[LOGO]
MAHASKA
INVESTMENT COMPANY
[GRAPHIC]
Rooted in the Past...
2002 ANNUAL REPORT
Poised for the Future
[GRAPHIC]
As the world swirls around us,
those that focus...flourish.
Our Mission is to maximize shareholder value
by a relentless focus on providing
efficient service and support
to our customers,
employees, and
communities.
[GRAPHIC]
Our Vision
To be the leading financial
services provider in our communities.
Message to Shareholders 1
2002 Financial Highlights 2
Company Focus 3
Subsidiary Highlights 3
Board of Directors 5
Corporate Officers 8
Consolidated Financial Statements 9
Company Information 12
Auditors' Report 12
Please refer to the Mahaska Investment Company 2003 Proxy Statement
for Management's Discussion and Analysis, Consolidated Financial
Statements, and notes to Consolidated Financial Statements.
Message to Shareholders
With each passing year, the information we receive and the decisions we
make become increasingly complex. Technology, deregulation, and our global
economy are continually reshaping the banking industry. One thing we know for
sure: Change is inevitable. At Mahaska Investment Company (the Company), we
believe the best way to set ourselves apart - to flourish - is to stay focused.
And that is exactly the commitment the Company made in 2002. Overall, 2002 was a
good year. Our stock price closed at $16.01 per share, an increase of 36.8% from
$11.70 in 2001. Our net income increased to $5,789,000 in 2002, from $4,356,000
in 2001, with basic earnings per share of $1.49 in 2002 and $1.10 in 2001.
Quarterly dividends paid to shareholders were 16 cents per share, reflecting a
6.7% increase over the previous year.
Part of our business strategy has been to remain open to opportunities that
allow us to broaden our customer base while at the same time, enhancing the
investment value for shareholders. Last year presented an opportunity for us to
continue this plan of growth. The Company has agreed to acquire Citizens Bank &
Trust in Hudson, which also has offices in Belle Plaine and Waterloo. Expansion
into these markets offers great growth potential. We believe that this bank,
while outside of the southeast region of Iowa historically serviced by the
Company, will fit well into our family of financial institutions. These
customers will have access to a larger variety of products and services, a
benefit of being a family member of Mahaska Investment Company.
[PHOTO]
As a community-focused financial group, we continue to place decision-making at
the local level and put forth a genuine effort to know the names - and the
financial needs and preferences - of each customer. From our tellers and loan
officers to our presidents and boards of directors, we all work hard to maintain
our commitment to be a community bank. Our strength is found in our ability to
offer an unmatched combination of responsive staff, extensive financial
resources and range of products and services, all in a local bank.
We will continue to seek opportunities to expand the Company and enhance the
returns to our shareholders. An essential element of our plan for continued
growth is to adopt a new name...a new brand...that reflects our focus, vision
and common service culture to the markets we serve, MidWestOne Financial Group.
One commitment...to remain a community bank offering quality personal
service. One focus...to run as an efficient organization. One determination...to
offer the best possible return for shareholders. One brand...that enables our
markets to see us as uniquely different because we stand for something...a
long-term financial relationship customers can count on.
Thank you for your continued support and confidence.
