<PAGE>
As filed with the Securities and Exchange Commission on January 25, 1999.
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
(Exact name of Registrant as specified in its charter)
--------------
<TABLE>
<S> <C>
Washington 91-0609840
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
601 West First Avenue
Spokane, Washington 99201-5015
(509) 838-3111
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------
C. Paul Sandifur, Jr., President
Metropolitan Mortgage & Securities Co., Inc.
601 West First Avenue
Spokane, WA 99201-5015
(509) 838-3111
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With copies to:
<TABLE>
<S> <C>
Susan Thomson, Esq. Robert J. Ahrenholz, Esq.
Associate General Counsel Kutak Rock
601 West First Avenue 717 Seventeenth Street, Suite 2900
Spokane, Washington 99201 Denver, Colorado 80202
(509) 838-3111 (303) 297-2400
</TABLE>
--------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [X]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this Form, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================
Proposed Proposed
Maximum Maximum Amount of
Title of Each Class of Amount to be Offering Price Aggregate Registration
Securities to be Registered Registered Per Unit Offering Price(1)(2) Fee(3)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Debentures Series III............... $100,000,000 -- $100,000,000 $27,800
==============================================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457(a).
(2) Includes $38,000,000 of Debentures that remain unsold and are being
carried forward from Registration Statement No. 333-43889 pursuant to Rule
429 of the Securities Act of 1933, for which a filing fee of $11,514 was
previously paid.
(3) A filing fee of $11,514 was previously paid for the $38,000,000 of
Debentures carried forward from Registration Statement No. 333-43889
pursuant to Rule 429.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended, or until this
Registration Statement shall become effective on such date as the Commission
acting pursuant to said Section 8(a) may determine.
Pursuant to Rule 429 under the Securities Act of 1933, the prospectus
included in this Registration Statement also relates to securities registered
and remaining unissued under Registration Statement No. 333-43889 previously
filed by the Registrant.
================================================================================
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement +
+filed with the Securities and Exchange Commission is effective. This +
+prospectus is not an offer to sell these securities and it is not soliciting +
+an offer to buy these securities in any state where the offer or sale is not +
+permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED JANUARY 25, 1999.
PROSPECTUS
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
$100,000,000 Investment Debentures, Series III
- -------------------------------------------------------------------------------
You should consider carefully the risk factors beginning on page 8 in this
prospectus.
The Debentures are obligations of our company and they are not insured or
guaranteed by any governmental agency, any insurance company, any affiliate of
our company or any other person or entity.
- -------------------------------------------------------------------------------
Metropolitan is offering Debentures with the following terms:
. The Debentures are unsecured debt instruments, senior only to outstanding
equity securities of Metropolitan.
. The Debentures rank equally with unsecured debt of Metropolitan and are
subordinate to all other debt of Metropolitan.
<TABLE>
<CAPTION>
Minimum Term To Annual
Investment Maturity Interest Rate(1)
---------- -------- ----------------
<S> <C> <C>
</TABLE>
- -----
(1) You may elect one of three options to receive principal and interest
payments on the Debentures: (a) to receive interest monthly, quarterly,
semi-annually or annually, without compounding, (b) to leave the interest
with Metropolitan and it will compound semi-annually, or (c) at the above
identified installment terms, equal monthly installments of principal and
interest in accordance with an amortization schedule that you select.
<TABLE>
<CAPTION>
Per
Debenture Total
--------- -----
<S> <C> <C>
Public Offering Price.................... 100% $100,000,000
Underwriting Discounts and
Commissions(1).......................... 0% to 6% None-$6,000,000
Proceeds, before expenses, to Issuer or
Other Persons........................... 100% to 94% $100,000,000-$94,000,000
</TABLE>
- -----
(1) You will not incur a direct sales charge. Debentures earn interest, without
deduction for underwriting discounts or commissions. We will reimburse our
underwriters for commissions paid to licensed securities sales
representatives. Sales commission rates on the sale of Debentures depend
upon the terms of the sale and upon whether the sales are reinvestments or
new purchases. See "PLAN OF DISTRIBUTION."
. Currently, there is no trading market for the Debentures and you should not
expect one to be established in the future.
. The Debentures are being issued only in book-entry form.
. This offering of Debentures is subject to withdrawal or cancellation by
Metropolitan without notice.
. We are offering the Debentures on a continuous, best efforts basis.
. There is no minimum amount of Debentures that must be sold.
. You may not purchase Debentures pursuant to this prospectus after January 31,
2000.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
METROPOLITAN INVESTMENT SECURITIES, INC.
The date of this prospectus is January , 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
FORWARD-LOOKING STATEMENTS................................................. 2
PROSPECTUS SUMMARY......................................................... 3
RISK FACTORS............................................................... 8
USE OF PROCEEDS............................................................ 9
DESCRIPTION OF DEBENTURES.................................................. 9
PLAN OF DISTRIBUTION....................................................... 12
LEGAL MATTERS.............................................................. 13
EXPERTS.................................................................... 13
AVAILABLE INFORMATION...................................................... 13
INCORPORATION BY REFERENCE................................................. 13
</TABLE>
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are subject to risks,
uncertainties, and assumptions about Metropolitan, including, among other
things:
. Our anticipated growth strategies,
. Anticipated trends in our businesses, including trends in the markets for
insurance, mortgages, annuities and real estate,
. Future interest rate trends, movements and fluctuations,
. Future expenditures for purchasing receivables, and
. Our ability to continue to control costs and accurately price the risk of
default on the payment of receivables.
----------------
You should rely only on the information contained in this prospectus. We
have not, and the underwriters have not, authorized any person to provide you
with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus is accurate as of the date on the
front cover of this prospectus only. Our business, financial condition, results
of operations and prospects may have changed since that date.
2
<PAGE>
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus.
This summary is not complete and does not contain all of the information that
you should consider before investing in the Debentures. You should read both
the prospectus and the accompanying Annual Report of Metropolitan on Form 10-K
for the fiscal year ended September 30, 1998, carefully before making your
investment decision.
The Metropolitan Consolidated Group Of Companies
General
Metropolitan was incorporated in the State of Washington in January, 1953.
Its principal executive offices are located at 601 West First Avenue, Spokane,
Washington 99201-5015. Its mailing address is P.O. Box 2162, Spokane,
Washington 99210-2162 and its telephone number is (509) 838-3111. Metropolitan
and its subsidiaries are collectively referred to in this prospectus as the
"Consolidated Group," while references solely to the parent company will be to
"Metropolitan."
History
Metropolitan's controlling shareholder is C. Paul Sandifur, Jr. Mr. Sandifur
has control through his voting power over a family trust and through his direct
ownership of common stock. See "Item 12" in Metropolitan's Annual Report on
Form 10-K for the year ended September 30, 1998, which is attached to this
prospectus. As a result of Mr. Sandifur's common control, we have several other
affiliates, including Summit Securities, Inc., Old Standard Life Insurance
Company and Old West Annuity & Life Insurance Company. Collectively, these
affiliated companies are referred to as "Affiliated Companies." The chart on
the next page depicts the relationship of certain significant companies in the
Consolidated Group.
Business
The Consolidated Group is engaged in a nationwide business of acquiring,
holding and selling receivables. These receivables include real estate
contracts and promissory notes that are secured by first position liens on real
estate. The Consolidated Group also invests in receivables consisting of real
estate contracts and promissory notes secured by second and lower position
liens, structured settlements, annuities, lottery prizes, and other
investments. These assets are collectively referred to in this prospectus as
"Receivables." The Receivables secured by real estate are typically non-
conventional because they were either financed by the sellers of the properties
involved or they were originated by institutional lenders who originate loans
for borrowers with impaired credit or for non-conventional properties. In
addition to Receivables, the Consolidated Group invests in other assets,
including U.S. Treasury obligations, corporate bonds and other securities.
The Consolidated Group's capital to invest in these Receivables comes from
several sources. The Consolidated Group uses funds generated from the sale and
securitization of Receivables, collateralized borrowings, Receivable cash
flows, the sale of annuities, the sale of debentures and preferred stock, the
sale of real estate, and securities portfolio earnings.
The Consolidated Group provides services to the Affiliated Companies for a
fee and engages in various business transactions with the Affiliated Companies.
Metropolitan provides Receivable acquisition services to the Affiliated
Companies and to our insurance subsidiary, Western United Life Assurance
Company ("Western United"). Metropolitan's wholly owned subsidiary, Metwest
Mortgage Services, Inc., conducts Receivable collection and servicing
activities for the Affiliated Companies and services Receivables for
Metropolitan and for Western United.
3
<PAGE>
The Consolidated Group owns various properties acquired through repossession
and other sources. These properties are held for sale and/or development. For a
more detailed discussion of the business of the Consolidated Group, see "Item
1" in Metropolitan's Annual Report filed on Form 10-K for the year ended
September 30, 1998, which is attached to this prospectus.
Organizational Chart
(as of September 30, 1998)
[CHART APPEARS HERE]
METROPOLITAN MORTGAGE
& SECURITIES CO., INC.
|
|
_______________________________________________________________
| | |
100%| | 96.5%|
METWEST | CONSUMERS
MORTGAGE | GROUP HOLDING
SERVICES, INC. | CO., INC.
| |
| 100%|
| CONSUMERS
| INSURANCE
| CO., INC.
| |
| 75.5%|
| 24.5% WESTERN UNITED
|_______________________ LIFE ASSURANCE
COMPANY
The above chart lists the Consolidated Group's principal operating
subsidiaries and their ownership.
Metropolitan Mortgage & Securities Co., Inc.: Parent organization, invests
in Receivables and other investments, including real estate development, which
are principally funded by proceeds from Receivable investments, other
investments, and securities offerings.
Consumers Group Holding Co., Inc.: A holding company, its sole business
activity currently being that of a shareholder of Consumers Insurance Co., Inc.
Consumers Insurance Co., Inc.: Inactive property and casualty insurer, its
principal business activity currently being that of a shareholder of Western
United Life Assurance Company.
Western United Life Assurance Company: Metropolitan's largest subsidiary and
largest company within the Consolidated Group, is engaged in investing in
Receivables and other investments principally funded by annuity contract sales
and sales of life insurance policies.
Metwest Mortgage Services, Inc.: Performs loan origination, collection and
servicing functions. It is an FHA/HUD licensed servicer and lender, and is
licensed as a Fannie Mae seller/servicer.
- --------
* The remaining 3.5% of Consumers Group Holding Co., Inc. is owned by Summit
Securities, Inc.
4
<PAGE>
Offering Summary
Debenture Offering We are offering $100,000,000 in principal
amount of Investment Debentures, Series III.
They are being issued at the minimum investment
amounts, terms and rates set forth on the cover
page of this prospectus. There is no minimum
amount of Debentures that must be sold.
Debentures will be issued only in book-entry
form. See "DESCRIPTION OF DEBENTURES."
Debentures The Debentures are unsecured debt instruments
of Metropolitan. At September 30, 1998, we had
outstanding approximately $198,205,000
(principal and compounded and accrued interest)
of debenture debt and $125,702,000 (principal
and accrued interest) of collateralized debt
and similar obligations. See "CAPITALIZATION."
Principal and Interest You may elect one of three options to receive
Payments principal and interest payments on the
Debentures: (1) to receive interest monthly,
quarterly, semi-annually or annually, without
compounding, (2) to leave the interest with
Metropolitan and it will compound semi-
annually, or (3) for the installment
Debentures, equal monthly installments of
principal and interest in accordance with an
amortization schedule that you select. The
minimum investment amounts, terms and interest
rates on unissued Debentures offered hereby may
be changed from time to time by Metropolitan by
supplementing this prospectus. The terms of
Debentures issued prior to such change will not
be affected. See "DESCRIPTION OF DEBENTURES--
Payment of Principal and Interest."
Use of Proceeds We will use the proceeds from the sales of this
Debenture offering to invest in Receivables and
to make other investments, which may include
investments in existing subsidiaries, new
business ventures or to acquire other
companies. We may also use the proceeds to
retire maturing debentures, pay preferred stock
dividends, for property development and for
general corporate purposes. See "USE OF
PROCEEDS."
Risk Factors Your investment in the Debentures involves a
certain degree of risk. You should invest in
the Debentures only after reviewing the risks
described in this prospectus. See "RISK
FACTORS" for a complete discussion of the risks
associated with investing in the Debentures.
5
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Consolidated Group
at September 30, 1998.
<TABLE>
<CAPTION>
Amount
Class Outstanding
----- ------------
<S> <C>
Debt Payable:
Advances under funding facility with NationsBanc Mortgage
Capital Corp., interest at 6.625% per annum; due on March 24,
1999; collateralized by $122,129,000 in real estate contracts
and mortgage notes............................................ $118,342,972
Reverse repurchase agreements with Seattle Northwest; interest
at 5.57% per annum; due on October 1, 1998; collateralized by
$2,900,000 in U.S. Treasury Bonds............................. 2,892,750
Note payable to Summit Securities, Inc., interest at 11.0% per
annum; due on June 30, 1999; collateralized by $3,200,000 in
structured settlement agreements.............................. 2,560,000
Real estate contracts and mortgage notes payable, interest
rates ranging from 3% to 11.6% per annum, due through 2016;
collateralized by senior liens on certain of the Company's
real estate contracts, mortgage notes and real estate held for
sale.......................................................... 1,802,680
Accrued interest payable....................................... 103,909
------------
Total Debt Payable........................................... 125,702,311
============
Debenture Bonds:
Investment Debentures, Series II maturing in 1998 to 2002, at
5.5% to 11%................................................... 174,540,100
Investment Debentures Series I, maturing in 1997 to 2007 at
7.5% to 10.25%................................................ 732,900
Compound and accrued interest.................................. 22,932,294
------------
Total Debenture Bonds........................................ 198,205,294
============
Stockholders' Equity:
Preferred Stock................................................ 19,454,071
Common Stock................................................... 293,417
Additional paid-in capital..................................... 18,580,051
Net unrealized losses on investments........................... (680,619)
Retained earnings.............................................. 21,109,849
------------
Total Stockholders' Equity................................... 58,756,769
------------
Total Capitalization......................................... $382,664,374
============
</TABLE>
6
<PAGE>
Summary Consolidated Financial Data
The summary consolidated financial data shown below as of September 30, 1998
and 1997 and for the years ended September 30, 1998, 1997 and 1996 (other than
the ratio of earnings to fixed charges and preferred stock dividends) have been
derived from, and should be read in conjunction with, the consolidated
financial statements, related notes, and Management's Discussion and Analysis
of Financial Condition and Results of Operations appearing in Metropolitan's
Form 10-K, which is incorporated herein by reference and attached to this
prospectus. The consolidated financial data shown below as of September 30,
1996, 1995 and 1994 and for the years ended September 30, 1995 and 1994 (other
than the ratio of earnings to fixed charges and preferred stock dividends) have
been derived from the consolidated financial statements not included elsewhere
herein.
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
(dollars in thousands except per share amounts)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS
OF INCOME DATA:
Revenues................ $ 155,955 $ 155,135 $ 156,672 $ 138,107 $ 138,186
========== ========== ========== ========== ==========
Income before minority
interest............... $ 10,453 $ 9,791 $ 8,146 $ 6,376 $ 5,702
Income allocated to
minority interests..... (126) (123) (108) (73) (224)
---------- ---------- ---------- ---------- ----------
Net income.............. 10,327 9,668 8,038 6,303 5,478
Preferred stock
dividends.............. (3,732) (4,113) (3,868) (4,038) (3,423)
---------- ---------- ---------- ---------- ----------
Income applicable to
common stockholders.... $ 6,595 $ 5,555 $ 4,170 $ 2,265 $ 2,055
========== ========== ========== ========== ==========
Ratio of earnings to
fixed charges.......... 1.75 1.77 1.46 1.35 1.29
Ratio of earnings to
fixed charges and
preferred stock
dividends(1)........... 1.37 1.31 1.14 1.03 1.04
PER COMMON SHARE
DATA(2):
Basic and diluted income
per share applicable to
common
stockholders(3)........ $ 50,728 $ 42,733 $ 32,073 $ 17,288 $ 14,996
========== ========== ========== ========== ==========
Weighted average number
of common shares
outstanding(2)......... 130 130 130 131 137
========== ========== ========== ========== ==========
Cash dividends per
common share........... $ 1,200 $ -- $ -- $ 3,800 $ 675
========== ========== ========== ========== ==========
CONSOLIDATED BALANCE
SHEET DATA:
Total assets............ $1,226,665 $1,112,389 $1,282,659 $1,078,468 $1,063,290
Debentures, line of
credit advances, other
debt payable and
securities sold, not
owned.................. 323,908 190,131 363,427 226,864 261,500
Stockholders' equity.... 58,757 54,113 46,343 40,570 32,625
</TABLE>
- --------
(1) The consolidated ratio of earnings to fixed charges and preferred stock
dividends was 1.37, 1.31, 1.14, 1.03, and 1.04 for the years ended
September 30, 1998, 1997, 1996, 1995 and 1994, respectively. Assuming no
benefit from the earnings of its subsidiaries with the exception of direct
dividend payments, the ratio of earnings to fixed charges and preferred
dividends for Metropolitan alone was 1.10, 1.01, 1.11, 1.05, and 1.34 for
the years ended September 30, 1998, 1997, 1996, 1995 and 1994,
respectively.
The consolidated ratio of earnings to fixed charges excluding preferred
stock dividends was as follows for the years ended September 30, 1998--
1.75; 1997--1.77; 1996--1.46; 1995--1.35; and 1994--1.29. The ratio of
earnings to fixed charges excluding preferred stock dividends for
Metropolitan, assuming no benefit from the earnings of its subsidiaries
with the exception of direct dividend payments was 1.40, 1.36, 1.48, 1.40,
and 1.36 for the years ended September 30, 1998, 1997, 1996, 1995 and 1994,
respectively.
(2) All information retroactively reflects the reverse common stock split of
2,250:1 which occurred during the fiscal year ended September 30, 1994.
(3) Earnings per common share, basic and diluted, are computed by deducting
preferred stock dividends from net income and dividing the result by the
weighted average number of shares of common stock outstanding. There were
no common stock equivalents or potentially dilutive securities outstanding
during any year presented.
7
<PAGE>
RISK FACTORS
When deciding whether or not to purchase the Debentures, you should
carefully consider the risks set forth in the section entitled "INTRODUCTION--
Factors Affecting Future Operating Results" of Metropolitan's Annual Report on
Form 10-K for the year ended September 30, 1998, incorporated into and attached
to this prospectus. You should also consider the following risks associated
with an investment in the Debentures:
The Indenture does not Metropolitan's and your rights and
restrict the ability of obligations in the Debentures are defined in
Metropolitan to incur an indenture dated as of July 6, 1979, and a
additional debt supplement to that indenture dated as of
December 31, 1997. The indenture does not
restrict our ability to issue additional
debentures or to incur other debt. We are not
required to maintain any specified financial
ratios, minimum net worth, minimum working
capital or a sinking fund.
Debentures are not insured The Debentures offered in this prospectus are
against the risk of loss unsecured obligations of our company and they
are not insured or guaranteed by any bank,
any governmental agency, any insurance
company, any affiliate of our company or any
other person or entity. Thus, the Debentures
have greater risk than investments that are
insured by such entities against the risk of
loss.
Debentures are not a liquid There is no trading market for the Debentures
investment due to the absence and it is not anticipated that one will
of an established trading develop. Generally, you cannot have your
market Debentures redeemed until they mature. There
are only limited situations in which
Debentures will be redeemed early. These may
include situations where there is a mutual
agreement between you and Metropolitan, or
when the "prepayment on death" provision
applies. You should consider your needs for
liquidity before investing in the Debentures
and you should be prepared to hold any
Debentures purchased in this offering until
their maturity. See "DESCRIPTION OF
CERTIFICATES."
Risks with holding book-entry Our use of book-entry Debentures rather than
Debentures because there are actual physical certificates in this offering
no physical certificates to could limit the markets for these securities,
transfer prevent a secondary market from forming and
could delay payments to you. The absence of
physical certificates for the Debentures may
prevent a secondary market from developing
because investors may be unwilling to invest
in securities if they cannot obtain delivery
of physical certificates. The use of book-
entry certificates may delay payments to you
because distributions on the Debentures would
be made first to the person in whose name the
certificates are registered.
Possible inability to continue The State of Washington regulates the amount
selling securities of securities that Metropolitan can sell
under the Debenture Company Act. Under that
Act, the amount of securities that can be
sold can be, and has previously been, limited
by the State of Washington. Because of this
limitation, we may be restricted in the
amount of securities that we are able to
offer in this offering or in future
offerings.
8
<PAGE>
USE OF PROCEEDS
If all the Debentures offered are sold, we expect net proceeds to total
$100,000,000 before deducting sales commissions and other expenses. Sales
commissions will range from zero to six percent (0%-6%) of the offering
proceeds (between $0 and $6,000,000), depending on the maturities of
Debentures sold and whether sales are reinvestments or new purchases. Other
expenses are estimated to be $215,000. There can be no assurance that any of
the Debentures can or will be sold.
In conjunction with the other funds available to us through operations
and/or borrowings, we currently plan to utilize the proceeds of the Debenture
offerings for the following purposes: priority will be given first to
(i) funding investments in Receivables and other investments, which may
include investments in existing subsidiaries, the commencement of new business
ventures or the acquisition of other companies, and then to (ii) the
development of real estate currently held by Metropolitan or acquired in the
future. Presently there are no commitments or agreements for material
acquisitions. However, the Consolidated Group continues to evaluate possible
acquisition candidates. To the extent internally generated funds are
insufficient or unavailable for the retirement of maturing debentures through
the period ending January 31, 2000, proceeds of this offering may be used for
retiring maturing debentures, preferred stock dividends and for general
corporate purposes, including debt service and other general operating
expenses. Approximately $48.0 million in principal amount of debt securities
will mature between February 1, 1999 and January 31, 2000 with interest rates
ranging from 6.1% to 10.25% and averaging approximately 7.9% per annum. See
"BUSINESS--Factors Affecting Future Operating Results" under Item 1 in our
Annual Report on Form 10-K for the year ended September 30, 1998.
Management anticipates that some of the proceeds from this offering will be
invested in money market funds, bank repurchase agreements, commercial paper,
U.S. Treasury Bills and similar securities investments while awaiting use as
described above. Due to our inability to accurately forecast the total amount
of Debentures to be sold in this offering, no specific amounts have been
allocated for any of the foregoing purposes.
In the event substantially less than the maximum proceeds are obtained, we
do not anticipate any material changes to our planned use of proceeds from
those described above.
DESCRIPTION OF DEBENTURES
General
The Debentures will be issued under an indenture dated as of July 6, 1979
and a supplement thereto dated as of December 31, 1997 (collectively, the
"Indenture"). The following statements relating to the Debentures and the
Indenture are summaries and do not purport to be complete. Such summaries are
subject to the detailed provisions of the Indenture and are qualified in their
entirety by reference to the Indenture, a copy of which is filed as an exhibit
to the Registration Statement and is also available for inspection at the
office of the trustee.
The Debentures will represent unsecured general obligations of Metropolitan
and will be issued in book-entry form without coupons, in fractional
denominations of $0.01 or more subject to the stated minimum investment amount
requirements. The Debentures will be sold to the public at 100% of their
principal amount. The Debentures will be issued in accordance with the minimum
investment amounts, maturities and interest rates set forth on the cover page
of this prospectus. The stated interest rates, maturities, and minimum
investment amounts of any unissued Debentures may be changed at any time by
Metropolitan by supplementing this prospectus. Any such change will have no
effect on the terms of the previously sold Debentures.
