FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 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. 0-25217
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PEOPLES BANKCORP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 16-1560886
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
825 State Street
Ogdensburg, New York 13669
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(Address of principal (Zip Code)
executive office)
Issuer's telephone number, including area code: (315) 393-4340
--------------
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
As of November 12, 2002, the latest practicable date, 133,442 shares of the
registrant's common stock, $.01 par value per share, were issued and
outstanding.
Transitional small business disclosure format (check one):
Yes [ ] No [X]
PART I. FINANCIAL STATEMENTS
Item 1. Financial Statements
Consolidated Statements of Financial Condition as of
September 30, 2002 (unaudited) and December 31, 2001............... 3
Consolidated Statements of Income for the Three
and Nine Months Ended September 30, 2002 and 2001
(unaudited).........................................................4
Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 2002 and 2001 (unaudited).......................5
Notes to Consolidated Financial Statements..........................7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...........................................8
Item 3. Controls and Procedures............................................10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings..................................................11
Item 2. Changes in Securities and Use of Proceeds..........................11
Item 3. Defaults Upon Senior Securities....................................11
Item 4. Submission of Matters to a Vote of Security Holders................11
Item 5. Other Information..................................................11
Item 6. Exhibits and Reports on Form 8-K...................................11
SIGNATURES
2
PART I. FINANCIAL STATEMENTS
PEOPLES BANKCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
SEPTEMBER 30, 2002 AND DECEMBER 31, 2001
(In thousands, except per share data)
September 30, December 31,
ASSETS 2002 2001
------------- -----------
(Audited)
Cash and Cash Equivalents:
Cash and due from banks $ 3,018 $ 1,403
Interest-bearing deposits in other banks 1,839 645
--------- ---------
Total cash and cash equivalents 4,857 2,048
Securities available-for-sale - at fair value 5,600 5,034
Securities held-to-maturity (fair value of $867 (unaudited)
at September 30, 2002 and $1,568 at December 31, 2001) 850 1,525
Loans, net of deferred fees 17,274 19,015
Less allowance for loan losses 180 179
--------- ---------
Net loans 17,094 18,836
Real estate owned -- 45
Premises and equipment, net 401 418
Federal Home Loan Bank stock, at cost-required by law 184 163
Accrued interest receivable 132 145
Other assets 6 3
--------- ---------
TOTAL ASSETS $ 29,124 $ 28,217
========= =========
LIABILITIES AND EQUITY
Liabilities:
Deposits:
Demand accounts - non-interest bearing $ 852 $ 735
Savings and club accounts - interest bearing 3,356 3,215
Time certificates - interest bearing 18,091 18,126
NOW and money market accounts - interest bearing 2,286 1,943
--------- ---------
Total deposits 24,585 24,019
--------- ---------
Borrowed money 1,000 1,000
Advance payments by borrowers for property taxes and insurance 2 2
Other liabilities 164 131
--------- ---------
Total liabilities 25,751 25,152
--------- ---------
Commitments and contingencies
Stockholders' Equity:
Preferred stock $.01 par value per share, 500,000 shares authorized,
no shares issued or outstanding -- --
Common stock of $.01 par value, 3,000,000
shares authorized, 133,442 and 131,979 shares issued and
outstanding at September 30, 2002 and December 31, 2001 1 1
Additional paid-in capital 1,030 1,007
Retained earnings - substantially restricted 2,342 2,167
Accumulated other comprehensive income 123 3
Loan to employee stock ownership plan (75) (75)
Common stock in treasury, at cost (2,881 shares at September 30, 2002 and
2,411 shares at December 31, 2001) (48) (38)
--------- ---------
Total stockholders' equity 3,373 $ 3,065
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 29,124 $ 28,217
========= =========
See accompanying notes to consolidated financial statements.
