ITEM 2. PROPERTIES
USAA Auto Loan Grantor Trust 1997-1 (the Trust) was formed pursuant to a Pooling and Servicing Agreement dated as of October 1, 1997 between USAA Federal Savings Bank as Seller and Servicer, and Chase Manhattan Bank, New York, as Trustee.
The Trust was established solely for the purpose of acquiring the fixed rate simple interest motor vehicle installment loans and related collateral (the Receivables), issuing its 6.0% Automobile Loan Pass-Through Certificates, Class A, and 6.15% Automobile Loan Pass-Through Certificates, Class B (the Certificates), and engaging in related transactions.
The property of the Trust consists of the Receivables described above. A summary of Receivable activity and delinquency information follows (unaudited):
Units ($ in 000's)
Original Receivables outstanding, 60,285 $700,205,448.34 October 1, 1997 Prepayments 3,086 $ 77,151,588.22 Repossessions 8 $ 105,143.26 Receivables outstanding, 57,191 $622,948,716.86 December 31, 1997
Delinquent Receivables as of December 31, 1997:
Units ($ in 000's)
31-60 days 162 $1,616,289.44 61-90 days 28 $ 308,985.10 91 days or more 6 $ 74,764.97 Total 196 $2,000,039.51
Losses on repossessions for the period ending December 31, 1997 were approximately $105,143.26 on 8 Receivables.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
As of December 31, 1997, there were 25 direct and indirect participants in The Depository Trust Company holding positions in the Certificates. The principal markets in which the Certificates are traded are the U.S.domestic capital markets.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 10-K
Exhibit "A" - Aggregate Statement
Exhibit "B" - Accountant's Annual Report
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
USAA FEDERAL SAVINGS BANK (Registrant)
/s/ MICHAEL J. BROKER ----------------------------- By: MICHAEL J. BROKER (Duly Authorized Officer of USAA Federal Savings Bank, as Servicer, on behalf of the Trust)
EXHIBIT "A"
AGGREGATE REPORT
EXHIBIT "B"
ACCOUNTANT'S ANNUAL REPORT
January 31, 2000
The Board of Directors USAA Federal Savings Bank
RE: USAA Auto Loan Grantor Trust 1997-1
We have applied certain agreed upon procedures, as discussed below, to the servicing records of USAA Federal Savings Bank (the Bank) from January 1, 1999, to December 31, 1999, in accordance with the requirements of Section 13.11 of the Pooling and Servicing Agreement dated as of October 1, 1997 (the Pooling Agreement), between USAA Federal Savings Bank, as Seller and Servicer, and The Chase Manhattan Bank, as Trustee. It is understood that this letter is solely for the information and use of the management of the Bank, the Trustee, and the Rating Agencies in connection with the Pooling Agreement and is not to be referred to or distributed (for any purpose) to anyone else.
We are independent with respect to the Servicer and conform to the standards of the profession as contained in the Code of Professional Conduct and pronouncements of the American Institute of Certified Public Accountants, and the Rules of Professional Conduct of the Texas Board of Public Accountancy.
Unless otherwise indicated, the following conventions have been adopted in presenting our procedures and findings:
o the term "compared" means compared to and found to be in agreement with, unless otherwise noted. Such compared amounts and percentages are deemed to be in agreement if differences are, in our judgement, minor or if differences are attributable to rounding.
o the term "recomputed" means calculated and found the amount to be in agreement with, unless otherwise noted. Such recomputed amounts and percentages are deemed to be in agreement if differences are attributable to rounding.
o capitalized terms herein are defined in the Pooling Agreement and are used with the meaning set forth therein.
Our procedures and findings were as follows:
1. As described in items 2., 3., and 4. below, we have performed certain procedures relating to the Servicer's accounting and reporting performed in connection with the servicing of the Receivables under the Pooling Agreement. Based on our procedures performed, we found no exceptions, other than those which we believe to be immaterial to the Bank's compliance with the Pooling Agreement. We are, however, noting below certain other matters for your information.
2. We read the Pooling Agreement and the Servicer's Certificate, as described in Exhibit D of the Pooling Agreement.
The Board of Directors USAA Federal Savings Bank
3. In accordance with Section 13.11 of the Pooling Agreement, we have reviewed the Servicer's procedures and records relating to the servicing of the Receivables. As a result of this review, the only matter noted was as follows:
A. Seventy-two receivables out of the total pool of approximately 23,472 receivables outstanding at December 31, 1999, were noted to have received three or more credit-related extensions since the loan's inception. Fourteen loans exceeded the four month aggregate limitation for extensions. While these extensions were made within the guidelines of the Bank's credit policy, they did exceed the maximum of two credit-related extensions provided for within Section 13.2 of the Pooling Agreement.
4. With respect to the Monthly Servicer Certificate Reports (Monthly Reports) provided to the Trustee, the Paying Agent, the Rating Agencies, the Cash Collateral Depositor and the Cash Collateral Trustee, we obtained the Monthly Reports for March, May, July, August, and September of 1999 (summary of Monthly Reports is attached as Exhibit I) and performed the following procedures, which were applied as indicated with respect to the letter symbols explained below:
A. We compared with and agreed to amounts appearing in the "ABS History" report prepared by officials of the Bank.
B. We recomputed using the amounts or numbers included in the Monthly Report and/or prior Monthly Reports using the formula as defined by the Pooling Agreement.
C. We compared with and agreed to amounts included in the prior month's Monthly Report.
D. We compared with and agreed to amounts appearing in the "Transaction History Inquiry."
E. We compared with and agreed to amounts or percentages appearing in the USAA Auto Loan Grantor Trust 1997-1 6.00% Automobile Loan Pass-Through Certificates, Class A and 6.15% Automobile Loan Pass-Through Certificates, Class B Prospectus dated October 30, 1997.
F. We compared with and agreed to amounts or numbers appearing in the "ABS Loans with Late Payments" and "ABS Loans Paid Ahead 60 or More Days from Last Payment" reports prepared by officials of the Bank.
G. We inquired of officials of the Bank who represented this line equals zero.
H. We compared with and agreed to amounts appearing in The Chase Manhattan Bank business checking account bank statement received by the Bank from The Chase Manhattan Bank.
I. We compared line I.A.1.b. to the supporting documentation and noted that the amount did not agree to the amount recorded on the March Monthly Report by $4,790.00. The amount per the supporting documentation is $2,068,842.46. As a result of this difference, each row identified with the letter "I" does not agree by its applicable pro rata portion of the $4,790.00 The client was notified of the error and the Monthly Report was subsequently corrected.
The Board of Directors USAA Federal Savings Bank
J. We compared line I.A.3.a. to the supporting documentation and noted that the amount did not agree to the amount recorded on the August Monthly Report by $11,117.77. The amount per the supporting documentation is $73,421.43. As a result of this difference, each row identified with the letter "J" does not agree by its applicable pro rata portion of the $11,117.77. The client was notified of the error and the Monthly Report was subsequently corrected.
It should be understood that we make no representation as to questions of legal interpretation and that such procedures would not necessarily reveal any material misstatements. Because the above procedures do not constitute an audit made in accordance with generally accepted auditing standards, we do not express an opinion on the items referred to above. Had we performed additional procedures or had we performed an audit in accordance with generally accepted auditing standards, other matters might have come to our attention that would have been reported to you. This letter is related only to the items specified above and does not extend to any financial statements or financial information of USAA Federal Savings Bank and should not be associated with such financial statements or financial information.
Very truly yours,
/s/ KPMG LLP