<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter ended Sept. 30, 2000 Commission file number 2-80339
--------------- --------
FARMERS NATIONAL BANC CORP.
---------------------------
(Exact name of registrant as specified in its charter)
OHIO 34-1371693
---------------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No)
incorporation or organization)
20 South Broad Street
Canfield, OH 44406 44406
---------------------------------------- -------------------------
(Address of principal executive offices) (Zip Code)
(330) 533-3341
----------------------------------------------------
(Registrant's telephone number, including area code)
Not applicable
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at October 31, 2000
----- -------------------------------
Common Stock, No Par Value 7,910,524 shares
<PAGE> 2
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. FINANCIAL STATEMENTS PAGE
Included in Part I of this report:
Farmers National Banc Corp. and Subsidiary
Consolidated Balance Sheets 1
Consolidated Statements of Income and
Comprehensive Income 2
Consolidated Statements of Cash Flows 3
Notes to Consolidated Financial Statements 4
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 5-9
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK 10
PART II - OTHER INFORMATION
---------------------------
Other Information and Signatures 10-12
<PAGE> 3
CONSOLIDATED BALANCE SHEETS
FARMERS NATIONAL BANC CORP. AND SUBSIDIARY
<TABLE>
<CAPTION>
(In Thousands of Dollars)
SEPTEMBER 30, DECEMBER 31,
2000 1999
----------------------------------
<S> <C> <C>
ASSETS
Cash and due from banks $16,786 $19,846
Federal funds sold 73 3,821
-------------------------------
TOTAL CASH AND CASH EQUIVALENTS 16,859 23,667
-------------------------------
Securities available for sale 87,876 73,659
Other securities 2,651 2,618
Loans 343,242 322,635
Less allowance for credit losses 4,469 4,128
-------------------------------
NET LOANS 338,773 318,507
-------------------------------
Premises and equipment, net 8,071 8,103
Other assets 5,271 4,576
-------------------------------
$459,501 $431,130
===============================
LIABILITIES AND STOCKHOLDERS EQUITY
Deposits (all domestic):
Noninterest-bearing $29,307 $29,343
Interest-bearing 301,687 302,120
-------------------------------
TOTAL DEPOSITS 330,994 331,463
-------------------------------
U. S. Treasury interest-bearing demand note 767 800
Securities sold under repurchase agreements 26,843 28,011
Federal Home Loan Bank advances 41,581 15,936
Federal funds purchased 1,400 0
Other liabilities and deferred credits 2,942 3,026
-------------------------------
TOTAL LIABILITIES 404,527 379,236
-------------------------------
Stockholders Equity:
Common Stock - Authorized 12,500,000 shares; issued and
outstanding 7,910,524 in 2000 and 7,658,832 in 1999 40,862 37,294
Retained earnings 15,653 15,584
Accumulated other comprehensive loss (364) (892)
Treasury stock, at cost; 84,413 shares in 2000 and 4,976 in 1999 (1,177) (92)
-------------------------------
TOTAL STOCKHOLDERS EQUITY 54,974 51,894
-------------------------------
$459,501 $431,130
===============================
</TABLE>
1
<PAGE> 4
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FARMERS NATIONAL BANC CORP. AND SUBSIDIARY
<TABLE>
<CAPTION>
(In Thousands except Per Share Data)
FOR THE THREE MONTHS ENDED
SEPT. 30, SEPT. 30,
2000 1999
-------------- -------------
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $7,259 $6,643
Interest and dividends on securities:
Taxable interest 956 885
Nontaxable interest 197 186
Dividends 199 43
Interest on federal funds sold 109 18
--------------------------------------
TOTAL INTEREST INCOME 8,720 7,775
--------------------------------------
INTEREST EXPENSE
Deposits 2,994 2,681
Borrowings 1,034 460
--------------------------------------
TOTAL INTEREST EXPENSE 4,028 3,141
--------------------------------------
NET INTEREST INCOME 4,692 4,634
Provision for credit losses 210 210
--------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES 4,482 4,424
--------------------------------------
OTHER INCOME
Service charges on deposit accounts 366 301
Investment security losses 0 (14)
Other operating income 274 121
--------------------------------------
TOTAL OTHER INCOME 640 408
--------------------------------------
OTHER EXPENSES
Salaries and employee benefits 1,540 1,415
Net occupancy expense of premises 150 144
Furniture and equipment expense,
including depreciation 159 176
Intangible and other taxes 154 148
Other operating expenses 817 777
---------------------------------------
TOTAL OTHER EXPENSES 2,820 2,660
--------------------------------------
INCOME BEFORE FEDERAL INCOME TAXES 2,302 2,172
