UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
______________________________
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Quarterly Period Ended March 31, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________ to _________
Commission File Number 0-50322
COMMUNITY FIRST BANCORP, INC.
- --------------------------------------------------------------------------------
(Exact name of Small Business Issuer as specified in its Charter)
Maryland 36-4526348
------------------------------ -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
240 South Main Street, Madisonville, Kentucky 42431
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(270) 821-7211
- --------------------------------------------------------------------------------
(Issuer's telephone number)
Not applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) 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 March 31, 2003, there were no shares of the Registrant's common
stock, par value $.01 per share, outstanding.
Transitional Small Business Issuer Disclosure Format (check one):
Yes X No
--- ---
* * * * * *
NOTE: On May 14, 2003, the Registrant's Registration Statement on Form SB-2 was
declared effective by the Securities and Exchange Commission. The Registration
Statement and the related Prospectus which formed a part thereof related to the
offering of the Registrant's common stock in connection with the conversion from
mutual to stock form (the "Conversion") of Community First Bank (the "Bank").
Upon consummation of the Conversion on June 26, 2003, the Bank became a wholly
owned subsidiary of the Registrant, and the Registrant closed the public
offering of its common stock. The Registrant had not engaged in any business
prior to the consummation of the Conversion. The Registrant did not have any
material assets or liabilities prior to the consummation of the Conversion. The
information presented in this Form 10-QSB therefore relates solely to the
business conducted by the Bank.
1
COMMUNITY FIRST BANK
Madisonville, Kentucky
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Condition as of March 31, 2003
and December 31, 2002 (Unaudited) 3
Statements of Income - (Unaudited) for the
three months ended March 31, 2003 and 2002 4
Statements of Cash Flows - (Unaudited) for the
three months ended March 31, 2003 and 2002 5
Notes to Financial Statements (Unaudited) 7
Item 2. Management's Discussion and Analysis
or Plan of Operation 9
Item 3. Controls and Procedures 12
PART II. OTHER INFORMATION
Item 2. Changes in Securities 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures and Certifications 14
ITEM 1. FINANCIAL STATEMENTS
COMMUNITY FIRST BANK
STATEMENTS OF CONDITION
(Unaudited)
March 31, December 31,
2003 2002
------------ ------------
Assets
Cash and cash equivalents:
Cash and due from banks $ 730,630 $ 733,126
Interest-bearing deposits in other banks 534,300 --
Time deposits 25,000 25,000
------------ ------------
Total cash and cash equivalents 1,289,930 758,126
Investment securities held-to-maturity 1,889,606 1,901,750
Loans, net of unearned interest 27,866,040 25,815,638
Allowance for loan losses (124,282) (105,868)
Accrued interest receivable 141,047 135,220
Premises and equipment, net 766,208 772,662
Foreclosed real estate -- 17,000
Stock in Federal Home Loan Bank, at cost 640,300 634,100
Other assets 65,033 56,197
------------ ------------
Total assets $ 32,533,883 $ 29,967,825
============ ============
Liabilities and Equity
Liabilities:
Deposits $ 30,634,314 $ 28,128,252
Accrued interest payable and other liabilities
92,517 90,707
------------ ------------
Total liabilities 30,726,831 28,218,959
------------ ------------
Commitments and contingencies -- --
------------ ------------
Association equity:
Retained earnings - substantially
restricted 1,807,052 1,748,866
------------ ------------
Total equity 1,807,052 1,748,866
------------ ------------
Total liabilities and equity $ 32,533,883 $ 29,967,825
============ ============
See notes to financial statements.
