SUMMIT SECURITIES INC /ID/, S-1, 1994-01-14

SUMMIT SECURITIES INC /ID/
S-1, 1994-01-14
MISCELLANEOUS BUSINESS CREDIT INSTITUTION

Previous: AMERICAN MEDICAL HOLDINGS INC, 10-Q, 1994-01-14

<PAGE>

As filed with the Securities and Exchange Commission on January 13, 1994
Registration No. 33-

FORM S-1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT

Under

THE SECURITIES ACT OF 1933

SUMMIT SECURITIES, INC.
(Exact name of registrant as specified
in governing instruments)

Idaho 6799
(State or other jurisdiction of (Primary Standard Industrial
incorporation or organization) Classification Code Number)

929 W. Sprague Avenue
Spokane, WA 99204
82-0438135 (509) 838-3111
(I.R.S. Employer (Address, including zip code,
Identification No.) and telephone number,
including area code, of
registrant's principal
executive offices)

C. Paul Sandifur, Jr.
President
Summit Securities, Inc.
929 W. Sprague Ave.
Spokane, WA 99204
(509) 838-3111
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Approximate date of commencement of proposed sale to the public: As soon
as practicable after the Registration Statement becomes effective.

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/

Total Number of Pages: 153
Exhibit at Page: 95

<PAGE>

CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each Amount Proposed Proposed Amount of
class of to be maximum maximum registration
securities to registered offering aggregate fee
be registered price per offering
unit price
<S> <C> <C> <C> <C>
Preferred
Stock Shares 150,000 $ 100 $15,000,000 $ 5,172.42

Investment
Certificates $40,000,000 $1.00 $40,000,000 $ 6,896.55
</TABLE>

The Registrant is hereby proposing to register a new offering of
Investment Certificates, Series A, in the amount of $20,000,000 and is
hereby amending Registration No. 33-51836 pursuant to Rule 429 of which
approximately $20,000,000 of Investment Certificates, Series A, remain
unsold. The registration fee is calculated on the amount being
registered hereunder.

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.
<PAGE>

PART I

SUMMIT SECURITIES, INC.

Cross Reference Sheet
Showing Location in Prospectus of Items of the Form

1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus........ Outside Front Cover
Page
2. Inside Front and Outside Back Cover Pages
of Prospectus................................. Inside Front Cover
Page
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges............ Prospectus Summary;
Summary Financial
Data;
Certain Investment
Considerations/
Risk Factors;
4. Use of Proceeds............................... Use of Proceeds
5. Determination of Offering Price............... *
6. Dilution...................................... *
7. Selling Security Holders...................... *
8. Plan of Distribution.......................... Plan of Distribution
9. Description of Securities to be Registered.... Description of
Securities;
Description
of Certificates;
Description of
Capital
Stock; Description
of Preferred Stock
10. Interest of Named Experts and Counsel......... Legal Matters;
Experts
11. Information with Respect to Registrant........ Front Cover Page;
Prospectus
Summary; The
Company;
Capitalization;
Summary Financial
Data; Management's
Discussion and
Analysis
of Financial
Condition and
Results of
Operations;
Business;
Management;
Principal
Shareholders;
Certain
Transactions;
Financial Statements
and Supplementary
Data
<PAGE>

12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................... Indemnification

*Not applicable or negative.

<PAGE>

PROSPECTUS
SUMMIT SECURITIES, INC.
$40,000,000 Investment Certificates, Series A
150,000 Shares Variable Rate Cumulative Preferred Stock,
Series S-1 ($100 Per Share Offering Price
and Liquidation Preference)

The Investment Certificates, Series A ("Certificates") and the
shares of Variable Rate Cumulative Preferred Stock, Series S-1
("Preferred Stock") of Summit Securities, Inc. ("the Company") covered
by this prospectus are being offered separately and not as units on a
continuous, best efforts basis. The Certificates are unsecured
indebtedness of the Company, senior in liquidation to the outstanding
equity securities of the Company, including Preferred Stock to be
issued hereunder, subordinate to the Company's collateralized debt and
on a parity with all other outstanding Certificates issued by the
Company, unsecured accounts payable and accrued liabilities. At the
election of owners of Investment Certificates, Series A, interest will
be paid monthly, quarterly, semi-annually or annually, or will remain
with the Company to compound semi-annually. If annual payments of
interest are elected, interest will not compound. Owners may elect to
be paid monthly installments of the principal and interest pursuant to
an amortization schedule selected by the owner. Interest rates,
maturities, and minimum investment amounts, are set forth below. The
Certificates will be issued in fully registered form in fractional
denominations of $0.01 or multiples thereof at 100% of the principal
amount paid. The Company reserves the right to change prospectively the
interest rates, maturities, and minimum investment amounts on unsold
Certificates. See "Description of Certificates".
<TABLE>
<CAPTION>
MINIMUM TERM TO ANNUAL
INVESTMENT MATURITY INTEREST RATE
---------- ---------------------- -------------
(Investment Certificates, Series A)
<S> <C>
$ 1,000 60 to 120 months
$ 1,000 48 to 59 months
$ 1,000 36 to 47 months
$ 100 24 to 35 months
$ 100 12 to 23 months
$ 1,000 6 to 11 months
</TABLE>

Preferred Stock distributions are cumulative and are to be
declared monthly on the first business day of the month to shareholders
of record as of the fifth calendar day of each month. Distributions are
to be paid in cash on the twentieth calendar day of each month in an
amount equal to the offering price of $100 per share multiplied by the
distribution rate divided by twelve. The Board has authorized for an
indefinite period, a distribution rate on the Preferred Stock of one
percentage point above the Applicable Rate. The Applicable Rate means
the greater of the "Treasury Bill Rate," the "Ten Year Constant
Maturity Rate" or the "Twenty Year Constant Maturity Rate" plus one
half of one percentage point determined immediately prior to the
Declaration Date. In no event, will the Applicable Rate for any
distribution period be less than 6% per annum nor greater than 14% per
<PAGE>

annum. See "Description of Preferred Stock-Distributions."

The initial distribution rate for distributions payable on the
20th day of February, 1994 is % per annum.

Preferred Stock may be redeemed, in whole or in part, at the
option of the Company, at a price per share of $102 if redeemed prior
to January 1, 1995, and of $100 per share thereafter plus, in each
case, declared and unpaid dividends to the redemption date. Under
certain limited circumstances, the Board of Directors may, in their
sole discretion and without any obligation to do so, redeem shares
tendered for redemption by stockholders. If redeemed, the price shall
be at $97 per share during the first year after date of original
issuance and $99 per share thereafter. See "Description of Preferred
Stock-Redemption of Shares".

As of September 30, 1993, the Company had outstanding
approximately $21,959,000 (principal and compound and accrued interest)
of Certificates and similar obligations, and approximately $23,000
(principal and accrued interest) of collateralized debt. The total
liabilities of the Company ranking senior in liquidating preference to
the Preferred Stock were approximately $22,254,000. Preferred Stock is
junior to all debts of the Company including the Company's Investment
Certificates, Series A, and preferred to the Company's common stock in
liquidation.

There are no limitations on the Company's ability to incur
additional secured indebtedness. There is no trading market for the
Certificates or the Preferred Stock and none is expected to be
established in the future. See "Certain Investment Considerations-Risk
Factors". A list of persons willing to sell or purchase preferred stock
of the parent company, Metropolitan, has been maintained by the
Company's broker-dealer affiliate as a convenience to holders of the
parent company's preferred stock. The Company will use its best efforts
to make this listing available for Preferred Stock offered hereunder
following completion of this offering. This offering of Certificates
and Preferred Stock is subject to withdrawal or cancellation by the
Company without notice. No minimum amount of Certificates or Preferred
Stock must be sold.

The Certificates and Preferred Stock offered hereby involve
significant investor considerations which should be analyzed prior to
any investment decision. See "Certain Investment Considerations-Risk
Factors".

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE SALES PROCEEDS TO
TO PUBLIC COMMISSIONS (1) THE COMPANY (2)
<S> <C> <C> <C>
Per
Certificate 100% .25% to 5% 99.75% to 95%
Total: $40,000,000 $100,000-$2,000,000 $38,000,000-$39,900,000
<PAGE>

Per
Preferred
Share $100 0% to 5% 100% to 95%
Total: $15,000,000 None - $750,000 $15,000,000-$14,250,000

</TABLE>

(1) There is no sales charge to the investor. The Company will
reimburse Metropolitan Investment Securities, Inc., an affiliated
company, for commissions paid to licensed securities sales
representatives. Sales commission rates on the sale of Certificates
depend upon the terms of the sale and upon whether the sales are
renewals or new purchases. See "Plan of Distribution".

(2) Before deducting expenses estimated at $165,000.

The Certificates and Preferred Stock are being offered for sale on
a continuous, best efforts basis, directly to investors through
Metropolitan Investment Securities, Inc., which is the exclusive sales
agent for the publicly issued securities of the Company and its parent
company, Metropolitan Mortgage & Securities Co., Inc. No offering will
be made pursuant to this prospectus subsequent to January 31, 1995. The
offering is subject to Schedule E of the Bylaws of the National
Association of Securities Dealers, Inc. See "Plan of Distribution".

