FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 17262
S. Y. BANCORP, INC.
(Exact name of registrant as specified in its charter)
Kentucky 61-1137529
(State or other jurisdiction (I.R.S. Employer
or organization) Identification No.)
1040 East Main Street, Louisville, Kentucky, 40206
(Address of principal executive offices)
(502) 582-2571
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports 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
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, no par value - 3,275,675
shares issued and outstanding at May 1, 1997
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The following consolidated financial statements of S.Y. Bancorp, Inc. and
Subsidiaries, Stock Yards Bank & Trust Company (Kentucky) and Stock Yards Bank
& Trust Company (Indiana), are submitted herewith:
Consolidated Balance Sheets
March 31, 1997 and December 31, 1996
Consolidated Statements of Income
for the three months ended March 31, 1997 and 1996
Consolidated Statements of Cash Flow
for the three months ended March 31, 1997 and 1996
Notes to Consolidated Financial Statements
S. Y. BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, 1997 and December 31, 1996
March 31, 1997 December 31, 1996
(In thousands, except share data)
Assets
Cash and due from banks $ 20,917 $ 15,348
Federal funds sold - 4,500
Mortgage loans held for sale 4,112 4,362
Securities available for sale (amortized
cost $33,849 in 1997 and $19,111 in 1996) 33,711 19,441
Securities held to maturity (approximate market
value $41,170 in 1996 and $56,055 in 1996) 41,617 56,079
Loans 311,655 301,548
Allowance for loan losses 5,359 5,155
------- -------
Net loans 306,296 296,393
Premises and equipment 10,874 10,079
Accrued interest receivable 2,521 2,299
Other assets 6,708 6,864
------- -------
TOTAL ASSETS $426,756 $415,365
======= =======
Liabilities and Stockholders' Equity
Deposits
Non-interest bearing $ 61,808 $ 63,627
Interest bearing 306,520 291,624
------- -------
Total deposits 368,328 355,251
Securities sold under agreements
to repurchase and federal funds purchased 16,186 19,728
Short- term borrowings 3,250 2,668
Accrued interest payable an
other liabilities 4,245 3,427
Long-term debt 2,295 2,697
------- -------
TOTAL LIABILITIES 394,304 383,771
------- -------
Stockholders' equity
Common stock, no par value; 5,000,000
shares authorized; 3,274,353 and
3,271,480 shares issued and
outstanding in 1997 and 1996, respectively 5,461 5,451
Surplus 13,456 13,390
Retained earnings 13,625 12,535
Net unrealized gain (loss) on securities
available for sale, net of tax (90) 218
------- -------
TOTAL STOCKHOLDERS' EQUITY 32,452 31,594
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $426,756 $ 415,365
======= =======
See accompanying notes to consolidated financial statements.
S.Y. BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
For the three months ended March 31, 1997 and 1996
1997 1996
(In thousands, except share and per share data)
Interest income
Loans $7,061 $5,879
Federal funds sold 180 49
Mortgage loans held for sale 57 81
U.S. Treasury and Federal agencies 823 522
Obligations of states and political
subdivisions 96 96
----- -----
Total interest income 8,217 6,627
----- -----
Interest expense
Deposits 3,363 2,705
Securities sold under agreements
to repurchase and federal funds purchased 152 151
Short-term borrowings 22 20
Long-term debt 43 11
----- -----
Total interest expense 3,580 2,887
----- -----
Net interest income 4,637 3,740
Provision for loan losses 225 180
----- -----
Net interest income after
provision for loan losses 4,412 3,560
Non-interest income
Trust income 646 531
Service charges on deposit accounts 444 353
Gains on sales of mortgage loans
held for sale 213 195
Gains on sales of securities
available for sale 80 35
Other 197 120
----- -----
Total non-interest income 1,580 1,234
Non-interest expenses
Salaries and employee benefits 2,317 1,833
Net occupancy expense 255 232
Furniture and equipment expense 357 345
Other 867 793
----- -----
Total non-interest expenses 3,796 3,203
----- -----
Income before income taxes 2,196 1,591
Income tax expense 713 519
----- -----
Net income $1,483 $1,072
===== =====
Net income per share,
Primary and fully diluted $ .44 $ .32
===== =====
Average common shares
Primary 3,383,768 3,352,750
Fully diluted 3,383,784 3,361,318
========= =========
See accompanying notes to consolidated financial statements.
