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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period_____________ to___________
Commission File No. 0-30505
WEST POINTE BANCORP, INC.
(Exact name of registrant as specified in its charter)
Illinois 36-4149655
- ----------------------------- ---------------------------------
(State of incorporation) (IRS Employer Identification No.)
West Pointe Bancorp, Inc.
5701 West Main Street
Belleville, Illinois 62226
----------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (618) 234-5700
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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Outstanding at May 12, 2004
- ------------------------- ---------------------------
Common stock $1 par value 995,335
TABLE OF CONTENTS
Page
----
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Comprehensive Income 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK 18
ITEM 4. CONTROLS AND PROCEDURES 18
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 19
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 19
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 19
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS 20
ITEM 5. OTHER INFORMATION 20
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 20
SIGNATURE PAGE 21
EXHIBIT INDEX 22
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WEST POINTE BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
MARCH 31, DECEMBER 31,
2004 2003
------------- -------------
Assets
Cash and due from banks $ 9,104,499 $ 8,875,108
Interest bearing due from banks 12,350,712 104,775
------------- -------------
Cash and cash equivalents 21,455,211 8,979,883
Federal Home Loan Bank stock 12,724,000 12,520,600
Securities:
Available-for-sale, at fair value 162,457,795 166,700,103
Loans held for sale 1,081,699 338,729
Loans 214,187,063 216,754,989
Allowance for loan losses (2,543,270) (2,697,139)
------------- -------------
Net Loans 211,643,793 214,057,850
Bank premises and equipment 11,885,460 11,914,722
Cash surrender value of life insurance 8,719,509 8,374,188
Accrued interest and other assets 2,488,835 2,264,366
------------- -------------
Total Assets $ 432,456,302 $ 425,150,441
============= =============
Liabilities
Deposits:
Noninterest bearing $ 41,226,341 $ 41,470,256
Interest bearing 326,627,480 319,450,628
------------- -------------
Total Deposits 367,853,821 360,920,884
Repurchase agreements 20,703,135 19,185,867
Other borrowings 1,162,100 1,237,100
Federal Home Loan Bank advances 5,000,000 9,400,000
Accrued interest and other liabilities 5,503,790 3,675,177
------------- -------------
Total Liabilities 400,222,846 394,419,028
Stockholders' Equity
Preferred stock, $1 par value - 50,000 shares authorized and unissued ---- ----
Common stock, $1 par value - 10,000,000 shares authorized; 1,013,085
and 1,008,698 shares issued at March 31, 2004 and December 31, 2003,
respectively 1,013,085 1,008,698
Surplus 13,656,425 13,482,395
Retained earnings 16,660,974 15,943,128
Treasury stock, 17,750 shares (648,575) (648,575)
Accumulated other comprehensive income 1,551,547 945,767
------------- -------------
Total Stockholders' Equity 32,233,456 30,731,413
------------- -------------
Total Liabilities and Stockholders' Equity $ 432,456,302 $ 425,150,441
============= =============
See the accompanying notes to consolidated financial statements.
3
WEST POINTE BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
---------------------------
2004 2003
---------- ----------
Interest and Fee Income:
Loans
Taxable $3,395,148 $3,781,207
Non-taxable 39,712 50,557
Securities
Taxable 1,137,409 1,016,849
Non-taxable 396,224 394,252
Deposits with banks 5,171 34,024
---------- ----------
Total Interest and Fee Income 4,973,664 5,276,889
Interest Expense:
Deposits 1,400,771 1,797,423
Repurchase agreements 65,845 91,941
Other borrowings 10,332 13,770
Federal Home Loan Bank advances 77,669 70,375
---------- ----------
Total Interest Expense 1,554,617 1,973,509
---------- ----------
Net Interest Income 3,419,047 3,303,380
Provision for Loan Losses 180,000 495,000
---------- ----------
Net Interest Income After
Provision For Loan Losses 3,239,047 2,808,380
Noninterest Income:
Service charges on deposits 354,855 338,065
Mortgage banking 114,176 273,352
Trust fees 167,374 177,033
Brokerage and insurance services 75,415 72,883
Credit card income 84,384 94,000
Increase in cash surrender value of life insurance 95,693 124,537
Gain on sale of securities, net 147,847 333,331
Other 48,887 58,440
---------- ----------
Total Noninterest Income 1,088,631 1,471,641
Noninterest Expense:
Employee compensation and benefits 1,726,208 1,627,624
Occupancy, net 165,707 186,798
Furniture and equipment 183,239 160,453
Legal and professional fees 260,775 271,128
Data processing 116,606 118,829
Advertising 78,464 86,171
Other 681,136 665,855
---------- ----------
Total Noninterest Expense 3,212,135 3,116,858
---------- ----------
Income Before Income Taxes 1,115,543 1,163,163
Income Tax Expense 258,800 278,800
---------- ----------
Net Income $ 856,743 $ 884,363
========== ==========
Average Shares Outstanding:
Basic 991,869 978,608
Diluted 1,032,040 1,003,937
Per Share Data:
Net income:
Basic $ .86 $ .90
Diluted $ .83 $ .88
Dividends declared $ .14 $ .12
See the accompanying notes to consolidated financial statements.
4
WEST POINTE BANCORP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
---------------------------
2004 2003
---------- ----------
Net Income $ 856,743 $ 884,363
---------- ----------
Other Comprehensive Income (Loss), Net Of Tax
Unrealized holding gains (losses) on securities available for sale (net of
income tax (benefits) of $427,466 and $(247,513) for 2004 and 2003,
respectively) 697,445 (403,838)
Less adjustment for realized gains included in net
income (net of income taxes of $56,182 and $126,666,
for 2004 and 2003, respectively) 91,665 206,665
---------- ----------
Other Comprehensive Income (Loss) 605,780 (610,503)
---------- ----------
Comprehensive Income $1,462,523 $ 273,860
========== ==========
See the accompanying notes to consolidated financial statements.
