SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1997
Commission File Numbers 33-99612, 33-11623, 33-15833, 33-16145
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
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(Exact name of registrant as specified in its registration statements)
Delaware 13-3320910
- ---------------------------------------------- -------------------
(State or other jurisdiction of incorporation) (I.R.S. Employer
Identification No.)
11 Madison Avenue, New York, New York 10010
- ---------------------------------------------- -------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 212-325-1811
-------------------
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
1,000 shares of common stock
outstanding as of November 12, 1997
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CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
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INDEX
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Page
Number
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Financial Condition as of
September 30, 1997 and December 31, 1996 3
Statements of Operations for the Nine Months Ended
September 30, 1997 and 1996 4
Statements of Cash Flows for the Nine Months Ended
September 30, 1997 and 1996 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Defaults Upon Senior Securities 8
Item 4. Submission of Matters to a Vote of Security Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8, 9
SIGNATURE 10
INDEX TO EXHIBITS 11
Page 2
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CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
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STATEMENTS OF FINANCIAL CONDITION
---------------------------------
September 30, December 31,
1997 1996
------------- ------------
(unaudited)
(in thousands, except par
value and share data)
Assets:
Cash $ 11 $ 11
Investment in trusts 596 605
Mortgage Pass-Through Certificates 19,462 7,952
Resale agreements -- 23,109
Receivables from affiliates -- 76
Accrued Interest 424 542
------- -------
Total Assets $20,493 $32,295
======= =======
Liabilities and Stockholder's Equity:
Securities sold not yet purchased:
U.S. Government treasury notes -- 22,859
Payables to affiliates 18,624 7,855
Accrued Interest -- 712
------- -------
Total Liabilities 18,624 31,426
------- -------
Stockholder's Equity:
Common stock, (par value $1.00 per share,
1,000 shares authorized and outstanding) 1 1
Retained earnings 1,868 868
------- -------
Total Stockholder's Equity 1,869 869
------- -------
Total Liabilities and Stockholder's Equity $20,493 $32,295
======= =======
See Notes to Financial Statements.
Page 3
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CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
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STATEMENTS OF OPERATIONS
------------------------
(unaudited)
Nine Months Nine Months
Ended Ended
September 30, September 30,
1997 1996
------------- -------------
(in thousands)
Revenues:
Net gains on sales of beneficial interests in trusts $ -- $ --
Principal transactions 1,256 --
Interest income 564 --
------ -------
Total revenues 1,820 --
Expenses:
Interest expense 265 --
General and administrative expenses 17 --
------ -------
Total expenses 282 --
Income from operations before income
taxes 1,538 --
Income taxes 538 --
------ -------
Net income $1,000 $ --
====== =======
See Notes to Financial Statements.
Page 4
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CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
----------------------------------------------------
STATEMENTS OF CASH FLOWS
------------------------
(unaudited)
Nine Months Nine Months
Ended Ended
September 30, September 30,
1997 1996
------------- -------------
(in thousands)
Cash Flows From Operating Activities:
Net income $ 1,000 $ --
Adjustments to reconcile net income to net cash
Provided by (Used for) operating activities:
Decrease in investments in and distribution
by trusts 9 14
(Increase) in Mortgage Pass-Through Certificates (11,510) --
Decrease in resale agreements 23,109 --
Decrease in receivables from affiliates 76 --
Decrease in accrued interest receivable 118 --
(Decrease) in accrued interest payable (712) --
-------- --------
Net Cash Provided by
Operating Activities 12,090 14
-------- --------
Cash Flows From Financing Activities:
(Decrease) in securities sold not yet purchased (22,859) --
Decrease in deferred debt issuance costs -- 945
Increase (Decrease) in payables to affiliates 10,769 (959)
-------- --------
Net Cash (Used for) Financing
Activities (12,090) (14)
-------- --------
Net increase in cash -- --
-------- --------
Cash at beginning of year 11 11
-------- --------
Cash at end of year $ 11 $ 11
======== ========
See Notes to Financial Statements
Page 5
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CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
----------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(unaudited)
(1) Description of Business
-----------------------
Credit Suisse First Boston Mortgage Securities Corp. (the "Company"),
is a wholly owned subsidiary of Credit Suisse Management Corporation
("FBSC"), which is a wholly owned subsidiary of Credit Suisse First
Boston, Inc., a privately owned holding company.
The foregoing financial statements are unaudited; however, in the
opinion of management, all adjustments (comprising only normal
recurring accruals) necessary for a fair presentation of the financial
statements have been included. A summary of the significant accounting
policies is set forth in Note 2 to the Company's December 31, 1996
Financial Statements contained in the Company's 1996 Form 10-K.
Page 6
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
-------------
The principal activities of the Company include (i) issuing and selling
collateralized mortgage obligations (the "Bonds"), (ii) issuing and
selling Strips of Participation Certificates ("Splits"), (iii) issuing
and selling Conduit Mortgage Pass-Through Certificates ("Conduits"),
(iv) issuing and selling Commercial/Multifamily Mortgage Pass-Through
Certificates ("Multifamily") and (v) issuing and selling Home Equity
Loan Pass-Through Certificates ("Home Equity").
