<PAGE>
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, 1997
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 33-84896
PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1996-1
ISSUE DATE: MAY 31, 1996
(Exact name of the registrant as specified in charter)
Delaware 36-4080773
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
75 NORTH FAIRWAY DRIVE
VERNON HILLS, ILLINOIS 60061
Registrant's telephone number, including area code:
(847) 549-6500
Securities registered pursuant to Section 12(b) of the Act: None
Title of each Class Name of each exchange on which registered
_________________________ _________________________________________
_________________________ _________________________________________
Securities registered pursuant to Section 12(g) of the Act: None
_____________________________________________________________________
(Title of Class)
_____________________________________________________________________
(Title of Class)
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. [ ] Not applicable.
The aggregate market value of the voting and non-voting common equity held
by non-affiliates of the Registrant: Not applicable.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.
YES _____ NO _____. Not applicable.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. Not applicable.
DOCUMENTS INCORPORATED BY REFERENCE
Not applicable.
<PAGE>
Part I
------
Item 1. Business. Not applicable.
------ --------
Item 2. Properties.
------ ----------
The Registrant furnishes information regarding the mortgaged properties by
reference to the annual report (the "Annual Report") filed under Item 14
hereof and attached hereto as Exhibit 99.1. Page 3 of the Annual Report pro-
vides the number and aggregate principal balance of delinquent or foreclosed
mortgage loans as well as the available credit, special hazard, bankruptcy
and fraud coverage available to certain Certificates.
Item 3. Legal Proceedings.
------ -----------------
There are no material pending legal proceedings involving either the Mortgage
Pool or the Trustee or the Registrant with respect to the Mortgage Pool,
other than ordinary routine litigation incidental to the Trustee's or the
Registrant's duties under the Pooling and Servicing Agreement.
Item 4. Submission of Matters to a Vote of Security Holders.
------ ---------------------------------------------------
No vote or consent of Certificateholders has been solicited for any purpose
during the fourth quarter of the fiscal year covered by this report.
Part II
-------
Item 5. Market for Registrant's Common Equity and Related Stockholder
------ -------------------------------------------------------------
Matters. Not applicable.
- -------
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. No material disagreement concerning accounting proce-
- --------------------
dures or change of accountants has occurred.
<PAGE>
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 Manage-
------- -----------------------------------------------------------
ment. As of December 31, 1997, the following persons were known to the
- ----
Registrant to be the registered beneficial owners of more than 5% of the
aggregate fractional undivided interest evidenced by any publicly offered
Certificates:
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Name and Address Amount and Nature of Percent of
Title of Class of Beneficial Owner Beneficial Ownership Class
- -------------- ------------------- -------------------- -----------
<S> <C> <C> <C>
Mortgage The Bank of New York $ 25,000,000.00 24.01
Pass-Through 925 Patterson Plank Rd.
Certificates, Secaucus, NJ 07094
Class A-1
Mortgage Bankers Trust Company $ 22,624,138.00 21.73
Pass-Through c/o BT Services
Certificates, Tennessee Inc.
Class A-1 648 Grassmere Park Dr.
Nashville, TN 37211
Mortgage Comerica Bank $ 6,500,000.00 6.24
Pass-Through 411 W. Lafayette
Certificates, Capital Change-Proxy
Class A-1 Detroit, MI 48286
Mortgage Compass Bank $ 50,000,000.00 48.02
Pass-Through 701 S. 20th St.
Certificates, 11th Fl.
Class A-1 Birmingham, AL 35233
Mortgage Deseret Trust Co.-Zions $ 11,975,000.00 100.00
Pass-Through PO Box 11558
Certificates, Salt Lake City, UT 84147
Class A-2
Mortgage Deseret Trust Co.-Zion $ 5,107,000.00 100.00
Pass-Through PO Box 11558
Certificates, Salt Lake City, UT 84147
Class A-3
Mortgage Edwards (A.G.) & Sons, $ 1,958,000.00 95.93
Pass-Through Inc.
Certificates, 1 N. Jefferson
Class A-4 St. Louis, MO 63103
Mortgage Bost & Co. $ 10,700,000.00 34.53
Pass-Through C/o Mellon Bank
Certificates, P.O. Box 3195
Class A-5 Pittsburgh, PA 15230-3195
Attn.: MBS Income Dept.
Mortgage Donaldson, Lufkin & $ 2,000,000.00 6.45
Pass-Through Jenrette Securities
Certificates, Corporation, Newport Tower
Class A-5 525 Washington Blvd., 31st Fl.
Jersey City, NJ 07310-1689
Mortgage Ell & Co. $ 4,300,000.00 13.88
Pass-Through C/o Northern Trust Co.
Certificates, P.O. Box 92395
Class A-5 Chicago, IL 60675-2395
Mortgage OKGBD & Co. $ 13,990,000.00 45.14
Pass-Through C/o Bankers Trust
Certificates, P.O. Box 704
Class A-5 Church Street Station
New York, NY 10015
Mortgage Citicorp Services, Inc. $ 31,152,146.00 100.00
Pass-Through P.O. Box 30576
Certificates, Tampa, FL 33630
Class A-6
Mortgage Bankers Trust Company $ 1,000,000.00 8.86
Pass-Through c/o BT Services
Certificates, Tennessee, Inc.
Class A-7 648 Grassmere Park Rd.
Nashville, TN 37211
Mortgage Fleet Bank of $ 10,288,556.00 91.14
Pass-Through Massachusetts, N.A.
Certificates, Fleet Services Corp.
