FORM 10 - Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended June 30, 2002 Commission file number 33-18888
------------- --------
ORRSTOWN FINANCIAL SERVICES, INC
--------------------------------
(Exact name of registrant as specified in its charter)
Commonwealth of Pennsylvania 23-2530374
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
77 East King Street 17257
P.O. Box 250, Shippensburg, Pennsylvania -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (717) 532-6114
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filled by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for 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
--- ---
Class Outstanding at July 25, 2002
- ---------------------------- ----------------------------
(Common Stock, no par value) 2,390,624
Page 1 of 21
ORRSTOWN FINANCIAL SERVICES, INC.
INDEX
Page
Part I - FINANCIAL INFORMATION
Item 1. Financial statements (unaudited)
Condensed consolidated balance sheets - June 30, 2002
and December 31, 2001 4
Condensed consolidated statements of income - Three months
ended June 30, 2002 and 2001 5
Condensed consolidated statements of income - Six months
ended June 30, 2002 and 2001 6
Condensed consolidated statements of comprehensive income -
Three months & Six months ended June 30, 2002 and 2001 7
Condensed consolidated statements of cash flows - Six
Months ended June 30, 2002 and 2001 8
Notes to condensed consolidated financial statements 9 - 10
Item 2. Management's discussion and analysis of financial
condition and results of operations 11 - 15
PART II - OTHER INFORMATION
Other Information 17
Signatures 18
Exhibits 19 - 21
Page 2 of 21
PART I - FINANCIAL INFORMATION
Page 3 of 21
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ORRSTOWN FINANCIAL SERVICES, INC.
AND ITS WHOLLY-OWNED SUBSIDIARY, ORRSTOWN BANK
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Unaudited) (Audited)*
June 30, December 31,
(Dollars in Thousands) 2002 2001
ASSETS
Cash and due from banks $ 12,692 $ 12,650
Interest bearing deposits with banks 1,099 679
Federal funds sold 11,973 24,347
Securities available for sale 77,191 68,422
Federal Home Loan Bank, Federal Reserve and
Atlantic Central Bankers Bank Stock, at cost
which approximates market value 1,804 1,703
Loans 262,976 249,816
Allowance for loan losses (3,354) (3,104)
--------- ---------
Net Loans 259,622 246,712
Premises and equipment, net 9,487 9,019
Accrued Interest receivable 1,665 1,541
Cash value-life insurance 6,040 5,923
Other assets 2,460 2,732
--------- ---------
Total assets $ 384,033 $ 373,728
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing 37,952 39,881
Interest bearing 254,567 241,287
--------- ---------
Total deposits 292,519 281,168
Federal funds purchased and other short
term borrowed funds 22,493 31,531
Long term borrowed funds 31,513 26,512
Accrued interest payable 283 373
Other liabilities 2,943 2,982
--------- ---------
Total liabilities 349,751 342,566
--------- ---------
Common stock, no par value-$.1041 stated value
per share at June 30, 2002 and December 31,
2001, 10,000,000 shares authorized with
2,390,624 shares issued at June 30, 2002
and 2,378,608 issued at December 31, 2001 249 248
Additional paid - in capital 25,558 25,077
Retained earnings 7,577 5,557
Accumulated other comprehensive income 898 280
--------- ---------
Total stockholders' equity 34,282 31,162
--------- ---------
Total liabilities and stockholders' equity $ 384,033 $ 373,728
========= =========
*Condensed from audited financial statements
The accompanying notes are an integral part of these
condensed financial statements.
Page 4 of 21
ORRSTOWN FINANCIAL SERVICES, INC.