3
COMMUNITY FIRST BANK
STATEMENTS OF INCOME
For the three months ended March 31, 2003 and 2002
(Unaudited)
Three Months Ended
March 31,
---------------------
2003 2002
--------- ---------
Interest income:
Interest and fees on loans $ 483,545 $ 397,857
Interest on investment securities 28,811 53,635
Federal Home Loan Bank dividends 6,254 --
--------- ---------
Total interest income 518,610 451,492
--------- ---------
Interest expense:
Interest on deposits 194,862 246,130
Interest on Federal Home Loan Bank advances 2,424 5,225
Interest on other borrowings -- --
--------- ---------
Total interest expense 197,286 251,355
--------- ---------
Net interest income 321,324 200,137
Provision for loan losses 19,000 2,200
--------- ---------
Net interest income after provision for
loan losses 302,324 197,937
--------- ---------
Other income:
Service charges and fees 33,414 24,726
Loss on sale of fixed assets -- (3,600)
Insurance commissions and premiums 1,866 2,208
Other income 7,838 15,463
--------- ---------
43,118 38,797
--------- ---------
Other expenses:
Compensation and benefits 119,455 110,614
Directors fees 10,800 10,800
Occupancy expense 31,374 23,214
Insurance premiums 5,628 2,397
Data processing 39,383 37,587
Advertising 18,055 16,382
Office supplies and postage 14,360 8,729
Payroll and other taxes 17,133 7,746
Professional fees 7,236 9,932
Other operating expenses 23,832 23,041
--------- ---------
287,256 250,442
--------- ---------
Income (loss) before income taxes 58,186 (13,708)
Income tax expense -- --
--------- ---------
Net income (loss) $ 58,186 $ (13,708)
========= =========
See notes to financial statements.
4
COMMUNITY FIRST BANK
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2003 and 2002
(Unaudited)
Three Months Ended
March 31,
--------------------------
2003 2002
----------- -----------
Cash flows from operating activities:
Net income (loss) $ 58,186 $ (13,708)
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities:
FHLB stock dividend (6,200) (6,700)
Provision for loan losses 19,000 2,200
Depreciation, amortization and accretion 12,000 8,764
Loss on sale of fixed assets -- 3,600
Loss on sale of foreclosed assets -- 20
Change in assets and liabilities:
Accrued interest receivable and other assets (14,664) (20,939)
Accrued interest payable and other liabilities 1,810 (18,974)
----------- -----------
Net cash provided (used) by
operating activities 70,132 (45,737)
----------- -----------
Cash flows from investing activities:
Net increase in loans (2,050,988) 113,611
Proceeds from maturities/calls of held-to-maturity
securities 12,144 774,348
Proceeds from sale of foreclosed assets -- 1,680
Purchases of premises and equipment (5,546) (100,725)
----------- -----------
Net cash provided (used) by
investing activities (2,044,390) 788,914
----------- -----------
Cash flows from financing activities:
Net increase in deposits 2,506,062 976,714
Payments on short-term borrowings (1,000,000) (1,000,000)
Proceeds from short-term borrowings 1,000,000 1,000,000
----------- -----------
Net cash provided by financing activities 2,506,062 976,714
----------- -----------
Net increase in cash and cash equivalents 531,804 1,719,891
Cash and cash equivalents, beginning of period 758,126 2,306,937
----------- -----------
Cash and cash equivalents, end of period $ 1,289,930 $ 4,026,828
=========== ===========
See notes to financial statements.
5
COMMUNITY FIRST BANK
STATEMENTS OF CASH FLOWS, Continued
For the three months ended March 31, 2003 and 2002
(Unaudited)
Three Months Ended
March 31,
----------------------
2003 2002
---------- ----------
Supplemental Disclosures:
Cash paid for interest $ 196,695 $ 319,566
========== ==========
Noncash Transactions:
Federal Home Loan Bank Stock dividend received $ 6,200 $ 6,700
========== ==========
Loans transferred to foreclosed real estate $ -- $ 7,400
========== ==========
Loans to facilitate the sale of foreclosed real estate $ -- $ 15,300
========== ==========
See notes to financial statements.
6
COMMUNITY FIRST BANK
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. COMMUNITY FIRST BANCORP, INC.
Community First Bancorp, Inc. (the "Company") was incorporated under
the laws of the State of Maryland for the purpose of becoming the
holding company of Community First Bank (the "Bank") in connection with
the Bank's conversion from a federally chartered mutual savings bank to
a federally chartered stock savings bank. On May 23, 2003, the Company
commenced a subscription offering of its shares in connection with the
Bank's conversion. The Company's offering and the Bank's conversion
closed on June 26, 2003. A total of 277,725 shares were sold at $10.00
per share. Prior to consummation of the conversion, the Company had no
assets or liabilities, and as of March 31, 2003, no shares had been
issued.
2. BASIS OF PRESENTATION
The accompanying unaudited 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
statement of financial condition, statement of income and statement of
cash flows in conformity with generally accepted accounting principles.
