FORM 10-Q - QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 34-26589, eff. 4/12/93.)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
Commission file number: 0-12668
Hills Bancorporation
Incorporated in Iowa I.R.S. Employer Identification
No. 42-1208067
131 MAIN STREET, HILLS, IOWA
Telephone number: (319) 679-2291
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. [X] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
SHARES OUTSTANDING
CLASS AT July 31, 2000
-------------------------- -------------------
Common Stock, no par value 1,495,941
<PAGE>
HILLS BANCORPORATION
Index to Form 10-Q
Part I
FINANCIAL INFORMATION
Page
Number
Item 1. Financial Statements
Consolidated balance sheets, June 30, 2000 (unaudited)
and December 31, 1999
Consolidated statements of income, (unaudited) for three
and six months ended June 30, 2000 and 1999
Consolidated statements of comprehensive income, (unaudited)
for three and six months ended June 30, 2000 and 1999.
Consolidated statements of stockholders' equity, (unaudited)
for six months ended June 30, 2000 and 1999
Consolidated statements of cash flows (unaudited) for six
months ended June 30, 2000 and 1999
Notes to consolidated financial statements (unaudited)
Item 2. Management's discussion and analysis of financial condition
and results of operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The information appearing on page 11 of item 2 under
the heading "Market Risk Management" is incorporated herein
by reference.
Part II
OTHER INFORMATION
Item 1. Legal proceedings
Item 2. Changes in securities and use of proceeds
Item 3. Defaults upon senior securities
Item 4. Submission of matters to vote of security holders
Item 5. Other information
Item 6. Exhibits and reports on Form 8-K
COMPUTATION OF EARNINGS PER SHARE
SIGNATURES
<PAGE>
HILLS BANCORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
June 30,
2000 December 31,
Unaudited 1999*
------------------------
<S> <C> <C>
ASSETS
Cash and due from banks .................................. $ 24,321 $ 21,765
Investment securities:
Available for sale (amortized cost June 30, 2000
$134,634; December 31, 1999 $133,516) ................ 132,849 131,961
Held to maturity (fair value June 30, 2000 $16,692;
December 31, 1999 $18,362) .......................... 16,687 18,307
Stock of Federal Home Loan Bank ....................... 7,789 5,930
Federal funds sold ....................................... 200 206
Loans, net ............................................... 605,334 565,381
Property and equipment, net .............................. 13,203 11,646
Accrued interest receivable .............................. 7,116 6,376
Deferred income taxes, net ............................... 3,878 3,954
Other assets ............................................. 7,890 8,440
--------- ---------
$ 819,267 $ 773,966
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Noninterest-bearing deposits ............................. $ 72,965 $ 66,794
Interest-bearing deposits ................................ 525,912 495,292
--------- ---------
Total deposits ........................................ $ 598,877 $ 562,086
Federal funds purchased and securities
sold under agreements to repurchase ................... 15,753 26,714
Federal Home Loan Bank notes ............................. 125,700 108,700
Accrued interest payable ................................. 2,253 2,040
Other liabilities ........................................ 3,178 3,209
--------- ---------
$ 745,761 $ 702,749
--------- ---------
REDEEMABLE COMMON STOCK HELD BY
EMPLOYEE STOCK OWNERSHIP PLAN
(ESOP) ................................................ $ 11,344 $ 10,953
--------- ---------
STOCKHOLDERS' EQUITY
Capital stock, common, no par value; authorized 10,000,000
shares; issued June 30, 2000 - 1,495,941 shares;
December 31, 1999 - 1,495,941 shares .................. $ 10,214 $ 10,214
Retained earnings ........................................ 64,418 61,984
Accumulated other comprehensive income, unrealized gains
(losses) on investment securities, net ................. (1,126) (981)
--------- ---------
$ 73,506 $ 71,217
Less, maximum cash obligation related to
ESOP shares ........................................... 11,344 10,953
--------- ---------
$ 62,162 $ 60,264
--------- ---------
$ 819,267 $ 773,966
========= =========
<FN>
* Derived from audited financial statements.