AND ITS WHOLLY-OWNED SUBSIDIARY, ORRSTOWN BANK
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended
June June
(Dollars in Thousands) 2002 2001
INTEREST INCOME
Interest and fees on loans $ 4,599 $ 4,822
Interest on federal funds sold 57 149
Interest and dividends on investment securities 1,066 957
Interest income on deposits with banks 5 4
------- -------
Total interest income 5,727 5,932
------- -------
INTEREST EXPENSE
Interest on deposits 1,544 2,125
Interest on borrowed money 490 569
------- -------
Total interest expense 2,034 2,694
------- -------
Net interest income 3,693 3,238
Provision for loan losses 150 60
------- -------
Net interest income after provision for loan losses 3,543 3,178
------- -------
OTHER INCOME
Service charges on deposits 548 500
Other service charges 249 316
Trust department income 381 312
Brokerage income 132 62
Other income 82 80
Securities gains / (losses) 17 (2)
------- -------
Total other income 1,409 1,268
------- -------
OTHER EXPENSES
Salaries and employee benefits 1,433 1,213
Net occupancy and equipment expenses 435 427
Other operating expenses 945 1,015
------- -------
Total other expense 2,813 2,655
------- -------
Income before income tax 2,139 1,791
Income tax expenses 642 500
------- -------
Net income $ 1,497 $ 1,291
======= =======
PER SHARE DATA
Earnings per share
Basic earnings per share $ 0.63 $ 0.55
Weighted average number of shares outstanding 2,389,059 2,363,577
Diluted earnings per share $ 0.62 $ 0.54
Weighted average number of shares outstanding 2,433,690 2,386,868
Dividends per share $ 0.170 $ 0.143
The accompanying notes are an integral part of these
condensed financial statements.
Page 5 of 21
ORRSTOWN FINANCIAL SERVICES, INC.
AND ITS WHOLLY-OWNED SUBSIDIARY, ORRSTOWN BANK
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Six Months Ended
June June
(Dollars in Thousands) 2002 2001
INTEREST INCOME
Interest and fees on loans $ 9,141 $ 9,470
Interest on federal funds sold 113 187
Interest and dividends on investment securities 2,068 2,151
Interest income on deposits with banks 10 6
-------- --------
Total interest income 11,332 11,814
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INTEREST EXPENSE
Interest on deposits 3,152 4,348
Interest on borrowed money 944 1,181
-------- --------
Total interest expense 4,096 5,529
-------- --------
Net interest income 7,236 6,285
Provision for loan losses 300 120
-------- --------
Net interest income after provision for loan losses 6,936 6,165
-------- --------
OTHER INCOME
Service charges on deposits 1,024 912
Other service charges 468 454
Trust department income 703 608
Brokerage income 212 130
Other income 162 164
Securities gains / (losses) 18 31
-------- --------
Total other income 2,587 2,299
-------- --------
OTHER EXPENSES
Salaries and employee benefits 2,912 2,497
Net occupancy and equipment expenses 863 839
Other operating expenses 1,726 1,776
-------- --------
Total other expense 5,501 5,112
-------- --------
Income before income tax 4,022 3,352
Income tax expenses 1,191 936
-------- --------
Net income $ 2,831 $ 2,416
======== ========
PER SHARE DATA
Earnings per share
Basic earnings per share $ 1.19 $ 1.03
Weighted average number of shares outstanding 2,386,211 2,360,493
Diluted earnings per share $ 1.17 $ 1.01
Weighted average number of shares outstanding 2,429,067 2,382,158
Dividends per share $ 0.340 $ 0.286
The accompanying notes are an integral part of these
condensed financial statements.
Page 6 of 21
ORRSTOWN FINANCIAL SERVICES, INC.
AND ITS WHOLLY-OWNED SUBSIDIARY, ORRSTOWN BANK
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Three Months Ended
June June
(Dollars in Thousands) 2002 2001
COMPREHENSIVE INCOME
Net Income $ 1,497 $ 1,291
Other comprehensive income, net of tax
Unrealized gain (loss) on investment securities
available for sale 722 (494)
------- -------
Comprehensive Income $ 2,219 $ 797
======= =======
Six Months Ended
June June
(Dollars in Thousands) 2002 2001
COMPREHENSIVE INCOME
Net Income $ 2,831 $ 2,416
Other comprehensive income, net of tax
Unrealized gain (loss) on investment securities
available for sale 618 195
------- -------
Comprehensive Income $ 3,449 $ 2,611
======= =======
The accompanying notes are an integral part of these
condensed financial statements.
