-----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, Sbqqmg89KcnED7WVQtNrV3pJzyiw7eOsC9UaIbmoiQNzW0lpql8NDTNas+VtsWzs ryZPZgrPp+l465Q2edr26g== 0000928385-02-002021.txt : 20020515 0000928385-02-002021.hdr.sgml : 20020515 20020515125110 ACCESSION NUMBER: 0000928385-02-002021 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST CAPITAL INC CENTRAL INDEX KEY: 0001070296 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 352056949 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-25023 FILM NUMBER: 02649967 BUSINESS ADDRESS: STREET 1: 220 FEDERAL DRIVE N W CITY: CORYDON STATE: IN ZIP: 47112 BUSINESS PHONE: 8127382198 MAIL ADDRESS: STREET 1: 220 FEDERAL DRIVE N W CITY: CORYDON STATE: IN ZIP: 47112 10QSB 1 d10qsb.txt QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB (Mark One) ---------- (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 2002 -------------- OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File No. 0-25023 ------- First Capital, Inc. ------------------- (Exact name of registrant as specified in its charter) Indiana 35-2056949 ------------------------------------------------------------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 220 Federal Drive NW, Corydon, Indiana 47112 -------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 1-812-738-2198 -------------- Not applicable -------------------------------------------- Former name, former address and former fiscal year, if changed since last report APPLICABLE ONLY TO CORPORATE ISSUERS; Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 2,539,277 shares of common stock were outstanding as of April 30, 2002. FIRST CAPITAL, INC. INDEX Part I Financial Information Page ---- Item 1. Consolidated Financial Statements Consolidated Balance Sheets as of March 31, 2002 and December 31, 2001 (unaudited) 3 Consolidated Statements of Income for the three months ended March 31, 2002 and 2001 (unaudited) 4 Consolidated Statements of Cash Flows for the three months ended March 31, 2002 and 2001 (unaudited) 5 Notes to consolidated financial statements (unaudited) 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-11 Part II Other Information 12 Signatures 13 - 2 - PART I-FINANCIAL INFORMATION FIRST CAPITAL, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31, December 31, 2002 2001 --------- ------------ ASSETS Cash and due from banks $ 6,306 $ 7,184 Interest bearing deposits with banks 6,085 5,199 Securities available for sale, at fair value 60,905 54,891 Securities-held to maturity 1,793 1,836 Loans receivable, net 201,391 201,730 Federal Home Loan Bank stock, at cost 2,291 2,179 Foreclosed real estate 139 212 Premises and equipment 5,951 5,940 Accrued interest receivable: Loans 1,053 1,043 Securities 732 798 Cash value of life insurance 1,227 1,214 Other assets 572 597 --------- --------- Total Assets $ 288,445 $ 282,823 ========= ========= LIABILITIES Deposits: Noninterest-bearing $ 17,827 $ 18,629 Interest-bearing 189,445 185,493 --------- --------- Total Deposits 207,272 204,122 Retail repurchase agreements 187 284 Advances from Federal Home Loan Bank 45,140 42,825 Accrued interest payable 1,261 1,253 Accrued expenses and other liabilities 898 859 --------- --------- Total Liabilities 254,758 249,343 --------- --------- STOCKHOLDERS' EQUITY Preferred stock of $.01 par value per share Authorized 1,000,000 shares; none issued -- -- Common stock of $.01 par value per share Authorized 5,000,000 shares; issued 2,546,629 shares (2,545,961 shares in 2001) 25 25 Additional paid-in capital 12,892 12,878 Retained earnings-substantially restricted 21,596 21,127 Accumulated other comprehensive income (loss) (72) 231 Unearned ESOP shares (471) (482) Unearned stock sompensation (196) (212) Less treasury stock, at cost - 7,146 shares (87) (87) --------- --------- Total Stockholders' Equity 33,687 33,480 --------- --------- Total Liabilities and Stockholders' Equity $ 288,445 $ 282,823 ========= =========
See accompanying notes to consolidated financial statements. - 3 - PART I-FINANCIAL INFORMATION FIRST CAPITAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, ------------------------ 2002 2001 -------- -------- (in thousands, except per share data) INTEREST INCOME Loans receivable, including fees $3,836 $3,772 Securities Taxable 659 658 Tax-exempt 93 86 Federal Home Loan Bank dividends 33 31 Interest bearing deposits with banks 56 131 ------ ------ Total interest income 4,677 4,678 INTEREST EXPENSE Deposits 1,584 2,052 Advances from Federal Home Loan Bank 641 478 Customer repurchase agreements -- -- ------ ------ Total interest expense 2,225 2,530 Net interest income 2,452 2,148 Provision for loan losses 45 36 ------ ------ Net interest income after provision for loan losses 2,407 2,112 NONINTEREST INCOME Service charges on deposit accounts 311 269 Commission income 66 84 Gain on sale of securities -- 15 Gain on sale of mortgage loans -- 71 Other income 22 16 ------ ------ Total noninterest income 399 455 ------ ------ NONINTEREST EXPENSE Compensation and benefits 877 795 Occupancy and equipment 211 214 Other operating expenses 513 444 ------ ------ Total noninterest expense 1,601 1,453 ------ ------ Income before income taxes 1,205 1,114 Income tax expense 412 397 ------ ------ Net income 793 717 OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX Unrealized gain (loss) on securities: Unrealized holding gains (losses) arising during the period (502) 331 Less: reclassification adjustment -- -- ------ ------ Other comprehensive income (loss) (502) 331 ------ ------ Comprehensive Income $ 291 $1,048 ====== ====== Net income per common share, basic $ 0.32 $ 0.29 ====== ====== Net income per common share, diluted $ 0.32 $ 0.29 ====== ======
See accompanying notes to consolidated financial statements. - 4 - PART I-FINANCIAL INFORMATION FIRST CAPITAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 31, ------------------------ 2002 2001 -------- -------- (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 793 $ 717 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of premiums and accretion of discounts 44 (17) Depreciation expense 102 110 Deferred income taxes (41) (5) ESOP compensation expense 15 12 Stock compensation expense 17 18 Increase in cash value of life insurance (13) (13) Provision for loan losses 45 36 Net gain on sale of securities held to maturity -- (15) Proceeds from sales of mortgage loans -- 3,138 Mortgage loans originated for sale -- (3,067) Net gain on sale of mortgage loans -- (71) Decrease in accrued interest receivable 57 293 Increase in accrued interest payable 8 48 Net change in other assets/liabilities 305 166 ------- ------- Net Cash Provided By Operating Activities 1,332 1,350 ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES Net increase in interest bearing deposits with banks (886) (6,188) Purchase of securities available for sale (9,372) (8,328) Proceeds from maturities of securities available for sale 2,427 2,188 Purchase of securities held to maturity (300) -- Proceeds from maturities of securities held to maturity 313 4,151 Proceeds from sale of securities held to maturity -- 356 Principal collected on mortgage-backed securities 415 282 Net (increase) decrease in loans receivable 271 (1,992) Purchase of Federal Home Loan Bank stock (112) (100) Proceeds from sale of foreclosed real estate 96 -- Purchase of premises and equipment (113) (96) ------- ------- Net Cash Used by Investing Activities (7,261) (9,727) ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES Net increase in deposits 3,150 7,508 Net increase in advances from Federal Home Loan Bank 2,315 320 Net increase (decrease) in retail repurchase agreements (97) 115 Exercise of stock options 7 32 Purchase of treasury stock -- (19) Dividends paid (324) (274) ------- ------- Net Cash Provided By Financing Activities 5,051 7,682 ------- ------- Net Decrease in Cash and Due From Banks (878) (695) Cash and due from banks at beginning of period 7,184 6,010 ------- ------- Cash and Due From Banks at End of Period $ 6,306 $ 5,315 ======= =======
See accompanying notes to consolidated financial statements. - 5 - FIRST CAPITAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Presentation of Interim Information First Capital, Inc. ("Company") is the holding company for First Harrison Bank ("Bank"). The information presented in this report relates primarily to the Bank's operations. In the opinion of management, the unaudited consolidated financial statements include all normal adjustments considered necessary to present fairly the financial position as of March 31, 2002, and the results of operations for the three months ended March 31, 2002 and 2001 and cash flows for the three months ended March 31, 2002 and 2001. All of these adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of results for a full year. The consolidated financial statements and notes are presented as permitted by Form 10-QSB, and do not contain certain information included in the Company's annual audited consolidated financial statements. The consolidated financial statements include the accounts of the Company, the Bank and the Bank's wholly owned subsidiary, First Harrison Financial Services, Inc. (formerly HCB Insurance Agency, Inc.). All material intercompany balances and transactions have been eliminated in consolidation. 2. Supplemental Disclosures of Cash Flow Information
Three Months Ended March 31, ------------------ 2002 2001 ---- ---- (In thousands) Cash payments for: Interest $ 2,217 $ 2,482 Taxes 149 79 Noncash investing activity: Amortized cost of securities transferred from held to maturity to available for sale -- 182