3
PEOPLES BANKCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ----------------------
2002 2001 2002 2001
------- ------ ------ ------
Interest income:
Loans $ 338 $ 393 $1,041 $1,226
Securities 106 112 357 329
Other short-term investments 12 8 26 39
------ ------ ------ ------
Total interest income 456 513 1,424 1,594
------ ------ ------ ------
Interest expense:
Deposits 198 302 654 929
Borrowings 8 10 25 45
------ ------ ------ ------
Total interest expense 206 312 679 974
------ ------ ------ ------
Net interest income 250 201 745 620
Provision for loan losses 1 24 22 45
------ ------ ------ ------
Net interest income after provision
for loan losses 249 177 723 575
------ ------ ------ ------
Non-interest income:
Gain on sale of available for sale securities 27 -- 38 --
Service charges 6 6 19 25
Other 7 7 20 22
------ ------ ------ ------
Total non-interest income 40 13 77 47
------ ------ ------ ------
Non-interest expense:
Salaries and employee benefits 91 80 262 247
Director fees 18 13 59 43
Building, occupancy and equipment 16 17 48 49
Data processing 12 9 34 28
Postage and supplies 6 6 20 23
Deposit insurance premium 1 1 3 3
Insurance 3 3 9 9
Other 23 28 88 86
------ ------ ------ ------
Total non-interest expense 170 157 523 488
------ ------ ------ ------
Income before income tax expense 119 33 277 134
Income tax expense 40 8 102 43
------ ------ ------ ------
Net income $ 79 $ 25 $ 175 $ 91
====== ====== ====== ======
Earnings per share
Basic $ .63 $ .19 $ 1.40 $ .69
Diluted $ .60 $ .18 $ 1.34 $ .68
Weighted average shares outstanding 132 132 131 132
See accompanying notes to consolidated financial statements.
4
PEOPLES BANKCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(In thousands)
Nine Months Ended
September 30,
------------------------
2002 2001
-------- -------
Cash flows from operating activities:
Net income $ 175 $ 91
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 17 19
Decrease in accrued interest receivable 13 12
Provision for loan losses 22 45
Net amortization (accretion) of premium/discounts (7) (9)
Increase in other liabilities 40 42
Increase in other assets (3) (18)
-------- -------
Net cash provided by operating activities 257 182
-------- -------
Cash flows from investing activities:
Net (increase) decrease in loans 1,652 1,018
Purchases of securities available-for-sale (3,250) (3,996)
Proceeds from maturities and principal reductions
of securities available-for-sale 2,831 804
Purchases of securities held-to-maturity (600) --
Proceeds from maturities and principal reductions
of securities held-to-maturity 1,255 1,151
Purchase of FHLB stock (21) (7)
Purchase of fixed assets -- --
Sale of foreclosed real estate 113 --
-------- -------
Net cash provided (used) by investing activities 1,980 (1,030)
-------- -------
Cash flows from financing activities:
Increase in deposits 566 583
Borrowings from FHLB -- 3,200
Repayments to FHLB -- (2,700)
Decrease in advance payments and borrowers for
property taxes and insurance -- --
Cash dividends paid on common stock -- --
Payments to acquire treasury stock (10) --
Issuance of common stock upon exercise of options 16 --
-------- -------
Net cash provided by financing activities 572 1,083
Net increase in cash and cash equivalents 2,809 235
Cash and cash equivalents at beginning of period 2,048 809
-------- -------
Cash and cash equivalents at end of period $ 4,857 $ 1,044
======== =======
(continued)
5
PEOPLES BANKCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(In thousands)
Nine Months Ended
September 30,
------------------------
2002 2001
-------- -------
Supplemental Disclosure of Cash Flow Information:
Non-cash investing activities:
Loans transferred to real estate owned through foreclosure $ 70 $ --
Additions to real estate owned -- 24
Treasury stock utilized for MRP -- 7
Cash paid during the period for:
Interest 679 974
Income taxes 85 44
====== ======
6
PEOPLES BANKCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Nine months ended September 30, 2002 and 2001
NOTE 1 - PEOPLES BANKCORP, INC.
- -------------------------------
Peoples Bankcorp, Inc. (the "Company") was incorporated under the laws of the
State of New York for the purpose of becoming the holding company of Ogdensburg
Federal Savings and Loan Association (the "Association") in connection with the
Association's conversion from a federally chartered mutual savings and loan
association to a federally chartered capital stock savings and loan association.
On November 22, 1998, the Company commenced a subscription offering of its
shares in connection with the Association's conversion. The Company's offering
and the Association's conversion closed on December 28, 1998. A total of 134,390
shares were sold at $10.00 per share.