Page 7 of 21
ORRSTOWN FINANCIAL SERVICES, INC.
AND ITS WHOLLY-OWNED SUBSIDIARY, ORRSTOWN BANK
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended
June June
(Dollars in Thousands) 2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,831 $ 2,416
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 382 422
Provision for loan losses 300 120
Other, net (411) (340)
------- -------
Net cash provided by operating activities 3,102 2,618
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Net (increase) decrease in interest bearing
deposits with banks (420) (498)
Purchases of available for sale securities (15,122) (17,265)
Sales and maturities of available for sale
securities 7,284 23,737
Net (purchases) redemption of FHLB Stock (101) 0
Net (increase) in loans (13,210) (30,392)
Purchases of bank premises and equipment (850) (247)
------- -------
Net cash provided (used) by investing activities (22,419) (24,665)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits 11,352 13,373
Cash dividends paid (812) (675)
Proceeds from sale of stock 483 476
Net increase (decrease) in short term purchased
funds (9,038) 7,472
Proceeds in long term debt 5,000 0
Payments on long term debt 0 (28)
------- -------
Net cash provided by financing activities 6,985 20,618
------- -------
Net increase (decrease) in cash and cash
Equivalents (12,332) (1,429)
Cash and cash equivalents at beginning of period 36,997 11,021
-------- -------
Cash and cash equivalents at end of period $ 24,665 $ 9,592
======== =======
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 4,186 $ 5,764
Income Taxes 1,135 930
Supplemental schedule of noncash investing and financing activities:
Unrealized gain (loss) on investments available for
sale (net of deferred taxes of $318 and $100 at
June 30, 2002 and 2001,respectively) 618 195
The accompanying notes are an integral part of these
condensed financial statements.
Page 8 of 21
ORRSTOWN FINANCIAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002
(UNAUDITED)
Review of Interim Financial Statements
The condensed consolidated financial statements as of and for the three and six
month periods ended June 30, 2002 and 2001 have been reviewed by independent
certified public accountants. Their report on their review is attached as
Exhibit 99 to this 10-Q
NOTE 1. Basis of Presentation
The financial information presented at and for the three and six month periods
ended June 30, 2002 and 2001 is unaudited. Information presented at December 31,
2001 is condensed from audited year-end financial statements. However, unaudited
information reflects all adjustments (consisting solely of normal recurring
adjustments) that are, in the opinion of management, necessary for a fair
presentation of the financial position, results of operations and cash flows for
the interim period.
NOTE 2. Principles of Consolidation
The consolidated financial statements include the accounts of the corporation
and its wholly-owned subsidiary, Orrstown Bank. All significant intercompany
transactions and accounts have been eliminated.
NOTE 3. Cash Flows
For purposes of the statements of cash flows, the corporation has defined cash
and cash equivalents as those amounts included in the balance sheet captions
"cash and due from banks" and "federal funds sold". As permitted by Statement of
Financial Accounting Standards No.104, the corporation has elected to present
the net increase or decrease in deposits in banks, loans and deposits in the
statement of cash flows.
NOTE 4. Federal Income Taxes
For financial reporting purposes the provision for loan losses charged to
operating expense is based on management's judgment, whereas for federal income
tax purposes, the amount allowable under present tax law is deducted.
Additionally, certain expenses are charged to operating expense in the period
the liability is incurred for financial reporting purposes, whereas for federal
income tax purposes, these expenses are deducted when paid. As a result of these
timing differences, deferred income taxes are provided in the financial
statements. Income tax expense is less than the amount calculated using the
statutory tax rate as a result of tax exempt income earned primarily from state
and political subdivision obligations.