Class A-7 2nd Fl., NYROTO2B
Rochester, NY 14638
Mortgage A.G. Edwards & Sons, $ 895,000.00 82.33
Pass-Through Inc.
Certificates, I N. Jefferson
Class A-8 St. Louis, MO 63103
Mortgage Seattle-Northwest $ 115,000.00 10.57
Pass-Through Securities Corporation
Certificates, 1420 Fifth Ave., Suite 4300
Class A-8 Seattle, WA 98101
Mortgage A. G. Edwards & $ 6,182,000.00 94.78
Pass-Through Sons, Inc.
Certificates, 1 N. Jefferson
Class A-9 St. Louis, MO 63103
Mortgage Bankers Trust Company $ 1,000,000.00 28.43
Pass-Through C/o BT Services
Certificates, Tennessee Inc.
Class A-10 648 Grassmere Park Dr.
Nashville, TN 37211
Mortgage Northern Trust Company $ 517,834.00 14.72
Pass-Through 801 S. Canal C-In
Certificates, Chicago, IL 60607
Class A-10
Mortgage SSB-Custodian $ 2,000,000.00 56.85
Pass-Through Global Corp. Action
Certificates, Dept. JAB5W
Class A-10 Boston, MA 02105
Mortgage Amalgamated Bank of $ 500,000.00 24.06
Pass-Through New York
Certificates, 11-15 Union Square West
Class A-11 New York, NY 10003
Mortgage Firstar Trust Company $ 1,577,864.00 75.94
Pass-Through 777 E. Wisconsin Ave.
Certificates, Milwaukee, WI 53202
Class A-11
Mortgage A.G. Edwards & Sons, $ 1,723,000.00 84.33
Pass-Through Inc.
Certificates, 1 N. Jefferson
Class A-12 St. Louis, MO 63103
Mortgage Morgan, Keegan & $ 190,000.00 9.30
Pass-Through Company, Inc.
Certificates, 50 N. Front St.
Class A-12 Memphis, TN 38103
Mortgage Bankers Trust Company $ 67,441,870.00 100.00
Pass-Through c/o BT Services
Certificates, Tennessee Inc.
Class A-13 648 Grassmere Park Dr.
Nashville, TN 37211
Mortgage Citibank, N.A. $ 7,882,052.00 100.00
Pass-Through P.O. Box 30576
Certificates, Tampa, FL 33630
Class A-14
Mortgage A.G. Edwards Trust $ 1,705,000.00 98.27
Pass-Through Company
Certificates, 2 N. Jefferson
Class A-15 P.O. Box 66734
St. Louis, MO 63166
Mortgage A.G. Edwards & Sons, $ 1,898,000.00 93.00
Pass-Through Inc.
Certificates, 1 N. Jefferson
Class A-16 St. Louis, MO 63103
Mortgage Northern Trust Company $ 10,652,000.00 100.00
Pass-Through 801 S. Canal C-In
Certificates, Chicago, IL 60607
Class A-17
Mortgage A. G. Edwards & Sons, $ 2,556,000.00 94.43
Pass-Through Inc.
Certificates, 1 N. Jefferson
Class A-18 St. Louis, MO 63103
Mortgage Chase Manhattan Bank $ 135,386,130.00 100.00
Pass-Through 4 New York Plaza
Certificates, 13th Fl.
Class X New York, NY 10004
Mortgage Bankers Trust Company $ 7,365,844.05 100.00
Pass-Through Attn.: Leslie Gaskill
Certificates, 3 Park Plaza, 16th Fl.
Class P Irvine, CA 92714
Mortgage Atwell & Co. $ 450,000.00 6.82
Pass-Through C/o Chase Manhattan
Certificates, Bank, N.A.
Class B-1 Attn.: Bond Interest
Collection Dept.
P.O. Box 456, Wall
Street Station
New York, NY 10005
Mortgage Donaldson, Lufkin & $ 450,000.00 6.82
Pass-Through Jenrette Securities
Certificates, Corporation
Class B-1 140 Broadway, 26th Fl.
New York, NY 10005
Mortgage Donaldson, Lufkin & $ 1,175,000.00 17.80
Pass-Through Jenrette Securities
Certificates, Corporation
Class B-1 140 Broadway, 26th Fl.
New York, NY 10005
Mortgage Donaldson, Lufkin & $ 4,522,892.00 68.56
Pass-Through Jenrette Securities
Certificates, Corporation
Class B-1 140 Broadway, 26th Fl.
New York, NY 10005
Mortgage Enemel & Co. $ 4,000,000.00 80.83
Pass-Through P.O. Box 704
Certificates, Church Street Station
Class B-2 New York, NY 10008
Mortgage Enemel & Co. $ 948,419.00 19.16
Pass-Through P.O. Box 704
Certificates, Church Street Station
Class B-2 New York, NY 10008
Mortgage Donaldson, Lufkin & $ 2,804,105.00 100.00
Pass-Through Jenrette Securities
Certificates, Corporation
Class B-3 140 Broadway, 26th Fl.
New York, NY 10005
</TABLE>
<PAGE>
Item 13. Certain Relationships and Related Transactions. Not applicable.
------- ----------------------------------------------
Part IV
-------
Item 14. Exhibits, Financial Statement, Schedules, and Reports on Form
------- -------------------------------------------------------------
8-K.
- ---
EX-99.1 Report on the mortgaged properties filed under Part I, Item 2.
EX-99.2 Report of Ernst & Young regarding Master Servicer's servicing
activities, prepared pursuant to the Pooling and Servicing
Agreement.