NOTE 2 - BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
- --------------------------------------------------------------
The accompanying unaudited financial statements have been prepared in accordance
with the instructions to Form 10-QSB and on the same basis as the Company's
audited financial statements. In the opinion of management, all adjustments,
consisting of normal recurring accruals, necessary to present fairly the
financial position, results of operations, and cash flows for the interim
periods presented have been included. The results of operations for such interim
periods are not necessarily indicative of the results expected for the full
year.
NOTE 3 - PLAN OF CONVERSION
- ---------------------------
On July 23, 1998, the Association's Board of Directors formally approved a plan
("Plan") to convert from a federally chartered mutual savings and loan
association to a federally chartered stock savings and loan association subject
to approval by the Association's members and the Office of Thrift Supervision.
The Plan called for the common stock of the Association to be purchased by the
Company and the common stock of the Company to be offered to various parties in
a subscription offering at a price based upon an independent appraisal of the
Association. All requisite approvals were obtained and the conversion and the
Company's offering were consummated effective December 28, 1998.
Upon consummation of the conversion, the Association established a liquidation
account in an amount equal to its retained earnings as reflected in the latest
statement of financial condition used in the final conversion prospectus. The
liquidation account will be maintained for the benefit of certain depositors of
the Association who continue to maintain their deposit accounts in the
Association after conversion. In the event of a complete liquidation of the
Association, such depositors will be entitled to receive a distribution from the
liquidation account before any liquidation may be made with respect to the
common stock.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company's assets consist primarily of its ownership of the Association. As
such, the following discussion relates primarily to the Association's financial
condition and results of operations. The Association's results of operations
depend primarily on net interest income, which is determined by (i) the
difference between rates of interest it earns on its interest-earning assets and
the rates it pays on interest-bearing liabilities (interest rate spread), and
(ii) the relative amounts of interest-earning assets and interest-bearing
liabilities.
The Association's results of operations are also affected by non-interest
expense, including primarily compensation and employee benefits, federal deposit
insurance premiums and office occupancy costs. The Association's results of
operations also are affected significantly by general and economic and
competitive conditions, particularly changes in market interest rates,
government policies and actions of regulatory authorities, all of which are
beyond its control.
FORWARD-LOOKING STATEMENTS
In addition to historical information contained herein, the following discussion
contains forward-looking statements that involve risks and uncertainties.
Economic circumstances, the Company's operations and the Company's actual
results could differ significantly from those discussed in the forward-looking
statements. Some of the factors that could cause or contribute to such
differences are discussed herein but also include changes in the economy and
interest rates in the nation and the Company's market area generally. Some of
the forward-looking statements included herein are the statements regarding
management's determination of the amount and adequacy of the allowance for
losses on loans and the effect of certain recent accounting pronouncements.
COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2002 AND DECEMBER 31, 2001
Total assets at September 30, 2002 amounted to $29.1 million, a $907,000 or
3.21% increase from December 31, 2001's level of $28.2 million. The increase in
total assets was centered in a $2.8 million or 137.16% increase in in cash and
cash equivalents, partially offset by a $1.7 million or 9.25% decrease in net
loans and a $675,000 or 44.26% decrease in securities held to maturity. Total
liabilities at September 30, 2002 increased from $25.1 million at December 31,
2001 to $25.8 million. Deposits, which comprise the majority of total
liabilities, amounted to $24.6 million at September 30, 2002, up from $24.0
million at December 31, 2001 for an increase of $566,000, or 2.36% with
increases in all categories of deposits other than time certificates. Total
stockholders' equity at September 30, 2002 amounted to $3.4 million as compared
to $3.1 million at December 31, 2001. The increase in retained earnings of
$175,000 was in addition to a $120,000 increase in accumulated other
comprehensive income and a $23,000 increase in paid-in capital. At September 30,
2002 the Association was in compliance with all applicable regulatory capital
requirements with core and tangible capital of $2.9 million (10.2% of adjusted
total assets) and total risk based capital of $3.1 million (24.63% of risk
weighted assets).
RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND
2001
NET INCOME. Net income for the three months ended September 30, 2002 amounted to
$79,000 as compared to $25,000 for the three months ended September 30, 2001.
The $54,000 or 216% increase was due to the combined effects of a $106,000
decrease in total interest expense, a $27,000 increase in non-interest income
and a $23,000 decrease in the provision for loan losses. These improvements were
partially offset by a $32,000 increase in income tax expense and a $13,000
increase in non-interest expense. For the nine months ended September 30, 2002,
net income amounted to $175,000 as compared to $91,000 for the nine months ended
September 30, 2001 with the $84,000 or 92.31% increase attributable to the
aforementioned factors.
