UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
OR
[ ] 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 0-28312
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 71-0785261
- --------------------------------------------- ---------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
200 West Stephenson
Harrison, Arkansas 72601
- --------------------------------------- ----------
(Address of principal executive office) (Zip Code)
(870) 741-7641
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: As of May 7,
2001, there were issued and outstanding 3,385,707 shares of the Registrant's
Common Stock, par value $.01 per share.
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
TABLE OF CONTENTS
PAGE
PART I. FINANCIAL INFORMATION ----
- ------- ---------------------
Item 1. Consolidated Financial Statements
Consolidated Statements of Financial Condition
As of March 31, 2001 (unaudited) and December 31, 2000 1
Consolidated Statements of Income for
the three months ended March 31, 2001 (unaudited)
and 2000 (unaudited) 2
Consolidated Statement of Stockholders' Equity for
the three months ended March 31, 2001 (unaudited) 3
Consolidated Statements of Cash Flows for the three months
ended March 31, 2001 (unaudited) and 2000 (unaudited) 4
Notes to Unaudited Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures about Market Risk 12
PART II. OTHER INFORMATION
- -------- -----------------
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands)
March 31, December 31,
ASSETS 2001 2000
---------------- --------------
(Unaudited)
Cash and cash equivalents $ 29,330 $ 11,564
Investment securities - held to maturity 151,477 184,310
Federal Home Loan Bank stock 5,168 5,098
Loans receivable, net of allowance 495,431 498,305
Accrued interest receivable 5,446 6,910
Real estate acquired in settlement of
loans, net 287 261
Office properties and equipment, net 7,115 7,170
Prepaid expenses and other assets 464 284
---------------- --------------
TOTAL ASSETS $694,718 $713,902
================ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $538,859 $540,327
Federal Home Loan Bank advances 76,855 93,359
Advance payments by borrowers for
taxes and insurance 1,314 1,006
Other liabilities 3,327 2,588
---------------- --------------
Total liabilities 620,355 637,280
---------------- --------------
STOCKHOLDERS' EQUITY:
Preferred stock, no par value, 5,000,000
shares authorized, none issued
Common stock, $.01 par value, 20,000,000
shares authorized, 5,153,751 shares
issued, 3,385,707 and 3,553,981 shares
outstanding at March 31, 2001 and December
31, 2000, respectively 52 52
Additional paid-in capital 51,137 51,045
Employee stock benefit plans (2,398) (2,680)
Retained earnings-substantially restricted 57,485 56,713
---------------- --------------
106,276 105,130
Treasury stock, at cost, 1,768,044 and
1,599,770 shares at March 31, 2001 and
December 31, 2000, respectively (31,913) (28,508)
---------------- --------------
Total stockholders' equity 74,363 76,622
---------------- --------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $694,718 $713,902
================ ==============
See notes to unaudited consolidated financial statements.
1
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share)
(Unaudited)
Three Months Ended
March 31,
----------------------
2001 2000
---------- ----------
INTEREST INCOME:
Loans receivable $10,068 $9,147
Investment securities 2,939 3,353
Other 126 33
---------- ----------
Total interest income 13,133 12,533
---------- ----------
INTEREST EXPENSE:
Deposits 7,278 6,419
Other borrowings 1,409 1,225
---------- ----------
Total interest expense 8,687 7,644
---------- ----------
NET INTEREST INCOME 4,446 4,889
PROVISION FOR LOAN LOSSES 9 --
---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,437 4,889
---------- ----------
NONINTEREST INCOME:
Deposit fee income 309 227
Other 366 158
---------- ----------
Total noninterest income 675 385
---------- ----------
NONINTEREST EXPENSES:
Salaries and employee benefits 2,218 1,997
Net occupancy expense 275 254
Federal insurance premiums 26 27
Provision for real estate losses 7 --
Data processing 257 206
Postage and supplies 140 142
Other 473 506
---------- ----------
Total noninterest expenses 3,396 3,132
---------- ----------
INCOME BEFORE INCOME TAXES 1,716 2,142
INCOME TAX PROVISION 573 712
---------- ----------
NET INCOME $1,143 $1,430
========== ==========
EARNINGS PER SHARE:
Basic $ 0.35 $ 0.39
========== ==========
Diluted $ 0.35 $ 0.39
========== ==========
Cash Dividends Declared $ 0.11 $ 0.10
========== ==========
See notes to unaudited consolidated financial statements.