Page 9 of 21
NOTE 5. Other Commitments
In the normal course of business, the bank makes various commitments and incurs
certain contingent liabilities which are not reflected in the accompanying
financial statements. These commitments include various guarantees and
commitments to extend credit and the bank does not anticipate any losses as a
result of these transactions.
NOTE 6. Changes in Common Stock
During July 2001 the Board of Directors of Orrstown Financial Services, Inc.
approved a 5% stock dividend, payable September 15, 2001 to shareholders of
record August 1, 2001. All per share amounts have been adjusted to give
retroactive recognition to the 5% stock dividend paid September 15, 2001.
NOTE 7. Investment Securities
Management determines the appropriate classification of securities at the time
of purchase. If management has the intent and the corporation has the ability at
the time of purchase to hold securities until maturity or on a long - term
basis, they are classified as securities held to maturity and carried at
amortized historical cost. Securities to be held for indefinite periods of time
and not intended to be held to maturity or on a long - term basis are classified
as available for sale and carried at fair value. Securities held for indefinite
periods of time include securities that management intends to use as part of its
asset and liability management strategy and that may be sold in response to
changes in interest rates, resultant prepayment risk and other factors related
to interest rate and resultant prepayment risk changes.
Realized gains and losses on dispositions are based on the net proceeds and the
adjusted book value of the securities sold, using the specific identification
method. Unrealized gains and losses on investment securities available for sale
are based on the difference between book value and fair value of each security.
These gains and losses are credited or charged to shareholders' equity, whereas
realized gains and losses flow through the corporation's operations.
Management has classified all investments securities as "available for sale". At
June 30, 2002 fair value exceeded amortized cost by $1,360,000. In stockholders'
equity, the balance of accumulated other comprehensive income increased to
$898,000 after recognizing the tax effects of the unrealized gains. At December
31, 2001, fair value exceeded amortized cost by $425,000 increasing accumulated
other comprehensive income to $280,000 after recognizing the tax effects of the
unrealized gains.
Page 10 of 21
ORRSTOWN FINANCIAL SERVICES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Summary
Orrstown Financial Services, Inc. recorded net income of $1,497,000 for the
second quarter of 2002 compared to $1,291,000 for the same period in 2001,
representing an increase of $206,000 or 16.0%. Basic earnings per share was
$0.63 for the second quarter of 2002 up $0.08 from the $0.55 earned during the
second quarter of 2001.
Net income for the first six months of 2002 was $2,831,000 compared to
$2,416,000 for the same period in 2001, representing an increase of $415,000 or
17.2%. Net income per share for the first six months of 2002 was $1.19 up form
the $1.03 per share realized during the six months ended June 30, 2001. All per
share amounts have been restated to reflect the 5% stock dividend paid to
shareholders on September 15, 2001.
The following statistics compare 2002's second quarter and year-to-date
performance to that of 2001:
Three Months Ended Six Months Ended
June June June June
2002 2001 2002 2001
Return on average assets 1.60% 1.58% 1.55% 1.53%
Return on average equity 18.08% 17.82% 17.52% 17.21%
Average equity / Average assets 8.82% 8.89% 8.82% 8.87%
A more detailed discussion of the elements having the greatest impact on net
income follows.
Net Interest Income
Net interest income for the second quarter of 2002 was $3,693,000 representing a
growth of $455,000, or 14.1% over the $3,238,000 realized during the second
quarter of 2001. Growth was due primarily to volume as the net interest margin
tightened from 4.40% in the second quarter 2001 to 4.35% during second quarter
2002.
Net interest income for the first six months of 2002 was $7,236,000 representing
an increase of $951,000, or 15.1% over the $6,285,000 generated during the first
six months of 2001. Net interest income gains were due, in large part, to volume
increases in the commercial loan portfolio. The rates paid on interest bearing
liabilities declined at a faster pace than those of interest earning assets
thereby increasing the net interest spread by 11 basis points year to date.