S.Y. BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the three months ended March 31, 1997 and 1996
1997 1996
(In thousands)
Operating Activities
Net income $ 1,483 1,072
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Provision for loan losses 225 180
Depreciation, amortization and accretion, net 300 258
Gain on sales of mortgages held for sale ( 213) ( 195)
Gain on sales of securities available for sale ( 80) ( 35)
(Increase) decrease in mortgage loans held for sale 463 ( 3,299)
(Increase) decrease in accrued interest receivable ( 222) 200
(Increase) decrease in other assets 127 10
Increase (decrease) in accrued interest payable 141 ( 215)
Increase (decrease) in other liabilities 611 245
----- -----
Net cash provided (used) by operating activities 2,835 ( 1,779)
----- -----
Investing Activities
Net (increase) decrease in federal funds sold 4,500 -
Purchases of securities available for sale ( 17,749) -
Purchases of securities held to maturity ( 9,998) ( 11,503)
Proceeds from maturities of securities held to maturity 24,485 3,301
Proceeds from maturities of securities available for sale 30 1,045
Proceeds from sales of securities available for sale 3,026 4,850
Net (increase) decrease in loans ( 10,128) ( 5,710)
Proceeds from sales of other real estate owned 172 -
Purchases of premises and equipment ( 1,068) ( 1,140)
----- -----
Net cash provided (used) by investing activities ( 6,730) ( 9,157)
----- -----
Financing Activities
Net increase (decrease) in deposits 13,077 3,382
Net increase (decrease) in securities sold under
agreements to repurchase and fed funds purchased ( 3,542) 1,330
Net increase (decrease) in short-term borrowings 582 2,036
Exercise of stock options 76 52
Cash dividends paid ( 327) ( 327)
Repayments of long-term debt ( 402) -
----- -----
Net cash provided (used) by financing activities 9,464 6,473
----- -----
Net increase (decrease) in cash and cash equivalents 5,569 ( 4,463)
Cash and cash equivalents at beginning of period 15,348 16,229
------ ------
Cash and cash equivalents at end of period $ 20,917 $ 11,766
====== ======
Income tax payments were $0 in 1997, and $0 in 1996.
Cash paid for interest was $3,439,000 in 1997, and $3,102,000 in 1996.
See accompanying notes to consolidated financial statements.
S.Y. BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not include
all information and footnotes required by generally accepted accounting
principles for complete financial statements. The consolidated financial
statements of S.Y. Bancorp, Inc. and Subsidiaries reflect all adjustments
(consisting only of adjustments of a normal recurring nature) which are, in
the opinion of management, necessary for a fair presentation of financial
condition and results of operations for the interim periods.
The consolidated financial statements include the accounts of S.Y.
Bancorp, Inc. and its wholly owned subsidiaries, Stock Yards Bank & Trust
Company, a Kentucky bank, and Stock Yards Bank & Trust Company, an Indiana
bank. All significant intercompany transactions have been eliminated in
consolidation. The Indiana Bank was acquired on October 1, 1996, and its
operations are reflected in the consolidated financial statements subsequent
to that date.
A description of other significant accounting policies is presented in the
Consolidated Financial Statements for the year ended December 31, 1996
included in S.Y. Bancorp, Inc.'s Annual Report, and its Form 10-K for the
year then ended.
Interim results for the three month period ended March 31, 1997 are not
necessarily indicative of the results for the entire year.
Bancorp's common stock split 2-for-1 in August, 1996. The split was
effected in the form of a 100% stock dividend. All share and per share
information has been restated to reflect the stock split.