FEDERAL INCOME TAXES 689 689
--------------------------------------
NET INCOME $1,613 $1,483
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Unrealized gains (losses) on securities 513 44
--------------------------------------
COMPREHENSIVE INCOME $2,126 $1,527
======================================
* NET INCOME PER SHARE $0.21 $0.19
======================================
</TABLE>
<TABLE>
<CAPTION>
(In Thousands except Per Share Data)
FOR THE NINE MONTHS ENDED
SEPT. 30, SEPT. 30,
2000 1999
-------------- ------------
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $21,005 $19,001
Interest and dividends on securities:
Taxable interest 2,869 2,775
Nontaxable interest 577 525
Dividends 340 125
Interest on federal funds sold 325 172
--------------------------------
TOTAL INTEREST INCOME 25,116 22,598
--------------------------------
INTEREST EXPENSE
Deposits 8,758 8,030
Borrowings 2,489 1,195
--------------------------------
TOTAL INTEREST EXPENSE 11,247 9,225
--------------------------------
NET INTEREST INCOME 13,869 13,373
Provision for credit losses 630 630
--------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES 13,239 12,743
--------------------------------
OTHER INCOME
Service charges on deposit accounts 993 864
Investment security losses 0 (11)
Other operating income 563 358
--------------------------------
TOTAL OTHER INCOME 1,556 1,211
--------------------------------
OTHER EXPENSES
Salaries and employee benefits 4,549 4,204
Net occupancy expense of premises 450 431
Furniture and equipment expense,
including depreciation 479 488
Intangible and other taxes 443 445
Other operating expenses 2,481 2,387
---------------------------------
TOTAL OTHER EXPENSES 8,402 7,955
--------------------------------
INCOME BEFORE FEDERAL INCOME TAXES 6,393 5,999
FEDERAL INCOME TAXES 1,936 1,899
--------------------------------
NET INCOME $4,457 $4,100
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Unrealized gains (losses) on securities 528 (742)
--------------------------------
COMPREHENSIVE INCOME $4,985 $3,358
================================
* NET INCOME PER SHARE $0.58 $0.54
================================
</TABLE>
2
<PAGE> 5
CONSOLIDATED STATEMENTS OF CASH FLOWS
FARMERS NATIONAL BANC CORP. AND SUBSIDIARY
<TABLE>
<CAPTION>
(In Thousands of Dollars)
NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999
--------------------------------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Interest received $26,053 $23,559
Fees and commissions received 1,539 1,207
Interest paid (11,021) (9,285)
Cash paid to suppliers and employees (8,186) (7,674)
Income taxes paid (2,111) (1,944)
-----------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 6,274 5,863
-----------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of investment securities available for sale 12,130 20,380
Proceeds from sales of investment securities available for sale 0 5,216
Purchases of other securities and securities available for sale (26,122) (18,710)
Net increase in loans made to customers (21,808) (32,722)
Purchases of premises and equipment (363) (568)
-----------------------------
NET CASH USED IN INVESTING ACTIVITIES (36,163) (26,404)
-----------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand deposits,
NOW accounts and savings accounts 1,558 4,867
Net increase (decrease) in time deposits and repurchase agreements (3,721) 245
Net increase in Federal Home Loan Bank borrowings 25,645 7,379
Net increase in federal funds purchased 1,400 0
Purchase of Treasury Stock (1,085) (91)
Dividends paid (2,823) (2,410)
Proceeds from sale of common stock 2,107 2,546
-----------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 23,081 12,536
-----------------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (6,808) (8,005)
CASH AND CASH EQUIVALENTS
Beginning of period 23,667 22,680
-----------------------------
End of period $16,859 $14,675
=============================
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATIONS
Net income $4,457 $4,100
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 350 339
Amortization and accretion 1,456 1,269
Provision for credit losses 630 630
Gain on sale of investment securities 0 11
Increase in prepaid expenses (410) (283)
Other (209) (203)
-----------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $6,274 $5,863
=============================
</TABLE>
3
<PAGE> 6
FARMERS NATIONAL BANC CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Management Representation:
The financial statements for September 30, 2000 and 1999 have been prepared
by management without audit and, therefore, have not been certified by our
Independent Certified Public Accountants.