The Registrant has filed a Report on Form 8-K on or before the tenth
day of each month during the last quarter of the period covered by this
report. Each such Report on Form 8-K described distributions made to
Certificateholders on the Distribution Date occurring in the month pre-
ceding the month in which such Report on Form 8-K was filed, as well as
provided certain information regarding delinquent Mortgage Loans and
credit enhancements as of such Distribution Date.
<PAGE>
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.
PNC MORTGAGE SECURITIES CORP.
as Sponsor
(Registrant)
March 31, 1998 By: \s\Thomas G. Lehmann Vice President
--------------------
Thomas G. Lehmann
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 and on the dates indicated.
Date Signatures Title
- ---- ---------- -----
Principal Executive Officers and Directors:
March 31, 1998 \s\Saiyid T. Naqvi President and Director
------------------
Saiyid T. Naqvi
March 31, 1998 \s\Alexander T. Topping, Jr. Director and Senior
----------------------------- Vice President
Alexander T. Topping, Jr.
Principal Financial Officer and Director:
March 31, 1998 \s\Douglas H. Burr Director, Senior Vice
------------------- President and Chief
Douglas H. Burr Financial Officer
Principal Accounting Officer:
March 31, 1998 \s\John W. Lauber Vice President and
----------------- Controller
John W. Lauber
<PAGE>
PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1996-1
Annual Accounting Report Reference Sheet
----------------------------------------
The Annual Accounting Report discloses relevant Mortgage Pool information for
each month of the current reporting year as well as aggregates of such infor-
mation for the reporting year. The descriptions below refer primarily to
the aggregate information which is located in the "Total" column on page two
of the report.
"BALANCES FROM LAST FISCAL MONTH-END"
Carries forward the loan count and the aggregate principal balance of the
Mortgage Pool from the previous Annual Report.
"PRINCIPAL POOL COLLECTIONS"
Shows detailed information regarding principal collections on the mortgage
loans. The line "Scheduled Principal Collected Due Current Month" repre-
sents the current year's aggregate principal installments applied to the
Certificate Principal Balance. The line "Unscheduled Principal Collections/
Reversals" represents partial prepayments of principal (curtailments) applied
or reversed in the current year. The line "Liquidations-in-Full" represents
the proceeds of prepaid mortgage loans and foreclosed mortgage loans, as
well as insurance proceeds applied to liquidate defaulted mortgage loans.
The lines "Principal Balance Sale Adjustments" represent adjustments to
original Certificate Principal Balances purchased by the Certificateholders
resulting from incorrect data supplied by the Seller/Servicers at the Mortgage
Pool origination. The line "Net Principal Distributed" represents the actual
distribution to Certificateholders respecting principal applied to the Certi-
ficate Principal Balance.
"CAPITAL LOSS"
Shows the amount of principal written off as a result of receiving sale and
insurance proceeds on acquired property insufficient to cover the outstanding
principal balance of the mortgage loan at the time of liquidation.
"BALANCE CURRENT FISCAL MONTH-END"
Provides the loan count and aggregate principal balance of the Mortgage
Pool at the close of the current fiscal year.
"SCHEDULED INTEREST AT MORTGAGE RATE"
Shows scheduled interest collections. The fiscal year's aggregate interest
installments at the pass-through rate due on the Certificate Principal
Balance outstanding at the beginning of each fiscal month is shown under
the appropriate column. The actual amount of interest distributed for the
current fiscal year after the rounding adjustment is shown in the "Total"
column.
"UNSCHEDULED INTEREST AT MORTGAGE RATE"
Provides detailed information regarding interest collections or reversals
other than the scheduled interest collections. The line "Unscheduled
Interest Collections/Reversals" represents interest collected or reversals
of previous interest applications. The lines "Interest Sale Adjustments"
represent the interest, at the pass-through rate, applicable to the Certi-
ficate Principal Balance increased, or the Certificate Principal Balance
decreased, as reported in Section B. The line "Interest Accrual Adjustment"
represents adjustments to the scheduled interest resulting from the appli-
cation of the partial prepayment of principal (curtailment) before the
installment due in any one fiscal month during the current fiscal year.
The line "Interest Uncollected on Liquidation" represents that portion of
the accrued interest (based on a 30 day month) that was not collected as
a result of a liquidation-in-full in the current fiscal year. The line
"Interest Uncollected on Non-Earning Assets" represents the interest accrued
but not collected as a result of a mortgage loan in a non-earning (non
accruing) status. The line "Net Unscheduled Interest Distributed" represents
the actual distribution of unscheduled items to Certificateholders.
"OTHER"
Provides detailed information regarding collections of mortgage loan conversion
fees, expense reimbursements, i.e., property preservation expenses, etc., gains
on liquidated mortgage loans and hazard insurance premium refunds as a result
of a liquidations-in-full on defaulted mortgage loans.
"SCHEDULED SERVICING FEE EXPENSES"
Provides a break-down of servicing fees payable to PNC Mortgage Securities
Corp. and Seller/Servicers, representing the difference between interest
collected at the mortgage rates and interest passed through to Certifi-
cateholders at the pass-through rate (see Section E).
"UNSCHEDULED SERVICING FEES"
Provides detailed information on servicing fees directly related to the funds
reported under "Unscheduled Interest at Mortgage Rate" (Section F).
"MISCELLANEOUS EXPENSES"
Shows the amount of expenses reimbursed to PNC Mortgage Securities Corp. and
Seller/Servicers for expenditures resulting from mortgage loans in foreclo-
sure, i.e., attorney fees, trustee fees, property preservation expenses,
etc., which are reimbursable under the terms of the Pooling and Servicing
Agreement. The expenses will not be reimbursed until all proceeds
available from primary mortgage insurance, if any, have been deposited to
the certificate account.
