FORM 10-Q - QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 34-26589, eff. 4/12/93.)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
Commission file number: 0-12668
Hills Bancorporation
Incorporated in Iowa I.R.S. Employer Identification
------------------------------
No. 42-1208067
131 MAIN STREET, HILLS, IOWA
Telephone number: (319) 679-2291
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.
[X] Yes [ ] No
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 practical date.
SHARES OUTSTANDING
CLASS At October 31, 1998
- -------------------------- -------------------
Common Stock, no par value 1,467,754
HILLS BANCORPORATION
Index to Form 10-Q
Part I
FINANCIAL INFORMATION
Page
Number
Item 1. Financial Statements
Consolidated balance sheets, September 30, 1998
(unaudited) and December 31, 1997
Consolidated statements of income, (unaudited) for
three and nine months ended September 30, 1998
and 1997
Consolidated statements of comprehensive income,
(unaudited) for three and nine months ended
September 30, 1998 and 1997.
Consolidated statements of stockholders' equity,
(unaudited) for nine months ended September 30,
1998 and 1997
Consolidated statements of cash flows (unaudited)
for nine months ended September 30, 1998 and 1997
Notes to consolidated financial statements
Item 2. Management's discussion and analysis of financial
condition and results of operations
Part II
OTHER INFORMATION
Item 1. Legal proceedings
Item 2. Changes in securities
Item 3. Defaults upon senior securities
Item 4. Submission of matters to vote of security holders
Item 5. Other information
Item 6. Exhibits and reports on Form 8-K
COMPUTATION OF EARNINGS PER SHARE
SIGNATURES
HILLS BANCORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands)
September 30,
1998 December 31,
Unaudited 1997*
------------- ------------
ASSETS
Cash and due from banks .............................. $ 14,251 $ 15,508
Investment securities:
Available for sale (amortized cost
September 30, 1998 $118,633;
December 31, 1997 $108,718) ..................... 120,610 109,486
Held to maturity (fair value
September 30, 1998 $22,518;
December 31, 1997 $24,230) ...................... 21,976 23,840
Stock of Federal Home Bank ........................ 4,347 4,738
Federal funds sold ................................... 19,796 2,447
Loans, net ........................................... 447,017 422,761
Property and equipment, net .......................... 10,623 9,437
Accrued interest receivable .......................... 5,941 5,441
Deferred income taxes, net ........................... 1,432 1,859
Other assets ......................................... 8,237 7,585
-------- --------
$654,230 $603,102
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Noninterest-bearing deposits ......................... $ 53,075 $ 52,174
Interest-bearing deposits ............................ 449,173 427,596
-------- --------
Total deposits .................................... $502,248 $479,770
Federal funds purchased and securities
sold under agreements to repurchase ............... 8,326 9,008
Federal Home Loan Bank notes ......................... 75,732 50,764
Accrued interest payable ............................. 2,004 2,060
Other liabilities .................................... 2,268 2,318
-------- --------
$590,578 $543,920
-------- --------
REDEEMABLE COMMON STOCK HELD BY
EMPLOYEE STOCK OWNERSHIP PLAN
(ESOP) ............................................ $ 8,802 $ 7,682
-------- --------
STOCKHOLDERS' EQUITY
Capital stock, common, no par value;
authorized 10,000,000 shares;
issued September 30, 1998 and December 31,
1997 - 1,467,754 shares ........................... $ 9,070 $ 9,070
Retained earnings .................................... 53,338 49,627
Accumulated other comprehensive income,
unrealized gains on investment securities, net .... 1,244 485
-------- --------
$ 63,652 $ 59,182
Less, maximum cash obligation related to
ESOP shares ....................................... 8,802 7,682
-------- --------
$ 54,850 $ 51,500
-------- --------
$654,230 $603,102
======== ========
* Derived from audited financial statements.
See Notes to Financial Statements.
