U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
___________________________
FORM 10-QSB
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 0-28446
-------
MITCHELL BANCORP, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
North Carolina 56-1966011
- - ----------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
210 Oak Avenue, Spruce Pine, North Carolina 28777
- - --------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (828) 765-7324
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
---- ----
As of September 30, 1998, there were 937,174 shares of the Registrant's common
stock, par value $0.01 per share, outstanding. The Registrant has no other
classes of common equity outstanding.
Transitional small business disclosure format:
Yes X No
---- ----
1
MITCHELL BANCORP, INC.
AND SUBSIDIARY
Spruce Pine, North Carolina
Index
PART I. Page(s)
- - ------- -------
FINANCIAL INFORMATION
Item 1.
Financial Statements
Consolidated Balance Sheets-(Unaudited) as of June 30, 1998
and September 30, 1998............................................ 3
Consolidated Statements of Income - (Unaudited) for the
three month periods ended September 30, 1997 and 1998............. 4
Consolidated Statements of Stockholders' Equity (Unaudited)......... 5
Consolidated Statements of Cash Flows - (Unaudited) for the
three months ended September 30, 1997 and 1998.................... 6
Notes to (Unaudited) Consolidated Financial Statements.............. 7-9
Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations.........................................10-13
PART II.
- - --------
OTHER INFORMATION
Item 1. Legal Proceedings......................................... 14
Item 2. Changes in Securities..................................... 14
Item 3. Defaults Upon Senior Securities........................... 14
Item 4. Submission of Matters to a Vote of Security Holders....... 14
Item 5. Other Information......................................... 14
Item 6. Exhibits and Reports on Form 8-K..........................14-15
Signatures.......................................................... 16
2
MITCHELL BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share data)
June 30, September 30,
Assets ----------------------------------
------ 1998 1998
---- ----
Cash and due from banks $ 44 $ 167
Interest earning deposits 8,115 9,337
Investment securities:
Available for sale (amortized cost of $13) 628 662
Loans receivable, net 27,506 26,290
Real estate owned 345 288
Premises and equipment, net 56 53
Federal Home Loan Bank stock 291 291
Accrued interest receivable 5 7
Deferred income taxes 142 103
Prepaid expenses and other assets 174 242
--------- ---------
Total assets $ 37,306 $ 37,440
========= =========
Liabilities and Stockholders' Equity
------------------------------------
Deposits $ 21,564 $ 21,792
Accrued interest payable 76 68
Accrued expenses and other liabilities 992 910
Current income taxes payable 42 39
--------- ---------
Total liabilities 22,674 22,809
--------- ---------
Stockholders' equity:
Preferred stock ($.01 par value, 500,000
shares authorized; none outstanding) - -
Common stock ($.01 par value, 3,000,000
shares authorized; 979,987 shares issued;
930,902 and 937,174 shares outstanding
June 30 and September 30, 1998,
respectively) 10 10
Paid-in capital 9,274 9,289
Retained earnings, substantially restricted 6,419 6,256
Treasury stock, at cost (48,995 and 42,723
shares, respectively) (784) (684)
Accumulated other comprehensive income 374 396
Unearned compensation:
Employee stock ownership plan (661) (636)
--------- ---------
Total stockholders' equity 14,632 14,631
--------- ---------
Total liabilities and stockholders'
equity $ 37,306 $ 37,440
========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
3
MITCHELL BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Comprehensive Income
(Unaudited)
(in thousands, except per share data)
For Three Months Ended
September 30,
-------------------------
1997 1998
---- ----
Interest income:
Loans $ 608 $ 578
Investments 7 7
Interest earning deposits 48 121
-------- --------
Total interest income 663 706
Interest expense:
Deposits 235 290
-------- --------
Net interest income 428 416
Provision for loan losses 6 6
-------- --------
Net interest income after provision
for loan losses 422 410
Non-interest income:
Other 1 1
-------- --------
Total non-interest income 1 1
-------- --------
Non-interest expenses:
Compensation 88 98
Other employee benefits 64 71
Net occupancy expense 6 6
Deposit insurance premiums 3 3
Data processing 7 7
Other 47 158
-------- --------
Total non-interest expenses 215 343
-------- --------
Income before income taxes 208 68
Income tax expense 83 56
-------- --------
Net income 125 12
Other comprehensive income:
Net unrealized gains on securities available
for sale, net of income taxes of $1 and $12,
respectively 1 22
-------- --------
Comprehensive income $ 126 $ 34
======== ========
Basic and diluted net income per share $ .15 $ .01
Weighted average shares 860 873
The accompanying notes are an integral part of these consolidated financial
statements.
