-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HniceyzARj8g8WhCiN9TPh5Xt/8oqm+4pIohur88WIeq+7FWp70oh80Z2o053iJn N8DyI+nXwaLZENYJc6u5Rg== 0000950123-97-002723.txt : 19970329 0000950123-97-002723.hdr.sgml : 19970329 ACCESSION NUMBER: 0000950123-97-002723 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970328 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP CENTRAL INDEX KEY: 0000802106 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 133320910 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 033-08856 FILM NUMBER: 97567880 BUSINESS ADDRESS: STREET 1: C/O NORWEST BANK MINNESOTA N A STREET 2: 11000 BROKEN LAND PARKWAY CITY: COLUMBIA STATE: MD ZIP: 21044 BUSINESS PHONE: 4108842076 MAIL ADDRESS: STREET 1: 11000 BROKEN LAND PARKWAY STREET 2: 2 INTERNATIONAL PLACE CITY: COLUMBIA STATE: MD ZIP: 21044 FORMER COMPANY: FORMER CONFORMED NAME: CS FIRST BOSTON MORTGAGE SECURITIES CORP /DE/ DATE OF NAME CHANGE: 19951115 FORMER COMPANY: FORMER CONFORMED NAME: CS FIRST BOSTON MORTGAGE SECURITIES CORP /DE/ DATE OF NAME CHANGE: 19931118 FORMER COMPANY: FORMER CONFORMED NAME: FIRST BOSTON MORTGAGE SECURITIES CORP /DE/ DATE OF NAME CHANGE: 19920703 10-K 1 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES 1 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 Fiscal Year Ended December 31, 1996 Commission File Numbers 33-99612, 33-11623, 33-15833, 33-16145 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. (Exact name of registrant as specified in its registration statements) Delaware 13-3320910 (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation) 11 Madison Avenue, New York, New York 10010 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 212- 322-1811 Securities registered pursuant to section 12(b) of the Act: None. Securities registered pursuant to section 12(g) of the Act: Title of Number of shares outstanding each class as of December 31, 1996 Common Stock 1,000 par value $1.00 per share As of March 21, 1997 none of the Registrant's Common Stock was held by non-affiliates. 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 --- --- 2 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. INDEX Page Number ------ PART I Item 1. Business 3 Item 2. Properties 6 Item 3. Legal Proceedings 6 Item 4. Submission of Matters to a Vote of Security Holders 7 PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters 7 Item 6. Selected Financial Data 7 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Item 8. Financial Statements 8 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 15 PART III Item 10. Directors and Executive Officers of the Registrant 15 Item 11. Executive Compensation 15 Item 12. Security Ownership of Certain Beneficial Owners and Management 15 Item 13. Certain Relationships and Related Transactions 15 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 16 SIGNATURES 17 INDEX TO EXHIBITS 18 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 19 Page 2 3 PART I Item 1. Business Credit Suisse First Boston Mortgage Securities Corp. (formerly CS First Boston Mortgage Securities Corp.) (the "Company"), is a wholly owned subsidiary of Credit Suisse First Boston Management Corporation (formerly CS First Boston Securities Corporation) ("FBSC"), which is a wholly owned subsidiary of Credit Suisse First Boston, Inc., (formerly CS First Boston, Inc.) a privately owned holding company. The Company was incorporated in the State of Delaware on December 31, 1985. The Company was organized to form trusts to issue and sell Collateralized Mortgage Obligations ("CMOs") backed by mortgage-backed certificates (the "Certificates") issued and guaranteed as to the payment of principal and interest by the Government National Mortgage Association ("GNMA"), the Federal National Mortgage Association ("FNMA"), the Federal Home Loan Mortgage Corporation ("FHLMC") and/or mortgage loans and participations therein; to issue Strips of Participation Securities ("SPLITS") backed by Certificates; and to issue Conduit Mortgage Pass-Through Certificates ("Conduits") representing undivided fractional interests in a trust formed by the Company, where the trust property consists of a pool of mortgage loans. Shelf registrations filed for the Company since inception are as follows (dollars in thousands):
