SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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, 1996
___ 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 33-54426
CAPITOL HOME EQUITY LOAN TRUST 1990-1
(Issuer in respect of the Capitol Home Equity Loan Asset Backed Certificates,
Series 1990-1, Class A and Class B
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(Exact name of registrant as specified in its charter)
Maryland 52-1714779
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(State or other jurisdiction of (I.R.S Employer
incorporation or organization) (Identification No.)
8401 Connecticut Avenue
Chevy Chase, Maryland 2081
(Address of principal executive offices) (Zip Code)
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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:
Capitol Home Equity Loan Asset
Backed Certificates, Series 1990-1, Class B
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.
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INTRODUCTORY NOTE
Chevy Chase Bank, F.S.B. (the "Originator") is the originator, seller and
servicer under the Pooling and Servicing Agreement (the "Agreement"), dated
as of December 1, 1990, by and between the Originator and Chemical Bank, as
trustee, providing for the issuance of the Capitol Home Equity Loan Asset
Backed Certificates, Series 1990-1, Class A and Class B (the
"Certificates"), and is the originator of the Capitol Home Equity Loan
Trust 1990-1 (the "Registrant"). The Certificates do not represent
obligations of, or any interest in, the Originator. The Originator has made
application for an exemption from certain reporting requirements. Pursuant
to a letter from the Commission's Office of Chief Counsel, Division of
Corporation Finance, dated February 6, 1991 granting the Originator's
application, the Originator is not required to respond to various items of
Form 10-K. Such items are designated herein as "Not Applicable."
PART I
Item 1. Business
Not Applicable.
Item 2. Properties
Not Applicable.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
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PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
The Certificates representing investors' interests in the Trust are
represented by two Certificates for Class B, one of which is registered in
the name of Cede & Co., the nominee of the Depository Trust Company and the
other Class B Certificate in the principal amount of $533 is registered in
the name of Merrill Lynch, Pierce, Fenner & Smith.
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.
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Item 12.Security Ownership of Certain Beneficial Owners and Management
The Certificates representing investors' interests in the Trust are
represented by two Certificates for Class B, one of which is registered in
the name of Cede & Co., the nominee of the Depository Trust Company ("DTC"),
and the other Class B Certificate in the principal amount of $533 is
registered in the name of Merrill Lynch, Pierce, Fenner & Smith. 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 primary holder of record of Certificates,
which it held on behalf of 8 brokers, dealers, banks and other direct
participants in the DTC system at December 31, 1996. Such direct participants
may hold Certificates for their own accounts or for the accounts of their
customers. At December 31, 1996, based on information furnished to the
Originator by DTC, the following direct DTC participants held positions in
Certificates representing interests in the Trust equal to or exceeding 5% of
the total face amount of Class B Certificates outstanding on that date:
Aggregate Amount of Percent of
Name Certificates Held Class B
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Bank of New York ............................ $15,000,000 17.9%
Bankers Trust Co. ........................... $10,000,000 11.9%
Brown Brothers Harriman & Company ........... $25,000,000 29.8%
Chase Manhattan Bank, N.A ................... $13,000,000 15.5%
Merrill Lynch, Pierce, ...................... $15,008,000 17.9%
Fenner & Smith Safekeeping
The address of each of the above participants is:
c/o The Depository Trust Company
55 Water Street
New York, NY 10041
Item 13. Certain Relationships and Related Transactions
None.
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PART IV
Item 14.Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following documents are filed as part of this Report:
(i) Management's Report dated December 20, 1996, together with
Annual Accountant's Report.
(ii) Annual Report to Certificateholders for the year
ended December 31, 1996.
No proxy soliciting material has been or is expected to be distributed by the
Trust.
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<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.
CAPITOL HOME EQUITY LOAN TRUST 1990-1
By: Chevy Chase Bank, F.S.B.
Originator of the Trust and Servicer
Date: March 24, 1997 By: Stephen R. Halpin
_______________________________
Stephen R. Halpin, Jr.