NET INTEREST INCOME. Net interest income before provision for loan losses
increased by $49,000, or 24.38%, from $201,000 for the three months ended
September 30, 2001 to $250,000 for the three months ended September 30, 2002.
The increase in net interest income was primarily due to a $106,000 decrease in
interest expense as compared to the three months ended September 30, 2001,
offset by a $57,000 decrease in total interest income. The decrease in interest
expense was due to a $104,000 decrease in interest on deposits which reflected
the decrease in interest rates during the three months ended September 30, 2002
as compared to the same period in 2001. The decrease in interest income was
primarily due to a $55,000 decrease in interest from loans due to the decreases
in the loan portfolio. For the nine months ended September 30, 2002, net
interest income before provision
8
for loan losses amounted to $745,000 up from $620,000 for the first three
quarters of fiscal year 2001 for an increase of $125,000 with the change due to
the aforementioned factors.
PROVISION FOR LOAN LOSSES. For the three months ended September 30, 2002, the
Company made a $1,000 provision for loan losses as compared to a provision of
$24,000 or the same period in 2001. The lower provision in 2002 reflected the
level of charge-offs during that period. For the nine months ended September 30,
2002 the Company made a $22,000 provision for loan losses as compared to an
$45,000 provision for the same period in 2001.
A provision for losses on loans is charged to earnings to bring the total
allowance for loan losses to a level considered appropriate by management based
on historical experience, the volume and type of lending conducted by the
Association, the status of past due principal and interest payments, general
economic conditions, particularly as such conditions relate to the Association's
market area, and other factors related to the collectibility of the
Association's loan portfolio. There can be no assurance that the loan loss
allowance of the Association will be adequate to cover losses on nonperforming
assets in the future.
NON-INTEREST INCOME. Non-interest income for the three months ended September
30, 2002 amounted to $40,000 as compared to $13,000 for the three months ended
September 30, 2001 with the increase due to a $27,000 gain on sale of available
for sale securities. No securities sales occurred during the same period in
2001. For the nine months ended September 30, 2002, non-interest income amounted
to $77,000 as compared to $47,000 for the nine months ended September 30, 2001
with the increase due to a $38,000 increase in gains on sales of available for
sale securities, offset by a $6,000 decrease in service charges and a $2,000
decrease in other non interest income.
NON-INTEREST EXPENSES. Non-interest expenses for the third quarter of 2002
totaled $170,000, up from $157,000 for the third quarter of 2001 with the
increase primarily due to the combined effects of a $11,000 increase in salaries
and employee benefits and a $5,000 increase in directors' fees. For the nine
months ended September 30, 2002, non-interest expenses totaled $523,000 which
represented a $35,000 increase as compared to the first three quarters of fiscal
year 2001. The increase in the first three quarters of fiscal year 2002 was
primarily attributable to a $15,000 increase in salaries and employee benefits,
a $16,000 increase in directors fees and a $6,000 increase in data processing.
INCOME TAX EXPENSE. Income tax expense for the three months ended September 30,
2002 amounted to $40,000, a $32,000 increase from the same period in 2001 with
the increase primarily attributable to an increase in pre-tax income. The
Company's effective tax rates for the respective periods were 33.61% and 24.24%.
For the nine months ended September 30, 2002, income tax expense amounted to
$102,000, up from $43,000 for the same period in 2001 with the increase
primarily due to the increased level of pre-tax income. The Company's effective
tax rates for the first three quarters of fiscal years 2002 and 2001 were 36.82%
and 32.08%, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Association is required to maintain levels of liquid assets consistent with
its safe and sound operation. The Association believes its level of liquid
assets are sufficient for its needs.
The Association's primary sources of funds are deposits, repayment of loans and
mortgage-backed securities, maturities of investments and interest-bearing
deposits, funds provided from operations. The Association is also able to obtain
advances from the Federal Home Loan Bank of New York. While scheduled repayments
of loans and mortgage-backed securities and maturities of investment securities
are predicable sources of funds, deposit flows and loan prepayments are greatly
influenced by the general level of interest rates, economic conditions and
competition. The Association uses its liquidity resources principally to fund
existing and future loan commitments, to fund maturing certificates of deposit
and demand deposit withdrawals, to invest in other interest-earning assets, to
maintain liquidity, and to meet operating expenses.