- 6 - FIRST CAPITAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 3. Comprehensive Income Comprehensive income is defined as the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Comprehensive income for the Company includes net income and other comprehensive income representing the net unrealized gains and losses on securities available for sale. The following tables set forth the components of other comprehensive income and the allocated tax amounts for the three months ended March 31, 2002 and 2001:
Three Months Ended March 31, ------------------ 2002 2001 ---- ---- (In thousands) Unrealized gains (losses) on securities: Unrealized holding gains (losses) arising during the period $(502) $ 548 Income tax (expense) benefit 199 (217) ----- ----- Net of tax amount (303) 331 ----- ----- Less: reclassification adjustment for (gains) losses included in net income -- -- Income tax (expense) benefit -- -- ----- ----- Other comprehensive income (loss) $(303) $ 331 ===== =====
4. Supplemental Disclosure for Earnings Per Share (Dollars in thousands, except per share data) Basic: Earnings: Net income $ 793 $ 717 ========== ========== Shares: Weighted average common shares outstanding 2,472,141 2,461,747 ========== ========== Net income per common share, basic $ 0.32 $ 0.29 ========== ========== Diluted: Earnings: Net income $ 793 $ 717 ========== ========== Shares: Weighted average common shares outstanding 2,472,141 2,461,747 Add: Dilutive effect of outstanding options 23,555 9,452 Add: Dilutive effect of restricted shares 3,107 616 ---------- ---------- Weighted average common shares outstanding, as adjusted 2,498,803 2,471,815 ========== ========== Net income per common share, diluted $ 0.32 $ 0.29 ========== ==========
- 7 - PART I - ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FIRST CAPITAL, INC. AND SUBSIDIARIES Safe Harbor Statement for Forward Looking Statements This report may contain forward-looking statements within the meaning of the federal securities laws. These statements are not historical facts, rather statements based on the Company's current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements are preceded by terms such as "expects," "believes," "anticipates," "intends" and similar expressions. Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company's actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, general economic conditions, including changes in market interest rates and changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; and other factors disclosed periodically in the Company's filings with the Securities and Exchange Commission. Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this report or made elsewhere from time to time by the Company or on its behalf. Except as required by applicable law or regulation, the Company assumes no obligation to update any forward-looking statements. Financial Condition Total assets increased from $282.8 million at December 31, 2001 to $288.4 million at March 31, 2002, an increase of 2.0%. When compared to March 31, 2001, the growth in assets was $30.6 million or 11.9%. Loans receivable, net experienced no significant change, decreasing from $201.7 million at December 31, 2001 to $201.4 million at March 31, 2002. The new loan originations during the quarter were offset primarily by two commercial loan payoffs of $2.2 million. Residential mortgage loans increased by $2.2 million and home equity lines of credit increased by $1.0 million during the quarter ended March 31, 2002. Securities available for sale increased $6.0 million from $54.9 million at December 31, 2001 to $60.9 million at March 31, 2002 as a result of purchases of $9.4 million, offset by maturities of $2.4 million and principal repayments of $387,000. Investment securities held-to-maturity decreased $43,000 as a result of purchases of $300,000, offset by maturities of $313,000 and principal repayments of $29,000. Cash and interest bearing deposits with banks were unchanged, totaling $12.4 million at December 31, 2001 and March 31, 2002. - 8 - PART I - ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FIRST CAPITAL, INC. AND SUBSIDIARIES Total deposits increased 1.5%, from $204.1 million at December 31, 2001 to $207.3 million at March 31, 2002. Checking and savings accounts grew by $1.9 million while time deposits grew by $1.3 million during the period. Federal Home Loan Bank borrowings increased $2.3 million from $42.8 million at December 31, 2001 to $45.1 million at March 31, 2002. The new advances were drawn primarily to take advantage of historically low interest rates at favorable terms. Total stockholders equity increased from $33.5 million at December 31, 2001 to $33.7 million at March 31, 2002 primarily as a result of retained net income of $469,000 offset by net unrealized losses of $303,000 on securities available for sale. Results of Operations Net Income. Net income was $793,000 ($.32 per share diluted) for the three months ended March 31, 2002 compared to $717,000 ($.29 per share diluted) for the same period in 2001. An increase in net interest income was partially offset by a decrease