FORM 10-QSB
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period ended March 31, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ____________.
Commission File Number 0-25971
-------
INDIAN VILLAGE BANCORP, INC.
----------------------------
(Exact name of small business issuer as specified in its charter)
Pennsylvania 34-1891199
------------ ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
100 South Walnut Street, Gnadenhutten, Ohio 44629
-------------------------------------------------
(Address of principal executive offices)
(740) 254-4313
--------------
(Issuer's telephone number)
As of May 10, 2002, the latest practical date, 402,139 of the issuer's common
shares, $.01 par value, were issued and outstanding.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
- --------------------------------------------------------------------------------
1
INDIAN VILLAGE BANCORP, INC.
INDEX
Page
----
PART I -FINANCIAL INFORMATION
Item 1. Condensed Financial Statements (Unaudited)
Consolidated Balance Sheets ............................................................ 3
Consolidated Statements of Income ...................................................... 4
Consolidated Statements of Comprehensive Income ........................................ 5
Consolidated Statements of Changes in Shareholders' Equity.............................. 6
Consolidated Statements of Cash Flows .................................................. 8
Notes to Consolidated Financial Statements ............................................. 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations...................................... 15
Part II - Other Information
Item 1. Legal Proceedings.................................................................. 23
Item 2. Changes in Securities.............................................................. 23
Item 3. Defaults Upon Senior Securities.................................................... 23
Item 4. Submission of Matters to a Vote of Security Holders................................ 23
Item 5. Other Information.................................................................. 23
Item 6. Exhibits and Reports on Form 8-K................................................... 23
SIGNATURES ........................................................................................... 24
- --------------------------------------------------------------------------------
2
INDIAN VILLAGE BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
- -------------------------------------------------------------------------------
March 31, June 30,
2002 2001
---- ----
ASSETS
Cash and due from banks $ 1,070 $ 1,238
Interest-bearing deposits in other banks 818 2,261
-------- --------
Total cash and cash equivalents 1,888 3,499
Securities available for sale at fair value 23,681 17,014
Loans, net of allowance for loan losses 52,160 48,289
Premises and equipment, net 1,443 1,504
Real estate owned 70 70
Federal Home Loan Bank stock 1,279 1,207
Bank-owned life insurance 2,122 2,038
Accrued interest receivable 495 444
Other assets 122 152
-------- --------
Total assets $ 83,260 $ 74,217
======== ========
LIABILITIES
Deposits $ 49,899 $ 44,617
Federal Home Loan Bank advances 24,908 21,200
Accrued interest payable 132 116
Other liabilities 91 157
-------- --------
Total liabilities 75,030 66,090
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 1,000,000 shares authorized,
none outstanding -- --
Common stock, $.01 par value, 5,000,000 shares authorized
445,583 shares issued 4 4
Additional paid-in capital 3,251 3,245
Retained earnings - substantially restricted 5,980 5,730
Unearned employee stock ownership plan shares (349) (371)
Treasury stock, at cost, 43,444 shares at March 31, 2002 and
June 30, 2001 (514) (514)
Accumulated other comprehensive income (loss) (142) 33
-------- --------
Total shareholders' equity 8,230 8,127
-------- --------
Total liabilities and shareholders' equity $ 83,260 $ 74,217
======== ========
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
3
INDIAN VILLAGE BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share amounts)
- -------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
March 31, March 31,
--------- ---------
2002 2001 2002 2001
---- ---- ---- ----
INTEREST AND DIVIDEND INCOME
Loans, including fees $ 1,004 $ 952 $ 3,018 $ 2,698
Taxable securities 192 297 571 1,009
Tax exempt securities 76 33 192 72
Interest-bearing deposits and
Federal funds sold -- 21 10 47
------- ------- ------- -------
Total interest income 1,272 1,303 3,791 3,826
INTEREST EXPENSE
Deposits 471 550 1,521 1,554
Federal Home Loan Bank advances 323 309 946 948
------- ------- ------- -------
Total interest expense 794 859 2,467 2,502
------- ------- ------- -------
NET INTEREST INCOME 478 444 1,324 1,324
Provision for loan losses 15 6 45 20
------- ------- ------- -------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 463 438 1,279 1,304
NONINTEREST INCOME
Service charges and other fees 22 24 73 62
Gain on sale of securities
available for sale, net 11 81 89 107
Other income 32 8 93 (1)
------- ------- ------- -------
Total noninterest income 65 113 255 168
NONINTEREST EXPENSE
Salaries and employee benefits 197 185 569 541
Occupancy and equipment 47 50 143 138
Professional and consulting fees 18 20 82 97
Franchise taxes 23 22 67 48
Data processing 26 20 70 62
Director and committee fees 17 11 50 50
Other expense 65 68 187 211
------- ------- ------- -------
Total noninterest expense 393 376 1,168 1,147
------- ------- ------- -------
INCOME BEFORE INCOME TAXES 135 175 366 325
Income tax expense 5 60 19 99
------- ------- ------- -------
NET INCOME $ 130 $ 115 $ 347 $ 226
======= ======= ======= =======
EARNINGS PER COMMON SHARE (BASIC) $ 0.36 $ 0.31 $ 0.95 $ 0.60
======= ======= ======= =======
EARNINGS PER COMMON SHARE (DILUTED) $ 0.35 $ 0.31 $ 0.94 $ 0.60
======= ======= ======= =======
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
4
INDIAN VILLAGE BANCORP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Dollars in thousands)
- -------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
March 31, March 31,
--------- ---------
2002 2001 2002 2001
---- ---- ---- ----
NET INCOME $ 130 $ 115 $ 347 $ 226