5
WEST POINTE BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
--------------------------------
2004 2003
------------ ------------
Operating Activities
Net income $ 856,743 $ 884,363
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 187,300 173,645
Net amortization on securities 292,677 355,456
Gain on sale of securities, net (147,847) (333,331)
Gain on sale of mortgage loans (83,301) (253,487)
Federal Home Loan Bank stock dividends (203,400) (258,000)
Provision for loan losses 180,000 495,000
Proceeds from sales of mortgage loans held for sale 4,249,253 16,594,521
Originations of mortgage loans held for sale (4,908,922) (14,919,983)
Increase in cash surrender value of life insurance policies (95,693) (124,537)
Increase in other assets and other liabilities, net 1,212,531 354,088
------------ ------------
Net Cash Provided By Operating Activities 1,539,341 2,967,735
Investing Activities
Proceeds from sales of securities available for sale 2,373,081 4,624,201
Proceeds from maturities of securities available for sale 4,351,004 25,604,648
Purchases of securities available for sale (1,649,542) (39,356,825)
Net (increase) decrease in loans 2,204,757 (4,292,441)
Purchases of life insurance policies (200,000) ----
Purchases of bank premises and equipment (158,038) (330,090)
------------ ------------
Net Cash Used in Investing Activities 6,921,262 (13,750,507)
Financing Activities
Net decrease in noninterest bearing deposits (243,915) (3,415,956)
Net increase in interest bearing deposits 7,176,852 8,449,021
Net increase (decrease) repurchase agreements 1,517,268 (1,870,874)
Decrease in other borrowings (75,000) (75,000)
Repayment of FHLB advances (4,400,000) ----
Proceeds from issuance of common stock 178,417 121,002
Dividends paid (138,897) (117,559)
------------ ------------
Net Cash Provided By Financing Activities 4,014,725 3,090,634
------------ ------------
Net Increase (Decrease) in Cash and Cash Equivalents 12,475,328 (7,692,138)
Cash and cash equivalents - Beginning of year 8,979,883 22,474,026
------------ ------------
Cash and cash equivalents - End of Period $ 21,455,211 $ 14,781,888
============ ============
Supplemental Disclosure of Cash Flow Information
Interest paid $ 1,557,971 $ 2,072,630
Real estate acquired in settlement of loans 29,300 103,212
See the accompanying notes to consolidated financial statements.
6
WEST POINTE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A -- PRINCIPLES OF ACCOUNTING
The consolidated financial statements of West Pointe Bancorp, Inc.
("West Pointe") or ("the Company") have been prepared in accordance with
accounting principles generally accepted in the United States of America for the
banking industry and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States of America for annual reporting. Reference is hereby made to the notes to
consolidated financial statements contained in West Pointe's annual report on
Form 10-K for the year ended December 31, 2003. The foregoing consolidated
financial statements are unaudited. However, in the opinion of management, all
adjustments necessary for a fair presentation of the consolidated financial
statements have been made. All such adjustments are of a normal recurring
nature. The results of operations for the interim periods presented herein are
not necessarily indicative of the results to be expected for the full year. The
consolidated balance sheet of the Company as of December 31, 2003 has been
derived from the audited consolidated balance sheet of the Company as of that
date.
The consolidated financial statements include the accounts of the
Company and it's wholly owned subsidiary West Pointe Bank And Trust Company (the
"Bank"), an Illinois chartered commercial bank. All material intercompany
transactions and balances are eliminated. West Pointe is a bank holding company
that engages in its business through its sole subsidiary.
In preparing the consolidated financial statements, management is
required to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the consolidated balance sheet and
revenues and expenses for the period. Actual results could differ significantly
from those estimates.
Material estimates that are particularly susceptible to significant
change relate to the determination of the allowance for loan losses and the
valuation of real estate acquired in connection with foreclosures or in
satisfaction of loans. In connection with the determination of the allowance for
loan losses and the valuation of real estate acquired by foreclosure, management
obtains independent appraisals for significant properties.
Certain 2003 amounts have been reclassified where appropriate to
conform to the consolidated financial statement presentation used in 2004.
The Company has a stock-based employee compensation plan, which is
described more fully in West Pointe's annual report on Form 10-K for the year
ended December 31, 2003. The Company accounts for this plan under the
recognition and measurement principles of Accounting Principles Board (APB)
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations. No stock-based employee compensation cost is reflected in net
income, as all options granted under those plans had an exercise price equal to
the market value of the underlying common stock on the grant date. The following
table illustrates the effect on net income and earnings per share if the Company
had applied the fair value recognition provisions of Statement of Financial
Accounting Standard (SFAS) No. 123, "Accounting for Stock-Based Compensation,"
to stock-based employee compensation:
THREE MONTHS ENDED
MARCH 31,
------------------------------
2004 2003
----------- -----------
Net income, as reported $ 856,743 $ 884,363
Less: Total stock-based employee
compensation cost determined under the fair
value based method, net of income taxes (56,317) (52,375)
----------- -----------
Pro forma net income $ 800,426 $ 831,988
=========== ===========
Earnings per share:
Basic - as reported $ .86 $ .90
Basic - pro forma .81 .85
Diluted - as reported .83 .88
Diluted - pro forma .78 .83
7
NOTE B -- NET INCOME PER SHARE
The calculation of net income per share is summarized as follows:
THREE MONTHS ENDED
MARCH 31,
---------------------------
2004 2003
---------- ----------
Basic
Net Income $ 856,743 $ 884,363
========== ==========
Average common shares outstanding 991,869 978,608
========== ==========
Net income per common share - basic $ .86 $ .90
========== ==========
Diluted
Net Income $ 856,743 $ 884,363
========== ==========
Average common shares outstanding 991,869 978,608
Dilutive potential due to stock options 40,171 25,329
---------- ----------
Average common shares outstanding 1,032,040 1,003,937
========== ==========
Net income per common share - diluted $ .83 $ .88
========== ==========
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion describes West Pointe's results of operations
during the three-month periods ended March 31, 2004 and 2003, and its financial
condition, asset quality, and capital resources as of March 31, 2004 and
December 31, 2003. This discussion should be read in conjunction with West
Pointe's unaudited consolidated financial statements and notes thereto. The
results of operations for the interim periods presented herein are not
necessarily indicative of the results to be expected for the full year.