"NET FUNDS DISTRIBUTED"
Provides the aggregate amount distributed to Certificateholders for the
current fiscal year.
"INSURANCE RESERVES"
Provides certain information regarding the status of the credit, special
hazard, bankruptcy and fraud support established for certain Certificates.
"DELINQUENT INSTALLMENTS"
Provides certain information regarding delinquent mortgage loans as of the
calendar year end.
<PAGE>
<TABLE>
PNC SERIES 1996-1 (1380)
EXHIBIT 99.1
FISCAL 1997
<CAPTION>
JANUARY FEBRUARY MARCH APRIL
<S> <C> <C> <C> <C>
ISSUE DATE: 05/31/96
CERTIFICATE BALANCE AT ISSUE: $329,894,608.04
BALANCES FROM LAST FISCAL MONTH-END:
PRINCIPAL DOLLARS $323,956,788.04 $322,111,502.99 $321,484,897.11 $319,972,560.03
UNITS 1101 1095 1094 1090
PRINCIPAL POOL COLLECTIONS:
SCHEDULED PRINCIPAL COLLECTED DUE CURRENT MONTH 254,270.62 255,285.25 257,103.50 259,141.67
UNSCHEDULED PRINCIPAL COLLECTION/REVERSALS 129,641.21 64,926.68 182,491.12 83,616.72
LIQUIDATIONS-IN-FULL 1,461,373.22 306,393.95 1,072,742.46 608,996.70
PRINCIPAL BALANCE SALE ADJUSTMENTS 0.00 0.00 0.00 0.00
NET PRINCIPAL DISTRIBUTED 1,845,285.05 626,605.88 1,512,337.08 951,755.09
CAPITAL LOSS (PRINCIPAL WRITTEN OFF): 0.00 0.00 0.00 0.00
BALANCES CURRENT FISCAL MONTH-END:
PRINCIPAL DOLLARS 322,111,502.99 321,484,987.11 319,972,560.03 319,020,804.94
UNITS 1095 1094 1090 1087
SCHEDULED INTEREST AT MORTGAGE RATE: 2,100,990.25 2,087,938.35 2,083,951.18 2,074,308.27
UNSCHEDULED INTEREST AT MORTGAGE RATE:
UNSCHEDULED INTEREST COLLECTION/REVERSALS (1,717.83) (0.15) (1,594.07) 0.19
INTEREST SALE ADJUSTMENTS 0.00 0.00 0.00 0.00
INTEREST ACCRUAL ADJUSTMENT 0.00 0.00 0.00 0.00
INTEREST UNCOLLECTED ON LIQUIDATION 0.00 0.00 0.00 0.00
INTEREST UNCOLLECTED ON NON-EARNING ASSETS 0.00 0.00 0.00 0.00
NET UNSCHEDULED INTEREST DISTRIBUTED (1,717.83) (0.15) (1,594.07) 0.19
OTHER:
LOAN CONVERSION FEE 0.00 0.00 0.00 0.00
EXPENSE REIMBURSEMENTS 0.00 0.00 0.00 0.00
GAIN ON LIQUIDATIONS 0.00 0.00 0.00 0.00
HAZARD INSURANCE PREMIUM REFUNDS 0.00 0.00 0.00 0.00
NET OTHER DISTRIBUTIONS 0.00 0.00 0.00 0.00
SCHEDULED SERVICING FEE EXPENSES: 79,187.21 78,594.25 78,453.12 78,100.87
UNSCHEDULED SERVICING FEES:
UNSCHEDULED SERVICE FEE COLLECTIONS/REVERSALS (53.91) (0.01) (60.69) 0.00
SERVICING FEES SALE ADJUSTMENTS 0.00 0.00 0.00 0.00
SERVICING FEES ACCRUAL ADJUSTMENTS 0.00 0.00 0.00 0.00
SERVICING FEES UNCOLLECTED ON LIQUIDATIONS 0.00 0.00 0.00 0.00
SERVICING FEES UNCOLLECTED - NON-EARNING ASSETS 0.00 0.00 0.00 0.00
NET UNSCHEDULED SERVICING FEE DISTRIBUTED (53.91) (0.01) (60.69) 0.00
MISCELLANEOUS EXPENSES: 0.00 0.00 0.00 0.00
NET FUNDS DISTRIBUTED $3,865,424.17 $2,635,949.84 $3,516,301.76 $2,947,962.68
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMSC SERIES 1996-1 (1380)
FISCAL 1997 MAY JUNE JULY
<S> <C> <C> <C>
ISSUE DATE: 05/31/96
CERTIFICATE BALANCE AT ISSUE: $329,894,608.04
BALANCES FROM LAST FISCAL MONTH-END:
PRINCIPAL DOLLARS $319,020,804.94 $318,034,158.79 $315,337,653.82
UNITS 1087 1084 1076
PRINCIPAL POOL COLLECTIONS:
SCHEDULED PRINCIPAL COLLECTED DUE CURRENT MONTH 260,930.30 262,547.16 263,454.91
UNSCHEDULED PRINCIPAL COLLECTION/REVERSALS 63,960.95 148,373.70 90,556.39
LIQUIDATIONS-IN-FULL 661,754.90 2,285,584.11 2,313,501.52
PRINCIPAL BALANCE SALE ADJUSTMENTS 0.00 0.00 0.00
NET PRINCIPAL DISTRIBUTED 986,646.15 2,696,504.97 2,667,512.82
CAPITAL LOSS (PRINCIPAL WRITTEN OFF): 0.00 0.00 (95,411.58)
BALANCES CURRENT FISCAL MONTH-END:
PRINCIPAL DOLLARS 318,034,158.79 315,337,653.82 312,574,729.42
UNITS 1084 1076 1068
SCHEDULED INTEREST AT MORTGAGE RATE: 2,067,799.32 2,061,124.97 2,043,174.69
UNSCHEDULED INTEREST AT MORTGAGE RATE:
UNSCHEDULED INTEREST COLLECTION/REVERSALS (3.63) (3.06) 76.27
INTEREST SALE ADJUSTMENTS 0.00 0.00 0.00
INTEREST ACCRUAL ADJUSTMENT 0.00 0.00 0.00