Other comprehensive income, net of tax
Unrealized gains (losses) on securities
available for sale arising during period (89) 126 (117) 470
Reclassification adjustment for
accumulated (gains) losses included in
net income (7) (54) (58) (71)
----- ----- ----- -----
Net unrealized gains (losses)
on securities (96) 72 (175) 399
COMPREHENSIVE INCOME (LOSS) $ 34 $ 187 $ 172 $ 625
===== ===== ===== =====
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
5
INDIAN VILLAGE BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(Dollars in thousands)
- -------------------------------------------------------------------------------
Unrealized
Gain on
Additional Unearned Securities
Common Paid-In Retained ESOP Treasury Available
Stock Capital Earnings Shares Stock for Sale Total
----- ------- -------- ------ ----- -------- -----
Balance at July 1, 2000 $ 4 $ 4,022 $ 5,498 $ (333) $ (273) $ (261) $ 8,657
Net income for the period -- -- 226 -- -- -- 226
Cash dividend - $0.21 per share -- -- (80) -- -- -- (80)
Return of capital - $2.00 per share -- (780) -- (66) -- -- (846)
Purchase of 21,165 shares of
Treasury stock -- -- -- -- (241) -- (241)
Release of 2,000 ESOP shares -- 3 -- 20 -- -- 23
Change in fair value of securities
available for sale -- -- -- -- -- 399 399
------- ------- ------- ------- ------- ------- -------
Balance at March 31, 2001 $ 4 $ 3,245 $ 5,644 $ (379) $ (514) $ 138 $ 8,138
======= ======= ======= ======= ======= ======= =======
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
6
INDIAN VILLAGE BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (CONTINUED)
(Unaudited)
(Dollars in thousands)
- -------------------------------------------------------------------------------
Unrealized
Gain on
Additional Unearned Securities
Common Paid-In Retained ESOP Treasury Available
Stock Capital Earnings Shares Stock for Sale Total
----- ------- -------- ------ ----- -------- -----
Balance at July 1, 2001 $ 4 $ 3,245 $ 5,730 $ (371) $ (514) $ 33 $ 8,127
Net income for the period -- -- 347 -- -- -- 347
Cash dividend - $0.27 per share -- -- (97) -- -- -- (97)
Release of 2,256 ESOP shares -- 6 -- 22 -- -- 28
Change in fair value of securities
available for sale -- -- -- -- -- (175) (175)
------- ------- ------- ------- ------- ------- -------
Balance at March 31, 2002 $ 4 $ 3,251 $ 5,980 $ (349) $ (514) $ (142) $ 8,230
======= ======= ======= ======= ======= ======= =======
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
7
INDIAN VILLAGE BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
- -------------------------------------------------------------------------------
Nine Months Ended
March 31,
---------
2002 2001
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 347 $ 226
Adjustments to reconcile net income to net cash from operating
activities:
Depreciation 86 85
Premium amortization, net of accretion 71 (123)
Provision for loan losses 45 20
Federal Home Loan Bank stock dividends (52) (62)
Gain/Loss on sale of securities available for sale (89) (107)
Compensation expense on ESOP shares 28 23
Net change in accrued interest receivable and other assets (105) 163
Net change in accrued expenses and other liabilities 40 (30)
-------- --------
Net cash from operating activities 371 195
CASH FLOWS FROM INVESTING ACTIVITIES
Net change in time deposits -- 200
Purchases of securities available for sale (21,662) (16,979)
Proceeds from sales of securities available for sale 10,999 15,567
Proceeds from maturities of securities available for sale 3,749 1,760
Net change in loans (3,916) (5,888)
Purchases of bank-owned life insurance -- (2,009)
Premises and equipment expenditures, net (25) (50)
Purchases of Federal Home Loan Bank stock (20) (25)
-------- --------
Net cash from investing activities (10,875) (7,424)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits 5,282 6,460
Net change in short-term Federal Home Loan Bank advances 2,750 (550)
Repayment of long-term FHLB advances (1,000) --
Proceeds from long-term Federal Home Loan Bank advances 2,000 3,200
Principal payments on long-term debt (42) --
Cash dividends paid (97) (80)
Return of capital distribution -- (846)
Purchases of treasury stock -- (241)
-------- --------
Net cash from financing activities 8,893 7,943
-------- --------
Net change in cash and cash equivalents (1,611) 714
Cash and cash equivalents at beginning of period 3,499 1,087
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,888 $ 1,801
======== ========
Supplemental disclosures of cash flow information
Cash paid during the period for
Interest $ 2,475 $ 2,503
Income taxes -- 12
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
8
INDIAN VILLAGE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Table dollar amounts in thousands)
- -------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These interim financial statements are prepared without audit and reflect all
adjustments which, in the opinion of management, are necessary to present fairly
the financial position of Indian Village Bancorp, Inc. ("Corporation") at March
31, 2002, and its results of operations and cash flows for the periods
presented. All such adjustments are normal and recurring in nature. The
accompanying consolidated financial statements have been prepared in accordance
with the instructions for Form 10-QSB and, therefore, do not purport to contain
all the necessary financial disclosures required by accounting principles
generally accepted in the United States of America that might otherwise be
necessary in the circumstances, and should be read in conjunction with the
financial statements and notes thereto of the Corporation for the year ended
June 30, 2001. The accounting policies of the Corporation described in the notes
to financial statements contained in the Corporation's June 30, 2001, financial
statements, have been consistently followed in preparing this Form 10-QSB. The
results of operations for the nine months ended March 31, 2002 are not
necessarily indicative of the results of operations that may be expected for the
full year.
The consolidated financial statements include the accounts of the Corporation
and its wholly-owned subsidiary, Indian Village Community Bank (the "Bank"). All
significant intercompany transactions and balances have been eliminated.