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
HILLS BANCORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Three and Six Months Ended June 30, 2000 and 1999
(In Thousands, Except Per Share Data)
<TABLE>
Three Months Ended Six Months Ended
------------------ -----------------
June 30 June 30
----------------- -----------------
2000 1999 2000 1999
----------------- -----------------
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans .......... $12,225 $10,215 $23,863 $19,878
Interest on investment securities:
Taxable ........................... 1,902 1,776 3,735 3,527
Non-taxable ....................... 429 384 845 763
Interest on federal funds sold ...... 95 96 267 357
----------------- -----------------
Total interest income ............... $14,651 $12,471 $28,710 $24,525
----------------- -----------------
Interest Expense:
Interest on deposits ................ $ 5,928 $ 5,188 $11,334 $10,278
Interest on securities sold under
Interest on FHLB borrowings ......... 1,897 1,042 3,850 2,119
----------------- -----------------
Total interest expense .............. $ 7,954 $ 6,324 $15,446 $12,592
----------------- -----------------
Net interest income ................. $ 6,697 $ 6,147 $13,264 $11,933
Provision for loan losses .............. 201 204 474 408
----------------- -----------------
Net interest income after provision
Other income:
Loan origination fees ............... $ 65 $ 205 $ 112 $ 404
Trust fees .......................... 578 500 1,167 1,026
Deposit account charges and fees .... 630 532 1,199 984
Other fees and charges .............. 592 440 1,176 918
----------------- -----------------
$ 1,865 $ 1,677 $ 3,654 $ 3,332
----------------- -----------------
Other expenses:
Salaries and employee benefits ...... $ 2,620 $ 2,473 $ 5,280 $ 4,815
Occupancy ........................... 331 297 671 590
Furniture and equipment ............. 509 459 995 910
Office supplies and postage ......... 259 258 500 524
Other operating ..................... 1,163 1,110 2,331 2,005
----------------- -----------------
$ 4,882 $ 4,597 $ 9,777 $ 8,844
----------------- -----------------
Income before income taxes .......... $ 3,479 $ 3,023 $ 6,667 $ 6,013
Federal and state income taxes ......... 1,080 942 2,064 1,853
----------------- -----------------
Net income .......................... $ 2,399 $ 2,081 $ 4,603 $ 4,160
================= =================
Earning per common share:
Basic ............................. $ 1.60 $ 1.40 $ 3.08 $ 2.82
Diluted ........................... 1.59 1.39 3.05 2.79
</TABLE>
<PAGE>
HILLS BANCORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three and Six Months Ended June 30, 2000 and 1999
(In Thousands, Except Per Share Data)
<TABLE>
Three Months Ended Six Months Ended
June 30 June 30
------------------- ------------------
2000 1999 2000 1999
------------------ ------------------
<S> <C> <C> <C> <C>
Net Income ...................................... $ 2,399 $ 2,081 $ 4,603 $ 4,160
Other comprehensive income:
Unrealized gains (losses) on debt securities . 137 (1,301) (230) (2,156)
Income tax effect of unrealized gains (losses) (51) 483 85 798
------------------ ------------------
Comprehensive Income ......................... $ 2,485 $ 1,263 $ 4,458 $ 2,802
================== ==================
</TABLE>
<PAGE>
HILLS BANCORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Six Months Ended June 30, 2000 and 1999
(In Thousands)
<TABLE>
Less
Maximum
Accumulated Cash
Other Obligation
Capital Retained Comprehensive To ESOP
Stock Earnings Income Shares Total
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 2000 .......................... $10,214 $61,984 $ (981) $(10,953) $60,264
Net income ........................................ - - 4,603 - - - - 4,603
Change related to ESOP shares ..................... - - - - - - (391) (391)
Cash dividends ($1.45 per share) .................. - - (2,169) - - - - (2,169)
Other comprehensive income ........................ - - - - (145) - - (145)
-------------------------------------------------------
Balance, June 30, 2000 ............................ $10,214 $64,418 $(1,126) $(11,344) $ 62,162
=======================================================
Balance, January 1, 1999 ......................... $ 9,140 $55,428 $ 1,185 $ (9,301) $ 56,452
Net income ........................................ - - 4,160 - - - - 4,160
Change related to ESOP shares ..................... - - - - - - (968) (968)
Cash dividends ($1.30 per share) .................. - - (1,911) - - - - (1,911)
Other comprehensive income ........................ - - - - (1,372) - - (1,372)
Issuance of 24,424 shares of common stock ......... 645 - - - - - - 645
Income tax benefit related to
stock options exercised ......................... - - 308 - - - - 308
--------------------------------------------------------
Balance, June 30, 1999 ............................ $ 9,785 $ 57,985 $ (187) $(10,269) $ 57,314
========================================================
</TABLE>
See Notes to Financial Statements.