4
MITCHELL BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity
(Unaudited)
(in thousands except share data)
Accumulated
Other Unearned
Common Paid-In Retained Treasury Comprehensive Compensation
Stock Capital Earnings Stock Income For ESOP Total
------ ------- -------- -------- ---------- ------------ -----
Balance at June 30, 1997 $ 10 $ 9,225 $ 6,329 $ (784) $ 277 $ (732) $ 14,325
Comprehensive income:
Net income - - 433 - - - 433
Other comprehensive
income:
Unrealized gain on
securities available
for sale, net of
income taxes - - - - 97 - 97
-------- --------- --------- --------- --------- --------- --------
Comprehensive income - - 433 - 97 - 530
-------- --------- --------- --------- --------- --------- --------
Dividends paid ($.40 per
share) - - (343) - - - (343)
Earned compensation-ESOP - 49 - - - 71 120
-------- --------- --------- --------- --------- --------- --------
Balance at June 30, 1998 10 9,274 6,419 (784) 374 (661) 14,632
Comprehensive income:
Net income - - 12 - - - 12
Other comprehensive income:
Unrealized gain on
securities available
for sale, net of
income taxes - - - - 22 - 22
-------- --------- --------- --------- --------- --------- --------
Comprehensive income - - 12 - 22 - 34
-------- --------- --------- --------- --------- --------- --------
Dividends paid ($.20 per share) (175) (175)
Funding for MRP vesting 100 100
Earned compensation-ESOP 15 25 40
-------- --------- --------- --------- --------- --------- --------
Balance at September 30,
1998 $ 10 $ 9,289 $ 6,256 $ (684) $ 396 $ (636) $ 14,631
======== ========= ========= ========= ========= ========= ========
The accompanying notes are an integral part of these consolidated financial statements.
5
MITCHELL BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Three Months Ended
September 30,
----------------
1997 1998
---- ----
Operating activities:
Net income $ 125 $ 12
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 2 3
Provision for loan losses 6 6
Net loss on the sale of real estate - 3
Increase (decrease) in reserve for
uncollected interest 2 (7)
Deferred income taxes 21 27
Net increase (decrease) in deferred loan fees 4 (7)
Amortization of unearned compensation 22 40
Increase in accrued interest receivable - (2)
Increase in prepaid expenses and other assets (25) (65)
Decrease in accrued interest payable (2) (8)
Increase in accrued expenses and other liabilities 56 3
------- -------
Net cash provided by operating activities 211 5
------- -------
Investing activities:
Net (increase) decrease in loans (600) 1,274
Proceeds from the sale of real estate - 16
Investment in life insurance cash surrender value (2) (3)
------- -------
Net cash provided (used) by investing activities (602) 1,287
------- -------
Financing activities:
Net increase in deposits 1,500 228
Dividends paid (170) (175)
------- -------
Net cash provided (used) by financing activities 1,330 53
------- -------
Increase (decrease) in cash and cash equivalents 939 1,345
Cash and cash equivalents at beginning of period 3,606 8,159
------- -------
Cash and cash equivalents at end of period $ 4,545 $ 9,504
======= =======
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 276 $ 298
Income taxes 48 94
Noncash transactions:
Unrealized gain on securities available for sale,
net of deferred tax liability $ 1 $ 22
Loans to facilitate the sale of real estate owned $ - $ 111
Real estate acquired in satisfaction of mortgage
loans $ - $ 61
Treasury stock used to fund MRP vesting $ - $ 100
The accompanying notes are an integral part of these consolidated financial
statements.
6
MITCHELL BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
1. Mitchell Bancorp, Inc.
----------------------
Mitchell Bancorp, Inc. ("Bancorp") was incorporated under the laws of the
State of North Carolina for the purpose of becoming the savings and loan
holding company of Mitchell Savings Bank, Inc. SSB (the "Savings Bank") in
connection with the Savings Bank's conversion from a state chartered mutual
savings bank to a state chartered stock savings bank (the "Conversion"),
pursuant to its Plan of Conversion. Bancorp commenced on May 8, 1996, a
Subscription Offering of its shares in connection with the Conversion. On July
12, 1996, the Conversion was completed. The financial statements of the
Savings Bank are presented on a consolidated basis with those of the Bancorp.
The consolidated financial statements included herein are for the
Bancorp, the Savings Bank and the Savings Bank's wholly owned subsidiary,
Mitchell Mortgage and Investment Co. (MMI) herein collectively referred to as
the "Company". The impact of MMI on the consolidated financial statements is
insignificant. MMI has no operating activity other than to own stock in a
third-party service bureau used by the Savings Bank.