Debentures may be transferred or exchanged for other Debentures of the same
series, of a like aggregate principal amount, subject to the limitations set
forth in the Indenture. No service charge will be made for any transfer or
exchange of Debentures. Metropolitan may require payment of taxes or other
governmental charges imposed in connection with any such transfer or exchange.
Interest will accrue at the stated rate from the date of issue until maturity.
The Debentures are not convertible into capital stock or other securities of
Metropolitan.
9
<PAGE>
The Debentures are not subject to redemption prior to maturity, but may be
prepaid pursuant to the prepayment on death provision described below. Also,
in limited circumstances involving an investor's demonstrated financial
hardship, subject to regulatory restrictions affecting redemptions and
exchanges of securities during an offering, Metropolitan may, in its sole
discretion, consider a request for an early payout of a Debenture upon terms
mutually agreed to by the holder of the Debenture and Metropolitan. Such early
payout requests are reviewed in the order received and are subject to the
review by Metropolitan's executive management.
Payment of Principal and Interest
Interest will be payable to Debenture holders under one of several interest
payment plans. The purchaser selects an interest payment plan at the time the
Debentures are purchased and can change this plan at any time by giving
written notice to Metropolitan. The purchaser may elect to have interest paid
on a monthly, quarterly, semi-annual or annual basis, without compounding. Or,
an investor may elect to leave the accrued interest with Metropolitan in which
case it will compound semi-annually at the stated interest rate. Under the
compounding option, upon written notice to Metropolitan, the Debenture
holder(s) may withdraw the interest accumulated during the last two completed
semi-annual compounding periods as well as the interest accrued from the end
of the last compounding period to the date Metropolitan receives the notice.
Amounts compounded prior to the last two semi-annual compounding periods are
available only at maturity.
Alternatively, at the election of the Debenture holder, at the time of
investment and subject to the minimum term and investment requirements set
forth on the cover page of this prospectus, level monthly installments
comprised of principal and interest will be paid to the Debenture holder
commencing 30 days from date of issue of the Debenture until maturity. The
amount of each installment will be determined by the amortization term
designated by the Debenture holder at the time the Debenture is purchased.
Debenture holders are notified in writing between 15 and 45 days prior to
the date their Debentures will mature. When a Debenture matures, the amounts
due on maturity are placed in a separate bank trust account until paid to the
registered owner(s). Debentures do not earn interest after the maturity date.
Metropolitan will pay the principal and accumulated interest due on matured
Debentures to the registered owner(s) in cash at Metropolitan's main office in
Spokane, Washington or by check mailed to the address designated by the
registered owner.
Prepayment on Death
In the event of the death of a Debenture holder, any party entitled to
receive some or all of the proceeds from that Debenture may elect to have his
or her portion of the principal and any accrued but unpaid interest prepaid in
full in five consecutive equal monthly installments. Interest will continue to
accrue on the declining principal balance of such portion. No interest penalty
will be assessed. Any request for prepayment shall be made to Metropolitan in
writing and shall be accompanied by evidence satisfactory to Metropolitan of
the death of the registered owner or joint registered owner. Before
prepayment, Metropolitan may require the submission of additional documents or
other material which it may consider necessary to determine the portion of the
proceeds the requesting party is entitled to receive, or assurances which, in
Metropolitan's discretion, it considers necessary to fulfill its obligations.
Related Indebtedness
The Indenture pursuant to which the Debentures are issued does not restrict
Metropolitan's ability to issue additional debentures or to incur other debt.
The Indenture does not require Metropolitan to maintain any specified
financial ratios, minimum net worth or minimum working capital. There is no
sinking fund for the redemption of the Debentures. Debentures will not be
guaranteed or insured by any governmental agency. The State of Washington
regulates the amount of debt securities Metropolitan may issue, its debt to
equity ratio, certain of its investments and various other aspects of its
business. At September 30, 1998, Metropolitan had
10
<PAGE>
outstanding approximately $198,205,000 (principal and compounded and accrued
interest) of debenture debt and $125,702,000 (principal and accrued interest)
of collateralized debt and similar obligations. The Debentures offered hereby
are senior in liquidation to all outstanding equity securities of
Metropolitan. They are subordinate to Metropolitan's collateralized debt as
set forth above and are on a parity with unsecured accounts payable and
accrued liabilities. There are no limitations on Metropolitan's ability to
incur additional collateralized debt. Debenture holders should not rely on the
terms of the Indenture for protection of their investment, but should look
rather to the creditworthiness of Metropolitan and its ability to satisfy its
obligations.
Concerning the Trustee
Seattle First National Bank ("SFNB") was the trustee (the "Trustee") under
the Indenture until March 8, 1996, when SFNB sold its trust activities to
First Trust National Association ("First Trust") which assumed all of the
duties of the Trustee pursuant to the terms of the Indenture, as amended.
First Trust was acquired by US Bank National Association ("US Bank") in 1998.
US Bank has assumed all of the duties of the Trustee in accordance with the
terms of the Indenture, as amended. The Trustee is obligated under the
Indenture to oversee and, if necessary, to take action to enforce fulfillment
of Metropolitan's obligations to Debenture holders. The Trustee is a national
banking association with a combined capital and surplus in excess of $100
million. Metropolitan and certain of its affiliates may maintain deposit
accounts with and may, from time to time, borrow money from the Trustee and
conduct other banking transactions with it. At September 30, 1998, and as of
the date of this prospectus, no loans from the Trustee were outstanding. In
the event of default, the Indenture permits the Trustee to become a creditor
of Metropolitan and does not preclude the Trustee from enforcing its rights as
a creditor, including rights as a holder of collateralized indebtedness.
Rights and Procedures in the Event of Default
Events of default include (i) the failure of Metropolitan to pay interest
on any Debenture for a period of 30 days after it becomes due and payable;
(ii) the failure to pay the principal or any required installment thereof of
any Debenture when due; (iii) the failure to perform any other covenant in the
Indenture for 60 days after notice; and (iv) certain events of bankruptcy,
insolvency or reorganization with respect to Metropolitan. Upon the occurrence
of an event of default, either the Trustee or the holders of 25% or more in
principal amount of Debentures then outstanding may declare the principal of
all the Debentures outstanding to be immediately due and payable.
The Trustee must give the Debenture holders notice by mail of any default
within 90 days after the occurrence of the default, unless it has been cured
or waived. The Trustee may withhold such notice if it determines in good faith
that such withholding is in the best interests of the Debenture holders,
unless the default is a failure to pay principal or interest on any Debenture.
Subject to certain conditions, any such default, except for a failure to
pay principal or interest when due, may be waived by the holders of a majority
in aggregate principal amount of the Debentures then outstanding. Such holders
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or of exercising any power
conferred on the Trustee, except as otherwise provided in the Indenture. The
Trustee may require reasonable indemnity from holders of Debentures before
acting at their direction.
Within 120 days after the end of each fiscal year, Metropolitan must
furnish to the Trustee a statement of certain officers of Metropolitan
concerning their knowledge as to whether or not Metropolitan is in default
under the Indenture.
Modification of the Indenture
Debenture holders' rights may be modified with the consent of the holders
of 66 2/3% of the outstanding principal amounts of Debentures, and 66 2/3% of
those series specifically affected. In general, no adverse
11
<PAGE>
modification of the terms of payment and no modifications reducing the
percentage of Debentures required for modification is effective against any
Debenture holder without his or her consent.
Restrictions on Consolidation, Merger and Other Fundamental Corporate Changes
Metropolitan may not consolidate with or merge into any other corporation
or transfer substantially all its assets unless either Metropolitan is the
continuing corporation after such consolidation or merger or the person
acquiring by conveyance or transfer of such assets shall be a corporation
organized and existing under the laws of the United States or any state
thereof which assumes the performance of every covenant of Metropolitan under
the Indenture and certain other conditions precedent are fulfilled.
Transfer Agent and Registrar
Metropolitan acts as its own transfer agent and registrar of the
Debentures.
PLAN OF DISTRIBUTION
The Debentures are offered directly to the public on a continuing best
efforts basis through Metropolitan Investment Securities, Inc. ("MIS"), which
is affiliated with Metropolitan through the common control by C. Paul Sandifur
Jr. Accordingly, the offering has not received the independent selling agent
review customarily made when an unaffiliated selling agent offers securities.
No commission or other expense of the offering will be paid by the purchasers
of the Debentures. A commission will, however, be paid by Metropolitan on most
Debenture purchases up to a maximum amount of 6% of the Debenture price,
generally depending on the term of the Debenture and whether or not the
transaction is a reinvestment or new purchase. Debentures are offered only for
cash or cash equivalents. MIS will transmit such funds directly to
Metropolitan by noon of the next business day after receipt. During the three
fiscal years ended September 30, 1998, MIS has received commissions of
$3,698,362 from Metropolitan on sales of approximately $112,685,000 of
Metropolitan's debt securities.
MIS is a member of the National Association of Securities Dealers, Inc.
(the "NASD"). Due to the affiliation of Metropolitan and MIS, Rule 2720 of the
NASD Conduct Rules requires, in part, that a qualified independent underwriter
be engaged to make a recommendation regarding the interest rates to be paid on
the Debentures offered by this prospectus. Accordingly, MIS has obtained a
letter from Cruttenden Roth Incorporated ("Cruttenden"), a NASD member,
stating that the interest rates on the Debentures using a formula tied to
corresponding interest rates paid by the U.S. Treasury and regional financial
institutions are consistent with Cruttenden's recommendations which were based
on conditions and circumstances existing as of the date of the prospectus.
Metropolitan undertakes to maintain the interest rates on Debentures no lower
than those recommended by Cruttenden based on the formula. Accordingly, the
yield at which the Debentures will be distributed will be no lower than that
recommended by Cruttenden. Cruttenden has assumed the responsibilities of
acting as the qualified independent underwriter in pricing the offering and
conducting due diligence. For performing its functions as a qualified
independent underwriter with respect to the Debentures offered hereunder,
Cruttenden is to be paid $66,667.00 in fees.
The Registrant has agreed to indemnify Cruttenden against, or make
contributions to Cruttenden with respect to certain liabilities under the
Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as
amended.
There is not now and Metropolitan does not expect that there will be a
public trading market for the Debentures in the future. MIS does not intend to
make a market for the Debentures. See "RISK FACTORS."
MIS may enter into selected dealer agreements with and reallow to certain
dealers, who are members of the NASD, and certain foreign dealers who are not
eligible for membership in the NASD, a commission of up to 6% of the principal
amount of Debentures sold by such dealers.
12
<PAGE>
LEGAL MATTERS
Certain legal matters relating to the Debentures to be offered by this
prospectus will be passed upon for Metropolitan by the law firm of Kutak Rock,
Denver, Colorado.
EXPERTS
The consolidated balance sheets of Metropolitan Mortgage & Securities Co.,
Inc. and its subsidiaries as of September 30, 1998 and 1997, and the
consolidated statements of income, stockholders' equity and cash flows for each
of the three years in the period ended September 30, 1998, incorporated by
reference in this prospectus, have been incorporated herein in reliance on the
report, which includes an explanatory paragraph describing changes in the
methods of accounting for the transfer and servicing of financial assets in
1997 and impaired loans in 1996, of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
AVAILABLE INFORMATION
Metropolitan is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files periodic reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports and other information
filed by Metropolitan with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission in Washington, D.C. at
450 Fifth Street, N.W., Washington, DC 20549 and at certain of its regional
offices which are located in the New York Regional Office, Seven World Trade
Center, Suite 1300, New York, NY 10048, and the Chicago Regional Office,
CitiCorp Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661-2511.
In addition, the Commission maintains a World Wide Web site that contains
reports, proxy statements and other information regarding registrants such as
Metropolitan, that filed electronically with the Commission at the following
Internet address: (http://www.sec.gov).
Metropolitan has filed with the Securities and Exchange Commission in
Washington, D.C., a Registration Statement on Form S-2 under the Securities Act
of 1933, as amended, with respect to the Debentures offered hereby. This
prospectus does not contain all of the information set forth in the
Registration Statement, as permitted by the rules and regulations of the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document filed with the Commission is incorporated herein by
reference in this prospectus:
Annual Report on Form 10-K for the fiscal year ended September 30, 1998
(filed January 13, 1999).
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
Metropolitan will provide without charge to each person, including to whom a
prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the information that has been referenced in this prospectus
other than exhibits to such documents. Requests for such copies should be
directed to Corporate Secretary, Metropolitan Mortgage & Securities Co., Inc.,
PO Box 2162, Spokane, Washington 99210-2162, telephone number (509) 838-3111.
13
<PAGE>
Metropolitan Mortgage & Securities Co., Inc.
[LOGO OF METROPOLITAN MORTGAGE & SECURITIES CO., INC.]
$100,000,000 Investment Debentures, Series III
----------------
PROSPECTUS
----------------
January , 1999
Metropolitan Investment Securities, Inc.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
<TABLE>
<S> <C>
SEC Registration Fee(1)............................................ $ 27,800
NASD Filing Fee.................................................... 10,500
Independent Underwriter Fee and Expenses........................... 66,667
Blue Sky Qualification Fees and Expenses(2)........................ 3,000
Accounting Fees and Expenses(2).................................... 50,000
Legal Fees and Disbursements(2).................................... 20,000
Trustee's Fees and Expenses(2)..................................... 5,000
Printing Expenses(2)............................................... 30,000
Miscellaneous Expenses(2).......................................... 2,033
--------
Total Expenses................................................... $215,000
========
</TABLE>
- --------
(1) $11,514 of this fee was previously paid with the Registration Statement
No. 333-43889
(2) Estimated
Item 15. Indemnification of Directors and Officers
Metropolitan has no contractual or other arrangement with its controlling
persons, directors or officers regarding indemnification, other than as set
forth in its Articles of Incorporation. Metropolitan's Articles of
Incorporation permits indemnification of a director, officer or employee up to
the indemnification limits permitted by Washington state law which permits
indemnification for judgments, fines and amounts paid in settlement actually
and reasonably incurred in connection with an action, suit or proceeding if
the indemnified person acted in good faith and in a manner reasonably believed
to be in and not opposed to the best interests of the corporation.
Item 16. Exhibits
(a) Exhibits
<TABLE>
<C> <S>
1(a). Form of Selling Agreement between Metropolitan and Metropolitan
Investment Securities, Inc. regarding Investment Debentures, Series
III (incorporated by reference to Exhibit 1(a) to Registration
Number 333-43889).
*1(b). Form of Agreement to Act as "Qualified Independent Underwriter,"
between Metropolitan, Metropolitan Investment Securities, Inc. and
Cruttenden Roth Incorporated with respect to Debentures to be
registered.
*1(c). Form of Pricing Recommendation Letter of Cruttenden Roth Incorporated
with respect to Debentures to be registered.
4(a). Indenture, dated as of July 6, 1979, between Metropolitan and
Seattle-First National Bank, Trustee (incorporated by reference to
Exhibit 3 to Metropolitan's Annual Report on Form 10-K for
fiscal 1979).
4(b). First Supplemental Indenture, dated as of October 3, 1980, between
Metropolitan and Seattle-First National Bank, Trustee (incorporated
by reference to Exhibit 4 to Metropolitan's Annual Report on Form
10-K for fiscal 1980).
4(c). Second Supplemental Indenture, dated as of November 12, 1984, between
Metropolitan and Seattle-First National Bank, Trustee (incorporated
by reference to Exhibit 4(d) to Registration No. 2-95146).
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
4(d). Third Supplemental Indenture, dated as of December 31, 1997, between
Metropolitan and First Trust National Association, successor
Trustee (incorporated by reference to Exhibit 4(d) to Form 10-K
filed January 8, 1998).
*5. Opinion of Kutak Rock as to the validity of the Debentures.
9. Irrevocable Trust Agreement (incorporated by reference to Exhibit
9(b) to Registration No. 2-81359).
10(a). Employment Agreement between Metropolitan Mortgage & Securities Co.,
Inc. and Bruce Blohowiak (incorporated by reference to Exhibit
10(a) to Form 10-K filed January 8, 1998).
10(b). Employment Agreement between Metropolitan Mortgage & Securities Co.,
Inc. and Michael Kirk (incorporated by reference to Exhibit 10(b)
to Form 10-K filed January 8, 1998).
10(c). Employment Agreement between Metropolitan Mortgage & Securities Co.,
Inc. and Jon McCreary (incorporated by reference to Exhibit 10(c)
to Form 10-K filed January 8, 1998).
10(d). Reinsurance Agreement between Western United Life Assurance Company
and Old Standard Life Insurance Company (incorporated by reference
to Exhibit 10(d) to Form 10-K filed January 8, 1998).
11. Statement indicating computation of earnings per common share
(incorporated by reference to Exhibit 11 to Form 10-K filed January
13, 1999).
12. Statement of computation of ratio of earnings to fixed charges
(incorporated by reference to Exhibit 12 to Form 10-K filed January
13, 1999).
*23(a). Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23(b). Consent of Kutak Rock (included in Exhibit 5).
24. Power of attorney (included on Page II-5 of the Registration
Statement).
*25. Statement on Form T-1 of First Trust National Association.
27. Financial Data Schedule (incorporated by reference to Exhibit 27 to
Form 10-K filed January 13, 1999).
</TABLE>
- --------
* Filed herewith.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended (the "Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
II-2
<PAGE>
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers, and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling persons of the
Registrant in the successful defense of any action, suit, or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
(c) For the purpose of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
For the purpose of determining any liability under the Act, each post-
effective amendment that contains a form of prospectus shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Spokane, State of Washington, on this 25th day of
January, 1999.
Metropolitan Mortgage & Securities Co., Inc.
/s/ C. Paul Sandifur, Jr.
____________________________________________
C. Paul Sandifur, Jr.,
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, whose signatures
appear below, hereby constitute and appoint C. Paul Sandifur, Jr. their true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for them and in their name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as full and to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ C. Paul Sandifur, Jr. President, Chief Executive January 25, 1999
____________________________________ Officer and Chairman of the
C. Paul Sandifur, Jr. Board (Principal Executive
Officer)
/s/ Bruce J. Blohowiak Executive Vice President, January 25, 1999
____________________________________ Chief Operating Officer and
Bruce J. Blohowiak Director
/s/ Steven Crooks Vice President, Principal January 25, 1999
____________________________________ Financial Officer and
Steven Crooks Principal Accounting
Officer
/s/ Reuel Swanson Secretary and Director January 25, 1999
____________________________________
Reuel Swanson
/s/ Charles Stolz Director January 25, 1999
____________________________________
Charles Stolz
/s/ Irv Marcus Director January 25, 1999
____________________________________
Irv Marcus
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ John T. Trimble Director January 25, 1999
____________________________________
John T. Trimble
/s/ Harold Erfurth Director January 25, 1999
____________________________________
Harold Erfurth
</TABLE>
II-5
<PAGE>
EXHIBIT 1(b)
FORM OF AGREEMENT TO ACT AS "QUALIFIED INDEPENDENT UNDERWRITER"
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
Investment Debentures, Series III
This agreement made as of the ____ day of January 1999 by and between
Metropolitan Mortgage & Securities Co., Inc., a Washington corporation
("Metropolitan"), Metropolitan Investment Securities, Inc., a Washington
corporation ("MIS"), and CRUTTENDEN ROTH INCORPORATED, a California corporation
("CRUTTENDEN").
WITNESSETH:
WHEREAS, Metropolitan intends to offer $100,000,000 in Investment
Debentures Series III (hereinafter referred to as "Debentures"), which will be
offered in reliance on a registration statement filed on Form S-2 with the
Securities and Exchange Commission; and,
WHEREAS, MIS, a broker/dealer and affiliate of Metropolitan and a member of
the National Association of Securities Dealers ("NASD"), will be engaged as the
sole managing agent for Metropolitan; and,
WHEREAS, pursuant to subparagraph (c) of Rule 2720 of the NASD, MIS, as a
NASD member, may participate in such underwriting only if the yield at which the
Debentures offered to the public is not lower than the yield recommended by a
"Qualified Independent Underwriter" as that term is defined in Rule 2720
subparagraph (b)(15) of the NASD, and who participates in the preparation of the
registration statement and prospectus relating to the offering and exercises
customary standards of due diligence, with respect thereto; and,
WHEREAS, this agreement ("Agreement") describes the terms on which
Metropolitan is retaining CRUTTENDEN to serve as such a "Qualified Independent
Underwriter" in connection with this offering of Debentures;
NOW, THEREFORE, in consideration of the recitations set forth above, and
the terms, promises, conditions, and covenants herein contained, the parties
hereby contract and agree as follows:
DEFINITIONS
As hereinafter used, except as the context may otherwise require, the term
"Registration Statement" means the registration statement on Form S-2 (including
the related preliminary prospectus, financial statements, exhibits and all other
documents to be filed as a part thereof or incorporated therein) for the
registration of the offer and sale of the debentures under the Securities Act of
1933, as amended, and the rules and regulations thereunder (the "Act") filed
with the Securities and Exchange Commission (the "Commission"), and any
amendment thereto, and the term "Prospectus" means the prospectus including any
preliminary or final prospectus and any materials incorporated by reference into
and attached to the Prospectus (including the form of prospectus to be filed
with the Commission pursuant to Rule 424(b) under the Act) and any amendment or
supplement thereto, to be used in connection with the offering.
1. Rule 2720 REQUIREMENT.
CRUTTENDEN hereby confirms its agreement as set forth in subparagraph
15(g) of Rule 2720 of the Bylaws of the NASD and represents that, as
appropriate, CRUTTENDEN satisfies or at the times designated in such
paragraph (l5) will satisfy the other requirements set forth therein
or will receive an exemption from such requirements from the NASD.
2. CONSENT.
CRUTTENDEN hereby consents to be named in the Registration Statement
and Prospectus as having acted as a "Qualified Independent
Underwriter" solely for the purposes of Rule 2720 referenced herein.
Except as permitted by the immediately preceding sentence or to the
extent required by law,
<PAGE>
all references to CRUTTENDEN in the Registration Statement or
Prospectus or in any other filing, report, document, release or other
communication prepared, issued or transmitted in connection with the
offering by Metropolitan or any corporation controlling, controlled by
or under common control with Metropolitan, or by any director,
officer, employee, representative or agent of any thereof, shall be
subject to CRUTTENDEN's prior written consent with respect to form and
substance.
3. PRICING FORMULA AND RECOMMENDATION LETTER
CRUTTENDEN agrees to render a written letter of recommendation as to
the yields below which Metropolitan's Debentures may not be offered
based on the pricing formula that is set forth in Schedules "A" and
"B," copies of which are attached hereto, and incorporated herein by
reference (the "Pricing Recommendation Letter"). It is understood and
agreed by CRUTTENDEN that the securities to which this Agreement
relates will be offered on a continuous, best efforts basis by MIS, as
the managing agent, pursuant to the Selling Agreement in effect
between MIS and Metropolitan which are filed as exhibits to the
Registration Statement referred to above. Metropolitan, through MIS,
will continue to offer the debt securities according to the terms and
conditions of said agreement, including, without limitation, Schedules
"A" and B" in accordance with this Agreement. CRUTTENDEN reserves the
right to review and amend its Pricing Recommendation Letter upon the
filing of any post-effective amendment to this Registration Statement
or upon occurrence of any material event which may or may not require
such an amendment to be filed, or at such time as the offering under
this registration shall terminate or otherwise lapse under operation
of law.