Page 11 of 21
Net Interest Income (Continued)
The tables that follow state rates on a fully taxable equivalent basis (FTE) and
demonstrates the aforementioned effects:
(Dollars in Thousands) Three Months Ended
June 2002 June 2001
Avg Balance Rates Avg Balance Rates
Interest earning assets $ 350,869 6.67% $ 303,890 7.95%
Interest bearing liabilities 301,610 2.70% 264,343 4.09%
--------- ---------
Free Funds $ 49,259 $ 39,547
========= =========
Net interest income $ 3,693 $ 3,238
========= =========
Net interest spread 3.97% 3.86%
Free funds ratio 14.04% 13.01%
Net interest margin 4.35% 4.40%
(Dollars in Thousands) Six Months Ended
June 2002 June 2001
Avg Balance Rates Avg Balance Rates
Interest earning assets $ 344,484 6.76% $ 295,419 8.17%
Interest bearing liabilities 296,271 2.79% 258,326 4.31%
--------- ---------
Free Funds $ 48,213 $ 37,093
========= =========
Net interest income $ 7,236 $ 6,285
========= =========
Net interest spread 3.97% 3.86%
Free funds ratio 14.00% 12.56%
Net interest margin 4.36% 4.40%
Non-Interest Income and Expense
The following compares three months ended June 30, 2002 to three months ended
June 30, 2001:
Other income increased $141,000, or 11.1%, from $1,268,000 during the second
quarter of 2001 to $1,409,000 during the second quarter of 2002. Gains in the
second quarter were primarily attributable to trust and brokerage income growth
of $139,000.
Other expenses increased moderately from $2,655,000 during the second quarter
2001 to $2,813,000 during 2002's second quarter, resulting in an increase of
$158,000, or 6.0%. Salaries and benefits expense grew $220,000, or 18.1% due to
annual reviews, staff increases and the opening of our eleventh branch in
Carlisle, Pennsylvania on June 24, 2002. The opening of the eleventh branch was
also responsible for investment in premises and equipment rising 5.2% from
$9,019,000 to $9,487,000. Other operating expenses decreased for the current
quarter versus the second quarter 2001.
Page 12 of 21
Non-Interest Income and Expense (Continued)
The following compares six months ended June 30, 2002 to six months ended June
30, 2001:
Other income grew $288,000, or 12.5%, form $2,299,000 during the first half of
2001 to $2,587,000 during the same period of 2002. Primary areas of growth
included asset management income by $177,000 and credit life and disability
income by $92,000.
Other expenses rose form $5,112,000 during the six months of 2001 to $5,501,000
for the six months ended 2002, growing $389,000, or 7.6%. Again, salary and
benefit increases of $415,000 were the main contributing factors.
Income Tax Expense
Income tax expense increased $142,000, or 28.4%, during the second quarter of
2002 versus the second quarter of 2001. For the first half of 2002 versus 2001,
income tax expense rose $255,000, or 27.2%. Tax exempt income has become a
smaller part of the revenue stream. Effective income tax rates were as follows:
Three Months Ended Six Months Ended
June June June June
2002 2001 2002 2001
Effective income tax rate 30.0% 27.9% 29.6% 27.9%
The marginal federal income tax bracket is 34% for all periods presented.
Provision and Allowance for Loan Losses
The provision for loan losses and the other changes in the allowance for loan
losses are shown below:
(Dollars in Thousands) Three Months Ended Six Months Ended
June June June June
2002 2001 2002 2001
Balance at beginning of period $ 3,208 $ 2,747 $ 3,104 $ 2,691
Recoveries of loans previously
charged off 4 1 5 2
Additions to allowance charged
to expense 150 60 300 120
------- ------- ------- -------
Total 3,362 2,808 3,409 2,813
Loans charged off 8 5 55 10
------- ------- ------- -------
Balance at end of period $ 3,354 $ 2,803 $ 3,354 $ 2,803
======= ======= ======= =======
In the opinion of management, the allowance, when taken as a whole, is adequate
to absorb reasonably estimated loan losses inherent in the Bank's loan
portfolio. The unallocated portion of the allowance for loan losses was
approximately 62% at June 30, 2002.