Results of Operations (in thousands)
------------------------------------
The Company recorded no gains or (losses) on the sale of beneficial
interests in trusts for the nine months ended September 30, 1997 and
September 30, 1996.
During the nine months ended September 30, 1997 and September 30, 1996,
the Company issued, as depositor, aggregate principal amounts of Bonds,
Conduits, Splits, Multifamily and Home Equities of $1,565,539 and
$1,225,792 respectively.
Net unrealized gains and losses on mortgage pass-through certificates
are reflected in principal transactions. Realized gains and losses on
the sale of mortgage pass-through certificates are also reflected in
principal transactions. For the nine months ended September 30, 1997,
principal transactions of $1,256 are included in the Company's
Statement of Operations.
Management fees, professional fees and other administrative expenses
are paid by FBSC on behalf of the Company.
Liquidity and Capital Resources
-------------------------------
The Company utilizes FBSC to borrow funds and facilitate the settlement
of all transactions through intercompany accounts as required with
FBSC. FBSC does not charge the Company interest on such borrowings.
Page 7
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PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
-----------------
None.
Item 2. Changes in Securities
---------------------
Not applicable
Item 3. Defaults Upon Senior Securities
-------------------------------
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not applicable.
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to Registration
Statement No. 33-47579).
By-Laws of the Company (incorporated by reference to
Exhibit 3.2 to Registration Statement No. 33-47579).
Form of Indenture (incorporated by reference to Exhibit 4
to Registration Statement No. 33-11924).
Form of Standard Terms and Provisions of Pooling and
Servicing Mortgage Loans/Mortgage Certificates
(incorporated by reference to Exhibit 4.1 to Registration
Statement No. 33-47579).
Page 8
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Item 6. Exhibits and Reports on Form 8-K (continued)
--------------------------------------------
(b) Reports on Form 8-K:
--------------------
<TABLE>
<CAPTION>
Items Reported Financial Statements Filed Date of Filing
-------------- -------------------------- --------------
<S> <C> <C> <C>
Item 2. Acquisition or Disposition of Assets Not Applicable January 23, 1997
Item 2. Acquisition or Disposition of Assets Not Applicable February 20, 1997
Item 5. Other Events Not Applicable March 17, 1997
Item 7. Financial Statements and Exhibits Not Applicable March 26, 1997
Item 7. Financial Statements and Exhibits Not Applicable March 27, 1997
Item 5. Other Events Not Applicable May 7, 1997
Items 5 & 7. Other Events and
Financial Statements and Exhibits Not Applicable June 10, 1997
Items 5 & 7. Other Events and
Financial Statements and Exhibits Not Applicable June 12, 1997
Items 5 & 7. Other Events and
Financial Statements and Exhibits Not Applicable June 16, 1997
Items 5 & 7. Other Events and
Financial Statements and Exhibits Not Applicable June 27, 1997
Items 5 & 7. Other Events and
Financial Statements and Exhibits Not Applicable July 16, 1997
Items 5 & 7. Other Events and
Financial Statements and Exhibits Not Applicable July 25, 1997
Items 5 & 7. Other Events and
Financial Statements and Exhibits Not Applicable August 21, 1997
Item 7. Financial Statements and Exhibits Not Applicable September 11, 1997
Items 5 & 7. Other Events and
Financial Statements and Exhibits Not Applicable September 17, 1997
Items 5 & 7. Other Events and
Financial Statements and Exhibits Not Applicable September 24, 1997
Items 5 & 7. Other Events and
Financial Statements and Exhibits Not Applicable September 29, 1997
</TABLE>
Page 9
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Credit Suisse First Boston Mortgage
Securities Corp.
By: THOMAS M. ZINGALLI
------------------
Thomas M. Zingalli
Controller and Principal
Accounting Officer
(Duly Authorized Officer and
Principal Accounting Officer)
Dated: November 12, 1997
Page 10
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INDEX TO EXHIBITS
-----------------
Exhibit
Number Description of Exhibit Page
- ------ ---------------------- ----
3.1 Restated Certificates of Incorporation of the Company *
3.2 By-Laws of the Company *
4 Form of Indenture **
4.1 Form of Standard Terms and Provisions of
Pooling and Servicing Mortgage
Loans/Mortgage Certificates. *
* Incorporated by reference to the same Exhibits in Registration Statement
No. 33-47579 on Form S-11 filed with the Securities and Exchange Commission.
** Incorporated by reference to the same Exhibits in Registration Statement
No. 33-11924 on Form S-11 filed with the Securities and Exchange Commission.
Page 11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 11
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 19,462
<CURRENT-ASSETS> 20,493
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,493
<CURRENT-LIABILITIES> 18,624
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 1,868
<TOTAL-LIABILITY-AND-EQUITY> 20,493
<SALES> 0
<TOTAL-REVENUES> 1,820
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 17
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 265
<INCOME-PRETAX> 1,538
<INCOME-TAX> 538
<INCOME-CONTINUING> 1,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,000
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