The date of this prospectus is February , 1994.
<PAGE>

INSIDE FRONT COVER PAGE OF PROSPECTUS, REFER TO GRAPH APPENDIX ITEM 1
<PAGE>

No person has been authorized to give any information or to make
any representations other than those contained in this Prospectus. If
given or made, such information or representations must not be relied
upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell securities in any jurisdiction to any
person to whom it is unlawful to make such offer in such jurisdiction.
Neither the delivery of this Prospectus nor any sales made hereunder
shall under any circumstances create any implication that there has
been no change in the affairs of the Company since the date hereof.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 and, in accordance therewith, files
periodic reports and other information with the Securities and Exchange
Commission. Such reports can be inspected at the public reference
facilities maintained by the Commission in Washington, D.C. at 450 5th
Street, N.W., Judiciary Plaza, Washington, DC 20549 and at the public
reference facilities in the New York Regional Office, 7 World Trade
Center, Suite 1300, New York, NY 10048, and Chicago Regional Office,
Northwest Atrium Center, Suite 1400, 500 West Madison Avenue, Chicago,
IL 60661-2511. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 5th Street N.W., Judiciary
Plaza, Washington, DC 20549 at prescribed rates.

The Company has filed with the Securities and Exchange Commission
in Washington, D.C., a Registration Statement under the Securities Act
of 1933 with respect to the securities 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.
For further information, reference is made to the Registration
Statement, including the exhibits filed or incorporated as a part
thereof, which may be examined without charge at the Public Reference
Room of the Commission in Washington, D.C., or copies of which may be
obtained from the Commission upon payment of the prescribed fees.

<PAGE>

TABLE OF CONTENTS

Page

Available Information.............................

Prospectus Summary ...............................

Summary Financial Data............................

Certain Investment Considerations-Risk
Factors...........................................

Description of Securities.........................

Description of Certificates..................
Description of Capital Stock.................
Description of Preferred Stock...............

Legal Matters.....................................

Experts...........................................

Plan of Distribution..............................

Use of Proceeds...................................

Capitalization....................................

Selected Financial Data...........................

Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................................

Business..........................................

Management........................................

Executive Compensation............................

Indemnification...................................

Principal Shareholders............................

Certain Transactions..............................

Index to Financial Statements.....................

<PAGE>

PROSPECTUS SUMMARY

This summary is qualified in its entirety, and should be read in
conjunction with the detailed information and financial statements
appearing elsewhere in this prospectus. This offering involves certain
considerations to prospective investors which are set forth in
"Description of Securities" and "Certain Investment Considerations-Risk
Factors".

The Company

Summit Securities, Inc. (the "Company") was incorporated under the
laws of the State of Idaho on July 25, 1990. Its Articles of
Incorporation provide that its existence is perpetual. The Company is
a wholly-owned subsidiary of Metropolitan Mortgage & Securities Co.,
Inc., a Washington corporation ("Metropolitan").

The Company is engaged, nationwide, in the business of acquiring,
holding and selling real estate receivables (hereafter "Receivables").
The Company invests in Receivables using funds generated from
Receivable cash flows, and the sale of Certificates and Preferred
Stock. The Company's Receivable investments are acquired through its
parent company, Metropolitan, which performs the underwriting and
review procedures. Its Receivables are serviced through an affiliate,
Spokane Mortgage Company, doing business under the trade name MetWest
Services. The Company may also engage in other businesses or activities
without restriction in accordance with the provisions of its Articles
of Incorporation.

The Company's principal offices are located at 929 West Sprague
Avenue, Spokane, Washington 99204. Its telephone number is (509)
838-3111. The Company also maintains offices at 1000 Hubbard, Coeur
d'Alene, Idaho.

The Offering
INVESTMENT CERTIFICATES:

The Offering . . . . $40,000,000 of Certificates due from six months to
one hundred twenty months after date of issue, as selected by the
purchaser. See "Description of Certificates." There is no minimum
amount which must be sold.

The Certificates . . . . The Certificates are unsecured indebtedness of
the Company which will rank equally with the Company's other unsecured
obligations. At September 30, 1993, the Company had outstanding
approximately $21,959,000 (principal and compounded and accrued
interest) of certificates and similar obligations and approximately
$23,000 (principal and accrued interest) of collateralized debt. The
Certificates are not insured by any governmental or private agency nor
are they guaranteed by the Company's parent corporation, Metropolitan.

Use of Proceeds . . . . To provide funds for Receivable investments,
other investments, retiring maturing certificates, preferred stock
dividends and for general corporate purposes which may include
acquisition of affiliates as part of a corporate reorganization. See
"Use of Proceeds" and "Certain Transactions."

Principal and Interest Payments . . . . Interest will be paid monthly,
<PAGE>

quarterly, semiannually or annually (without compounding) or if
remaining with the Company to compound semiannually, as selected by the
holder of the Certificates. Holders may elect to be paid equal monthly
installments of principal and interest pursuant to an amortization
schedule selected by the holder. The stated rates of interest on
unissued Certificates offered hereby may be changed from time to time
by the Company, but any such change shall not affect the rate of
interest on any Certificates issued prior to the change. See
"Description of Certificates."

Trustee . . . . West One Bank, Idaho, N.A. See "Description of
Certificates".

PREFERRED STOCK:

Offering . . . . 150,000 shares of Variable Rate Cumulative Preferred
Stock, $10 par value, Series S-1, (the "Preferred Stock"), being
offered on a continuous basis at $100 per share.

Distributions. . . . Distributions (which may be classified as
dividends or returns of capital for federal income tax purposes) on
Preferred Stock offered hereunder are cumulative from the date of issue
and, when and as declared, are payable monthly at the rates described
on the cover page of the Prospectus based on the price of $100 per
share. See "Description of Preferred Stock-Distributions".

Liquidation Rights . . . . $100 per share of Preferred Stock, plus
declared and unpaid dividends and junior to all debts of the Company.
See "Description of Preferred Stock - Liquidation Rights".

Redemption Upon Call by the Company . . . . The shares of Preferred
Stock are redeemable, in whole or in part, at the option of the
Company, upon not less than 30 nor more than 60 days' notice by mail,
at a redemption price of $102 per share, if redeemed prior to January
1, 1995 and $100 per share if redeemed thereafter, plus, in each case,
accrued and unpaid dividends to the date fixed for redemption. See
"Description of Preferred Stock-Redemption of Shares".

Discretionary Redemption Upon Request of Holder . . . . Subject to
certain limitations, the Company may, in its sole discretion, accept
shares of Preferred Stock for redemption upon the receipt of
unsolicited written requests for redemption of blocks of shares from
any holder. Redemption prices in such event will be $97 per share if
the redemption occurs during the first year after the date of original
issuance of the shares and $99 per share thereafter plus, in each case,
any declared but unpaid dividends. The Company will not redeem shares
at the holder's request during the first three years after the initial
sale of such shares except in those cases involving the death or major
medical emergency of the holder or any joint holder. Any such
discretionary redemptions will also depend on the Company's financial
condition, including its liquidity position. See "Description of
Preferred Stock - Redemption of Shares". The Company, through its
affiliated broker/dealer, intends to use its best efforts to maintain
an in-house trading list for holders of Preferred Stock following the
termination of the offering. See "Certain Investment
Considerations-Risk Factors".

Voting Rights . . . . The holders of Preferred Stock have no voting
<PAGE>

rights except (i) as expressly granted by the State of Idaho law and
(ii) in the event distributions payable on Preferred Stock are in
arrears in an amount equal to twenty-four or more full monthly
distributions, or more per share. See "Description of Preferred
Stock-Voting Rights".

Use of Proceeds . . . . Provide funds for Receivables investments,
other investments, retiring maturing certificates, preferred stock
dividends and for general corporate purposes which may include the
acquisition of affiliates as part of a corporate reorganization. See
"Use of Proceeds" and "Certain Transactions".

Federal Income Tax Considerations. . . . In the event the Company has
earnings and profits for federal income tax purposes in any future
year, the distributions paid in that year will constitute taxable
income to the recipient to the extent of such earnings and profits. The
Company is unable to predict the future character of its distributions.
The Company will treat distributions made with respect to Preferred
Stock in a manner similar to other dividends and distributions. Under
current income tax law, such items are not deductible to the Company in
computing taxable income. The Company believes that distributions made
with respect to Preferred Stock will be characterized as tax free
returns of capital for federal income tax purposes to the extent that
the Company has no current or accumulated earnings and profits as
computed for federal income tax purposes. Such distributions are tax
free to both corporate and individual holders to the extent of their
basis in the stock. Distributions in excess of the holder's basis are
considered capital gain income. In the event a holder of Preferred
Stock disposes of the stock in a taxable sale or exchange, taxable gain
may be recognized by the holder to the extent prior distributions were
a tax-free return of capital. Corporations generally can exclude 70%
of taxable dividends received in any year (which may be reduced if it
uses debt to acquire or continue to carry the Preferred Stock).
Purchasers are advised to consult their own tax advisors with respect
to the federal income tax treatment of distributions made. See
"Description of Preferred Stock-Federal Income Tax Consequences of
Distributions."

