SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2001
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 0-24330
Bedford Bancshares, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1709924
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
125 West Main Street, Bedford, Virginia 24523
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(Address of principal executive offices)
(540) 586-2590
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(Registrant's telephone number, including area code)
Check whether issuer (1) filed all reports required to be filed by Sections
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 report(s), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date.
Class: Common Stock, par value $.10 per share
Outstanding at August 6, 2001: 2,059,777
BEDFORD BANCSHARES, INC. AND SUBSIDIARY
INDEX TO FORM 10-QSB
PART I FINANCIAL INFORMATION PAGE
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Item 1 Financial Statements
Consolidated Statements of Financial Condition at June 30,
2001 (unaudited) and September 30, 2000 3
Consolidated Statements of Income for the three and nine
months ended June 30, 2001 and 2000 (unaudited) 4
Comprehensive Statement of Income for the three and nine
months ended June 30, 2001 and 2000 (unaudited) 5
Consolidated Statements of Cash Flows for the nine months
ended June 30, 2001 and 2000 (unaudited) 6
Notes to Unaudited Interim Consolidated Financial Statements
7
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II OTHER INFORMATION
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Item 1 Legal Proceedings 13
Item 2 Changes in Securities 13
Item 3 Defaults upon Senior Securities 13
Item 4 Submission of Matters to a Vote of Security Holders 13
Item 5 Other Information 13
Item 6 Exhibits and Reports on Form 8-K 13
SIGNATURES 14
2
BEDFORD BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Financial Condition
June 30 September 30
2001 2000
--------- ---------
(In Thousands)
(Unaudited)
Assets
- ------
Cash and cash equivalents ........................................... $ 7,617 $ 5,512
Investment securities held to maturity (estimated market value of
$506 and $506) ...................................................... 505 507
Marketable equity securities available for sale, at market value .... -- 50
Investment securities available for sale, at market value ........... 7,002 6,855
Investment in Federal Home Loan Bank stock, at cost ................. 2,300 1,900
Loans receivable, net ............................................... 183,854 169,592
Foreclosed real estate, net ......................................... 26 --
Property and equipment, net ......................................... 1,367 1,365
Accrued interest receivable ......................................... 1,035 1,133
Deferred income taxes ............................................... 32 270
Other assets ........................................................ 1,111 357
--------- ---------
Total assets .................................................... $ 204,849 $ 187,541
========= =========
Liabilities and Stockholders' Equity
- ------------------------------------
Liabilities
- -----------
Deposits ............................................................ $ 140,521 $ 129,770
Advances from the Federal Home Loan Bank ............................ 40,000 34,000
Advances from borrowers for taxes and insurance ..................... 418 694
Dividends payable ................................................... 232 215
Other liabilities ................................................... 268 306
--------- ---------
Total liabilities ............................................... 181,439 164,985
--------- ---------
Commitments and contingent liabilities
Stockholders' equity
- --------------------
Preferred stock, par value $.10 per share, authorized 250,000; issued
and outstanding, none ............................................... -- --
Common stock, par value, $.10 per share, authorized 2,750,000
shares; issued and outstanding 2,110,160 at June 30, 2001 and
2,149,270 at September 30, 2000 .................................... 211 215
Additional paid in capital .......................................... 10,345 10,466
Retained earnings, substantially restricted ......................... 13,329 12,503
Accumulated other comprehensive income (loss) ....................... (32) (122)
Less stock acquired by ESOP and RRP ................................. (443) (506)
--------- ---------
Total stockholders' equity ...................................... 23,410 22,556
--------- ---------
Total liabilities and stockholders' equity ...................... $ 204,849 $ 187,541
========= =========
See notes to consolidated financial statements
3
BEDFORD BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
. Three Months Ended Nine Months Ended
June 30 June 30
----------------- -----------------