HILLS BANCORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Three and Nine Months Ended September 30, 1998 and 1997
(In Thousands, Except Per Share Data)
Three Months Ended Nine Months Ended
September 30 September 30
1998 1997 1998 1997
-------- -------- -------- --------
Interest Income:
Interest and fees on loans ........................ $ 9,566 $ 8,904 $ 28,108 $ 25,460
Interest on investment securities:
Taxable ......................................... 1,698 1,680 5,064 5,046
Non-taxable ..................................... 354 306 1,019 898
Interest on federal funds sold .................... 350 54 893 134
-------- -------- -------- --------
Total interest income ............................. $ 11,968 $ 10,944 $ 35,084 $ 31,538
-------- -------- -------- --------
Interest Expense:
Interest on deposits .............................. $ 5,185 $ 4,942 $ 15,253 $ 14,264
Interest on securities sold under
agreements to repurchase ............................. 88 90 257 288
Interest on FHLB borrowings ....................... 1,106 747 3,277 2,007
-------- -------- -------- --------
Total interest expense ............................ $ 6,379 $ 5,779 $ 18,787 $ 16,559
-------- -------- -------- --------
Net interest income ............................... $ 5,589 $ 5,165 $ 16,297 $ 14,979
Provision for loan losses ............................ 304 195 712 785
-------- -------- -------- --------
Net interest income after provision
for loan losses ................................. $ 5,285 $ 4,970 $ 15,585 $ 14,194
-------- -------- -------- --------
Other income:
Net gains (losses) on sale of investment securities $ -- $ (62) $ -- $ 992
Loan origination fees ............................. 166 117 500 237
Trust fees ........................................ 403 322 1,266 947
Deposit account charges and fees .................. 458 482 1,351 1,385
Other fees and charges ............................ 348 283 1,079 912
-------- -------- -------- --------
$ 1,375 $ 1,142 $ 4,196 $ 4,473
-------- -------- -------- --------
Other expenses:
Salaries and employee benefits .................... $ 2,133 $ 1,858 $ 6,366 $ 5,445
Occupancy ......................................... 284 269 859 756
Furniture and equipment ........................... 421 335 1,249 1,005
Office supplies and postage ....................... 293 208 882 626
Contributions ..................................... 5 17 13 1,109
Other operating ................................... 949 884 2,779 2,598
-------- -------- -------- --------
$ 4,085 $ 3,571 $ 12,148 $ 11,539
-------- -------- -------- --------
Income before income taxes ........................ $ 2,575 $ 2,541 $ 7,633 $ 7,128
Federal and state income taxes ....................... 756 788 2,237 1,829
-------- -------- -------- --------
Net income ........................................ $ 1,819 $ 1,753 $ 5,396 $ 5,299
======== ======== ======== ========
Earning per common share:
Basic ........................................... $ 1.24 $ 1.19 $ 3.68 $ 3.61
Diluted ......................................... 1.22 1.18 3.62 3.58
See Notes to Financial Statements
HILLS BANCORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three and Nine Months Ended September 30, 1998 and 1997
(In Thousands, Except Per Share Data)
Three Months Ended Nine Months Ended
September 30 September 30
------------------- ------------------
1998 1997 1998 1997
------- ------- ------- -------
Net Income ...................................... $ 1,819 $ 1,753 $ 5,396 $ 5,299
Other comprehensive income:
Unrealized gains (losses) on debt securities . 1,147 365 1,209 (547)
Income tax effect of unrealized gains (losses) (426) (135) (450) 183
------- ------- ------- -------
Comprehensive Income ......................... $ 2,540 $ 1,983 $ 6,155 $ 4,935
======= ======= ======= =======
HILLS BANCORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Nine Months Ended September 30, 1998 and 1997
(In Thousands)
Capital Retained Unrealized ESOP
Stock Earnings Gains (Losses) Obligations Total
--------------------------------------------------------
Balance, January 1, 1998 ........ $ 9,070 $49,627 $ 485 $ (7,682) $ 51,500
Net income ...................... - - 5,396 - - - - 5,396
Change related to ESOP shares ... - - - - - - (1,120) (1,120)
Cash dividends ($1.20 per share) - - (1,763) - - - - (1,763)
Unrealized gains (losses) on debt
securities, net ............... - - - - 759 - - 759
Tax savings on restricted
stock issued .................. - - 78 - - - - 78
------- -------- ------- ------- --------