2
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2001
(In Thousands)
(Unaudited)
Issued Employee Treasury Stock
Common Stock Additional Stock ---------------------- Total
-------------------- Paid-In Benefit Retained Stockholders'
Shares Amount Capital Plans Earnings Shares Amount Equity
-------------------- ------------ ------------ -------- ---------------------- -------------
Balance, December 31, 2000 5,153,751 $52 $51,045 $(2,680) $56,713 1,599,770 $(28,508) $76,622
Net income 1,143 1,143
Release of ESOP shares 92 104 196
Stock compensation expense 178 178
Purchase of treasury
stock, at cost 168,274 (3,405) (3,405)
Dividends paid (371) (371)
--------- --------- ------------ ------------ -------- ---------- ---------- -------------
Balance, March 31, 2001 5,153,751 $ 52 $51,137 $(2,398) $57,485 1,768,044 $(31,913) $74,363
========= ========= ============ ============ ======== ========== ========== =============
See notes to unaudited consolidated financial statements.
3
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended March 31,
------------------------------
2001 2000
------------------------------
OPERATING ACTIVITIES:
Net income $1,143 $1,430
Adjustments to reconcile net income
to net cash provided by operating activities:
Provision for loan losses 9 --
Provision for real estate losses 7 --
Deferred tax benefit (27) (47)
Federal Home Loan Bank stock dividends (70) (66)
Loss on sale of repossessed assets, net 3 1
Originations of loans held for sale (8,560) (740)
Proceeds from sales of loans 6,520 1,134
Gain on sale of mortgage loans
originated to sell (70) (12)
Depreciation 173 161
Depreciation on real estate owned -- 32
Accretion of deferred loan fees, net (103) (122)
Release of ESOP shares 204 159
Stock compensation expense 178 235
Changes in operating assets & liabilities:
Accrued interest receivable 1,464 418
Prepaid expenses & other assets (166) (569)
Other liabilities 776 1,088
------- -------
Net cash provided by operating activities 1,481 3,102
------- -------
INVESTING ACTIVITIES:
Purchases of investment securities-held
to maturity -- (10,530)
Proceeds from maturities/calls of
investment securities-held to maturity 32,833 2,000
Loan originations, net of repayments 4,991 (7,588)
Proceeds from sales of repossessed assets 19 104
Purchases of office properties and equipment (118) (115)
------- -------
Net cash provided (used) by investing activities 37,725 (16,129)
------- -------
(Continued)
4
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended March 31,
------------------------------
2001 2000
------------------------------
FINANCING ACTIVITIES:
Net increase (decrease) in deposits (1,468) 17,838
Advances from FHLB 1,450 22,972
Repayment of advances from FHLB (17,954) (26,975)
Net increase in advance payments
by borrowers for taxes & insurance 308 281
Purchase of treasury stock (3,405) (2,364)
Dividends paid (371) (392)
------- -------
Net cash provided (used) by financing activities (21,440) 11,360
------- -------
Net increase (decrease) in cash and cash equivalents 17,766 (1,667)
CASH AND CASH EQUIVALENTS:
Beginning of period 11,564 9,983
------- -------
End of period $29,330 $ 8,316
======= =======
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
Cash paid for:
Interest $ 8,665 $ 7,452
======= =======
Income taxes $ -- $ --
======= =======
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING ACTIVITIES:
Real estate acquired in settlement of loans $ 50 $ 100
======= =======
Loans to facilitate sales of real estate owned $ -- $ 98
======= =======
(Concluded)
See notes to unaudited consolidated financial statements.
5
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
First Federal Bancshares of Arkansas, Inc. (the "Corporation") is a unitary
holding company which owns all of the stock of First Federal Bank of Arkansas,
FA (the "Bank"). The Bank provides a broad line of financial products to
individuals and small to medium-sized businesses. The consolidated financial
statements also include the accounts of the Bank's wholly-owned subsidiary,
First Harrison Service Corporation ("FHSC"), whose activities are limited.