/s/ Charles S. Howard
- ------------------------------
Charles S. Howard
Chairman, President & CEO
/s/ David A. Meinert
- ------------------------------
David A. Meinert
Executive Vice President & CFO
Financial Highlights
Year Ended December 31
(in thousands, except per share data) 2002 2001 2000 1999 1998
- --------------------------------------------------------------------------------------------------------
Summary of Income Data
Interest income excluding loan pool participations... $27,482 30,510 31,551 21,162 17,996
Interest and discount on loan pool participations.... 10,058 9,595 7,275 7,668 7,970
Total interest income................................ 37,540 40,105 38,826 28,830 25,966
Total interest expense............................... 17,027 21,427 21,427 13,195 10,490
Net interest income.................................. 20,513 18,678 17,399 15,635 15,476
Provision for loan losses............................ 1,070 1,776 892 3,628 1,179
Other income......................................... 3,787 4,287 2,566 1,947 1,856
Other operating expenses............................. 14,426 14,467 13,313 10,462 8,947
Income before income tax............................. 8,804 6,722 5,760 3,492 7,206
Income tax expense................................... 3,015 2,366 1,759 1,270 2,583
Net income........................................... $ 5,789 4,356 4,001 2,222 4,623
------- ------ ------ ------ ------
Per Share Data
Net income - basic................................... $ 1.49 1.10 0.99 0.58 1.26
Net income - diluted................................. 1.46 1.09 0.99 0.56 1.20
Cash dividends declared.............................. 0.64 0.60 0.60 0.60 0.56
Book value........................................... 14.17 13.12 12.51 11.59 10.51
Net tangible book value.............................. 11.53 10.37 9.54 8.62 8.99
------- ------ ------ ------ ------
Selected Financial Ratios
Net income to average assets......................... 1.07% 0.82% 0.81% 0.64% 1.65%
Net income to average equity......................... 10.91% 8.59% 8.18% 5.29% 12.16%
Dividend payout ratio................................ 42.95% 54.55% 60.61% 103.45% 44.44%
Average equity to average assets..................... 9.79% 9.57% 9.90% 12.04% 13.54%
Tier 1 capital to assets at end of period............ 14.59% 9.95% 10.58% 11.42% 14.02%
Net interest margin.................................. 4.10% 3.84% 3.87% 4.89% 6.04%
Gross revenue of loan pools to total gross revenue... 24.34% 21.61% 17.58% 24.91% 28.64%
Interest and discount income of loan pools
to total interest income.......................... 26.79% 23.92% 18.74% 26.59% 30.69%
Allowance for loan losses to total loans............. 1.30% 1.05% 0.94% 1.42% 1.32%
Non-performing loans to total loans.................. 0.86% 1.08% 0.95% 1.71% 0.84%
Net loans charged off to average loans............... 0.15% 0.42% 0.65% 1.14% 0.52%
------- ------ ------ ------ ------
December 31 (in thousands) 2002 2001 2000 1999 1998
- --------------------------------------------------------------------------------------------------------
Selected Balance Sheet Data
Total assets......................................... $537,782 545,795 515,212 486,189 298,389
Total loans net of unearned discount................. 306,024 322,681 312,081 282,091 165,427
Total loan pool participations....................... 82,341 110,393 74,755 67,756 54,510
Allowance for loan losses............................ 3,967 3,381 2,933 4,006 2,177
Total deposits....................................... 395,546 378,645 370,144 348,672 232,733
Total shareholders' equity........................... 55,698 50,827 49,295 50,235 38,232
-------- ------- ------- ------- -------
Stand for Something
and Stand Out
Growth is invigorating. It is exciting, challenging and unifying. It is
also hard work. Numerous hours were put forth in 2002 to continue a journey
begun in 2001 by our board of directors and senior management. That was the year
we determined that our long-term direction needed to be more focused. Management
and staff, working with an outside consultant, developed priorities and
established goals to improve business processes and performance. We were
determined to operate as a more efficient organization and improve returns to
our shareholders.
Having laid the groundwork to improve our business performance, it was
natural to take the next step in 2002, establishing a unifying brand for our
Company. In order to stay focused and stay on the path of success, we needed to
take a new look at ourselves. We knew intuitively that we wanted to be the
leading financial services provider in our communities. In order to accomplish
this, we were willing to step back and re-evaluate the Company. However, we knew
it would be a much more honest and accurate analysis if we utilized the
expertise of an outside party who would
[GRAPHIC]
It's A Family Thing.
Members of a family are connected in many ways. They share a name, physical
attributes, as well as beliefs and traditions. Each member of the Mahaska
Investment Company family stands on individual merits, yet contributes to - and
ultimately impacts - the success of our family. The new MidWestOne Financial
Group brand will provide a unifying force that will help propel us into the
future. The strengths found in each of our banks contribute to the success of
our family and are the factors that enable us to continue moving forward,
building upon yesterday's successes as we look toward tomorrow's opportunities.
We are poised for 2003 and beyond, and we see One success...MidWestOne
Financial Group.