The Corporation's and Bank's revenues, operating income and assets are primarily
from the financial institution industry. The Bank is engaged in the business of
residential mortgage lending and consumer banking with operations conducted
through its main office located in Gnadenhutten, Ohio and a branch office in New
Philadelphia, Ohio. These communities and the contiguous areas are the source of
substantially all the Bank's loan and deposit activities. The majority of the
Bank's income is derived from residential and consumer lending activities and
investments.
To prepare financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes estimates
and assumptions based on available information. These estimates and assumptions
affect the amounts reported in the financial statements and disclosures
provided, and future results could differ. The allowance for loan losses and
fair values of financial instruments are particularly subject to change.
The provision for income taxes is based on the effective tax rate expected to be
applicable for the entire year. Income tax expense is the total of the
current-year income tax due or refundable and the change in deferred tax assets
and liabilities. Deferred tax assets and liabilities are the expected future tax
amounts for the temporary differences between carrying amounts and tax bases of
assets and liabilities, computed using enacted tax rates. A valuation allowance,
if needed, reduces deferred tax assets to the amount expected to be realized.
- -------------------------------------------------------------------------------
(Continued)
9
INDIAN VILLAGE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Table dollar amounts in thousands)
- -------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Basic earnings per common share is net income divided by the weighted average
number of common shares outstanding during the period. The weighted average
number of shares outstanding during the three and nine months ended March 31,
2002 used for this calculation were 367,694 and 366,948, respectively. The
weighted average number of shares outstanding during the three and nine months
ended March 31, 2001 used for this calculation were 364,743 and 379,385,
respectively. Employee Stock Ownership Plan ("ESOP") shares are considered
outstanding for this calculation unless unallocated. Diluted earnings per share
shows the dilutive effect of additional common shares issuable under stock
options. The weighted number of shares outstanding during the three and nine
months ended March 31, 2002 used for this calculation were 371,002 and 370,256,
respectively. There was $0.01 per share dilution of the stock options for the
three and nine months ended March 31, 2002. No stock options were outstanding as
of March 31, 2001, therefore the weighted number of shares outstanding were the
same for the basic and diluted calculation.
NOTE 2 -CONSUMMATION OF THE CONVERSION TO A STOCK SAVINGS AND LOAN
ASSOCIATION WITH THE CONCURRENT FORMATION OF A HOLDING COMPANY
On January 20, 1999, the Board of Directors of the Bank, subject to regulatory
approval and approval by the members of the Bank, unanimously adopted a Plan of
Conversion under which the Bank would convert from a federally chartered mutual
savings bank to a federally chartered stock savings bank and concurrently form a
holding company to own 100% of the Bank's stock. The conversion was consummated
on July 1, 1999, and the Corporation sold its common stock in an amount equal to
the pro forma market value of the Bank after giving effect to the conversion. A
total of 445,583 common shares of the Corporation were sold at $10.00 per share.
The Corporation received net proceeds of $4,024,000, after deducting conversion
costs of $432,000.
The Corporation retained 50% of the net proceeds from the sale of common shares.
The remainder of the net proceeds was invested in the capital stock issued by
the Bank to the Company.
As part of the conversion, the Bank established a liquidation account in an
amount equal to its regulatory capital as of December 31, 1998. The liquidation
account will be maintained for the benefit of eligible depositors who continue
to maintain their accounts at the Bank after the conversion. The liquidation
account will be reduced annually to the extent that eligible depositors have
reduced their qualifying deposits. Subsequent increases will not restore an
eligible account holder's interest in the liquidation account. In the event of a
complete liquidation, each eligible depositor will be entitled to receive a
distribution from the liquidation account in an amount proportionate to the
current adjusted qualifying balances for accounts then held. The Bank may not
pay dividends that would reduce shareholders' equity below the required
liquidation account balance.
Under Office of Thrift Supervision ("OTS") regulations, ___ limitations have
been imposed on all "capital distributions" by savings institutions, including
cash dividends. Under OTS regulations, the Bank is not permitted to pay a cash
dividend on its common shares if the regulatory capital would, as a result of
the payment of such dividend, be reduced below the amount required for the
liquidation account, or applicable regulatory capital requirements prescribed by
the OTS.
Effective June 29, 2000, the Bank converted from a federally chartered stock
savings bank to an Ohio-chartered institution and assumed the obligation of the
liquidation account.
- -------------------------------------------------------------------------------
(Continued)
10
INDIAN VILLAGE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Table dollar amounts in thousands)
- -------------------------------------------------------------------------------
NOTE 3 - SECURITIES AVAILABLE FOR SALE
The amortized cost and estimated fair values of securities available for sale
are summarized as follows:
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
March 31, 2002
- --------------
Obligations of states and
political subdivisions $ 7,218 $ 19 $ (123) $ 7,114
Corporate debt securities 940 18 (6) 952
Mortgage-backed securities 14,088 50 (108) 14,030
Equity securities 1,650 5 (70) 1,585
-------- -------- -------- --------
$ 23,896 $ 92 $ (307) $ 23,681
======== ======== ======== ========
June 30, 2001
- --------------
Obligations of states and
political subdivisions $ 5,145 $ 35 $ (78) $ 5,102
Corporate debt securities 497 5 -- 502
Mortgage-backed securities 9,923 126 (38) 10,011
Equity securities 1,399 1 (1) 1,399
-------- -------- -------- --------
$ 16,964 $ 167 $ (117) $ 17,014
======== ======== ======== ========
The amortized cost and estimated fair values of debt securities available for
sale at March 31, 2002, by contractual maturity, are shown below. Actual
maturities could differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment
penalties. Securities not due at a single maturity date, primarily
mortgage-backed securities, are shown separately.