4. FEES AND EXPENSE.
It is agreed that CRUTTENDEN shall be paid a fee in the amount of
$66,667 payable upon delivery of the Pricing Recommendation Letter
referred to in paragraph 3 above.
5. MATERIAL FACTS.
Metropolitan represents and warrants to CRUTTENDEN's that at the time
the Registration Statement and, at the time the Prospectus is filed
with the Commission (including any preliminary prospectus and the form
of prospectus filed with the Commission pursuant to Rule 424(b)) and
at all times subsequent thereto, to and including the date on which
payment for, and delivery of, the Debentures to be sold in the
Offering is made by the underwriter or underwriters, as the case may
be, participating in the Offering and by Metropolitan (such date being
referred to herein as the "Closing Date"), the Prospectus (as amended
or supplemented if it shall have been so amended or supplemented) will
contain all material statements which are required to be stated
therein in accordance with the Act and will conform to all other
requirements of the federal securities laws, and will not, on such
date include any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading and that all contracts and documents
required by the Act to be filed or required as exhibits to the
Registration Statement have been filed. Metropolitan further
represents and warrants that any further filing, report, document,
release or communication which in any way refers to CRUTTENDEN or to
the services to be performed by CRUTTENDEN pursuant to this Agreement
will not contain any untrue or misleading statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
Metropolitan further warrants and represents that:
(a) All leases, contracts and agreements referred to in or filed as
exhibits to the Registration Statement to which Metropolitan or
its subsidiaries is a party or by which it is bound are in full
force and effect, except as may otherwise be disclosed in the
Registration Statement.
(b) Metropolitan has good and marketable title, except as otherwise
indicated in the Registration Statement and Prospectus, to all
of its assets and properties described therein as being owned by
it, free and clear of all liens, encumbrances and defects except
such encumbrances and defects which do not, in the aggregate,
materially affect or interfere with the use made and proposed to
be made of such properties as described in the Registration
<PAGE>
Statement and Prospectus; and Metropolitan has no material
leased properties except as disclosed in the Prospectus.
(c) Metropolitan is duly organized under the laws of the State of
Washington and, as of the effective date of the Registration
Statement and at the Closing Date Metropolitan will be validly
existing and in good standing under the laws of the State of
Washington with full corporate power and authority to own its
properties and conduct its business to the extent described in
the Registration Statement and Prospectus; Metropolitan is duly
qualified to do business as a foreign corporation and is in good
standing in all jurisdictions in which the nature of the
business transacted by it or its ownership of properties or
assets makes qualification necessary; the authorized and
outstanding capitalization of Metropolitan is as set forth in
the Prospectus and the description in the Prospectus of the
capital stock of Metropolitan conforms with and accurately
describes the rights set forth in the instruments defining the
same;
(d) Metropolitan is not in violation of its Certificate of
Incorporation or Bylaws or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any bond, debenture, note, or other
evidence of indebtedness, contract or lease or in any indenture
or loan agreement to which it is a party or by which it is
bound.
(e) The execution, delivery and performance of this Agreement has
been duly authorized by all necessary corporate action on the
part of Metropolitan and MIS and performance of the foregoing
agreement and the consummation of the transactions contemplated
thereby, will not conflict with or result in a breach of any of
the terms or constitute a violation of the respective
Certificates of Incorporation or Bylaws of Metropolitan or MIS,
or any deed of trust, lease, sublease, indenture, mortgage, or
other agreement or instrument to which Metropolitan or MIS is a
party or by which either of them or their property is bound, or
any applicable law, rule, regulation, judgment, order or decree
of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over Metropolitan or
MIS or their properties or obligations; and no consent,
approval, authorization or order of any court or governmental
agency or body is required for the consummation of the
transactions contemplated herein and in the other agreements
previously referred to in this paragraph except as may be
required under the Act or under any state securities or laws.
(f) Any certificate signed by an officer of Metropolitan and
delivered to CRUTTENDEN pursuant to this Agreement shall be
deemed a representation and warranty by Metropolitan to
CRUTTENDEN, to have the same force and effect as stated herein,
as to the matters covered thereby.
(g) If any event relating to or affecting Metropolitan shall occur
as a result of which it is necessary, in CRUTTENDEN's opinion,
to amend or supplement the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser,
Metropolitan undertakes to inform CRUTTENDEN of such events
within a reasonable time thereafter, and will forthwith prepare
and furnish to CRUTTENDEN, without expense to them, a reasonable
number of copies of an amendment or amendments or a supplement
or supplements to the Prospectus (in form and substance
satisfactory to CRUTTENDEN) which will amend or supplement the
Prospectus so that as amended or supplemented it will not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein in
light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, not misleading.
(h) Metropolitan hereby warrants and represents that it will offer
the Debentures in accordance with the pricing formula that is
set forth in Schedules "A" and "B" which are incorporated by
reference herein.
<PAGE>
(i) All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of
Metropolitan submitted pursuant hereto, shall remain operative
and in full force and effect, surviving the date of this
Agreement.
6. AVAILABILITY OF INFORMATION.
Metropolitan hereby agrees to provide CRUTTENDEN, at its expense, with
all information and documentation with respect to its business,
financial condition and other matters as CRUTTENDEN may deem relevant
based on the standards of reasonableness and good faith and shall
request in connection with CRUTTENDEN's performance under this
Agreement, including, without limitation, copies of all correspondence
with the Commission, certificates of its officers, opinions of its
counsel and comfort letters from its auditors. The above-mentioned
certificates, opinions of counsel and comfort letters shall be
provided to CRUTTENDEN as CRUTTENDEN may request on the effective date
of the Registration Statement and on the Closing Date. Metropolitan
will make reasonably available to CRUTTENDEN, its auditors, counsel,
and officers and directors to discuss with CRUTTENDEN any aspect of
Metropolitan which CRUTTENDEN may deem relevant. In addition,
Metropolitan, at CRUTTENDEN's request, will cause to be delivered to
CRUTTENDEN copies of all certificates, opinions, letters and reports
to be delivered to the underwriter or underwriters, as the case may
be, pursuant to any underwriting agreement executed in connection with
the Offering or otherwise, and shall cause the person issuing such
certificate, opinion, letter or report to authorize CRUTTENDEN to rely
thereon to the same extent as if addressed directly to CRUTTENDEN.
Metropolitan represents and warrants to CRUTTENDEN that all such
information and documentation provided pursuant to this paragraph 6
will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statement therein not
misleading. In addition, Metropolitan will promptly advise CRUTTENDEN
of all telephone conversations with the Commission which relate to or
may affect the Offering.
7. INDEMNIFICATION.
(a) Subject to the conditions set forth below, and in addition to
any rights of indemnification and contribution to which
CRUTTENDEN may be entitled pursuant to any agreement among
underwriters, underwriting agreement or otherwise, and to the
extent allowed by law, Metropolitan hereby agrees that it will
indemnify and hold CRUTTENDEN and each person controlling,
controlled by or under common control with CRUTTENDEN within the
meaning of Section 15 of the Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or the
rules and regulations thereunder (individually, an "Indemnified
Person") harmless from and against any and all loss, claim,
damage, liability, cost or expense whatsoever to which such
Indemnified Person may become subject under the Act, the
Exchange Act, or other federal or state statutory law or
regulation, at common law or otherwise, arising out of, based
upon, or in any way related or attributed to (i) this Agreement,
(ii) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or
Prospectus or any other filing, report, document, release or
communication, whether oral or written, referred to in paragraph
5 hereof or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, (iii) any application or
other document executed by Metropolitan or based upon written
information furnished by Metropolitan filed in any jurisdiction
in order to qualify the Debentures under the securities or Blue
Sky laws thereof, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iv)
the breach of any representation or warranty made by
Metropolitan in this Agreement. Metropolitan further agrees
that upon demand by an Indemnified Person at any time or from
time to time, it will promptly reimburse such Indemnified Person
for, or pay, any loss, claim, damage, liability, cost or expense
as to which Metropolitan has indemnified such person pursuant
hereto. Notwithstanding the foregoing provisions of this
paragraph 7, any such payment or reimbursement by Metropolitan
of fees, expenses or disbursement incurred by an Indemnified
Person in any proceeding in which a final judgment by a court of
competent jurisdiction (after all appeals or the expiration of
time to appeal) is entered against such Indemnified Person as a
direct result of such person's negligence, bad faith or
<PAGE>
willful misfeasance will be promptly repaid to Metropolitan. In
addition, anything in this paragraph 7 to the contrary
notwithstanding, Metropolitan shall not be liable for any
settlement of any action or proceeding effected without its
written consent.
(b) Promptly after receipt by an Indemnified Person under sub-
paragraph (a) above of notice of the commencement of any action,
such Indemnified Person will, if a claim in respect thereof is
to be made against Metropolitan under paragraph (a), notify
Metropolitan in writing of the commencement thereof; but the
omission to so notify Metropolitan will not relieve Metropolitan
from any liability which it may have to any Indemnified Person
otherwise than under this paragraph 7 if such omission shall not
have materially prejudiced Metropolitan's ability to investigate
or to defend against such claim. In case any such action is
brought against any Indemnified Person, and such Indemnified
Person notifies Metropolitan of the commencement thereof,
Metropolitan will be entitled to participate therein and, to the
extent that it may elect by written notice delivered to the
Indemnified Person promptly after receiving the aforesaid notice
from such Indemnified Person, to assume the defense thereof with
counsel reasonably satisfactory to such Indemnified Person;
PROVIDED, HOWEVER, that if the defendants in any such action
include both the Indemnified Person and Metropolitan or any
corporation controlling, controlled by or under common control
with Metropolitan, or any director, officer, employee,
representative or agent of any thereof, or any other "Qualified
Independent Underwriter" retained by Metropolitan in connection
with the Offering and the Indemnified Person shall have
reasonably concluded that there may be legal defenses available
to it which are different from or additional to those available
to such other defendant, the Indemnified Person shall have the
right to select separate counsel to represent it. Upon receipt
of notice from Metropolitan to such Indemnified Person of its
election so to assume the defense of such action and approval by
the Indemnified Person of counsel, Metropolitan will not be
liable to such Indemnified Person under this paragraph 7 for any
fees of counsel subsequently incurred by such Indemnified Person
in connection with the defense thereof (other than the
reasonable costs of investigation subsequently incurred by such
Indemnified Person) unless (i) the Indemnified Person shall have
employed separate counsel in accordance with the provision of
the next preceding sentence (it being understood, however, that
Metropolitan shall not be liable for the expenses of more than
one separate counsel in any one jurisdiction representing the
Indemnified Person, which counsel shall be approved by
CRUTTENDEN), (ii) Metropolitan, within a reasonable time after
notice of commencement of the action, shall not have employed
counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person, or (iii) Metropolitan shall
have authorized in writing the employment of counsel for the
Indemnified Person at the expense of Metropolitan, and except
that, if clause (i) or (iii) is applicable, such liability shall
be only in respect of the counsel referred to in such clause (i)
or (iii).
<PAGE>
(c) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in
paragraph 7 is due in accordance with its terms but is for any
reason held by a court to be unavailable from Metropolitan to
CRUTTENDEN on grounds of policy or otherwise, Metropolitan and
CRUTTENDEN shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or
defending same) to which Metropolitan and CRUTTENDEN may be
subject in such proportion so that CRUTTENDEN is responsible for
that portion represented by the percentage that its fee under
this Agreement bears to the public offering price appearing on
the cover page of the Prospectus and Metropolitan is responsible
for the balance, except as Metropolitan may otherwise agree to
reallocate a portion of such liability with respect to such
balance with any other person, including, without limitation,
any other "Qualified Independent Underwriter"; PROVIDED,
HOWEVER, that (i) in no case shall CRUTTENDEN be responsible for
any amount in excess of the fee set forth in paragraph 4 above
and (ii) no person guilty of fraudulent misrepresentation within
the meaning of Section 11(f) of the Act shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph
(c), any person controlling, controlled by or under common
control with CRUTTENDEN, or any partner, director, officer,
employee, representative or any agent of any thereof, shall have
the same rights to contribution as CRUTTENDEN and each person
who controls Metropolitan within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, each officer of
Metropolitan who shall have signed the Registration Statement
and each director of Metropolitan shall have the same rights to
contribution as Metropolitan, subject in each case to clause (i)
of this paragraph (c). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action,
suit or proceeding against such party in respect of which a
claim for contribution may be made against the other party under
this paragraph (c), notify such party from whom contribution may
be sought, but the omission to so notify such party shall not
relieve the party from whom contribution may be sought from any
other obligation it or they may have hereunder or otherwise than
under this paragraph (c). The indemnity and contribution
agreements contained in this paragraph 7 shall remain operative
and in full force and effect regardless of any investigation
made by or on behalf of any Indemnified Person or termination of
this Agreement.
8. AUTHORIZATION BY METROPOLITAN.
Metropolitan represents and warrants to CRUTTENDEN that this Agreement
has been duly authorized, executed and delivered by Metropolitan and
constitutes a valid and binding obligation of Metropolitan.
9. AUTHORIZATION BY MIS.
MIS represents and warrants to CRUTTENDEN that this Agreement has been
duly authorized, executed and delivered by MIS and constitutes a valid
and binding obligation of MIS.
10. AUTHORIZATION BY CRUTTENDEN.
CRUTTENDEN represents and warrants to Metropolitan that this Agreement
has been duly authorized, executed and delivered by CRUTTENDEN and
constitutes a valid and binding obligation of CRUTTENDEN.
<PAGE>
11. NOTICE.
Whenever notice is required to be given pursuant to this Agreement,
such notice shall be in writing and shall be mailed by first class
mail, postage prepaid, addressed (a) if to CRUTTENDEN ROTH
INCORPORATED, at 18301 Von Karman, Suite 100, Irvine, CA 92612,
Attention: Byron Roth and (b) if to Metropolitan, at 601 W. 1st.
Avenue - Department 115000, Spokane, Washington 99201, Attention:
Susan Thomson, Assistant Corporate Counsel.
12. GOVERNING LAW.
This Agreement shall be construed (both as to validity and
performance) and enforced in accordance with and governed by the laws
of the State of Washington applicable to agreements made and to be
performed wholly within such jurisdiction.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the day and year first above mentioned.
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
By:_____________________________________________
C. Paul Sandifur, Jr., President
METROPOLITAN INVESTMENT SECURITIES, INC.
By:_____________________________________________
Reuel Swanson, Secretary
CRUTTENDEN ROTH INCORPORATED
By:_____________________________________________
Monte Brem, Vice President, Corporate Finance
<PAGE>
SCHEDULE A
Metropolitan Mortgage & Securities Co., Inc.
The opinion of CRUTTENDEN is conditioned upon Metropolitan's undertaking to
maintain the rates on its Debentures at least equal to an "assumed floor."
Based upon the pricing formula described below:
1. The interest rate to be paid on the Debentures shall be fixed by
Metropolitan from time to time. However, the rate shall not be lower than
the computation made per the worksheet on Schedule B, which is attached and
incorporated by reference herein.
2. The "assumed floor" for 6 to 11 month Debentures shall be at least 1.0%
above the lesser of the interest rate on the 6 month U.S. Treasury Bills,
on a discount basis, based upon the auction average (which is published
widely in newspapers throughout the country, normally on the day following
the auction) and a composite average of the offering rates on 6 month
certificates of deposit currently being offered by banks and savings
institutions in the northwestern section of the United States. For
purposes of this composite average of certificate of deposit rates, the
rates being offered by the following institutions shall be considered
initially:
a. Seattle First National Bank
b. Security State Bank
c. U.S. Bank of Washington
d. Wells Fargo Bank
e. Washington Trust Bank
f. Washington Mutual Savings Bank
CRUTTENDEN and Metropolitan agree to review on an ongoing basis the group
which comprises the composite average, and may substitute another
institution in the composite group from time-to-time by mutual agreement,
as the case may be.
3. The "assumed floor" for 60 to 120 month Debentures shall be computed in
like manner as that described in paragraph "2" above, except that the
latest auction average on 5 year U.S. Treasury Notes shall be considered in
place of the 6 month U.S. Treasury Bills, and 5 year certificates of
deposit currently offered in the composite group shall be considered in
lieu of the 6 month rate.
4. Rates on 12 to 23 month, 24 to 35 month, 36 to 47 month and 48 to 59 month
Debentures shall be at least equal to the interpolated differences between
the computation of the "assumed floor" of 6 to 11 month Debentures and 60
to 120 month Debentures, based upon the computation set forth in Schedule
B.
5. Rates on Debentures payable in installments of principal and interest shall
be no lower than .25% below the "assumed floor" for 60 to 120 month
Debentures.
6. The computation of the "assumed floor" shall be made monthly, as of the
first Tuesday of each month, or at such other times during any month that
Metropolitan causes the offering rates to change from those in effect on
the first Tuesday of each month ("the computation date"). Metropolitan
agrees to furnish CRUTTENDEN with a computation of the "assumed floor" by
completing the worksheet on Schedule B. Should the offering rates at that
time on Metropolitan's Debentures be less than the "assumed floor" as
computed, Metropolitan agrees to raise the rates on its Debentures to at
least the "assumed floor" within 10 calendar days of the computation date.
Should Metropolitan fail to raise its offering rates within the 10 day
period referred to above, CRUTTENDEN reserves the right, in its
uncontrolled discretion, to withdraw its opinion regarding the offering
rates on the Debentures.
<PAGE>
SCHEDULE B
Metropolitan Mortgage & Securities Co., Inc.
PRICING FORMULA
C.D. RATE
- ---------
Average rate among a composite of 6 selected Banks and Savings and Loans as of
the 1st Tuesday of each month.
GOVERNMENT RATE
- ---------------
Most current of 8 selected auction rates available on the 1st Tuesday of each
month.
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Certificate of
Deposit (CD) Government Rate Enter Lesser of Metropolitan's
Calculation Calculation Column A or B Assumed Floor Current Rate
- -------------------- ----------------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
5 yr CD rate = _____ 5 yr Gov't Rate = _____
6 mo CD rate = _____ 6 mo Gov't Rate = _____
DIFFERENCE = _____ DIFFERENCE = _____
x .20 X .20
_____ _____
Differential = _____ Differential = _____
(enter in (a) below) (enter in (a) below)
6 mo (actual) 6 mo (actual)
rate = _____ rate = _____ __________________ + 1%______________ ________________
(a) + (a) + 6-11 months
_____ _____
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
1 yr rate = _____ 1 yr rate = _____ _______________ + 1%___________ _______________
(a) + (a) + 12-23 months
_____ _____
2 yr rate = _____ 2 yr rate = _____ _______________ + 1%___________ _______________
(a) + (a) + 24-35 months
_____ _____
3 yr rate = _____ 3 yr rate = _____ _______________ + 1%___________ _______________
(a) + (a) + 36-47 months
_____ _____
4 yr rate = _____ 4 yr rate = _____ _______________ + 1%___________ _______________
(a) + (a) + 48-59 months
_____ _____
5 yr (actual) 5 yr (actual)
rate = _____ rate = _____ _______________ + 1%___________ _______________
(a) + (a) + 60-120 months
_____ _____
</TABLE>
INSTALLMENT PAYMENTS (Floor equal to yearly ______ ______ ______
rate MINUS .50) (yearly -.50
rate)
<PAGE>
EXHIBIT 1(c)
FORM OF PRICING RECOMMENDATION LETTER
Date: January __, 1999
C. Paul Sandifur, Jr., President
Metropolitan Investment Securities, Inc.
917 West Sprague Avenue
Spokane, Washington 99201
Re: Pricing of Metropolitan Mortgage & Securities Co., Inc., Offering of
$100,000,000 in Principal Amount of Investment Debentures, Series III
Dear Mr. Sandifur:
This letter will serve to confirm our engagement as a "qualified
independent underwriter" as that term is defined in subparagraph (b)(15) of Rule
2720 to the NASD bylaws, as amended ("Rule 2720").
Based upon our review of the registration statement, and the performance of
"due diligence" as required in subparagraph (c)(3) to Rule 2720, it appears that
the yields on the Investment Debentures, Series III (which are based upon the
computation set forth in Schedules A and B to the Agreement to Act as "Qualified
Independent Underwriter" dated January __, 1999 which is filed as Exhibit 1(b)
to the registration statement), are no lower than those which we would
recommend.
We hereby consent to the use of our name as a "qualified independent
underwriter," in the Registration Statement filed by Metropolitan Mortgage &
Securities Co., Inc. with respect to the above-referenced matter.
Very truly yours,
CRUTTENDEN ROTH INCORPORATED
By:__________________________________
cc: National Association of Securities Dealers, Inc.
<PAGE>
EXHIBIT 5
OPINION OF KUTAK ROCK
<PAGE>
<TABLE>
<S> <C> <C>
KUTAK ROCK
SUITE 2900 ATLANTA
KANSAS CITY
717 SEVENTEENTH STREET LITTLE ROCK
NEW YORK
DENVER, COLORADO 80202-3329 NEWPORT BEACH
OKLAHOMA CITY
303-297-2400 OMAHA
PHOENIX
FACSIMILE 303-292-7799 PITTSBURGH
WASHINGTON
http://www.kutakrock.com
-------------------------
</TABLE>
January 25, 1999
Metropolitan Mortgage & Securities Co., Inc.
601 West First Avenue
Spokane, WA 99201-5015
Re: Metropolitan Mortgage & Securities Co., Inc.
Investment Debentures Series III
Ladies and Gentlemen:
We have acted as counsel to Metropolitan Mortgage & Securities Co., Inc.
(the "Company") in connection with the filing of a registration statement to
which this opinion is filed as an exhibit on Form S-2, under the Securities Act
of 1933, as amended (the "Act"). The registration statement covers a proposed
offering by the Company of up to $100,000,000 principal amount of Investment
Debentures, Series III (the "Debentures"). Such registration statement, as
amended, on file with the Securities and Exchange Commission (the "Commission")
at the time such registration statement becomes effective (including financial
statements and schedules, exhibits and all other documents filed as a part
thereof or incorporated therein) are herein referred to as the "Registration
Statement."
In connection with this opinion, we have made such investigations and
examined such records, including the Company's Certificate of Incorporation,
Bylaws and corporate minutes as we deemed necessary to the performance of our
services and to give this opinion. We have also examined and are familiar with
the originals or copies, certified or otherwise identified to our satisfaction,
of such other documents, corporate records and other instruments as we have
deemed necessary for the preparation of this opinion. In expressing this
opinion, we have relied, as to any questions of fact upon which our opinion is
predicated, upon representations and certificates of the officers of the
Company.
In giving this opinion we assumed:
(a) the genuineness of all signatures and the authenticity and
completeness of all documents submitted to us as originals;
(b) the conformity to originals and the authenticity of all documents
supplied to us as certified, photocopied, conformed or facsimile copies and
the authenticity and completeness of the originals of any such documents;
and
(c) the proper, genuine and due execution and delivery of all documents
by all parties to them and that there has been no breach of the terms
thereof.
Based upon the foregoing and subject to the qualifications set forth above,
and assuming (i) that the Registration Statement has become effective under the
Act, (ii) that all required actions are taken and conditions satisfied
<PAGE>
Metropolitan Mortgage & Securities Co., Inc.