<PAGE>
HILLS BANCORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 2000 and 1999
(In Thousands)
<TABLE>
2000 1999
--------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ..................................................................... $ 4,603 $ 4,160
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation ............................................................... 680 714
Provision for loan losses .................................................. 474 408
Deferred income taxes ...................................................... 161 (60)
Compensation paid by issuance of common stock .............................. - - 20
(Increase) decrease in accrued interest receivable ......................... (740) (774)
Amortization of bond discount .............................................. 33 245
(Increase) in other assets ................................................. 378 (849)
Amortization of intangibles ................................................ 172 172
Increase in accrued interest and other liabilities ......................... 182 1,046
--------------------
Net cash provided by operating activities .................................. $ 5,943 $ 5,082
--------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of investment securities:
Available for sale ......................................................... $ 13,531 $ 19,637
Held to maturity ........................................................... 1,568 2,241
Purchase of investment securities, available for sale ........................ (16,489) (26,689)
Federal funds sold, net ...................................................... 6 24,895
Loans made to customers, net of collections .................................. (40,427) (48,877)
Purchases of property and equipment .......................................... (2,237) (1,210)
--------------------
Net cash (used in) investing activities .................................... $(44,048) $(30,003)
--------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits ........................................ $ 36,791 $ 10,857
Net increase (decrease) in fed funds purchased and securities sold under
agreements to repurchase ................................................. (10,961) (2,065)
Borrowings from FHLB ....................................................... 40,000 25,000
Payments on FHLB notes ..................................................... (23,000) (7,000)
Stock options exercised .................................................... - - 625
Income tax benefits on stock options exercised ............................. - - 308
Dividends paid ............................................................. (2,169) (1,911)
--------------------
Net cash provided by financing activities ............................... $ 40,661 $ 25,814
--------------------
Increase in cash and due from banks ..................................... $ 2,556 $ 893
CASH AND DUE FROM BANKS
Beginning .................................................................. 21,765 16,427
--------------------
Ending ..................................................................... $ 24,321 $ 17,320
====================
SUPPLEMENTAL DISCLOSURES Cash payments for:
Interest paid to depositors and others .................................. $ 11,121 $ 10,282
Interest paid on other obligations ...................................... 4,112 2,314
Non-cash financing transaction, increase in maximum cash obligation
related to ESOP shares ................................................. 391 968
</TABLE>
See Notes to Financial Statements.
<PAGE>
HILLS BANCORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1. Interim Financial Statements
Interim consolidated financial statements have not been examined by independent
public accountants, but include all adjustments (consisting only of normal
recurring accruals) which, in the opinion of management, are necessary for a
fair presentation of the results for these periods. The results of operation for
the interim periods are not necessarily indicative of the results for a full
year.
In reviewing these financial statements, reference should be made to the Notes
to Financial Statements contained in the Financial Statements for the year ended
December 31, 1999.
There were no changes in accounting policies which had a significant effect on
the interim consolidated financial statements for the periods presented.
For purposes of reporting cash flows, cash and due from banks includes cash on
hand and amounts due from banks (including cash items in process of clearing).
Cash flows from demand deposits, NOW accounts, savings accounts, and federal
funds purchased and sold are reported net since their original maturities are
less than three months. Cash flows from loans and time deposits are presented as
net increases or decreases.
Note 2. Loans
The following tables set forth the composition of loans and the allowance for
loan losses:
(In thousands)
June 30
-------------------------
2000 1999
-------------------------
Agricultural ................................. $ 30,131 $ 27,997
Commercial and financial ..................... 35,927 34,300
Real estate, construction .................... 40,417 38,634
Real estate, mortgage ........................ 477,892 382,741
Loans to individuals ......................... 30,927 34,935
-------- --------
$615,294 $518,607
Less allowance for loan losses ............... 9,960 9,227
-------- --------
$605,334 $509,380
======== ========
Transactions in the allowance for loan losses are as follows:
(In thousands)
Six Months
Ended June 30
-------------------------
2000 1999
-------------------------
Balance, beginning ........................... $ 9,750 $ 8,856
Provision charged to expense ............... 474 408
Net charge-offs ............................ (264) (37)
------- -------
Balance, ending .............................. $ 9,960 $ 9,227
======= =======
<PAGE>
The following summarizes the Company's nonaccrual, past due, restructured and
impaired loans:
(In thousands)
June 30
--------------------
2000 1999
--------------------
Nonaccrual .......................................... $ - - $ - -
Accruing loans, past due 90 days or more ............ 2,172 1,749
Restructured loan ................................... - - - -
Impaired loans ...................................... 8,837 9,413
Note 3. Earnings Per Share
Basic net income per share amounts are computed by dividing net income by the
weighted average number of common shares outstanding during the period. Diluted
earnings per share are computed by dividing net income by the weighted average
number of common shares outstanding during the period plus the number of
potential dilutive common shares attributable to the Company's stock option
plan.
<PAGE>
PART I, ITEM 2.