2001 2000 2001 2000
------- ------- ------- -------
(Dollars in Thousands, Except Per Share Data)
Interest Income:
Loans ........................................... $ 3,560 $ 3,237 $10,506 $ 9,123
U.S. Government Obligations including agencies .. 132 122 374 425
Other investments, including overnight deposits . 90 71 259 207
------- ------- ------- -------
Total interest income ........................ 3,782 3,430 11,139 9,755
------- ------- ------- -------
Interest Expense:
Deposits ........................................ 1,507 1,304 4,474 3,666
Borrowed funds .................................. 568 524 1,693 1,475
------- ------- ------- -------
Total interest expense ....................... 2,075 1,828 6,167 5,141
------- ------- ------- -------
Net interest income .......................... 1,707 1,602 4,972 4,614
Provision for credit losses ...................... 45 30 120 90
------- ------- ------- -------
Net interest income after provision for credit
Losses .......................................... 1,662 1,572 4,852 4,524
------- ------- ------- -------
Noninterest income:
Service charges and fees on loans ............... 159 149 390 445
Other customer service fees and
commissions ................................... 112 90 306 297
Other ........................................... 20 14 66 47
------- ------- ------- -------
Total noninterest income ..................... 291 253 762 789
------- ------- ------- -------
Noninterest expense:
Personnel compensation and benefits ............. 562 465 1,572 1,444
Occupancy and equipment ......................... 135 79 344 226
Data Processing ................................. 122 112 362 319
Federal insurance of accounts ................... 6 6 19 32
Advertising ..................................... 40 31 103 104
Professional fees ............................... 72 33 225 124
Other ........................................... 107 100 320 327
------- ------- ------- -------
Total noninterest expense .................... 1,044 826 2,945 2,576
------- ------- ------- -------
Income before income taxes ................... 909 999 2,669 2,737
Provision for income taxes ...................... 345 381 1,013 1,063
------- ------- ------- -------
Net income .................................... $ 564 $ 618 $ 1,656 $ 1,674
======= ======= ======= =======
Basic earnings per share ......................... $ 0.27 $ 0.30 $ 0.80 $ 0.81
======= ======= ======= =======
Diluted earnings per share ....................... $ 0.26 $ 0.29 $ 0.77 $ 0.78
======= ======= ======= =======
See notes to consolidated financial statements
4
BEDFORD BANCSHARES, INC. AND SUBSIDIARY
Comprehensive Statements of Income
(Unaudited)
Three Months Ended Nine Months Ended
June 30 June 30
------------------ -----------------
2001 2000 2001 2000
------- ------- ------- -------
(Dollars in Thousands, Except Per Share Data)
Net Income ................................... $ 564 $ 618 $ 1,656 $ 1,674
Other comprehensive income, net of tax effect:
Unrealized gains (losses) on securities
available for sale ........................ (52) 30 90 (37)
------- ------- ------- -------
Comprehensive income ......................... $ 512 $ 648 $ 1,746 $ 1,637
======= ======= ======= =======
5
BEDFORD BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
June 30
-----------------
2001 2000
---- ----
Operating activities:
Net Income ........................................................... $ 1,656 $ 1,674
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for credit losses ........................................ 120 90
Provision for depreciation and amortization ........................ 154 107
Amortization of investment security premiums and accretion of
discounts, net ..................................................... 4 3
(Increase) decrease in deferred income taxes ....................... 238 (86)
(Gain) loss on sale of loans, investments and foreclosed real estate (26) --
(Increase) decrease in accrued interest receivable ................. 98 (187)
(Increase) decrease in other assets ................................ (753) (64)
Increase (decrease) in other liabilities ........................... (36) (882)
-------- --------
Net cash provided by (used in) operating activities ............... 1,455 655
-------- --------
Investing activities:
Proceeds from the sale of available for sale investment securities . 2,500 4,664
Proceeds from the sale of marketable equity securities ............. 59 --
Proceeds from maturities of available for sale investment securities 2,500 509
Purchases of available for sale investment securities .............. (5,000) (1,500)
Purchase of Federal Home Loan Bank stock ........................... (400) (400)
Net increase in loans to customers ................................. (14,382) (20,595)
Principal collected on mortgage-backed securities .................. 2 2