Commission Date of Shelf Type of File # Filing Amount Issue ------ ------ ------ ----- 33-3119 02/12/86 $1,000,000 CMO 33-4884 04/15/86 2,000,000 CMO 33-8856 09/18/86 1,000,000 SPLIT 33-10305 11/19/86 250,000 Conduit 33-10311 11/20/86 2,000,000 CMO 33-11750 02/04/87 2,000,000 CMO 33-11924 02/12/87 2,000,000 CMO 33-12461 (A) 03/06/87 1,000,000 Conduit 33-12541 03/10/87 2,000,000 SPLIT 33-37221 10/16/90 500,000 Conduit 33-47579 04/26/92 1,700,000 Conduit 33-59342 05/05/93 500,000 Commercial/Multifamily 33-65950 07/13/93 500,000 Home Equity 33-82354 08/11/94 500,000 Commercial/Multifamily 33-98604 11/08/95 1,000,000 Commercial/Multifamily 33-99612 11/17/95 3,000,000 Conduit 33-99612 (B) 11/29/95 1,740,000 Conduit 33-11623 09/09/96 800,000 Conduit 33-15833 11/08/96 800,000 Conduit 33-16145 11/14/96 300,000 Conduit
(A) Represents amendment No. 1 effectively increasing the shelf amount from $250,000 to $ 1,000,000 as filed on Form S-11 #33-10305. (B) Represents amendment No. 1 effectively decreasing the shelf amount from $3,000,000 to $1,740,000 as filed on Form S-11 #33-99612. Page 3 4 Item 1. Business (continued) The Company established the following Trusts which have issued Collateralized Mortgage Obligations since inception (dollars in thousands):
Pricing Type of Principal Trust Series Date Collateral Amount ----- ------ ---- ---------- ------ I A 04/07/86 FNMA $ 140,000 I B 04/07/86 FHLMC 249,000 II A 06/04/86 FHLMC 500,000 III A 06/25/86 FNMA 162,000 IV A 10/21/86 FNMA 161,800 IV B 10/21/86 FHLMC 396,265 V A 10/30/86 FHLMC 500,000 VI A 12/02/86 FNMA 185,000 VII A 12/03/86 FHLMC 240,000 VII B 12/04/86 GNMA 300,000 VIII A 12/05/86 FNMA 500,000 IX A 01/07/87 FNMA 350,000 X A 01/15/87 FNMA 300,000 XI A 02/26/87 GNMA 1,000,000 12 A 03/25/87 FHLMC 250,000 13 A 03/31/87 FHLMC 250,000 14 A 04/20/87 FNMA 200,000 15 A 05/12/87 FHLMC/FNMA 250,000 16 A 05/27/87 GNMA 150,000 17 A 06/16/87 FHLMC/FNMA 270,000 18 A 06/30/88 GNMA 500,100 19 A 09/28/88 FHLMC 203,615 20 A 08/29/90 GNMA 154,500 21 A 04/30/91 GNMA 69,514 ---------- $7,281,794 ----------
The Company has sold, through private placements, the beneficial interests in Owner Trusts since inception: Percent of beneficial interest sold during the year ended: ----------------------
Trust 1986 1987 1988 - ----- ---- ---- ---- I 100.000% II 98.000 III 98.000 IV 98.000% V 100.000 VI 98.000 VII 100.000 VIII 98.000 IX 98.635 X 100.000 XI 100.000
Page 4 5 Item 1. Business (continued) Percent of beneficial interest sold during the year ended: ----------------------
Trust 1987 1988 1990 1991 - ----- ---- ---- ---- ---- 12 100.000% 13 99.800 14 99.800 15 99.800 16 100.000 17 100.000 18 100.000% 19 100.000 20 100.000% 21 100.000%
There were no beneficial interests in Owner Trusts sold by the Company during the three years ended December 31, 1996. The Company, as Seller, has also issued the following SPLITS since inception (dollars in thousands):
Pricing Type of Principal Series Date Collateral Amount ------ ---- ---------- ------ 1987-A 02/19/87 FHLMC $ 445,000 1987-B 03/13/87 FNMA 275,000 1987-C 03/27/87 GNMA 126,900 1987-D 04/13/87 GNMA 110,000 1988-E 09/07/88 GNMA 200,000 ----------- $ 1,156,900 -----------
The Company established the following Trust Funds, which sold Conduit Mortgage Pass-Through Certificates since inception (dollars in thousands):
Pricing Principal Series Date Amount - ------ ---- ------ 1987-1, Class A 07/16/87 $ 72,600 1988-1, Class A 10/13/88 63,794 1988-2, Class A 10/19/88 95,000 1988-3, Class A 11/02/88 61,692 1988-4, Class A 11/09/88 45,893 1989-1, Class A 01/31/89 86,612 1989-2, Class A 02/09/89 81,300 1989-4, Class A 05/03/89 99,877 1989-5, Class A 12/21/89 144,015 1990-1, Class A 09/27/90 134,070 1991-1, Class A 12/24/91 110,201 1992-1, Class A 02/14/92 174,564 1992-2, Class A 07/15/92 131,153 1992-3, Class A 07/23/92 92,623 1992-4, Class A 09/17/92 156,397 1992-5, Class A 09/17/92 115,196
Page 5 6 Item 1. Business (continued) 1993-1, Class A 03/01/93 81,879 1993-2, Class A 03/31/93 296,803 1993-3, Class A 04/28/93 50,839 1993-4, Class A 06/11/93 115,000 1993-5, Class A 07/29/93 342,468 1993-6, Class A 08/27/93 208,700 1993-6R 02/23/94 18,997 1993-2R 08/15/94 21,409 1995-1, Class A 12/15/95 1,278,320 1996-1, Class A 05/28/96 305,580 1996-1R 10/04/96 73,672 1996-2 12/09/96 280,000 1996-3 12/19/96 278,286 ------------- $ 5,016,940 -------------