FORWARD-LOOKING STATEMENTS
This filing and future filings made by West Pointe with the Securities
and Exchange Commission, as well as other filings, reports and press releases
made or issued by West Pointe, and oral statements made by executive officers or
directors of West Pointe may include forward-looking statements. These
forward-looking statements are not based on historical information, but rather
are based on assumptions and describe future plans, strategies, projections and
expectations of West Pointe and are generally identified by use of terms
"believe", "expect", "intend", "anticipate", "estimate", "project", or similar
words. West Pointe's ability to predict results or the actual effect of future
plans or strategies is uncertain. Factors, which could have a material adverse
effect on West Pointe's operations 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 Board of Governors of the Federal Reserve System, the
quality and composition of the loan or investment portfolios, demand for loan
products, deposit flows, competition, demand for financial services in West
Pointe's market areas and accounting principles and guidelines. Additionally,
the policies of the Federal Deposit Insurance Corporation (FDIC), the State of
Illinois Office of Banks and Real Estate, the Financial Accounting Standards
Board (FASB), the Public Company Accounting Oversight Board (PCAOB) and the
Securities and Exchange Commission (SEC) could cause actual results to differ
from those currently anticipated. All of these uncertainties, as well as others,
are present in a banking operation and stockholders are cautioned that
management's view of the future on which it prices its products, evaluates
collateral, sets loan reserves and estimates costs of operations and regulation
may prove to be other than as anticipated. West Pointe assumes no obligation to
update any forward-looking statements that are made from time to time.
OVERVIEW
Net income for the first quarter of 2004 was $856,743 or $.83 per
diluted common share compared to net income of $884,363 or $.88 per diluted
common share for the first quarter of 2003. Return on average assets for the
first quarter of 2004 was .81% compared to .87% for the first quarter of 2003.
Return on average equity for the first quarter of 2004 was 10.83% compared to
12.39% for the first quarter of 2003.
The modest decrease in net income, for the quarters compared, was
primarily attributable to decreases in noninterest income and increases in
noninterest expense. The impact of these items on net income was partially
offset by increases in net interest income, a reduction in the provision for
loan losses and a reduction in income tax expense.
Total assets at March 31, 2004 increased to $432,456,302 from
$425,150,441 at December 31, 2003 primarily from an increase in interest bearing
due from bank balances partially offset by reduced levels of investment
securities and loans. The increase in total assets was primarily funded by an
increase in deposits.
9
RESULTS OF OPERATIONS
Table 1 summarizes West Pointe's statement of income and the change in
each category for the periods presented.
TABLE 1 - Comparative Statements of Income
Three Months Ended
March 31, Change
--------------------------- --------------------------
2004 2003 Amount Percent
---------- ---------- ---------- -------
Total interest income
(fully tax-equivalent) $5,168,151 $5,469,272 $ (301,121) (5.5)%
Total interest expense 1,554,617 1,973,509 (418,892) (21.2)
---------- ---------- ----------
Net interest income 3,613,534 3,495,763 117,771 3.4
Provision for loan losses 180,000 495,000 (315,000) (63.6)
Noninterest income:
Service charges on deposits 354,855 338,065 16,790 5.0
Mortgage banking 114,176 273,352 (159,176) (58.2)
Trust fees 167,374 177,033 (9,659) (5.5)
Brokerage and insurance services 75,415 72,883 2,532 3.5
Credit card income 84,384 94,000 (9,616) (10.2)
Increase in cash surrender value of
life insurance 95,693 124,537 (28,844) (23.2)
Gains on sale of securities, net 147,847 333,331 (185,484) (55.6)
Other 48,887 58,440 (9,553) (16.3)
---------- ---------- ----------
Total 1,088,631 1,471,641 (383,010) (26.0)
---------- ---------- ----------
Noninterest expense:
Employee compensation and benefits 1,726,208 1,627,624 98,584 6.1
Occupancy, net 165,707 186,798 (21,091) (11.3)
Furniture and equipment 183,239 160,453 22,786 14.2
Legal and professional fees 260,775 271,128 (10,353) (3.8)
Data processing 116,606 118,829 (2,223) (1.9)
Advertising 78,464 86,171 (7,707) (8.9)
Other 681,136 665,855 15,281 2.3
---------- ---------- ----------
Total Noninterest Expenses 3,212,135 3,116,858 95,277 3.1
---------- ---------- ----------
Income before income taxes 1,310,030 1,355,546 (45,516) (3.4)
Less: tax-equivalent adjustment 194,487 192,383 2,104 1.1
Income tax expense 258,800 278,800 (20,000) (7.2)
---------- ---------- ----------
Net income $ 856,743 $ 884,363 $ (27,620) (3.1)%
========== ========== ==========
NET INTEREST INCOME
Tax-equivalent net interest income increased $117,771 or 3.4% for the
first quarter of 2004 compared to the first quarter of 2003. The increase in
tax-equivalent net interest income for the first quarter of 2004 compared to the
first quarter of 2003 was attributable to a decrease in interest expense,
partially offset by a decrease in tax-equivalent interest income.