Balance, September 30, 1998 ..... $ 9,070 $ 53,338 $ 1,244 $(8,802) $ 54,850
======= ======== ======= ======= ========
Balance, January 1, 1997 ........ $ 8,996 $ 44,079 $ 676 $(6,416) $ 47,335
Exercise Stock Options
for 2,055 shares .............. 53 - - - - - - 53
Redemption of stock ............. (7) - - - - - - (7)
Net income ...................... - - 5,299 - - - - 5,299
Change related to ESOP shares ... - - - - - - (642) (642)
Cash dividends ($1.05 per share) - - (1,539) - - - - (1,539)
Unrealized gains (losses) on
debt securities, net .......... - - - - (364) - - (364)
------- ------- ------- ------- --------
Balance, September 30, 1997 ..... $ 9,042 $47,839 $ 312 $(7,058) $ 50,135
======= ======= ======= ======= ========
See Notes to Financial Statements.
HILLS BANCORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 1998 and 1997
(In Thousands)
1998 1997
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ..................................................................... $ 5,396 $ 5,299
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation ............................................................... 987 803
Provision for loan losses .................................................. 712 785
Net gains on disposition of investment securities .......................... - - (992)
(Increase) decrease in accrued interest receivable ......................... (500) (776)
Amortization of bond discount .............................................. 216 260
(Increase) in other assets ................................................. (910) (344)
Amortization of intangibles ................................................ 258 258
Increase in accrued interest and other liabilities ......................... (106) 398
-------- --------
Net cash provided by operating activities .................................. $ 6,053 $ 5,691
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of investment securities:
Available for sale ......................................................... $ 19,599 $ 15,251
Held to maturity ........................................................... 2,286 1,894
Proceeds from sales of available-for-sale securities ........................... - - 9,366
Purchase of investment securities:
Available for sale ......................................................... (29,785) (25,283)
Held to maturity ........................................................... - - (5,273)
Federal funds sold, net ........................................................ (17,349) 900
Loans made to customers, net of collections .................................... (24,968) (47,450)
Purchases of property and equipment ............................................ (2,173) (1,196)
-------- --------
Net cash (used in) investing activities .................................... $(52,390) $(51,791)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits ........................................ $ 22,478 $ 18,791
Net increase (decrease) in fed funds purchased and
securities sold under agreements to repurchase .......................... (682) 10,033
Borrowings from FHLB ....................................................... 40,000 20,000
Payments on FHLB notes ..................................................... (15,032) (31)
Stock options exercised .................................................... - - 53
Redemption of common stock ................................................. - - (7)
Tax savings on restricted stock issued ..................................... 78 - -
Dividends paid ............................................................. (1,762) (1,539)
-------- --------
Net cash provided by financing activities ............................... $ 45,080 $ 47,300
-------- --------
Increase in cash and due from banks ..................................... $ (1,257) $ 1,200
CASH AND DUE FROM BANKS
Beginning .................................................................. 15,508 15,036
-------- --------
Ending ..................................................................... $ 14,251 $ 16,236
======== ========
SUPPLEMENTAL DISCLOSURES Cash payments for:
Interest paid to depositors and others .................................. $ 15,309 $ 14,244
Interest paid on other obligations ...................................... 3,534 2,295
Non-cash financing transactions:
Increase in maximum cash obligation related
to ESOP shares ......................................................... 1,120 642
Net unrealized gains (losses) on debt securities ........................ 1,209 (547)
See Notes to Financial Statements.