2. Basis of Preparation
--------------------
The accompanying unaudited consolidated financial statements were
prepared in accordance with instructions for Form 10-QSB and, therefore, do
not include all disclosures necessary for a complete presentation of the
consolidated balance sheets, consolidated statements of income, consolidated
statements of stockholders' equity, and consolidated statements of cash flows
in conformity with generally accepted accounting principles. However, all
adjustments which are, in the opinion of management, necessary for the fair
presentation of the interim financial statements have been included. All such
adjustments are of a normal recurring nature. The statement of comprehensive
income for the three month period ended September 30, 1998 is not necessarily
indicative of the results which may be expected for the entire year.
It is suggested that these unaudited consolidated financial statements be
read in conjunction with the audited consolidated financial statements and
notes thereto for the Company for the year ended June 30, 1998 which are
included in the Form 10-KSB.
7
Notes to Consolidated
MITCHELL BANCORP, INC AND SUBSIDIARY Financial Statements, Continued
- - ------------------------------------------------------------------------------
3. Earnings Per Share
------------------
Basic and diluted earnings per share amounts have been computed in
accordance with Statement of Financial Accounting Standard No. 123 (SFAS 123).
Per share amounts for the three month period ended September 30, 1997 have
been restated in accordance with SFAS 123. Unallocated ESOP shares are not
considered as outstanding for purposes of the basic or diluted calculation.
4. Stockholders' Equity
--------------------
On January 29, 1997, the stockholders of the Company approved the
Company's Stock Option Plan and Management Recognition Plan (MRP) at the
Company's annual meeting. Shares granted to directors and employees under
these plans may be from authorized but unissued shares of common stock or they
may be purchased in the open market. The Company had previously announced and
repurchase 5% of its outstanding common stock to fund these plans. As of
September 30, 1998, 48,995 shares of common stock had been repurchased and
6,272 shares were used to fund the vesting of the MRP in July 1998. The
remaining 25,086 shares will be moved from treasury stock and restricted for
the remaining MRP awards unvested.
5. Change in control
-----------------
On August 13, 1998, the Company signed a definitive agreement under which
the Company will seek shareholder and regulatory approval to merge with First
Western Bank, Burnsville, North Carolina, a state chartered commercial bank.
Under the agreement, the shareholders will receive cash and/or shares of the
First Western's common stock subject to an exchange ratio as defined in the
merger agreement.
The pending change in control, if approved and consummated, will result
in the payment of certain employee benefits, the payment of employment
contract settlements, and the acceleration of certain benefit payments from
qualified and nonqualified retirement plans. As of September 30, 1998, the
Company has not accrued any additional liabilities with regard to these
potential benefit payments that will result upon approval and completion of
the merger.
Unvested stock options of 54,877 and unvested MRP awards of 25,086 under
the terms of the individual plan documents will fully vest with the change of
control. The Company will recognize at that time additional compensation
expense for unvested MRP awards which have not been recognized. The Company is
in the process of moving 25,086 shares from treasury stock and restricting
them for the unvested MRP awards. It is also the intent under the merger
agreement that the ESOP plan will have first rights to cash consideration for
its unallocated shares. This will enable the ESOP to repay its outstanding
debt obligation to the Company and distribute the excess proceeds to plan
participants, which will in effect terminate the plan.
8
Notes to Consolidated
MITCHELL BANCORP, INC AND SUBSIDIARY Financial Statements, Continued
- - ------------------------------------------------------------------------------
6. Asset Quality
-------------
At September 30, 1998, the Company had total nonperforming loans (i.e.,
loans which are contractually past due 90 days or more) and real estate owned
of approximately $527,000. Of the $239,000 of nonperforming loans, 35.6%, or
$85,000, were the result of loan customers filing bankruptcy. The Company's
ability to take action on these loans and the underlying collateral is
dependent on the bankruptcy procedures. As a percentage of net loans at
September 30, 1998, nonperforming loans was .91%. Total nonperforming assets
as a percent of total assets at September 30, 1998 was 1.41%.
9
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
The following discussion and analysis is intended to assist in understanding
the financial condition and the results of operations of the Company.
References to the "Company" include Mitchell Bancorp, Inc. and/or Mitchell
Savings Bank, Inc. SSB, as appropriate.
Comparison of Financial Condition at June 30, 1998 and September 30, 1998
The Company's total consolidated assets remained constant from June 30, 1998
to September 30, 1998. This was primarily attributable to the fact that the
Company did not experience any significant deposit growth during the three
month period.
The composition of the Company's balance sheet has not been materially
affected by market conditions between June 30, 1998 and September 30, 1998.