in noninterest income and an increase in noninterest expense. Net interest income for the three-month periods ended March 31, 2002 and 2001. Net interest income increased 14.1% from $2.1 million in 2001 to $2.5 million in 2002 as a result of an increase in interest-earning assets funded by growth in deposits and borrowings from the Federal Home Loan Bank and a decrease in the average cost of funds. Total interest income was unchanged from the quarter ended March 31, 2002 compared to the quarter ended March 31, 2001. The average balance of interest-earning assets was $271.3 million for the three-month period ended March 31, 2002 compared to $239.1 million for the same period in 2001. However, the average tax-equivalent yield on interest-earning assets decreased from 7.92% in 2001 to 6.98% in 2002 due to a markedly lower interest rate environment in 2002. Total interest expense decreased $305,000 to $2.2 million for the quarter ended March 31, 2002 as compared to $2.5 million during the same period in 2001. Interest on deposits decreased by $468,000 while the interest on Federal Home Loan Bank advances increased by $163,000 when comparing the first quarter of 2002 against the same period in 2001. The average balance of interest-bearing liabilities increased from $171.7 million in 2001 to $187.2 million in 2002 while the average rate on these same liabilities decreased from 5.00% in 2001 to 3.85% in 2002. Despite the steep drop in the interest rates by the Federal Reserve Board during 2001, the tax-equivalent interest rate spread increased from 2.92% to 3.13% and the net interest margin increased from 3.69% to 3.70% when comparing the first quarter results of 2001 with the same period in 2002 primarily due to the Bank's interest-bearing liabilities repricing faster than the interest-earning assets. - 9 - PART I - ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FIRST CAPITAL, INC. AND SUBSIDIARIES Provision for loan losses. The provision for loan losses was $45,000 for the three-month period ended March 31, 2002 as compared to $36,000 for the same period in 2001. During 2002, net loans receivable experienced no significant change, although residential mortgages increased by $2.2 million and home equity lines of credit by $1.0 million. Offsetting those increases were decreases of $2.4 million in commercial loans and $1.0 million in consumer loans. Residential mortgage loans and home equity lines of credit have an inherently lower degree of credit risk than commercial and consumer loans. However, the consistent application of management's allowance methodology resulted in an increase in the provision for loan losses due to higher levels of nonperforming loans as compared to the prior year and net charge-offs during the period. Provisions for loan losses are charges to earnings to maintain the total allowance for loan losses at a level considered reasonable by management to provide for probable known and inherent loan losses based on management's evaluation of the collectibility of the loan portfolio, including the nature of the portfolio, credit concentrations, trends in historical loss experience, specified impaired loans, and economic conditions. Although management uses the best information available, future adjustments to the allowance may be necessary due to changes in economic, operating, regulatory and other conditions that may be beyond the Bank's control. While the Bank maintains the allowance for loan losses at a level which it considers adequate to provide for estimated losses, there can be no assurance that further additions will not be made to the allowance for loan losses and that actual losses will not exceed the estimated amounts. In determining the adequacy of the allowance for loan losses, the Bank reviews all loans quarterly, and loans are assigned a risk weighting based on asset classification. The allowance is calculated by applying loss factors to outstanding loans based on the internal risk grade of each loan. Specific allowances related to impaired and substandard loans are established in cases where management has identified significant conditions or circumstances related to a loan that management believes indicate the probability that a loss has been incurred. A general allowance is calculated by applying loss factors to performing loans that have been grouped into homogeneous pools for the purpose of the calculation. Loss factors are based on the Bank's historical loss experience and industry peer group data and may be adjusted for significant factors that, in management's judgment, affect the collectibility of the portfolio. The allowance for loan losses was $1.1 million at both March 31, 2002 and December 31, 2001. Management has deemed these amounts as adequate on those dates based on its best estimate of probable known and inherent loan losses. At March 31, 2002, nonperforming loans amounted to $1.4 million compared to $1.3 million at December 31, 2001. Included in nonperforming loans are loans over 90 days past due secured by one-to-four family residential real estate in the amount of $420,000, consumer loans amounting to $182,000 and commercial loans of $37,000. These loans are accruing interest as the estimated value of the collateral and collection efforts are deemed sufficient to ensure full recovery. - 10 - PART I - ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FIRST CAPITAL, INC. AND SUBSIDIARIES Noninterest income. Noninterest income decreased 12.3% to $399,000 for the three months ended March 31, 2002 compared to $455,000 for the three months ended March 31, 2001. The Bank recognized gains of $86,000 on the sale of loans and securities during the first quarter of 2001. The Bank sold no loans or securities during the same period in 2002. Service charges on deposits increased 15.6% to $311,000 for the three months ended March 31, 2002 compared to $269,000 for the same period in 2001. Noninterest expense. Noninterest expense increased by $148,000 or 10.2% for the three month period ended March 31, 2002 compared to the same period in 2001. Compensation and benefits increased due to normal salary increases, an increase in staff and an increase in the cost of health insurance. Other significant increases in noninterest expenses as compared to the quarter ended March 31, 2001 include office supplies expense, ATM processing fees, charitable donations and professional fees for outsourced internal audit services. Income tax expense. Income tax expense for the three-month period ended March 31, 2002 was $412,000, compared to $397,000 for the same period in 2001. The effective tax rate decreased from 35.6% for 2001 to 34.2% for 2002. Liquidity and Capital Resources The Bank's primary sources of funds are customer deposits, proceeds from loan repayments, maturing securities and FHLB advances. While loan repayments and maturities are a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by market interest rates, general economic conditions and competition. At March 31, 2002, the Bank had cash and interest-bearing deposits with banks of $12.4 million and securities available-for-sale with a fair value of $60.9 million. If the Bank requires funds beyond its ability to generate them internally, it has additional borrowing capacity with the FHLB of Indianapolis and collateral eligible for repurchase agreements. The Bank's primary investing activity is the origination of one-to-four family mortgage loans and, to a lesser extent, consumer, multi-family, commercial real estate and residential construction loans. The Bank also invests in U.S. Government and agency securities and mortgage-backed securities issued by U.S. Government agencies. The Bank must maintain an adequate level of liquidity to ensure the availability of sufficient funds to support loan growth and deposit withdrawals, to satisfy financial commitments and to take advantage of investment opportunities. Historically, the Bank has been able to retain a significant amount of its deposits as they mature. The Bank is required to maintain specific amounts of capital pursuant to OTS requirements. As of March 31, 2002, the Bank was in compliance with all regulatory capital requirements, which were effective as of such date with tangible, core and risk-based capital ratios of 11.3%, 11.3% and 20.3%, respectively. The regulatory requirements at that date were 1.5%, 3.0% and 8.0%, respectively. - 11 - PART II OTHER INFORMATION FIRST CAPITAL, INC. Item 1. Legal Proceedings The Company is not a party to any legal proceedings. Periodically, there have been various claims and lawsuits involving the Bank, mainly as a plaintiff, such as claims to enforce liens, condemnation proceedings on properties in which the Bank holds security interests, claims involving the making and servicing of real property loans and other issues incident to the Bank's business. The Bank is not a party to any pending legal proceedings that it believes would have a material adverse affect on its financial condition or operations. Item 2. Changes in Securities and Use of Proceeds 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 Not applicable. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits -------- None. (b) Reports on Form 8-K ------------------- On January 14, 2002, the Company filed Form 8-K to announce the annual meeting of stockholders would be held on April 24, 2002. - 12 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned thereunto duly authorized. FIRST CAPITAL, INC. (Registrant) Dated May 13, 2002 BY: /s/ William W. Harrod ---------------------------- ----------------------------- William W. Harrod President and CEO Dated May 13, 2002 BY: /s/ Michael C. Frederick ---------------------------- ----------------------------- Michael C. Frederick Senior Vice President and Treasurer - 13 - -----END PRIVACY-ENHANCED MESSAGE-----