Estimated
Amortized Fair
Cost Value
---- -----
Due after one year through five years $ 101 $ 105
Due after five years through ten years 971 963
Due after ten years 8,736 8,583
Mortgage-backed securities 14,088 14,030
------- -------
$23,896 $23,681
======= =======
Proceeds from sales of securities available for sale during the nine months
ended March 31, 2002 were $11.0 million. Gross gains of $93,000 and gross losses
of $4,000 were realized on those sales. Proceeds from sales of securities
available for sale during the nine months ended March 31, 2001 were $15.6
million. Gross gains of $116,000 and gross losses of $9,000 were realized on
those sales.
- -------------------------------------------------------------------------------
(Continued)
11
INDIAN VILLAGE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Table dollar amounts in thousands)
- -------------------------------------------------------------------------------
NOTE 4 - LOANS
Loans are summarized as follows:
March 31, June 30,
2002 2001
---- ----
Real estate loans:
One-to four-family residential $ 37,825 $ 33,698
Multi-family residential 2,405 2,339
Nonresidential 2,506 2,576
Construction 1,342 1,488
Land 406 388
-------- --------
44,484 40,489
Consumer loans:
Home equity loans and lines of credit 2,394 2,190
Home improvement 1,571 1,125
Automobile 1,465 1,409
Loans on deposit accounts 364 459
Unsecured 154 200
Other 1,426 1,460
-------- --------
7,374 6,843
Commercial business loans 727 1,277
-------- --------
52,585 48,609
Less:
Net deferred loan fees and costs (59) (66)
Escrow (73) --
Loans in process (10) (1)
Allowance for loan losses (283) (253)
-------- --------
$ 52,160 $ 48,289
======== ========
Activity in the allowance for loan losses is summarized as follows:
Three Months Ended Nine Months Ended
March 31, March 31,
--------- ---------
2002 2001 2002 2001
---- ---- ---- ----
Balance at beginning of period $ 270 $ 245 $ 253 $ 237
Provision for losses 15 6 45 20
Charge-offs (2) (10) (15) (16)
Recoveries -- -- -- --
----- ----- ----- -----
Balance at end of period $ 283 $ 241 $ 283 $ 241
===== ===== ===== =====
- -------------------------------------------------------------------------------
(Continued)
12
INDIAN VILLAGE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Table dollar amounts in thousands)
- -------------------------------------------------------------------------------
NOTE 4 - LOANS (Continued)
Nonaccrual loans totaled approximately $1,104,000 and $943,000 at March 31,
2002, and June 30, 2001, respectively.
Impaired loans were as follows.
March 31, June 30,
2002 2001
---- ----
Loans with no allocated allowance $-- $--
for loan losses
Loans with allocated allowance 35 35
--- ---
Total $35 $35
2002 2001
---- ----
Amount of the allowance for loan losses allocated $35 $--
Average of impaired loans during the period $ 1 $--
Interest income recognized during impairment $-- $--
Cash-basis interest income recognized $-- $--
NOTE 5 - COMMITMENTS, OFF-BALANCE SHEET RISK AND CONTINGENCIES
There are various contingent liabilities that are not reflected in the financial
statements, including claims and legal actions arising in the ordinary course of
business. In the opinion of management, after consultation with legal counsel,
the ultimate disposition of these matters is not expected to have a material
effect on financial condition or results of operations.
The Corporation is a party to financial instruments with off-balance sheet risk
in the normal course of business to meet the financing needs of customers. These
financial instruments include commitments to make loans. The Corporation's
exposure to credit loss in case of nonperformance by the other party to the
financial instrument for commitments to make loans is represented by the
contractual amount of those instruments. The Corporation follows the same credit
policy to make such commitments as is followed for those loans recorded in the
financial statements.
As of March 31, 2002, variable rate and fixed rate commitments to make loans or
fund outstanding lines of credit amounted to approximately $1,179,000 and
$2,166,000. As of June 30, 2001, variable rate and fixed rate commitments to
make loans or fund outstanding lines of credit amounted to approximately
$1,602,000 and $2,012,000. Since loan commitments may expire without being used,
the amounts do not necessarily represent future cash commitments.
- -------------------------------------------------------------------------------
(Continued)
13
INDIAN VILLAGE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Table dollar amounts in thousands)
- -------------------------------------------------------------------------------
NOTE 6 - EMPLOYEE STOCK OWNERSHIP PLAN
The Bank has established an employee stock ownership plan ("ESOP") for the
benefit of substantially all employees of the Corporation and the Bank. The ESOP
borrowed funds from the Corporation with which to acquire common shares of the
Corporation. The loan is secured by the shares purchased with the loan proceeds
and will be repaid by the ESOP with funds from the Bank's discretionary
contributions to the ESOP and earnings on ESOP assets. The shares purchased with
the loan proceeds are held in a suspense account for allocation among
participants as the loan is repaid. When loan payments are made, ESOP shares are
allocated to participants based on relative compensation.
In September 2000, the Corporation declared and paid a $2.00 per share capital
distribution. The ESOP received $67,000 from the capital distribution on 33,261
unallocated shares. The ESOP purchased an additional 5,783 shares with the
proceeds from the capital distribution. The additional shares purchased are held
in suspense and allocated to participants in a manner similar to the original
ESOP shares. Additionally, the ESOP purchased and allocated an additional 476
shares with the proceeds from the special distribution, as well as accumulated
regular dividends, on allocated shares.