Total tax-equivalent interest income decreased $301,121 or 5.5% for the
first quarter of 2004 compared to the first quarter of 2003. The decrease in
tax-equivalent interest income for the quarters compared was primarily
attributable to the lower interest rate environment, partially offset by higher
volumes of interest earning assets. Average interest earning assets increased
3.8% to $395,270,183 in 2004 from $380,726,779 in 2003. The increase in average
interest earning assets was primarily due to internal growth in the investment
portfolio. The average rate earned on interest earning assets decreased 9.5% to
5.25% in 2004 from 5.80% in 2003. The decrease in the average rate earned was
primarily due to the lower interest rate environment, including the impact of
the June 2003 reduction in the prime-lending rate of 25 basis points. West
Pointe's loan portfolio yields tend to follow trends in the prime-lending rate.
While loan yields tend to follow trends in the prime-lending rate, they may not
follow simultaneously with such trends.
10
Total interest expense decreased $418,892 or 21.2% for the first
quarter of 2004 compared to the first quarter of 2003. The decrease in interest
expense was primarily attributable to the lower interest rate environment,
partially offset by a higher volume of interest bearing liabilities. Average
interest bearing liabilities increased 1.7% to $351,833,580 in 2004 compared to
$345,940,221 in 2003. The increase in average interest bearing liabilities was
primarily due to increases in the average balance of savings and money market
deposits, as well as interest bearing demand deposits. The increases in these
categories of deposits was primarily due to the continuing lower interest rate
environment that has resulted in customers desiring to retain funds in more
liquid accounts. The average rate paid on interest bearing liabilities decreased
22.9% to 1.78% in 2004 from 2.31% in 2003.
The net interest margin was 3.67% for the first quarter of 2004
compared to 3.70% for the first quarter of 2003. The modest decrease in the net
interest margin for the periods compared primarily resulted from the Company's
yield on interest earning assets declining at a slightly faster pace than the
Company's cost of funds.
PROVISION FOR LOAN LOSSES
The Company recorded a provision for loan losses of $180,000 during the
first quarter of 2004 compared to $495,000 recorded during the first quarter of
2003. The provision for loan losses represents management's judgment of the cost
associated with credit risk inherent in the loan portfolio. Factors which
influence management's determination of the provision for loan losses include,
among other things, a review of individual loans, size and quality of the loan
portfolio, current and projected economic conditions, regulatory guidelines, and
historical loan loss experience. Issues concerning loans to one borrower
contributed to the recording of a higher provision for loan losses during the
first quarter of 2003, compared to the first quarter of 2004. Activity in the
allowance for loan losses and nonperforming loan data is presented under "ASSET
QUALITY."
NONINTEREST INCOME
Total noninterest income was $1,088,631 for the first quarter of 2004
compared to $1,471,641 for the first quarter of 2003. Service charges on deposit
accounts increased $16,790 for the first quarter of 2004 compared to the first
quarter of 2003. The increase in service charges on deposit accounts for the
quarters compared was primarily attributable to the growth in the volume of
deposit accounts on which service charges are assessed coupled with increases in
various service charges that resulted from an analysis of the Company's service
charge schedule. The results of that analysis, completed during the fourth
quarter of 2003, were implemented on January 1, 2004. Income from mortgage
banking services decreased $159,176 for the first quarter of 2004 compared to
the first quarter of 2003. The decrease in mortgage banking income for the
periods compared was primarily attributable to a slightly higher interest rate
environment, which resulted in a reduced level of mortgage origination and
refinancing activities. The level of mortgage loan origination and refinancing
activities is directly related to prevailing interest rates as well as local
economic conditions. As of March 31, 2004, management is optimistic that the
level of mortgage banking income will remain stable during the remainder of
2004. Income from trust fees, income from brokerage and insurance services and
credit card income collectively decreased $16,743 for the first quarter of 2004
compared to the first quarter of 2003. The combined decrease from these
components of noninterest income was primarily due to normal fluctuations.
Income from trust fees is derived primarily from management of estates, personal
trusts and investment agencies. Products offered through our brokerage and
insurance function include stocks, bonds, mutual funds, annuities and other
non-deposit investment products. Credit card income primarily consists of
merchant processing fees for credit card transactions, revenues received from
West Pointe's "debit" card product and interchange fees received on credit card
transactions of West Pointe's cardholders. During the first quarter of 2004,
West Pointe recorded an increase in cash surrender value of life insurance of
$95,693 compared to an increase of $124,537 for the first quarter of 2003. These
cash surrender value increases relate to various bank owned life insurance
(BOLI) policies. Certain of the insurance policies serve as funding mechanisms
for West Pointe's director fee deferral program and West Pointe's salary
continuation plans which have been established for various officers of the
Company. The remaining policies were purchased to provide additional life
insurance benefits to certain Company officers. These BOLI policies provide
certain benefits to the Company including, but not limited to, the exclusion
from income taxes on the increase in their cash surrender values. The decrease
in income from this component of noninterest income was primarily attributable
to lower interest rates earned on the BOLI policies. Net security gains recorded
during the first quarter of 2004 totaled $147,847 compared to $333,331 during
the first quarter of 2003. Net security gains recorded during the first quarter
of 2004 primarily resulted from opportunities in
11
the marketplace to take such gains. Net security gains recorded during the first
quarter of 2003 resulted from management's decision to decrease interest income
on non-taxable securities to minimize alternative minimum tax positions. Other
noninterest income includes such items as interchange fees on automated teller
machine (ATM) transactions, safe deposit box rental fees, check printing fees
and other miscellaneous fees. Other noninterest income decreased $9,553 for the
first quarter of 2004 compared to the first quarter of 2003. The decrease in
other noninterest income for the first quarter of 2004 compared to the first
quarter of 2003 resulted from modest declines in a number of categories of other
noninterest income.