Page 13 of 21
Nonperforming Assets / Risk Elements
Nonperforming assets at June 30, are as follows:
June 30
(Dollars in Thousands) 2002 2001
Loans on nonaccrual (cash) basis
Loans secured by real estate $ 0 $ 0
Installment loans 14 30
Commercial loans 0 30
Credit card 0 0
------ ------
Total nonaccrual loans 14 60
====== ======
Loans whose terms have been renegotiated
Loans secured by real estate 1,428 0
Installment loans 0 0
Commercial loans 0 0
Credit card 0 0
------- ------
Total renegotiated loans 1,428 0
OREO 211 0
------- ------
Total nonperforming loans and OREO $ 1,653 $ 60
======= ======
Ratio of nonperforming assets to total loans and OREO 0.63% 0.03%
Ratio of nonperforming assets to total assets 0.43% 0.02%
Loans past due 90 or more days and still accruing
Loans secured by real estate $ 1,240 $ 1,129
Installment loans 20 2
Commercial loans 4 41
Credit card 0 2
------- -------
Total loans 90 or more days past due $ 1,264 $ 1,174
======= =======
Ratio of loans 90 or more days past due to total loans
And OREO 0.48% 0.49%
Ratio of loans 90 or more days past due to total assets 0.33% 0.35%
Total nonperforming and other risk assets $2,917 $1,234
Ratio of total risk assets to total loans and OREO 1.11% 0.52%
Ratio of total risk assets to total assets 0.76% 0.37%
Any loans classified for regulatory purposes as loss, doubtful, substandard or
special mention that have not been disclosed under Item III of Industry Guide 3
do not represent or result from trends or uncertainties which management
reasonably expects will materially impact future operating results, liquidity or
capital resources.
Page 14 of 21
Capital Resources and Balance Sheet Fluctuations
A comparison of Orrstown Financial Services, Inc's capital ratios to regulatory
minimum requirements at June 30, 2002 are as follows:
Orrstown Financial Regulatory Minimum
Services Requirements
Leverage Ratio 8.78% 4%
Risk Based Capital Ratios:
Tier I Capital Ratio 12.54% 4%
Total (Tier II) Capital Ratio
(core capital plus allowance
for loan losses 13.79% 8%
Capital Resources and Balance Sheet Fluctuations (Continued)
The growth experienced during 2002 has been supported by capital growth in the
form of retained earnings and capital infusion from the dividend reinvestment
plan. Dividend reinvestment plan participants have added $483,000 to equity as
of June 30, 2002. Equity represented 8.93% of assets at June 30, 2002 which is
up from 8.34% at December 31, 2001.
All balance sheet fluctuations exceeding 5% have been created by either the
growth that has been experienced during 2002 or single day fluctuations.
Management is not aware of any current recommendations by regulatory authorities
which, if implemented, would have a material effect on the corporation's
liquidity, capital resources or operations.
Page 15 of 21
PART II - OTHER INFORMATION
Page 16 of 21
OTHER INFORMATION
Item 1 - Legal Proceedings
- --------------------------
None
Item 2 - Changes in Securities
- ------------------------------
None
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
- -------------------------------------------
(a) Exhibits
99 - Report of independent accountant's on interim financial
statements
99.1 - Certification of the Chief Executive Officer pursuant to 18
U.S.C. Section 1350
99.2 - Certification of the Chief Financial Officer pursuant to 18
U.S.C. Section 1350
(b) Reports on Form 8 - K
None
Page 17 of 21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
/s/ Kenneth R. Shoemaker
------------------------------------------
(Kenneth R. Shoemaker, President)
(Duly Authorized Officer)
/s/ Bradley S. Everly
------------------------------------------
(Bradley S. Everly, Senior Vice President)
(Chief Financial Officer)
/s/ Robert B. Russell
------------------------------------------
(Robert B. Russell, Controller)
(Chief Accounting Officer)
Date August 12, 2002
--------------------
Page 18 of 21