ESOP compensation expense was $10,000 and $29,000 for the three and nine months
ended March 31, 2002. ESOP compensation expense was $8,000 and $23,000 for the
three and nine months ended March 31, 2001. ESOP shares as of March 31, 2002 and
June 30, 2001 were as follows:
March 31, June 30,
2002 2001
---- ----
Shares released for allocation 7,799 5,543
Unreleased shares 34,097 36,353
------- -------
Total ESOP shares 41,896 41,896
======= =======
Fair value of unreleased shares $ 511 $ 422
======= =======
The ESOP provides for the repurchase of any stock distributed to a participant
at its fair market value. The fair market value of the allocated shares subject
to repurchase was approximately $117,000 and $64,000 at March 31, 2002 and June
30, 2001 respectively.
- -------------------------------------------------------------------------------
(Continued)
14
INDIAN VILLAGE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Table dollar amounts in thousands)
- -------------------------------------------------------------------------------
INTRODUCTION
In the following pages, management presents an analysis of the financial
condition of Indian Village Bancorp, Inc. as of March 31, 2002 compared to June
30, 2001, and results of operations for the three and nine months ended March
31, 2002 compared with the same periods in 2001. This discussion is designed to
provide a more comprehensive review of the operating results and financial
position than could be obtained from an examination of the financial statements
alone. This analysis should be read in conjunction with the interim financial
statements and related footnotes included herein.
FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning of
the federal securities laws. The Corporation intends such forward-looking
statements to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Reform Act of 1995, and is
including this statement for purposes of these safe harbor provisions.
Forward-looking statements, which are based on certain assumptions and describe
future plans, strategies and expectations of the Corporation, are generally
identified by use of the words "believe," "expect," "intend," "anticipate,"
"estimate," "project," or similar expressions. The Corporation's ability to
predict results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material effect on the operations of the
Corporation and the subsidiaries include, but are not limited to, changes in:
interest rates, general economic conditions, legislative/regulatory changes,
monetary and fiscal policies of the U.S. Government, including policies of the
U.S. Treasury and the Federal Reserve Board, the quality or composition of the
loan or investment portfolios, demand for loan products, deposit flows,
competition, demand for financial services in the Corporation's market area and
accounting principles and guidelines. These risks and uncertainties should be
considered in evaluating forward-looking statements and undue reliance should
not be placed on such statements. Further information concerning the Corporation
and its business, including additional factors that could materially affect the
Corporation's financial results, is included in the Corporation's filings with
the SEC.
FINANCIAL CONDITION
Total assets at March 31, 2002 were $83.3 million compared to $74.2 million at
June 30, 2001, an increase of $9.1 million, or 12.3%. The increase in total
assets was funded by deposit growth of $5.3 million and an increase in
borrowings of $3.7 million which was used to increase securities available for
sale by $6.7 million and increase net loans by $3.9 million. The increase in
loans consisted primarily of an increase in one- to four-family residential real
estate loans of $4.1 million. The increase in one- to four-family residential
real estate loans is reflective of a stable local economy and the ability of the
Corporation to attract refinance activity because of the decrease in interest
rates. The security portfolio has changed to consist of more municipal
securities to help reduce the tax effect on the Company.
- -------------------------------------------------------------------------------
(Continued)
15
INDIAN VILLAGE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Table dollar amounts in thousands)
- -------------------------------------------------------------------------------
Total deposits were $49.9 million on March 31, 2002 compared to $44.6 million at
June 30, 2001, an increase of $5.3 million, or 11.9%. The Corporation
experienced an increase in certificates of deposit of $3.3 million and money
market accounts of $2.7 million which was partially offset by a decrease in NOW
accounts of $927,000. Management attributes the increase in deposits to the
opening of the new branch office in New Philadelphia, Ohio in November 1999
along with the related promotion of deposit products in order to help establish
the office. The certificate deposit portfolio as a percent of total deposits
decreased from 71.2% at June 30, 2001 to 70.3% at March 31, 2002. Almost all
certificates of deposit held by the Corporation mature in less than three years
with the majority maturing in the next year.
As a secondary source of liquidity, the Corporation obtains borrowings from the
Federal Home Loan Bank of Cincinnati, from which it held advances totaling $24.9
million at March 31, 2002 and $21.2 million at June 30, 2001. Due to continued
loan demand and in order to better leverage the Corporation's capital, the
Corporation used these funds to originate mortgage loans and purchase securities
available for sale as well as provide for short-term liquidity needs. FHLB
advances at March 31, 2002 consisted of $2.8 million in short-term advances and
$22.1 million in long-term callable fixed-rate advances. The long-term callable
advances have specified call dates ranging from one to five years at which time
the advances may be called at the option of the Federal Home Loan Bank.
Additional advances may be obtained from the Federal Home Loan Bank to fund
future loan growth and liquidity as needed.
Total shareholders' equity increased from $8.1 million at June 30, 2001 to $8.2
million at March 31, 2002.
Nonperforming assets, consisting of $70,000 in real estate owned and $1,104,000
of nonaccrual loans, totaled $1,174,000 at March 31, 2002 or 1.41% of total
assets, an increase of $161,000 from June 30, 2001. At March 31, 2002 one
borrower had total loans classified nonaccrual of $725,000. The majority of
these loans are collateralized by either one- to four-family residential or
multi-family property. In addition, a favorable judgment on other unencumbered
property belonging to the borrower has been entered on the Bank's behalf. This
judgment further enhances our ability to collect all amounts due on the loans.
The borrower has filed for chapter eleven bankrupcy protection and the
proceedings are now scheduled for May 2002. Management has made the
determination that $35,000 of the nonaccrual loans were impaired as of March 31,
2002. This assessment is based on the fact that the majority of the loans are
low loan-to-value residential loans. At some point in the future, depending on
the court approved repayment plan and if any extensions are granted, the balance
of these loans may need to be classified as impaired based on the increasing
loan-to-value due to the increasing accrued interest. The allowance for loan
losses totaled $283,000 at March 31, 2002, representing 25.6% of nonaccrual
loans and 0.54% of gross loans receivable. At June 30, 2001 the allowance for
loan losses totaled $253,000 and represented 26.8% of nonaccrual loans and 0.52%
of gross loans receivable.