INTEREST UNCOLLECTED ON LIQUIDATION 0.00 0.00 0.00
INTEREST UNCOLLECTED ON NON-EARNING ASSETS 0.00 0.00 0.00
NET UNSCHEDULED INTEREST DISTRIBUTED (3.63) (3.63) 76.27
OTHER:
LOAN CONVERSION FEE 0.00 0.00 0.00
EXPENSE REIMBURSEMENTS 0.00 0.00 0.00
GAIN ON LIQUIDATIONS 0.00 0.00 0.00
HAZARD INSURANCE PREMIUM REFUNDS 0.00 0.00 0.00
NET OTHER DISTRIBUTIONS 0.00 0.00 0.00
SCHEDULED SERVICING FEE EXPENSES: 77,873.36 77,633.80 76,999.84
UNSCHEDULED SERVICING FEES:
UNSCHEDULED SERVICE FEE COLLECTIONS/REVERSALS (0.13) (0.11) 2.58
SERVICING FEES SALE ADJUSTMENTS 0.00 0.00 0.00
SERVICING FEES ACCRUAL ADJUSTMENTS 0.00 0.00 0.00
SERVICING FEES UNCOLLECTED ON LIQUIDATIONS 0.00 0.00 0.00
SERVICING FEES UNCOLLECTED - NON-EARNING ASSETS 0.00 0.00 0.00
NET UNSCHEDULED SERVICING FEE DISTRIBUTED (0.13) (0.11) 2.58
MISCELLANEOUS EXPENSES: 0.00 0.00 0.00
NET FUNDS DISTRIBUTED $2,976,568.61 $4,679,993.19 $4,633,761.36
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMSC SERIES 1996-1 (1380)
FISCAL 1997 AUGUST SEPTEMBER OCTOBER NOVEMBER
<S> <C> <C> <C> <C>
BALANCES FROM LAST FISCAL YEAR-END:
PRINCIPAL DOLLARS $312,574,729.42 $310,356,606.36 $306,717,029.79 $301,979,334.76
UNITS 1068 1061 1049 1035
PRINCIPAL POOL COLLECTIONS:
SCHEDULED PRINCIPAL COLLECTED DUE CURRENT MONTH 263,802.31 262,889.74 262,151.52 261,440.28
UNSCHEDULED PRINCIPAL COLLECTION/REVERSALS 68,709.44 46,482.69 162,830.77 100,048.86
LIQUIDATIONS-IN-FULL 1,885,611.31 3,330,204.14 4,312,712.74 3,965,180.93
PRINCIPAL BALANCE SALE ADJUSTMENTS 0.00 0.00 0.00 0.00
NET PRINCIPAL DISTRIBUTED 2,218,123.06 3,639,576.57 4,737,695.03 4,326,670.07
CAPITAL LOSS (PRINCIPAL WRITTEN OFF): 0.00 0.00 0.00 0.00
BALANCES CURRENT FISCAL YEAR-END:
PRINCIPAL DOLLARS 310,356,606.36 306,717,029.79 301,979,334.76 297,652,664.69
UNITS 1061 1049 1035 1022
SCHEDULED INTEREST AT MORTGAGE RATE: 2,024,669.57 2,010,467.82 1,986,372.57 1,954,216.13
UNSCHEDULED INTEREST AT MORTGAGE RATE:
UNSCHEDULED INTEREST COLLECTION/REVERSALS 142.78 24.99 0.00 60.25
INTEREST SALE ADJUSTMENTS 0.00 0.00 0.00 0.00
INTEREST ACCRUAL ADJUSTMENT 0.00 0.00 0.00 0.00
INTEREST UNCOLLECTED ON LIQUIDATION 0.00 0.00 0.00 0.00
INTEREST UNCOLLECTED ON NON-EARNING ASSETS 0.00 0.00 0.00 0.00
NET UNSCHEDULED INTEREST DISTRIBUTED 142.78 24.99 0.00 60.25
OTHER:
LOAN CONVERSION FEE 0.00 0.00 0.00 0.00
EXPENSE REIMBURSEMENTS 0.00 0.00 0.00 0.00
GAIN ON LIQUIDATIONS 0.00 0.00 0.00 0.00
HAZARD INSURANCE PREMIUM REFUNDS 0.00 0.00 0.00 0.00
NET OTHER DISTRIBUTIONS 0.00 0.00 0.00 0.00
SCHEDULED SERVICING FEE EXPENSES: 76,350.46 75,821.34 74,962.58 73,841.52
UNSCHEDULED SERVICING FEES:
UNSCHEDULED SERVICE FEE COLLECTIONS/REVERSALS 1.87 0.71 0.00 1.07
SERVICING FEES SALE ADJUSTMENTS 0.00 0.00 0.00 0.00
SERVICING FEES ACCRUAL ADJUSTMENTS 0.00 0.00 0.00 0.00
SERVICING FEES UNCOLLECTED ON LIQUIDATIONS 0.00 0.00 0.00 0.00
SERVICING FEES UNCOLLECTED - NON-EARNING ASSETS 0.00 0.00 0.00 0.00
NET UNSCHEDULED SERVICING FEE DISTRIBUTED 1.87 0.71 0.00 1.07
MISCELLANEOUS EXPENSES: 0.00 0.00 0.00 0.00
NET FUNDS DISTRIBUTED $4,166,583.08 $5,574,247.33 $6,649,105.02 $6,207,103.86
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMSC SERIES 1996-1 (1380)
FISCAL 1997 DECEMBER TOTAL
<S> <C> <C>
BALANCES FROM LAST FISCAL YEAR-END:
PRINCIPAL DOLLARS $297,652,664.69 $323,956,788.04
UNITS 1022 1101
PRINCIPAL POOL COLLECTIONS:
SCHEDULED PRINCIPAL COLLECTED DUE CURRENT MONTH 260,311.91 3,123,329.17
UNSCHEDULED PRINCIPAL COLLECTION/REVERSALS 104,918.37 1,246,556.90
LIQUIDATIONS-IN-FULL 1,532,915.35 23,736,971.33
PRINCIPAL BALANCE SALE ADJUSTMENTS 0.00 0.00
NET PRINCIPAL DISTRIBUTED 1,898,145.63 28,106,857.40
CAPITAL LOSS (PRINCIPAL WRITTEN OFF): 0.00 (95,411.58)
BALANCES CURRENT FISCAL YEAR-END:
PRINCIPAL DOLLARS 295,754,519.06 295,754,519.06
UNITS 1016 1016