In the opinion of the management of the registrant, the accompanying
consolidated financial statements for the nine month period ending September 30,
2000 and 1999 include all adjustments, consisting of only normal recurring
adjustments necessary for a fair statement of the results for the periods.
(In Thousands of Dollars)
Stockholders Equity Nine Months Ended
September 30, 2000
-------------------------
COMMON STOCK
Balance 1/1/00 37,294
177,310 shares sold 2,107
153,795 shares issued as a stock dividend 1,461
--------
Balance 9/30/00 40,862
--------
RETAINED EARNINGS
Balance 1/1/00 15,584
Net Income 4,457
Dividends Declared: $.38 Cash dividends on common
stock (2,927)
Stock Dividend (1,461)
--------
Balance 9/30/00 15,653
--------
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance 1/1/00 (892)
Net change in unrealized depreciation on debt
securities, net of income taxes 528
--------
Balance 9/30/00 (364)
--------
TREASURY STOCK, AT COST
Balance 1/1/00 (92)
Shares Purchased (1,085)
--------
Balance 9/30/00 (1,177)
--------
TOTAL STOCKHOLDERS EQUITY AT 9/30/00 54,974
========
4
<PAGE> 7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following financial review presents an analysis of the assets and liability
structure of the Corporation and a discussion of the results of operations for
each of the periods presented in this quarterly report, liquidity, capital and
credit quality. Certain statements in this report that relate to Farmers
National Banc Corp.'s plans, objectives, or future performance may be deemed to
be forward-looking statements within the Private Securities Litigation Reform
Act of 1995. Such statements are based on management's current expectations.
Actual strategies and results in future periods may differ materially from those
currently expected because of various risks and uncertainties.
RESULTS OF OPERATIONS
The Corporation's net income for the first nine months of 2000 was $4.457
million, or $.58 per share, which is a 8.71% increase compared with the $4.100
million, or $.54 per share earned during the same period last year. Return on
average assets and return on average equity for the first nine months of 2000
were 1.34% and 11.31% respectively, compared to 1.34% and 11.21% for the same
period in 1999.
The increase in net income for the first nine months of 2000 was primarily
the result of an increase in net interest income. The Corporation's net interest
income increased $496 thousand, or 3.71% from $13.373 million for 1999 to
$13.869 million for the same period in 2000. Interest income on loans and
investment securities is up 11.14% compared to the first nine months of last
year. Most of this increase is a result of the growth in loans outstanding.
Increasing demand in the Corporation's commercial real estate and installment
loan products has increased average balances in the total loan portfolio by
10.46% over the past twelve months. This growth has contributed to the increase
in loan income of $2.004 million or 10.55%. Funds not used for loan growth have
been used to purchase investment securities. The corporation's average balance
of investment securities has increased 5.04% from September, 1999 to September,
2000. In addition, there has been an increase in the yields earned on
securities. This growth has increased income on securities by $514 thousand or
14.29% over the same time period. Interest expense on deposits and borrowings is
21.92% higher for the first nine months of 2000 compared to the first nine
months of 1999. This is primarily the result of an increase of $1.294 million in
interest expense on borrowings as the bank continues to increase its' borrowings
from the Federal Home Loan Bank to fund some of the increase in interest-earning
assets. The bank has also experienced an increase in the average rate paid on
time deposits, from 5.30% in 1999 to 5.58% in 2000.
Other income increased 28.49% from $1.211 million in 1999 to $1.556 million
in 2000. Most of this growth is the result of an increase in service charges and
fees related to deposit accounts. In addition, $123 thousand of this increase is
attributable to a gain on sale of land. The Corporation's total other expenses
for the first nine months of 2000 increased 5.62% from $7.955 million in 1999 to
$8.402 million in 2000. The increase in other operating expenses is due
primarily to asset growth and the increased volume of the operations of the
bank. Management will continue to closely monitor and keep the increases in
noninterest expenses to a minimum.
5
<PAGE> 8
LIQUIDITY
The Corporation maintains, in the opinion of management, liquidity
sufficient to satisfy depositors' requirements and meet the credit needs of
customers. The Corporation depends on its ability to maintain its market share
of deposits as well as acquiring new funds. The Corporation's ability to attract
deposits and borrow funds depends in large measure on its profitability,
capitalization and overall financial condition.
Principal sources of liquidity for the Corporation include assets
considered relatively liquid such as short-term investment securities, federal
funds sold and cash and due from banks.