On January 1, 1997, Bancorp implemented Statement of Financial Accounting
Standard No. 125, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities." Under this standard, accounting
for transfers and servicing of financial assets and extinguishments of
liabilities is based on control. After a transfer of financial assets, an
entity recognizes the financial and servicing assets it controls and the
liabilities it has incurred, derecognizes financial assets when control has
been surrendered and derecognized liabilities when extinquished. The
implementation of this Statement did not have a material effect on Bancorp's
consolidated financial statements.
(2) Allowance for Loan Losses
An analysis of the changes in the allowance for loan losses for the
three months ended March 31 follows (in thousands):
1997 1996
Beginning balance $5,155 $4,507
Provision for loan losses 225 180
Loans charged off ( 31) ( 22)
Recoveries 10 15
----- -----
Ending balance $5,359 $4,680
===== =====
Information regarding impaired loans at March 31, 1997 follows:
Recorded investment in impaired loans $ 943,000
Impaired loans with Statement 114 valuation allowance $ 95,000
Amount of Statement 114 valuation allowance $ 16,000
Amount of impaired loans without Statement 114
valuation allowance $ 848,000
=======
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
This item discusses the results of operations for S.Y. Bancorp, Inc.
("Bancorp"), and its subsidiaries, Stock Yards Bank & Trust Company ("the
Kentucky Bank") and Stock Yards Bank & Trust Company ("the Indiana Bank") for
the three months ended March 31, 1997 and compares that period with the
same period of the previous year. Unless otherwise indicated, all
references in this discussion to the "Banks" include Bancorp. In addition,
the discussion describes the significant changes in the financial condition
of the Banks that have occurred during the first three months of 1997
compared to December 31, 1996. This discussion should be read in conjunction
with the consolidated financial statements and accompanying notes presented in
Part I, Item 1 of this report.
A. RESULTS OF OPERATIONS
Net income of $1,483,000 for the three months ended March 31, 1997
increased $411,000 or 38.3% from $1,072,000 for the comparable 1996 period.
Net income per share on a fully diluted basis was $.44 for the first quarter
of 1997, an increase of 37.5% from the $.32 for the same period in 1996.
Return on average assets and return on average stockholders' equity was 1.47%
and 18.58%, respectively, for the first quarter of 1997, compared to 1.34%
and 15.30%, respectively, for the same period in 1996.
The following paragraphs provide an analysis of the significant factors
affecting operating results and financial condition.
Net Interest Income
In thousands except percentages
Three Months Ended
March 31
1997 1996
Interest income $ 8,217 $ 6,627
Tax equivalent adjustment 44 51
----- -----
Interest income, tax equivalent basis 8,261 6,678
Total interest expense 3,580 2,887
Net interest income, tax ----- -----
equivalent basis (1) $ 4,681 $ 3,791
Net interest spread (2), ===== =====
annualized 4.06% 4.10
Net interest margin(3), ===== =====
annualized 4.92% 5.03%
===== =====
Notes:
(1) Net interest income, the most significant component of the Banks'
earnings, is total interest income less total interest expense. The level of
net interest income is determined by the mix and volume of interest earning
assets, interest bearing deposits and borrowed funds, and by changes in
interest rates.
(2) Net interest spread is the difference between the taxable equivalent rate
earned on interest earning assets less the rate expensed on interest bearing
liabilities.
(3) Net interest margin represents net interest income on a taxable equivalent
basis as a percentage of average interest earning assets. Net interest margin
affected by both the interest rate spread and the level of non-interest bearing
sources of funds, primarily consisting of demand deposits and stockholders'
equity.
Fully taxable equivalent net interest income of $4,681,000 for the three
months ended March 31, 1997 increased $890,000 or 23.5% from $3,791,000 for
the same period last year. Net interest spread and net interest margin were
4.06% and 4.92%, respectively, for the first quarter of 1997 and 4.10% and
5.03%, respectively, for the first quarter of 1996. In the relatively
stable interest rate environment of the past two years, higher yielding
earning assets have matured. The average rate paid on interest bearing
liabilities has not dropped as significantly. Thus, net interest spread and
margin have decreased.
