SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2002
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OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-25538
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TECHE HOLDING COMPANY
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(Exact name of registrant as specified in its charter)
Louisiana 72-128746
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(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
211 Willow Street, Franklin, Louisiana 70538
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (337) 365-0366
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N/A
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Former name, former address and former fiscal year, if changed
since last report.
Indicate by check X 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
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APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: February 10, 2003
Class 2,333,668
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$.01 par value common stock Outstanding Shares
TECHE HOLDING COMPANY
FORM 10-Q
FOR THE QUARTER ENDED DECEMBER 31, 2002
INDEX
Page
Number
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 1
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Item 3. Quantitative and Qualitative Disclosures about Market Risk 9
Item 4. Controls and Procedures 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities and Use of Proceeds 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
CERTIFICATIONS 13
TECHE HOLDING COMPANY
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
At At
December 31, September 30,
2002 2002*
--------- ---------
(unaudited)
ASSETS
Cash and cash equivalents ................................................. $ 33,467 $ 35,375
Securities available-for-sale, at estimated
market value (amortized cost of $88,019 and $63,009) .................... 88,887 64,110
Securities held to maturity (estimated market value of $25,667 and $31,188) 25,517 30,897
Loans receivable, net of allowance for loan losses
of $3,454 and $3,459 .................................................... 338,789 350,623
Accrued interest receivable ............................................... 2,316 2,501
Investment in Federal Home Loan Bank stock, at cost ....................... 5,248 5,211
Real estate owned, net .................................................... 626 580
Prepaid expenses and other assets ......................................... 635 742
Life insurance contracts .................................................. 8,909 8,772
Premises and equipment, at cost less accumulated depreciation ............. 15,127 15,206
--------- ---------
TOTAL ASSETS ........................................................ $ 519,521 $ 514,017
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits .................................................................. $ 356,061 $ 349,125
Advances from Federal Home Loan Bank ...................................... 101,778 103,471
Advance payments by borrowers for taxes and insurance ..................... 977 1,352
Accrued interest payable .................................................. 679 702
Accounts payable and other liabilities .................................... 3,205 3,001
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Total liabilities ................................................... 462,700 457,651
--------- ---------
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 10,000,000 shares
authorized; 4,387,656 shares issued ................................... 44 44
Preferred stock, 5,000,000 shares authorized;
none issued ........................................................... - -
Additional paid in capital .............................................. 45,007 44,618
Retained earnings ....................................................... 43,043 41,713
Unearned ESOP shares .................................................... (674) (757)
Treasury stock (2,051,088 and 2,005,588 shares, at cost) ................ (31,185) (29,968)
Unrealized gain on securities available-for-sale, net of
deferred income taxes ................................................. 586 716
--------- ---------
Total stockholders' equity .......................................... 56,821 56,366
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .......................... $ 519,521 $ 514,017
========= =========
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* The consolidated balance sheet at September 30, 2002 has been taken from
the audited balance sheet at that date.
See Notes to Unaudited Consolidated Financial Statements.
1
TECHE HOLDING COMPANY
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS)
For Three Months ended
December 31,
----------------------
2002 2001
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INTEREST INCOME:
Interest and fees on loans .......... $6,667 $7,565
Interest and dividends on investments 1,001 947
Other interest income ............... 95 84
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7,763 8,596
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INTEREST EXPENSE:
Deposits ............................ 2,184 3,093
Advances from Federal Home Loan Bank 1,509 1,311
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3,693 4,404
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NET INTEREST INCOME ................... 4,070 4,192
PROVISION FOR LOAN LOSSES ............. 30 45
------ ------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES ..................... 4,040 4,147
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NON-INTEREST INCOME:
Service charges and other ........... 2,002 1,918
Other income ........................ 300 31
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TOTAL NON-INTEREST INCOME ............. 2,302 1,949
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NON-INTEREST EXPENSE:
Compensation and employee benefits .. 1,914 1,803
Occupancy expense ................... 828 898
Marketing and professional .......... 479 500
Other operating expenses ............ 659 662
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Total non-interest expense ...... 3,880 3,863
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INCOME BEFORE INCOME TAXES ............ 2,462 2,233
INCOME TAXES .......................... 849 770
------ ------
NET INCOME ............................ $1,613 $1,463
====== ======
BASIC INCOME PER COMMON SHARE ......... $ .71 $ .65
====== ======
DILUTED INCOME PER COMMON SHARE ....... $ .67 $ .62
====== ======
DIVIDENDS DECLARED PER COMMON SHARE ... $ .125 $ .125
====== ======
See Notes to Unaudited Consolidated Financial Statements.