January 25, 1999
Page 2
with respect to the issuance of the Company's Debentures as specified in the
prospectus and (iii) consideration is received for the Debentures: we are of
the opinion that, when issued, the Debentures will be binding obligations of the
Company.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and the use of our name in the Registration Statement. In giving such
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Act or the Rules and
Regulations of the Commission promulgated pursuant thereto.
Very truly yours,
/s/ Kutak Rock
--------------
Kutak Rock
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
Metropolitan Mortgage & Securities Co., Inc.
Spokane, Washington
We consent to the incorporation by reference in this Registration Statement on
Form S-2 of our reports, which include an explanatory paragraph describing
changes in the methods of accounting for the transfer and servicing of financial
assets in 1997 and impaired loans in fiscal 1996, dated November 20, 1998, on
our audits of the consolidated financial statements and financial statement
schedules of Metropolitan Mortgage & Securities Co., Inc. and subsidiaries as of
September 30, 1998 and 1997, and for each of the three years in the period ended
September 30, 1998, which report is included in the Annual Report on Form 10-K.
We also consent to the reference to our firm under the caption "Experts."
/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
Spokane, Washington
January 25, 1999
<PAGE>
EXHIBIT 25
FORM T-1
<PAGE>
EXHIBIT 25
STATEMENT ON FORM T-1 OF U.S. BANK TRUST NATIONAL ASSOCIATION (FORMERLY FIRST
TRUST NATIONAL ASSOCIATION)
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Statement of Eligibility Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) ______
U.S. BANK TRUST NATIONAL ASSOCIATION
------------------------------------
(Exact name of trustee as specified in its charter)
91-1587893
----------
(I.R.S. Employer Identification No.)
601 UNION STREET, SUITE 2120, SEATTLE, WA 98101
----------------------------------------- -----
(Address of principal executive offices) (Zip code)
METROPOLITAN MORTGAGE & SECURITIES CO., INC.
--------------------------------------------
(Exact name of obligor as specified in its charter)
WASHINGTON 91-1587893
---------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)
601 WEST FIRST AVENUE, SPOKANE, WA (509) 838-3111 99201
-------------------------------------------------- -----
(Address & phone no. of principal executive offices) (Zip code)
INVESTMENT DEBENTURES
---------------------
(Title of the indenture securities)
<PAGE>
1. General information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency, Washington D.C. 20521.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with the obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee, U.S. Bank Trust National
Association.
3. Voting securities of the trustee. Furnish the following information as
to each class of voting securities of the trustee:
As of December 1, 1998
Col. A Col. B
Title of class Amount outstanding
-------------- ------------------
Common Stock 1,000 Shares
4. Trusteeships under other indentures. If the trustee is a trustee under
another indenture under which any other securities, or certificates of interest
or participation in any other securities, of the obligor are outstanding,
furnish the following information:
(a) Title of securities outstanding under each such other indenture:
None.
(b) A brief statement of the facts relied upon as a basis for the
claim that no conflicting interest within the meaning of Section 310(b)(1)
of the Act arises as a result of the trusteeship under any such other
indenture, including a statement as to how the indenture securities will
rank as compared with the securities issued under such other indenture.
Not applicable.
5. Interlocking directories and similar relationships with the obligor or
underwriters. If the trustee or any of the directors or executive officers of
the trustee is a director, officer, partner, employee, appointee, or
representative of the obligor or of any underwriter for the obligor, identify
each such person having any such connection and state the nature of each such
connection.
None.
6. Voting securities of the trustee owned by the obligor or its officials.
Furnish the following information as to the voting securities of the trustee
owned beneficially by the obligor and each director, partner and executive
officer of the obligor:
<PAGE>
As of December 1, 1998
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
Percentage of
voting
Securities
represented by
Amount owned amount given
Name of owner Title of class beneficially in Col. C
------------- -------------- ------------ ---------
<S> <C> <C> <C>
None.
</TABLE>
7. Voting securities of the trustee owned by underwriters or their
officials. Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner and executive officer of each such underwriter.
As of December 1, 1998
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
Percentage of
voting
Securities
represented by
Amount owned amount given
Name of owner Title of class beneficially in Col. C
<S> <C> <C> <C>
None.
</TABLE>
8. Securities of the obligor owned or held by the trustee. Furnish the
following information as to securities of the obligor owned beneficially or held
as collateral security for obligations in default by the trustee:
As of December 1, 1998
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
Amount owned
beneficially
Whether the or held as Percentage of
securities are collateral class
voting or security for represented by
nonvoting obligations in amount given
Title of class securities default in Col. C
-------------- ---------- ------- ---------
<S> <C> <C> <C>
None.
</TABLE>
<PAGE>
9. Securities of underwriters owned or held by the trustee. If the
trustee owns beneficially or holds as collateral security for obligations in
default any securities of an underwriter for the obligor, furnish the following
information as to each class of securities of such underwriter any of which are
so owned or held by the trustee.
As of December 1, 1998
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
Amount owned
Beneficially
or held as
collateral Percentage of
security for Class
Title of obligations in represented by
Issuer and Amount default by amount given
title of class outstanding trustee in Col. C
-------------- ----------- ------- ---------
<S> <C> <C> <C>
None.
</TABLE>
10. Ownership or holdings by the trustee of voting securities of certain
affiliates or security holders of the obligor. If the trustee owns beneficially
or holds as collateral security for obligations in default voting securities of
a person who, to the knowledge of the trustee (1) owns 10% or more of the voting
securities of the obligor or (2) is an affiliate, other than a subsidiary, of
the obligor, furnish the following information as to the voting securities of
such person.
As of December 1, 1998
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
Amount owned
beneficially
or held as
collateral Percentage of
security for Class
Title of obligations in represented by
issuer and Amount default by Amount given
title of class outstanding trustee in Col. C
-------------- ----------- ------- ---------
<S> <C> <C> <C>
None.
</TABLE>
11. Ownership or holdings by the trustee of any securities of a person
owning 50% or more of the voting securities of the obligor. If the trustee owns
beneficially or holds as collateral security for obligations in default any
securities of a person who, to the knowledge of the trustee, owns 50% or more of
the voting securities of the obligor, furnish the following information as to
each class of securities of such person any of which are so owned or held by the
trustee.
As of December 1, 1998
<PAGE>
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D
Amount owned
Beneficially
or held as
collateral Percentage of
security for class
Title of obligations in represented by
issuer and Amount default by amount given
title of class outstanding trustee in Col. C
-------------- ----------- ------- ---------
<S> <C> <C> <C>
None.
</TABLE>
12. Indebtedness of the obligor to the trustee. Except as noted in the
instructions, if the obligor is indebted to the trustee, furnish the following
information:
As of December 1, 1998
<TABLE>
<CAPTION>
Col. A Col. B Col. C
Nature of indebtedness Amount outstanding Date due
---------------------- ------------------ --------
<S> <C> <C>
None.
</TABLE>
13. Defaults by the obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
Not applicable.
(b) If the trustee is a trustee under another indenture under which
any other securities, or certificates of interest or participation in any
other securities, of the obligor are outstanding, or is trustee for more
than one outstanding series of securities under the indenture, state
whether there has been a default under any such indenture or series,
identify the indenture or series affected, and explain the nature of any
such default.
Not applicable.
14. Affiliations with the underwriters. If any underwriter is an affiliate
of the trustee, describe each such affiliation.
None.
15. Foreign trustee. Identify the order or rule pursuant to which the
foreign trustee is authorized to act as sole trustee under indentures qualified
or to be qualified under the Act.
Not applicable.
<PAGE>
16. List of exhibits. List below all exhibits filed as part of this
statement of eligibility and qualification.
1. Articles of association of U.S. Bank Trust National Association
(attached).
2. Certificate of authority of U.S. Bank Trust National Association to
commence business (attached).
3. Authorization of the trustee to exercise corporate trust powers
(attached).
4. Bylaws of U.S. Bank Trust National Association (attached).
5. Not applicable.
6. Consent of U.S. Bank Trust National Association required by Section
321(b) of the Act (attached).
7. Latest report of condition of U.S. Bank Trust National Association
(attached).
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, U.S. Bank Trust National Association, a national banking association
organized under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Seattle, and State of Washington,
on the 1st day of December, 1998.
U.S. BANK TRUST NATIONAL ASSOCIATION
By /s/ D. Huhta
----------------------------------
<PAGE>
Exhibit-1
ARTICLES OF ASSOCIATION
U.S. BANK TRUST NATIONAL ASSOCIATION
For the purpose of organizing an association to perform any lawful
activities of national banks, the undersigned do enter into the following
Articles of Association:
FIRST. The title of the Association shall be "U.S. Bank Trust National
Association."
SECOND. The main office of this Association shall be in the City of
Seattle, County of King, State of Washington. The business of this Association
will be limited to that of a national trust bank, and to support activities
incidental thereto. This Association will not amend these Articles of
Association to expand the scope of or alter its business beyond that stated in
the Article Second without the prior approval of the Comptroller of the
Currency. Prior to the transfer of any stock of the Association, the
Association will seek the prior approval of the appropriate federal depository
institution regulatory agency.
THIRD. The board of directors of the Association shall consist of not less
than five nor more than twenty-five persons, the exact number to be fixed and
from time to time by resolution of a majority of the full board of directors or
by resolution of a majority of the shareholders at any annual or special meeting
thereof. Each director shall own common or preferred stock of this Association
with an aggregate par, fair market, or equity value of not less than $1,000.00
as of either (i) the date of purchase, or (ii) the date the person became a
director, whichever is more recent. Any combination of common or preferred
stock of this Association or U.S. Bancorp may be used.
Any vacancy in the board of directors may be filled by action of a majority
of the remaining directors between meetings of shareholders. The board of
directors may not increase the number of directors between meetings of
shareholders to a number that (1) exceeds by more than two the number of
directors last elected by shareholders where the number was fifteen or less, and
(2) exceeds by more than four the number of directors last elected by
shareholders where the number was sixteen or more, but in no event shall the
number of directors exceed twenty-five.
Terms of directors, including directors, selected to fill vacancies, shall
expire at the next regular meeting of shareholders at which directors are
elected, unless the directors resign or are removed from office.
Page 1 of 8
March 30, 1998
<PAGE>
Despite the expiration of director's term the director shall continue to
serve until his or her successor is elected and qualifies or until there is a
decrease in the number of directors and his or her position is eliminated.
Honorary or advisory members of the board of directors, without voting
power or power of final decision in matters concerning the business of this
Association, may be appointed by resolution of a majority of the full board of
directors, or by resolution of shareholders at any annual or special meeting.
Honorary or advisory directors shall not be counted for purposes of determining
the number of directors of this Association or the presence of a quorum in
connection with any board action, and shall not be required to own qualifying
shares.
FOURTH. There shall be an annual meeting of the shareholders to elect
directors and transact whatever other business may be brought before the
meeting. It shall be held at the main office or any other convenient place the
board of directors may designate, on the day of each year specified therefor in
the bylaws, or if that day falls on a legal holiday in the State in which this
Association is located, on the next following banking day. If no election is
held on the day fixed, or in event of a legal holiday, an election may be held
on any subsequent day within sixty days of the day fixed, to be designated by
the board of directors, or, if the directors fail to fix the day, by
shareholders representing two-thirds of the shares issued and outstanding. In
all cases at least ten-days advance notice of the meeting shall be given to the
shareholders by first class mail.
A director may resign at any time by delivering written or oral notice to
the board of directors, its chairperson, or to this Association, which
resignation shall be effective when the notice is delivered unless the notice
specifies a later effective date.
A director may be removed by shareholders at a meeting called to remove him
or her, when notice of the meeting stating that the purpose or one of the
purposes is to remove him or her is provided, if there is a failure to fulfill
one of the affirmative requirements for qualification, or for cause; provided,
---------
however, that a director may not be removed if the number of votes sufficient to
- -------
elect him or her under cumulative voting is voted against his or her removal.
FIFTH. The authorized amount of capital stock of this Association shall be
10,000 shares of common stock of the par value of one-hundred dollars ($100.00)
each; but said capital stock may be increased or decreased from time to time,
according to the provisions of the laws of the United States.
Page 2 of 8
March 30, 1998
<PAGE>
No holder of shares of the capital stock of any class of this Association
shall have any preemptive or preferential right of subscription to any shares of
any class of stock of this Association, whether now or hereafter authorized, or
to any obligations convertible into stock of this Association, issued, or sold,
nor any right of subscription to any thereof other than such, if any, as the
board of directors, in its discretion may from time to time determine and at
such price as the board of directors may from time to time fix.
Unless otherwise specified in these Articles of Association or required by
law, (1) all matters requiring shareholder action, including amendments to the
Articles of Association, must be approved by shareholders owning a majority
voting interest in the outstanding voting stock, and (2) each shareholder shall
be entitled to one vote per share.
Unless otherwise provided in the bylaws, the record date for determining
shareholders entitled to notice of and to vote at any meeting is the close of
business on the day before the first notice is mailed or otherwise sent to the
shareholders, provided that in no event may a record date be more that seventy
days before the meeting.
SIXTH. The board of directors shall appoint one of its members president
of this Association and one of its members chairperson of the board. The board
of directors shall also have the power to appoint one or more vice presidents, a
secretary who shall keep minutes of the directors' and shareholders' meetings
and be responsible for authenticating the records of this Association, and such
other officers and employees as may be required to transact the business of this
Association. A duly appointed officer may appoint one or more officers or
assistant officers if authorized by the board of directors in accordance with
the bylaws.
The board of directors shall have the power to:
(1) Define the duties of the officers, employees, and agents of this
Association.
(2) Delegate the performance of its duties, but not the responsibility for
its duties, to the officers, employees, and agents of this
Association.
(3) Fix the compensation and enter into employment contracts with its
officers and employees upon reasonable terms and conditions,
consistent with applicable law.
Page 3 of 8
March 30, 1998
<PAGE>
(4) Dismiss officers and employees.
(5) Require bonds from officers and employees and to fix the penalty
thereof.
(6) Ratify written policies authorized by this Association's management or
committees of the board.
(7) Regulate the manner in which any increase or decrease of the capital
of this Association shall be made; provided, however, that nothing
-------- -------
herein shall restrict the power of shareholders to increase or
decrease the capital of this Association in accordance with law, and
nothing shall raise or lower from two-thirds the percentage required
for shareholder approval to increase or reduce the capital.
(8) Manage and administer the business and affairs of this Association.
(9) Adopt bylaws, not inconsistent with law or these Articles of
Association, for managing the business and regulating the affairs of
this Association.
(10) Amend or repeal bylaws, except to the extent that the Articles of
Association reserve this power in whole or in part to shareholders.
(11) Make contracts.
(12) Generally to perform all acts that are legal for a board of directors
to perform.
SEVENTH. The board of directors shall have the power to change the
location of the main office to any other place within the limits of the City of
Seattle without the approval of the shareholders, and shall have the power to
establish or change the location of any branch or branches of this Association
to any other location permitted under applicable law, without the approval of
the shareholders, subject to approval by the Comptroller of the Currency.
EIGHTH. The corporate existence of this Association shall continue until
terminated according to the laws of the United States.
NINTH. The board of directors of this Association, or any three (3) or
more shareholders owning, in the aggregate, not less than twenty-five percent
(25%) of the stock of this Association, may call a special meeting of
shareholders at any time. Unless otherwise provided by the bylaws or the laws
of the United
Page 4 of 8
March 30, 1998
<PAGE>
States, or waived by shareholders, a notice of the time, place, and purpose of
every annual and special meeting of the shareholders shall be given by first-
class mail, postage prepaid, mailed at least ten, and no more than sixty, days
prior to the date of the meeting to each shareholder of record at his/her
addresses as shown upon the books of this Association. Unless otherwise
provided by these Articles of Association or the bylaws, any action requiring
approval of shareholders must be effected at a duly called annual or special
meeting.
TENTH. Any action required to be taken at a meeting of the shareholders or
directors or any action that may be taken at a meeting of shareholders or
directors may be taken without a meeting if consent in writing, setting forth
the action as taken shall be signed by all the shareholders or directors
entitled to vote with respect to the matter thereof. Such action shall be
effective on the date on which the last signature is placed on the writing, or
such earlier date as is set forth therein.
ELEVENTH. Meetings of the board of directors or shareholders, regular or
special, may be held by means of conference telephone or similar communication
equipment by means of which all persons participating in the meeting can
simultaneously hear each other, and participation in such meeting by such
aforementioned means shall constitute presence in person at such meeting.
TWELFTH. (a) Any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than any action
by or in the right of the Association) by reason of the fact that he is or was a
director, officer, employee or agent of the Association, or is or was serving at
the request of the Association as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall be indemnified by the Association, unless similar indemnification is
provided by such other corporation, partnership, joint venture, trust or other
enterprise (any funds received by any person as a result of the provisions of
this Article being deemed an advance against his receipt of any such other
indemnification from any such other corporation, partnership, joint venture,
trust or other enterprise), against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interest of the Association, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its
---- ----------
equivalent, shall not, of itself,
Page 5 of 8
March 30, 1998
<PAGE>
create a presumption that the person seeking indemnification did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interest of the Association, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) Any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of the
Association to procure a judgment in its favor by reason of the fact that such
person is or was a director, officer, employee or agent of the Association, or
is or was serving at the request of the Association as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other corporation, partnership, joint venture, trust or other enterprise shall
be indemnified by the Association, unless similar indemnification is provided by
such other corporation, partnership, joint venture, trust or other enterprise
(any funds received by any person as a result of the provisions of this Article
being deemed an advance against his receipt of any such other indemnification
from any such other corporation, partnership, joint venture, trust or other
enterprise), against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Association and except that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Association
unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
of the circumstances of the case, such person is fairly and reasonably entitled
to indemnify for such expenses which the Court of Chancery or such other court
shall deem proper.
(c) To the extent that a director, officer, employee or agent of the
Association has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in paragraphs (a) and (b), or in defense
of any claim, issue or matter therein, such person shall be indemnified by the
Association against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection therewith.
(d) Except as set forth in paragraph (c) of this Article, any
indemnification under paragraphs (a) and (b) of this Article (unless ordered by
the court), shall be made by the Association only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because such person has met the
applicable standard of conduct set forth in paragraphs (a) and (b) of this
Article. Such determination shall be made (1) by a majority vote of the
directors who are
Page 6 of 8
March 30, 1998
<PAGE>
not parties to such action, suit or proceeding, even though less than a quorum,
or (2) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the Association in advance of the final disposition
of such action, suit or proceeding upon receipt of any undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the Association.
Such expenses (including attorneys' fees) incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the Board of Directors
deems appropriate.
(f) The indemnification and advancement of expenses provided by this
Article shall not be deemed exclusive of any other rights to which those seeking
indemnification or seeking advancement of expenses may be entitled under any by-
law, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in an official capacity and as to action in another capacity
while holding such office.
(g) By action of the Board of Directors, notwithstanding any interest of
the directors in the action, the Association may purchase and maintain
insurance, in such amounts as the Board of Directors deems appropriate, on
behalf of any person who is or was a director, officer, employee or agent of the
Association, or is or was serving at the request of the Association as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Association shall have the power to indemnify him against
such liability under the provisions of this Article.
(h) For purpose of this Article, references to "the Association" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees or agents, so that any
person who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position under
this Article with respect to the resulting or surviving corporation
Page 7 of 8
March 30, 1998
<PAGE>
as he would have with respect to such constituent corporation if its separate
existence had continued.
(i) For purposes of this Article, references to "other enterprises" shall
include employee benefit plans; reference to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Association" shall include any
service as a director, officer, employee or agent of the Association which
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Association" as referred to in this
Article.
(j) The indemnification and advancement of expenses hereby provided shall,
unless otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such person.
THIRTEENTH. These Articles of Association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of the holders of a
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount. This Association's board of directors may
propose one or more amendments to these Articles of Association for submission
to the shareholders.
Page 8 of 8
March 30, 1998
<PAGE>
Exhibit-2. Certificate of Authority to Commence Business
COMPTROLLER OF THE CURRENCY
TREASURY DEPARTMENT [Picture] OF THE UNITED STATES
Washington, D.C.,
Whereas, satisfactory evidence has been presented to the Comptroller of the
Currency that FIRST TRUST WASHINGTON located in SEATTLE State of WASHINGTON has
complied with all provisions of the statutes of the United States required to be
complied with before being authorized to commence the business of banking as a
National Banking Association;
Now, therefore, I hereby certify that the above named association is
authorized to commence the business of banking as a National Banking Association
under the title "FIRST TRUST NATIONAL ASSOCIATION" effective July 15, 1996
In testimony whereof, witness my signature and seal of
Office this 15th day of July 1996
/s/ Robert R. Klinzing
----------------------
Charter No. 23133 Robert R. Klinzing
Deputy Comptroller of the Currency
Midwestern District
<PAGE>
[Logo]
- -------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of National Banks
- -------------------------------------------------------------------------------
Washington, D.C. 20219
CERTIFICATE
-----------
I, Julie L. Williams, Acting Comptroller of the Currency, do hereby certify
that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq.,
as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering, regulation and
supervision of all National Banking Associations.
2. Effective March 30, 1998, the title of "First Trust National Association,"
Seattle, Washington (Charter No. 23133), was changed to "U.S. Bank Trust
National Association," Seattle, Washington, (Charter No. 23133).
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at
the Treasury Department, in the City of
Washington and District of Columbia, this
16th day of April, 1998.
[SEAL] /s/ Julie L. Williams
----------------------------------
Acting Comptroller of the Currency
<PAGE>
[Logo]
- -------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of National Banks
- -------------------------------------------------------------
Midwestern District Office
2345 Grand Blvd., Suite 700
Kansas City, Missouri 64108-2625
March 30, 1998
Mr. Kenneth D. Hoffman
Secretary
U.S. Bank Trust National Association
601 Union Street
Seattle, Washington 98191
Dear Mr. Hoffman:
The Office of the Comptroller of the Currency (OCC) has received your letter
concerning the title change and the appropriate amendment to the Articles of
Association. The OCC has recorded that as of March 30, 1998, the title of First
Trust National Association, Seattle, Washington, Charter No. 23133, was changed
to "U.S. Bank Trust National Association."
As a result of Garn-St Germain Depository Institutions Act of 1982, the OCC is
no longer responsible for the approval of national bank name changes nor does it
maintain official records on the use of alternate titles. The use of other
titles or the retention of the rights to any previously used title is the
responsibility of the bank's board of directors. Legal counsel should be
consulted to determine whether or not the new title, or any previously used
title, could be challenged by competing institutions under the provisions of
federal or state law.
Sincerely,
/s/ Judith A. Bollig
- --------------------
Judith A. Bollig
Analysis Specialist
<PAGE>
March 26, 1998
Ms. Jill Kennard
Midwestern District Office VIA COURIER
Comptroller of the Currency
2345 Grand Avenue, Suite 700
Kansas City, Missouri 64108
Re: First Trust National Association
Dear Ms. Kennard:
First Trust National Association, charter number 23133 has changed its corporate
title to U.S. Bank Trust National Association, effective March 30, 1998.
A certified copy of the resolutions amending the Articles of Association,
effective March 30, 1998, is enclosed. These amendments to the Articles conform
to the requirements of 12 USC 21a.
Please contact Elizabeth Becker, counsel at U.S. Bancorp, at (612) 244-0410, if
you have any questions.