Mahaska State Bank
The "first born" of our subsidiaries, Mahaska State Bank (MSB), continues
to shine. Despite a down economy, it increased earnings to $3.5 million in 2002
from $2.6 million in 2001. MSB has taken to heart our Company's Mission
Statement, "...to maximize share holder value by a relentless focus on providing
efficient service and support to our customers, employees and communities."
During 2002, the bank continued to respond to a need for affordable housing in
Mahaska County, assuming a key role in the First Time Home Grant Program and
First Time Home Buyer Program through the Iowa Finance Authority (IFA). MSB
works with IFA and the City of Oskaloosa Housing Trust Fund to obtain grant
money and loans for qualified families with low to moderate income.
Central Valley Bank
Central Valley Bank (CVB) continued to do an excellent job of steadily
increasing business through the unique combination that is our Company's
hallmark
Subsidiary Highlights
The Best of Both Words
look upon our Company with a direct and objective point-of-view. So we called
upon the services of a marketing communications firm with a strong track record
of branding financial institutions.
Our branding consultant challenged us to ask ourselves pertinent questions
in order to identify who we are and what we have to offer our customers. What
makes us unique? What makes us better than our competition? What are our
strengths as well as our opportunities? What's our message? In other words, who
are we, as a company? Where do we want to go and how are we going to get there?
All of this introspection and self-analysis confirmed the direction we
decided to take in 2001. We realized our strength is found in our ability to be
a community bank with the resources of a larger regional organization. We offer
the best of both worlds to all of our customers...an unmatched combination of
responsive staff, considerable financial resources and a wide range of products
and services, all in a local bank.
[GRAPHIC]
....attractive pricing, extensive selection and personal service. Chartered in
1994, CVB has grown from $32 million to $119 million in total assets. It was
extremely important for CVB to grow in its early years, and now its focus has
turned to enhanced earnings. It has provided increased earnings for four
consecutive years, with record highs in 2002. Over the same period, the bank has
also experienced a tremendous improvement in its operating efficiency.
Pella State Bank
Pella State Bank (PSB), the fastest-growing bank in Pella, is turning the
Company's Vision Statement into action, "To be the leading financial services
provider in our communities." PSB has committed itself each and every day to
making this a reality.
Its 2002 highlights are many, and include 28% growth in assets to $56
million and a $10 million increase in deposits to $46 million; the addition of
an ATM at the branch location's drive-through (with usage now exceeding that of
the ATM at the main bank); and a growth in the number of employees to better
serve the bank's expanding customer base.
Midwest Federal Savings
When we added Midwest Federal Savings & Loan Association of Eastern Iowa
(Midwest Federal) to our family, we knew it would fit in well with our tradition
of personal service. And by joining our family, Midwest Federal, in turn, would
have the deep resources of the Company to offer its customers. This has proven
to be a thriving, complementary relationship. Midwest Federal continued to
enhance our family in 2002 through increased loan origination fees and service
charge income. Midwest Federal also grew its average balances of commercial
loans and commercial real estate loans during 2002.
Subsidiary Highlights
What's in a Name?
In looking toward the future and defining where we want the Company to go,
our evaluation process led us to adopt a name that reflects what we are today as
well as the potential of what we can grow to be. Contingent upon shareholder
approval at our annual meeting, Mahaska Investment Company will become
MidWestOne Financial Group, Inc. Each subsidiary, in some fashion, will
incorporate the MidWestOne brand, making them easily identifiable as a member of
our financial family. So no matter which of our markets a customer or prospect
is in, our community banks will be quickly associated with MidWestOne Financial
Group.
We recognized that by including our county name in our Company name,
Mahaska Investment Company inherently implied our focus remained within the
boundaries of Mahaska County. In fact, our growth has led the Company into the
counties of Benton, Black Hawk, Des Moines, Wapello, and beyond. Our new name
sets the stage for future local and regional growth - and perhaps expansion
into surrounding states
[GRAPHIC]
[PHOTO]
Growing Forward
like Illinois and Missouri. Yes, we are extremely confident that MidWestOne is
an accurate depiction of who we are and where we're going...and growing.
