PENNROCK FINANCIAL SERVICES CORP - 10-Q Quarterly Report

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended September 30, 2002 Commission File Number 0-15040
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PennRock Financial Services Corp.
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(Exact name of registrant as specified in its charter)

Pennsylvania 23-2400021
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1060 Main St.
Blue Ball, Pennsylvania 17506
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(Address of principal executive offices) (Zip code)

(717) 354-4541
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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 periods 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 practical date.

Class Outstanding at November 14, 2002
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Common Stock ($2.50 par value) 6,931,324 Shares

PENNROCK FINANCIAL SERVICES CORP. AND SUBSIDIARIES
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FORM 10-Q
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For the Quarter Ended September 30, 2002

Contents
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PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements

Consolidated balance sheets - September 30, 2002,
December 31, 2001 and September 30, 2001.

Consolidated statements of income - Three months and nine months ended
September 30, 2002 and 2001.

Consolidated statements of comprehensive income - Three months and
nine months ended September 30, 2002 and 2001.

Consolidated statements of cash flows - Nine months ended
September 30, 2002 and 2001.

Notes to consolidated financial statements.

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations

Item 4. Controls and Procedures

PART II. OTHER INFORMATION
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Item 1. Legal Proceedings

Item 2. Changes in Securities

Item 3. Defaults Upon Senior Securities

Item 4. Submission of Matters to a Vote of Security Holders

Item 6. Exhibits and Reports on Form 8-K

SIGNATURES
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PART I. FINANCIAL INFORMATION

For the Quarter Ended September 30, 2002

Item 1. Financial Statements

PENNROCK FINANCIAL SERVICES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended Nine Months Ended
(Amounts in thousands) September 30, September 30,
------------------ -------------------
2002 2001 2002 2001
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Net income $3,042 $3,002 $ 9,531 $9,028
Other comprehensive income (loss),
net of tax:
Unrealized gains on securities
available for sale:
Gain arising during the period,
net of tax 1,182 1,017 3,444 289
Reclassification adjustment
for gains included in net
income, net of tax (202) (298) (131) (1,136)
------- ------- ------- -------
Other comprehensive income (loss) 980 719 3,313 (847)
------- ------- ------- -------
Comprehensive income $4,022 $3,721 $12,844 $8,181
======= ======= ======= =======

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2002

NOTE 1. BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of
PennRock Financial Services Corp. and its subsidiaries. All material
intercompany balances and transactions have been eliminated in consolidation.

The information contained in the financial statements is unaudited. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation of the results of
interim periods have been made. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements.
Operating results for the nine months ended September 30, 2002 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 2002.

The accounting policies of PennRock Financial Services Corp. and
Subsidiaries, as applied in the consolidated interim financial statements
presented, are substantially the same as those followed on an annual basis as
presented in the 2001 Annual Report to shareholders except as discussed in
Note 5.

NOTE 2. BUSINESS

PennRock Financial Services Corp. ("PennRock") is a bank holding company
incorporated in 1986 under the laws of Pennsylvania. Blue Ball National Bank
("the Bank") and The National Advisory Group, Inc. ("National") are wholly
owned subsidiaries of PennRock. The Bank provides a broad range of banking,
trust and other financial services to consumers, small businesses and
corporations in south-central and southeastern Pennsylvania. PennRock
Insurance Group Inc., a wholly owned subsidiary of the Bank, began operations
in the first quarter of 1999 to offer and sell annuity products. National,
established in 1984, is the parent company for four corporations: National
Actuarial Consultants, Ltd. which provides consulting, actuarial and
administrative services to retirement and employee benefit plans; National
Financial Advisors, Inc. which offers investment, advisory and asset
management services to retirement plan sponsors and participants, and serves
as an investment advisor to the Dresher Family of Funds; NFA Brokerage
Services, Inc. which is a mutual-funds-only broker dealer; and National
Shareholder Services, Inc. which provides transfer agency services for the
Dresher Family of Funds. The Dresher Family of Funds is an open-end
diversified management investment company (mutual fund) which consists of two
portfolios: The Dresher Comprehensive Growth Fund and The Dresher Classic
Retirement Fund.