Purchases of premises, equipment and leasehold improvements ........ (156) (198)
Proceeds from the sale of REO ...................................... -- (313)
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Net cash provided by (used in) investing activities ............... (14,877) (17,831)
-------- --------
Financing activities:
Exercise of stock options .......................................... 22 --
Allocation of ESOP and RRP shares .................................. 91 134
Dividends paid ..................................................... (664) (605)
Net increase (decrease) in customer deposits ....................... 10,751 10,604
Proceeds from (repayments of) advances and other borrowed money .... 6,000 10,000
Repurchase of stock ................................................ (414) (264)
Net increase (decrease) in advance payments from borrower for taxes
and insurance ...................................................... (276) (153)
Other, net ......................................................... 17 9
-------- --------
Net cash provided by financing activities ......................... 15,527 19,725
-------- --------
Increase (decrease) in cash and cash equivalents .................. 2,105 2,549
Cash and cash equivalents at beginning of period ...................... 5,512 2,744
-------- --------
Cash and cash equivalents at end of period ............................ $ 7,617 $ 5,293
======== ========
6
BEDFORD BANCSHARES, INC. AND SUBSIDIARY
Notes to Unaudited Interim Consolidated Financial Statements
June 30, 2001
NOTE 1: BASIS OF PRESENTATION
- ------------------------------
The accompanying unaudited interim consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
("GAAP") for interim financial information. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements.
The accompanying unaudited interim consolidated financial statements
include the accounts of Bedford Bancshares, Inc.,and its wholly owned
subsidiaries Bedford Federal Savings Bank and CVFS. All significant intercompany
balances and transactions have been eliminated in consolidation.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for the fair presentation have been
included. The results of operations for the interim period ended June 30, 2001
is not necessarily indicative of the results which may be expected for any
future period. For further information, refer to consolidated financial
statements and footnotes thereto included in the Corporation's Annual Report on
Form 10-KSB for the year ended September 30, 2000.
NOTE 2: EARNINGS PER SHARE
- ---------------------------
Earnings per share are calculated as follows:
Three Months Ended Nine Months Ended
June 30 June 30
----------------------- -------------------------
2001 2000 2001 2000
--------- --------- --------- ---------
Basic Earnings Per Share:
Net Income............................................ $564,000 $618,000 $1,656,000 $1,674,000
======== ======== ========== ==========
Average Shares Outstanding, Net of
Unallocated ESOP Shares (61,334 and 77,334
at June 30, 2001 and 2000, respectively).............. 2,050,367 2,071,937 2,069,099 2,078,569
========= ========= ========= =========
Basic Earnings Per Share.............................. $0.27 $0.30 $0.80 $0.81
===== ===== ===== =====
Diluted Earnings Per Share;
Net Income............................................ $564,000 $618,000 $1,656,000 $1,674,000
======== ======== ========== ==========
Average Shares Outstanding, Net of
unallocated ESOP Shares (61,334 and 77,334
at June 30, 2001 and 2000, respectively).............. 2,050,367 2,071,937 2,069,099 2,078,569
Dilutive effect of RRP Plan shares.................. 782 793 782 1,117
Dilutive effect of Stock Options.................... 85,902 55,378 85,902 59,167
--------- --------- --------- ---------
Average Shares Outstanding............................ 2,137,051 2,128,108 2,155,783 2,138,853
========= ========= ========= =========
Diluted Earnings Per Share............................ $0.26 $0.29 $0.77 $0.78
===== ===== ===== =====
7
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
- --------------------------
The Private Securities Litigation Reform Act of 1995 contains safe
harbor provisions regarding forward-looking statements. When used in this
discussion, the words, "believes", "anticipates", "contemplates", "expects", and
similar expressions are intended to identify forward-looking statements. Such
statements are subject to certain risks and uncertainties, which could cause
actual results to differ materially from those projected. Those risks and
uncertainties that may affect the operations performance, development and the
results of the Corporation's business include the following: changes in interest
rates, risks associated with the effect of opening a new branch, the ability to
control costs and expenses, and general economic conditions.