NONINTEREST EXPENSE
Total noninterest expense was $3,212,135 for the first quarter of 2004
compared to $3,116,858 for the first quarter of 2003. The increase in
noninterest expense was primarily attributable to an increase in employee
compensation and benefits, the largest component of noninterest expense.
Employee compensation and other benefit expenses increased $98,584 for the first
quarter of 2004 compared to the first quarter of 2003. The increase in employee
compensation and benefits for the quarters compared was primarily attributable
to normal merit increases and staff additions associated with overall growth in
banking operations. Net occupancy expenses decreased $21,091 during the first
quarter of 2004 compared to the first quarter of 2003. The decrease in net
occupancy expenses for the quarters compared was primarily attributable to
reduced levels of maintenance and repairs associated with West Pointe's banking
locations. Furniture and equipment expenses increased $22,786 during the first
quarter of 2004 compared to the first quarter of 2003. The modest increase in
furniture and equipment expenses for the quarters compared was attributable to
normal operations. Legal and professional fees, data processing expenses and
advertising expense collectively decreased $20,283 for the first quarter of 2004
compared to the first quarter of 2003. The combined decrease, from these
components of noninterest expense, was primarily due to normal fluctuations.
Other noninterest expense increased $15,281 for the first quarter of 2004
compared to the first quarter of 2003. Other noninterest expense includes such
items as FDIC insurance premiums, mortgage banking expenses, telephone expenses,
postage costs, certain credit card program expenses and other miscellaneous
expenses. The increase in other noninterest expenses, for the quarters compared,
was related to various categories, none of which were individually significant.
INCOME TAX EXPENSE
West Pointe recorded income tax expense of $258,800 for the first
quarter of 2004 compared to income tax expense of $278,800 for the first quarter
of 2003. West Pointe's effective income tax rate was 23.2% for the first quarter
of 2004 compared to 24.0% for the first quarter of 2003. The modest decrease in
income tax expense and the related effective income tax rate for the quarters
compared primarily resulted from a lower level of earnings as well as a slightly
higher level of tax-exempt interest as a percentage of total interest income.
12
FINANCIAL CONDITION
GENERAL
Certain components of West Pointe's consolidated balance sheet at March
31, 2004 compared to December 31, 2003 are presented in summary form in Table 2.
Total assets increased $7,305,861 to $432,456,302 at March 31, 2003 compared to
$425,150,441 at December 31, 2003. This increase primarily resulted from an
increase in interest bearing due from bank balances, offset by decreases in
loans and securities. Interest bearing due from bank balances generally
represent the temporary investment of excess funds that are not needed to fund
loan demand or the purchase of securities.
TABLE 2 - Selected Comparative Balance Sheet Items
March 31, December 31,
2004 2003
------------ ------------
Total assets $432,456,302 $425,150,441
Loans 214,187,063 216,754,989
Securities 162,457,795 166,700,103
Deposits 367,853,821 360,920,884
Repurchase agreements 20,703,135 19,185,867
Other borrowings 1,162,100 1,237,100
Federal Home Loan Bank advances 5,000,000 9,400,000
Stockholders' equity 32,233,456 30,731,413
LOANS
Loans decreased $2,567,926 to $214,187,063 at March 31, 2004 from
$216,754,989 at year-end 2003. This decrease was derived collectively from
modest decreases in the commercial, financial and agricultural, real estate
construction, residential real estate and other consumer loan segments of the
loan portfolio. The combined decrease from these loan portfolio segments was
partially offset by an increase in the commercial real estate segment of the
loan portfolio.
Table 3 presents the composition of the loan portfolio by type of
borrower and major loan category and the percentage of each to the total
portfolio for the periods presented.
TABLE 3 - Loan Portfolio Composition
March 31, December 31,
2004 2003
--------------------------- ---------------------------
Amount Percent Amount Percent
------------ ------- ------------ -------
Commercial borrowers:
Commercial, financial
and agricultural $ 54,943,515 25.7% $ 55,147,337 25.5%
Commercial real estate 81,354,888 38.0 79,620,879 36.7
Real estate construction 17,443,394 8.1 19,489,319 9.0
------------ ----- ------------ -----
Total commercial 153,741,797 71.8 154,257,535 71.2
------------ ----- ------------ -----
Consumer borrowers:
1-4 family residential
real estate 50,548,197 23.6 52,059,308 24.0
Other consumer loans 9,897,069 4.6 10,438,146 4.8
------------ ----- ------------ -----
Total consumer 60,445,266 28.2 62,497,454 28.8
------------ ----- ------------ -----
Total loans $214,187,063 100.0% $216,754,989 100.0%
============ ===== ============ =====
13
SECURITIES
Total securities decreased to $162,457,795 at March 31, 2004 compared
to $166,700,103 at year-end 2003. The security portfolio provides a balance to
interest rate and credit risk in other categories of the balance sheet while
providing a vehicle for the investment of available funds not needed to fund
loan demand. The security portfolio also supplies securities as required
collateral for certain deposits and for securities sold under agreements to
repurchase. Additional information regarding West Pointe's securities sold under
agreements to repurchase is presented and discussed under "Borrowings."
Available-for-sale securities are recorded at fair value. Net
unrealized gains on available-for-sale securities totaled $2,502,495 at March
31, 2004, compared to net unrealized gains of $1,525,430 at December 31, 2003.
Table 4 presents the composition of securities at their carrying values
for the periods presented.
TABLE 4 - Security Portfolio Composition
March 31, December 31,
2004 2003
------------ ------------
Available-for-sale securities:
Mortgage-backed securities $121,642,300 $126,843,672
Obligations of states and political subdivisions 40,815,495 39,856,431
------------ ------------
Total available-for-sale $162,457,795 $166,700,103
============ ============
DEPOSITS
West Pointe's deposit base is its primary source of liquidity and
consists of deposits originating within the communities served by its banking
locations. Deposits are West Pointe's primary and most reliable funding source
for interest earning assets.