The accompanying unaudited consolidated financial statements of the
Corporation have been prepared in accordance with instructions to Form 10-Q.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
However, such information reflects all adjustments which are, in the opinion
of management, necessary for a fair statement of results for the interim
periods.
The accompanying consolidated financial statements include the accounts of the
Corporation and the Bank. All material intercompany transactions have been
eliminated in consolidation.
The results of operations for the three months ended March 31, 2001 are not
necessarily indicative of the results to be expected for the year ending
December 31, 2001. The unaudited consolidated financial statements and notes
thereto should be read in conjunction with the audited financial statements
and notes thereto for the year ended December 31, 2000, contained in the
Corporation's 2000 Annual Report to Stockholders.
NOTE 2 - RECENTLY ISSUED ACCOUNTING STANDARDS
Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for
Derivative Instruments and Hedging Activities, is effective for all fiscal
years beginning after June 15, 2000. SFAS 133, as amended, establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts and for hedging
activities. Under SFAS 133, certain contracts that were not formerly
considered derivatives may now meet the definition of a derivative. The
Company adopted SFAS 133 effective January 1, 2001. The effect of such
adoption did not impact the financial position, results of operations, or cash
flows of the Company.
6
NOTE 3 - EARNINGS PER SHARE
The weighted average number of common shares used to calculate earnings per
share for the periods ended March 31, 2001 and 2000 were as follows:
Three months ended
March 31,
--------------------------
2001 2000
--------------------------
Basic weighted - average shares 3,254,571 3,712,414
Effect of dilutive securities 9,641 --
--------- ---------
Diluted weighted - average shares 3,264,212 3,712,414
--------- ---------
NOTE 4 - DECLARATION OF DIVIDENDS
At their meeting on February 26, 2001, the Board of Directors declared an $.11
(eleven cent) per share cash dividend on the common stock of the Corporation.
The cash dividend was paid on March 23, 2001 to the stockholders of record at
the close of business on March 9, 2001.
NOTE 5 - INVESTMENT SECURITIES
Investment securities consisted of the following (in thousands):
March 31, 2001
-----------------------
Amortized Fair
HELD TO MATURITY Cost Value
-----------------------
U. S. Government and
Agency obligations $151,477 $150,658
======== ========
7
NOTE 6 - LOANS RECEIVABLE
Loans receivable consisted of the following (in thousands):
March 31, 2001 December 31, 2000
------------------ -----------------
First mortgage loans:
One- to four- family residences $370,103 $377,341
Other properties 43,251 41,751
Construction 25,940 24,937
Less:
Unearned discounts (213) (191)
Undisbursed loan funds (9,550) (9,126)
Deferred loan fees, net (2,666) (2,747)
---------- ----------
Total first mortgage loans 426,865 431,965
---------- ----------
Consumer and other loans:
Commercial 21,175 20,239
Automobile 16,143 16,051
Consumer 6,048 5,893
Home equity and second mortgage 20,763 19,797
Savings 1,868 2,042
Other 2,933 2,768
Add deferred loan costs 238 241
---------- ----------
Total consumer and other loans 69,168 67,031
---------- ----------
Allowance for loan losses (602) (691)
---------- ----------
Loans receivable, net $495,431 $498,305
========== ==========
Non-accrual loans at March 31, 2001 were $1.5 million. All loans 90 days or
more past due are recorded as non-accrual.