HILLS BANCORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward Looking Information
Forward looking information relating to the financial results or strategies of
the Company are made in the Management's Discussion and Analysis. The following
paragraphs identify forward looking statements and the risks that need to be
considered when reading those statements.
Forward looking statements include such words as believe, expect, anticipate,
target, goal, objective and other words with similar meaning. The Company is
under no obligation to update such statements.
The risks involved in the operations and strategies of the Company include
competition from other financial institutions, changes in interest rates,
changes in economic or market conditions and changes in regulatory factors.
These risks, which are not all inclusive, cannot be estimated.
Recent Activities
During the first six months of 2000 the Company expanded to a new market and two
significant construction projects were started. In February we opened a new
office in downtown Cedar Rapids, Iowa, our tenth location. At the end of the six
months our consolidated total assets exceeded $819 million, reflecting continued
growth at all locations. The construction of our new operations center in Hills,
began in March 2000, and continues to be on schedule with a completion expected
by February of 2001. The total cost of the project is expected to be
approximately $3.1 million, plus capitalized interest cost during constuction.
Also we began construction of a 6,000 square foot addition to the Coralville
office, which will be primarily for retail banking services in the growing
Coralville market. The Coralville project also includes a substantial remodeling
of the existing two story Coralville office. Total project costs are estimated
to be approximately $2.1 million.
Financial Position
Total assets at June 30, 2000 totaled $819.3 million and represent a $99.8
million increase in assets from one year ago. This increase in assets includes
an increase in net loans from June 30, 1999 to June 30, 2000 of $96.0 million,
with primarily all the loan growth attributable to real estate loans, consistent
with our loan growth of the past few years. The local and national economy
continues to be strong despite recent increases in interest rates. Our asset
growth was funded primarily by deposit growth of $53.9 million, federal funds
purchased and securities sold under agreements to repurchase of $7.3 million and
a net increase in Federal Home Loan Bank note advances of $32.0 million. Due to
the continued loan demand and challenges for funding sources, asset-liability
management continues to be very important. The asset-liability management
encompasses both the management of interest rate sensitivity and the maintenance
of adequate liquidity. Interest rate sensitivity management attempts to provide
the optimal level of net interest income while managing exposure to risks
associated with interest rate movements. Liquidity management involves planning
to meet anticipated funding needs. Management monitors the rate sensitivity and
liquidity positions on an on-going basis and, when necessary, appropriate action
is taken to minimize any adverse effects of rapid interest rate movements or any
unexpected liquidity concerns. We believe that we will be able to maintain
sufficient liquidity.
In January 2000, Hills Bancorporation paid a dividend of $2,169,000 or $1.45 per
share, an 11.54% increase from the $1.30 paid in January 1999. After payment of
the dividend and adjustment for accumulated other comprehensive income,
stockholders' equity as of June 30, 2000 totaled $62,162,000. The total
stockholders' equity of Hills Bancorporation as of June 30, 2000 before the
reduction for the ESOP shares, totaled 8.97% of total assets. Under risk-based
capital rules, our total risk based capital is 14.13% of risk adjusted assets,
and substantially in excess of required miniumums.
<PAGE>
Results of Operations
Net income for the quarter and six months ended June 30, 2000 compared to the
same periods in 1999 had increases of $318,000 and $443,000, respectively. For
both periods the changes were primarily the result of significant increases in
net interest income which was the result of increases in average earning assets
from the prior year. Average earning assets were approximately $102.5 million
higher for the six months ended June 30, 2000 compared to the same period in
1999. Other income increased over the prior year by $188,000 for the three month
period ended June 30 and $322,000 for the six month period then ended. Loan
origination fees for the quarter and six months decreased $140,000 and $292,000,
respectively as interest rates increased significantly from the rates prevailing
during the first six months of 1999 and this directly affected the volume of
loans sold in the secondary market. Trust fees, deposit account charges and
other fees increased $328,000 for the three months and $614,000 for the six
months which were the direct results of volume increases in trust assets and
deposit accounts opened, respectively.
Other expenses increased $285,000 and $933,000 for the three and six month
periods presented. For the $933,000 increase, salaries and benefits accounted
for $465,000, occupancy and furniture and equipment expense $166,000 and all
other expenses $302,000. The salaries and employee benefits increased as the
result of salary adjustments in the first quarter of 2000 and the addition of
employees at the new Cedar Rapids office. The East Iowa City branch of Hills
Bank and Trust Company was opened in June 1999 and the Cedar Rapids office of
Hills Bank opened in February 2000. The two new locations accounted for a
portion of the increase in occupancy expense and other expense increases in
marketing and business promotion. Also early in 2000 the banks introduced
on-line banking services and incurred increased promotion expenses. The usage of
on-line service has exceeded our expectations and we look forward to continued
increased usage.