Total deposits increased $6,932,937 to $367,853,821 at March 31, 2004
compared to $360,920,884 at year-end 2003. The interest bearing demand deposit
component of the deposit portfolio decreased $929,288 from year-end 2003. The
savings and money market deposit and the time deposit components of the deposit
portfolio increased $1,259,435 and $6,846,705, respectively, from year-end 2003.
The increase in the savings and money market deposit component of the deposit
portfolio is primarily attributable to continuing customer preferences to retain
funds in more liquid interest bearing deposits. The increase in the time deposit
component of the deposit portfolio was primarily attributable to additional
deposits received from one public entity.
Balances in the noninterest bearing demand deposit component of the
deposit portfolio decreased $243,915 from year-end 2003. Balances in this
component of the deposit portfolio are subjected to seasonal fluctuations, which
generally result in higher balances at year-end.
14
Table 5 sets forth the composition of deposits and the percentage of
each category to total deposits for the periods presented.
TABLE 5 - Deposit Liability Composition
March 31, December 31,
2004 2003
--------------------------- ---------------------------
Amount Percent Amount Percent
------------ ------- ------------ -------
Noninterest bearing demand deposits $ 41,226,341 11.2% $ 41,470,256 11.5%
Interest bearing demand deposits 33,016,086 9.0 33,945,374 9.4
Savings and money market deposits 118,359,570 32.1 117,100,135 32.4
Time deposits $100,000 or more 65,781,404 17.9 59,379,919 16.5
Time deposits less than $100,000 109,470,420 29.8 109,025,200 30.2
------------ ----- ------------ -----
Total deposits $367,853,821 100.0% $360,920,884 100.0%
============ ===== ============ =====
BORROWINGS
Total borrowings amounted to $26,865,235 at March 31, 2004, compared to
$29,822,967 at year-end 2003. At March 31, 2004 and December 31, 2003,
borrowings consisted of repurchase agreements, Federal Home Loan Bank advances
and a short-term borrowing with an unaffiliated bank.
Repurchase agreements increased $1,517,268 from year-end 2003. These
borrowings serve as an alternative funding source to deposits. The majority of
the repurchase agreements were in the form of cash management repurchase
agreement accounts. Such accounts involve the daily transfer of excess funds
from noninterest bearing deposit accounts into interest bearing cash management
repurchase agreement accounts. Cash management repurchase agreement accounts are
marketed to commercial and individual deposit customers and are considered to be
a stable source of funds. Repurchase agreements, other than cash management
repurchase agreements, generally represent an alternative to short-term
certificates of deposit. The increase in repurchase agreements from year-end
2003 was primarily due to normal fluctuations.
At March 31, 2004, the Bank had one $5,000,000 Federal Home Loan Bank
term advance, which reflected an interest rate of 5.63% and had a scheduled
maturity of December 13, 2004. This advance is callable on a quarterly basis. In
addition to the term advance, the Bank, at December 31, 2003, had an overnight
advance in the amount of $4,400,000. The overnight advance served as a funding
alternative to federal funds purchased.
At March 31, 2004, other borrowings consisted of a $1,162,100 borrowing
under a line of credit with an unaffiliated bank. This line of credit presently
allows for borrowings, by West Pointe, of up to $5,000,000. The line of credit
matures on January 7, 2005, and bears interest at a rate of 50 basis points
under the prime-lending rate. As of December 31, 2003, the amount of this
borrowing totaled $1,237,100.
ASSET QUALITY
West Pointe's asset quality management program, particularly with
regard to loans, is designed to analyze potential risk elements and to support
the growth of a high quality loan portfolio. The existing loan portfolio is
monitored via West Pointe's loan rating system. The loan rating system is used
to determine the adequacy of the allowance for loan losses. West Pointe's loan
analysis process proactively identifies, monitors and works with borrowers for
whom there are indications of future repayment difficulties. West Pointe's
lending philosophy is to invest in the communities served by its banking centers
so that it can effectively monitor and control credit risk.
At March 31, 2004, nonperforming assets totaled $2,380,582, or .55% of
total assets, compared to nonperforming assets at year-end 2003 of $2,504,550 or
..59% of total assets. Nonperforming assets, at March 31, 2004, included $259,300
relating to foreclosed property. All foreclosed property is held for sale and is
initially recorded on an individual property basis at estimated fair value less
cost to sell. Subsequent to foreclosure,
15
management evaluates foreclosed properties and a valuation allowance is
established if the estimated fair value declines. As of March 31, 2004,
management does not anticipate any significant losses upon disposition of the
foreclosed property. Nonperforming loans in the commercial, financial and
agricultural segment of the portfolio increased modestly from December 31, 2003.
All other categories of nonperforming loans decreased from December 31, 2003 to
March 31, 2004. The percentage of nonperforming loans to total loans totaled
..99% at March 31, 2004 compared to 1.05% at December 31, 2003. Management is in
various stages of workout or liquidation of the nonperforming loans.
Table 6 sets forth a summary of West Pointe's loan portfolio mix and
nonperforming assets.