HILLS BANCORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1. Interim Financial Statements
Interim consolidated financial statements have not been examined by independent
public accountants, but include all adjustments (consisting only of normal
recurring accruals) which, in the opinion of management, are necessary for a
fair presentation of the results for these periods. The results of operation for
the interim periods are not necessarily indicative of the results for a full
year.
For purposes of reporting cash flows, cash and due from banks includes cash on
hand and amounts due from banks (including cash items in process of clearing).
Cash flows from demand deposits, NOW accounts, savings accounts, and federal
funds purchased and sold are reported net since their original maturities are
less than three months. Cash flows from loans and time deposits are presented as
net increases or decreases.
Note 2. Loans
The following tables set forth the composition of loans and the allowance for
loan losses:
(In thousands)
September 30
--------------------------
1998 1997
--------- ---------
Agricultural ................................ $ 33,946 $ 27,135
Commercial and financial .................... 36,523 33,742
Real estate, construction ................... 24,512 9,887
Real estate, mortgage ....................... 330,525 322,278
Loans to individual ......................... 29,994 29,741
--------- ---------
$ 455,500 $ 422,783
Less allowance for loan losses .............. 8,483 (7,854)
--------- ---------
$ 447,017 $ 414,929
========= =========
Transactions in the allowance for loan losses are as follows:
(In thousands)
Nine Months
ended September 30
------------------------
1998 1997
------- -------
Balance, beginning ........................... $ 8,010 $ 7,311
Provision charged to expense ............... 712 785
Net charge-offs ............................ (239) (242)
------- -------
Balance, ending .............................. $ 8,483 $ 7,854
======= =======
The following summarizes the Company's nonaccrual, past due, restructured and
impaired loans:
(In thousands)
September 30
1998 1997
------ ------
Nonaccrual .................................... $ - - $ - -
Accruing loans, past due 90 days or more ...... 1,825 963
Restructured loan ............................. - - - -
Impaired loans ................................ 7,996 7,173
Note 3. Changes in Accounting Policies
SFAS No. 130, "Reporting Comprehensive Income" was issued in June 1997 and was
adopted January 1, 1998 for the initial period ended March 31, 1998. Statement
#130 establishes standards for reporting comprehensive income in financial
statements. The Company has presented a Statement of Comprehensive Income. SFAS
No. 131,"Disclosures About Segments of an Enterprise and Related Information"
expands certain reporting and disclosure requirements for segments from current
standards. Statement #131 will be effective for the year ended December 31,
1998, but the Company operates in one business segment and the Statement will
have no effect on the financial statements.
Note 4. Earnings Per Share
Basic net income per share amounts are computed by dividing net income by the
weighted average number of common shares outstanding during the period. Diluted
earnings per share are computed by dividing net income by the weighed average
number of common shares outstanding during the period plus the number of
potential dilutive common shares attributable to the Company's stock option
plan.
PART I, ITEM 2.
HILLS BANCORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The consolidated balance sheet of Hills Bancorporation as of September 30, 1998
reflects total assets of $654.2 million which is an increase of $51.1 million
from December 31, 1997. Net loans increased from $422.8 million to $447.0
million, which represents an increase of $24.2. Compared to one year ago, total
assets have increased from $592.1 million to $654.2 million for an increase of
$62.1 million. Also during this year, net loans increased $32.1 million to
$438.1 million as of September 30, 1998. Loan demand continues to be very strong
due to a continued strong local economy and a favorable low interest rate
environment. Single family loans and other real estate loans continued to
account for the majority of the loan growth.