COMPARISON OF RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 2002 AND
MARCH 31, 2001
The general economic conditions, the monetary and fiscal policies of federal
agencies and the regulatory policies of agencies that regulate financial
institutions affect the operating results of the Corporation. Interest rates on
competing investments and general market rates of interest influence the
Corporation's cost of funds. Lending activities are influenced by the demand for
real estate loans and other types of loans, which in turn is affected by the
interest rates at which such loans are made, general economic conditions and the
availability of funds for lending activities.
- -------------------------------------------------------------------------------
(Continued)
16
INDIAN VILLAGE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Table dollar amounts in thousands)
- -------------------------------------------------------------------------------
The Corporation's net income primarily depends on its net interest income, which
is the difference between the interest income earned on interest-earning assets,
such as loans and securities, and interest expense incurred on interest-bearing
liabilities, such as deposits and borrowings. The level of net interest income
is dependent on the interest rate environment and the volume and composition of
interest-earning assets and interest-bearing liabilities. Provisions for loan
losses, service charges, gains on the sale of assets, other income, noninterest
expense and income taxes also affect net income.
Net income was $347,000 for the nine months ended March 31, 2002, compared to
$226,000 for the nine months ended March 31, 2001. The increase in net income
was primarily the result of an increase in noninterest income. Basic earnings
per common share was $0.95 for the nine months ended March 31, 2002 compared to
$0.60 for the nine months ended March 31, 2001. Diluted earnings per common
share was $0.94 for the nine months ended March 31, 2002. Diluted earnings per
share were $0.60 for the nine months ended March 31, 2001 because stock options
were not granted until September 20, 2001.
Net interest income totaled $1.3 million for the nine months ended March 31,
2002 and March 31, 2001. The stability in net interest income is attributable to
a decrease in interest rate spread offset by an increase in the ratio of average
interest-earning assets to average interest-bearing liabilities.
Interest and fees on loans increased approximately $320,000, or 11.9%, from $2.7
million for the nine months ended March 31, 2001 to $3.0 million for the nine
months ended March 31, 2002. The increase in interest and fees on loans was due
to an increase in the average balance of loans, partially offset by a decrease
in the yield earned.
Interest earned on securities totaled $763,000 for the nine months ended March
31, 2002, as compared to $1.1 million for the nine months ended December 31,
2001. The decrease was a result of a lower yield earned on securities.
Interest on interest-bearing deposits and overnight deposits decreased from
$47,000 for the nine months ended March 31, 2001, as compared to $10,000 for the
same period in 2002 due to lower average balances and decrease in the yield
earned.
Interest paid on deposits decreased $33,000 for the nine months ended March 31,
2002, compared to the nine months ended March 31, 2001. The decrease in interest
expense was due to a decrease in the yield paid partially offset by an increase
in the average balance of deposits.
Interest on Federal Home Loan Bank advances totaled $946,000 for the nine months
ended March 31, 2002, compared to $948,000 for the nine months ended March 31,
2001. The decrease was the result of a lower cost of funds. The borrowings were
used to provide funding for loan demand and to better leverage the Corporation's
capital.
The Corporation maintains an allowance for loan losses in an amount that, in
management's judgment, is adequate to absorb probable losses inherent in the
loan portfolio. While management utilizes its best judgment and information
available, the ultimate adequacy of the allowance is dependent on a variety of
factors, including past loan loss experience, known and inherent risks in the
nature and volume of the portfolio, information about specific borrower
situations and estimated collateral values, economic conditions and other
factors. The provision for loan losses is determined by management as the amount
to be added to the allowance for loan losses after net charge-offs have been
deducted to bring the allowance to a level which is considered adequate to
absorb losses inherent in the loan portfolio.
- -------------------------------------------------------------------------------
(Continued)
17
INDIAN VILLAGE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Table dollar amounts in thousands)
- -------------------------------------------------------------------------------
The provision for loan losses for the nine months ended March 31, 2002 totaled
$45,000 compared to $20,000 for the nine months ended March 31, 2001. The
Corporation experienced net charge-offs of $15,000 during the nine months ended
March 31, 2002 compared to $16,000 during the nine months ended March 31, 2001.
The Corporation's low charge-off history is the product of a variety of factors,
including the Corporation's underwriting guidelines, which generally require a
loan-to-value or projected completed value ratio of 80% for the purchase or
construction of one- to four-family residential properties and a minimum of 75%
for commercial real estate and land loans, established income information and
defined ratios of debt to income. Despite this history, the Corporation cannot
give any assurances as to the level of future charge-offs.
Noninterest income includes service charges and other fees, net gains on sales
of securities available for sale and other income. For the nine months ended
March 31, 2002, noninterest income totaled $255,000 compared to $168,000 for the
nine months ended March 31, 2001. During the 2002 period, the Corporation
experienced an increase in other income of $94,000 which primarily consisted of
income from the bank-owned life insurance. The Corporation also experienced and
increase in service charges and other fees of $11,000 which was offset by a
decrease in net gains on sales of securities available for sale of $18,000.
Noninterest expense totaled $1.2 million for the nine months ended March 31,
2002 compared to $1.1 million for same period in 2001 an increase of $21,000 or
1.8%. The increase in noninterest expense was primarily the result of a $28,000
increase in salaries and employee benefits and a $19,000 increase in franchise
tax expense which was offset by a decrease of $24,000 in other expenses and a
$15,000 decrease in professional and consulting fees. The decrease in other
expenses consisted primarily of a decrease in advertising and stationary and
supplies expense.