Average earning assets increased $82,406,000, or 27.2% to $385,589,000
for the first three months of 1997 compared to 1996. Average interest
bearing liabilities increased $69,574,000 or 28.5% to $313,731,000 for the
first three months of 1997 compared to 1996.
Interest rate sensitivity has a major impact on the earnings of the
Banks. As interest rates change in the market, rates earned on assets do
not necessarily move identically with rates paid on liabilities. Proper
asset and liability management involves the matching of interest sensitive
assets and liabilities to reduce interest rate risk. The Banks manage
interest rate risk by primarily making variable rate loans. The Banks do,
however, make fixed rate loans which are matched, along with investment
securities, against longer term fixed rate time deposits. The Banks' largest
interest earning asset is loans and approximately half of the loan portfolio
is comprised of variable rate loans. Variable rate loans reprice immediately
with a change in the prime interest rate. Deposits, the Banks' largest
interest bearing liability, do not resopond nearly as quickly nor as
significantly to changes in market interest rates. At March 31, 1997,
interest earning assets repricing within one year slightly exceeded interest
bearing liabilities repricing within one year. A position of interest
earning assets repricing more quickly than interest bearing liabilities
assets generally allows for a positive impact on net interest income in
periods of rising interest rates and a negative impact in periods of
declining interest rates. The cumulative interest sensitivity gap through
one year was approximately 2% and Bancorp believes it has the ability to
effectively manage its interest sensitivity gap to control the degree of
interest rate risk on the balance sheet.
Provision for Loan Losses
The allowance for loan losses is based on management's continuing review of
individual credits, recent loss experience, current economic conditions, the
risk characteristics of the various categories of loans, and such other
factors that, in management's judgment, deserve current recognition in
estimating loan losses.
An analysis of the changes in the allowance for loan losses and selected
ratios follows:
Three months ended
March 31
(In thousands except percentages)
1997 1996
Balance at January 1 $ 5,155 $ 4,507
Provision for loan losses 225 180
Loan charge-offs, net of recoveries ( 21) ( 7)
----- -----
Balance at March 31 $ 5,359 $ 4,680
======= =======
Average loans, net of unearned income $308,784 $255,318
======= =======
Provision for loan losses to average loans (1) .29% .28%
Net loan charge-offs to average loans (1) .03% .01%
Allowance for loan losses to average loans 1.74% 1.83%
Allowance for loan losses to perioden d loans 1.72% 1.81%
(1) Amounts annualized
Non-interest Income and Expenses
The following table sets forth the major components of non-interest
income and expenses for the three months ended March 31, 1997 and 1996.
In thousands
Three Months Ended
March 31
1997 1996
Non-interest income
Trust income $ 646 $ 531
Service charges on deposit accounts 444 353
Gains on sales of mortgage
loans held for sale 213 195
Gains on sales of securities
available for sale 80 35
Other 197 120
----- -----
Total non-interest income $1,580 $1,234
===== =====
Non-interest expenses
Salaries and employee benefits $2,317 $1,833
Net occupancy expense 255 232
Furniture and equipment expense 357 345
Other 867 793
----- -----
Total non-interest expenses $3,796 $3,203
===== =====
Non-interest income increased $346,000, or 28.0%, for the first quarter
of 1997, compared to the same period in 1996. Trust income increased
$115,0000 or 21.7% in the first quarter of 1997, as compared to the same
period in 1996. Trust assets under management at March 31, 1997 were
$538,000,000 as compared to $470,000,000 at December 31, 1996.
Service charges on deposit accounts increased $91,000 or 25.8% in the first
quarter of 1997, as compared to the same period in 1996. Growth in deposit
accounts spurred by the introduction of new deposit products and by the opening
of new branch offices has presented opportunities for increased fee income
in this area. Additionally, rates for some deposit services were raised in
the second quarter of 1996.