Cash flows generated from operating activities increased to $6.274 million
compared to $5.863 million for the same period in 1999. This increase of $411
thousand is primarily the result of an increase in net interest received and
fees and commissions received. Net cash flows used in investing activities
amounted to $36.163 million. Security purchases, net of maturities, amounted to
$13.992 million since December 31, 1999. Loans made to customers increased
$21.808 million in 2000.
Net cash flows provided by financing activities were $23.081 million in 2000
compared to $12.536 million in 1999. In 2000, $25.645 million of these funds
were generated from increases in Federal Home Loan Bank borrowings. The
Corporation continues to utilize advance products from Federal Home Loan Bank to
fund some of its' growth in real estate loans. During the first nine months of
2000, $1.085 million was used to purchase treasury stock.
CAPITAL RESOURCES
The capital management function is a continuous process which consists of
providing capital for both the current financial position and the anticipated
future growth of the Corporation. As of September 30, 2000, the corporation's
total risk-based capital ratio stood at 17.79%, and the Tier I risk-based
capital ratio and Tier I leverage ratio were at 16.53% and 12.08%, respectively.
Regulations established by the Federal Deposit Insurance Corporation Improvement
Act require that for a bank to be considered well capitalized, it must have a
total risk-based capital ratio of 10%, a Tier I risk-based capital ratio of 6%
and a Tier I leverage ratio of 5%.
6
<PAGE> 9
LOAN PORTFOLIO
The following shows the composition of loans at the dates indicated:
(In Thousands of Dollars)
Sept. 30, Dec. 31,
2000 1999
---------------------------
Commercial, financial and agricultural 11,660 11,650
Real Estate - mortgage 184,105 172,926
Installment loans to individuals 147,477 138,059
---------------------------
Total Loans 343,242 322,635
===========================
The following table sets forth aggregate loans in each of the following
categories for the dates indicated:
(In Thousands of Dollars)
Sept. 30, Dec. 31,
2000 1999
---------------------------
Loans accounted for on a nonaccrual basis 226 310
Loans contractually past due 90 days or
more as to interest or principal payments
(not included in nonaccrual loans above) 464 439
Loans considered troubled debt restructurings
(not included in nonaccrual or contractually
past due above) 0 0
Management knows of no loans not included in the table above where serious doubt
exists as to the ability of the borrower to comply with the current loan
repayment terms.
The following shows the amounts of contracted interest income and interest
income reflected in income on loans accounted for on a nonaccrual basis and
loans considered troubled debt restructuring for the periods indicated:
(In Thousands of Dollars)
Sept. 30, Dec. 31,
2000 1999
---------------------------
Gross interest that would have been recorded
if the loans had been current in accordance
with their original terms 11 13
Interest income included in income on the loans 1 3
7
<PAGE> 10
RISK ELEMENTS (CONTINUED)
A loan is placed on a nonaccrual basis whenever sufficient information is
received to question the collectibility of the loan. Generally, once a loan is
placed on a nonaccrual basis, interest that may be accrued and not collected on
the loan is charged against earnings.
As of September 30, 2000, there were no concentrations of loans exceeding 10% of
total loans which are not disclosed as a category of loans. As of that date
also, there are no other interest-earning assets that are either nonaccrual,
past due or restructured.
SUMMARY OF CREDIT LOSS EXPERIENCE
The following is an analysis of the allowance for credit losses for the periods
indicated:
(In Thousands of Dollars)
Nine Months Year
Ended Ended
Sept. 30, Dec. 31,
2000 1999
-------------------------------
Balance at beginning of period 4,128 3,689
Loan losses:
Commercial, financial & agricultural (23) (27)
Real estate - mortgage (31) (75)
Installment loans to individuals (431) (614)
-----------------------------
(485) (716)
Recoveries on previous loan losses:
Commercial, financial & agricultural 1 12
Real estate - mortgage 6 32
Installment loans to individuals 189 271
-----------------------------
196 315
-----------------------------
Net loan losses (289) (401)
Provision charged to operations (1) 630 840
-----------------------------
Balance at end of period 4,469 4,128
=============================
Ratio of net credit losses to average net
loans outstanding .12% .13%
8
<PAGE> 11
SUMMARY OF CREDIT LOSS EXPERIENCE (CONT'D)
(1) The provision for possible credit losses charged to operating expense is
based on management's judgment after taking into consideration all factors
connected with the collectibility of the existing loan portfolio. Management
evaluates the loan portfolio in light of economic conditions, changes in the
nature and volume of the loan portfolio, industry standards and other relevant
factors. Specific factors considered by management in determining the amounts
charged to operating expenses include previous credit loss experience, the
status of past due interest and principal payments, the quality of financial
information supplied by loan customers and the general condition of the
industries in the community to which loans have been made.
