Stephen R. Halpin, Jr.
Executive Vice President Executive Vice President and
Chief Financial Officer
November 18, 1998
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Chevy Chase Bank, F.S.B.:
We have examined management's assertion, included in the accompanying
Management's Report on the Effectiveness of the Internal Control Structure
Relative to the Servicing of Automobile Loan Receivables, that Chevy Chase
Bank, F.S.B. (the "Bank") maintained an effective internal control structure
over financial reporting relative to the servicing of automobile loan
receivables owned by Chevy Chase Auto Receivables Trusts Series 1995-1,
1995-2, 1996-1, 1996-2, 1997-1, 1997-2, 1997-3 and 1997-4 (collectively
referred to as the "Trusts" herein) as of September 30, 1998.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly,
included obtaining an understanding of the internal control structure over
financial reporting, testing, and evaluating the design and operating effect
veness of the internal control structure, and such other procedures as we
considered necessary in the circumstances. We believe that our examination
provides a reasonable basis for our opinion.
Because of inherent limitations in any internal control structure, errors
or irregularities may occur and not be detected. Also, projections of any
evaluation of the internal control structure over financial reporting to
future periods are subject to the risk that the internal control structure
may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
In our opinion, management's assertion that the Bank maintained an effective
internal control structure over financial reporting relative to the
servicing of automobile receivables owned by the Bank's automobile loan
Trusts as of September 30, 1998, is fairly stated, in all material respects,
based upon criteria established in Internal Control - Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
This report is intended solely for the information and use of the board of
directors and management of the Bank, Norwest Bank Minnesota, N.A., Credit
Suisse, First Boston Corporation, MBIA Insurance Corporation, U.S. Bank
National Association, AMBAC Indemnity Corporation and Financial Guaranty
Insurance Company, and should not be used for any other purpose.
Arthur Andersen LLP
Washington, D.C.
November 18, 1998