TABLE 6 - Loan Portfolio Mix and Nonperforming Assets
March 31, 2004 December 31, 2003
---------------------------------- -----------------------------------
Loans and Loans and
Foreclosed Non-performing Foreclosed Non-performing
Property Assets Property Assets
------------ -------------- ------------ --------------
Commercial borrowers:
Commercial, financial and
agricultural $ 54,943,515 $ 77,436 $ 55,147,337 $ 60,753
Commercial real estate 81,354,888 890,248 79,620,879 946,877
Real estate construction 17,443,394 ---- 19,489,319 ----
------------ -------------- ------------ --------------
Total commercial 153,741,797 967,684 154,257,535 1,007,630
Consumer borrowers:
1-4 family residential
real estate 50,548,197 1,103,122 52,059,308 1,213,500
Other consumer loans 9,897,069 50,476 10,438,146 53,420
------------ -------------- ------------ --------------
Total consumer 60,445,266 1,153,598 62,497,454 1,266,920
------------ -------------- ------------ --------------
Total loans 214,187,063 2,121,282 216,754,989 2,274,550
Foreclosed property 259,300 259,300 230,000 230,000
------------ -------------- ------------ --------------
Total $214,446,363 $ 2,380,582 $216,984,989 $ 2,504,550
============ ============== ============ ==============
Nonaccrual loans $ 1,669,247 $ 1,676,187
Accruing loans past due
90 days or more 452,035 598,363
-------------- --------------
Total nonperforming loans 2,121,282 2,274,550
Foreclosed property 259,300 230,000
-------------- --------------
Total nonperforming assets $ 2,380,582 $ 2,504,550
============== ==============
Nonperforming loans to total loans .99% 1.05%
Nonperforming assets to total loans
and foreclosed property 1.11% 1.15%
Nonperforming assets to total assets .55% .59%
Net charge-offs for the first quarter of 2004 totaled $333,869 compared
to $108,559 for the first quarter of 2003. Charge-offs and recoveries in the
residential real estate segment of the loan portfolio primarily related to
several loans to one borrower. Charge-offs and recoveries recorded during the
first quarter of 2004 and 2003 in all other segments of the loan portfolio were
not significant. Net charge-offs, on an annualized basis, as a percent of
average total loans amounted to .62% during the first quarter of 2004 compared
to .20% for the first quarter of 2003.
West Pointe's allowance for loan losses at March 31, 2004, decreased to
$2,543,270 from $2,697,139 at December 31, 2003. The decrease in the allowance
for loan losses was primarily due to the level of first quarter 2004 net
charge-offs, partially offset by the first quarter 2004 provision for loan
losses. At March 31, 2004, the allowance for loan losses represented 119.89% of
nonperforming loans compared to 118.58% and 116.37% at December 31, 2003 and
March 31, 2003, respectively. The ratio of the allowance for loan losses to
total loans was 1.19% at March 31, 2004 compared to 1.24% and 1.25% at December
31, 2003 and March 31, 2003, respectively. Management believes that the
allowance for loan losses at March 31, 2004 was adequate to absorb probable
incurred
16
losses in the loan portfolio. However, past loan loss experience as it relates
to current portfolio mix, evaluation of potential losses in the portfolio,
subsequent changes in economic conditions and other factors may require changes
in the levels of the allowance for loan losses.
Table 7 presents information pertaining to the activity in and an
analysis of West Pointe's allowance for loan losses for the periods presented.
TABLE 7 - Allowance For Loan Losses
Three Months Ended
March 31,
----------------------------
2004 2003
---------- ----------
Balance at beginning of period $2,697,139 $2,409,446
Loans charged off:
Commercial, financial and agricultural 15,064 40,719
Residential real estate 352,279 89,390
Consumer 23,267 24,391
Credit cards 8,110 ----
---------- ----------
Total charge-offs 398,720 154,500
---------- ----------
Recoveries of loans previously charged off:
Commercial, financial and agricultural 4,030 45,673
Residential real estate 60,452 ----
Consumer 301 235
Credit cards 68 33
---------- ----------
Total recoveries 64,851 45,941
---------- ----------
Net charge-offs 333,869 108,559
Provision for loan losses 180,000 495,000
---------- ----------
Balance at end of period $2,543,270 $2,795,887
========== ==========
Net charge-offs (annualized) as a
percent of average total loans .62% .20%
Allowance for loan losses to total loans 1.19% 1.25%
Allowance for loan losses to
nonperforming loans 119.89% 116.37%
CAPITAL RESOURCES
CAPITAL RESOURCES
Total stockholders' equity increased $1,502,043 from $30,731,413 at
December 31, 2003 to $32,233,456 at March 31, 2004. Net income for the first
quarter of 2004 was $856,743. The increase to stockholders' equity primarily
resulted from first quarter 2004 net income coupled with an increase in
accumulated other comprehensive income.
Financial institutions are required to maintain ratios of capital to
assets in accordance with guidelines promulgated by the federal banking
regulators. The guidelines are commonly known as "Risk-Based Guidelines" as they
define the capital level requirements of a financial institution based upon the
level of credit risk associated with holding various categories of assets. The
Risk-Based Guidelines require minimum ratios of Tier 1 and Total Capital to
risk-weighted assets of 4% and 8%, respectively. At March 31, 2004, West
Pointe's Tier 1 and Total capital ratios were 12.27% and 13.29%, respectively.
In addition to the Risk-Based Guidelines, the federal banking agencies have
established a minimum leverage ratio guideline for financial institutions (the
"Leverage Ratio Guideline"). The Leverage Ratio Guideline provides for a minimum
ratio of Tier 1 capital to average assets of 4%. West Pointe's leverage ratio at
March 31, 2004, was 7.22%. Accordingly, West Pointe has satisfied these
regulatory guidelines.
17
RECENT ACCOUNTING PRONOUNCEMENTS
Currently, there are no newly issued accounting pronouncements, which
would have a significant effect on the Company's financial statements.
CRITICAL ACCOUNTING POLICIES
There have been no significant changes in the Company's critical
accounting policies from that disclosed as of December 31, 2003.