The collateral in the Trust Fund issuances listed above consists of mortgage pools of fixed and adjustable rate, fully amortizing mortgage loans. The Company, as Seller, has also issued the following Commercial/Multifamily Mortgage Pass-Through Certificates since inception (dollars in thousands):
Series Date Amount ------ ---- ------ 1993-M1 08/12/93 $ 97,118 1994-M1 03/11/94 157,570 Series 94 05/16/94 15,000 Series 94-E 05/16/94 16,802 1994-CFB1 06/22/94 262,189 1994-MHC1 10/04/94 303,524 1995-AEW1 10/30/95 287,679 1995-FHA1 11/15/95 171,543 1995-MBL1 11/28/95 108,566 1995-WF1 12/21/95 243,850 ----------- $1,663,841 -----------
The Company, as Seller, has also issued the following Home Equity Loan Pass-Through Certificates since inception (dollars in thousands):
Series Date Amount ------ ---- ------ 1993-H1 09/29/93 $78,017 ------- $78,017 -------
Item 2. Properties The Company neither owns nor leases any physical property. Item 3. Legal Proceedings The Company is not a party to any material actual or pending legal proceedings. Page 6 7 Item 4. Submission of Matters to a Vote of Security Holders There were no matters submitted to a vote of security holders during the year ended December 31, 1996. Part II Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters As of March 21, 1997 all outstanding shares of the Company's common stock are owned indirectly by Credit Suisse First Boston, Inc. and are not traded in any exchange or in the over-the-counter market. Item 6. Selected Financial Data Selected financial data is omitted because the information is included in the financial statements or notes thereto. Item 7. 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 The Company recorded no gains on the sale of beneficial interests during the years ended December 31, 1996, 1995, and 1994. 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 year ended December 31, 1996, principal transactions of $1,188,000 are included in the Company's Statement of Operations. During the years ended December 31, 1996, 1995 and 1994 the Company issued, as depositor, aggregate principal amounts of Bonds, Splits, Conduits, Multifamily and Home Equity of $937,538,000, $2,089,958,000, and $795,491,000 respectively. 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 8 Item 8. Financial Statements INDEX TO FINANCIAL STATEMENTS PAGE Independent Auditors' Report 9 Balance Sheets as of December 31, 1996 and 1995 10 Statements of Operations for the Years Ended December 31, 1996, 1995 and 1994 11 Statements of Changes in Stockholder's Equity for the Years Ended December 31, 1996, 1995 and 1994 11 Statements of Cash Flows for the Years Ended December 31, 1996, 1995 and 1994 12 Notes to Financial Statements 13 Financial Statement Schedules are omitted because they are not required, inapplicable, or the information is included in the financial statements or notes thereto. Page 8 9 Independent Auditors' Report The Board of Directors Credit Suisse First Boston Mortgage Securities Corp.: We have audited the accompanying balance sheets of Credit Suisse First Boston Mortgage Securities Corp. as of December 31, 1996 and 1995, and the related statements of operations, changes in stockholder's equity, and cash flows for each of the years in the three year period ended December 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Credit Suisse First Boston Mortgage Securities Corp. as of December 31, 1996 and 1995, and the results of its operations and its cash flows for each of the years in the three year period ended December 31, 1996, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP March 21, 1997 Page 9 10 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. BALANCE SHEETS
December 31, 1996 1995 ---- ---- (In thousands, except par value and share data) Assets: Cash $ 11 $ 11 Investment in trusts 605 623 Deferred debt issuance costs -- 945 Mortgage Pass-Through Certificates 7,952 -- Resale agreements 23,109 -- Receivables from affiliates 76 -- Accrued Interest 542 -- --------- -------- Total Assets $ 32,295 $ 1,579 --------- -------- Liabilities and Stockholder's Equity: Securities sold not yet purchased: U.S. Government treasury notes 22,859 -- Payables to affiliates 7,855 1,578 Accrued interest 712 -- --------- -------- Total Liabilities 31,426 1,578 --------- -------- Stockholder's Equity: Common Stock, (par value $1.00 per share, 1,000 shares authorized and outstanding) 1 1 Retained earnings 868 -- --------- -------- Total Stockholder's Equity 869 1 --------- -------- Total Liabilities and Stockholder's Equity $ 32,295 $ 1,579 ========= =========