<PAGE>

SELECTED FINANCIAL DATA

The financial data shown below as of and for the years ended
September 30, 1993, 1992, 1991 and for the period July 25, 1990 (date
of incorporation) through September 30, 1990 (other than the Ratio of
Earnings to Fixed Charges) have been derived from, and should be read
in conjunction with, the Company's financial statements and related
notes appearing elsewhere herein. The financial statements as of and
for the year ended September 30, 1993 have been audited by Coopers &
Lybrand. The financial statements as of and for the years ended
September 30, 1992, and 1991 and for the period July 25, 1990 (date of
incorporation) through September 30, 1990, have been audited by BDO
Seidman.
<TABLE>
<CAPTION>
July 25, 1990
(Date of
Year Ended Year Ended Year Ended Incorporation)
September 30, September 30, September 30, Through
September 30,
1993 1992 1991 1990
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:

Revenues $ 2,815,624 $ 2,435,843 $1,026,405 $ 8,229
========== ========== ========== ==========
Income before
extraordinary item $ 283,107 $ 611,595 $ 238,205 $ 5,345
Extraordinary item (1) --- 49,772 -- --
---------- ---------- ---------- ----------
Net Income $ 283,107 $ 661,367 $ 238,205 $ 5,345
========== ========== ========== ==========
Weighted average number
of common shares
outstanding 20,000 20,000 20,000 20,000

Per Common Share Data:
Income before
extraordinary
item $ 14.15 $ 30.58 $ 11.91 $ .27
Extraordinary item -- 2.49 -- --
---------- ---------- ---------- ----------
Net income $ 14.15 $ 33.07 $ 11.91 $ .27
========== ========== ========== ==========
Ratio of Earnings
to Fixed
Charges: 1.24 1.53 1.37 --

BALANCE SHEET DATA:
Due from/(to) Parent
Company, net $ 1,710,743 $ (400,365) $(5,528,617) $ (22,010)
Total Assets $25,441,605 $17,696,628 $16,718,823 $2,027,355

Debt Securities
and Other
Debt Payable $21,982,078 $14,289,648 $ 8,451,106 --

Stockholder's Equity $ 3,188,024 $ 2,904,917 $ 2,243,550 $2,005,345

<FN>
(1) Benefit from utilization of net operating loss carryforwards.
</TABLE>

<PAGE>

CERTAIN INVESTMENT CONSIDERATIONS - RISK FACTORS

General

1. Limited Operating History: The Company was incorporated on
July 25, 1990, and has been engaged in profitable business operations
since December 1990. Due to such limited operating history no
assurances can be given as to the continued profitability of the
Company, nor are there any guarantees of performance of the Receivables
described herein, although the Company's officers who are also officers
and/or directors of Metropolitan have had extensive experience in the
purchase and servicing of such Receivables. See "Business",
"Management", and "Certain Transactions". The Company's ability to pay
the principal and interest on the Certificates as they become due and
dividends on Preferred Stock will depend on the Company's continued
profitability, measured principally by its ability to maintain a
positive interest spread between the rates on the Certificates and the
returns on its investments.

2. Impact of Interest Rates and Economic Conditions: The results
of operations for financial institutions, including the Company, may be
materially and adversely affected by changes in prevailing economic
conditions, including changes in interest rates. Rates paid on
certificates tend to rise more quickly in a rising interest rate
environment than do rates on Receivables. Presently, however, the
Company's interest sensitive assets will reprice more quickly in 1994
than its interest sensitive liabilities. Additionally, the extent to
which borrowers prepay loans is affected by prevailing interest rates.
When interest rates increase, borrowers are less likely to prepay
loans, whereas when interest rates decrease, borrowers are more likely
to prepay loans. Prepayments may or may not adversely affect the
levels of Receivables retained in the Company's portfolio, as well as
its net interest income. See "Business - Real Estate Receivable
Investments - Yield and Discount Considerations". Recently, the
interest rate environment has been one of declining rates and a steep
"yield curve". That is, long-term rates are significantly higher than
short-term rates. This environment has had a positive effect on the
Company's profitability. It is unlikely, however, that this favorable
interest rate environment will continue indefinitely. The Company is
exposed to the risk that its interest expense may rise more quickly
than its interest income. Currently, the Company's assets reprice
sooner than do its liabilities and, therefore, the Company's net
interest margin may increase if interest rates increase. Conversely,
if interest rates decrease, the Company's net interest income would
likely decrease. See "Management's Discussion and Analysis of
Financial Conditions and Results of Operations - Asset/Liability
Management."

3. Dependence Upon Parent Corporation and Management: All
decisions with respect to the day-to-day management of the Company will
be made exclusively by its officers, who are also officers and/or
directors of Metropolitan, the Company's parent, which is responsible
for the selection and acquisition of Receivables, the servicing and
management of such Receivables, and other administrative services for
the Company. These arrangements are expected to continue indefinitely.
See "Certain Transactions." However, the Company is not contractually
restricted from obtaining these services from outside sources. The
Receivables acquired through Metropolitan consist of those considered
<PAGE>

acceptable by Metropolitan for its own portfolio but considered excess
to Metropolitan's needs. See "Business". Through September 30, 1993,
the Receivables were purchased by the Company at Metropolitan's cost of
acquisition. Metropolitan may charge an underwriting fee to the Company
for underwriting services in connection with such transactions in the
future.

4. Conflicts of Interest: Since the Company and Metropolitan are
affiliated and all of the Company's officers and directors are also
officers and directors of Metropolitan, certain conflicts of interest
may arise between the companies. The purchasers of the Certificates
and Preferred Stock must, to a great extent, rely on the integrity and
corporate responsibilities of the Company's officers and directors to
assure themselves that they will not abuse their discretion in
selecting Receivables for purchase from Metropolitan, and in making
other business decisions. The officers and directors expect to devote
as much time as necessary to the affairs of the Company. See Note 7,
Financial Statements. The Company may compete with Metropolitan in the
acquisition of Receivables. Metropolitan will also be entitled to
receive dividends from the Company except to the extent that applicable
corporate law prohibits the payment of dividends if the effect would be
the insolvency of the Company. There is otherwise no legal obligation
for Metropolitan to maintain the Company's net worth or to support the
Company's operations.

5. Use of Leverage and Related Indebtedness: The Company's
primary sources of new financing for its operations are the sale of
certificates and preferred stock. See Business - Method of Financing
and Management's Discussion and Analysis of Financial Condition and
Results of Operations. The Company's principal sources of cash flow
include Receivable payments and proceeds from the sale of certificates
and preferred stock. To the extent the Company's cash flow is
insufficient or unavailable for the payoff of certificates which mature
during the period ending January 31, 1995, portions of the net proceeds
from this Certificate and Preferred Stock offering may be used for such
purpose. See "Use of Proceeds". Approximately $1,918,000 in principal
amount of debt securities will mature between January 31, 1994 and
January 31, 1995. The Company's ability to repay its other outstanding
obligations, including those created by the sale of the securities
described herein, may be contingent upon the success of future public
offerings of certificates and preferred stock.

6. Concentration of Investments in Real Estate Receivables:
Approximately 77% of the Company's assets at September 30, 1993 were
invested in Receivables. As of that date approximately 67% of such
investments were secured by first position liens with 33% secured by
second or lower position liens. Although there exists a generally
inherent greater risk of loss with respect to non-first position lien
receivables, generally higher yields are required for such investments.
See "Business - Investment in Real Estate Secured Receivables." As of
September 30, 1993, approximately 21% of the Receivable portfolio was
collateralized by real estate located in the Pacific Northwest
(Washington, Oregon, Idaho and Montana) and approximately 9% by
property located in California and approximately 27% by property
located in Hawaii. See Note 2, Financial Statements, and
"Business-Plan of Operation-Method of Financing." All such Receivable
investments are subject to a risk of the obligor's default on the
obligation and loss in the event of foreclosure. The risk of default
<PAGE>

or loss on resale can be affected by changes in general or local
economic conditions, property values, changes in zoning, land use,
environmental laws and other legal restrictions including restriction
and timing on methods of foreclosure.

Relative to Certificates

1. Lack of Indenture Restrictions and Related Indebtedness: The
Indenture pursuant to which the Certificates are issued does not
restrict the Company's ability to issue additional certificates or to
incur other debt. Neither does the Indenture require the Company to
maintain any specified financial ratios, minimum net worth or minimum
working capital. The Certificates are senior in liquidation to all
outstanding equity securities of the Company, are subordinate only to
the Company's collateralized debt and are on a parity with all other
outstanding certificates, unsecured accounts payable and accrued
liabilities. There are no limitations on the Company's ability to
incur collateralized debt. As of September 30, 1993, the Company's
collateralized debt and related accrued interest amounted to $23,000.
There was $20,082,000 of principal plus compounded and accrued interest
of $1,877,000 on outstanding certificates on September 30, 1993.

2. Absence of Insurance and Guarantees: The Certificates are
neither insured by the Company's parent, nor any governmental agency
(as are certain investments in financial institutions such as banks,
savings and loans or credit unions) nor are they guaranteed by any
public agency or private entity. It should also be noted that the
Company is not subject to any generally applicable governmental
limitations on its own borrowing. In these respects, the Company is
similar to most other commercial enterprises which sell debt to public
investors, but dissimilar to those financial institutions providing
insurance against the risk of loss to investors. The investment risk
in the Certificates is thus higher than the risk incurred by investors
in such insured financial institutions. There are no provisions for a
sinking fund for repayment of the Certificates.

3. Absence of Trading Market/Liquidity: It is not anticipated
that a trading market for the Certificates will develop. The
Certificates are not subject to redemption prior to maturity.
Prepayments pursuant to the "prepayment on death" provision described
in "Description of Certificates" or upon mutual agreement between the
Company and the Certificateholders will not constitute redemptions.
Prospective investors should carefully consider their needs for
liquidity before investing in the Certificates and upon investing,
should be prepared to hold the Certificates until maturity. See
"Description of Securities".