Each time we add a subsidiary to our family, it is because a particular
institution will enable us to expand into a new market while broadening the
services available to the bank's customers. Citizens Bank & Trust, our newest
acquisition, offers an opportunity to expand in very attractive markets. These
markets offer many opportunities for growth throughout the customer's life
cycle...buying a house or automobile, financing or expanding a small business,
sending children to college, saving for retirement...these are the things
customers dream of, and we have the financial resources to help them achieve
their dreams.
Gaining Momentum
While in recent years we have grown through bank acquisitions, future
expansion may include establishing additional branches of our existing banks in
our family. Another possible avenue for growth may be establishing or acquiring
non-banking businesses such as insurance agencies. We are always seeking
opportunities to grow into additional lines of business and new markets. Again,
the new name will allow for future growth in many directions, while unifying
each new subsidiary, branch or other business with a shared vision: Offering
customers an extensive range of financial products and services normally found
in a large bank, while at the same time, striving for the kind of personal,
long-term customer relationship for which community banks are known.
[LOGO] MidWestOne Financial Group, Inc.
Board of Directors Corporate Officers
(seated, from left) (seated, from left)
John P. Pothoven David A. Meinert
Chairman & President, Mahaska State Bank Executive Vice President & CEO
Richard R. Donohue Charles S. Howard
Managing Partner, Theobald, Donohue & Chairman, President & CEO
Thompson, P.C
Roger A. Parlett
David A. Meinert Senior Vice President, Data Processing
Executive Vice President & CFO
(standing, from left)
Charles S. Howard
Chairman, President & CEO Steven G. Wickard
Chief Credit Officer
John W. N. Steddom
Civil Engineer, Retired Karen K. Binns
Secretary/Treasurer &
(standing, from left) Administrative Assistant
William D. Hassel Keith C. Comfort
Vice Chairman & President, Vice President Finance & Controller
Midwest Federal Savings
Barbara J. Bone
Edward C. Whitham Human Resources Officer
Financial Management Accounting
Barbara A. Finney
James G. Wake Internet Banking Manager/
General Manager, Smith-Wake Operations Officer
Investments
Michael R. Welter
General Contractor
"Individual commitment to a group effort -
that is what makes a team work, a company work,
a society work, a civilization work."
Vince Lombardi
Poised for the Future
Our brand is not just a new name. It is a promise to our existing customers
and prospects that must be fulfilled by each representative of MidWestOne, from
our teller to our loan officer to our CEO to each member of our board of
directors. We are committed to using our extensive depth of products and
services to provide for all of the customer's financial needs. And we will
accomplish this by having a personal relationship with each customer. The
MidWestOne brand is not just the promise, but the fulfillment.
Every aspect of our business, from communications to operating systems to
our people, will embody our brand mission and values. Our brand symbolizes our
uniqueness, and it is essential to the Company's success for all of us to be
ambassadors of our brand...to incorporate this individuality into our daily
interactions with customers. By placing our brand at the center of our
corporate strategy, we are poised for continued success in 2003 and beyond.