However, all adjustments (all of which are of a normal recurring
nature) which are, in the opinion of management, necessary for the fair
presentation of the interim financial statements have been included.
The statement of income for periods presented is not necessarily
indicative of the results which may be expected for the entire year.
3. EARNINGS PER SHARE
As of March 31, 2003, neither the Company nor the Bank had any shares
of common stock outstanding. As such the statements of income do not
disclose earnings per share as would otherwise be required.
4. PLAN OF CONVERSION
On March 13, 2003, the Board of Directors of the Bank, subject to
regulatory approval, adopted a proposed Plan of Conversion (the "Plan")
to convert from a federally chartered mutual savings bank to a
federally chartered stock savings bank. The Bank will become a wholly
owned subsidiary of a concurrently formed holding company. The Plan
provides that the holding company will offer nontransferable
subscription rights to purchase common stock of the holding company.
The rights will be offered first to eligible account holders, the
tax-qualified employee stock benefit plans, supplemental eligible
account holders and other members. Any shares remaining may then be
offered to the general public.
The Plan provides for the establishment, upon completion of the
conversion, of a special "liquidation account" in an amount equal to
the Bank's net worth as of the date of conversion. This account is for
the benefit of eligible account holders and supplemental eligible
account holders in the event of liquidation of the Bank. The interest
7
as to each deposit account will be in the same proportion of the total
liquidation account as the balance of the deposit account on the
qualifying dates was to the aggregate balance of all deposit account of
eligible account holders and supplemental account holders on the
qualifying dates. The liquidation account will be reduced in a
proportionate amount if the amount in any deposit account on any annual
closing date is less than it was on the respective qualifying dates.
The liquidation account will not be increased despite any increase in a
deposit account after the respective qualifying dates.
The regulations of the OTS prohibit the Bank from declaring or paying a
cash dividend if the effect thereof would cause the Bank's regulatory
capital to be reduced below either the amount required for the
liquidation account or the federal regulatory capital requirements.
Costs associated with the conversion will be deferred and deducted from
the proceeds of the stock offering. If, for any reason, the offering is
not successful, the deferred costs will be charged to operations. As of
March 31, 2003, there was $20,900 of costs associated with the
conversion that have been deferred.
8
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
GENERAL
The following discussion and analysis is intended to assist in understanding the
financial condition and results of operations of the Bank.
FORWARD-LOOKING STATEMENTS
When used in this discussion and elsewhere in this Quarterly Report on Form
10-QSB, the words or phrases "will likely result," "are expected to," will
continue," "is anticipated," "estimate," "project," or similar expressions are
intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. The Bank cautions readers not
to place undue reliance on any such forward-looking statements, which speak only
as of the date made, and advises readers that various factors, including
regional and national economic conditions, substantial changes in level of
market interest rates, credit and other risks of lending and investment
activities and competitive and regulatory factors could affect the Company's
financial performance and could cause the Bank's actual results for future
periods to differ materially from those anticipated or projected. The Bank does
not undertake and specifically disclaims any obligation to update any
forward-looking statements to reflect occurrence of anticipated or unanticipated
events or circumstances after the date of such statements.
COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED MARCH
31, 2003 AND 2002
Net Income. Net income for the quarter ended March 31, 2003 was $58,000 compared
to a net loss of $14,000 for the same period last year. The Bank's net income
for the first three months of fiscal year 2003 reflects management's ongoing
efforts to restore the Bank to profitability.
Net Interest Income. Net interest income increased $122,000 or 61.0% to $322,000
for the three months ended March 31, 2003 compared to $200,000 for the three
months ended March 31, 2002. This increase reflects a shift in interest-earning
assets into higher-yielding loans. During the three months ended March 31, 2003,
net loans averaged $27.6 million for the period as compared to $22.1 million
during the first three months of fiscal year 2002. While interest rates
decreased during this period, interest income increased by $68,000 primarily due
to higher outstanding loan balances. Net interest income also benefitted from
reduced deposit costs in the lower interest rate environment as higher costing
certificates of deposit matured. Accordingly, interest expense decreased by
$54,000. The Bank's interest rate spread increased to 4.23% for the three months
ended March 31, 2003 compared to 3.43% for the three months ended March 31,
2002. Net interest margin increased to 4.24% for the 2003 period compared to
2.76% for the 2002 period.