Sincerely,
/s/ Kenneth D. Hoffman
- ----------------------
Kenneth D. Hoffman
Secretary
cc: Thomas Smith
<PAGE>
Exhibit-3
[Logo]
- -------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of National Banks
- -------------------------------------------------------------------------------
Washington, D.C. 20219
Certificate of Fiduciary Powers
I, Julie L. Williams, Acting Comptroller of the Currency, do hereby certify
that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq.,
as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.
2. "U.S. Bank Trust National Association," Seattle, Washington (Charter No.
23133), was granted, under the hand and seal of the Comptroller, the right to
act in all fiduciary capacities authorized under the provisions of the Act of
Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and that the
authority so granted remains in full force and effect on the date of this
Certificate.
IN TESTIMONY WHEREOF, I have hereunto subscribed
my name and caused my seal of office to be affixed
to these presents at the Treasury Department in
the City of Washington and District of Columbia,
this 16th day of April, 1998.
[SEAL] /s/ Julie L. Williams
----------------------------------
Acting Comptroller of the Currency
<PAGE>
Exhibit-4
U.S. BANK TRUST NATIONAL ASSOCIATION
BYLAWS
ARTICLE I
---------
Meetings of Shareholders
------------------------
Section 1.1 Annual Meeting. The annual meeting of the shareholders, for
--------------
the election of directors and the transaction of other business, shall be held
at a time and place as the Chairman or President may designate. Notice of such
meeting shall be given at least ten days prior to the date thereof, to each
shareholder of the Association. If, for any reason, an election of directors is
not made on the designated day, the election shall be held on some subsequent
day, as soon thereafter as practicable, with prior notice thereof.
Section 1.2 Special Meetings. Except as otherwise specifically provided
----------------
by law, special meetings of shareholders may be called for any purpose, at any
time by a majority of the board of directors, or by any shareholder or group of
shareholders owning at least ten percent of the outstanding stock. Every such
special meeting, unless otherwise provided by law, shall be called upon not less
than ten days prior notice stating the purpose of the meeting.
Section 1.3 Nominations for Directors. Nominations for election to the
-------------------------
board of directors may be made by the board of directors or by any shareholder.
Section 1.4 Proxies. Shareholders may vote at any meeting of the
-------
shareholders by proxies duly authorized in writing. Proxies shall be valid only
for one meeting and any adjournments of such meeting and shall be filed with the
records of the meeting.
Section 1.5 Quorum. A majority of the outstanding capital stock,
------
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law. A majority of the votes cast
shall decide every question or matter submitted to the shareholders at any
meeting, unless otherwise provided by law or by the Articles of Association.
ARTICLE II
----------
Directors
---------
Section 2.1 Board of Directors. The Board of Directors (hereinafter
------------------
referred to as the "board"), shall have power to manage and administer the
business and affairs of the Association. All authorized corporate powers of the
Association shall be vested in and may be exercised by the board.
<PAGE>
Section 2.2 Powers. In addition to the foregoing, the board of directors
------
shall have and may exercise all of the powers granted to or conferred upon it by
the Articles of Association, the Bylaws and by law.
Section 2.3 Number. The Board shall consist of a number of members to be
------
fixed and determined from time to time by resolution of the board or the
shareholders at any meeting thereof, in accordance with the Articles of
Association.
Section 2.4 Organization Meeting. The newly elected board shall meet for
--------------------
the purpose of organizing the new board and electing and appointing such
officers of the Association as may be appropriate. Such meeting shall be held
on the day of the election or as soon thereafter as practicable, and, in any
event, within thirty days thereafter. If, at the time fixed for such meeting,
there shall not be a quorum present, the directors present may adjourn the
meeting until a quorum is obtained.
Section 2.5 Regular Meetings. The regular meetings of the board shall be
----------------
held, without notice, as the Chairman or President may designate and deem
suitable.
Section 2.6 Special Meetings. Special meetings of the board may be called
----------------
by the Chairman or the President of the Association, or at the request of two or
more directors. Each member of the board shall be given notice stating the time
and place of each such meeting.
Section 2.7 Quorum. A majority of the directors shall constitute a quorum
------
at any meeting, except when otherwise provided by law; but fewer may adjourn any
meeting. Unless otherwise provided, once a quorum is established, any act by a
majority of those constituting the quorum shall be the act of the board.
Section 2.8 Vacancies. When any vacancy occurs among the directors, the
---------
remaining members of the board may appoint a director to fill such vacancy at
any regular meeting of the board, or at a special meeting called for that
purpose.
ARTICLE III
-----------
Committees
----------
Section 3.1 Advisory Board of Directors. The board may appoint persons,
---------------------------
who need not be directors, to serve as advisory directors on an advisory board
of directors established with respect to the business affairs of either this
Association alone or the business affairs of a group of affiliated organizations
of which this Association is one. Advisory directors shall have such powers and
duties as may be determined by the board, provided that the board's
responsibility for the business and affairs of this Association shall in no
respect be delegated or diminished.
<PAGE>
Section 3.2 Audit Committee. The board shall appoint an Audit Committee
---------------
which shall consist of at least two Directors of the Association or of an
affiliate of the Association. If legally permissible, the board may determine
to name itself as the Audit Committee. The Audit Committee shall direct and
review audits of the Association's fiduciary activities.
The members of the Audit Committee shall be appointed each year and shall
continue to act until their successors are named. The Audit Committee shall
have power to adopt its own rules and procedures and to do those things which in
the judgment of such Committee are necessary or helpful with respect to the
exercise of its functions or the satisfaction of its responsibilities.
Section 3.3 Executive Committee. The board may appoint an Executive
-------------------
Committee, which shall consist of at least three directors and which shall have,
and may exercise, all the powers of the board between meetings of the board or
otherwise when the board is not meeting.
Section 3.4 Other Committees. The board may appoint, from time to time,
----------------
committees of one or more persons who need not be directors, for such purposes
and with such powers as the board may determine. In addition, either the
Chairman or the President may appoint, from time to time, committees of one or
more officers, employees, agents or other persons, for such purposes and with
such powers as either the Chairman or the President deems appropriate and
proper.
Whether appointed by the board, the Chairman, or the President, any such
Committee shall at all times be subject to the direction and control of the
board.
Section 3.5 Meetings, Minutes and Rules. An advisory board of directors
---------------------------
and/or committee shall meet as necessary in consideration of the purpose of the
advisory board of directors or committee, and shall maintain minutes in
sufficient detail to indicate actions taken or recommendations made; unless
required by the members, discussions, votes, or other specific details need not
be reported. An advisory board of directors or a committee may, in
consideration of its purpose, adopt its own rules for the exercise of any of its
functions or authority.
ARTICLE IV
----------
Officers and Employees
----------------------
Section 4.1 Chairman of the Board. The board may appoint one of its
---------------------
members to be Chairman of the board to serve at the pleasure of the board. The
Chairman shall supervise the carrying out of the policies adopted or approved by
the board; shall have general executive powers, as well as the specific powers
conferred by these Bylaws; shall also have and may exercise such powers and
duties as from time to time may be conferred upon or assigned by the board.
<PAGE>
Section 4.2 President. The board may appoint one of its members to be
---------
President of the Association. In the absence of the Chairman, the President
shall preside at any meeting of the board. The President shall have general
executive powers, and shall have and may exercise any and all other powers and
duties pertaining by law, regulation or practice, to the Office of President, or
imposed by these Bylaws. The President shall also have and may exercise such
powers and duties as from time to time may be conferred or assigned by the
board.
Section 4.3 Vice President. The board may appoint one or more Vice
--------------
Presidents who shall have such powers and duties as may be assigned by the board
and to perform the duties of the President on those occasions when the President
is absent, including presiding at any meeting of the board in the absence of
both the Chairman and President.
Section 4.4 Secretary. The board shall appoint a Secretary, or other
---------
designated officer who shall be Secretary of the board and of the Association,
and shall keep accurate minutes of all meetings. The Secretary shall attend to
the giving of all notices required by these Bylaws to be given; shall be
custodian of the corporate seal, records, documents and papers of the
Association; shall provide for the keeping of proper records of all transactions
of the Association; shall have and may exercise any and all other powers and
duties pertaining by law, regulation or practice, to the Secretary, or imposed
by these Bylaws; and shall also perform such other duties as may be assigned
from time to time, by the board.
Section 4.5 Other Officers. The board may appoint, and may authorize the
--------------
Chairman or the President to appoint, any officer as from time to time may
appear to the board, the Chairman or the President to be required or desirable
to transact the business of the Association. Such officers shall exercise such
powers and perform such duties as pertain to their several offices, or as may be
conferred upon or assigned to them by the Bylaws, the board, the Chairman or the
President.
Section 4.6 Tenure of Office. The Chairman or the President and all other
----------------
officers shall hold office for the current year for which the board was elected,
unless they shall resign, become disqualified, or be removed. Any vacancy
occurring in the Office of Chairman or President shall be filled promptly by the
board.
Any officer elected by the board or appointed by the Chairman or the
President may be removed at any time, with or without cause, by the affirmative
vote of a majority of the board or, if such officer was appointed by the
Chairman or the President, by the Chairman or the President, respectively.
<PAGE>
ARTICLE V
---------
Stock
-----
Section 5.1. Shares of stock shall be transferable on the books of the
Association, and a transfer book shall be kept in which all transfers of stock
shall be recorded. Every person becoming a shareholder by such transfer shall,
in proportion to such person's shares, succeed to all rights of the prior holder
of such shares. Each certificate of stock shall recite on its face that the
stock represented thereby is transferable only upon the books and records of the
Association properly endorsed.
ARTICLE VI
----------
Corporate Seal
--------------
Section 6.1. The Association shall have no corporate seal; provided,
however, that if the use of a seal is required by, or is otherwise convenient or
advisable pursuant to, the laws or regulations of any jurisdiction, the
following seal may be used, and the Chairman, the President, the Secretary and
any Assistant Secretary shall have authority to affix such seal:
ARTICLE VII
-----------
Miscellaneous Provisions
------------------------
Section 7.1 Execution of Instruments. All agreements, checks, drafts,
------------------------
orders, indentures, notes, mortgages, deeds, conveyances, transfers,
endorsements, assignments, certificates, declarations, receipts, discharges,
releases, satisfactions, settlements, petitions, schedules, accounts,
affidavits, bonds, undertakings, guarantees, proxies and other instruments or
documents may be signed, countersigned, executed, acknowledged, endorsed,
verified, delivered or accepted on behalf of the Association, whether in a
fiduciary capacity or otherwise, by an officer of the Association, or such
employee or agent as may be designated from time to time by the board by
resolution, or by the Chairman or the President by written instrument, which
resolution or instrument shall be certified as in effect by the Secretary or an
Assistant Secretary of the Association. The provisions of this section are
supplementary to any other provision of the Articles of Association or Bylaws.
<PAGE>
Section 7.2 Records. The Articles of Association, the Bylaws, and the
-------
proceedings of all meetings of the shareholders, the board, and standing
committees of the board, shall be recorded in appropriate minute books provided
for the purpose. The minutes of each meeting shall be signed by the Secretary,
or other officer appointed to act as Secretary of the meeting.
Section 7.3 Trust Files. There shall be maintained in the Association
-----------
files all fiduciary records necessary to assure that its fiduciary
responsibilities have been properly undertaken and discharged.
Section 7.4 Trust Investments. Funds held in a fiduciary capacity shall
-----------------
be invested according to the instrument establishing the fiduciary relationship
and according to law. Where such instrument does not specify the character and
class of investments to be made and does not vest in the Association a
discretion in the matter, funds held pursuant to such instrument shall be
invested in investments in which corporate fiduciaries may invest under law.
Section 7.5 Notice. Whenever notice is required by the Articles of
------
Association, the Bylaws or law, such notice shall be by mail, postage prepaid,
telegram, in person, or by any other means by which such notice can reasonably
be expected to be received, using the address of the person to receive such
notice, or such other personal data, as may appear on the records of the
Association. Prior notice shall be proper if given not more than 30 days nor
less than 10 days prior to the event for which notice is given.
ARTICLE VIII
Indemnification
---------------
Section 8.1. The Association shall indemnify to the full extent permitted
by, and in the manner permissible under, the Articles of Association and the
laws of the United States of America, as applicable and as amended from time to
time, any person made, or threatened to be made, a party to any action, suit or
proceeding, whether criminal, civil, administrative or investigative, by reason
of the fact that such person is or was a director, advisory director, officer or
employee of the Association, or any predecessor of the Association, or served
any other enterprise as a director or officer at the request of the Association
or any predecessor of the Association.
Section 8.2. The board in its direction may, on behalf of the Association,
indemnify any person, other than a director, advisory director, officer or
employee, made a party to any action, suit or proceeding by reason of the fact
that such person is or was an agent of the Association or any predecessor of the
Association serving in such capacity at the request of the Association or any
predecessor of the Association.
<PAGE>
ARTICLE IX
----------
Bylaws: Interpretation and Amendment
-------------------------------------
Section 9.1. These Bylaws shall be interpreted in accordance with and
subject to appropriate provisions of law, and may be amended, altered or
repealed, at any regular or special meeting of the board.
Section 9.2. A copy of the Bylaws, with all amendments, shall at all times
be kept in a convenient place at the main office of the Association, and shall
be open for inspection to all shareholders during Association hours.
<PAGE>
Exhibit-6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939 in connection with the proposed issuance by Metropolitan Mortgage and
Securities Co., Inc. of Investment Debentures Series III, we hereby consent that
reports of examinations by federal, state, territorial and district authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon its request therefor.
U.S. BANK TRUST NATIONAL ASSOCIATION
By Dyan Huhta
----------
Dated: December 1, 1998
----------------
<PAGE>
Board of Governors of the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
Expires March 31, 2001
Federal Financial Institutions Examination Council
- -------------------------------------------------------------------------------
[Logo] 1
Please refer to page i,
Table of Contents, for
the required disclosure
of estimated burden.
- -------------------------------------------------------------------------------
Consolidated Reports of Condition and Income for A Bank With Domestic Offices
Only and Total Assets of $100 Million or More But Less Than $300--FFIEC 033
<TABLE>
<S> <C>
Report at the close of business September 30, 1998 (19980930)
(RCRI 9999)
This report is required by law: 12 U.S.C. (S) 324 This report form is to be filed by banks with domestic
(State member banks); 12 U.S.C. (S) 1817 (State offices only. Banks with foreign offices (as defined in
nonmember banks); and 12 U.S.C. (S) 161 (National the instructions) must file FFIEC 031.
banks).
- ---------------------------------------------------------------------------------------------------------------------
NOTE: The Reports of Condition and Income must be The Reports of Condition and Income are to be prepared in
signed by an authorized officer and the Report of accordance with Federal regulatory authority instructions.
Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and We, the undersigned directors (trustees), attest to the
three directors for State member and National banks. correctness of the Report of Condition (including the
I, /s/ Signed supporting schedules) for this report date and declare
--------------------------------------------------- that it has been examined by us and to the best of our
Name and Title of Officer Authorized to Sign Report knowledge and belief has been prepared in conformance with
the instructions issued by the appropriate Federal
of the named bank do hereby declare that the Reports regulatory authority and is true and correct.
of Condition and Income (including the supporting /s/ Signed
schedules) for this report date have been prepared in -----------------------------------------------------------
conformance with the instructions issued by the Director (Trustee)
appropriate Federal regulatory authority and are true /s/ Dyan Huhta
to the best of my knowledge and belief. -----------------------------------------------------------
/s/ Signed Director (Trustee)
- ------------------------------------------------------ /s/ Signed
Signature of Officer Authorized to Sign Report -----------------------------------------------------------
Director (Trustee)
10/24/98
- -------------------------------------------------------
Date of Signature
- ---------------------------------------------------------------------------------------------------------------------
Submission of Reports
Each bank must prepare its Reports of Condition and
Income either: That party (if other than EDS) must transmit the bank's
computer data file to EDS.
(a) in electronic form and then file the computer For electronic filing assistance, contact EDS Call Report
data file directly with the banking agencies' Services, 2150 N. Prospect Ave., Milwaukee, WI 53202,
collection agent, Electronic Data Systems Corporation telephone (800) 255-1571.
(EDS), by modem or on computer diskette; or To fulfill the signature and attestation requirement for
(b) in hard-copy (paper) form and arrange for another the Reports of Condition and Income for this report date,
party to convert the paper report to electronic form. attach this signature page to the hard-copy record of the
completed report that the bank places in its files.
- ---------------------------------------------------------------------------------------------------------------------
FDIC Certificate Number |__|__|__|__|__| Call No. 205 033 9/30/98
(RCRI 9050) STBK: 53-0836 STCERT: 53-33804
U.S. Bank Trust National Association
Two Union Square, 601 Union Street
Seattle, WA 98101
Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller
of the Currency
</TABLE>
2
<PAGE>
FFIEC 033
Page i
Consolidated Reports of Condition and Income for 2
A Bank With Domestic Offices Only and Total
Assets of $100 Million or More But Less Than $300 Million
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Table of Contents
<S> <C>
Signature Page Cover Report of Condition
Report of Income Schedule RC--Balance Sheet........................RC-1, 2
Schedule RI--Income Statement................................RI-1, 2, 3 Schedule RC-A--Cash and Balances Due
From Depository Institutions.......................RC-3
Schedule RI-A--Changes in Equity Capital...........................RI-3 Schedule RC-B--Securities.........................RC-4, 5
Schedule RI-B--Charge-offs and Recoveries on Schedule RC-C--Loans and Lease Financing Receivables:
Loans and Leases and Changes in Allowance
for Credit Losses.............................................RI-4, 5 Part I. Loans and Leases.......................RC-6, 7
Schedule RI-E--Explanations.....................................RI-5, 6 Part II. Loans to Small Businesses and
Small Farms (to be completed for the
June report only)...........................RC-7a, 7b
Schedule RC-E--Deposit Liabilities................RC-8, 9
Schedule RC-F--Other Assets.........................RC-10
Schedule RC-G--Other Liabilities....................RC-10
Schedule RC-K--Quarterly Averages...................RC-11
Disclosure of Estimated Burden Schedule RC-L--Off-Balance Sheet Items......RC-12, 13, 14
The estimated average burden associated with this information collection Schedule RC-M--Memoranda........................RC-14, 15
is 34.1 hours per respondent and is estimated to vary from 15 to 400
hours per response, depending on individual circumstances. Burden Schedule RC-N--Past Due and Nonaccrual Loans,
estimates include the time for reviewing instructions, gathering and Leases, and Other Assets..........................RC-16
maintaining data in the required form, and completing the information
collection, but exclude the time for compiling and maintaining business Schedule RC-O--Other Data for Deposit
records in the normal course of a respondent's activities. A Federal Insurance and FICO Assessments................RC-17, 18
agency may not conduct or sponsor, and an organization (or a person) is
not required to respond to a collection of information, unless it Schedule RC-R--Regulatory Capital...............RC-19, 20
displays a currently valid OMB control number. Comments concerning the
accuracy of this burden estimate and suggestions for reducing this Optional Narrative Statement Concerning
burden should be directed to the Office of Information and Regulatory the Amounts Reported in the Reports of
Affairs, Office of Management and Budget, Washington, D.C. 20503, and Condition and Income..............................RC-21
to one of the following:
Special Report (to be completed by all banks)
Secretary
Board of Governors of the Federal Reserve System
Washington, D.C. 20551
Legislative and Regulatory Analysis Division
Office of the Comptroller of the Currency
Washington, D.C. 20219
Assistant Executive Secretary
Federal Deposit Insurance Corporation
Washington, D.C. 20429
</TABLE>
For information or assistance, national and state nonmember banks should contact
the FDIC's Call Reports Analysis Section, 550 17th Street, NW, Washington, D.C.
20429, toll free on (800) 688-FDIC(3342), Monday through Friday between 8:00
a.m. and 5:00 p.m., Eastern time. State member banks should contact their
Federal Reserve District Bank.
1
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RI- 1
Seattle WA 98101 Vendor ID: D CERT: 33804
</TABLE>
Transit Number: 91000020
Consolidated Report of Income 3
for the period January 1, 1998 - September 30, 1998
All Report of Income schedules are to be reported on a calendar year-to-date
basis in thousands of dollars.
Schedule RI - Income Statement
<TABLE>
<CAPTION>
I280
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income: RIAD
a. Interest and fee income on loans (1): ----
(1) Real estate loans 4246 0 1.a.1
(2) Installment loans 4247 0 1.a.2
(3) Credit cards and related plans 4248 0 1.a.3
(4) Commercial (time and demand) and all other loans 4249 0 1.a.4
b. Income from lease financing receivables:
(1) Taxable leases 4505 0 1.b.1
(2) Tax-exempt leases 4307 0 1.b.2
c. Interest income on balances due from depository institutions (2) 4115 1,693 1.c
d. Interest and dividend income on securities:
(1) U.S. Treasury securities and U.S. Government agency obligations 4027 65 1.d.1
(2) Securities issued by states and political subdivisions in the U.S.:
(a) Taxable securities 4506 0 1.d.2a
(b) Tax-exempt securities 4507 0 1.d.2b
(3) Other domestic debt securities 3657 0 1.d.3
(4) Foreign debt securities 3658 0 1.d.4
(5) Equity securities (including investments in mutual funds) 3659 146 1.d.5
e. Interest income from trading assets 4069 0 1.e
f. Interest income on federal funds sold and securities purchased under agreements
to resell 4020 0 1.f
g. Total interest income (sum of items 1.a through 1.f) 4107 1,904 1.g
</TABLE>
_______________
(1) See instructions for loan classifications used in this schedule.
(2) Includes interest income on time certificates of deposit not held for
trading.
1
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RI-2
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
4
Schedule RI - Continued
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2. Interest expense:
a. Interest on deposits: RIAD Year-to-date
----
(1) Transaction accounts (NOW accounts, ATS accounts, and telephone and preauthorized
transfer accounts) 4508 0 2.a.1
(2) Nontransaction accounts:
(a) Money market deposit accounts (MMDAs) 4509 0 2.a.2a
(b) Other savings deposits 4511 0 2.a.2b
(c) Time deposits of $ 100,000 or more A517 0 2.a.2c
(d) Time deposits of less than $ 100,000 A518 0 2.a.2d
b. Expense of federal funds purchased and securities sold under agreements to repurchase 4180 0 2.b
c. Interest on demand notes issued to the U.S. Treasury, trading liabilities, and on
other borrowed money 4185 0 2.c
d. Not applicable.
e. Interest on subordinated notes and debentures 4200 0 2.e
f. Total interest expense (sum of items 2.a through 2.e) 4073 0 2.f
3. Net interest income (item 1.g minus 2.f) 4074 1,904 3.
4. Provisions:
a. Provision for credit losses 4230 0 4.a
b. Provision for allocated transfer risk 4243 0 4.b
5. Noninterest income:
a. Income from fiduciary activities 4070 5,760 5.a
b. Service charges on deposit accounts 4080 0 5.b
c. Trading revenue (must equal Schedule RI, sum of Memorandum items 8.a through 8.d) A220 0 5.c
d. Not applicable.
e. Not applicable.
f. Other noninterest income:
(1) Other fee income 5407 278 5.f.1
(2) All other noninterest income * 5408 123 5.f.2
g. Total noninterest income (sum of items 5.a through 5.f.(2)) 4079 6,161 5.g
6. a. Realized gains (losses) on held-to-maturity securities 3521 0 6.a
b. Realized gains (losses) on available-for-sale securities 3196 0 6.b
7. Noninterest expense:
a. Salaries and employee benefits 4135 1,742 7.a
b. Expenses of premises and fixed assets (net of rental income) (excluding salaries and
employee benefits and mortgage interest) 4217 353 7.b
c. Other noninterest expense * 4092 3,903 7.c
d. Total noninterest expense (sum of items 7.a through 7.c) 4093 5,998 7.d
8. Income (loss) before income taxes and extraordinary items and other adjustments (item 3
plus or minus items 4.a, 4.b, 5.g, 6.a, 6.b, and 7.d) 4301 2,067 8.