Relative to Preferred Stock

1. Effect of Certain Subordination and Liquidation Rights: The
liquidation preference of Preferred Stock offered herein is $100 per
share. In the event of liquidation of the Company, outstanding shares
of Preferred Stock are at parity with the liquidation preference of all
other series of preferred stock of the Company which may be
outstanding, and are subordinate to all outstanding debt of the Company
including its Certificates. Preferred Stock is preferred in liquidation
to the Company's common stock. As of September 30, 1993, total assets
of the Company were approximately $25,442,000 and the total liabilities
<PAGE>

of the Company ranking senior in liquidation preference to Preferred
Stock were approximately $22,254,000.

2. Federal Income Tax Considerations: To the extent that the
Company may not have current or accumulated earnings and profits as
computed for federal income tax purposes, the Company believes that
distributions made with respect to Preferred Stock would be
characterized as tax free returns of capital for federal income tax
purposes. A tax free distribution reduces a shareholder's basis to the
extent of the distribution received. Such distributions are tax free to
both corporate and individual holders to the extent of their basis in
the stock. Distributions in excess of the holder's basis are
considered capital gain income. In the event a holder of Preferred
Stock disposes of the stock in a taxable sale or exchange, taxable gain
may be recognized by the holder to the extent prior distributions were
a tax-free return of capital. In the event the Company has earnings
and profits for federal income tax purposes in any future year, the
distributions paid in that year will constitute taxable income to the
recipient to the extent of such earnings and profits. Corporate
holders generally can exclude 70% of taxable dividends received in any
year (which will be reduced if it has debt that is directly
attributable to the holder's investment in the Preferred Stock). The
Company is unable to predict the future character of its distributions.
Purchasers are advised to consult their own tax advisors with respect
to the federal income tax treatment of distributions made. See
"Description of Preferred Stock-Federal Income Tax Consequences of
Distributions."

3. Limited Marketability of Shares: The Preferred Stock is not
expected to be traded on any National or Regional Stock Exchange and no
independent public market for Preferred Stock is anticipated. At
present, management does not anticipate applying for a listing for such
public trading. In order to provide the parent company's preferred
shareholders with some liquidity, the Company's broker/dealer affiliate
has operated an in-house trading list to match buyers and sellers of
the parent company's preferred stock. The Company will use its best
efforts to make this listing available for the Preferred Stock offered
hereunder following completion of this offering. With limited
exceptions, the Company has established a policy that all preferred
shareholders must place their shares for sale on the in-house trading
list for 60 consecutive days before the Company will entertain a
request for redemption. There is no assurance that the shares will be
sold within the 60 day period. There is no assurance that the Company
will redeem the shares if they have not sold within the 60 day period.
There can be no assurance that this system will operate, nor that it
will provide liquidity comparable to securities traded on recognized
public stock exchanges. See "Description of Preferred Stock-Redemption
of Shares".

4. Control by Common Shareholders: The Common Stock is the only
class of the Company's stock carrying voting rights. Common
stockholders now hold, and upon completion of this offering will
continue to hold, effective control of the Company except as described
below. The Board resolution authorizing the Preferred Stock provides
that in the event distributions payable on any shares of preferred
stock, including the Preferred Stock offered hereunder, are in arrears
in an amount equal to twenty four full monthly dividends or more per
share, then the holders of Preferred Stock and all other outstanding
<PAGE>

preferred stock shall be entitled to elect a majority of the Board of
Directors of the Company. Preferred Stock shareholders may also become
entitled to certain other voting rights as required by law. See
"Description of Preferred Stock-Voting Rights".

5. Limitations on Redemption and Restrictions on Distributions:
Preferred Stock is designed as a long term investment in the equity of
the Company, not as a short-term liquid investment. The Preferred
Stock is redeemable solely at the option of the Company, and with
limited exceptions is specifically not redeemable for 3 years following
its purchase. In addition, the Company may not purchase or acquire any
shares of Preferred Stock in the event that cumulative dividends
thereon have not been paid in full except pursuant to a purchase or
exchange offer made on the same terms to all holders of Preferred
Stock. See "Description of Preferred Stock-Redemption of Shares". The
Company is restricted from making distributions on Preferred Stock in
the event that any distributions to which the holders of other series
of preferred stock are entitled to have not been paid. See "Description
of Preferred Stock-Distributions."

<PAGE>

DESCRIPTION OF SECURITIES

Description of Certificates

The Certificates will be issued under a Trust Indenture, as
amended, dated as of November 15, 1990, between the Company and West
One Bank, Idaho, N.A. as Trustee (the "Trustee"). The following
statements under this caption relating to the Certificates 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 the Indenture is filed as an exhibit to the Registration Statement
of which this Prospectus is a part and is incorporated in this
Prospectus by reference.

General

The Certificates will represent general unsecured obligations of
the Company and will be issued in fully registered form without
coupons, in fractional denominations of $0.01 or more. The Certificates
will be sold at 100% of the principal amount, subject to the stated
minimum investment amount requirements. The Certificates will have the
maturities and the interest rates set forth on the cover page of this
Prospectus. The stated interest rates, maturities, minimum investment
amounts and incremental denominations of unissued Certificates may be
changed at any time by the Company. Any such change will have no effect
on the terms of the previously sold certificates.

Certificates may be transferred or exchanged for other
Certificates of the same series of a like aggregate principal amount,
subject to the limitations provided in the Indenture. No service
charge will be made for any transfer or exchange of Certificates. The
Company 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 date of issue until maturity. The
Certificates are not convertible into capital stock or other securities
of the Company.

The Certificates are not subject to redemption prior to maturity,
but may be prepaid pursuant to the prepayment on death provision
described below or upon mutual agreement between the holder of the
Certificate and the Company.

Payment of Principal and Interest

Interest will be payable in cash to the Certificateholder(s) under
one of several plans of interest payment. The purchaser may elect to
have interest paid on a monthly, quarterly, semiannual or annual basis,
without compounding or elect to accumulate interest with compounding
semiannually at the stated interest rate. Certificateholders make the
interest payment election at the time of purchase of the Certificates.
The interest payment election may be changed at any time by written
notice to the Company. Under the compounding option, the
Certificateholder(s), upon written notice to the Company, may withdraw
the interest accumulated during the last two completed semiannual
compounding periods as well as the interest accrued from the end of the
last compounding period to the date the Company receives the notice.
Amounts compounded prior to the last two compounding periods are
<PAGE>

available only at maturity.

At the election of the Certificateholder 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
Certificateholder commencing 30 days from the issue date of the
Certificate until maturity. The amount of each installment will be
determined by the amortization term designated by the Certificateholder
at the time the Certificate is purchased. The minimum amortization
term is 60 months.

Certificateholders will be notified in writing approximately 30
days prior to the date their Certificates will mature. The amounts due
on maturity are placed in a separate non interest-bearing bank trust
account until paid to the Certificateholder(s). Certificates do not
earn interest after the maturity date. Unless otherwise requested by
the Certificateholder, the Company will pay the principal and
accumulated interest due on the matured certificate to the
Certificateholder(s) in cash at the Company's main office, or by check
mailed to the address of the Certificateholder(s).

Prepayment on Death

In the event of the death of a registered owner of a Certificate,
any party entitled to receive some or all of the proceeds of the
Certificate 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 penalties
will be assessed. Any request for prepayment shall be made to the
Company in writing and shall be accompanied by the Certificate and
evidence satisfactory to the Company of the death of the registered
owner or joint registered owner. Before prepayment, the Company 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 the
Company's discretion, it considers necessary to the fulfillment of its
obligations.

Related Indebtedness

The Indenture pursuant to which the Certificates are issued does
not restrict the Company's ability to issue additional Certificates or
to incur other debt. The Indenture does not require the Company to
maintain any specified financial ratios, minimum net worth or minimum
working capital. Certificates will not be guaranteed or insured by any
governmental or private agency. The Certificates offered hereby are
senior in liquidation to all outstanding equity securities of the
Company. They are subordinate to the Company's collateralized debt and
are on a parity with all other outstanding certificates, unsecured
accounts payable and accrued liabilities. The amount of outstanding
certificates on September 30, 1993, (including compounded and accrued
interest) was $21,959,000. There are no limitations on the Company's
ability to incur collateralized debt. Collateralized debt outstanding
on that date of $23,000 (principal and accrued interest) consisted
primarily of senior liens on the real estate collateral for the
Company's real estate receivables.
<PAGE>

West One Bank, the Trustee, is obligated under the Indenture to
oversee and, if necessary, to take action to enforce fulfillment of the
Company's obligations to Certificateholders. The Trustee is a national
banking association headquartered in Boise, Idaho, with a combined
capital and surplus in excess of $200,000,000. The Company and certain
of its affiliates maintain deposit accounts with and expect to, from
time to time, borrow money from the bank and conduct other banking
transactions with it. At September 30, 1993 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
the Company 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 the failure of the Company to pay
interest on any Certificate for a period of 30 days after it becomes
due and payable; the failure to pay the principal or any required
installment thereof of any Certificate when due; the failure to perform
any other covenant in the Indenture for 60 days after notice; and
certain events in bankruptcy, insolvency or reorganization with respect
to the Company. Upon the occurrence of an Event of Default, either the
Trustee or the holders of 25% or more in principal amount of
Certificates then outstanding may declare the principal of all the
Certificates to be due and payable immediately.