[GRAPHIC]
[PHOTO]
Consolidated Balance Sheets
December 31 (in thousands) 2002 2001
- -----------------------------------------------------------------------------------------------
Assets
Cash and due from banks................................................... $ 11,441 12,872
Interest-bearing deposits in banks........................................ 2,662 2,965
Federal funds sold........................................................ 1,950 --
-------- -------
Cash and cash equivalents........................................... 16,053 15,837
-------- -------
Investment securities:
Available for sale..................................................... 91,193 50,206
Held to maturity (fair value of $17,511 in 2002 and $22,034 in 2001)... 16,671 21,332
Loans, net of unearned discount........................................... 306,024 322,681
Allowance for loan losses................................................. (3,967) (3,381)
-------- -------
Net loans........................................................... 302,057 319,300
-------- -------
Loan pool participations.................................................. 82,341 110,393
Premises and equipment, net............................................... 8,376 8,355
Accrued interest receivable............................................... 4,403 4,540
Goodwill.................................................................. 9,351 9,351
Other intangible assets................................................... 1,034 1,324
Other assets.............................................................. 6,303 5,157
-------- -------
Total assets........................................................ $537,782 545,795
======== =======
Liabilities and Shareholders' Equity
Deposits:
Demand................................................................. $ 29,236 26,961
NOW and Super NOW...................................................... 44,848 45,372
Savings................................................................ 102,358 97,989
Certificates of deposit................................................ 219,104 208,323
-------- -------
Total deposits...................................................... 395,546 378,645
-------- -------
Federal funds purchased................................................... 1,500 10,650
Federal Home Loan Bank advances........................................... 69,293 91,174
Notes payable............................................................. -- 9,200
Long-term debt............................................................ 10,310 --
Other liabilities......................................................... 5,435 5,299
-------- -------
Total liabilities................................................... 482,084 494,968
-------- -------
Shareholders' Equity
Common stock, $5 par value; authorized 20,000,000 shares;
issued 4,912,849 as of December 31, 2002 and 2001................... 24,564 24,564
Capital surplus........................................................ 12,942 13,033
Treasury stock at cost, 982,341 and 1,040,255 shares as of
December 31, 2002 and 2001, respectively............................ (11,963) (12,595)
Retained earnings...................................................... 28,375 25,082
Accumulated other comprehensive income................................. 1,780 743
-------- -------
Total shareholders' equity.......................................... 55,698 50,827
-------- -------
Total liabilities and shareholders' equity.......................... $537,782 545,795
======== =======
Consolidated Statements of Income
Year Ended December 31 (in thousands, except per share data) 2002 2001 2000
- ----------------------------------------------------------------------------------------
Interest Income
Interest and fees on loans.................................. $22,845 25,172 25,298
Interest income and discount on loan pool participations.... 10,058 9,595 7,275
Interest on bank deposits................................... 22 56 116
Interest on federal funds sold.............................. 115 252 164
Interest on investment securities:
Available for sale....................................... 3,376 3,542 4,182
Held to maturity......................................... 1,124 1,488 1,791
------- ------ ------
Total interest income................................. 37,540 40,105 38,826
======= ====== ======
Interest Expense
Interest on deposits:
NOW and Super NOW........................................ 270 521 782
Savings.................................................. 1,876 2,961 3,779
Certificates of deposit.................................. 9,422 11,920 10,788
Interest on federal funds purchased......................... 21 57 191
Interest on Federal Home Loan Bank advances................. 4,872 5,166 4,484
Interest on notes payable................................... 270 802 1,403
Interest on long-term debt.................................. 296 -- --
------- ------ ------
Total interest expense................................ 17,027 21,427 21,427
------- ------ ------
Net interest income................................... 20,513 18,678 17,399
Provision for loan losses................................... 1,070 1,776 892