9. Applicable income taxes (on item 8) 4302 725 9.
10. Income (loss before extraordinary items and other adjustments) (item 8 minus 9) 4300 1,342 10.
11. Extraordinary items and other adjustments, net of income taxes * 4320 0 11.
12. Net income (loss) (sum of items 10 and 11) 4340 1,342 12.
_______________
* Describe on Schedule RI-E Explanations.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RI-3
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
5
Schedule RI - Continued
I281
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Memoranda RIAD Year-to-date
----
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired
after August 7, 1986, that is not deductible for federal income tax purposes 4513 0 M.1
2. Income from the sale and servicing of mutual funds and annuities (included in Schedule
RI, item 8) 8431 0 M.2
3. Not applicable Number
4. Number of full-time equivalent employees at end of current period (round to nearest ------
whole number) 4150 37 M.4
5. Interest and fee income on tax-exempt obligations (other than securities and leases) of
states and political subdivisions in the U.S. (reportable in Schedule RC-C, part I, item
8) included in Schedule RI, item 1.a above 4504 0 M.5
6. To be completed by banks with loans to finance agricultural production and other loans
to farmers (Schedule RC-C, part I, item 3) exceeding five percent of total loans.
Interest and fee income on agricultural loans included in item 1.a above 4251 0 M.6
7. If the reporting bank has restated its balance sheet as a result of applying push down CCYY MM DD
accounting this calendar year, report the date of the bank's acquisition (1) 9106 N/A M.7
8. Trading revenue (from cash instruments and off-balance sheet derivative instruments) RIAD Year-to-date
(sum of Memorandum items 8.a through 8.d must equal Schedule RI, item 5.c): ----
a. Interest rate exposures 8757 0 M.8.a
b. Foreign exchange exposures 8758 0 M.8.b
c. Equity security and index exposures 8759 0 M.8.c
d. Commodity and other exposures 8760 0 M.8.d
9. Impact on income of off-balance sheet derivatives held for purposes other than trading:
a. Net increase (decrease) to interest income 8761 0 M.9.a
b. Net (increase) decrease to interest expense 8762 0 M.9.b
c. Other (noninterest) allocations 8763 0 M.9.c
10. Not applicable.
11. Does the reporting bank have a Subchapter S election in effect for federal income tax YES NO
purposes for the current tax year? A530 NO M.11
12. Deferred portion of total applicable income taxes included in Schedule RI, items 9 and
11 (to be reported with the December Report of Income) 4772 N/A M.12
</TABLE>
_______________
(1) For example, a bank acquired on June 1, 1997 would report 19970601
Schedule RI-A - Changes in Equity Capital
Indicate decreases and losses in parentheses.
I283
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RIAD
1. Total equity capital originally reported in the December 31, 1997, Reports of ---- 108,565 1.
Condition and Income 3215
2. Equity capital adjustments from amended Reports of Income, net* 3216 0 2.
3. Amended balance end of previous calendar year (sum of items 1 and 2) 3217 108,565 3.
4. Net income (loss) (must equal Schedule RI, item 12) 4340 1,342 4.
5. Sale, conversion, acquisition, or retirement of capital stock, net 4346 0 5.
6. Changes incident to business combinations, net 4356 0 6.
7. LESS: Cash dividends declared on preferred stock 4470 0 7.
8. LESS: Cash dividends declared on common stock 4460 0 8.
9. Cumulative effect of changes in accounting principles from prior years * (see
instructions for this schedule) 4411 0 9.
10. Corrections of material accounting errors from prior years * (see instructions for
this schedule) 4412 0 10.
11. Change in net unrealized holding gains (losses) on available-for-sale securities 8433 7 11.
12. Other transactions with parent holding company * (not included in item 5, 7, or 8
above) 4415 0 12.
13. Total equity capital end of current period (sum of items 3 through 12) (must equal
Schedule RC, item 28) 3210 109,914 13.
</TABLE>
_______________
Describe on Schedule RI-E - Explanations.
3
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RI-4
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
6
Schedule RI-B - Charge-offs and Recoveries on Loan and Leases and Changes in
Allowance for Credit Losses
Part I. Charge-offs and Recoveries on Loans and Leases (1)
I286
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------
-----------Calendar year-to-date-------------
Part I excludes charge-offs and recoveries through the (Column A) (Column B)
allocated transfer risk reserve. Charge-offs Recoveries
---------------------- ----------------
RIAD RIAD
---- ----
<S> <C> <C> <C> <C> <C>
1. Real estate loans 4256 0 4257 0 1.
2. Installment loans 4258 0 4259 0 2.
3. Credit cards and related plans 4262 0 4263 0 3.
4. Commercial (time and demand) and all other loans 4264 0 4265 0 4.
5. Lease financing receivables 4266 0 4267 0 5.
6. Total (sum of items 1 through 5) 4635 0 4605 0 6.
</TABLE>
<TABLE>
<CAPTION>
Memoranda Dollar Amounts in Thousands
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RIAD RIAD
1. Loans to foreign governments and official institutions included ---- 0 ---- 0 M.1
in part I, items I through 4 above 4643 4627
2. To be completed by banks with loans to finance agricultural
production and other loans to farmers (Schedule RC-C, part I, item RIAD RIAD
3) exceeding five percent of total Loans. ---- 0 ---- 0 M.2
Agricultural loans included in part I, items 1 through 4, above 4268 4269
3. Not applicable.
4. Loans to finance commercial real estate, construction, and land RIAD RIAD
development activities (not secured by real estate) included in ---- 0 ---- 0 M.4
Schedule RI-B, part I, items 2 through 4, above 5443 5444
5. Real estate loans (sum of Memorandum items 5.a through 5.e must
equal Schedule RI-B, part I, item 1, above):
a. Construction and land development 5445 0 5446 0 M.5.a
b. Secured by farmland 5447 0 5448 0 M.5.b
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end Loans secured by 1-4 family
residential properties and extended under lines of credit 5449 0 5450 0 M.5.c1
(2) All other loans secured by 1-4 family residential
properties 5451 0 5452 0 M.5.c2
d. Secured by multifamily (5 or more) residential properties 5453 0 5454 0 M.5.d
e. Secured by nonfarm nonresidential properties 5455 0 5456 0 M.5.e
_______________
</TABLE>
(1) See instructions for loan classifications used in this schedule.
4
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RI-5
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
7
Schedule RI-B - Continued
Part II. Changes in Allowance for Credit Losses
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------------
RIAD
----
<S> <C> <C> <C>
1. Balance originally reported in the December 31, 1997, Reports of Condition and Income 3124 0 1.
2. Recoveries (must equal or exceed part I, item 6, column B above) 2419 0 2.
3. LESS: Charge-offs (must equal or exceed part *, item 6, column A above) 2432 0 3.
4. Provision for credit losses (must equal Schedule RI, item 4.a) 4230 0 4.
5. Adjustments * (see instructions for this schedule) 4815 0 5.
6. Balance end of current period (sum of items 1 through 5) (must equal or exceed Schedule RC,
item 4.b) A512 0 6.
</TABLE>
_______________
* Describe on Schedule RI-E - Explanations.
Schedule RI-E - Explanations
Schedule RI-E is to be completed each quarter on a calendar year-to-date basis.
Detail all adjustments in Schedules RI-A and RI-B, all extraordinary items and
other adjustments in Schedule RI, and all significant items of other noninterest
income and other noninterest expense in Schedule R1. (See instructions for
details.)
I295
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. All other noninterest income (from Schedule RI, item 5.f.(2)) Report
amounts that exceed 10% of Schedule RI, item 5.f.(2): RIAD Year-to-Date
----
a. Net gains (losses) on other real estate owned 5415 N/A 1.a
b. Net gains (tosses) on sales of loans 5416 N/A 1.b
c. Net gains (losses) on sales of premises and fixed assets 5417 N/A 1.c
Itemize and describe the three largest other amounts that exceed 10% of
Schedule RI, item 5.f.(2):
TEXT RIAD
---- ----
d. 4461: SERVICE FEE 4461 123 1.d
e. 4462: 4462 N/A 1.e
f. 4463: 4463 N/A 1.f
2. Other noninterest expense (from Schedule RI, item 7.c):
a. Amortization expense of intangible assets 4531 1,373 2.a
Report amounts that exceed 10% of Schedule RI, item 7.c:
b. Net (gains) losses on other real estate owned 5418 N/A 2.b
c. Net (gains) losses on sales of loans 5419 N/A 2.c
d. Net (gains) losses on sales of premises and fixed assets 5420 N/A 2.d
Itemize and describe the three largest other amounts that exceed 10% of
Schedule RI, item 7.c:
TEXT RIAD
---- ----
e. 4464: CTS EXP TRUST OPERATIONS INTERCOMPANY 4464 2,176 2.e
f. 4467: 4467 N/A 2.f
g. 4468: 4468 N/A 2.g
</TABLE>
5
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RI-6
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
8
Schedule RI-E - Continued
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
3. Extraordinary items and other adjustments and applicable income tax effect (from
Schedule RI, item 11.) (itemize and describe all extraordinary items and other
adjustments):
TEXT RIAD RIAD Year-to-Date
- --------------------------------------------------------------------------------------- ----
a. (1) 4469: 4469 0 3.a.1
(2) Applicable income tax effect 4486 0 3.a.2
b. (1) 4487: 4487 0 3.b.1
(2) Applicable income tax effect 4488 0 3.b.2
c. (1) 4489: 4489 0 3.c.1
(2) Applicable income tax effect 4491 0 3.c.2
4. Equity capital adjustments from amended Reports of income (from Schedule RI-A,
item 2) (itemize and describe all adjustments):
TEXT RIAD
---- ----
a. 4492: 4492 N/A 4.a
b. 4493: 4493 N/A 4.b
5. Cumulative effect of changes in accounting principles from prior years (from
Schedule RI-A, item 9) (itemize and describe all changes in accounting principles):
TEXT RIAD
---- ----
a. 4494: 4494 N/A 5.a
b. 4495: 4495 N/A 5.b
6. Corrections of material accounting errors from prior years (from Schedule RI-A,
item 10) (itemize and describe all corrections):
TEXT RIAD
---- ----
a. 4496: 4496 N/A 6.a
b. 4497: 4497 N/A 6.b
7. Other transactions with parent holding company (from Schedule RI-A, item 12)
(itemize and describe all such transactions):
TEXT RIAD
---- ----
a. 4498: 4498 N/A 7.a
b. 4499: 4499 N/A 7.b
8. Adjustments to allowance for credit losses (from Schedule RI-B, part II, item 5)
(itemize and describe all adjustments):
TEXT RIAD
---- ----
a. 4521: 4521 N/A 8.a
b. 4522: 4522 N/A 8.b
I298 I299
9. Other explanations (the space below is provided for bank to briefly describe, at
its option, any other significant items affecting the Report of Income):
No comment: X (RIAD 4769)
Other explanations (please type or print clearly):
(TEXT 4769)
</TABLE>
9
<PAGE>
<TABLE>
<S> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFEIC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-1
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
9
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC - Balance Sheet
C200
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A): RCON
----
a. Noninterest-bearing balances and currency and coin (1) 0081 10,139 1.a
b. Interest-bearing balances (2) 0071 77,840 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 4,785 2.b
3. Federal funds sold and securities purchased under agreements to resell 1350 0 3.
4. Loans and lease financing receivables: RCON
a. Loans and leases, net of unearned income ----
(from Schedule RC-C) 2122 0 4.a
b. LESS: Allowance for loan and lease losses 3123 0 4.b
c. LESS: Allocated transfer risk reserve 3128 0 4.c
d. Loans and Leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b and 4.c) 2125 0 4.d
5. Trading assets 3545 0 5.
6. Premises and fixed assets (including capitalized leases) 2145 162 6.
7. Other real estate owned (from Schedule RC-M) 2150 0 7.
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M) 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding 2155 0 9.
10. Intangible assets (from Schedule RC-M) 2143 18,446 10.
11. Other assets (from Schedule RC-F) 2160 3,108 11.
12. Total assets (sum of items 1 through 11) 2170 114,480 12.
</TABLE>
_______________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
1
<PAGE>
<TABLE>
<S> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFEIC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-2
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
10
Schedule RC - Continued
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E) RCON
RCON ----
---- 2200 0 13.a
(1) Noninterest-bearing (1) 6631 0 13.a.1
(2) Interest-bearing 6636 0 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs
(1) Noninterest-bearing
(2) Interest-bearing
14. Federal funds purchased and securities sold under agreements to repurchase 2800 0 14.
15. a. Demand notes issued to the U.S. Treasury 2840 0 15.a
b. Trading liabilities 3548 0 15.b
16. Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
a. With a remaining maturity of one year or less 2332 0 16.a
b. With a remaining maturity of more than one year through three years A547 0 16.b
c. With a remaining maturity of more than three years A548 0 16.c
17. Not applicable
18. Bank's liability on acceptances executed and outstanding 2920 0 18.
19. Subordinated notes and debentures (2) 3200 0 19.
20. Other liabilities (from Schedule RC-G) 2930 4,566 20.
21. Total liabilities (sum of items 13 through 20) 2948 4,566 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus 3838 0 23.
24. Common stock 3230 100 24.
25. Surplus (exclude all surplus related to preferred stock) 3839 109,468 25.
26. a. Undivided profits and capital reserves 3632 337 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities 8434 9 26.b
27. Cumulative foreign currency translation adjustments
28. Total equity capital (sum of items 23 through 27) 3210 109,914 28.
29. Total liabilities and equity capital (sum of items 21 and 28) 3300 114,480 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external auditors as of any date during 1997 6724 N/A M.1
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
_______________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited life preferred stock and related surplus.
2
<PAGE>
<TABLE>
<S> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFEIC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-3
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
11
Schedule RC-A - Cash and Balances Due From Depository Institutions
Exclude assets held for trading.
C205
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RCON
1. Cash items in process of collection, unposted debits, and currency and coin: ----
a. Cash items in process of collection and unposted debits 0020 0 1.a
b. Currency and coin 0080 0 1.b
2. Balances due from depository institutions in the U.S.:
a. U.S. branches and agencies of foreign banks 0083 0 2.a
b. Other commercial banks in the U.S. and other depository institutions in the U.S. 0085 87,979 2.b
3. Balances due from banks in foreign countries and foreign central banks:
a. Foreign branches of other U.S. banks 0073 0 3.a
b. Other banks in foreign countries and foreign central banks 0074 0 3.b
4. Balances due from Federal Reserve Banks 0090 0 4.
5. Total (sum of items 1 through 4) (must equal Schedule RC, sum of items 1.a and 1.b) 0010 87,979 5.
<CAPTION>
Memorandum
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RCON
1. Noninterest-bearing balances due from commercial banks in the U.S. (included in ----
items 2.a and 2.b above) 0050 10,139 M.1
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFEIC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-4
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
12
Schedule RC-B - Securities
Exclude assets held for trading.
C210
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------
Held-to-maturity Available-for-sale
(Column A) (Column B) (Column C) (Column D)
Amortized Cost Fair Value Amortized Cost Fair Value (1)
-------------- -------------- -------------- --------------
RCON RCON RCON RCON
---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. U.S. Treasury securities 0211 0 0213 0 1286 1,501 1287 1,515 1.
2. U.S. Government agency obligations
(exclude mortgage-backed securities):
a. Issued by U.S. Government agencies (2) 1289 0 1290 0 1291 0 1293 0 2.a
b. Issued by U.S. Government-sponsored
agencies (3) 1294 0 1295 0 1297 0 1298 0 2.b
3. Securities issued by states and political
subdivisions in the U.S.:
a. General obligations 1676 0 1677 0 1678 0 1679 0 3.a
b. Revenue obligations 1681 0 1686 0 1690 0 1691 0 3.b
c. Industrial development and similar
obligations 1694 0 1695 0 1696 0 1697 0 3.c
4. Mortgage-backed securities (MBS):
a. Pass-through securities:
(1) Guaranteed by GNMA 1698 0 1699 0 1701 0 1702 0 4a1
(2) Issued by FNMA and FHLMC 1703 0 1705 0 1706 0 1707 0 4a2
(3) Other pass-through securities 1709 0 1710 0 1711 0 1713 0 4a3
b. Other mortgage-backed securities
(include CMOs, REMICs, and stripped MBS):
(1) Issued or guaranteed by FNMA, FHLMC,
or GNMA 1714 0 1715 0 1716 0 1717 0 4b1
(2) Collateralized by MBS issued or
guaranteed by FNMA, FHLMC, or GNMA 1718 0 1719 0 1731 0 1732 0 4b2
(3) All other mortgage-backed securities 1733 0 1734 0 1735 0 1736 0 4b3
5. Other debt securities:
a. Other domestic debt securities 1737 0 1738 0 1739 0 1741 0 5.a
b. Foreign debt securities 1742 0 1743 0 1744 0 1746 0 5.b
6. Equity securities:
a. Investments in mutual funds and other
equity securities with readily
determinable fair values A510 0 A511 0 6.a
b. All other equity securities (1) 1752 3,270 1753 3,270 6.b
7. Total (sum of items 1 through 6)
(total of column A must equal Schedule RC,
item 2.a) (total of column D must equal
Schedule RC, item 2.b) 1754 0 1771 0 1772 4,771 1773 4,785 7.
</TABLE>
__________
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.b, column D.
(2) Includes Small Business Administration "Guaranteed Loan Pool Certificates,"
U.S. Maritime Administration obligations, and Export-Import Bank
participation certificates.
(3) Includes obligations (other than mortgage-backed securities) issued by the
Farm Credit System, the Federal Home Loan Bank System, the Federal Home
Loan Mortgage Corporation, the Federal National Mortgage Association, the
Financing Corporation, Resolution Funding Corporation, the Student Loan
Marketing Association, and the Tennessee Valley Authority.
4
<PAGE>
<TABLE>
<S> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFEIC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-5
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
13
Schedule RC-B - Continued
C212
Memoranda
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------------
RCON
----
<S> <C> <C> <C>
1. Pledged securities (1) 0416 1,111 M.1
2. Maturity and repricing data for debt securities (1, 2) (excluding those in nonaccrual
status):
a. Securities issued by the U.S. Treasury, U.S. Government agencies, and states and
political subdivisions in the U.S.; other non-mortgage debt securities; and
mortgage pass-through securities other than those backed by closed-end first lien
1-4 family residential mortgages with a remaining maturity or repricing frequency
of: (3, 4)
(1) Three months or less A549 0 M.2.a.1
(2) Over three months through 12 months A550 1,515 M.2.a.2
(3) Over one year through three years A551 0 M.2.a.3
(4) Over three years through five years A552 0 M.2.a.4
(5) Over five years through 15 years A553 0 M.2.a.5
(6) Over 15 years A554 0 M.2.a.6
b. Mortgage pass-through securities backed by closed-end first lien 1-4 family
residential mortgages with a remaining maturity or repricing frequency of: (3, 5)
(1) Three months or less A555 0 M.2.b.1
(2) Over three months through 12 months A556 0 M.2.b.2
(3) Over one year through three years A557 0 M.2.b.3
(4) Over three years through five years A558 0 M.2.b.4
(5) Over five years through 15 years A559 0 M.2.b.5
(6) Over 15 years A560 0 M.2.b.6
c. Other mortgage backed securities (include CMOs, REMICs and stripped MBS; exclude
mortgage pass-through securities) with an expected average life of: (6)
(1) Three years or less A561 0 M.2.c.1
(2) Over three years A562 0 M.2.c.2
d. Fixed rate AND floating rate debt securities with a REMAINING MATURITY of one
year or less (included in Memorandum items 2.a through 2.c above) A248 1,515 M.2.d
3-6. Not applicable.
7. Amortized cost of held-to-maturity securities sold or transferred to available-for-
sale or trading securities during the calendar year-to-date (report the amortized
cost at date of sale or transfer) 1778 0 M.7
8. High-risk mortgage securities (included in the held-to-maturity and available-for-
sale accounts in Schedule RC-B, item 4.b):
a. Amortized cost 8780 0 M.8.a
b. Fair value 8781 0 M.8.b
9. Structured notes (included in the held-to-maturity and available-for-sale accounts
in Schedule RC-B, items 2, 3, and 5):
a. Amortized cost 8782 0 M.9.a
b. Fair value 8783 0 M.9.b
</TABLE>
__________
(1) Includes held-to-maturity securities at amortized cost and available-for-
sale securities at fair value.
(2) Exclude equity securities, e.g., investments in mutual funds, Federal
Reserve stock, common stock, and preferred stock.
(3) Report fixed rate debt securities by remaining maturity and floating rate
debt securities by repricing frequency.
(4) Sum of Memorandum items 2.a.(1) through 2.a.(6) plus any nonaccrual debt
securities in the categories of debt securities reported in Memorandum item
2.a that are included in Schedule RC-N, item 6, column C, must equal
Schedule RC-B, sum of items 1, 2, 3 and 5, columns A and D, plus mortgage
pass-through securities other than those backed by closed-end first lien
1-4 family residential mortgages included in Schedule RC-B, item 4.a,
columns A and D.
(5) Sum of Memorandum items 2.b.(1) through 2.b.(6) plus any nonaccrual
mortgage pass-through securities backed by closed-end first lien 1-4 family
residential mortgages included in Schedule RC-N, item 6, column C, must
equal Schedule RC-B, item 4.a, sum of columns A and D, less the amount of
mortgage pass-through securities other than those backed by closed-end
first lien 1-4 family residential mortgages included in Schedule RC-B, item
4.a, columns A and D.
(6) Sum of Memorandum items 2.c.(1) and 2.c.(2) plus any nonaccrual "Other
mortgage-backed securities" included in Schedule RC-N, item 6, column C,
must equal Schedule RC-B, item 4.b, sum of columns A and D.
5
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-6
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
14
Schedule RC-C - Loans and Lease Financing Receivables
Part I. Loans and Leases
Do not deduct the allowance for loan and lease losses from amounts reported in
this schedule. Report total loans and leases, net of unearned income. Exclude
assets held for trading and commercial paper.