The Trustee must give the Certificateholders 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 interest
of the Certificateholders, except if the default consists of failure to
pay principal or interest on any Certificate.

Subject to certain conditions, any such default, except failure to
pay principal or interest when due, may be waived by the holders of a
majority (in aggregate principal amount) of the Certificates 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 Certificates before acting at
their direction.

Within 120 days after the end of each fiscal year the Company must
furnish to the Trustee a statement of certain officers of the Company
concerning their knowledge as to whether or not the Company is in
default under the Indenture.

Modification of the Trust Indenture

Certificateholders' rights may be modified with the consent of the
holders of 66 2/3% of the outstanding principal amounts of
Certificates, and 66 2/3% of each series specially affected. In
general, no adverse modification of the terms of payment and no
modification reducing the percentage of Certificates required for
modification is effective against any Certificateholder without his or
her consent.
<PAGE>

Restrictions on Consolidation, Merger, etc.

The Company may not consolidate with or merge into any other
corporation or transfer substantially all its assets unless either the
Company is the continuing corporation formed by such consolidation, or
into which the Company is merged, 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 the Company under the
Indenture and certain other conditions precedent are fulfilled. The
Indenture contains no other provisions or covenants which afford
holders of the Certificates special protection in the event of a highly
leveraged buyout transaction.

DESCRIPTION OF CAPITAL STOCK

Holders of shares of Common Stock are entitled to one vote per
share on all matters to be voted on by the shareholders. Subject to
the rights of holders of outstanding shares of Preferred Stock, if any,
the holders of Common Stock are entitled to receive such dividends, if
any, as may be declared from time to time by the Board of Directors in
its discretion from funds legally available, and upon liquidation or
dissolution of the Company are entitled to receive all assets available
for distribution to common shareholders. The Common Stock has no
preemptive or other subscription rights, and there are no conversion
rights or redemption or sinking fund provisions with respect to such
shares. All outstanding shares of Common Stock are fully paid and
nonassessable. Currently, Metropolitan holds 100% of the Common Stock
of the Company.

DESCRIPTION OF PREFERRED STOCK

This offering consists of 150,000 shares of Variable Rate
Cumulative Preferred Stock, Series S-1 (hereinafter referred to as
"Preferred Stock"). All of the shares of Preferred Stock offered by
the Company, hereby, when issued and sold against the consideration set
forth in the prospectus will be validly issued, fully paid and
nonassessable. The relative rights and preferences of Preferred Stock
have been fixed and determined by the Board of Directors of the Company
and are set forth in the Preferred Stock Authorizing Resolution (the
"Authorizing Resolution").

The following statements relating to the Preferred Stock are
summaries and do not purport to be complete and are qualified in their
entirety by reference to the Preferred Stock Authorizing Resolution, a
copy of which has been filed with the Commission as an exhibit to the
Registration Statement and is also available for inspection at the
principal office of the Company.

Distributions

Distributions on Preferred Stock are cumulative and are to be
declared monthly on the first business day of the month payable to the
shareholders of record as of the fifth calendar day of each month
commencing on the month following commencement of the offering.
Distributions are to be paid in cash on the twentieth calendar day of
each month in an amount equal to the offering price of $100 per share
multiplied by the distribution rate divided by twelve. The
<PAGE>

distribution rate will be the "Applicable Rate" as defined herein
subject to the authority of the Company's Board of Directors to
authorize, by resolution, a higher rate.

The Applicable Rate for any monthly distribution period cannot be
less than 6% or greater than 14% per annum. The Applicable Rate for any
monthly distribution period shall be (i) the highest of the Treasury
Bill Rate, the Ten-Year Constant Maturity Rate and the Twenty-Year
Constant Maturity Rate (each as hereinafter defined), (ii) plus one
half of one percentage point. Should the Company determine in good
faith that one or more of such rates cannot be determined for any
distribution period, then the Applicable Rate of such period shall be
the higher of whichever of such rates can be so determined, plus one
half of one percentage point. Should the Company determine in good
faith that none of such rates can be determined for any distribution
period, then the Applicable Rate in effect for the preceding
distribution period shall be continued for such distribution period.
The distribution rate for each monthly distribution period shall be
calculated as promptly as practical by the Company. The Company will
cause notice of the distribution rate to be enclosed with the next
mailed distribution payment check. In making such calculation, the
Treasury Bill Rate, Ten-Year Constant Maturity Rate and Twenty-Year
Constant Maturity Rate shall each be rounded to the nearest five
hundredths of a percentage point.

The Company's Board of Directors has adopted a resolution to
authorize a distribution rate on the Preferred Stock at one percentage
point higher than the Applicable Rate. Such higher distribution rate
will continue from month to month until the Board elects to terminate
it.

Treasury Bill Rate

rate shall be published during the relevant Calendar Period) for all of
the U.S. Treasury Bills then having maturities of not less than 80 nor
more the 100 days , as published during such Calendar Period by the
Federal Reserve Board or, if the Federal Reserve Board shall not
publish such rates, by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Company. In the event
that the Company determines in good faith that for any reason the
Company cannot determine the Treasury Bill Rate for any distribution
period as provided above in this paragraph, the Treasury Bill Rate for
such distribution period shall be the arithmetic average of the per
annum market discount rates based upon the closing bids during such
Calendar Period for each of the issues of marketable noninterest
bearing U.S. Treasury securities with a maturity of not less than 80
nor more than 100 days from the date of each such quotation, as quoted
daily for each business day in New York City (or less frequently if
daily quotations shall not be generally available) to the Company by at
least three recognized primary U.S Government securities dealers
selected by the Company. In the event that the Company determines in
good faith that for any reason the Company cannot determine the
Treasury Bill Rate for any distribution period as provided above in
this paragraph, the Treasury Bill Rate for such distribution period
shall be the arithmetic average of the per annum market discount rates
based upon the closing bids during such Calendar Period for each of the
issues of marketable interest bearing U.S. Treasury securities with a
maturity of not less than 80 nor more than 100 days from the date of
each such quotation, as quoted daily for each business day in New York
City (or less frequently if daily quotations shall not be generally
available) to the Company by at least three recognized primary U.S.
Government securities dealers selected by the Company.

Ten-year Constant Maturity Rate

Special Securities (as defined below) then having maturities of not
less than eight nor more than twelve years, as published during such
Calendar Period by the Federal Reserve Board or, if the Federal Reserve
Board shall not publish such yields, by any Federal Reserve Bank or by
any U.S. Government department or agency selected by the Company. In
the event that the Company determines in good faith that for any reason
the Company cannot determine the Ten Year Constant Maturity Rate for
any distribution period as provided above in this paragraph, then the
Ten-Year Constant Maturity Rate for such distribution period shall be
the arithmetic average of the per annum average yields to maturity
based upon the closing bids during such Calendar Period for each of the
issues of actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities) with a final maturity date
not less than eight or more then twelve years from the date of each
quotation, as quoted daily for each business day in New York City (or
less frequently if daily quotations shall not be generally available)
to the Company by at least three recognized primary U.S. Government
securities dealers selected by the Company.

Twenty-Year Constant Maturity Rate

Except as provided below in this paragraph, the "Twenty-Year
Constant Maturity Rate" for each distribution period shall be the
arithmetic average of the two most recent weekly per annum Twenty-Year
Average Yields (or the one weekly per annum Twenty-Year Average Yield,
if only one such yield shall be published during the relevant Calendar
Period), as published weekly by the Federal Reserve board during the
Calendar Period immediately prior to the ten calendar days immediately
preceding the first day of the distribution period for which the
distribution rate on Preferred Stock is being determined. In the event
that the Federal Reserve Board does not publish such a weekly per annum
Twenty-Year Average Yield during such Calendar Period, then the
Twenty-Year Constant Maturity Rate for such distribution period shall
be the arithmetic average of the two most recent weekly per annum
Twenty-Year Average Yields (or the one weekly per annum Twenty-Year
Average Yield, if only one such Yield shall be published during such
Calendar Period), as published weekly during such Calendar Period by
any Federal Reserve Bank or by any U.S. Government department or agency
selected by the Company. In the event that a per annum Twenty-Year
Average Yield shall not be published by the Federal Reserve Board or by
any Federal Reserve Bank or by any U.S. Government department or agency
during such Calendar Period, then the twenty-Year Constant Maturity
Rate for such distribution period shall be the arithmetic average of
the two most recent weekly per annum average yields to maturity (or the
one weekly average yield to maturity, if only one such yield shall be
published during such Calendar Period) for all of the actively traded
marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) then having maturities of not less than eighteen
nor more than twenty-two years, as published during such Calendar
Period by the Federal Reserve board or, if the Federal Reserve Board
shall not publish such yields, by any Federal Reserve Bank or by any
U.S. Government department or agency selected by the Company.

In the event the Company determines in good faith that for any
reason the Company cannot determine the Twenty-Year Constant Maturity
rate for any distribution period as provided above, then the
Twenty-Year Constant Maturity Rate for such distribution period shall
be the arithmetic average of the per annum average yields to maturity
<PAGE>

based upon the closing bids during such Calendar Period for each of the
issues of actively traded marketable U.S. Treasury Fixed interest rate
securities (other than Special Securities) with a final maturity date
of not less than eighteen or more than twenty-two years from the date
of each such quotation, as quoted daily for each business day in New
York City (or less frequently if daily quotations shall not be
generally available) to the Company by at least three recognized
primary U.S. Government securities dealers selected by the Company.