See Notes to Financial Statements. Page 10 11 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. STATEMENTS OF OPERATIONS
Year Ended December 31, 1996 1995 1994 ---- ---- ---- (in thousands) Revenues: Net gains on sales of beneficial interests in trusts $ -- $ -- $ -- Principal transactions 1,188 -- -- Interest income 535 -- -- ------ ---------- ------------ Total revenues 1,723 -- -- Expenses: Interest expense 388 -- -- General and administrative expenses -- -- -- ------ ---------- ------------ Total expenses 388 -- -- Income from operations before income taxes 1,335 -- -- Income taxes 467 -- -- ------ ---------- ------------ Net income $ 868 $ -- $ -- ====== ========== ============
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
Year Ended December 31, 1996 1995 1994 ---------- --------- --------- (in thousands) Common stock-balance at beginning of year $ 1 $ 1 $ 1 --------- -------- -------- Common stock-balance at end of year $ 1 $ 1 $ 1 ========= ======== ======== Retained earnings-balance at beginning of year $ - $ - $ - Net Income 868 - - --------- --------- -------- Retained earnings-balance at end of year $ 868 $ - $ - ---------- --------- -------- Total $ 869 $ 1 $ 1 ========= ========= ========
See Notes to Financial Statements. Page 11 12 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. STATEMENTS OF CASH FLOWS
Year Ended December 31, 1996 1995 1994 ---- ---- ---- (in thousands) Cash Flows From Operating Activities: Net income $ 868 $ -- $ -- Adjustments to reconcile net income to net cash provided by (used for) operating activities: Decrease in investments in and distribution by trusts 18 66 143 Decrease in other assets -- -- 334 (Decrease) in other liabilities -- -- (447) (Increase) in Mortgage Pass-Through Certificates (7,952) -- -- (Increase) in resale agreements (23,109) -- -- (Increase) in receivables from affiliates (76) -- -- (Increase) in accrued interest receivable (542) -- -- Increase in accrued interest payable 712 -- -- --------- ------- ------ Net Cash Provided by (Used for) Operating Activities (30,081) 66 30 --------- ------- ------ Cash Flows From Financing Activities: Increase in securities sold not yet purchased 22,859 -- -- Decrease in deferred debt issuance costs 945 185 65 Increase (decrease) in payables to affiliates 6,277 (251) (95) --------- ------- ------ Net Cash (Used for) Provided by Financing Activities 30,081 (66) (30) --------- ------- ------ Net increase in cash -- -- -- Cash at beginning of year 11 11 11 --------- ------- ------ Cash at end of year $ 11 $ 11 $ 11 ========= ======= ======
See Notes to Financial Statements Page 12 13 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. NOTES TO FINANCIAL STATEMENTS 1. Description of business Credit Suisse First Boston Mortgage Securities Corp. (the "Company"), is a wholly owned subsidiary of Credit Suisse First Boston Management Corporation (formerly CS First Boston Securities Corporation ("FBSC"), which is a wholly owned subsidiary of Credit Suisse First Boston, Inc., (the "Parent Company") a privately owned holding company. The Company was granted authority to do business in the state of Delaware on April 18, 1986 ("date of inception"). The Company was organized to form trusts; to issue and sell Collateralized Mortgage Obligations ("CMOs"); to issue Strips of Participation Securities ("SPLITS"); and to issue Conduit Mortgage Pass- Through Certificates ("Conduits"). CMOs are backed by mortgage-backed certificates (the "Certificates") issued and guaranteed as to the payment of principal and interest by the Government National Mortgage Association ("GNMA"), the Federal National Mortgage Association ("FNMA"), the Federal Home Loan Mortgage Corporation ("FHLMC") and/or mortgage loans and participations therein. SPLITS are backed by Certificates. Conduits represent undivided fractional interests in a trust formed by the Company, where the trust property consists of a pool of mortgage loans. Since inception, the Company has had the following activity: - Established 21 Trusts which have issued CMO's with an aggregate principal balance