Other significant balance sheet changes from December 31, 1997 to September 30,
1998 are as follows:
o Available for sale investment securities increasing $11.2 million to $120.6
million. o Federal funds sold were $17.3 million higher at September 30th
than December 31, 1997.
o Deposits including securities sold under agreements to repurchase totaled
$510.6 million at September 30, 1998 compared to $488.8 million at December
31, 1997.
o Federal Home Loan Bank's borrowings increased a net $25 million as Hills
Bank and Trust Company took advantage of lower interest rates on four and
five year advances available.
o Also due to lower investment rates accumulated other comprehensive income
which was all unrealized gains on investment securities increased from
$485,000 at December 31, 1997 to $1,244,000 at September 30, 1998.
Asset-liability management encompasses both the management of interest rate
sensitivity and the maintenance of adequate liquidity. Interest rate sensitivity
management attempts to provide the optimal level of net interest income while
managing exposure to risks associated with interest rate movements. Liquidity
management involves planning to meet anticipated funding needs. Management
monitors the rate sensitivity and liquidity positions on an on-going basis and,
when necessary, appropriate action is taken to minimize any adverse effects of
rapid interest rate movements or any unexpected liquidity concerns.
In January 1998, Hills Bancorporation paid a dividend of $1.20 per share, a
14.29% increase from the $1.05 paid in January 1997. The total dividend of
$1,763,000 is deducted from stockholders' equity and is reflected in the
resulting stockholders' equity as of September 30, 1998 of $54,850,000.
Stockholders' equity at September 30, 1998 and December 31, 1997 reflects an
adjustment for unrealized gain (losses) on debt securities, net of income taxes.
The total stockholders' equity of Hills Bancorporation as of September 30, 1998
before the reduction for the ESOP shares, as a percent of total assets is 9.73%.
Under risk-based capital rules, total capital is 15.06% of risk adjusted assets,
compared to the current 8% requirement.
Net income for the quarter ending September 30, 1998 increased $66,000 from the
previous year's quarter. Net interest income increased $424,000 and $1,318,000
for the quarter and the nine months ending September 30, 1998 compared to the
same time periods in 1997. The increase in net interest income continues to be
due to significant increases in the volume of earning assets during the first
nine months of 1998 compared to 1997. The increase in average earning assets for
the nine months ending September 30, 1998 compared to the same months in 1997 is
approximately $65.8 million and is due primarily to average net loans increasing
$42.8 million and the investment in federal funds being $19.3 million higher.
The large federal fund balances were the result of funds borrowed from the
Federal Home Loan Banks earlier in 1998 to be used for funding of expected loan
growth. A significant other income item in the second quarter of 1997 was the
recognition of $1,054,000 on the sale of a marketable equity security held by
Hills Bancorporation. The equity security was transferred to the Hills
Bancorporation Foundation, a private charitable foundation, organized
exclusively for charitable and educational purposes to benefit the communities
which the banks' serve. As a result of the stock contribution, Hills
Bancorporation received an income tax savings of approximately $340,000 which is
reflected as tax savings in the federal and state income taxes expense for the
second quarter of 1997.
Other income changes occurred in loan origination fees which increased $49,000
for the three months ended September 30, 1998 from one year ago and $263,000 for
the nine months ending September 30 1998, compared to the same period in 1997.
Trust fees showed growth over 1997 with an $81,000 increase for the quarter and
$319,000 for the nine months. Other expenses, excluding the contribution
discussed above increased $514,000 and $1,705,000 for the third quarter and the
nine months ended September 30, 1998 compared to the same period in 1997. The
major portion of this increase was $921,000 increase in salaries and employee
benefits as full-time equivalent employees increased by thirty and normal yearly
increases for existing employees. Also the full service Mount Vernon office
opened in February, 1998 and has ten employees. All other operating expenses are
up $784,000 as a result of increase in marketing, other professional fees,
expenses relating to the new bank in Mount Vernon and other data processing
charges.
Basic and diluted earnings per share for the three months ending September 30,
1998 were $1.24 and $1.22 in comparison to $1.19 and $1.18 for the quarter
ending September 30, 1997. The earnings per share for the nine months ended
September 30, 1998 and September 30, 1997 were $3.68 and $3.61 for basic
earnings per share and $3.62 and $3.58 for diluted earnings per share for both
periods presented.