As used herein, the term "Calendar Period" means a period of 14
calendar days; the term "Special Securities" means securities which
may, at the option of the holder, be surrendered at face value in
payment of any federal estate tax or which provide tax benefits to the
holder and are priced to reflect such tax benefits or which were
originally issued at a deep or substantial discount; the term "Ten Year
Average Yield" means the average yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate securities (adjusted to
constant maturities of ten years); and the term "Twenty-Year Average
Yield" means the average yield of maturities for actively traded
marketable U.S. treasury fixed interest rate securities (adjusted to
constant maturities of 20 years).

Restrictions on Distributions

The Company may not declare or pay a distribution on any share of
Preferred Stock for any distribution period unless, at the same time a
like distribution shall be declared or paid on all shares of preferred
stock then issued and outstanding and entitled to receive
distributions. See "Capitalization".

So long as any shares of Preferred Stock are outstanding, and
unless the full cumulative dividends on all outstanding preferred
shares shall have been paid or declared and set apart for all past
dividend periods, the Company may not: (i) declare or pay or set aside
for payment any dividend (other than a dividend in common stock or in
any other stock ranking junior to Preferred Stock as to dividends and
upon liquidation and other than as provided in the foregoing
paragraph); (ii) declare or pay any other distribution upon common
stock or upon any other stock ranking junior to or on a parity with
Preferred Stock as to dividends or upon liquidation; or (iii) redeem,
purchase or otherwise acquire common stock or any other stock of the
Company ranking junior to or on a parity with Preferred Stock as to
dividends or upon liquidation for any consideration (or pay or make
available any funds for a sinking fund for the redemption of any shares
of any such stock) except by conversion into or exchange for stock of
the Company ranking junior to Preferred Stock as to dividends and upon
liquidation.

The Company may make distributions ratably on the shares of
Preferred Stock and shares of any stock of the Company ranking on a
parity therewith with regard to the payment of dividends, in accordance
with the sums which would be payable on such shares if all dividends,
including accumulations, if any, were declared and paid in full. As of
the date hereof, no dividends on the Company's common stock are in
arrears. No interest will be paid for or on account of any unpaid
dividends.

<PAGE>

Liquidation Rights

In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the holders of shares of
Preferred Stock will be entitled to receive out of the assets of the
Company available for distribution to stockholders, before any
distribution of assets is made to holders of common stock or any stock
of the Company ranking, upon liquidation, junior to Preferred Stock,
liquidating distributions in the amount of $100 per share plus declared
and unpaid dividends. Preferred Stock is junior in liquidation to
outstanding debt of the Company. As of September 30, 1993, the total
liabilities of the Company ranking senior in liquidation preference to
Preferred Stock were $22,254,000. There were no previous series of
preferred stock issued and outstanding as of September 30, 1993. See
"Business - Regulation". There are no limitations on the Company's
ability to incur additional secured indebtedness. See "Capitalization
and Certain Investment Considerations - Risk Factors".

The Preferred Stock Authorizing Resolution provides that, without
limitation, the voluntary sale, lease or conveyance of all or
substantially all of the Company's property or assets to, or its
consolidation or merger with, any other corporation shall not be deemed
to be a liquidation, dissolution or winding up of the Company. If,
upon any voluntary or involuntary liquidation, dissolution or winding
up of the Company, the amounts payable with respect to Preferred Stock
and any other shares of stock of the Company ranking as to any such
distribution on a parity with Preferred Stock are not paid in full, the
holders of Preferred Stock and of such other shares will share ratably
in any such distribution of assets of the Company in proportion to the
full respective preferential amounts to which they are entitled. After
payment of the full amount of the liquidating distribution to which
they are entitled, the holders of shares of Preferred Stock will not be
entitled to any further participation in any distribution of assets by
the Company.

Redemption of Shares

Upon call by the Company: . . . The shares of Preferred Stock are
redeemable, in whole or in part, only at the option of the Company at
a redemption price of $102 per share if redeemed prior to January 1,
1995 and $100 per share if redeemed thereafter plus, in each case,
declared and unpaid dividends to the date fixed for redemption.

Discretionary Redemption Upon Request of the Holder: . . . As
provided in the Preferred Stock Authorizing Resolution, the shares of
Preferred Stock are not redeemable at the option of the holder. If,
however, the Company receives an unsolicited written request for
redemption of a block of shares from any holder, the Company may, in
its sole discretion and subject to the limitations described below,
accept such shares for redemption. Any shares so tendered, which the
Company in its discretion, allows for redemption shall be redeemed by
the Company directly, (and not from or through a broker or dealer), at
a price equal to $97 per share, plus any declared but unpaid dividends
to date if redeemed during the first year after the date of original
issuance and $99 per share plus any declared but unpaid dividends if
redeemed thereafter. The Company may change such optional redemption
prices at anytime with respect to unissued shares of Series S.

<PAGE>

There can be no assurance that the Company's financial condition
will allow it to exercise its discretion to accept any particular
request for redemption of Preferred Stock. The Company will not redeem
any such shares tendered for redemption if to do so would be unsafe or
unsound in light of the Company's financial condition (including its
liquidity position); if payment of interest or principal on any
outstanding instrument of indebtedness is in arrears or in default; or
if payment of any dividend on Preferred Stock or share of any stock of
the Company ranking at least on a parity therewith is in arrears as to
dividends. In the event that cumulative dividends on Preferred Stock
have not been paid in full, the Company may not purchase or acquire any
shares of Preferred Stock otherwise than pursuant to a purchase or
exchange offer made on the same terms to all holders of Preferred
Stock.

As provided in the Preferred Stock Authorizing Resolution, for a
period of three years from the date of initial sale of each share of
Preferred Stock, any such optional redemption of such share shall occur
only upon the death or major medical emergency of the holder or any
joint holder of the share requested to be redeemed.

Voting Rights

The Preferred Stock has no voting rights except as provided in the
Preferred Stock Authorizing Resolution and except as required by Idaho
State Law regarding amendments to the Company's Articles of
Incorporation which adversely affect holders of such shares as a class
and requires approval of a majority of the outstanding shares entitled
to vote.

The Preferred Stock Authorizing Resolution provides that holders
of Preferred Stock, together with the holders of the Company's other
preferred stock thereafter authorized, voting separately and as a
single class, shall be entitled to elect a majority of the Board of
Directors of the Company in the event that distributions payable on any
shares of Preferred Stock shall be in arrears in an amount equal to
twenty-four full monthly dividends per share. Such right will continue
until all distributions in arrears have been paid in full.

Federal Income Tax Consequences of Distributions

The following discussion of the federal income tax consequences of
distributions is based upon the present Internal Revenue Code of 1986
as amended (the "Code"), existing Treasury regulations, current
published administrative positions of the Internal Revenue Service (the
"Service") contained in revenue rulings revenue procedures and notes
and existing judicial decisions. No assurance can be given that
legislative or administrative changes or court decisions may not be
forthcoming that could significantly modify the statements in this
discussion. Any such changes may or may not be retroactive with respect
to transactions effected prior to the date of such changes.

Distributions made to the holders of Preferred Stock will either
be taxable or not depending, in part, on the extent to which they are
made out of current or accumulated earnings and profits of the Company
as calculated for federal income tax purposes. To the extent, if any,
that distributions made by the Company to the holders of Preferred
Stock exceed current and accumulated earnings and profits of the
<PAGE>

Company, such distributions will be treated first as a tax-free return
of capital, reducing the holder's basis in Preferred Stock (not below
zero) and thereafter as capital gains (provided Preferred Stock is held
by the holder as a capital asset).

Distributions treated as capital gains result in (1) federal
income tax to a corporate holder at a maximum federal rate of 35% for
1993 and thereafter (exclusive of the impact, if any, of the
alternative minimum tax imposed by Section 55 of the Code) and (2)
federal income tax to a noncorporate holder on any amount treated as a
long-term capital gain at a maximum rate of 28% for 1993 and thereafter
(exclusive of the impact, if any, of the alternative minimum tax
imposed by Section 55 of the Code). Under certain circumstances,
distributions could be taxed as short-term capital gains which are
subject to the same tax rates as dividends. For 1993 and later years,
the maximum tax rate of noncorporate holders on such ordinary income is
39.6% which may be higher pursuant to certain statutory adjustments.

Although the Company believes that distributions made to the
holders of Preferred Stock may initially constitute nontaxable
distributions for federal income tax purposes, as described above,
certain events may cause the distributions to be treated as taxable
dividends. For example, the Company may generate taxable earnings and
profits, as computed for federal income tax purposes in future years,
the Service may challenge the Company's tax accounting methods, or
legislative enactments may cause a change in either the Company's tax
accounting methods or the manner in which earnings and profits are
computed for federal income tax purposes.