A summary of the activity in the allowance for loan losses is as follows (in
thousands):
Balance at December 31, 2000 $691
Provisions for estimated losses 9
Recoveries 4
Losses charged off (102)
-----
Balance at March 31, 2001 $602
=====
8
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
At March 31, 2001, the Corporation's assets amounted to $694.7 million
as compared to $713.9 million at December 31, 2000. The $19.2 million or 2.7%
decrease was primarily due to a decrease of $32.8 million or 17.8% in
investment securities-held to maturity and to a decrease of $2.9 million or
.6% in net loans receivable. The effect of this decrease on total assets was
partially offset by a $17.8 million or 153.6% increase in cash and cash
equivalents. Loan originations for the three month period ended March 31,
2001 consisted of $19.1 million in one- to four- family residential loans,
$749,000 in multi-family residential loans, $4.6 million in commercial loans,
$7.4 million in construction loans and $9.5 million in consumer installment
loans, of which $3.7 million consisted of home equity loans and $3.3 million
consisted of automobile loans. At March 31, 2001, the Bank had outstanding
loan commitments of $2.1 million, unused lines of credit of $7.5 million, and
the undisbursed portion of construction loans of $9.6 million. Liabilities
decreased $16.9 million or 2.7% to $620.4 million at March 31, 2001 compared
to $637.3 million at December 31, 2000. The decrease in liabilities was
primarily due to a decrease of $16.5 million or 17.7% in advances from the
Federal Home Loan Bank of Dallas ("FHLB of Dallas"). Stockholders' equity
amounted to $74.4 million or 10.7% of total assets at March 31, 2001 compared
to $76.6 million or 10.7% of total assets at December 31, 2000. The decrease
in stockholders' equity was primarily due to the purchase of 168,274 shares of
treasury stock totaling $3.4 million in connection with the Corporation's
stock repurchase plan and to a lesser extent due to the payment of cash
dividends aggregating $371,000. Such decrease during the three months ended
March 31, 2001 was partially offset by net income of $1.1 million resulting
from continued profitable operations.
Non-performing assets, consisting of non-accruing loans and repossessed
assets, amounted to $1.8 million or .25% of total assets at March 31, 2001,
compared to $1.9 million or .27% of total assets at December 31, 2000.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
GENERAL. The Corporation reported net income of $1.1 million during the
three months ended March 31, 2001 compared to net income of $1.4 million for
the same period in 2000. The decrease of $287,000 in net income in the 2001
period compared to the same period in 2000 was primarily due to a decrease in
net interest income and an increase in noninterest expenses which was offset
by an increase in noninterest income and a decrease in income tax expense.
Net interest income declined from $4.9 million for the three months ended
March 31, 2000 to $4.4 million for the same period in 2001. Net interest
income is determined by the Corporation's interest rate spread (i.e., the
difference between the yields earned on its interest-earning assets and the
rates paid on its interest-bearing liabilities) and the relative amounts of
interest-earning assets and interest-bearing liabilities. The Corporation's
interest rate spread and net interest margin decreased to 2.12% and 2.61%,
respectively, for the 2001 three month period compared to 2.49% and 2.96%,
respectively, for the 2000 three month period. These and other significant
fluctuations in operations are discussed below.
9
INTEREST INCOME. Interest income amounted to $13.1 million for the
three months ended March 31, 2001 compared to $12.5 million for the same
period in 2000. The increase of $600,000 or 4.8% was primarily due to an
increase in the average balance of net loans receivable, an increase in the
average yield earned on loans receivable and an increase in the average
balance of other interest earning assets, primarily overnight funds. Such
increase was partially offset by a decline in the average balance of
investment securities and a decrease in the average yield earned on investment
securities, primarily due to higher-yielding investments being called.
INTEREST EXPENSE. Interest expense increased $1.0 million or 13.6% to
$8.7 million for the three months ended March 31, 2001 compared to $7.6
million for the same period in 2000. Such increase was primarily due to an
increase in the average balance of deposits, an increase in interest rates
paid on such deposits, and an increase in the average interest rate paid on
advances.
NONINTEREST INCOME. Noninterest income increased $290,000 or 75.3% to
$675,000 for the three months ended March 31, 2001 compared to $385,000 for
the three months ended March 31, 2000. The increase in noninterest income for
the three month comparable periods ended March 31 was primarily due to an
increase of $37,000 from $38,000 to $75,000 in gross revenue from full service
brokerage operations, an increase of $81,000 or 35.7% from $227,000 to
$308,000 in deposit fee income and an increase of $58,000 from $12,000 to
$70,000 in the gain on the sale of mortgage loans in the secondary mortgage
market. The increase in noninterest income was also due to a decline in the
net loss recognized from the operations of real estate owned in the amount of
$47,000. The property primarily incurring such losses was disposed of in June
2000.