The Bank's principal sources of funds continues to be prepayment of loan
principal and current amortized loan payments. In addition, funds are provided
from current operations. All of the funds are used to fulfill loan commitments,
make short-term investments, and fund any deposit withdrawals needed. The
Company has no material commitments or plans which will materially affect its
liquidity or capital resources. The acquisition of property and equipment may be
in cash purchases, or they may be financed if favorable terms are available.
Year 2000
The Company and its three wholly-owned subsidiary commercial banks, Hills Bank
and Trust Company, Hills, Iowa; Hills Bank, Lisbon, Iowa; and Hills Bank Kalona,
Kalona, Iowa are taking the appropriate measures to be ready for the Millennium
change. The Banks' "Y2K" readiness plan is being implemented and a Year 2000
committee to oversees its progress. To date the Company has completed an
inventory and assessment of all computers, equipment and software containing
date sensitive functions. Contact has been made with the vendors of these
products to determine Year 2000 compatibility.
A renovation schedule is being followed to replace or upgrade identified
products which are not Year 2000 compliant. In 1998, the Company replaced its
primary computer system with a newer Year 2000 compliant system and has received
a warranty from the software company that the software will operate after the
Year 2000 without error relating to date data. In addition, the Company's
critical information systems are in the process of being tested to make certain
that by the end of 1998 the systems will be ready - one year ahead of the actual
changeover.
Contingency Plans
The Company is also working on contingency plans that will provide alternate
methods of doing business, if needed. The Year 2000 issues for banks depend not
only on compliance of the banks' software and equipment, but also on compliance
by all of the other institutions with which the banks do business. Four federal
regulatory agencies, which share the responsibility for supervising efforts by
banks and savings associations to make sure that they are taking the necessary
steps now to get ready for the Year 2000 date change. The Banks already keep
backup records for account transactions and will continue to do so. These
records could be used to correct and identify errors that might affect deposit,
loan or other account information due to a Year 2000 problem.
Risks
In the early weeks of 2000, the Company may experience some random supply chain
disruption that may affect its ability to produce and distribute key products.
These disruptions will be material if the U.S. experiences significant
interruptions in basic services, such as the electric power grid, telephone
service or the banking system.
Costs
The Banks replaced its primary computer system during the first quarter of 1998.
Since most of these types of upgrades or renovations will be capitalized as
property and equipment and depreciated it is expected that the costs will not
have a significant impact on the earnings or future liquidity of the Company.
Forward Looking Information
Forward looking information relating to the financial results or strategies of
the Company are made in the Management's Discussion and Analysis. The following
paragraphs identify forward looking statements and the risks that need to be
considered when reading those statements.
Forward looking statements include such words as believe, expect, anticipate,
target, goal, objective and other words with similar meaning. The Company is
under no obligation to update such statements.
The risks involved in the operations and strategies of the Company include
competition from other financial institutions, changes in interest rates,
changes in economic or market conditions and changes in regulatory factors.
These risks, which are not all inclusive, cannot be estimated.
HILLS BANCORPORATION
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings.
Item 2. Changes in Securities
There were no changes in securities.
Item 3. Defaults upon Senior Securities
Hills Bancorporation has no senior securities.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the
quarter ending September 30, 1998.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit
See exhibit II - Statement Re Computation of Earnings Per
Common Share
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter
ended September 30, 1998.
SIGNATURES
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 and thereunto duly authorized.
HILLS BANCORPORATION
(Registrant)
November 13, 1998 /s/ Dwight O. Seegmiller
Date -------------------------------------------
Dwight O. Seegmiller, President
(Duly authorized officer of the registrant)
/s/ James G. Pratt
-------------------------------------------
James G. Pratt, Treasurer
(Principal Financial Officer)