The volatility of income tax expense is primarily attributable to the increase
in tax exempt securities interest income. The provision for income taxes totaled
a $19,000 for the nine months ended March 31, 2002 compared to $99,000 for the
nine months ended March 31, 2001.
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2002
AND MARCH 31, 2001
Net income was $130,000 for the three months ended March 31, 2002, compared to
$115,000 for the three months ended March 31, 2001. The increase in net income
for the three months ended March 31, 2002 was primarily the result of an
increase in net interest income and a decrease in income tax expense which was
partially offset by a decrease in noninterest income and an increase in
noninterest expense. Basic earnings per common share was $0.36 for the three
months ended March 31, 2002 compared to $0.31 for the three months ended March
31, 2001. Diluted earnings per common share was $0.35 for the three months ended
March 31, 2002. Diluted earnings per share were $0.31 for the three months ended
March 31, 2001 because stock options were not granted until September 20, 2001.
Net interest income totaled $478,000 for the three months ended March 31, 2002,
as compared to $444,000 for the three months ended March 31, 2001, representing
an increase of $34,000, or 7.7%. The change in net interest income is
attributable to an increase in the ratio of average interest-earning assets to
average interest-bearing liabilities offset by a decrease in the interest rate
spread.
Interest and fees on loans increased approximately $52,000, or 5.5%, from
$952,000 for the three months ended March 31, 2001 to $1.0 million for the three
months ended March 31, 2002. The increase in interest income was due to higher
average loans offset by a lower average yield on loans.
- -------------------------------------------------------------------------------
(Continued)
18
INDIAN VILLAGE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Table dollar amounts in thousands)
- -------------------------------------------------------------------------------
Interest earned on securities totaled $268,000 for the three months ended March
31, 2002, as compared to $330,000 for the three months ended March 31, 2001. The
decrease was a result of lower average yield on securities.
There was less than $1,000 interest on interest-bearing deposits and overnight
deposits for the three months ended March 31, 2002. Interest on interest-bearing
deposits and overnight deposits for the three months ended March 31, 2001
totaled $21,000.
Interest paid on deposits decreased $79,000 for the three months ended March 31,
2002, compared to the three months ended March 31, 2001. The decrease in
interest expense was due to a decrease in the cost of funds offset with an
increase in the average balances of deposits.
Interest on Federal Home Loan Bank advances totaled $323,000 for the three
months ended March 31, 2002, compared to $309,000 for the three months ended
March 31, 2001. The increase was the result of a higher average balance offset
by a lower cost of funds. The additional borrowings were used to provide funding
for loan demand.
The provision for loan losses for the three months ended March 31, 2002 totaled
$15,000 compared to $6,000 for the three months ended March 31, 2001. The
Corporation experienced net charge-offs of $2,000 and $10,000 during the three
months ended March 31, 2002 and March 31, 2001, respectively.
For the three months ended March 31, 2002, noninterest income totaled $65,000,
compared to $113,000 for the three months ended March 31, 2001. During the 2002
period, the Corporation experienced a decrease in net gains on sales of
securities available for sale of $70,000 which was offset by an increase in
other income of $24,000 which primarily consisted of the income from the
bank-owned life insurance.
Noninterest expense totaled $393,000 for the three months ended March 31, 2002
compared to $376,000 for same period in 2001. The increase in noninterest
expense was primarily the result of a $12,000 increase in salaries and employee
benefits.
The volatility of income tax expense is primarily attributable to the increase
in tax exempt securities interest income. The provision for income taxes totaled
$5,000 for the three months ended March 31, 2002 compared to $60,000 for the
three months ended March 31, 2001.
- -------------------------------------------------------------------------------
(Continued)
19
INDIAN VILLAGE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Table dollar amounts in thousands)
- -------------------------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
The Corporation's liquidity, primarily represented by cash and cash equivalents,
is a result of its operating, investing and financing activities. These
activities are summarized below for the nine months ended March 31, 2002 and
2001.
Nine Months Ended
March 31,
---------
2002 2001
---- ----
Net income $ 347 $ 226
Adjustments to reconcile net income to
net cash from operating activities 24 (31)
-------- --------
Net cash from operating activities 371 195
Net cash from investing activities (10,875) (7,424)
Net cash from financing activities 8,893 7,943
-------- --------
Net change in cash and cash equivalents (1,611) 714
Cash and cash equivalents at beginning of period 3,499 1,087
-------- --------
Cash and cash equivalents at end of period $ 1,888 $ 1,801
======== ========
The Corporation's principal sources of funds are deposits, loan repayments,
maturities of securities, Federal Home Loan Bank advances and other funds
provided by operations. While scheduled loan repayments and maturing securities
are relatively predictable, deposit flows and early loan prepayments are
influenced by interest rates, general economic conditions, and competition. The
Corporation maintains investments in liquid assets based on management's
assessment of (1) need for funds, (2) expected deposit flows, (3) yields
available on short-term liquid assets and (4) objectives of the asset/liability
management program.
The Corporation has the ability to borrow funds from the Federal Home Loan Bank
and has various federal fund sources from correspondent banks, should the
Corporation need to supplement its future liquidity needs in order to meet loan
demand, deposit withdrawls, or to fund investment opportunities. ___ Management
believes the Corporation's liquidity position is strong based on its level of
cash, cash equivalents, core deposits, the stability of its other funding
sources and the support provided by its capital base.
Total shareholders' equity increased $103,000 between June 30, 2001 and March
31, 2002, the increase was primarily due increases in earnings retained which
was offset by a decreases in other comprehensive income.
- -------------------------------------------------------------------------------
(Continued)
20
INDIAN VILLAGE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Table dollar amounts in thousands)
- -------------------------------------------------------------------------------
The Corporation is not subject to any separate regulatory capital requirements.