If, and to the extent, distributions made to the holders of
Preferred Stock constitute dividends for federal income tax purposes,
any corporate holder of Preferred Stock otherwise entitled to the 70%
dividends received deduction permitted by Section 243 of the Code will
be entitled to such deduction with respect to such dividends. If such
holder is entitled to the full dividends-received deduction, the
maximum effective federal income tax rate on such dividends will be
10.5% based on existing federal income tax rates applicable to
corporations generally (exclusive of the alternative minimum tax).
However, a corporate holder should be aware that, under Code Section
246A, the 70% dividends received deduction will be reduced if the
holder has debt that is directly attributable to the holder's
investment in Preferred Stock. In addition, corporate shareholders may
be required under Code Section 1059 to treat the amount of dividends as
an extraordinary dividend and reduce the remaining basis and recognize
capital gain if no basis remains when the stock is sold. Noncorporate
taxpayers are not entitled to such a dividends received deduction.

The corporate dividends received deduction, pursuant to Section
246(b)(1) of the Code, cannot exceed 70% of the corporate shareholder's
taxable income computed without regard to the dividends received
deduction, net operating loss deduction, and certain other deductions
and adjustments. Code Section 246(b)(2) provides that the 246(b)(1)
limitation does not apply for any taxable year for which there is a net
operating loss and, for purposes of determining whether there is a net
operating loss, the dividends received deduction is allowed without
regard to the 246(b)(1) limit. In addition, Section 246(c)(2)
mandates, in the case of preferred stock, that the stock on which the
dividend is paid be held for at least 91 days in order for the
<PAGE>

corporate shareholder to qualify for the dividends received deduction.
This rule applies if the holder receives dividends on that stock which
were attributable to a period or periods more than 366 days. Special
rules prescribed by Section 246(c)(3) apply for determining holding
periods.

At this time, the Company is unable to determine the
characterization of distributions to be made during calendar 1994 or
any future year.

In the event the holder of Preferred Stock disposes of the stock
by redemption or otherwise in a taxable sale or exchange, the holder
will recognize gain equal to the excess of the amount received over the
holder's basis in the stock. The basis is equal to the holder's cost of
acquiring the stock, which is anticipated to be the $100 per share
offering price. This amount is reduced (not below zero) by the return
of capital distributions previously received by the holder. Provided
the stock is held by such holder as a capital asset, such gain would be
capital gain.

Thus, the basis in the Preferred Stock may ultimately be reduced
to zero assuming distributions are a return of a capital and that the
holder received aggregate distributions at least equal to the holder's
basis. In that event, the entire amount received by the holder from
redemption or otherwise in a taxable sale or exchange would be
recognized as gain.

Prospective purchasers are advised to consult their own tax
advisor with respect to the income tax treatment or any distribution
made with respect to the Preferred Stock.

Distributions paid with respect to Preferred Stock, whether deemed
to be dividends, return of capital, or capital gains for federal income
tax purposes will result in the same federal income tax consequences to
the Company as other payments of dividends. These distributions are not
deductible by the Company under current tax law. Additionally,
distributions to foreign taxpayers are subject to special rules not
discussed herein.

TAX WITHHOLDING WITH RESPECT TO CERTIFICATES AND PREFERRED STOCK

The Code generally requires reporting of all distributions on
capital stock and inclusion of dividends as income to the stockholder.
In addition, the Code requires the reporting of interest income earned
on investment certificates, and inclusion of interest as income to the
certificate holder. The Code will, in certain instances, require 31%
backup withholding by the payor of such dividends and interest.

In general, the Company is required to file with the Service each
year a Form 1099-DIV and Form 1099-INT information return (with a copy
to the holder) reporting the amount of dividends and interest paid to
the applicable holder during each calendar year. The holder must report
dividends, capital gain distributions or interest as income on the
holder's federal income tax return for that year. In addition,
nontaxable distributions on capital stock may be subject to tax if the
stockholder has no remaining tax basis in the stock.

Backup withholding on dividends and interest generally will be
<PAGE>

imposed if:

(1) the taxpayer fails to furnish a taxpayer identification
number to the payor;

(2) the Service notifies the payor twice within three calendar
years that the taxpayer furnished an incorrect taxpayer identification
number;

(3) the taxpayer is notified that he is subject to backup
withholding because he failed to report taxable dividends or interest
applicable;

(4) the taxpayer fails to certify to the payor that the taxpayer
is not subject to backup withholding; or

(5) the taxpayer fails to certify his taxpayer identification
number.

Transfer Agent and Registrar

The Company acts as its own Transfer Agent and Registrar for its
Certificates and capital stock.

<PAGE>

LEGAL MATTERS

The legality of the Certificates and Preferred Stock being offered
hereby is being passed upon for the Company by Susan A. Thomson, Esq.,
who is employed by Metropolitan as its Assistant Corporate Counsel and
Assistant Secretary, is a Vice President and legal counsel for
Metropolitan Investment Securities, Inc. and is Assistant Corporate
Counsel for the Company.

EXPERTS

The Financial Statements of the Company as of September 30, 1993
and for the year ended September 30, 1993 included in this Prospectus
have been included herein in reliance on the report, which includes an
explanatory paragraph describing changes in the Company's methods of
accounting for repossessed real properties and income taxes, of Coopers
& Lybrand, independent accountants given on the authority of that firm
as experts in accounting and auditing. The Financial Statements and
schedules of the Company as of September 30, 1992 and for each of the
years in the two-year period ended September 30, 1992 included in this
Prospectus and in the Registration Statement have been audited by BDO
Seidman, independent certified public accountants, to the extent and
for the periods set forth in their reports appearing elsewhere herein,
and in the Registration Statement, and are included in reliance upon
such reports given upon the authority of said firm as experts in
auditing and accounting.
<PAGE>

PLAN OF DISTRIBUTION

The Certificates and Preferred Stock are offered directly to the
public on a continuing best efforts basis through the Company's
affiliate, Metropolitan Investment Securities, Inc. (MIS).
Accordingly, the offering has not received the independent selling
agent review customarily made when an unaffiliated selling agent offers
securities. MIS is the exclusive selling agent for the publicly issued
securities of the Company and its parent company, Metropolitan Mortgage
& Securities Co., Inc. No commission or other expense of the offering
will be paid by the purchasers of the Certificates or Preferred Stock.
A commission will, however, be paid by the Company on most Certificate
purchases ranging from 0.25% to 5% of the Certificate price, depending
on the term of the Certificate and whether or not the transaction is a
reinvestment or new purchase. A commission in the maximum amount of 5%
of the offering price will also be paid by the Company on most
Preferred Stock purchases. Certificates are offered only for cash or
cash equivalents. Preferred Stock is offered for cash or other
consideration acceptable to the Company as determined by the Board of
Directors. The Company will also pay certain other expenses in
connection with the offering. During the three fiscal years ended
September 30, 1993, MIS has received commissions of $667,000 from the
Company on sales of approximately $23,612,000 of the Company's
certificates. Preferred Stock was not sold in previous years.

MIS is a member of the National Association of Securities
Dealer's, Inc. (NASD). As such Schedule E of the By-laws of the NASD
applies and requires, in part, that a qualified independent underwriter
be engaged to render an opinion regarding the fairness of the interest
rates to be paid on the Certificates and the fairness of the pricing of
the Preferred Stock offered through this Prospectus. Accordingly, MIS
has obtained an opinion from Welco Securities, Inc., an NASD member,
("Welco") that the interest rates on the Certificates using a formula
tied to corresponding interest rates paid by the U.S. Treasury and
regional financial institutions meets this fairness objective based on
conditions and circumstances existing as of the date of the Prospectus.
A similar opinion has been obtained from Welco, which states that the
offering price of the Preferred Stock meets the fairness objective
based on conditions and circumstances, existing as of the date of the
Prospectus. The Company undertakes to maintain the interest rates on
Certificates no lower than those recommended by Welco based on the
formula. Accordingly, the yield at which the Certificates will be
distributed will be no lower than that recommended by Welco and the
price offered for the Preferred Stock will be no higher than Welco
would have independently recommended. Welco 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
Certificates and Preferred Stock offered hereunder, Welco is to be paid
$33,500 in fees and $10,000 in non-accountable expenses plus its
accountable expenses, which are not expected to exceed $2,500.

There is not now and the Company does not expect that there will
be a public trading market for the Certificates or Preferred Stock in
the future. MIS does not intend to make a market for the Certificates
or Preferred Stock. However, MIS maintains a list of its parent
company's, Metropolitan's, preferred stock holders who wish to sell
Metropolitan's preferred stock. The Company will use its best efforts
<PAGE>

to make this listing available for Preferred Stock offered hereunder
following completion of this offering. See "Certain Investment
Considerations -Risk Factors-Limited Marketability of Shares."

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 5% of the principal amount of Certificates and Preferred Stock
sold by such dealers. After the commencement of the offering the
commissions and reallowances, if any, may be lowered.

<PAGE>

USE OF PROCEEDS

Certificate Proceeds . . . . The Company expects net proceeds from this
Certificate offering of $38,000,000 to $39,900,000 before deducting
expenses estimated at $165,000 (combined total for both Certificates
and Preferred Stock expenses) and after sales commissions, assuming all
of the Certificates are sold. There can be no assurance, however, that
any of the Certificates can be sold. Sales commissions will range
between $100,000 and $2,000,000 (0.25% to 5%) depending on maturities
of Certificates sold and whether sales are reinvestments or new
purchases. Such proceeds may be supplemented with funds generated by
the Company's operations and/or borrowings from brokers or banks. See
"Business-Method of Financing."