FINANCIAL CONDITION
- -------------------
At June 30, 2001, consolidated assets totaled $204.8 million, an
increase of $17.3 million from September 30, 2000. Assets increased primarily
due to the growth in the loan portfolio, which increased $14.3 million. The loan
growth was funded primarily by a $10.8 million rise in deposits and a $6 million
increase in FHLB advances.
RESULTS OF OPERATIONS
- ---------------------
General. Net income for the three months ended June 30, 2001 decreased
$54,000, or 8.7%, to $564,000 from $618,000 for the comparable 2000 period.. Net
income for the nine months ended June 30, 2001, was $1,656,000, a decrease of
$18,000, or 1.1%, from the $1,674,000 earned in the comparable 2000 period.
During the three and nine months ended June 30, 2001, the Corporation's
performance was impacted by the decline in interest rates and higher noninterest
expenses primarily related to compensation and benefits, and occupancy and
equipment expenditures. Although demand for mortgage financing remained strong
during the periods, net interest margin and spread declined 12 and 8 basis
points for the three months ended June 30, 2001 to 3.51% and 2.77%,
respectively, as a result of the lower rate environment. Similarly, net interest
margin and spread declined 9 and 14 basis points for the nine months ended June
30, 2001, to 3.50% and 2.73%, respectively. If the Federal reserve continues to
reduce short-term interest rates as currently predicted, the Corporation does
not expect their interest rate spreads and margins to significantly change in
the fourth quarter of fiscal 2001.
Interest Income. Interest income totaled $3.8 million for the three
months ended June 30, 2001, a $352,000 increase from the $3.4 million for the
comparable 2000 period. A $14.0 million increase in average loans receivable was
the primary reason for the increase.
8
For the nine months ended June 30, 2001, interest income totaled $11.1
million, a $1.4 million increase from the $9.8 million for the comparable 2000
period. An increase of $19.0 million in average loans receivable for the nine
months ended June 30, 2001 compared to the same nine months of 2000 combined
with a 22 basis improvement in the yield on average loans receivable were the
primary factors for the higher interest income.
Interest Expense. Interest expense totaled $2.1 million for the three
months ended June 30, 2001, a $247,000 increase from the $1.8 million for the
comparable 2000 period. A 23 basis point rise in the cost of average interest
bearing deposits plus an increase of $11.5 million in the average volume,
combined with a $5.8 million increase in average FHLB advances were the primary
reasons for the increase.
For the nine months ended June 30, 2001, interest expense totaled $6.2
million, a $1.1 million increase from the $5.1 million for the comparable 2000
period. Interest on deposits reflected an $808,000 increase, due to both higher
average volume and higher average cost, and interest on FHLB advances was up
$218,000 due primarily to an increase in average borrowings.
Net Interest Income. For the three months ended June 30, 2001, net
interest income was $1.7 million, up $105,000 from the net interest income
earned in the same period of 2000. A 10.3% rise in the level of average interest
earning assets was the primary reason for the increase in net interest income.
For the nine months ended June 30, 2001, net interest income was $5.0
million, up $358,000 from the net interest income earned in the same period of
2000. For the nine months ended June 30, 2001, average earning assets were
$189.1 million, up 10.9% from the average for the same period of 2000.
Provision for Loan Losses. The provision for loan losses was $45,000
for the three months ended June 30, 2001, compared to $30,000 for the same 2000
period. For the nine months ended June 30, 2001 the provision for loan losses
was $120,000 compared to $90,000 for the same period of 2000. For the three
months ended June 30, 2001, the Company experienced growth of 14.1% in
commercial loans. Additionally, for the nine months ended June 30, 2001, the
Company experienced growth of 12.0% in installment loans and 40.4% in commercial
loans. Management performs regular assessments of the credit risk in the loan
portfolio based on information available at such times, including the loan mix,
level of our nonperforming loans and assets, trends in the local real estate
market, and current and potential charge-offs.