Gains on sales of mortgage loans were $213,000 in the first quarter of 1997
compared to $195,000 in 1996. The Kentucky Bank operates a mortgage banking
company which originates residential mortgage loans and sells the loans in
the secondary market. The volume of loans originated by the mortgage company
has increased more than the gains on sales would indicate. Profit margins on
these loans have decreased markedly as competition in the industry has
increased.
Gains on sales of securities available for sale during the first quarter
of both 1997 and 1996 occurred as management sold lower yielding, shorter
term securities for intermediate term, higher yielding securities.
Other non-interest income increased $77,000 or 64.2% in the first
quarter of 1997 compared to 1996. Numerous factors contribute to this
increase including higher service fees and the addition of a brokerage
function in the first quarter of 1996.
Non-interest expenses increased $593,000 or 18.5% for the first quarter
of 1997 compared to the same period in 1996. Salaries and employee benefits
increased $484,000, or 26.4%, for the first quarter of 1997 compared to the
same period in 1996. These increases arose in part from regular salary
increases. Also, employees have been added throughout 1997 and 1996 with the
opening of new branches. The Bank had 228 full time equivalent employees as
of March 31, 1997 and 201 full time equivalents as of March 31, 1996. In
addition, the Banks have an incentive plan in place which is based on
profitability and employee performance. Expense accrues throughout the year,
and with higher earnings and a growing employee base, theseincentives have
increased. Net occupancy expense increased $23,000 or 9.9% in the
first quarter of 1997, as compared to 1996. Furniture and equipment expense
increased $12,000, or 3.5%, for the first quarter of 1997 compared to 1996.
These increases are largely due to the opening of new banking centers. In
1996 the Kentucky Bank opened its Stony Brook and Springhurst banking centers
and the Indiana Bank was acquired. Other non-interest expenses have increased
9.3% in the first quarter as compared to 1996. Again, these increases are
reflective of the Banks' expansion. Also, goodwill amortization related to
the Indiana Bank acquisition is included in 1997 totals. That amount was
$12,000 in the first quarter of 1997.
Income Taxes
Bancorp had income tax expense of $713,000 for the first three months of
1997, compared to $519,000 for the same period in 1996. The effective rate
was 32.5% in 1997 and 32.6% in 1996.
B. FINANCIAL CONDITION
Total Assets
Total assets increased $11,391,000 from December 31, 1996 to March 31,
1997. Average assets for the first three months of 1996 were $409,670,000.
Total assets at March 31, 1997 increased $88,601,000 from March 31, 1996,
representing a 27.6% increase. Since year end, loans have increased
approximately $10.1 million; cash due from banks and federal funds sold
decreased $1.1 million; securities available for sale increased $14.3
million, and securities held to maturity decreased $14.5 million.
Nonperforming Loans and Assets
Nonperforming loans, which include restructured, nonaccrual and loans
past due over 90 days, totaled $943,000 at March 31, 1997 and $854,000 at
December 31, 1996. This represents .30% of total loans at March 31, 1997
compared to .28% at December 31, 1996.
Nonperforming assets, which include nonperforming loans and other real
estate owned, (the bank had no other real estate owned at March 31, 1997)
totaled $943,000 at March 31, 1996 and $1,129,000 at December 31, 1995. This
represents .22% of total assets at March 31, 1997 compared to .27% at
December 31, 1996.
C. LIQUIDITY
The role of liquidity is to ensure that funds are available to meet
depositors' withdrawal and borrowers' credit demands while at the same time
maximizing profitability. This is accomplished by balancing changes in
demand for funds with changes in the supply of those funds. Liquidity to
meet demand is provided by maturing assets, short-term liquid assets that
can be converted to cash, and the ability to attract funds from external
sources - principally deposits.