Executive Vice President and
Chief Financial Officer
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EXHIBIT 14(a)(i)
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EXHIBIT 14(a)(ii)
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MANAGEMENT'S REPORT ON THE EFFECTIVENESS OF THE INTERNAL
CONTROL STRUCTURE RELATIVE TO THE SERVICING OF
HOME EQUITY LOANS
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 home equity loans
owned by the Chevy Chase Capitol Home Equity Loan Trusts 1990-1, 1991-1, 1992-1,
1993-1, 1994-1 and 1995-1 (collectively referred to as the "Trusts" herein) as
of September 30, 1996, and we have determined that the Bank maintained an
effective internal control structure over financial reporting relative to the
servicing of home equity loans owned by the Chevy Chase Capitol Home Equity Loan
Trusts as of September 30, 1996.
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.
John N. Sousane George P. Clancy
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John N. Sousane George P. Clancy
Vice President Executive Vice President
Stephen R. Halpin, Jr.
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Stephen R. Halpin, Jr.
Executive Vice President
Chief Financial Officer
December 20, 1996
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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 Home Equity Loans, that Chevy Chase Bank, F.S.B.
(the "Bank") maintained an effective internal control structure over financial
reporting relative to the servicing of home equity loans owned by the Chevy
Chase Capitol Home Equity Loan Trusts (1990-1, 1991-1, 1992-1, 1993-1, 1994-1,
and 1995-1, collectively referred to as the "Trusts" herein) as of September 30,
1996.
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 effectiveness 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
home equity loans owned by the Chevy Chase Capitol Home Equity Trusts as of
September 30, 1996, 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, Chemical Bank and Capital Markets
Assurance Corporation and should not to be used for any other purpose.
Arthur Andersen LLP
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Arthur Andersen LLP
Washington, D.C.
December 20, 1996
YEARLY CERTIFICATEHOLDERS STATEMENT (O)
CAPITOL HOME EQUITY LOAN TRUST 1990-1
Under subsection 5.02(b) of the Pooling and Servicing Agreement
dated as of December 1, 1990 by and between Chevy Chase Savings
Bank,F.S.B., a federally chartered savings bank, as Seller and
Servicer,and Chemical Bank, as Trustee (hereinafter as such agreement may
have been, or may from time to time be, amended, supplemented or
otherwise modified, the "Pooling and Servicing Agreement"), Chevy Chase
Savings Bank, F.S.B., as the Servicer, is required to prepare certain
information each year regarding distributions on each Class of Regular
Certificates and the performance of the Capitol Home Loan Trust
1990-1(the "Trust") during the related calendar year. The information
that is required to be prepared with respect to the distribution to
Holders(the "Certificateholders") of the Class A Certificates and the
Class B Certificates for the calendar year ended December 31, 1996 is set
forth below. Certain of the information is presented on the basis of an
original principal amount of $1,000 per Class A Certificate or Class B
Certificate, as the case may be. Capitalized terms used and not otherwise
defined herein have the meanings assigned them in the Pooling and
Servicing Agreement.
A. Information Regarding the Current Yearly
Distribution to Class A Certificateholders
(Per $1,000 Original Principal Amount of a
Class A Certificate).________________________
1. The total amount of the distribution
allocable to principal of the Class A
Certificates............................$0.00000
2. The amount of any Unpaid Class A
Principal Shortfall ....................$0.00000
3. The amount of any remaining Unpaid
Class A Principal Shortfall.............$0.00000
4. The total amount of the distribution
allocable to interest on the Class A
Certificates ...........................$0.00000
5. The amount of any Unpaid Class A
Interest Shortfall......................$0.00000
6. The amount of any remaining Unpaid
Class A Interest Shortfall..............$0.00000
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B. Information Regarding the Current Yearly
Distribution to Class B Certificateholders
(Per $1,000 Original Principal Amount of a
Class B Certificate).________________________
1. The total amount of the distribution
allocable to principal of the Class
B Certificates .........................$313.15979
2. The amount of any Unpaid Class B
Principal Shortfall ....................$0.00000
3. The amount of any remaining Unpaid
Class B Principal Shortfall.............$0.00000
4. The total amount of the distribution
allocable to interest on the Class B
Certificate.............................$51.03234
5. The amount of any Unpaid Class B
Interest Shortfall .....................$0.00000
6. The amount of any remaining Unpaid Class
B Interest Shortfall....................$0.00000
IN WITNESS WHEREOF, the undersigned has caused this Certificate to
be duly executed this 31st day of January, 1997.
CHEVY CHASE SAVINGS BANK, F.S.B.
as Servicer
By: John N. Sousane
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John N. Sousane
Vice President
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