The allowance for possible credit losses has been allocated according to the
amount deemed to be reasonably necessary to provide for the possibility of
losses being incurred within the following categories of loans as of the dates
indicated.
(In Thousands of Dollars)
Sept. 30, Dec. 31,
TYPES OF LOANS 2000 1999
--------------------------
Commercial, financial & agricultural 975 875
Real estate - mortgage 1,302 1,179
Installment 2,192 2,074
-------------------------
Total 4,469 4,128
=========================
The allocation of the allowance as shown above should not be interpreted as an
indication that charge-offs in 2000 will occur in the same proportions or that
the allocation indicates future charge-off trends. Furthermore, the portion
allocated to each loan category is not the total amount available for future
losses that might occur within such categories since the total allowance is a
general allowance applicable to the entire portfolio.
The percentage of loans in each category to total loans is summarized as
follows:
Sept. 30, Dec. 31,
TYPES OF LOANS 2000 1999
----------------------------
Commercial, financial & agricultural 3.4% 3.6%
Real Estate - mortgage 53.6% 53.6%
Installment loans to individuals 43.0% 42.8%
------------------------
100.0% 100.0%
========================
9
<PAGE> 12
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There are no material changes from the end of the preceding fiscal year
that would cause additional disclosure of the bank's exposure to market risk.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the registrant or
its subsidiary is a party, or of which any of their property is the subject,
except proceedings which arise in the ordinary course of business. In the
opinion of management, pending legal proceedings will not have a material effect
on the consolidated financial position of the registrant and its subsidiary.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) Farmers National Banc Corp's special meeting of shareholders was held
on November 9, 2000.
(c) Proxies were solicited by Farmers National Banc Corp's management
pursuant to Regulation 14 under the Securities Exchange Act of 1934. The
shareholders of Farmers National Banc Corp. and Security Financial Corp. voted
on an agreement whereby Security will merge with and into Farmers through a
tax-free, stock-for-stock exchange, with Farmers as the surviving corporation.
Under the terms of the Agreement, upon the consummation of the Merger all shares
of Security common stock issued and outstanding immediately prior to the
Effective Time (as defined in the Agreement) of the Merger shall be converted
into the right to receive that number of shares of Farmers common stock equal to
a number (rounded to the nearest thousandth) obtained by dividing $90.00 by the
Farmers Common Stock Average Closing Price (as defined in the Agreement);
provided however, that the Exchange Ratio (as defined in the Agreement) shall
not be less than 7.344, nor greater than 9.937, shares of Farmers common stock
for each one share of Security common stock. As of May 30, 2000, the value of
the transaction was approximately $32.6 million.
The shareholders of Farmers National Banc Corp. approved the merger with
the following results: For the merger: 6,105,525, Against: 230,001, Abstain:
51,015. Out of the total shares issued and outstanding, two-thirds (2/3)
approval was required to pass the proposal. 6,386,541 voted for the proposal.
The shareholders of Security Financial Corp. approved the merger with the
following results: For the merger: 278,120, Against: 5,106, Abstain: 2,489. Out
of the total shares issued and outstanding, at least a majority was required to
pass the proposal. 285,715 voted for the proposal.
10
<PAGE> 13
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed or incorporated by references as part of
this report:
2. Not applicable.
3(i). Not applicable.
3(ii). Not applicable.
4. The registrant agrees to furnish to the Commission upon request copies of
all instruments not filed herewith defining the rights of holders of long-term
debt of the registrant and its subsidiaries.
10. Not applicable.
11. Not applicable.
15. Not applicable.
18. Not applicable.
19. Not applicable.
22. Not applicable.
23. Not applicable.
24. Not applicable.
27. Financial Data Schedule (filed herewith)
99. Not applicable.
(b) - REPORTS ON FORM 8-K
No reports on Form 8-K were filed for the three months ended September 30,
2000.
11
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FARMERS NATIONAL BANC CORP.
Dated: 11/13/00
-------------------
/s/ Frank L. Paden
--------------------------------------
Frank L. Paden
President and Secretary
Dated: 11/13/00
--------------------------------
/s/ Carl D. Culp
--------------------------------------
Carl D. Culp
Executive Vice President
and Treasurer
12