Provision for Loan Losses. The provision for loan losses was $19,000 and $6,000
for the quarters ended March 31, 2003 and 2002, respectively. The Bank makes
provisions for loan losses in amounts deemed necessary to maintain the adequacy
of the allowance for loan losses. At March 31, 2003, the Bank's allowance for
loan losses was $124,000 or 0.45% of the gross loan portfolio.
9
Other Income. Other income was $43,000 and $42,000 for the quarters ended March
31, 2003 and 2002, respectively. The increase for the most recent quarter of
$1,000 or 2.4% is reflective of management's ongoing efforts to enhance fee
income.
Other Expenses. Other expenses were $288,000 and $250,000 for the quarters ended
March 31, 2003 and 2002, respectively. The increase for the quarter of $38,000
or 15.2% was due primarily to higher occupancy and compensation expense.
Income Tax Expense. The Bank did not record federal income tax expense for
either period. The Bank provides for both the current and deferred tax effects
of the transactions reported in its financial statements and established
deferred tax assets and liabilities for the temporary differences between the
financial reporting and tax bases of its assets and liabilities. The Bank,
however, establishes valuation allowances for its net deferred tax assets unless
it is more likely than not that these net deferred tax assets will be realized.
Based on its current earnings and other factors, the Bank determined in 2002
that it was appropriate to establish a valuation allowance for its net deferred
tax assets. At March 31, 2003, the Bank had $10,000 in net deferred tax assets
which were reserved through the recording of valuation allowances. When the Bank
determines that some or all of net deferred tax assets will be realizable, the
corresponding deferred tax valuation allowance will be reduced accordingly.
COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2003 AND DECEMBER 31, 2002
The Bank's total assets as of March 31, 2003 were $32.5 million, an increase of
$2.6 million from December 31, 2002's level of $30.0 million. The increase was
due to growth in the loan portfolio. Net loans receivable increased by $2.0
million, or 7.8%, which reflected our continued marketing efforts. Liabilities
increased by $2.5 million, or 8.89%, to $30.7 million due primarily to a $2.5
million, or 8.9%, increase in deposits as the Bank continued to attract deposits
locally at favorable rates. The $58,000 increase in equity reflected our
earnings for the period. At March 31, 2003, the Bank was in compliance with all
applicable regulatory capital requirements with tangible and core capital equal
to 5.55% of adjusted total assets and total risk-based capital equal to 10.53%
of risk-weighted assets.
ASSET QUALITY
The following table sets forth information regarding the Bank's nonperforming
assets at the dates indicated.
March 31, December 31,
2003 2002
--- ---
(In thousands)
Restructured loans $ -- $ --
Non-accrual loans -- 53
Accruing loans past due 90 days or more 29 33
---- ----
Total non-performing loans 29 86
Foreclosed assets -- --
---- ----
Total non-performing assets $ 29 $ 86
==== ====
10
At March 31, 2003, there were no loans outstanding not reflected in the above
table as to which known information about possible credit problems of borrowers
caused management to have serious doubts as to the ability of such borrowers to
comply with present loan repayment terms.
An analysis of the changes in the allowance for loan losses is as follows:
Three Months Ended March 31,
-------------------------------
2003 2002
--------- ---------
Balance, beginning of period $ 105,868 $ 105,000
Loans charged off (1,031) (8,933)
Loan recoveries 445 8,161
--------- ---------
Net charge-offs (586) (772)
Provision for loan losses 19,000 2,200
--------- ---------
Balance, end of period $ 124,282 $ 106,428
========= =========
LIQUIDITY AND CAPITAL RESOURCES
The Company currently has no operating business and does not have material
funding needs. In the future, the Company may require funds for dividends and
tax payments for which it will rely on dividends and other distributions from
the Bank. The Bank is subject to various regulatory restrictions on the payment
of dividends.
The Bank's sources of funds for lending activities and operations are deposits
from its primary market area, advances from the FHLB of Cincinnati, principal
and interest payments on loans, interest received on other investments and
federal funds purchased. Its principal funding commitments are for the
origination of loans, the payment of maturing deposits, and principal and
interest payments on advances from the FHLB. Deposits are considered a primary
source of funds supporting the Bank's lending and investment activities.