FINANCIAL MODERNIZATION LEGISLATION
On November 12, 1999, President Clinton signed legislation which could have a
far-reaching impact on the financial services industry. The Gramm-Leach-Bliley
("G-L-B") Act authorizes affiliations between banking, securities and insurance
firms and authorizes bank holding companies and national banks to engage in a
variety of new financial activities. Among the activities that are permitted to
bank holding companies are securities and insurance
9
brokerage, securities underwriting, insurance underwriting and merchant banking.
The Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), in consultation with the Secretary of the Treasury, may approve
additional financial activities. The G-L-B Act, however, prohibits future
acquisitions of existing unitary savings and loan holding companies, like the
Company, by firms which are engaged in commercial activities and limits the
permissible activities of unitary holding companies formed after May 4, 1999.
The G-L-B Act imposed new requirements on financial institutions with respect to
customer privacy. The G-L-B Act generally prohibits disclosure of customer
information to non-affiliated third parties unless the customer has been given
the opportunity to object and has not objected to such disclosure. Financial
institutions are further required to disclose their privacy policies to
customers annually. Financial institutions, however, are required to comply with
state law if it is more protective of customer privacy than the G-L-B Act.
The G-L-B Act contained significant revisions to the FHLB System. The G-L-B Act
imposed new capital requirements on the FHLBs and authorizes them to issue two
classes of stock with differing dividend rates and redemption requirements. The
G-L-B Act deleted the requirement that the FHLBs annually contribute $300
million to pay interest on certain government obligations in favor of a 20% of
net earnings formula. The G-L-B Act expanded the permissible uses of FHLB
advances by community financial institutions (under $500 million in assets) to
include funding loans to small businesses, small farms and small
agri-businesses. The G-L-B Act made membership in the FHLB voluntary for federal
savings associations.
The G-L-B Act contained a variety of other provisions including a prohibition
against ATM surcharges unless the customer has first been provided notice of the
imposition and amount of the fee. The G-L-B Act reduced the frequency of
Community Reinvestment Act examinations for smaller institutions and imposed
certain reporting requirements on depository institutions that make payments to
non-governmental entities in connection with the Community Reinvestment Act. The
G-L-B Act eliminated the SAIF special reserve and authorized a federal savings
association that converts to a national or state bank charter to continue to use
the term "federal" in its name and to retain any interstate branches.
The Company is unable to predict the impact of the G-L-B Act on its operations
at this time. Although the G-L-B Act reduces the range of companies with which
the Company may affiliate, it may facilitate affiliations with companies in the
financial services industry.
ITEM 3 CONTROLS AND PROCEDURES
The Company's Chief Executive Officer and Chief Financial Officer have
evaluated the Company's disclosure controls and procedures (as such term is
defined in Rule 13a-14 (c) under the Exchange Act) as of a date within 90 days
of the date of filing of this Form 10-QSB. Based upon such evaluation, the
Company's Chief Executive Officer and Chief Financial Officer have concluded
that such controls and procedures are effective to ensure that the information
required to be disclosed by the Company in the reports it files under the
Exchange Act is gathered, analyzed and disclosed with adequate timeliness.
There have been no significant changes in the Company's internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of the evaluation described above.
10
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
-----------------
None.
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
---------------------------------------------------
None.
ITEM 5. Other Information
-----------------
None.
ITEM 6. Exhibits and Reports on Form 8-K
--------------------------------
Exhibits:
Exhibit 99 - Certification of Chief Executive Officer and
Chief Financial Officer
Reports on Form 8-K: None.
11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
PEOPLES BANKCORP, INC.
Date: November 14, 2002 By: /s/ Robert E. Wilson
----------------------------------------
Robert E. Wilson
President and Chief Executive Officer
(Duly Authorized and Principal Executive,
Accounting and Financial Officer)
12
Certification
I, Robert E. Wilson, President and Chief Executive Officer and Chief Financial
Officer of Peoples Bankcorp, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Peoples Bankcorp,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board or directors (or persons fulfilling the equivalent
functions):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: November 14, 2002
/s/ Robert E. Wilson
-----------------------------------------------
Robert E. Wilson
President and Chief Executive Officer and Chief
Financial Officer
13