SCHEDULED INTEREST AT MORTGAGE RATE: 1,926,026.00 24,421,039.12
UNSCHEDULED INTEREST AT MORTGAGE RATE:
UNSCHEDULED INTEREST COLLECTION/REVERSALS 0.00 (3,014.26)
INTEREST SALE ADJUSTMENTS 0.00 0.00
INTEREST ACCRUAL ADJUSTMENT 0.00 0.00
INTEREST UNCOLLECTED ON LIQUIDATION 0.00 0.00
INTEREST UNCOLLECTED ON NON-EARNING ASSETS 0.00 0.00
NET UNSCHEDULED INTEREST DISTRIBUTED 0.00 (3,014.83)
OTHER:
LOAN CONVERSION FEE 0.00 0.00
EXPENSE REIMBURSEMENTS 0.00 0.00
GAIN ON LIQUIDATIONS 0.00 0.00
HAZARD INSURANCE PREMIUM REFUNDS 0.00 0.00
NET OTHER DISTRIBUTIONS 0.00 0.00
SCHEDULED SERVICING FEE EXPENSES: 72,814.79 920,633.14
UNSCHEDULED SERVICING FEES:
UNSCHEDULED SERVICE FEE COLLECTIONS/REVERSALS 0.00 (108.62)
SERVICING FEES SALE ADJUSTMENTS 0.00 0.00
SERVICING FEES ACCRUAL ADJUSTMENTS 0.00 0.00
SERVICING FEES UNCOLLECTED ON LIQUIDATIONS 0.00 0.00
SERVICING FEES UNCOLLECTED - NON-EARNING ASSETS 0.00 0.00
NET UNSCHEDULED SERVICING FEE DISTRIBUTED 0.00 (108.62)
MISCELLANEOUS EXPENSES: 0.00 0.00
NET FUNDS DISTRIBUTED $3,751,356.84 $51,604,357.74
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PNC MORTGAGE SECURITIES CORP.
MASTER SERVICING
MORTGAGE PASS-THROUGH CERTIFICATES
12/1997 DISTRIBUTION REPORT
PROCESSING MONTH: 11/1997
SERIES 1996-1 (1380) WEIGHTED AVERAGE PC RATE: 7.4706
- ----------------------------------------------------------------------------------------
<CAPTION>
INSURANCE RESERVES*
- -------------------
COVERAGE
INSURANCE TYPE ORIGINAL BALANCE CLAIMS IN PROGRESS CLAIMS PAID ADJUSTMENTS REMAINING
-------------- ---------------- ------------------ ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
MPI $0.00 $0.00 $0.00 $0.00 $0.00
SPECIAL HAZARD $3,298,946.00 $0.00 $0.00 $0.00 $3,298,946.00
BANKRUPTCY BOND
SINGLE-UNITS $119,559.00 $0.00 $0.00 $0.00 $119,559.00
MULTI-UNITS $0.00 $0.00 $0.00 $0.00 $0.00
MORTGAGE
REPURCHASE $6,597,892.00 $0.00 $0.00 $0.00 $6,597,892.00
<CAPTION>
DELINQUENT INSTALLMENTS
- -----------------------
ONE TWO THREE
----------------------- ---------------------- ----------------------
COUNT PRIN BALANCE COUNT PRIN BALANCE COUNT PRIN
BALANCE
----------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C> <C>
17 $5,089,810.33 2 $683,117.28 2 $563,767.37
IN FORECLOSURE ACQUIRED
----------------------- ----------------------
COUNT PRIN BALANCE COUNT PRIN BALANCE
----------------------- ----------------------
<S> <C> <C> <C>
4 $1,017,565.28 0 $0.00
</TABLE>
The Class B-4, Class B-5 and Class B-6 Certificates (the "Junior Subordinate
Certificates") provide credit support and limited special hazard, bankruptcy
and fraud coverage (collectively, "Coverage") to the (i) Class B-1, Class B-2
and Class B-3 Certificates (the "Senior Subordinate Certificates" and, together
with the Junior Subordinate Certificates, the "Class B Certificates"), (ii)
the Class A-1, Class A-2, Class A-3, Class A-4, Class A-6, Class A-7, Class
A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class A-14,
Class A-15, Class A-16, Class A-17, Class A-18, Class X, Class P and Class R
Certificates (the "Senior Certificates") and (iii) the Class A-5 Certificates
(the "Senior Support Certificates"), to the extent described in the prospec-
tus supplement (the "Prospectus Supplement") pursuant to which the Senior,
Senior Support and Senior Subordinate Certificates were offered. The Class
B-3 Certificates provide coverage to the Class B-1 and Class B-2 Certificates,
and the Class B-2 Certificates provide coverage to the Class B-1 Certificates,
in each case as described in the Prospectus Supplement. The Senior Subordi-
nate Certificates provide coverage to the senior and senior support certifi-
cates, and the Senior Support Certificates provide coverage to the Senior
Certificates, in each case, to the extent described in the Prospectus Supple-
ment.
