SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1998
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 May 11, 1998
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
INDEX
Page
Number
------
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Financial Condition as of March 31, 1998
and December 31, 1997 3
Statements of Operations for the Three Months Ended
March 31, 1998 and 1997 4
Statements of Cash Flows for the Three Months Ended
March 31, 1998 and 1997 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
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
-------- ------------
(unaudited)
(in thousands, except
par value and share data)
<S> <C> <C>
Assets:
Cash $ 11 $ 11
Investment in trusts 624 624
Mortgage Pass-Through Certificates 4,804 4,776
Accrued Interest 545 456
-------- --------
Total Assets $ 5,984 $ 5,867
======== ========
Liabilities and Stockholder's Equity:
Payables to affiliates 4,526 4,739
-------- --------
Total Liabilities 4,526 4,739
-------- --------
Stockholder's Equity:
Common stock, (par value $1.00 per share,
1,000 shares authorized and outstanding) 1 1
Retained earnings 1,457 1,127
-------- --------
Total Stockholder's Equity 1,458 1,128
-------- --------
Total Liabilities and Stockholder's Equity $ 5,984 $ 5,867
======== ========
</TABLE>
See Accompanying Notes to Financial Statements.
Page 3
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
-------------- --------------
(in thousands)
<S> <C> <C>
Principal transactions $ 333 $ 68
Interest income 344 165
-------- --------
Total revenues 677 233
Expenses:
Interest expense 170 100
General and administrative expenses -- 67
-------- --------
Total expenses 170 167
Income from operations before income
taxes 507 66
Income taxes 177 23
-------- --------
Net income $ 330 $ 43
======== ========
</TABLE>
See Accompanying Notes to Financial Statements.
Page 4
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
-------------- --------------
(in thousands)
<S> <C> <C>
Cash Flows From Operating Activities:
- -------------------------------------
Net income $ 330 $ 43
Adjustments to reconcile net income to net cash
Provided by (Used for) operating activities:
Decrease in investments in and distribution
by trusts -- 4
(Increase) decrease in Mortgage Pass-Through
Certificates (28) 4,488
Decrease in resale agreements -- 23,109
Decrease in receivables from affiliates -- 71
(Increase) decrease in accrued interest
receivable (89) 406
(Decrease) in accrued interest payable -- (712)
-------- --------
Net Cash Provided by
Operating Activities 213 27,409
-------- --------
Cash Flows From Financing Activities:
- -------------------------------------
(Decrease) in securities sold not yet purchased -- (22,859)
(Decrease) in payables to affiliates (213) (4,550)
-------- --------
Net Cash (Used for) Financing
Activities (213) (27,409)
-------- --------
Net increase in cash -- --
-------- --------
Cash at beginning of year 11 11
-------- --------
Cash at end of year $ 11 $ 11
======== ========
</TABLE>
See Accompanying Notes to Financial Statements
Page 5
<PAGE>
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, 1997
Financial Statements contained in the Company's 1997 Form 10-K.
Page 6
<PAGE>
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 three months ended March 31, 1998 and
March 31, 1997.
There were no Bonds, Conduits, Splits, Multifamily or Home Equities
issued during the three months ended March 31, 1998. During the three
months ended March 31, 1997, the Company issued, as depositor,
aggregate principal amounts of Bonds, Conduits, Splits, Multifamily
and Home Equities of $87,303.
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 three months ended March 31, 1998,
principal transactions of $333 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
<PAGE>
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
<PAGE>
Item 6. Exhibits and Reports on Form 8-K (continued)
(b) Reports on Form 8-K:
Items Reported Financial Statements Filed Date of Filing
Items 5 & 7. Other Events and
Financial Statements
and Exhibits Not Applicable March 5, 1998
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: /s/ THOMAS M. ZINGALLI
-----------------------------
Thomas M. Zingalli
Controller and Principal
Accounting Officer
(Duly Authorized Officer and
Principal Accounting Officer)
Dated: May 11, 1998
Page 10
<PAGE>
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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 11
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 4,804
<CURRENT-ASSETS> 5,984
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,984
<CURRENT-LIABILITIES> 4,526
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 1,457
<TOTAL-LIABILITY-AND-EQUITY> 5,984
<SALES> 0
<TOTAL-REVENUES> 677
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 170
<INCOME-PRETAX> 507
<INCOME-TAX> 177
<INCOME-CONTINUING> 330
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 330
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