------- ------ ------
Net interest income after provision for loan losses... 19,443 16,902 16,507
------- ------ ------
Other Income
Service charges............................................. 2,185 2,117 1,821
Data processing income...................................... 227 206 203
Other operating income...................................... 1,375 946 502
Investment security gains, net.............................. -- 1,018 40
Total other income.................................... 3,787 4,287 2,566
------- ------ ------
Other Expense
Salaries and employee benefits expense...................... 7,612 7,157 6,378
Net occupancy expense....................................... 2,339 2,162 1,877
Professional fees........................................... 658 988 658
Goodwill amortization....................................... -- 699 699
Other intangible asset amortization......................... 290 351 426
Other operating expense..................................... 3,527 3,110 3,275
------- ------ ------
Total other expense................................... 14,426 14,467 13,313
------- ------ ------
Income before income tax expense...................... 8,804 6,722 5,760
Income tax expense.......................................... 3,015 2,366 1,759
------- ------ ------
Net income............................................ $ 5,789 4,356 4,001
======= ====== ======
Net income per share - basic................................ $ 1.49 1.10 0.99
======= ====== ======
Net income per share - diluted.............................. $ 1.46 1.09 0.99
======= ====== ======
Consolidated Statements of Change in
Shareholder's Equity and Comprehensive Income
Accumulated
Other
Common Capital Treasury Retained Comprehensive
(In thousands, except share data) Stock Surplus Stock Earnings Income (Loss) Total
------- ------- -------- -------- ------------- ------
Balance at December 31, 1999............... $24,564 13,192 (8,525) 21,511 (507) 50,235
======= ====== ======= ====== ===== ======
Comprehensive income:
Net income.............................. -- -- -- 4,001 -- 4,001
Unrealized gains arising during the
year on securities available for sale -- -- -- -- 908 908
Less realized gains on securities
available for sale, net of tax....... -- -- -- -- (30) (30)
------- ------ ------- ------ ----- ------
Total comprehensive income........... -- -- -- 4,001 878 4,879
------- ------ ------- ------ ----- ------
Dividends paid ($.60 per share)........... -- -- -- (2,410) -- (2,410)
Stock options exercised (7,300 shares) -- (65) 89 -- -- 24
Treasury stock purchased (403,100 shares).. -- -- (3,433) -- -- (3,433)
------- ------ ------- ------ ----- ------
Balance at December 31, 2000............... 24,564 13,127 (11,869) 23,102 371 49,295
======= ====== ======= ====== ===== ======
Comprehensive income:
Net income.............................. -- -- -- 4,356 -- 4,356
Unrealized gains arising during the
year on securities available for sale -- -- -- -- 1,010 1,010
Less realized gains on securities
available for sale, net of tax....... -- -- -- -- (638) (638)
------- ------ ------- ------ ----- ------
Total comprehensive income.............. -- -- -- 4,356 372 4,728
------- ------ ------- ------ ----- ------
Dividends paid ($.60 per share)............ -- -- -- (2,376) -- (2,376)
Stock options exercised (34,280 shares).... -- (94) 418 -- -- 324
Treasury stock purchased (101,000 shares).. -- -- (1,144) - -- (1,144)
------- ------ ------- ------ ----- ------
Balance at December 31, 2001............... 24,564 13,033 (12,595) 25,082 743 50,827
======= ====== ======= ====== ===== ======
Comprehensive income:
Net income.............................. -- -- -- 5,789 -- 5,789
Unrealized gains arising during the
year on securities available for sale -- -- -- -- 1,037 1,037
------- ------ ------- ------ ----- ------
Total comprehensive income.............. -- -- -- 5,789 1,037 6,826
------- ------ ------- ------ ----- ------
Dividends paid ($.64 per share)............ -- -- -- (2,496) -- (2,496)
Stock options exercised (90,014 shares).... -- (172) 1,091 -- -- 919
Treasury stock purchased (32,100 shares)... -- -- (459) -- -- (459)
ESOP shares allocated...................... -- 81 -- -- -- 81
------- ------ ------- ------ ----- ------
Balance at December 31, 2002............... $24,564 12,942 (11,963) 28,375 1,780 55,698
======= ====== ======= ====== ===== ======
Company Information,
Auditors' Report
Mahaska Investment Company's Common Stock
trades on the Nasdaq National Market and the quotations are furnished by the
Nasdaq system. There were 456 shareholders of record on December 31, 2002, and
an estimated 750 additional beneficial holders whose stock was held in street
name by brokerage houses.
Nasdaq Symbol OSKY
Market Participants
Howe Barnes Investments, Inc.
Spear, Leeds & Kellogg
Knight Securities L.P.
Goldman, Sachs & Co.
Ladenburg, Thalmann & Co.
Dain Rauscher Inc.
Herzog, Heine, Geduld, LLC
Sandler O'Neill & Partners
Cincinnati Stock Exchange
Corporate Headquarters
222 1st Avenue East
P.O. Box 1104
Oskaloosa, IA 52577
(641) 673-8448
www.mahaskainv.com
Annual Shareholders' Meeting
April 30, 2003, 10:30 a.m.