Noninterest Income. For the three months ended June 30, 2001,
noninterest income was $291,000, up 15.0% from the $253,000 for the comparable
2000 period. Service charges and fees on loans were up $10,000 to $159,000 for
the third quarter of fiscal 2001 from $149,000 for the comparable period of
fiscal 2000 due primarily to a higher dollar amount of loans being closed. Other
customer service fees and commissions were up $22,000 due primarily to an
increase in income from transaction accounts. Other noninterest income increased
$6,000 to $21,000 for the three months ended June 30, 2001 from $14,000 for the
comparable 2000 period due to a $11,000 gain on the sale of maketable equity
available for sale.
9
For the nine months ended June 30, 2001, noninterest income was
$762,000 compared to $789,000 for the same period of 2000. Service charges and
fees on loans was down $55,000 due to the lower number and dollar amount of
loans closed. Other noninterest income was up $19,000 due to increased
commissions on the sale of mortgage insurance and the gain on the sale of
available for sale securities.
Noninterest Expense. Noninterest expense totaled $1.0 million for the three
months ended June 30, 2001, compared to $826,000 for the same three months of
fiscal 2000. Personnel compensation and benefits rose $97,000, to $562,000,
primarily due to an increase in staffing and an increase in benefit cost that
reflects the increase in the market value of the Company's common stock.
Occupancy and equipment expense was up $56,000 due primarily to expenses
associated with the operation of the New London branch, which was opened in
September of 2000, and expenses related to technology upgrades. Data processing
expense was up $10,000 due primarily to increases in transaction volume.
Professional fees were up $39,000 primarily due to higher legal expenses.
For the nine months ended June 30, 2001, noninterest expenses were
$2,945,000, compared to $2,576,000 for the comparable period of 2000. Personnel
compensation and benefits were up $128,000 due to staffing increases and higher
benefits costs. Occupancy and equipment expense was up $118,000 due primarily to
expenses associated with the New London office and expenses related to
technology upgrades. Data processing expenses were up $43,000 to increases in
volume and professional fees were up $101,000 due primarily to higher legal
expenses.
Provision for Income Taxes. The provision for income taxes was $345,000
for the three months ended June 30, 2001, down $36,000 from the $381,000
provision recorded in the same three months of fiscal 2000. The primary reason
for the decrease was the lower level of taxable income.
For the nine months ended June 30, 2001, the provision for income taxes
was $1.01 million, down 4.7% from the $1.06 million provision for the same
period of fiscal 2000. A lower level of taxable income is the primary reason for
the decline.
10
CAPITAL COMPLIANCE
- ------------------
The following table presents the Bank's compliance with its regulatory capital
requirements of June 30, 2001. (Dollar amounts in thousands).
June 30, 2001
-----------------------
Percentage
of assets
----------
GAAP Capital...................................... $20,479 9.97%
======= =====
Tangible capital.................................. $20,511 10.02%
Tangible capital requirement...................... $3,069 1.50%
------ -----
Excess............................................ $17,442 8.52%
======= =====
Core capital...................................... $20,511 10.02%
Core capital requirement.......................... 8,185 4.00%
----- -----
Excess............................................ $12,326 6.02%
======= =====
Total risk-based capital (1)...................... $21,385 16.47%
Total risk-based capital requirement (1).......... 10,388 8.00%
------ -----
Excess............................................ $10,997 8.47%
======= =====
- -------------------
(1) Based on risk-weighted assets of $129,855
Management believes that under current regulations, we will continue to
meet our minimum capital requirements in the foreseeable future. Events
beyond our control, such as changes in interest rates or a downturn in the
economy in areas in which we operate could adversely affect future earnings
and as a result, our ability to meet our future minimum capital
requirements.