NOTE 3. COMMITMENTS AND CONTINGENT LIABILITIES

The financial statements do not reflect various commitments and contingent
liabilities, such as commitments to extend credit, letters of credit,
guarantees, and liability for assets held in Trust, which arise in the normal
course of business. Commitments under outstanding letters of credit amounted
to $42.2 million and commitments to extend credit totaled $133.1 million as
of September 30, 2002. Management does not anticipate any significant loss
as a result of these transactions.

NOTE 4. STOCKHOLDERS' EQUITY

On July 9, 2002, the Board of Directors declared a 10% stock dividend payable
on August 13, 2002 to shareholders of record on July 23, 2002. All per-share
amounts in the accompanying financial statements have been restated for the
10% stock dividend and for a 5% stock dividend that was paid on August 10,
2001.

On June 25, 2002, the Board of Directors authorized the repurchase of up to
400,000 shares of common stock to be held as treasury shares to be used in
connection with future stock dividends and stock splits, employee benefit
plans, executive compensation plans, the Dividend Reinvestment Plan and other
corporate purposes.

NOTE 5. NEW ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards Nos. 141, "Business Combinations," and 142,
"Goodwill and Other Intangible Assets." SFAS No. 141 requires companies to
use the purchase method of accounting for all business combinations initiated
after June 30, 2001 and addresses the initial recognition and measurement of
goodwill and other intangibles acquired in a business combination. SFAS No.
142 addresses the recognition and measurement of goodwill and other
intangible assets subsequent to acquisition. Under the new standard,
goodwill is no longer amortized. Instead, it is tested for impairment at
least annually. Other intangible assets continue to be amortized over their
useful lives. PennRock adopted the provisions of SFAS No. 142 on January 1,
2002. The adoption of SFAS 142 will eliminate annual goodwill amortization
of approximately $403,000 per year. Goodwill was tested for impairment as of
June 30, 2002. Based on this test, management concluded that there was no
impairment. Goodwill totaled $7.8 million as of September 30, 2002, and
$8.0 million as of September last year.

NOTE 6. RECENT REGULATORY DEVELOPMENTS

On July 30, 2002, the President signed into law the Sarbanes-Oxley Act of
2002 ("the Act"). This legislation impacts corporate governance
of public companies including their officers and directors, their audit
committees, their relationship with their accountants and the audit function
itself. Certain provisions of the Act became effective on July 30, 2002.
Others will become effective as the SEC adopts appropriate rules.

The Act implements a broad range of governance and accounting measures for
public companies designed to promote honesty and transparency in
corporate America and better protect investors from corporate wrongdoing.
The Sarbanes-Oxley Act's principal legislation includes:

The creation of an independent accounting oversight board to oversee the
audit of public companies and auditors who perform such audits;

Auditor independence provisions which restrict non-audit services that
independent accountants may provide to their audit clients;

Additional corporate governance and responsibility measures, including (i)
requiring the chief executive officer and chief financial officer to
certify financial statements; (ii) prohibiting trading of securities by
officers and directors during periods in which certain employee benefit
plans are prohibited from trading; (iii) requiring the chief executive
officer and chief financial officer to forfeit salary and bonuses,
including profits on sale of company securities, in certain situations;
(iv) protecting whistleblowers and informants;

Expansion of the power of the audit committee, including the requirements
that the audit committee (i) have direct control of the engagement of the
outside auditor, (ii) be able to hire and fire the auditor, and (iii)
approve all non-audit services;

Expanded disclosure requirements, including accelerated reporting of
stock transactions by insiders and the prohibition of most loans to
directors and executive officers of non-financial institutions and
mandatory disclosure by analysts of potential conflicts of interest;

A range of enhanced penalties for fraud and other violations.

NOTE 7. SUBSEQUENT EVENT

On October 31, 2002, PennRock completed the acquisition of Pension Consulting
Services, Inc. ("PCS") of New Jersey for approximately $1.7 million. PCS is
a third party administrator for small to medium sized business and
professional corporate retirement plans located in Pennsylvania, Maryland,
New Jersey and Delaware. PCS will retain its name and function as a wholly
owned subsidiary of PennRock. Operations and personnel will relocate to
Dresher, Pennsylvania and will work out of the same offices as National.