The Class Principal Balances of the Class B and Senior Support Certificates
immediately after the principal and interest distribution on December 26,
1997 are as follows:
<TABLE>
<CAPTION>
CLASS CLASS PRINCIPAL BALANCE
<S> <C>
B-1 $ 6,490,836.98
B-2 $ 4,868,127.71
B-3 $ 2,758,606.60
B-4 $ 1,784,979.86
B-5 $ 649,083.51
B-6 $ 1,206,467.06
A-5 $30,480,168.28
</TABLE>
The amount of the special hazard, bankruptcy and fraud coverage as of the above
referenced distribution date is $3,298,946.00, $119,559.00 and $6,597,892.00,
respectively.
<PAGE>
Exhibit 99.2
[Ernst & Young LLP Letterhead]
Report of Independent Auditors on Agreement With
State Street Bank and Trust Company
Audit Committee
PNC Bank Corp.
We have audited, in accordance with generally accepted auditing standards,
the consolidated balance sheet of PNC Bank Corp. and subsidiaries (including
PNC Mortgage Securities Corp. (PNCMSC)) as of December 31, 1997, and the
related consolidated statements of income, changes in shareholders' equity,
and cash flows for the year then ended, and have issued our report thereon
dated January 23, 1998.
In connection with our audit of the consolidated financial statements
referred to above, nothing came to our attention that caused us to believe
that PNCMSC failed to comply with the terms, covenants, provisions, or
conditions of the sections of the agreements between PNCMSC and State
Street Bank and Trust Company (Trustee), as listed for each series of
certificates described in the accompanying schedule, insofar as they relate
to accounting matters. However, our audit of the consolidated financial
statements was not directed primarily toward obtaining knowledge of such
noncompliance.
This report is intended solely for use by the audit committee, management,
and the Trustee, and should not be used for any other purpose. However,
this report may become a matter of public record as a result of being included
as an exhibit to certain Form 10-Ks that are prepared by PNCMSC and filed with
the Securities and Exchange Commission on behalf of the trusts that are
established in connection with the series of certificates listed on the
accompanying schedule.
\s\Ernst & Young LLP
--------------------
January 23, 1998
Ernst & Young LLP is a member of Ernst & Young International, Ltd.
<PAGE>
<TABLE>
<CAPTION>
Schedule of Agreements With
State Street Bank and Trust Company
Description Sections
- ----------- --------
<S> <C>
POOLING AND SERVICING AGREEMENT, $107,435,372.77, Sears 3.02, 3.03,
Mortgage Securities Corporation, COFI Mortgage Pass- 3.04, 3.05,
Through Certificates, Series 1991-H, Cut-Off Date: 3.11, 3.12,
July 1, 1991 3.13
POOLING AND SERVICING AGREEMENT, $252,233,481.96 (Approxi- 3.02, 3.03,
mate), Sears Mortgage Securities Corporation, COFI Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1991-I (Certificate Trust 3.11, 3.12,
Fund), Mortgage Trust Pass-Through Certificates, Series 3.13
1991-I (Mortgage Trust Fund), Cut-Off Date: August 1, 1991
POOLING AND SERVICING AGREEMENT, $297,626,106 (Approximate), 3.02, 3.03,
Sears Mortgage Securities Corporation, LIBOR Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1991-J (Certificate Trust 3.11, 3.12,
Fund), Mortgage Trust Pass-Through Certificates, Series 3.13
1991-J (Mortgage Trust Fund), Cut-Off Date: August 1, 1991
POOLING AND SERVICING AGREEMENT, $127,859,031.91 (Approxi- 3.02, 3.03,
mate), Sears Mortgage Securities Corporation, LIBOR Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1991-K (Certificate Trust 3.11, 3.12,
Fund), Intermediate Trust Pass-Through Certificates, Series 3.13
1991-K (Intermediate Trust Fund), Mortgage Trust Pass-
Through Certificates, Series 1991-K (Mortgage Trust Fund),
Cut-Off Date: September 1, 1991
POOLING AND SERVICING AGREEMENT, $229,731,871.46, Sears 3.02, 3.03,
Mortgage Securities Corporation, LIBOR Mortgage Pass- 3.04, 3.05,
Through Certificates, Series 1991-M, Cut-Off Date: 3.11, 3.12,
November 1, 1991 3.13
POOLING AND SERVICING AGREEMENT, $138,083,034.63, Sears 3.02, 3.03,
Mortgage Securities Corporation, Individual-Rate Adjusta- 3.04, 3.05,
ble-Rate Mortgage Pass-Through Certificates, Series 3.11, 3.12,
1992-4, Cut-Off Date: February 1, 1992 3.13
POOLING AND SERVICING AGREEMENT, $148,599,249.98, Sears 3.02, 3.03,