of $7,281,794,000 as of their respective date of issuance. Additionally, the Company sold, through private placements, 21 Trusts consisting of beneficial interests in Owner Trusts. There were no Trusts issued during the years ended December 31, 1996, 1995, and 1994, respectively. - As seller, has issued 5 series of SPLITS with an aggregate principal balance of $1,156,900,000 as of their respective date of issuance. No SPLITS have been issued since 1988. - Established 29 Trust Funds which sold Conduits with an aggregate principal balance of $5,016,940,000 as of their respective date of issuance, including $937,538,000, $1,278,320,000, and $40,406,000 issued during the years ended December 31, 1996, 1995, and 1994, respectively. - As seller, has issued 10 series of Multifamily certificates with an aggregate principal balance of $1,663,841,000 as of their respective date of issuance, including $811,638,000 and $755,085,000 issued during the years ended December 31, 1995 and 1994, respectively. There were no Multifamily certificates issued during 1996. - As seller, has issued 1 series of Home Equity certificates with an aggregate principal balance of $78,017,000 as of December 31, 1993. There were no Home Equity certificates issued since 1993. Page 13 14 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. NOTES TO FINANCIAL STATEMENTS 2. Summary of significant accounting policies Deferred debt issuance costs, which consist primarily of shelf registration costs, are allocated to the specific Trust to which the expense relates on the date of issuance and are included in the cost of investment upon sale. The Company's investments in the Trusts are carried at cost less cash distributions received to date. Cash in excess of the Company's cost is recognized as income when received. The Company utilizes FBSC to borrow funds and facilitate the settlement of all transactions through intercompany accounts of which no interest is charged by FBSC to the Company. The Company is included in the consolidated federal and combined state and local income tax returns of Credit Suisse First Boston, Inc. The amount of income tax expense is computed on a separate company basis and allocated by Credit Suisse First Boston, Inc. to the Company. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 3. Mortgage Pass-Through Certificates In the normal course of business, the Company establishes trusts which sell mortgage pass-through certificates. All certificates are generally purchased from the trust by the underwriter and sold to third parties. As of December 31, 1996, the Company held $7,952,000 of certificates which they purchased directly from the trust. As of December 31, 1995 and 1994, respectively, all mortgage pass-through certificates were sold to third parties and none were held by the Company. The certificates are carried at market value and are expected to be sold in the near future. To acquire the mortgage pass-through certificates, the Company established an intercompany loan included in payables to affiliates on the balance sheet. The company is hedging the mortgage pass-through certificates with U.S. Government treasury notes sold not yet purchased. 4. Related party transactions In the normal course of business, the Company enters into securities transactions with affiliated companies. In addition, the Company enters into resale agreements with affiliated companies at prevailing interest rates. These affiliates have collateralized their borrowings with U.S. Government treasury notes whose market values approximate the amount of the borrowing. At December 31, 1996, there were $23,109,000 of such resale agreements outstanding. 5. Reorganization On July 1, 1996 the Parent Company's principal shareholder, CS Holding, announced a plan to reorganize its corporate structure, including the operations of the Parent Company. This reorganization was fully implemented as of January 1, 1997. Pursuant to this reorganization, CS Holding changed its name to Credit Suisse Group and is comprised of four distinct business units. As part of this reorganization the Parent Company changed its name from CS First Boston, Inc. to Credit Suisse First Boston, Inc. and the Company changed its name from CS First Boston Mortgage Securities Corp. to Credit Suisse First Boston Mortgage Securities Corp. FBSC changed its name from CS First Boston Securities Corporation to Credit Suisse First Boston Management Corporation. Page 14 15 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 The directors and executive officers of the Company are as follows:
NAME AGE TITLE DATE ELECTED ---- --- ----- ------------ Lawrence A. Shelley 38 President and Director 02/26/97 Diane Manno 38 Treasurer 09/13/96 Rhonda G. Matty 38 Assistant Secretary 08/24/94 Thomas A. DeGennaro 42 Director of Taxes 07/16/90 Thomas M. Zingalli 38 Controller and Principal Accounting Officer 08/05/94
Item 11. Executive Compensation No compensation was paid by the Company to persons who were directors, officers or employees of the Company for their services as directors or officers of the Company. Item 12. Security Ownership of Certain Beneficial Owners and Management Not applicable. Item 13. Certain Relationships and Related Transactions Not applicable. Page 15 16 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: (1) Financial Statements: The Financial Statements and Notes to Financial Statements appear on pages 10 through 14. The Report of Independent Auditors, KPMG Peat Marwick LLP, pertaining to the 1996, 1995 and 1994 financial statements appears on page 9. (2) Financial Statement Schedules Financial Statement Schedules are omitted because they are not required, inapplicable, or the information is included in the financial statements or notes thereto. (3) Exhibits: Articles of Incorporation of the Company as of December 31, 1985 (incorporated by reference to Exhibit 3.1 of the Company's Form S-11 Registration Statement No. 33-8856 dated September 18, 1986). By-Laws of the Company as of December 31, 1985 (incorporated by reference to Exhibit 3.2 of the Company's Form S-11 Registration Statement No. 33-8856 dated September 18, 1986). (b) Reports on Form 8-K None. (c) Exhibits filed as part of this report are included in Item 14(a) (3) above. Page 16 17 SIGNATURES Pursuant to the requirements of the 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, on this 21st day of March , 1997. CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. By: LAWRENCE A. SHELLEY ----------------------------- Lawrence A. Shelley President and Director 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 indicated on March 21, 1997. By: DIANE MANNO By: RHONDA G. MATTY ----------- --------------- Diane Manno Rhonda G. Matty Treasurer Assistant Secretary By: THOMAS A. DEGENNARO By: THOMAS M. ZINGALLI ------------------- ------------------ Thomas A. DeGennaro Thomas M. Zingalli Director of Taxes Controller and Principal Accounting Officer Page 17 18 INDEX TO EXHIBITS
Exhibit Number Description of Exhibit Page - ------ ---------------------- ---- 3.1 Articles of Incorporation of the Company as of December 31, 1985. * 3.2 By-Laws of the Company as of December 31, 1985. *
* Incorporated by reference to the same Exhibits in Registration Statement No. 33-8856 on Form S-11 filed with the Securities and Exchange Commission on September 18, 1986. Page 18 19 Consent of Independent Auditors The Board of Directors Credit Suisse First Boston Mortgage Securities Corp.: We consent to incorporation by reference in the registration statement Nos. 33-99612, 33-11623, 33-15833. and 33-16145 on Form S-3 of Credit Suisse First Boston Mortgage Securities Corp. of our report dated March 21, 1997 relating to the balance sheets of Credit Suisse First Boston Mortgage Securities Corp. as of December 31, 1996 and 1995, and the related statements of operations, changes in stockholder's equity, and cash flows for each of the years in the three year period ended December 31, 1996, which report appears in the December 31, 1996 report on Form 10-K of Credit Suisse First Boston Mortgage Securities Corp. KPMG Peat Marwick LLP March 21, 1997 Page 19 EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from Credit Suisse First Boston Mortgage Securities Corp. statement of financial condition and statement of operations; and is qualified in its entirety by reference to such Form 10-K annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. 1,000 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 11 0 0 0 7,952 32,295 0 0 32,295 31,426 0 0 0 1 868 32,295 0 1,723 0 0 0 0 388 1,335 467 868 0 0 0 868 0 0
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