C215
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RCON
1. Loans secured by real estate: ----
a. Construction and land development 1415 0 1.a
b. Secured by farmland (including farm residential and other improvements) 1420 0 1.b
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family residential properties and extended under
lines of credit 1797 0 1.c1
(2) All other loans secured by 1-4 family residential properties:
(a) Secured by first liens 5367 0 1.c2a
(b) Secured by junior liens 5368 0 1.c2b
d. Secured by multifamily (5 or more) residential properties 1460 0 1.d
e. Secured by nonfarm nonresidential properties 1480 0 1.e
2. Loans to depository institutions:
a. To commercial banks in the U.S.:
(1) To U.S. branches and agencies of foreign banks 1506 0 2.a2
(2) To other commercial banks in the U.S. 1507 0 2.a2
b. To other depository institutions in the U.S. 1517 0 2.b
c. To banks in foreign countries:
(1) To foreign branches of other U.S. banks 1513 0 2.c1
(2) To other banks in foreign countries 1516 0 2.c2
3. Loans to finance agricultural production and other loans to farmers 1590 0 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile) 1763 0 4.a
b. To non-U.S. addressees (domicile) 1764 0 4.b
5. Acceptances of other banks 1755 0 5.
6. Loans to individuals for household, family, and other personal expenditures (i.e., consumer loans)
(includes purchased paper):
a. Credit cards and related plans (includes check credit and other revolving credit plans) 2008 0 6.a
b. Other (includes single payment, installment, and all student loans) 2011 0 6.b
7. Loans to foreign governments and official institutions (including foreign central banks) 2081 0 7.
8. Obligations (other than securities and leases) of states and political subdivisions in the U.S. 2107 0 8.
9. Other Loans:
a. Loans for purchasing or carrying securities (secured and unsecured) 1545 0 9.a
b. All other loans (exclude consumer loans) 1564 0 9.b
10. Lease financing receivables (net of unearned income) 2165 0 10.
11. LESS: Any unearned income on loans reflected in items 1-9 above 2123 0 11.
12. Total loans and leases, net of unearned income (sum of items 1 through 10 minus item 11) (must
equal Schedule RC, item 4.a) 2122 0 12.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-7
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
15
Schedule RC-C - Continued
Part I. Continued
Memoranda
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RCON
----
1. Not applicable
2. Loans (1) and leases restructured and in compliance with modified terms (included in Schedule RC-C,
part I, above, and not reported as past due or nonaccrual in Schedule RC-N, Memorandum item 1):
a. Real estate loans 1617 0 M.2.a
b. All other loans and all lease financing receivables (exclude loans to individuals for household,
family, and other personal expenditures) 8691 0 M.2.b
3. Maturity and repricing data for loans and leases (excluding those in nonaccrual status):
a. Closed-end loans secured by first liens on 1-4 family residential properties (reported in Schedule
RC-C, Part I, item 1.c.2a) with a remaining maturity or repricing frequency of: (2, 3)
(1) Three months or less A564 0 M.3.a1
(2) Over three months through 12 months A565 0 M.3.a2
(3) Over one year through three years A566 0 M.3.a3
(4) Over three years through five years A567 0 M.3.a4
(5) Over five years through 15 years A568 0 M.3.a5
(6) Over 15 years A569 0 M.3.a6
b. All loans and leases (reported in Schedule RC-C, Part I, items 1 through 10) excluding closed-end
loans secured by first liens on 1-4 family residential properties (reported in Schedule RC-C,
Part I, item 1.c.2a) with a remaining maturity or repricing frequency of (2, 4)
(1) Three months or less A570 0 M.3.b1
(2) Over three months through 12 months A571 0 M.3.b2
(3) Over one year through three years A572 0 M.3.b3
(4) Over three years through five years A573 0 M.3.b4
(5) Over five years through 15 years A574 0 M.3.b5
(6) Over 15 years A575 0 M.3.b6
c. Fixed rate AND floating rate loans and leases (reported in Schedule RC-C, Part I, items 1 through
10) with a REMAINING MATURITY of one year or less A247 0 M.3.c
d. Fixed rate AND floating rate loans secured by nonfarm nonresidential properties (reported in
Schedule RC-C, Part I, item 1.e) with a REMAINING MATURITY of over five years A577 0 M.3.d
e. Fixed rate AND floating rate commercial and industrial loans (reported in Schedule RC-C, Part I,
item 4) with a REMAINING MATURITY of over three years A578 0 M.3.e
4. Loans to finance commercial real estate, construction, and land development activities (not secured by
real estate) included in Schedule RC-C, part I, items 4 and 9.b, page RC-6 (5) 2746 0 M.4
5. Loans and leases held for sale (included in Schedule RC-C, part I, page RC-6) 5369 0 M.5
6. Adjustable rate closed-end loans secured by first liens on 1-4 family residential properties in
domestic offices (included in Schedule RC-C, part I, item 1.c.(2)(a), page RC-6) 5370 0 M.6
</TABLE>
___________________
(1) See instructions for loan classifications used in Memorandum item 2.
(2) Report fixed rate loans and leases by remaining maturity and floating rate
loans by repricing frequency.
(3) Sum of Memorandum items 3.a.(1) through 3.a.(6) plus total nonaccrual
closed-end loans secured by first liens on 1-4 family residential
properties included in Schedule RC-N, Memorandum item 4.c.(2), column C,
must equal total closed-end loans secured by first liens on 1-4 family
residential properties from Schedule RC-C, part I, item 1.c.(2)(a).
(4) Sum of Memorandum items 3.b.(1) through 3.b.(6) plus total nonaccrual loans
and leases from Schedule RC-N, sum of items 1 through 5, column C, minus
nonaccrual closed-end loans secured by first liens on 1-4 family
residential properties included in Schedule RC-N, Memorandum item 4.c.(2),
column C, must equal total loans and leases from Schedule RC-C, Part I, sum
of items 1 through 10, minus total closed-end loans secured by first liens
on 1-4 family residential properties from Schedule RC-C, part I, item
1.c.(2)(a).
(5) Exclude loans secured by real estate that are included in Schedule RC-C,
part I, items 1.a through 1.e.
7
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-8
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
16
Schedule RC-E - Deposit Liabilities
C225
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
---Transaction Accounts --- --- Nontransaction Accounts---
(Column A) (Column B) (Column C)
Total trans- Memo: Total Total nontransaction
action accounts demand deposits accounts (including
(including total (included in MMDAs)
demand deposits) (column A)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Deposits of: RCON RCON RCON
---- ---- ----
1. Individuals, partnerships and corporations 2201 0 2240 0 2346 0 1.
2. U.S. Government 2202 0 2280 0 2520 0 2.
3. States and political subdivisions in the U.S. 2203 0 2290 0 2530 0 3.
4. Commercial banks in the U.S. 2206 0 2310 0 2550 0 4.
5. Other depository institutions in the U.S. 2207 0 2312 0 2349 0 5.
6. Banks in foreign countries 2213 0 2320 0 2236 0 6.
7. Foreign governments and official institutions
(including foreign central banks) 2216 0 2300 0 2377 0 7.
8. Certified and official checks 2330 0 2330 0 8.
9. Total (sum of items 1 through 8) (sum of columns A and
C must equal Schedule RC, item 13.a) 2215 0 2210 0 2385 0 9.
</TABLE>
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Memoranda RCON
1. Selected components of total deposits (i.e., sum of item 9, columns A and C): ----
a. Total individual Retirement Accounts (IRAs) and Keogh Plan accounts 6835 0 M.1.a
b. Total brokered deposits 2365 0 M.1.b
c. Fully insured brokered deposits (included in memorandum item 1.b above):
(1) Issued in denominations of less than $100,000 2343 0 M.1.c1
(2) Issued either in denominations of $100,000 or in denominations greater than $100,000 and
participated out by the broker in shares of $100,000 or less 2344 0 M.1.c2
d. Maturity data for brokered deposits:
(1) Brokered deposits issued in denominations of less than $100,000 with a remaining maturity of one
year or less (included in Memorandum item 1.c.(1) above) A243 0 M.1.d1
(2) Brokered deposits issued in denominations of $100,000 or more with a remaining maturity of one
year or less (included in Memorandum item 1.b above) A244 0 M.1.d2
e. Preferred deposits (uninsured deposits of states and political subdivisions in the U.S. reported in
item 3 above which are secured or collateralized as required under state law) (to be completed for
December report only) 5590 N/A M.1.e
2. Components of total nontransaction accounts (sum of Memorandum items 2.a through 2.d must equal item 9,
column C, above):
a. Savings deposits:
(1) Money market deposit accounts (MMDAs) 6810 0 M.2.a1
(2) Other savings deposits (excludes MMDAs) 0352 0 M.2.a2
b. Total time deposits of less than $100,000 6648 0 M.2.b
c. Total time deposits of $100,000 or more 2604 0 M.2.c
3. All NOW accounts (included in column A above) 2398 0 M.3
4. Not applicable
</TABLE>
8
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-9
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
17
Schedule RC-E - Continued
Memoranda (Continued)
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5. Maturity and repricing data for deposits of less than $100,000:
a. Time deposits of less than $100,000 with a remaining maturity or repricing RCON
frequency of: (1, 2) ----
(1) Three months or less A579 0 M.5.a1
(2) Over three months through 12 months A580 0 M5.a2
(3) Over one year through three years A581 0 M.5.a3
(4) Over three years A582 0 M.5.a4
b. Fixed rate AND floating rate time deposits of less than $100,000 with a
REMAINING MATURITY of one year or less (included in Memorandum items 5.a.(1)
through 5.a.(4) above) A241 0 M.5.b
6. Maturity and repricing data for time deposits of $100,000 or more:
a. Time deposits of $100,000 or more with a remaining maturity or repricing
frequency of : (1, 3)
(1) Three months or less A584 0 M.6.a1
(2) Over three months through 12 months A585 0 M6.a2
(3) Over one year through three years A586 0 M.6.a3
(4) Over three years A587 0 M.6.a4
b. Fixed rate AND floating rate time deposits of less than $100,000 or more with a
REMAINING MATURITY of one year or less (included in Memorandum items 6.a.(1)
through 6.a.(4) above) A242 0 M.6.b
</TABLE>
____________________________
(1) Report fixed rate time deposits by remaining maturity and floating rate
time deposits by repricing frequency.
(2) Sum of Memorandum items 5.a.(1) through 5.a.(4) must equal Schedule RC-E
Memorandum item 2.b above.
(3) Sum of Memorandum items 6.a.(1) through 6.a.(4) must equal Schedule RC-E
Memorandum item 2.c above.
9
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-10
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
18
Schedule RC-F - Other Assets C230
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RCON
----
1. Income earned, not collected on loans 2164 0 1.
2. Net deferred tax assets (1) 2148 1,257 2.
3. Interest only strips receivable (not in the form of a security) (2) on:
a. Mortgage loans A519 0 3.a
b. Other financial assets A520 0 3.b
4. Other (itemize and describe amounts that exceed 25% of this item) 2168 1,851 4.
TEXT RCON
---- ----
a. 3549: ACCRUED TRUST FEE RECEIVABLE 3549 595 4.a
b. 3550: ACCOUNTS RECEIVABLE 3550 754 4.b
c. 3551: 3551 N/A 4.c
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 11) 2160 3,108 5.
Memorandum
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------
1. Deferred tax assets disallowed for regulatory capital purposes 5610 434 M.1
</TABLE>
Schedule RC-G - Other Liabilities C235
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RCON
----
1. a. Interest accrued and unpaid on deposits (3) 3645 0 1.a
b. Other expenses accrued and unpaid (include income taxes payable) 3646 2,745 1.b
2. Net deferred tax liabilities (1) 3049 0 2.
3. Minority interest in consolidated subsidiaries 3000 0 3.
4. Other (itemize and describe amounts that exceed 25% of this item) 2938 1,821 4.
TEXT RCON
-------- ----
a. 3552: DEFERRED TRUST FEE INCOME 3552 1,752 4.a
b. 3553: 3553 N/A 4.b
c. 3554: 3554 N/A 4.c
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20) 2930 4,566 5.
</TABLE>
_________________________
(1) See discussion of deferred income taxes in Glossary entry on "income
taxes."
(2) Report interest only strips receivables in the form of a security as
available-for-sale securities in Schedule RC, item 2.b, or as a trading
assets in Schedule RC, item 5 as appropriate.
(3) For savings banks, includes "dividends" accrued and unpaid on deposits.
10
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-11
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
19
Schedule RC-K - Quarterly Averages (1) C255
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS RCON
----
1. Interest-bearing balances due from depository institutions 3381 77,102 1.
2. U.S. Treasury securities and U.S. Government agency obligations (3) 3382 1,501 2.
3. Securities issued by states and political subdivisions in the U.S. (3) 3383 0 3.
4. a. Other debt securities (3) 3647 0 4.a
b. Equity securities (4) (includes investments in mutual funds and Federal
Reserve stock) 3648 3,258 4.b
5. Federal funds sold and securities purchased under agreements to resell 3365 0 5.
6. Total Loans (2):
a. Real estate loans 3286 0 6.a
b. Installment loans 3287 0 6.b
c. Credit cards and related plans 3288 0 6.c
d. Commercial (time and demand) and all other loans 3289 0 6.d
7. Trading assets 3401 0 7.
8. Lease financing receivables (net of unearned income) 3484 0 8.
9. Total assets (5) 3368 113,592 9.
LIABILITIES
10. Interest-bearing transaction accounts (NOW accounts, ATS accounts, and
telephone and preauthorized transfer accounts) (exclude demand deposits) 3485 0 10.
11. Nontransaction accounts:
a. Money market deposit accounts (MMDAs) 3486 0 11.a
b. Other savings deposits 3487 0 11.b
c. Time deposits of $100,000 or more A514 0 11.c
d. Time deposits of less than $100,000 A529 0 11.d
12. Federal funds purchased and securities sold under agreements to
repurchase 3353 0 12.
13. Other borrowed money (includes mortgage indebtedness and obligations
under capitalized leases 3355 0 13.
<CAPTION>
Memorandum Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. To be completed by banks with loans to finance agricultural production
and other loans to farmers (Schedule RC-C, part I, item 3) exceeding five
percent of total loans.
Agricultural loans (2) included in items 6.a through 6.d above 3379 0 M.1
</TABLE>
______________________
(1) For all items, banks have the option of reporting either (1) an average of
daily figures for the quarter, or (2) an average of weekly figures (i.e.,
the Wednesday of each week of the quarter).
(2) See instructions for loan classifications used in this schedule.
(3) Quarterly averages for all debt securities should be based on amortized
cost.
(4) Quarterly averages for all equity securities should be based on historical
cost.
(5) The quarterly average for total assets should reflect all debt securities
(not held for trading) at amortized cost, equity securities with readily
determinable fair values at the lower of cost or fair value, and equity
securities without readily determinable fair values at historical cost.
11
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-12
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
20
Schedule RC-L - Off-Balance Sheet Items
Please read carefully the instructions for the preparation of Schedule RC-L.
Some of the amounts reported in Schedule RC-L are regarded as volume indicators
and not necessarily as measures of risk.
C260
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Unused commitments: RCON
a. Revolving, open-end lines secured by 1-4 family residential ----
properties, e.g., home equity lines 3814 0 1.a
b. Credit card lines 3815 0 1.b
c. Commercial real estate, construction, and land development:
(1) Commitments to fund loans secured by real estate 3816 0 1.c.1
(2) Commitments to fund loans not secured by real estate 6550 0 1.c.2
d. Securities underwriting 3817 0 1.d
e. Other unused commitments 3818 0 1.e
2. Financial standby letters of credit RCON 3819 0 2.
a. Amount of financial standby letters of credit ----
conveyed to others 3820 0 2.a
3. Performance standby letters of credit RCON 3821 0 3.
a. Amount of performance standby letters of ----
credit conveyed to others 3822 0 3.a
4. Commercial and similar letters of credit 3411 0 4.
5. Participations in acceptances (as described in the instructions)
conveyed to others by the reporting bank 3428 0 5.
6. Participations in acceptances (as described in the instructions)
acquired by the reporting (nonaccepting) bank 3429 0 6.
7. Securities borrowed 3432 0 7.
8. Securities lent (including customers' securities lent where the
customer is indemnified against loss by the reporting bank) 3433 0 8.
9. Financial assets transferred with recourse that have been treated
as sold for Call Report purpose:
a. First lien 1-to-4 family residential mortgage loans:
(1) Outstanding principal balance of mortgages transferred as
of the report date A521 0 9.a.1
(2) Amount of recourse exposure on these mortgages as of the
report date A522 0 9.a.2
b. Other financial assets (excluding small business obligations
reported in item 9c):
(1) Outstanding principal balance of assets transferred as of
the report date A523 0 9.b.1
(2) Amount of recourse exposure on these assets as of the
report date A524 0 9.b.2
c. Small business obligations transferred with recourse under
Section 208 of the Riegle Community Development and Regulatory
Improvement Act of 1994:
(1) Outstanding principal balance of small business obligations
transferred as of the report date A249 0 9.c.1
(2) Amount of retained recourse on these obligations as of the
report date A250 0 9.c.2
10. Notional amount of credit derivatives:
a. Credit derivatives on which the reporting bank is the guarantor A534 0 10.a
b. Credit derivatives on which the reporting bank is the beneficiary A535 0 10.b
11. Spot foreign exchange contracts 8765 0 11.
12. All other off-balance sheet liabilities (exclude off-balance sheet
derivatives) (itemize and describe each component of this item over
25% of Schedule RC, item 28, "Total equity capital") 3430 0 12.
TEXT RCON
---- ----
a. 3555: 3555 N/A 12.a
b. 3556: 3556 0 12.b
c. 3557: 3557 N/A 12.c
d. 3558: 3558 N/A 12.d
</TABLE>
12
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-13
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
21
Schedule RC-L - Continued
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
13. All other off-balance sheet assets (exclude off-balance sheet
derivatives) (itemize and describe each component of this item over
25% of Schedule RC, item 28, "Total equity capital") 5591 0 13.
TEXT RCON
---- ----
a. 5592: 5592 N/A 13.a
b. 5593: 5593 N/A 13.b
c. 5594: 5594 N/A 13.c
d. 5595: 5595 N/A 13.d
</TABLE>
C261
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Interest Foreign Equity Commodity
Off-Balance Sheet Derivatives Position Rate Exchange Derivative And Other
Indicators Contracts Contracts Contracts Contracts
- ------------------------------------------------------------------------------------------------------------
RCON RCON RCON RCON
---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
14. Gross amounts (e.g., notional
amounts)(for each column, sum of
item 14.a through 14.e must equal
sum of items 15, 16.a, and 16.b):
a. Futures contracts 8693 0 8694 0 8695 0 8696 0 14.a
b. Forward contracts 8697 0 8698 0 8699 0 8700 0 14.b
c. Exchange-traded option contracts:
(1) Written options 8701 0 8702 0 8703 0 8704 0 14.c1
(2) Purchased options 8705 0 8706 0 8707 0 8708 0 14.c2
d. Over-the-counter option contracts:
(1) Written options 8709 0 8710 0 8711 0 8712 0 14.d1
(2) Purchased options 8713 0 8714 0 8715 0 8716 0 14.d2
e. Swaps 3450 0 3826 0 8719 0 8720 0 14.e
15. Total gross notional amount of
derivative contracts held for trading: A126 0 A127 0 8723 0 8724 0 15.
16. Total gross notional amount of
derivative contracts held for purposes
other than trading:
a. Contracts marked to market 8725 0 8726 0 8727 0 8728 0 16.a
b. Contracts not marked to market 8729 0 8730 0 8731 0 8732 0 16.b
c. Interest rate swaps where the bank
has agreed to pay a fixed rate A589 0 16.c
17. Gross fair value of derivative contracts:
a. Contracts held for trading:
(1) Gross positive fair value 8733 0 8734 0 8735 0 8736 0 17.a1
(2) Gross negative fair value 8737 0 8738 0 8739 0 8740 0 17.a2
b. Contracts held for purposes other than
trading that are marked to market:
(1) Gross positive fair value 8741 0 8742 0 8743 0 8744 0 17.b1
(2) Gross negative fair value 8745 0 8746 0 8747 0 8748 0 17.b2
c. Contracts held for purposes other than
trading that are not marked to market:
(1) Gross positive fair value 8749 0 8750 0 8751 0 8752 0 17.c1
(2) Gross negative fair value 8753 0 8754 0 8755 0 8756 0 17.c2
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-14
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
22
Schedule RC-L - Continued
Memoranda
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1-2. Not applicable.
3. Unused commitments with an original maturity exceeding one year that are
reported in Schedule RC-L, items 1.a through 1.e, above (report only the
unused portions of commitments that are fee paid or otherwise legally binding) 3833 0 M.3
RCON
a. Participations in commitments with an original ----
maturity exceeding one year conveyed to others 3834 0 M.3.a
</TABLE>
Schedule RC-M - Memoranda
C265
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Extensions of credit by the reporting bank to its executive officers,
directors, principal shareholders, and their related interests as of the
report date: RCON
a. Aggregate amount of all extensions of credit to all executive officers, ----
directors, principal shareholders and their related interests 6164 0 1.a
b. Number of executive officers, directors, and principal
shareholders to whom the amount of all extensions of
credit by the reporting bank (including extensions of
credit to related interests) equals or exceeds the RCON Number
lesser of $ 500,000 or 5 percent of total capital as ---- ------
defined for this purpose in agency regulations 6165 0 1.b
2. Federal funds sold and securities purchased under agreements to resell with
U.S. branches and agencies of foreign banks (1) (included in Schedule RC, item 3) 3405 0 2.
3. Not applicable.
4. Outstanding principal balance of 1-4 family residential mortgage loans serviced
for others (include both retained servicing and purchased servicing):
a. Mortgages serviced under a GNMA contract 5500 0 4.a
b. Mortgages serviced under a FHLMC contract:
(1) Serviced with recourse to servicer 5501 0 4.b.1
(2) Serviced without recourse to servicer 5502 0 4.b.2
c. Mortgages serviced under a FNMA contract:
(1) Serviced under a regular option contract 5503 0 4.c.1
(2) Serviced under a special option contract 5504 0 4.c.2
d. Mortgages serviced under other servicing contracts 5505 0 4.d
5. Not applicable.
6. Intangible assets:
a. Mortgage servicing rights 3164 0 6.a
(1) Estimated fair value of mortgage servicing assets A590 0 6.a.1
b. Other identifiable intangible assets:
(1) Purchased credit card relationships 5506 0 6.b.1
(2) All other identifiable intangible assets 5507 18,261 6.b.2
c. Goodwill 3163 185 6.c
d. Total (sum of items 6.a, 6.b.1, 6.b.2 and 6.c (must equal Schedule RC,
item 10) 2143 18,446 6.d
e. Amount of intangible assets (included in item 6.b.(2) above) that have
been grandfathered or are otherwise qualifying for regulatory capital
purposes 6442 0 6.e
7. Mandatory convertible debt, net of common or perpetual preferred stock
dedicated to redeem the debt 3295 0 7.
</TABLE>
_______________
(1) Do not report federal funds sold and securities purchased under agreements
to resell with other commercial banks in the U.S. in this item.
14
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120 Page RC-15
Seattle, WA 98101 Vendor ID: D CERT: 33804
Transit Number: 91000020
</TABLE>
23
Schedule RC-M - Continued
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
8. a. Other real estate owned: RCON
----
(1) Direct and indirect investments in real estate ventures 5372 0 8.a.1
(2) All other real estate owned:
(a) Construction and land development 5508 0 8.a.2a
(b) Farmland 5509 0 8.a.2b
(c) 1-4 family residential properties 5510 0 8.a.2c
(d) Multifamily (5 or more) residential properties 5511 0 8.a.2d
(e) Nonfarm nonresidential properties 5512 0 8.a.2e
(3) Total (sum of items 8.a.(1) and 8.a.(2)) (must equal Schedule RC, item 7) 2150 0 8.a.3
b. Investments in unconsolidated subsidiaries and associated companies:
(1) Direct and indirect investments in real estate ventures 5374 0 8.b.1
(2) All other investments in unconsolidated subsidiaries and associated companies 5375 0 8.b.2
(3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule RC, item 8) 2130 0 8.b.3
9. Noncumulative perpetual preferred stock and related surplus included in Schedule RC,
item 23, "Perpetual preferred stock and related surplus" 3778 0 9.