CONTRACTUAL OBLIGATIONS
The Company enters into certain contractual obligations in the ordinary
course of operations. The required payments under these contracts represent
future cash requirements of the Company. The Company's significant fixed and
determinable contractual obligations, as of March 31, 2004, are set forth in the
following table:
Payments Due
--------------------------------------------------------------------------------
After After
One Year Three Years
One Year Through Through After
or Less Three Years Five Years Five Years Total
------------ ------------ ------------ ------------ ------------
Time certificates of deposit $135,399,016 $ 25,741,289 $ 14,102,887 $ 8,632 $175,251,824
Federal Home Loan Bank advances 5,000,000 -- -- -- 5,000,000
Other borrowings 1,162,100 -- -- -- 1,162,100
Operating leases 47,520 95,040 31,680 -- 174,240
------------ ------------ ------------ ------------ ------------
Total contractual cash obligations $140,608,636 $ 25,836,329 $ 14,134,567 $ 8,632 $181,588,164
============ ============ ============ ============ ============
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no material change to the market risk position from that
disclosed as of December 31, 2003, the end of the last fiscal year.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As of the end of the period covered by this report, the Company's
principal executive officer and principal financial officer carried out an
evaluation, with the participation of the Company's other management, of the
effectiveness of the Company's disclosure controls and procedures. Based upon
this evaluation, the principal executive officer and principal financial officer
have concluded that the Company's disclosure controls and procedures are
effective in ensuring that information required to be disclosed by the Company
in reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms. It should be noted that the design of the Company's
disclosure controls and procedures is based in part upon certain reasonable
assumptions about the likelihood of future events, and there can be no
reasonable assurance that any design of disclosure controls and procedures will
succeed in achieving its stated goals under all potential future conditions,
regardless of how remote. However, the Company's principal executive officer and
principal financial officer have concluded that the Company's disclosure
controls and procedures are, in fact, effective at a reasonable assurance level.
CHANGES IN INTERNAL CONTROL
In addition, there have been no changes in the Company's internal
control over financial reporting identified in connection with the evaluation
described in the above paragraph that occurred during the Company's last fiscal
quarter that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
18
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings
before any court, administrative agency or tribunal, nor is the Company
aware of any litigation threatened against it in any court,
administrative agency, or other tribunal. The Company's wholly owned
subsidiary, the Bank, is subject to various claims, lawsuits and
administrative proceedings arising in the ordinary course of business
from time to time. The Bank's management is of the opinion, based upon
present information, including evaluations by outside counsel, that the
Bank's financial condition, results of operations or cash flows will
not be materially affected by the ultimate resolution of pending or
threatened legal proceedings.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
RECENT SALE OF UNREGISTERED SECURITIES
In February 2004, our Board of Directors authorized the contribution of
1,181 shares of common stock, to the trustee of our 401(k) retirement
savings plan (the "Plan") without registration. Such issuance is exempt
from registration under the Securities Act under Section 3(a)(2). The
Plan is a pension, profit sharing or stock bonus plan that is qualified
under Section 401 of the Internal Revenue Code. The assets of the Plan
are held in a single trust fund for the benefit of our employees, which
does not hold assets for the benefit of the employees of any other
employer. All of the contributions to the Plan from our employees have
been invested in assets other than our common stock.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
The Company does not have any programs to repurchase shares of its
common stock and no such repurchases were made during the first quarter
of 2004.
Issuer Purchases of Equity Securities
- ------------------------------------------------------------------------------------------------------------
Total Number of Maximum Number
Shares Purchased of Shares that May
as Part of Publicly Yet Be Purchased
Total Number of Average Price Paid Announced Plans Under the Plans or
Period Shares Purchased per Share or Programs Programs
- ------------- ---------------- ------------------ ------------------- ------------------
January 2004 -- -- -- --
February 2004 -- -- -- --
March 2004 -- -- -- --
---------------- ------------------ ------------------- ------------------
Total -- -- -- --
================ ================== =================== ==================
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
19
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Proxies were mailed to shareholders on March 15, 2004 for the Company's
Annual Meeting of Shareholders, which was held on April 14, 2004. The
only matter submitted to, and approved by, shareholders is listed
below, as is a tabulation of voting.
(1) The following persons nominated as Directors were re-elected:
Class I For Against Withheld
------- --- ------- --------
William C. Allison 801,687.4964 0 1,000
Harry E. Cruncleton 801,687.4964 0 1,000
Other directors continuing in office are as follows: David G. Embry,
Jack B. Haydon, Charles G. Kurrus, III, Terry W. Schaefer, Edward J.
Szewczyk and Wayne W. Weeke.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: See Exhibit Index on page 22 hereof.
(b) Reports on Form 8-K: No reports on Form 8-K were filed by West
Pointe during the first quarter of 2004.
20
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.
WEST POINTE BANCORP, INC.
(Registrant)
DATE: May 14, 2004 By:/s/ Terry W. Schaefer
---------------------
Terry W. Schaefer
President and Chief
Executive Officer
(on behalf of the Registrant)
DATE: May 14, 2004 By:/s/ Bruce A. Bone
-----------------
Bruce A. Bone
Executive Vice President and
Chief Financial Officer
(as principal financial officer)
21
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
3.1 Articles of Incorporation (1)
3.2 Bylaws of West Pointe Bancorp, Inc. (1)
11.1 Computation of Net Income Per Share (incorporated by
reference to Note B of West Pointe's unaudited
interim consolidated financial statements included
herein).
31.1 Certification of President and Chief Executive
Officer Pursuant to Rule 13a-14(a) or 15d-15(e) of
the Exchange Act, as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Executive Vice President and Chief
Financial Officer Pursuant to Rule 13a-14(a) or
15d-15(e) of the Exchange Act, as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of President and Chief Executive
Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
32.2 Certification of Executive Vice President and Chief
Financial Officer Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(1) Documents incorporated by reference to the Company's Registration Statement
on Form 10 (file no. 000-30505) at the corresponding exhibit. All such
previously filed documents are hereby incorporated by reference in
accordance with Item 601 of Regulation S-K.
22