Mortgage Securities Corporation, Adjustable-Rate Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1992-8, Cut-Off Date: 3.11, 3.12,
May 1, 1992 3.13
POOLING AND SERVICING AGREEMENT, $115,993,983.88, Sears 3.02, 3.03,
Mortgage Securities Corporation, Individual-Rate Adjusta- 3.04, 3.05,
ble-Rate Mortgage Pass-Through Certificates, Series 3.11, 3.12,
1992-9, Cut-Off Date: June 1, 1992 3.13
POOLING AND SERVICING AGREEMENT, $203,706,651.41, Sears 3.02, 3.03,
Mortgage Securities Corporation, Adjustable-Rate Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1992-11, Cut-Off Date: 3.11, 3.12,
July 1, 1992 3.13
POOLING AND SERVICING AGREEMENT, $113,854,367.50, Sears 3.02, 3.03,
Mortgage Securities Corporation, Adjustable-Rate Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1992-12, Cut-Off Date: 3.11, 3.12,
July 1, 1992 3.13
POOLING AND SERVICING AGREEMENT, $112,796,366.84, Sears 3.02, 3.03,
Mortgage Securities Corporation, Multi-Class Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1992-13, Cut-Off Date: 3.11, 3.12,
August 1, 1992 3.13
POOLING AND SERVICING AGREEMENT, $281,187,657.98, Sears 3.02, 3.03,
Mortgage Securities Corporation, Adjustable-Rate Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1992-15, Cut-Off Date: 3.11, 3.12,
August 1, 1992 3.13
POOLING AND SERVICING AGREEMENT, $227,748,335.96, Sears 3.02, 3.03,
Mortgage Securities Corporation, Adjustable-Rate Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1992-16, Cut-Off Date: 3.11, 3.12,
September 1, 1992 3.13
POOLING AND SERVICING AGREEMENT, $130,827,671.91, Sears 3.02, 3.03,
Mortgage Securities Corporation, Adjustable-Rate Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1992-17 (Certificate 3.11, 3.12,
Trust), Mortgage Trust Pass-Through Certificates, Series 3.13
1992-17 (Mortgage Trust), Cut-Off Date: September 1, 1992
POOLING AND SERVICING AGREEMENT, $112,907,447.57, Sears 3.02, 3.03,
Mortgage Securities Corporation, Adjustable-Rate Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1992-18, Cut-Off Date: 3.11, 3.12,
September 1, 1992 3.13
POOLING AND SERVICING AGREEMENT, $95,240,927.23, Sears 3.02, 3.03,
Mortgage Securities Corporation, Mortgage Pass-Through 3.04, 3.05,
Certificates, Series 1992-20 (Certificate Trust), 3.11, 3.12,
Mortgage Trust Pass-Through Certificates, Series 1992-20 3.13
(Mortgage Trust), Cut-Off Date: November 1, 1992
POOLING AND SERVICING AGREEMENT, $154,459,134.29, Sears 3.02, 3.03,
Mortgage Securities Corporation, Adjustable-Rate Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1992-21, Cut-Off Date: 3.11, 3.12,
December 1, 1992 3.13
POOLING AND SERVICING AGREEMENT, $74,305,144.99, Sears 3.02, 3.03,
Mortgage Securities Corporation, Mortgage Pass-Through 3.04, 3.05,
Certificates, Series 1992-22, Cut-Off Date: December 3.11, 3.12,
1, 1992 3.13
POOLING AND SERVICING AGREEMENT, $301,925,000, Sears 3.02, 3.03,
Mortgage Securities Corporation, Adjustable-Rate Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1992-23, Cut-Off Date: 3.11, 3.12,
December 1, 1992 3.13
POOLING AND SERVICING AGREEMENT, $155,483,857.34, Sears 3.02, 3.03,
Mortgage Securities Corporation, Adjustable-Rate Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1992 PR-1, Cut-Off Date: 3.11, 3.12,
November 1, 1992 3.13
POOLING AND SERVICING AGREEMENT, $209,608,737.21, Sears 3.02, 3.03,
Mortgage Securities Corporation, Adjustable-Rate Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1993-2, Cut-Off Date: 3.11, 3.12,
February 1, 1993 3.13
POOLING AND SERVICING AGREEMENT, $144,518,012.23, Sears 3.02, 3.03,
Mortgage Securities Corporation, Adjustable-Rate Mortgage 3.04, 3.05,
Pass-Through Certificates, Series 1993-4, Cut-Off Date: 3.11, 3.12,
March 1, 1993 3.13
POOLING AND SERVICING AGREEMENT, $153,608,000.00, Sears 3.02, 3.03,
Mortgage Securities Corporation, Mortgage Pass-Through 3.04, 3.05,
Certificates, Series 1993-5, Cut-Off Date: May 1, 1993 3.11, 3.12,
3.13
POOLING AND SERVICING AGREEMENT, $95,766,838.53, Sears 3.02, 3.03,
Mortgage Securities Corporation, Mortgage Pass-Through 3.04, 3.05,
Certificates, Series 1993-10, Cut-Off Date: September 3.11, 3.12,
1, 1993 3.13
POOLING AND SERVICING AGREEMENT, $329,894,608.04, PNC 3.02, 3.03,
Mortgage Securities Corporation, Mortgage Pass-Through 3.04, 3.05,
Certificates, Series 1996-1, Cut-Off Date: May 1, 1996 3.11, 3.12,
3.13
</TABLE>
(a) Servicing in compliance with the terms of this agreement.