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations

This section presents management's discussion and analysis of the financial
condition and results of operations of PennRock Financial Services Corp.
(PennRock or the Company) and subsidiaries. This discussion should be read
in conjunction with the financial statements which appear elsewhere in this
report.

FORWARD LOOKING STATEMENTS

In this report, we may have included certain forward looking statements
relating to such matters as anticipated financial performance, business
prospects, technological developments, new products and similar matters. The
Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward looking statements. In order to comply with the terms of the safe
harbor, we must inform you that a variety of factors could cause the
Company's actual results and experiences to differ materially from the
anticipated results or other expectations expressed in these forward looking
statements. Our ability to predict the results or the effect of future plans
and strategies is inherently uncertain. Factors that could affect future
results include changes in market interest rates, local and national economic
trends and conditions, competition for products and services, changes in
customer preferences, legislative and regulatory changes, delinquency rates
on loans, changes in accounting principles, policies or guidelines, or the
failure of major customers, vendors or suppliers. You should consider these
factors in evaluating any forward looking statements and not place undue
reliance on such statements. We are not obligated to publicly update any
forward looking statements we may make in this report to reflect the impact
of subsequent events.

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Total assets of PennRock increased $134.3 million or 15.2% since September 30
last year and by $69.0 million or 7.3% from year-end 2001. Loans grew $57.6
million or 10.9% from September last year. For the first nine months of
2002, loans increased $26.7 million or 4.8%. Most of the loan growth was in
commercial real estate loans. Securities available for sale increased $75.8
million or 29.1% from September last year and by $33.1 million or 10.9% since
year-end. Most of the securities growth was in short duration mortgage-
backed securities. Deposits increased $100.4 million or 15.6% from last year
and by $79.7 million or 12.0% from year-end. Short-term borrowings increased
$15.5 million or 48.6% from last year but decreased $29.5 million or 38.4%
from year-end. Long-term debt increased $6.0 million.

Net income for the current quarter was $3.0 million or $.44 per share
compared with $3.0 million or $.43 per share for the third quarter of 2001,
an increase of $40,000 or 1.3%. Dividends paid in the third quarter of 2002
totaled $1.3 million or $.19 per share and $1.2 million or $.17 per share for
the third quarter of 2001.

For the first nine months of 2002, net income totaled $9.5 million or $1.37
per share compared with $9.0 million or $1.31 per share for the first nine
months of 2001, an increase of 5.6%. Net interest income increased $3.2
million, non-interest income excluding security gains increased $1.4 million
and non-interest expenses increased $2.1 million. Dividends of $4.0 million
or $.59 per share were paid in the first nine months of 2002 compared with
$3.5 million or $.52 per share in 2001. The dividend payout ratio was 42%
in 2002 and 40% in 2001.

NET INTEREST INCOME

Net interest income is the product of the volume of average earning assets
and the average rates earned on them, less the volume of average interest
bearing liabilities and the average rates paid on them. The amount of net
interest income is affected by changes in interest rates, volumes and the mix
of earning assets and paying liabilities. For analytical purposes, net
interest income is adjusted to a taxable equivalent basis. This adjustment
allows for a more accurate comparison among taxable and tax-exempt assets by
increasing tax-exempt income by an amount equivalent to the federal income
tax that would have been paid if this income were taxable at the statutory
rate of 34%.

Table 1 presents net interest income on a fully taxable equivalent basis for
the third quarter and first nine months of 2002 and 2001. For the third
quarter of 2002, net interest income on a fully taxable equivalent basis
totaled $8.4 million, an increase of $86,000 or 1.0% from $8.3 million earned
for the same period of 2001. For the first nine months of 2002 and 2001, net
interest income on a fully taxable equivalent basis totaled $26.5 million and
$23.8 million, respectively, an increase of $2.6 million or 11.1%.