2
TECHE HOLDING COMPANY
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
For Three Months
Ended December 31,
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2002 2001
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income ......................................................... $ 1,613 $ 1,463
Adjustments to reconcile net income to net cash provided by
operating activities:
Accretion of discount and amortization of premium on investments
and mortgage-backed securities ............................... 283 53
Provision for loan losses ...................................... 30 45
Depreciation ................................................... 234 302
Other items - net .............................................. 224 365
-------- --------
Net cash provided by operating activities .................. 2,384 2,228
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of securities available for sale .......................... (30,354) (23,401)
Purchase of securities held to maturity ............................ - (25,772)
Principal repayments of securities available for sale .............. 5,094 5,268
Principal repayments of securities held to maturity ................ 5,380 363
Net loan repayments ................................................ 11,853 14,523
Investment in FHLB stock ........................................... (37) (37)
Purchase of premises and equipment ................................. 204 (452)
-------- --------
Net cash used in investing activities .......................... (7,860) (29,508)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits ........................................... 6,936 6,654
Net (decrease) increase in FHLB advances ........................... (1,693) 27,170
Net decrease in advance payments by borrowers for
taxes and insurance .............................................. (375) (835)
Dividends paid ..................................................... (283) (284)
Purchase of common stock for treasury .............................. (1,217) (764)
-------- --------
Net cash provided by financing activities ...................... 3,368 31,941
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NET (DECREASE) INCREASE IN CASH ...................................... (2,108) 4,661
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ....................... 35,575 24,108
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD ............................. $ 33,467 $ 28,769
======== ========
See Notes to Unaudited Consolidated Financial Statements.
3
TECHE HOLDING COMPANY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - PRINCIPLES OF CONSOLIDATION
The consolidated financial statements as of and for the three month
period ended December 31, 2002 include the accounts of Teche Holding
Company (the "Company") and its subsidiary, Teche Federal Savings Bank
(the "Bank"). The Company's business is conducted principally through
the Bank. All significant inter-company accounts and transactions have
been eliminated in consolidation.
NOTE 2 - BASIS OF PRESENTATION
The accompanying consolidated financial statements were prepared in
accordance with instructions for Form 10-Q and, therefore, do not
include all information necessary for a complete presentation of
consolidated financial condition, results of operations, and cash flows
in conformity with accounting principles generally accepted in the
United States of America. However, all adjustments, consisting of
normal recurring accruals, which, in the opinion of management, are
necessary for a fair presentation of the consolidated financial
statements have been included. The results of operations for the period
ended December 31, 2002 are not necessarily indicative of the results
which may be expected for the entire fiscal year or any other period.
NOTE 3 - INCOME PER SHARE
Following is a summary of the information used in the computation of
basic and diluted income per common share for the three months ended
December 31, 2002 and 2001.
2002 2001
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Weighted average number of common
shares outstanding - used in computation
of basic income per common share ..................... 2,279,000 2,266,000
Effect of dilutive securities:
Stock options ........................................ 141,000 91,000
--------- ---------
Weighted average number of common shares
outstanding plus effect of dilutive securities - used in
computation of diluted net income per common share ..... 2,420,000 2,357,000
========= =========
4
NOTE 4 - COMPREHENSIVE INCOME
Comprehensive income includes net income and other comprehensive income
(loss) which, in the case of the Company, only includes unrealized
gains and losses on securities available-for-sale. Following is a
summary of the Company's comprehensive income for the three months
ended December 31, 2002 and 2001 (in thousands).
2002 2001
------ ------
Net income................................................ $1,613 $1,463
Other comprehensive loss, net of tax...................... (130) (515)
------ ------
Total Comprehensive Income................................ $1,483 $ 948
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5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The Company may from time to time make written or oral "forward-looking
statements" including statements contained in this Report and in other
communications by the Company which are made in good faith pursuant to the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements, such as statements of the Company's plans,
objectives, expectations, estimates and intentions, involve risks and
uncertainties and are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's financial performance to differ materially from the
plans, objectives, expectations, estimates and intentions expressed in such
forward-looking statements: the strength of the United States economy in general
and the strength of the local economies in which the Company conducts
operations; the effects of, and changes in, trade, monetary and fiscal policies
and laws, including interest rate policies of the Board of Governors of the
Federal Reserve System, inflation, interest rate, market and monetary
fluctuations; the timely development of and acceptance of new products and
services of the Company and the perceived overall value of these products and
services by users, including the features, pricing and quality compared to
competitors' products and services; the impact of changes in financial services'
laws and regulations (including laws concerning taxes, banking, securities and
insurance); technological changes; acquisitions; changes in consumer spending
and saving habits; and the success of the Company at managing the risks involved
in the foregoing.