The Bank, however, is subject to various regulatory capital requirements
administered by federal regulatory agencies. Failure to meet minimum capital
requirements can initiate certain mandatory actions that, if undertaken, could
have a direct material affect on the Bank's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective action,
the Bank must meet specific capital guidelines involving quantitative measures
of the Bank's assets, liabilities and certain off-balance sheet items as
calculated under regulatory accounting practices. The Bank's capital amounts and
classifications are also subject to qualitative judgments by regulators about
the Bank's components, risk weightings and other factors. At March 31, 2002, and
June 30, 2001, the Bank complies with all regulatory capital requirements. Based
on the Bank's computed regulatory capital ratios at March 31, 2002 and June 30,
2001, the Bank is considered well capitalized under the Federal Deposit
Insurance Corporation Act.
At March 31, 2002, and June 30, 2001 the Bank's actual capital levels and
minimum required levels were:
Minimum
Required To Be
Minimum Required Well Capitalized
For Capital Under Prompt Corrective
Actual Adequacy Purposes Action Regulations
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
March 31, 2002
- --------------
Total capital (to risk-
weighted assets) $8,166 14.6% $4,470 8.0% $5,587 10.0%
Tier 1 (core) capital (to
risk-weighted assets) 7,883 14.1 2,235 4.0 3,352 6.0
Tier 1 (core) capital (to
adjusted total assets) 7,883 9.6 3,286 4.0 4,107 5.0
Tangible capital (to
adjusted total assets) 7,883 9.6 1,232 1.5 N/A
June 30, 2001
- -------------
Total capital (to risk-
weighted assets) $7,890 17.3% $3,648 8.0% $4,561 10.0%
Tier 1 (core) capital (to
risk-weighted assets) 7,637 16.7 1,824 4.0 2,736 6.0
Tier 1 (core) capital (to
adjusted total 7,637 9.9 3,079 4.0 3,848 5.0
Tangible capital (to
adjusted total assets) 7,637 9.9 1,155 1.5 N/A
- -------------------------------------------------------------------------------
21
INDIAN VILLAGE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Table dollar amounts in thousands)
- -------------------------------------------------------------------------------
In May 2000, the Indian Village Bancorp, Inc. 2000 Stock Based Incentive Plan
was approved by shareholders at the Corporation's Annual Meeting. Subject to
certain adjustments to prevent dilution of awards to participants, the number of
shares of common stock reserved for awards under the plan is 62,381 shares,
consisting of 44,558 shares reserved for options and 17,823 shares reserved for
restricted stock awards. Authorized but unissued shares or shares previously
issued and reacquired by the Corporation may be used to satisfy awards under the
plan. If authorized but unissued shares are used to satisfy restricted stock
awards and the exercise of options granted under the plan, the number of
outstanding shares will increase and will have a dilutive effect on the holdings
of existing stockholders. The plan was effective on July 2, 2000. As of March
31, 2002, 44,400 options have been granted under the plan. As of March 31, 2002,
no restricted stock awards had been granted under the plan.
- -------------------------------------------------------------------------------
22
INDIAN VILLAGE BANCORP, INC.
PART II - OTHER INFORMATION
- -------------------------------------------------------------------------------
Item 1. Legal Proceedings
-----------------
None
Item 2. Changes in Securities
---------------------
Not applicable.
Item 3. Defaults on Senior Securities
-----------------------------
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not applicable.
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibit No. 3.1: Articles of Incorporation of Indian Village Bancorp, Inc. (1)
Exhibit No. 3.2: Bylaws of Indian Village Bancorp, Inc. (1)
Exhibit No. 4.0: Form of Stock Certificate of Indian Village Bancorp, Inc. (1)
Exhibit No. 10.1: Indian Village Community Bank Employee Stock Ownership Plan Trust Agreement (2)
Exhibit No. 10.2: ESOP Loan Commitment Letter and ESOP Loan Documents (2)
Exhibit No. 10.3: Employment Agreement between Indian Village Community Bank, Indian Village
Bancorp, Inc. and Marty R. Lindon (2)
Exhibit No. 10.4: Employment Agreement between Indian Village Community Bank, Indian Village
Bancorp, Inc. and Lori S. Frantz (2)
Exhibit No. 10.5: Indian Village Community Bank Employee Severance Compensation Plan (2)
Exhibit No. 10.6: Indian Village Bancorp, Inc. 2000 Stock Based Incentive Plan (3)
Exhibit No. 11.0: Statement re: computation of per share earnings (4)
- --------------------
(1) Incorporated herein by reference from the Exhibits to Form SB-2,
Registration Statement and amendments thereto, initially filed on March 18,
1998, Registration No. 333-74621.
(2) Incorporated herein by reference from the Exhibits to Form 10-QSB for the
quarter ended September 30, 1999, filed November 15, 1999.
(3) Incorporated herein be reference from the Proxy Statement filed March 27,
2000.
(4) Reference is hereby made to Consolidated Statements of Income on page 4,
hereof.
(b) No current reports on Form 8-K were filed by the Corporation during the
quarter ended March 31, 2002.
- -------------------------------------------------------------------------------
23
INDIAN VILLAGE BANCORP, INC.
SIGNATURES
- -------------------------------------------------------------------------------
Pursuant to the requirement of the Securities Exchange Act of 1934, the small
business issuer has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 10, 2002 /s/ Marty R. Lindon
--------------------------- ----------------------------------
Marty R. Lindon
President and Chief Executive Officer
Date: May 10, 2002 /s/ Lori S. Frantz
--------------------------- ----------------------------------
Lori S. Frantz
Vice President, Treasurer and
Chief Financial Officer
- -------------------------------------------------------------------------------
24