Cash and cash equivalents (cash due from banks, interest-bearing deposits in
other financial institutions, and federal funds sold), as of March 31, 2003,
totaled $1.3 million compared to $4.0 million at March 31, 2002. The Bank's cash
flows were provided mainly by financing activities, including $2.5 million from
net deposit increases. Operating activities provided $70,132 in cash for the
three months ended March 31, 2003 compared to $45,737 used in cash for the three
months ended March 31, 2002. The Bank used cash flows for its investing
activities primarily to fund an increase in gross loans of $2.1 million.
As a federal savings bank, the Bank is subject to regulatory capital
requirements of Office of Thrift Supervision ("OTS"). In order to be well
capitalized under OTS regulations, the Bank must maintain a leverage ratio of
Tier I Capital to average assets of at least 5% and ratios of Tier I and total
capital to risk-weighted assets of at least 6.0% and 10.0% respectively. At
March 31, 2003, the Bank satisfied the capital requirements for classification
as well capitalized under OTS regulations.
11
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.
12
Part II
OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
---------------------
(d) On May 14, 2003, the Securities and Exchange Commission declared
the registrant's Registration Statement on Form SB-2 (Commission File No.
333-104226) effective. The Registration Statement covered the sale by the
registrant of up to 277,725 shares of its common stock, $.01 par value, in
connection with the conversion to stock form of Community First Bank,
Madisonville, Kentucky (the "Bank"). The offering was commenced on May 23, 2003
and terminated on June 17, 2003 subject to approval of the conversion by the
Bank's members at a special meeting held on June 23, 2003. The conversion was
completed on June 26, 2003 with 277,725 shares sold at $10.00 per share for
aggregate proceeds of $2,777,250. The registrant estimates that it incurred
approximately $285,000 in expenses in the offering (including approximately
$100,000 in fees and reimbursable expenses paid to Keefe, Bruyette & Woods, Inc.
for its services as marketing agent) for estimated net proceeds of approximately
$2.5 million. The registrant used approximately 95% of the net proceeds to
acquire all of the shares of capital stock to be issued by the Bank in
connection with the conversion and retained the remainder of the proceeds for
ongoing expenses. All payments of proceeds or expenses were made to persons
other than directors, officers, general partners of the registrant or their
associates, persons owning 10% or more of any class of securities of the
registrant or affiliates of the registrant.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) The following exhibits are either being filed with or
incorporated by reference in this quarterly report on Form
10-QSB:
Number Description
------ -----------
3.1 Articles of Incorporation *
3.2 Bylaws *
4 Form of Common Stock Certificate *
10.1 Employment Agreement with William M. Tandy *
99.1 Certification under Section 906 of
Sarbanes-Oxley Act of 2002
-----------------
*Incorporated by reference from the Registrant's Registration Statement
on Form SB-2 (File No. 333-104226).
(b) During the quarter ended March 31, 2003, the Registrant did not
file any current reports on Form 8-K.
13
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
COMMUNITY FIRST BANCORP, INC.
Date: June 30, 2003 /s/William M. Tandy
--------------------------------------------
William M. Tandy, President
(Duly Authorized Representative)
Date: June 30, 2003 /s/Michael D. Wortham
--------------------------------------------
Michael D. Wortham, Vice President
(Chief Financial Officer)
CERTIFICATION
I, William M. Tandy, Chief Executive Officer of Community First Bancorp,
Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Community First
Bancorp, 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 registrant's board of directors (or persons performing 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: June 30, 2003 /s/William M. Tandy
--------------------------------------------
William M. Tandy
Chief Executive Officer
CERTIFICATION
I, Michael D. Wortham, Chief Financial Officer of Community First Bancorp,
Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Community First
Bancorp, 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 registrant's board of directors (or persons performing 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: June 30, 2003 /s/Michael D. Wortham
--------------------------------------------
Michael D. Wortham
Chief Financial Officer
Exhibit 99.1
CERTIFICATION PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
The undersigned executive officers of the Registrant hereby certify to
the best of their knowledge that this Quarterly Report on Form 10-QSB for the
quarter ended March 31, 2003 (the "Report") fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the
information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Registrant.
Date: June 30, 2003 /s/William M. Tandy
--------------------------------------------
Name: William M. Tandy
Title:Chief Executive Officer
Date: June 30, 2003 /s/Michael D. Wortham
--------------------------------------------
Name: Michael D. Wortham
Title:Chief Financial
Officer