Net loans decreased by $1.2 million, or 4.42%, as a result of the Company
experiencing scheduled repayments and payoffs of loans in the current interest
rate environment in excess of new loan originations.
Consistent with its historical lending practices, virtually all of the
Company's loan portfolio at September 30, 1998 consisted of fixed rate loans
with maturities up to sixteen (16) years. Consequently, the Company is exposed
to a high degree of interest rate risk in a rising interest rate environment.
The Company has historically accepted this risk in light of its relatively
high capital levels. See "Liquidity and Capital Resources" discussion below.
Deposits increased only $228,000 or 1.06%, from $21.6 million at June 30, 1998
to $21.8 million at September 30, 1998. The Company's experienced limited
growth in passbook savings and certificates of deposit during the three month
period.
10
Comparison of Results of Operations for the Three Months Ended September 30,
1997 and 1998
Net Income. Net income decreased $113,000 or 90.4% from net income of $125,000
for the three months ended September 30, 1997 to net income of only $12,000
for the three months ended September 30, 1998. The decrease was primarily the
result of additional non-interest expenses associated with the pending merger.
These additional merger related expenses, which are not tax deductible,
significantly reduced net income for the first quarter.
Net Interest Income. Net interest income decreased $12,000 or 2.80% from
$428,000 for the three months ended September 30, 1997 to $416,000 for the
three months ended September 30, 1998. The decline in net interest income
primarily reflects a 22 basis point increase in the average cost of funds for
the three months ended September 30, 1998 as compared to 1997. Furthermore,
there was approximately $3.3 million more in average deposits outstanding
during 1998 than in 1997. The interest rate spread also decreased from 2.85%
for three months ending September 30, 1997 to 2.38% for the three months
ending September 30, 1998.
Interest Income. Total interest income increased $43,000 from $663,000 for the
three months ended September 30, 1997 to $706,000 for the three months ended
September 30, 1998. Interest on loans decreased $30,000 as a result of a $2.2
million decrease in average loans outstanding, or 7.19%. Interest on overnight
funds increased by $73,000 as additional funds available from savings deposit
growth and loan repayment were invested in overnight funds.
Interest Expense. Interest expense increased $55,000 from $235,000 for the
three months ended September 30, 1997 to $290,000 for the three months ended
September 30, 1998. The increase for the three months ending September 30,
1998 was the result of a increase of approximately $3.4 million in the average
balance of certificates of deposits outstanding during 1998 as compared to the
same period in 1997. Certificates of deposit are higher costing funds than
other transaction accounts.
Provision for Loan Losses. The provision for loan losses for both three month
periods ended September 30, 1998 and 1997 was $6,000. Historically, management
has emphasized the Company's loss experience over other factors in
establishing provisions for loan losses. However, management has reviewed the
allowance for loan losses in relation to the Company's composition of its loan
portfolio and observations of the general economic climate and loan loss
expectations. The ratio of allowance to non-performing loans at September 30,
1998 was 86.2%.
Non-Interest Expense. Non-interest expense increased by $128,000 from $215,000
for the three months ending September 30, 1997 to $343,000 for 1998. This
increase was primarily the result of an increase in professional fees
associated with the Company's pending merger. The Company incurred legal and
accounting fees in connection with due diligence procedures, merger
negotiations, and other related activities during the three month period.
11
Income Taxes. Income tax expense for the three months ending September 30,
1998 was $56,000 compared to income tax expense of $83,000 for the same period
in 1997. Income tax expense for 1998 as a percentage of pretax income
increased because of the nondeductible merger related expenses incurred during
the period.
Liquidity and Capital Resources. The Company's primary sources of funds are
new deposits and proceeds from principal and interest payments on loans. While
maturities and scheduled amortization of loans are a predictable source of
funds, deposit flows and mortgage prepayments are greatly influenced by
general interest rates, economic conditions and competition. The Company's
primary investing activity is loan originations. The Company maintains
liquidity levels adequate to fund loan commitments, investment opportunities,
deposit withdrawals and other financial commitments. At September 30, 1998,
there were no material commitments for capital expenditures and the Company
had unfunded loan commitments of approximately $194,000. At September 30,
1998, management had no knowledge of any trends, events or uncertainties that
will have or are reasonably likely to have material effects on the liquidity,
capital resources or operations of the Company. Further at September 30, 1998,
management was not aware of any current recommendations by the regulatory
authorities which, if implemented, would have such an effect.