COMPARISON OF FINANCIAL CONDITION
The Company's total assets at December 31, 2002 and September 30, 2002 totaled
$519.5 million and $514.0 million, respectively, an increase of $5.5 million or
1.1%.
Securities available-for-sale totaled $88.9 million and securities held to
maturity totaled $25.5 million at December 31, 2002, which represents an
increase of $19.4 million or 20.4% as compared to September 30, 2002. The
Company purchased mortgage-backed securities with cash available from loan and
investment repayments.
Loans receivable totaled $338.8 million at December 31, 2002 which represented
an $11.8 million or 3.4% decrease compared to September 30, 2002. The Company
has de-emphasized long-term fixed rate mortgage loans in view of the low
interest rate environment, which has resulted in repayments exceeding loan
originations. While mortgage loans decreased during the quarter, consumer and
commercial loans increased.
Total deposits, after interest credited, at December 31, 2002 were $356.1
million which represents an increase of $7.0 million or 2.0% as compared to
September 30, 2002.
Advances decreased $1.7 million or 1.6% as compared to the amount at September
30, 2002. The decrease was primarily due to normal amortization during the
quarter.
Stockholders' equity increased to $56.8 million at December 31, 2002, from $56.4
million at September 30, 2002. Earnings for the quarter were partially offset by
dividends and stock repurchases.
6
COMPARISON OF EARNINGS FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND
2001
Net Income. The Company had net income of $1,613,000 for the three months ended
December 31, 2002, as compared to net income of $1,463,000 for the three month
period ended December 31, 2001. Earnings for the three months ended December 31,
2002 represent an increase of $150,000 compared to 2001, resulting primarily
from increased non-interest income.
Total Interest Income. Total interest income decreased by $833,000 or 9.7% to
$7.8 million for the three months ended December 31, 2002, from $8.6 million for
the three months ended December 31, 2001, as a $19.7 million increase in average
earning assets was offset by a decrease in average yields from 7.46% in 2001 to
6.46% in 2002. Interest income on loans decreased $900,000 to $6.7 million for
the three months ended December 31, 2002 from $7.6 million for the same period
ended December 31, 2001. The average yield on loans decreased to 7.69% for the
three months ended December 31, 2002 from 8.05% for the same period in 2001, and
the average yield on investment and mortgage-backed securities decreased to
3.70% for the three months ended December 31, 2002 from 5.22% for the same
quarter in 2001.
Total Interest Expense. Total interest expense decreased $700,000 or 16.1%, to
$3.7 million for the 2002 period from $4.4 million for the December 2001 period,
due to a decrease in average rates paid from 4.35% in 2001 to 3.46% in 2002.
Net Interest Income. Net interest income decreased $122,000 for the three month
period ended December 31, 2002 as compared to the same period ended December 31,
2001 due primarily to a decrease in the average interest rate spread from 3.11%
in 2001 to 3.00% in 2002.
Provision for Loan Losses. The provision for loan losses was $30,000 and $45,000
for the three month periods ended December 31, 2002 and 2001, respectively.
Management periodically estimates the likely level of losses to determine
whether the allowance for loan losses is adequate to absorb probable losses in
the existing portfolio. Based on these estimates, an amount is charged or
credited to the provision for loan losses and credited or charged to the
allowance for loan losses in order to adjust the allowance to a level determined
to be adequate to absorb probable losses.
Management's judgment as to the level of losses on existing loans involves the
consideration of current economic conditions and their potential effects on
specific borrowers, an evaluation of the existing relationships among loans,
known and inherent risks in the loan portfolio and the present level of the
allowance, results of examination of the loan portfolio by regulatory agencies
and management's internal review of the loan portfolio. In determining the
collectibility of certain loans, management also considers the fair value of any
underlying collateral.
Non-interest Income. Total non-interest income increased by $353,000 from $1.9
million in the three month period ended December 31, 2001 to $2.3 million in the
three month period ended December 31, 2002. This increase is due primarily to
the increase in service fee income associated with increased demand account
volume and also included a $120,000 gain on the sale of the Bank's Visa loan
portfolio.
Non-interest Expense. Total non-interest expense remained relatively stable at
$3.9 million for both of the periods compared.
7
Gain on Sale of Securities. The Company had no gains on the sale of securities
during the periods.
Income Tax Expense. Income taxes remained relatively constant at about 35% of
income before income taxes.