TABLE 1 - NET INTEREST INCOME
Three Months Ended Nine Months Ended
(Amounts in thousands) September 30, September 30,
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2002 2001 2002 2001
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Total interest income $13,769 $15,309 $42,662 $47,406
Total interest expense 5,845 7,734 17,923 25,889
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Net interest income 7,924 7,575 24,739 21,517
Tax equivalent adjustment 466 729 1,735 2,322
------- ------- -------- --------
Net interest income
(fully taxable equivalent) $ 8,390 $ 8,304 $26,474 $23,839
======= ======= ======== ========

Table 2 presents the average balances, taxable equivalent interest income and
expense and rates for PennRock's assets and liabilities for the three and
nine months ended September 30, 2002 and 2001.

Net interest income for the first nine months of 2002 benefited from
increases in both the interest rate spread and margin relative to the same
period last year. Although the yield on earning assets declined in 2002
compared with 2001, the drop in PennRock's cost of funds was greater.
Although net interest income increased by $86,000, both the interest rate
spread and margin declined during the third quarter of 2002 compared with the
third quarter of 2001 as the yield on earning assets declined more than the
cost of funds.

PROVISION AND ALLOWANCE FOR LOAN LOSSES

The provision for loan losses charged to earnings was $227,000 for both the
third quarter of 2002 and 2001. The provision was $1.0 million for the first
nine months of 2002 and 2001. The provision is based on management's
estimate of the amount needed to maintain an adequate allowance for loan
losses. The adequacy of the allowance will be examined in light of past loan
loss experience, current economic conditions, volume of non-performing and
delinquent loans and other relevant factors. The allowance is established at
a level considered by management to be adequate to absorb potential future
losses contained in the portfolio and is monitored on a continuous basis with
independent formal reviews conducted semiannually. The allowance is
increased by provisions charged to expense and decreased by net charge-offs.
Table 3 reflects an analysis of the allowance for loan losses for the third
quarter and first nine months of 2002 and 2001.

NON-PERFORMING ASSETS

Table 4 reflects PennRock's non-performing assets at September 30, 2002,
December 31, 2001 and September 30, 2001. PennRock's policy is to
discontinue the accrual of interest on loans for which the principal or
interest is past due 90 days or more unless the loan is well secured and
corrective action has begun or the loan is in the process of collection.
When a loan is placed on non-accrual status, any unpaid interest is charged
against income. Other real estate owned represents property acquired through
foreclosure.

Total non-performing loans increased $1.5 million from September 30 last year
and by $2.4 million from year end. The large increase in non-accrual loans
since year-end 2001 primarily represents the balance owed for the financing
of a commercial equipment lease to a lessee that declared bankruptcy in the
first quarter of 2002. The leased equipment has been recovered and is being
refurbished for sale. While the exact amount of recovery that PennRock may
receive is not known, during the third quarter of 2002, management
charged-off $1.5 million of this lease as unlikely to be realized.
Management increased the provision for loan losses in the fourth quarter of
2002.

LIQUIDITY

The purpose of liquidity management is to ensure that there are sufficient
cash flows available to meet a variety of needs. These include financial
commitments such as satisfying the credit needs of our borrowers and
withdrawals by our depositors, the ability to capitalize on investment and
business opportunities as they occur, and the funding of PennRock's own
operations. Liquidity is provided by maturities and sales of investment
securities, loan payments and maturities and liquidating money market
investments such as federal funds sold. Liquidity is also provided by short-
term lines of credit with various correspondents and fixed and variable rate
advances from the Federal Home Loan Bank of Pittsburgh and other
correspondent banks. However, PennRock's primary source of liquidity lies in
PennRock's ability to renew, replace and expand its base of core deposits
(consisting of demand, NOW, money market, savings and time deposits less than
$100,000).

Total deposits increased $100.4 million or 15.6% since September last year
and by $79.7 million or 12.0% from year-end. Although most of the deposit
growth during 2001 was in non-maturity deposits (which consists of all
deposits other than time deposits), during 2002 non-maturity deposit growth
has slowed while time deposit growth increased.