The Savings Bank exceeded all of its capital requirements at September 30,
1998. The Savings Bank had the following capital ratios at September 30, 1998:
For Capital Categorized as
Actual Adequacy Purposes "Well Capitalized"(1)
------------- ----------------- ---------------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
As of September 30, 1998:
Tier I Capital
(To average assets) $ 10,998 32.3% $ 1,363 > 4% $ 1,703 > 5%
- -
Tier I Capital
(To risk weighted
assets) $ 10,998 61.4% $ 716 > 4% $ 1,074 > 6%
- -
Total Capital
(To risk weighted
assets) $ 11,204 62.9% $ 1,432 >8% $ 1,790 > 10%
- -
1) As categorized under the Prompt Corrective Action Provisions.
Year 2000 Issues. The Company has formulated a Year 2000 Compliance Plan to
address this issue. The phases identified under the plan are awareness,
assessment, renovation, validation and implementation. The purpose of the plan
is to outline the procedures necessary for assuring that the Company is in a
state of readiness for the century date change. The Company is on hold
currently with regard to its contingency plan which would be designed to
prepare a operating alternative in the event that systems do not perform as
planned either before or after the century date change. The
13
Company has sought and received regulatory approval to delay the development
of a contingency plan dependent on the outcome of its pending merger. The
acquiror has notified the Company of its plans to convert the data processing
functions to its system shortly after the effective date of the merger.
Substantially all of the Company's material data processing functions are
provided by a third party service bureau. The service bureau has advised the
Company in writing that it is Year 2000 compliant. Company personnel are
scheduled to perform testing on the system by the end of 1998. The Company has
also made written and oral inquiries of non-information technology providers
as to their year 2000 readiness. No significant issues have been raised at
this time based on these inquiries and responses.
The Company had scheduled and has replaced certain teller terminals which are
on-line with the third party service bureau. The equipment is compatible with
the teller equipment utilized by the acquiring company. The computer upgrades
were necessitated by the age and condition of the previous equipment and the
cost was not material to the Company's financial condition. The Company has a
reasonable basis to conclude that the Year 2000 issue will not materially
affect future financial results, or cause reported financial information not
to be necessarily indicative of future operating results or future financial
condition. However, no assurance can be given that the Year 2000 compliance
plan will be completed successfully by the Year 2000
Successful and timely completion of the Year 2000 project is based on
management's best estimates derived from various assumptions of future events.
These events are inherently uncertain, including the progress and results of
vendors, suppliers and customers Year 2000 readiness.
13
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
From time to time, the Company may be a party to various legal
proceedings incident to its or their business. At September 30, 1998, there
were no legal proceedings to which the Bancorp or any subsidiary was a party,
or to which of any of their property was subject, which were expected by
management to result in a material loss.
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults Upon Senior Securities
-------------------------------
None
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
--------------------------------
2 Agreement and Plan of Merger, dated August 13, 1998, between
the Company and First Western Bank (incorporated by reference
to the Company's current report on Form 8-K dated August 18,
1998).
3(a) Company's Articles of Incorporation (incorporated by reference
to the Company's Registration Statement on Form SB-2 File No.
333-1888).
3(b) Company's Bylaws (incorporated by reference to the Company's
Registration Statement on Form SB-2 File No. 333-1888).
10.1 Employment Agreement with Emma Lee M. Wilson (incorporated by
reference to the Company's Registration Statement on Form SB-2
File No. 333-1888).
10.2 Employment Agreement with Edward Ballew, Jr. (incorporated by
reference to the Company's Registration Statement on Form SB-2
File No. 333-1888).
14
10.3 Mitchell Savings Bank, Inc., SSB 1996 Employee Stock Ownership
Plan (incorporated by reference to the Company's Registration
Statement on Form SB-2 File No. 333-1888).
10.4 Mitchell Bancorp, Inc. 1996 Stock Option Plan (incorporated by
reference to the Company's proxy statement for the 1996 Annual
Meeting of Stockholders).
10.5 Mitchell Bancorp, Inc. 1996 Management Recognition and
Development Plan (incorporated by reference to the Company's
proxy statement for the 1996 Annual Meeting of Stockholders).
27 Financial Data Schedule
A current report on Form 8-K was filed on August 19, 1998 to report the
signing of a definitive merger agreement with First Western Bank. The Form 8-K
included as exhibits the Agreement and Plan of Merger and related press
release. No financial statements were filed.
15
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.
Mitchell Bancorp, Inc.
Date: November 13, 1998 By: /s/Edward Ballew, Jr.
------------------ ------------------------------------
Edward Ballew Jr.
(Executive Vice President and Chief
Executive Officer)
Mitchell Bancorp, Inc.
Date: November 13, 1998 By: /s/Emma Lee M. Wilson
------------------ ------------------------------------
Emma Lee Wilson
(Chief Financial Officer)
16