LIQUIDITY AND CAPITAL RESOURCES
Under current Office of Thrift Supervision ("OTS") regulations, the Bank
maintains certain levels of capital. At December 31, 2002, the Bank was in
compliance with its three regulatory capital requirements as follows:
Amount Percent
------ -------
(In thousands)
Tangible capital............................ $47,089 9.13%
Tangible capital requirement................ 7,734 1.50
------- ----
Excess over requirement.................... $39,355 7.63%
======= ====
Core capital................................ $47,089 9.13%
Core capital requirement.................... 20,625 4.00
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Excess over requirement..................... $26,464 5.13%
======= ====
Risk based capital.......................... $50,453 17.89%
Risk based capital requirement.............. 22,558 8.00
------- ----
Excess over requirement..................... $27,895 9.89%
======= ====
Management believes that under current regulations, the Bank will continue to
meet its minimum capital requirements in the foreseeable future. Events beyond
the control of the Bank, such as increased interest rates or a downturn in the
economy in areas in which the Bank operates could adversely affect future
earnings and as a result, the ability of the Bank to meet its future minimum
capital requirements.
The Bank's liquidity is a measure of its ability to fund loans, pay withdrawals
of deposits, and other cash outflows in an efficient, cost effective manner. The
Bank's primary source of funds are deposits and scheduled amortization and
prepayment of loan and mortgage-backed securities principal. The Bank has also
borrowed funds from the Federal Home Loan Bank of Dallas ("FHLB"). As of
December 31, 2002, FHLB borrowed funds totaled $101.8 million. Loan repayments,
maturing investments and mortgage- backed securities prepayments are greatly
influenced by general interest rates and economic conditions.
The Bank is required under federal regulations to maintain sufficient liquidity
for its safe and sound operation. The Bank believes that it maintains sufficient
liquidity to operate the Bank in a safe and sound manner.
8
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
There have been no material changes from the information regarding market risk
disclosed under the heading "Asset and Liability Management" in the Company's
Annual Report for the fiscal year ended September 30, 2002.
Additional Key Operating Ratios
At or For the Three
Months Ended
December 31,
-----------------------------
2002(1) 2001(1)
------- -------
(Unaudited)
Return on average assets...................... 1.25% 1.21%
Return on average equity...................... 11.40% 11.20%
Average interest rate spread.................. 3.00% 3.11%
Nonperforming assets to total assets.......... 0.40% 0.33%
Nonperforming loans to total loans............ 0.42% 0.40%
Average net interest margin................... 3.39% 3.64%
Tangible book value per share................. $24.31 $22.00
- ---------------
(1) Annualized where appropriate.
9
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Chief Executive Officer and the Chief Financial Officer (the "Certifying
Officers") have evaluated the effectiveness of the Company's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
report and have concluded that such controls and procedures ensured that
material information was made known to them, particularly during the period in
which the periodic report was being prepared.
Internal Controls
The Certifying Officers have concluded that there were no significant
deficiencies in the design or operation of internal controls which could
adversely affect the Company's ability to record, process, summarize and report
financial data; nor have there been any significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Neither the Company nor the Bank was engaged in any legal
proceeding of a material nature at December 31, 2002. From
time to time, the Company is a party to legal proceedings in
the ordinary course of business wherein it enforces its
security interest in loans.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
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
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits 99.1
Certification pursuant to 18 U.S.C.ss.1350, as
adopted pursuant toss.906 of the Sarbanes-Oxley Act
of 2002.
(b) Reports on Form 8-K
None.
11
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.
TECHE HOLDING COMPANY
Date: February 13, 2003 By: /s/Patrick O. Little
---------------------------------------
Patrick O. Little
President and Chief Executive Officer
(Principal Executive Officer)
Date: February 13, 2003 By: /s/J. L. Chauvin
---------------------------------------
J. L. Chauvin
Senior Vice President and
Chief Financial Officer
(Principal Accounting Officer)
12
SECTION 302 CERTIFICATION
I, Patrick O. Little, President and Chief Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Teche Holding
Company;
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 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 officer 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 functions):
(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 officer and I have indicated in this
quarterly report whether 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: February 13, 2003 /s/Patrick O. Little
----------------------------------------
Patrick O. Little
President and Chief Executive Officer
13
SECTION 302 CERTIFICATION
I, J.L. Chauvin, Vice President and Treasurer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Teche Holding
Company;
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 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 officer 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 functions):
(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 officer and I have indicated in this
quarterly report whether 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: February 13, 2002 /s/J. L. Chauvin
-------------------------------------------
J. L. Chauvin
Vice President and Treasurer
14