Earnings per share, both basic and diluted, increased for the quarter ended June
30, 2000 compared to 1999. For the quarter ended June 30, 2000 basic and diluted
earnings per share totaled $1.60 and $1.59 in comparison to $1.40 and $1.39 for
the quarter ended June 30, 1999. For the six month period ended in June 2000,
basis and diluted earning per share totaled $3.08 and $3.05 compared to $2.82
and $2.79 for the same period in 1999.
Market Risk Management
Market risk is the risk of earnings volatility that results from adverse changes
in interest rates and market prices. The Company's market risk is comprised
primarily of interest rate risk arising form its core banking activities of
lending and deposit taking. Interest rate risk is the risk that changes in
market interest rates may adversely affect the Company's net interest income.
Management continually develops and applies strategies to mitigate this risk.
Management does not believe that the Company's primary market risk exposures and
how those exposures have been managed to-date in 2000 changed significantly when
compared to 1999.
Asset/Liability Management
The Company has a fully integrated asset/liability management system to assist
in managing the balance sheet. The process, which is used to project the results
of alternative investment decisions, includes the development of simulations
that reflect the effects of various interest rate scenarios on net interest
income. Management analyzes the simulations to manage interest rate risk, the
net interest margin and levels of net interest income.
The goal is to structure the balance sheet so that net interest margin
fluctuates in a narrow range during periods of changing interest rates. The
Company currently believes that net interest income would fall by less than 4
percent if interest rates increased or decreased by 300 basis points over a
one-year time horizon. This is within the Company's policy limits.
To improve net interest income and lessen interest rate risk, management
continues its strategy of de-emphasizing fixed-rate portfolio residential real
estate loans with long repricing periods. The Company continues to focus on
reducing interest rate risk by emphasizing growth in variable-rate consumer and
commercial loans. Other actions include the use of fixed-rate Federal Home Loan
Bank (FHLB) advances as alternatives to certificates of deposit, active
management of the available for sale investment securities portfolio to provide
for cash flows that will facilitate interest rate risk management.
The highly competitive banking environment in Iowa also greatly impacts the
Company's net interest margin. The effect of competition on net interest income
is difficult to predict.
<PAGE>
HILLS BANCORPORATION
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings.
Item 2. Changes in Securities and use of Proceeds
There were no changes in securities.
Item 3. Defaults upon Senior Securities
Hills Bancorporation has no senior securities.
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting held on April 17, 2000, the security holders
approved the following:
1. Election of Michael E. Hodge to a one year term to the Board
of Directors expiring at the 2001 Annual Meeting.
2. Election of Willis M. Bywater, Thomas J. Gill, D.D.S.,
Donald H. Gringer and Dwight O. Seegmiller to three-year terms
to the Board of Directors expiring at the 2003 Annual Meeting.
3. Approved the Hills Bancorporation 2000 Stock Option
and Incentive Plan.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit
See exhibit II - Statement Re Computation of Earnings Per
Common Share
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter
ended June 30, 2000.
<PAGE>
HILLS BANCORPORATION
EXHIBIT II
COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
Three months ended Six months ended
June 30 June 30
-------------------- -------------------
2000 1999 2000 1999
--------------------- --------------------
<S> <C> <C> <C> <C>
Weighted average numbe of shares
outstanding (basic) ................... 1,495,941 1,484,525 1,495,941 1,476,139
Weighted average of potential dilutive
shares attributable to stock options
granted computed under the treasury
stock method .......................... 12,677 11,871 12,631 16,217
---------------------------------------------
Weighted average number of shares
(diluted) ............................. 1,508,618 1,496,396 1,508,572 1,492,356
=============================================
Earnings Per Share:
Net income (in thousands) ............. $ 2,399 $ 2,081 $ 4,603 $ 4,160
Earnings per common share:
Basic ............................... $ 1.60 $ 1.40 $ 3.08 $ 2.82
Diluted ............................. 1.59 1.39 3.05 2.79
</TABLE>
<PAGE>
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 and thereunto duly authorized.
HILLS BANCORPORATION
(Registrant)
August 14, 2000 /s/ Dwight O. Seegmiller
-------------------- -------------------------------------------
Date Dwight O. Seegmiller, President
(Duly authorized officer of the registrant)
August 14, 2000 /s/ James G. Pratt
-------------------- -------------------------------------------
Date James G. Pratt, Treasurer
(Principal Financial Officer)