Elmhurst Country Club
2214 South 11th Street
Oskaloosa, IA 52577
Wall Street Journal and Other Newspapers
MahaskaInv
Transfer Agent/Dividend Disbursing Agent
Illinois Stock Transfer Company
209 West Jackson Boulevard
Suite 903
Chicago, IL 60606
(312) 427-2953
(800) 757-5755
Independent Auditor
KPMG LLP
2500 Ruan Center
Des Moines, IA 50309
Annual Report Design
J.W.Morton & Associates
Cedar Rapids, IA
The following table sets forth the quarterly high and low sales per share for
the Company's stock during 2002 and 2001.
'02 Quarter Ended High Low
- ----------------- ------ ------
March 31 $13.64 $11.10
June 30 14.52 13.15
September 30 14.30 11.70
December 31 16.23 13.36
[GRAPHIC]
'01 Quarter Ended High Low
- ----------------- ------ ------
March 31 $11.50 $ 8.25
June 30 11.00 9.76
September 30 12.50 10.75
December 31 11.70 10.40
As of December 31, 2002, the Company had 3,930,508 shares of Common Stock
outstanding. On December 31, 2001, there were 3,872,594 shares outstanding. The
Company has declared per share cash dividends with respect to its Common Stock
as follows:
Quarter 1st 2nd 3rd 4th
- ------- ---- ---- ---- ----
2002 $.16 $.16 $.16 $.16
2001 .15 .15 .15 .15
Auditors' Report
To the Board of Directors of Mahaska Investment Company:
We have audited, in accordance with the auditing standards generally accepted in
the United States of America, the consolidated balance sheets of Mahaska
Investment Company as of December 31, 2002 and 2001, and the related
consolidated statements of income, changes in stockholders equity and
comprehensive income and cash flows for each of the years in the three year
period ended December 31, 2002 (not presented herein); and in our report dated
January 30, 2003, we expressed an unqualified opinion on those consolidated
financial statements.
In our opinion, the information set forth in the condensed consolidated
financial information appearing on pages 9 through 11 is fairly presented, in
all material respects, in relation to the consolidated financial statements
from which it has been derived.
/s/ KPMG LLP
- -------------------
KPMG LLP
Des Moines, Iowa
January 30, 2003
FORM 10-K
Copies of Mahaska Investment Company's Annual Report to the Securities and
Exchange Commission Form 10-K will be mailed when available without charge to
shareholders upon written request to Karen K. Binns, Secretary/Treasurer, at the
corporate headquarters. It is also available on the Securities and Exchange
Commission's Internet web site at www.sec.gov/cgi-bin/srch-edgar.
BANK SUBSIDIARY LOCATIONS
Mahaska State Bank Midwest Federal Savings Central Valley Bank
------------------ ----------------------- -------------------
www.mahaskabank.com www.midwestfed.com www.centralvalleybank.com
Main Bank Main Bank Main Bank
124 South 1st Street 3225 Division Street 116 West Main
Oskaloosa, IA 52577 Burlington, IA 52601 Ottumwa, IA 52501
(641) 673-8303 (319) 754-6526 (641) 682-8355
Motor Bank Jefferson Street Branch Fairfield Downtown Branch
222 1st Avenue East 323 Jefferson Street 58 East Burlington
Oskaloosa, IA 52577 Burlington, IA 52601 Fairfield, IA 52556
(641) 673-1563 (319) 754-7553 (641) 472-6511
A Avenue West Office Fort Madison Branch Fairfield Drive-up Branch
301 A Avenue West 926 Avenue G 2408 West Burlington
Oskaloosa, IA 52577 Fort Madison, IA 52627 Fairfield, IA 52556
(641) 673-9444 (319) 372-3991 (641) 472-2424
North English Office Wapello Branch Sigourney Branch
10030 Highway 149 Highway 61 112 North Main
North English, IA 52316 Wapello, IA 52653 Sigourney, IA 52591
(319) 664-3311 (319) 523-8314 (641) 622-2381
[GRAPHIC]
Pella State Bank
www.pellabank.com
Main Bank
700 Main Street, Suite 100
Pella, IA 50219
(641) 628-4356
Oskaloosa Street Branch
500 Oskaloosa Street
Pella, IA 50219
(641) 628-4356
[LOGO]
MAHASKA
INVESTMENT COMPANY