The Banks have a number of sources of funds to meet its liquidity needs on
daily basis. An increase in loans affects liquidity as the repayment of
principal and interest are a daily source of funds. The deposit base,
consisting of relatively stable consumer and commercial deposits, and large
denomination ($100,000 and over) certificates of deposit, is another source
of funds. The majority of these deposits are from long term customers and
are a stable source of funds. In addition, federal funds purchased continue
to be a source of funds. Other sources of funds available to meet daily
needs include the sale of securities under agreements to repurchase and funds
made available under a treasury tax and loan note agreement with the federal
government. Also, the Kentucky Bank is a member of the Federal Home Loan
Bank of Cincinnati (FHLB). As a member of the FHLB, the Kentucky Bank has
access to credit products of the FHLB. These credit services provide the
Kentucky Bank with another source of funds. To date, the Kentucky Bank has
not accessed this source of funds.
Bancorp's liquidity depends primarily on the dividends paid to it as the
sole shareholder of the Banks. At March 31, 1997, the Banks may pay up to
$7,931,000 in dividends to Bancorp without regulatory approval.
D. CAPITAL RESOURCES
At March 31, 1997, stockholders' equity totaled $32,452,000, an increase of
$858,000 since December 31, 1996. One component of equity is net unrealized
gain (loss) on securities available for sale, net of tax. Fluctuations in
the bond market resulted in a net unrealized loss as of March 31, 1997. The
unrealized gain (loss) on securities available for sale, net of tax, showed a
$218,000 gain at year end and a $90,000 loss as of March 31, 1997.
Bank holding companies and their subsidiary banks are required by
regulators to meet risk based capital standards. These standards, or ratios,
measure the relationship of capital to a combination of balance-sheet and off-
balance sheet risks. The values of both balance sheet and off-balance sheet
items are adjusted to reflect credit risks.
At March 31, 1997, and December 31, 1996, the Banks' and Bancorp's tier 1
total risk based capital and leverage ratios were 9.90%, 11.26% and 7.69%,
respectively. These ratios exceed the 4.00% tier 1 and 8.0% total risk based
capital and 4% leverage ratio minimums.
E. NEW ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board (FASB) issued
SFAS No. 128 "Earnings Per Share" and SFAS No. 129 "Disclosure of Information
About Capital Structure." SFAS No. 128 simplifies the computation of earnings
per share (EPS) by replacing the presentation of primary EPS with a presentation
of basic EPS. The Stament requires dual presentation of basic and diluted EPS
by entities with complex capital structures. Basic EPS includes no dilution and
is computed by dividing income available to common shareholders by the
weighted average number of common shares outstanding for the period. Diluted
EPS reflects the potential dilution of securities that could share in the
earnings of an entity, similar to fully diluted EPS.
This statement is effective for financial statements issued for periods
ending after December 15, 1997, including interim periods, and requires
restatement of all prior period EPS data presented. Bancorp does not expect
the implementation of this Statement to have a material effect on the financial
statements.
Statement 129 establishes standards for disclosing information about an
entity's capital structure. This Statement contains no change in disclosure
requirements for companies that were subject to previously existing
requirements. It was issued to eliminate the exemption of nonpublic entities
from certain previously issued disclosure requirements.
Statement 129 is effective for periods ending after December 15, 1997.
Implementation of this Statement will not have a material effect on Bancorp's
consolidated financial statements.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(11) Computation of Per Share Earnings
(b) Reports on Form 8K
The registrant was not required to file a Form 8-K for any of the three
months ended March 31, 1997
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 thereunto duly authorized.
S.Y. BANCORP, INC.
Date: May 12, 1997 By: /s/ David H. Brooks
-------------------------
David H. Brooks, Chairman
and Chief Executive Officer
Date: May 12, 1997 By: /s/ David P. Heintzman
--------------------------
David P. Heintzman, President
Date: May 12, 1997 By: /s/ Nancy B. Davis
--------------------------
Nancy B. Davis, Senior Vice
President, Treasurer and Chief
Financial Officer