LIQUIDITY
- ---------
Our liquidity is a measure of our ability to fund loans, pay deposit
withdrawals and other cash outflows in an efficient, cost effective manner. Our
primary sources of funds are deposits, and scheduled amortization and prepayment
of loans. In addition, we supplement our funding needs by borrowing funds from
the FHLB of Atlanta, (the "FHLB"). As of June 30, 2001, such borrowed funds
totaled $40 million. Loan payments and prepayments, deposits and borrowings are
greatly influenced by general interest rates, economic conditions and
competition.
The amount of certificate accounts which are scheduled to mature during
the next twelve months ending June 30, 2001, is approximately $60.8 million. To
the extent that these deposits do not remain with us upon maturity, we believe
that we can replace these funds with other deposits, FHLB advances or other
borrowings. It has been our experience that a substantial portion of such
maturing deposits remain with us.
At June 30, 2001, we had loan commitments outstanding of $22.7 million.
These commitments will be funded from deposit inflows, loan repayments and
borrowings.
11
BEDFORD BANCSHARES, INC. AND SUBSIDIARY
Key Operating Ratios
Three Months Ended Nine Months Ended
June 30 June 30
------- -------
2001(1) 2000(1) 2001(1) 2000(1)
------- ------- ------- -------
(Unaudited)
Basic earnings per share ....................... $0.27 $0.30 $0.80 $0.81
Diluted earnings per share...................... $0.26 $0.29 $0.77 $0.78
Return on average assets........................ 1.12% 1.35% 1.13% 1.27%
Return on average equity........................ 9.67% 11.34% 9.57% 10.40%
Interest rate spread............................ 2.77% 2.85% 2.73% 2.87%
Net interest margin............................. 3.51% 3.63% 3.51% 3.60%
Noninterest expense to average assets........... 2.08% 1.81% 2.01% 1.95%
Net charge-offs to average outstanding loans....
0.04% 0.04% 0.02% 0.05%
June 30 September 30
2001 2000
-------- ------------
(Dollars in thousands)
(Unaudited)
Nonaccrual loans.......................................... $416 $960
Repossessed real estate................................... 26 --
---- ----
Total nonperforming assets................................ $442 $960
==== ====
Allowance for credit losses to nonperforming assets....... 212.42% 88.55%
Nonperforming loans to total loans........................ 0.23% 0.57%
Nonperforming assets to total assets...................... 0.22% 0.51%
Book value per share ..................................... $11.09 $10.49
====== ======
- ------------------------
(1) The ratios for the three- and nine-month periods are annualized
12
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
-----------------
Neither the Corporation nor the Bank was engaged in any
legal proceedings of a material nature at June 30, 2001.
From time to time, the Corporation is a part to legal
proceedings in the ordinary course of business wherein it
enforces its security interest in loans.
Item 2. Changes in Securities
---------------------
Not applicable.
Item 3. Defaults upon Senior Securities
-------------------------------
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not applicable.
Item 5. Other Information
-----------------
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) List of Exhibits:
3(i) Restated Articles of Incorporation of Bedford
Bancshares, Inc.*
3(ii) Bylaws of Bedford Bancshares, Inc.*
4 Specimen of Stock Certificate*
10.1 1994 Stock Option Plan*
10.2 Recognition and Retention Plan and Trust Agreement
10.3 Employment Agreement between the Registrant and
H. K. Neal*
(b) Reports on Form 8-K
Not applicable.
*Incorporated by reference to the Registrant's Form 10-KSB
filed with the SEC on December 9, 1994.
13
BEDFORD BANCSHARES, INC. AND SUBSIDIARY
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.
BEDFORD BANCSHARES, INC.
Date: August 7, 2001 By: /s/ Harold K. Neal
------------------
Harold K. Neal
President and
Chief Executive Officer
(Principal Executive Officer)
Date: August 7, 2001 By: /s/ James W. Smith
------------------
James W. Smith
Vice President and Treasurer
(Principal Accounting and
Financial Officer)
14