NONINTEREST EXPENSE. Noninterest expenses increased $264,000 or 8.4%
between the 2001 and 2000 three month periods ended March 31. The increase in
noninterest expenses during the three month period in 2001 compared to 2000
was primarily due to an increase in salaries and employee benefits and net
occupancy expenses. Salaries and employee benefits amounted to $2.2 million
compared to $2.0 million resulting in an increase of $221,000 or 11.1% for the
three month periods ended March 31, 2001 and 2000, respectively. Such
increase in salaries and employee benefits was primarily due to an increase in
personnel as well as salary and merit increases. Data processing expense for
the three months ended March 31, 2001 was $257,000 compared to $206,000 for
the same period in 2000 resulting in an increase of $51,000 or 24.8%. Such
increase was primarily due to growth and additional product offerings.
INCOME TAXES. Income taxes amounted to $573,000 and $712,000 for the
three months ended March 31, 2001 and 2000, respectively, resulting in
effective tax rates of 33.4% and 33.2%, respectively.
10
LIQUIDITY AND CAPITAL RESOURCES
The Bank's liquidity, represented by cash and cash equivalents and
eligible investment securities, is a product of its operating, investing and
financing activities. The Bank's primary sources of funds are deposits,
collections on outstanding loans, maturities and calls of investment
securities and other short-term investments and funds provided from
operations. While scheduled loan amortization and maturing investment
securities and short-term investments are relatively predictable sources of
funds, deposit flows and loan prepayments are greatly influenced by general
interest rates, economic conditions and competition. The Bank manages the
pricing of its deposits to maintain a steady deposit balance. In addition,
the Bank invests excess funds in overnight deposits and other short-term
interest-earning assets which provide liquidity to meet lending requirements.
The Bank has generally been able to generate enough cash through the retail
deposit market, its traditional funding source, to offset the cash utilized in
investing activities. As an additional source of funds, the Bank has borrowed
from the FHLB of Dallas. At March 31, 2001, the Bank had outstanding advances
from the FHLB of Dallas of $76.9 million. Such advances were used in the
Bank's normal operating and investing activities.
As of March 31, 2001, the Bank's regulatory capital was in excess of all
applicable regulatory requirements. At March 31, 2001, the Bank's tangible,
core and risk-based capital ratios amounted to 10.5%, 10.5% and 19.6%,
respectively compared to applicable requirements of 1.5%, 4.0% and 8.0%,
respectively.
IMPACT OF INFLATION AND CHANGING PRICES
The financial statements and related financial data presented herein
have been prepared in accordance with instructions to Form 10-Q, which require
the measurement of financial position and operating results in terms of
historical dollars, without considering changes in relative purchasing power
over time due to inflation.
Unlike most industrial companies, virtually all of the Bank's assets and
liabilities are monetary in nature. As a result, interest rates generally
have a more significant impact on a financial institution's performance than
does the effect of inflation.
11
FORWARD-LOOKING STATEMENTS
This Form 10-Q contains certain forward-looking statements and
information relating to the Corporation that are based on the beliefs of
management as well as assumptions made by and information currently available
to management. In addition, in those and other portions of this document, the
words "anticipate," "believe," "estimate," "except," "intend," "should" and
similar expressions, or the negative thereof, as they relate to the
Corporation or the Corporation's management, are intended to identify forward-
looking statements. Such statements reflect the current views of the
Corporation with respect to future looking events and are subject to certain
risks, uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize or should underlying assumptions prove incorrect,
actual results may vary from those described herein as anticipated, believed,
estimated, expected or intended. The Corporation does not intend to update
these forward-looking statements.
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
For a discussion of the Corporation's asset and liability management
policies as well as the potential impact of interest rate changes upon the
market value of the Bank's portfolio equity, see "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the
Corporation's 2000 Annual Report to Stockholders. There has been no material
change in the Corporation's asset and liability position or the market value
of the Bank's portfolio equity since December 31, 2000.
12
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
PART II
Item 1. Legal Proceedings
Neither the Corporation nor the Bank is involved in any pending
legal proceedings other than non-material legal proceedings
occurring in the ordinary course of business.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None.
13
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.
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
Date: May 10, 2001 By: /s/Larry J. Brandt
--------------------------------
Larry J. Brandt
President
Date: May 10, 2001 By: /s/Tommy W. Richardson
--------------------------------
Tommy W. Richardson
Chief Financial Officer
14