10. Mutual fund and annuity sales during the quarter (include proprietary, private label,
and third party products):
a. Money market funds 6441 0 10.a
b. Equity securities funds 8427 0 10.b
c. Debt securities funds 8428 0 10.c
d. Other mutual funds 8429 0 10.d
e. Annuities 8430 0 10.e
f. Sales of proprietary mutual funds and annuities (included in items 10.a through
10.e above) 8784 0 10.f
11. Net unamortized realized deferred gains (losses) on off-balance sheet derivative A525 0 11.
contracts included in assets and liabilities reported in Schedule RC
12. Amount of assets netted against nondeposit liabilities on the balance sheet A526 0 12.
(Schedule RC) in accordance with generally accepted accounting principles (1)
13. Outstanding principal balance of loans other than 1-4 family residential mortgage
loans that are serviced for others (to be completed if this balance is more than
$10 million and exceeds ten percent of total assets) A591 0 13.
<CAPTION>
Memorandum
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Reciprocal holdings of banking organizations' capital instruments (to be completed 3836 N/A M.1.
for the December report only)
</TABLE>
_______________
(1) Exclude netted on-balance sheet amounts associated with off-balance sheet
derivative contracts, deferred-tax assets netted against deferred tax
liabilities, and assets netted in accounting for pensions
15
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120
Seattle, WA 98101 Vendor ID: D CERT: 33804 Page RC-16
Transit Number: 91000020
</TABLE>
24
Schedule RC-N - Past Due and Nonaccrual Loans (1), Leases, and Other Assets
The FFIEC regards the information reported in all of Memorandum item 1, in items
1 through 7, column A, and in Memorandum items 2 through 4, column A, as
confidential.
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------
(Column A) (Column B) (Column C)
Past due 30 through 89 Past due 90 days or Nonaccrual
days and still accruing more and still accruing
----------------------- ----------------------- -------------------
RCON RCON RCON
---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
1. Real estate loans 1210 0 1211 0 1212 0 1.
2. Installment loans 1214 0 1215 0 1216 0 2.
3. Credit cards and related plans 1218 0 1219 0 1220 0 3.
4. Commercial (time and demand) and all other
loans 1222 0 1223 0 1224 0 4.
5. Lease financing receivables 1226 0 1227 0 1228 0 5.
6. Debt securities and other assets (exclude
other real estate owned and other repossessed
assets) 3505 0 3506 0 3507 0 6.
=============================================================================================================================
Amounts reported in items 1 through 5 above include guaranteed and unguaranteed portions of past due and nonaccrual loans and
leases. Report in item 7 below certain guaranteed loans and leases that have already been included in the amounts reported in
items 1 through 5.
<CAPTION>
RCON RCON RCON
---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
7. Loans and leases reported in items 1 through 5
above which are wholly or partially guaranteed
by the U.S. Government 5612 0 5613 0 5614 0 7.
a. Guaranteed portion of loans and leases 5615 0 5616 0 5617 0 7.a
included in item 7 above
<CAPTION>
Memoranda C273
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------
RCON RCON RCON
---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
1. Restructured loans and leases included in
Schedule RC-N, items 1 through 5, above (and not
reported in Schedule RC-C, Memorandum item 2) 1658 0 1659 0 1661 0 M.1
2. To be completed by banks with loans to finance
agricultural production and other loans to
farmers (Schedule RC-C, part I, item 3) exceeding
five percent of total loans:
Agricultural loans included in Schedule RC-N,
items 1 through 4, above 1230 N/A 1231 N/A 1232 N/A M.2
3. Loans to finance commercial real estate,
construction, and land development activities
(not secured by real estate) included in Schedule
RC-N, items 2 through 4, above 5421 0 5422 0 5423 0 M.3
4. Real estate loans (sum of Memorandum items 4.a
through 4.e must equal Schedule RC-N, Item 1,
above):
a. Construction and land development 5424 0 5425 0 5426 0 M.4a
b. Secured by farmland 5427 0 5428 0 5429 0 M.4b
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4
family residential properties and extended
under lines of credit 5430 0 5431 0 5432 0 M.4c1
(2) All other loans secured by 1-4 family
residential properties 5433 0 5434 0 5435 0 M.4c2
d. Secured by multifamily (5 or more)
residential properties 5436 0 5437 0 5438 0 M.4d
e. Secured by nonfarm nonresidential properties 5439 0 5440 0 5441 0 M.4e
</TABLE>
_______________
(1) See instructions for loan classifications used in this schedule.
16
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120
Seattle, WA 98101 Vendor ID: D CERT: 33804 Page RC-17
Transit Number: 91000020
</TABLE>
25
Schedule RC-O - Other Data for Deposit Insurance and FICO Assessments
C275
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Unposted debits (see instructions): RCON
----
a. Actual amount of all unposted debits 0030 0 1.a
OR
b. Separate amount of unposted debits:
(1) Actual amount of unposted debits to demand deposits 0031 N/A 1.b.1
(2) Actual amount of unposted debits to time and savings deposits (1) 0032 N/A 1.b.2
2. Unposted credits (see instructions):
a. Actual amount of all unposted credits 3510 0 2.a
OR
b. Separate amount of unposted credits:
(1) Actual amount of unposted credits to demand deposits 3512 N/A 2.b.1
(2) Actual amount of unposted credits to time and savings deposits (1) 3514 N/A 2.b.2
3. Uninvested trust funds (cash) held in bank's own trust department (not included in total
deposits) 3520 0 3.
4. Deposits of consolidated subsidiaries (not included in total deposits):
a. Demand deposits of consolidated subsidiaries 2211 0 4.a
b. Time and savings deposits (1) of consolidated subsidiaries 2351 0 4.b
c. Interest accrued and unpaid on deposits of consolidated subsidiaries 5514 0 4.c
5. Not applicable.
6. Reserve balances actually passed through to the Federal Reserve by the reporting bank on
behalf of its respondent depository institutions that are also reflected as deposit
liabilities of the reporting bank:
a. Amount reflected in demand deposits (included in Schedule RC-E, Memorandum item 4.a) 2314 0 6.a
b. Amount reflected in time and savings deposits (1) (included in Schedule RC-E, Memorandum
item 4.b) 2315 0 6.b
7. Unamortized premiums and discounts on time and savings deposits: (1,2)
a. Unamortized premiums 5516 0 7.a
b. Unamortized discounts 5517 0 7.b
8. The be completed by banks with "Oaker deposits."
a. Deposits purchased or acquired from other FDIC-insured institutions during the quarter:
(1) Total deposits purchased or acquired from other FDIC-insured institutions during the
quarter A531 N/A 8.a.1
(2) Amount of purchased or acquired deposits reported in item 8.a.(1) above attributable to
a secondary fund (i.e., BIF members report deposits attributable to SAIF; SAIF members
report deposits attributable to BIF) A532 N/A 8.a.2
b. Total deposits sold or transferred during the quarter A533 N/A 8.b
</TABLE>
_______________
(1) For FDIC insurance and FICO assessment purposes, "time and savings
deposits" consists of nontransaction accounts and all transaction accounts
other than demand deposits.
(2) Exclude core deposit intangibles.
- --------------------------------------------------------------------------------
C277
Person to whom questions about the Reports of Condition and Income should be
directed:
Janice Decker, Accountant III 651-205-2024
- --------------------------------------------------------------------------------
Name and Title (TEXT 8901) Tel: Area code/phone number/extension (TEXT 8902)
YES NO
Even though Call Reports must be filed electronically, send ---- --
my bank a sample set of paper Call Report forms for next 9117 NO
quarter:
651-205-3008
-------------------------------------------------
Fax: Area Code/phone number (TEXT 9116)
17
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120
Seattle, WA 98101 Vendor ID: D CERT: 33804 Page RC-18
Transit Number: 91000020
</TABLE>
26
Schedule RC-O - Continued
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RCON
----
9. Deposits in lifeline accounts 5596 9.
10. Benefit-responsive "Depository Institution Investment Contracts" (included in total deposits) 8432 0 10.
11. Adjustments to demand deposits reported in Schedule RC-E for certain reciprocal demand
balances:
a. Amount by which demand deposits would be reduced if the reporting bank's reciprocal demand
balances with the domestic offices of U.S. banks and savings associations and insured branches in
Puerto Rico and U.S. territories and possessions that were reported on a gross basis in Schedule
RC-E had been reported on a net basis 8785 0 11.a
b. Amount by which demand deposits would be increased if the reporting bank's reciprocal demand
balances with foreign banks and foreign offices of other U.S. banks (other than insured branches
in Puerto Rico and U.S. territories and possessions) that were reported on a net basis in
Schedule RC-E had been reported on a gross basis A181 0 11.b
c. Amount by which demand deposits would be reduced if cash items in process of collection were
included in the calculation of the reporting bank's net reciprocal demand balances with the
domestic offices of U.S. banks and savings associations and insured branches in Puerto Rico and
U.S. territories and possessions in Schedule RC-E A182 0 11.c
12. Amount of assets netted against deposit liabilities on the balance sheet (Schedule RC) in
accordance with generally accepted accounting principles (exclude amounts related to reciprocal
demand balances):
a. Amounts netted against demand deposits A527 0 12.a
b. Amounts netted against time and savings deposits A528 0 12.a
</TABLE>
<TABLE>
<CAPTION>
Memoranda
(To be completed each quarter except as noted) Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Total deposits of the bank
(sum of Memorandum items 1.a.(1) and 1.b.(1) must equal Schedule RC, item 13.a): RCON
a. Deposit accounts of $100,000 or less: ----
(1) Amount of deposit accounts of $100,000 or less 2702 0 M.1.a1
(2) Number of deposit accounts of $100,000 or less RCON Number
(to be completed for the June report only) ---- ------
3779 N/A M.1.a2
b. Deposit accounts of more than $100,000:
(1) Amount of deposit accounts of more than $100,000 2710 0 M.1.b1
(2) Number of deposit accounts of more than $100,000 RCON Number
---- ------
2722 0 M.1.b2
2. Estimated amount of uninsured deposits of the bank:
a. An estimate of your bank's uninsured deposits can be determined by multiplying the number of deposit
accounts of more than $100,000 reported in Memorandum item 1.b.(2) above by $100,000 and subtracting
the result from the amount of deposit accounts of more than $100,000 reported in Memorandum item
1.b.(1) above.
RCON YES NO
---- --- --
Indicate in the appropriate box at right whether your bank has a method or
procedure for determining a better estimate of uninsured deposits than the
estimate described above 6861 N/A M.2.a
b. If the box marked YES has been checked, report the estimate of uninsured
deposits determined by using your bank's method or procedure 5597 N/A M.2.b
3. Has the reporting institution been consolidated with a parent bank or savings
association in that parent bank's or parent savings association's Call Report or
Thrift Financial Report? FDIC Cert No
If so, report the legal title and FDIC Certificate Number of the parent bank or
parent savings association:
TEXTA545: A545 N/A M.3
</TABLE>
18
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120
Seattle, WA 98101 Vendor ID: D CERT: 33804 Page RC-19
Transit Number: 91000020
</TABLE>
27
Schedule RC-R - Regulatory Capital
This schedule must be completed by all banks as follows: Banks that reported
total assets of $1 billion or more in Schedule RC, item 12, for June 30, 1997,
must complete items 2 through 9 and Memoranda items 1 and 2. Banks with assets
of less than $1 billion must complete items 1 through 3 below or Schedule RC-R
in its entirety, depending on their response to item 1 below.
C280
<TABLE>
<S> <C> <C> <C> <C>
1. Test for determining the extent to which Schedule RC-R must be completed. To RCON YES NO
be completed only by banks with total assets of less than $1 billion. Indicate in ---- --- --
the appropriate box at the right whether the bank has total capital greater than 6056 X 1.
or equal to eight percent of adjusted total assets
For purposes of this test, adjusted total assets equals total assets less cash, U.S. Treasuries, U.S.
Government agency obligations, and 80 percent of U.S. Government-sponsored agency obligations plus the
allowance for loan and lease losses and selected off-balance sheet items as reported on Schedule RC-L (see
instructions).
If the box marked YES has been checked, then the bank only has to complete items 2 and 3 below. If the box
marked NO has been checked, the bank must complete the remainder of this schedule.
A NO response to item 1 does not necessarily mean that the bank's actual risk-based capital ratio is less than
eight percent or that the bank is not in compliance with the risk-based capital guidelines.
</TABLE>
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
NOTE: All banks are required to complete items 2 and 3 (Column A) (Column B)
below. See optional worksheet for items 3.a through 3.f. Subordinated Debt (1)
and Intermediate Term Other Limited-Life
Preferred Stock Capital Instruments
--------------------- -------------------
<S> <C> <C> <C>
2. Portion of qualifying limited-life capital instruments (original weighted average maturity of RCON
at least five years) that is includible in Tier 2 capital: ----
a. Subordinated debt (1) and intermediate term preferred stock A515 0 2.a
b. Other limited-life capital instruments A516 0 2.b
3. Amounts used in calculating regulatory capital ratios (report amounts determined by the bank
for its own internal regulatory capital analyses consistent with applicable capital standards):
a. 1. Tier 1 capital 8274 91,025 3.a.1
2. Tier 2 capital 8275 0 3.a.2
3. Not applicable
b. Total risk-based capital 3792 91,025 3.b
c. Excess allowance for loan and lease losses (amount that exceeds 1.25% of gross risk-
weighted assets) A222 0 3.c
d. 1. Net risk-weighted assets (gross risk-weighted assets less excess allowance reported
in item 3.c above and all other deductions) A223 20,373 3.d.1
2. Not applicable
e. Maximum contractual dollar amount of recourse exposure in low level recourse transactions
(to be completed only if bank uses the "direct reduction method" to report these
transactions in Schedule RC-R) 1727 0 3.e
f. "Average total assets" (quarterly average reported in Schedule RC-K, less all assets
deducted from Tier 1 capital) (2) A224 94,703 3.f
</TABLE>
Items 4-9 and Memoranda items 1 and 2 are to be completed
by banks that answered NO to item 1 above and by banks
with total assets of $1 billion or more.
<TABLE>
<CAPTION>
-------------------------------------------------------
(Column A) (Column B)
Assets Recorded on the Credit Equivalent Amount
Balance Sheet of Off-Balance Sheet Items (3)
------------- ------------------------------
RCON RCON
---- ----
<S> <C> <C> <C> <C> <C>
4. Assets and credit equivalent amounts of off-balance sheet
items assigned to the Zero percent risk category:
a. Assets recorded on the balance sheet 5163 4,835 4.a
b. Credit equivalent amount of off-balance sheet items 3796 N/A 4.b
</TABLE>
_______________
(1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7.
(2) Do not deduct excess allowance for loan and lease losses.
(3) Do not report in column B the risk-weighted amount of assets reported in
column A.
19
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120
Seattle, WA 98101 Vendor ID: D CERT: 33804 Page RC-20
Transit Number: 91000020
</TABLE>
28
Schedule RC-R - Continued
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------------------
(Column A) (Column B)
Assets Recorded on the Credit Equivalent Amount
Balance Sheet of Off-Balance Sheet Items (1)
------------- ------------------------------
RCON RCON
-------- --------
<S> <C> <C> <C> <C> <C>
5. Assets and credit equivalent amounts of off-balance sheet
items assigned to the 20 percent risk category:
a. Assets recorded on the balance sheet 5165 87,979 5.a
b. Credit equivalent amount of off-balance sheet items 3801 N/A 5.b
6. Assets and credit equivalent amounts of off-balance sheet
items assigned to the 50 percent risk category:
a. Assets recorded on the balance sheet 3802 N/A 6.a
b. Credit equivalent amount of off-balance sheet items 3803 N/A 6.b
7. Assets and credit equivalent amounts of off-balance sheet
items assigned to the 100 percent risk category:
a. Assets recorded on the balance sheet 3804 2,777 7.a
b. Credit equivalent amount of off-balance sheet items 3805 N/A 7.b
8. On-balance sheet asset values excluded from and deducted in 3806 18,889 8.
the calculation of the risk-based capital ratio (2)
9. Total assets recorded on the balance sheet (sum of items 3807 114,480 9.
4.a, 5.a, 6.a, 7.a, and 8, column A) (must equal Schedule RC,
item 12 plus items 4.b and 4.c)
</TABLE>
Memoranda
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RCON
1. Current credit exposure across all off-balance sheet derivative contracts covered by the ----
risk-based capital standards 8764 N/A M.1.
</TABLE>
<TABLE>
<CAPTION>
With a remaining maturity of
(Column A) (Column B) (Column C)
Over one year
One year or less through five years Over five years
---------------- ------------------ ---------------
2. Notional principal amounts of off-balance RCON RCON RCON
sheet derivative contracts: (3) -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
a. Interest rate contracts 3809 N/A 8766 N/A 8767 N/A M.2a
b. Foreign exchange contracts 3812 N/A 8769 N/A 8770 N/A M.2b
c. Gold contracts 8771 N/A 8772 N/A 8773 N/A M.2c
d. Other precious metals contracts 8774 N/A 8775 N/A 8776 N/A M.2d
e. Other commodity contracts 8777 N/A 8778 N/A 8779 N/A M.2e
f. Equity derivative contracts A000 N/A A001 N/A A002 N/A M.2f
</TABLE>
_______________
(1) Do not report in column B the risk-weighted amount of assets reported in
column A.
(2) Include the difference between the fair value and the amortized cost of
available-for-sale securities in item 8 and report the amortized cost of
these securities in items 4 through 7 above. Item 8 also includes on-
balance sheet asset values (or portions thereof) of off-balance sheet
interest rate, foreign exchange rate, and commodity contracts and those
contracts (e.g. future contracts) not subject to risk-based capital.
Exclude from item 8 margin accounts and accrued receivables not included in
the calculation of credit equivalent amounts of off-balance sheet
derivatives as well as any portion of the allowance for loan and lease
losses in excess of the amount that may be included in Tier 2 capital.
(3) Exclude foreign exchange contracts with an original maturity of 14 days or
less and all futures contracts.
20
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120
Seattle, WA 98101 Vendor ID: D CERT: 33804 Page RC-21
Transit Number: 91000020
</TABLE>
Optional Narrative Statement Concerning the Amounts
Reported in the Reports of Condition and Income
at close of business on September 30, 1998
U.S. Bank Trust National Association Seattle WA
- --------------------------------------- ------------------ -----------------
Legal Title of Bank City State
The management of the reporting bank may, if it wishes, submit a brief narrative
statement on the amounts reported in the Reports of Condition and Income. This
optional statement will be made available to the public, along with the publicly
available data in the Reports of Condition and Income, in response to any
request for individual bank report data. However, the information reported in
column A and in all of Memorandum item 1 of Schedule RC-N is regarded as
confidential and will not be released to the public. BANKS CHOOSING TO SUBMIT
THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE STATEMENT DOES NOT CONTAIN THE
NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL BANK CUSTOMERS, REFERENCES TO THE
AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS IN SCHEDULE RC-N, OR ANY OTHER
INFORMATION THAT THEY ARE NOT WILLING TO HAVE MADE PUBLIC OR THAT WOULD
COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing not to make a
statement may check the "No comment" box below and should make no entries of any
kind in the space provided for the narrative statement; i.e., DO NOT enter in
this space such phrases as "No statement," "Not applicable," "N/A," "No
comment," and "None."
The optional statement must be entered on this sheet. The statement should not
exceed 100 words. Further, regardless of the number of words, the statement must
not exceed 750 characters, including punctuation, indentation, and standard
spacing between words and sentences. If any submission should exceed 750
characters, as defined, it will be truncated at 750 characters with no notice to
the submitting bank and the truncated statement will appear as the bank's
statement both on agency computerized records and in computer-file releases to
the public.
All information furnished by the bank in the narrative statement must be
accurate and not misleading. Appropriate efforts shall be taken by the
submitting bank to ensure the statement's accuracy. The statement must be
signed, in the space provided below, by a senior officer of the bank who thereby
attests to its accuracy.
If, subsequent to the original submission, material changes are submitted for
the data reported in the Reports of Condition and Income, the existing narrative
statement will be deleted from the files, and from disclosure; the bank, at its
option, may replace it with a statement, under signature, appropriate to the
amended data.
The optional narrative statement will appear in agency records and in release to
the public exactly as submitted (or amended as described in the preceding
paragraph) by the management of the bank (except for the truncation of
statements exceeding the 750-character limit described above). THE STATEMENT
WILL NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY AGENCIES FOR
ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT SIGNIFY THAT ANY
FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE ACCURACY OF THE
INFORMATION CONTAINED THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY
PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE
REPORTING BANK.
- --------------------------------------- --------------------------------------
C271 C272
No comment: X (RCON 6979)
BANK MANAGEMENT STATEMENT (please type or print clearly) (TEXT 6980):
______________________________________
Signature of Executive Officer of Bank
______________________________________
Date of Signature
21
<PAGE>
<TABLE>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 09/30/1998 ST-BK: 53-0836 FFIEC 033
Two Union Sq, 601 Union St, Ste 2120
Seattle, WA 98101 Vendor ID: D CERT: 33804 Page RC-22
Transit Number: 91000020
</TABLE>
30
THIS PAGE IS TO BE COMPLETED BY ALL BANKS
- --------------------------------------------------------------------------------
OMB No. For OCC: 1557-0081
OMB No. For FDIC: 3064-0052
OMB No. For Federal Reserve: 7100-0036
Expiration Date: 03/31/2001
SPECIAL REPORT
(Dollar Amounts in Thousands)
CLOSE OF BUSINESS DATE: FDIC Certificate Number:
September 30, 1998 33804 C700
- --------------------------------------------------------------------------------
LOANS TO EXECUTIVE OFFICERS (complete as of each Call Report Date)
- --------------------------------------------------------------------------------
The following information is required by Public Laws 90-44 and 102-242, but does
not constitute a part of the Report of Condition. With each Report of
Condition, these Laws require all banks to furnish a report of all Loans or
other extensions of credit to its executive officers made since the date of the
previous Report of Condition. Data regarding individual loans or other
extensions of credit are not required. If no such loans or other extensions of
credit were made during the period, insert "none" against subitem (a). (Exclude
the first $15,000 of indebtedness of each executive officer under bank credit
card plan.) See Sections 215.2 and 215.3 of Title 12 of the Code of Federal
Regulations (Federal Reserve Board Regulation) for the definitions of "executive
officer" and "extension of credit," respectively. Exclude loans and other
extensions of credit to directors and principal shareholders who are not
executive officers.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RCON
----
<S> <C> <C> <C>
a. Number of Loans made to executive officers since the previous Call Report date 3561 NONE a.
b. Total dollar amount of above loans (in thousands of dollars) 3562 0 b.
c. Range of interest charged on above loans (example: 9-3/4% = 9.75%) 7701/7702. 0.00% to 0.00% c.
</TABLE>
- --------------------------------------------------------------------------------
SIGNATURE AND TITLE OF OFFICER AUTHORIZED TO DATE (Month, Day, Year):
SIGN REPORT:
/s/ Signed, Vice President 10/24/98
- --------------------------------------------------------------------------------
FDIC 8040/53 (3-98)
22