Table 5 reflects the changes in the major classifications of deposits and
borrowed funds by comparing the balances at the end of the third quarter of
2002 with year-end and the third quarter of 2001.

CAPITAL RESOURCES

Total stockholders' equity increased $8.7 million or 11.2% from September 30,
2001 and by $8.4 million or 10.7% since year end. Stockholders' equity is
impacted by changes in the unrealized market gains and losses of the
securities available for sale portfolio, net of deferred taxes and is shown
on the consolidated balance sheets as a component of stockholders' equity as
accumulated other comprehensive loss, net of tax. This portfolio had net
unrealized losses in each period presented. The net unrealized loss declined
by $1.6 million from September 30, 2001 and by $3.3 million from year-end
2001. The net unrealized gains and losses of the securities available for
sale portfolio are excluded from computations of regulatory ratios.

Table 6 shows PennRock's capital resources as of September 30, 2002, December
31 and September 30, 2001. PennRock and its subsidiary bank exceed all
minimum capital guidelines.

Item 4. Controls and Procedures

Within 90 days prior to the date of this report, PennRock's Chief Executive
Officer and Chief Financial Officer, with the assistance of other members of
the management team, carried out an evaluation of the effectiveness of the
design and operation of PennRock's disclosure controls and procedures. The
term "disclosure controls and procedures" as defined in SEC Rule 13a-14(c)
refers to the controls and other procedures of a company that are designed to
ensure that information required to be disclosed by a company in the reports
that it files under the Exchange Act of 1934 is recorded, processed,
summarized and reported within the required time periods. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that PennRock's disclosure controls and procedures are effective in all
material respects.

There have been no significant changes to PennRock's internal controls or in
other factors that could significantly affect our internal controls.

PART II. OTHER INFORMATION
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For the Quarter ended September 30, 2002

Item 1. Legal Proceedings

Various legal actions or proceedings are pending involving PennRock or its
subsidiaries. Management believes that the aggregate liability or loss, if
any, will not be material.

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 6. Exhibits and Reports on Form 8-K

(a) Exhibits. The following list of exhibits required by Item 601 of
Regulation S-K are filed herewith or incorporated by reference.

(b) Reports on Form 8-K: From July 1, 2002 to the date of this Report,
PennRock filed two Current Reports on Form 8-K.

A current report on Form 8-K dated July 9, 2002 was filed with the
Securities and Exchange Commission on or about July 10, 2002. The report
was filed under Item 5 - "Other Events" and disclosed that on July 9,
2002 the Company had declared a 10% stock dividend to all shareholders of
record on July 23, 2002 payable on August 13, 2002.

A current report on Form 8-K dated October 31, 2002 was filed with the
Securities and Exchange Commission on or about October 31, 2002. The
report was filed under Item 5 - "Other Events" and disclosed that on
October 31, 2002 the Company completed the acquisition of Pension
Consulting Services, Inc., a third party retirement plan administrator.

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.

PennRock Financial Services Corp.
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(Registrant)

Date: November 14, 2002 By: /s/ Melvin Pankuch
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Melvin Pankuch
Executive Vice President and
Chief Executive Officer

Date: November 14, 2002 By: /s/ George B. Crisp
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George B. Crisp
Vice President and Treasurer
(Principal Financial and Accounting Officer)

Certifications
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Certification of Chief Executive Officer:

I, Melvin Pankuch, Executive Vice President and Chief Executive Officer,
certify that:

1. I have reviewed this quarterly report on Form 10-Q of PennRock Financial
Services Corp;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;

b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation Date");
and

c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.

Date: November 14, 2002 By: /s/ Melvin Pankuch
- ----------------------- -----------------------------------------------
Melvin Pankuch
Executive Vice President and
Chief Executive Officer

Certification of Chief Financial Officer:

I, George B. Crisp, Vice President and Treasurer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PennRock Financial
Services Corp;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:

a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;

b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and

c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.

Date: November 14, 2002 By: /s/ George B. Crisp
- ------------------------ -----------------------------------------------
George B. Crisp
Vice President and Treasurer
(Principal Financial and Accounting Officer)

Exhibit Index
----------------