Preferred Stock Proceeds . . . .The Company expects net proceeds from
this Preferred Stock offering of $14,250,000 to $15,000,000 before
deducting expenses estimated at $165,000 (combined total for both
Certificates and Preferred Stock expenses) and after sales commissions
of up to $750,000 (5%), assuming all of the Preferred Stock is sold.
There can be no assurance, however, that any of the Preferred Stock can
be sold. Such proceeds may be supplemented with funds generated by
the Company's operations and/or borrowings from brokers or banks. See
"Business-Method of Financing."

In conjunction with the other funds available to it, the Company
will utilize the proceeds of the Certificates and Preferred Stock
offerings for funding investments in Receivables, and other
investments, which may include the acquisition of affiliates as part of
a corporate reorganization. See "Certain Transactions". To the extent
internally generated funds are insufficient or unavailable for the
retirement of maturing certificates through the period ending January
31, 1995, and for payment of operational expenses and preferred stock
dividend requirements, portions of the net proceeds of this offering
may also be used for such purposes. Approximately $1,918,000 million
in principal amount of debt securities will mature between January 31,
1994 and January 31, 1995 with interest rates ranging from 6% to 10%
and averaging approximately 7.7% per annum. See Note 4 to the
Consolidated Financial Statements and "Certain Investment
Considerations - Risk Factors".

Management anticipates that some of the proceeds of this offering
will be invested in money market funds, bank repurchase agreements,
commercial paper, U.S. Treasury Bills and similar short term
investments until used as stated above. Due to the Company's inability
to accurately forecast the total amount of Certificates or Preferred
Stock to be sold pursuant to this offering, no specific amounts have
been allocated for any of the foregoing purposes.

CIRCULAR DIAGRAM OF USE OF PROCEEDS REFER TO GRAPH APPENDIX ITEM 2

<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company
at September 30, 1993:
<TABLE>
<CAPTION>
September 30,
1993
<S> <C>
DEBT PAYABLE

Real estate contracts and
mortgage notes payable
7% to 10%, due 1993 to 2002 $ 22,653
-----------
INVESTMENT CERTIFICATES

Investment Certificates,
Maturing 1993 to 1998,
at 6% to 11% 20,082,501
Compound and accrued interest 1,876,924
-----------
Total Investment Certificates 21,959,425
-----------
STOCKHOLDER'S EQUITY
Common Stock, $10 par:
2,000,000 shares authorized;
20,000 shares issued and
outstanding 200,000

Additional paid-in capital 1,800,000

Retained earnings 1,188,024
-----------
Total Stockholder's Equity 3,188,024
-----------
Total Capitalization $25,170,102
===========
</TABLE>

<PAGE>

SELECTED FINANCIAL DATA

BALANCE SHEET DATA:
Due from/(to) Parent
Company, net $ 1,710,743 $ (400,365) $(5,528,617) $ (22,010)
Total Assets $25,441,605 $17,696,628 $16,718,823 $2,027,355

Debt Securities
and Other
Debt Payable $21,982,078 $14,289,648 $ 8,451,106 --

Stockholder's Equity $ 3,188,024 $ 2,904,917 $ 2,243,550 $2,005,345

<FN>
(1) Benefit from utilization of net operating loss carryforwards.
</TABLE>

<PAGE>

Management's Discussion and Analysis of Financial
Condition and Results of Operations

Results of Operations

Revenues of the Company increased to $2.8 million in 1993 from
$2.4 million in 1992 and $1.0 million in 1991. The growth from 1992 to
1993 is attributable primarily to increased investment earnings on
additional outstanding Receivables and increased revenues associated
with the sale of repossessed property. The growth from 1991 to 1992
was almost entirely attributable to increased investment earnings on
additional outstanding Receivables. The Company has increased its
investment in Receivables from $8.2 million at September 30, 1991 to
$11.6 million at September 30, 1992 to $19.5 million at September 30,
1993.

The Company continued to realize net income from operations during
1993. Net income for the fiscal year ended September 30, 1993 was
$283,000 compared to $661,000 in 1992 and $238,000 in 1991. The 1993
decrease in net income is attributable to a reduced spread between
interest sensitive income and interest sensitive expense along with
increased operating expenses associated with the increased volume of
Certificate sales, Receivable investments and real estate held for
sale. The 1992 increase in net income is attributable to an increased
spread between interest sensitive income and interest sensitive expense
along with increased operating expenses associated with the increased
volume of Certificate sales, Receivables investments and real estate
held for sale.

The Company, during 1993, experienced a slight increase in the
loss from sale of real estate repossessions and also increased its
provision for losses on Receivables.

Since the date of its incorporation, the Company has benefitted
from a declining interest rate environment with lower money costs and
relatively consistent yields on Receivables acquired through
Metropolitan. In addition, a declining rate environment has positively
impacted earnings by increasing the value of the portfolio of
predominantly fixed rate Receivables. Higher than normal prepayments
in the Receivable portfolio were experienced during 1993 and 1992,
allowing the Company to recognize unamortized discounts on Receivables
at an accelerated rate. It is anticipated that Metropolitan may begin
charging the Company underwriting fees associated with Receivables
acquired from Metropolitan. Management anticipates that any such
underwriting fee that may be charged by Metropolitan in the future will
result in a slightly lower yield over the life of the Receivables.
Management is unable to predict the specific impact of any such
underwriting fee because no specific fee has been proposed or suggested
to date. See "Business-Investment in Real Estate Receivables."

Maintaining efficient collection procedures and minimizing
delinquencies in the Company's Receivable portfolio are ongoing
management goals. During 1993, the Company experienced a loss on sale
of repossessed real estate of $18,400. Management believes that yields
received on Receivables, which currently range from 12-15%
(approximately 6-9% in excess of the Treasury, or risk-free, rate),
will more than compensate the Company for such risk of loss.

<PAGE>

In April 1992, the Accounting Standards Division of the American
Institute of Certified Public Accountants issued Statement of Position
(SOP) No. 92-3, "Accounting for Foreclosed Assets," which provides
guidance on determining the accounting treatment for foreclosed assets.
SOP 92-3 requires that foreclosed assets be carried at the lower of (a)
fair value minus estimated costs to sell, or (b) cost. The Company
applied the provisions of SOP 92-3 effective October 1, 1992. The
initial charge for its application is estimated to be approximately
$10,000, before the application of related income taxes, and is
included in continuing operations in 1993.

Interest Sensitive Income and Expense

Management continually monitors the interest sensitive income and
expense of the Company. Interest sensitive expense is predominantly
the interest costs of Investment Certificates, while interest sensitive
income includes interest on Receivables, earned discount on
Receivables, dividends and other investment income.

The spread between interest sensitive income and interest
sensitive expense was $362,300 in 1991, $925,300 in 1992 and $695,600
in 1993. The decrease from 1992 to 1993 of approximately $230,000 was
the result of management's decision to accumulate cash to fund a
contract purchase commitment in excess of $7 million from an affiliate
in December 1992. Also, the Company recognized $366,935 of dividend
income (13% dividend rate) from its preferred stock investment in its
affiliate in 1992 and paid interest to its parent company at prime plus
1 1/2% on the borrowings used to finance the purchase of the preferred
stock. In March 1992, the Company transferred the preferred stock to
Metropolitan in full satisfaction of the $6 million payable. Therefore,
there were no dividends received by the Company in fiscal 1993 on the
preferred stock. See Note 7 to Financial Statements.

Other Income

Other income increased from approximately $500 in 1991 to $16,600
in 1992 to $42,700 in 1993. Other income is predominantly
miscellaneous fees and charges related to Receivables, thus its growth
is primarily due to the growth in Receivables.

Other Expenses

Operating expenses increased from approximately $100,600 in 1991
to $178,300 in 1992 to $244,600 in 1993 largely due to the increased
volume of Investment Certificate sales and Receivable investments.

Provision for Losses on Real Estate Receivables

The provision for losses on Receivables has increased as the size
of the portfolio of Receivables has grown. The following table
summarizes the Company's allowance for losses on Receivables:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Beginning Balance $59,244 $50,000 $ -
Provision 15,000 18,762 50,000

<PAGE>

(Charge-offs)/
Recoveries, net 22,410 ( 9,518) -
------- ------- -------
Ending Balance $96,654 $59,244 $50,000
======= ======= =======
<FN>
These allowances are in addition to unamortized purchase discounts of
$1.1 million in 1993, 1992 and 1991.
</TABLE>

Gain/Loss on Real Estate Sold

During 1993, the Company experienced a loss on the sale of real
estate of approximately $18,400. At the end of fiscal 1993, the
Company had $61,000 in real estate held for sale, less than 1% of total
real estate assets.

Effect of Inflation

During the three year period ended September 30, 1993, inflation
has had a generally positive impact on the Company's operations. This
impact has primarily been indirect in that the level of inflation tends
to influence inflation expectations, which tends to impact interest
rates on both Company assets and liabilities. Thus, with lower
inflation rates over the past three years, interest rates have been
generally declining during this period, which has reduced the Company's
cost of funds. Interest rates on Receivables acquired, due to their
nature, have not declined to the same extent as the cost of the
Company's borrowings. In addition, inflation has not had a material
effect on the Company's operating expenses. The main reason for the
increase in operating expenses has been an increase in the number of
Receivables acquired and serviced and increased sales of Investment
Certificates.

Revenues from real estate sold are influenced in part by
inflation, as, historically, real estate values have fluctuated with
the rate of inflation. However, the Company is unable to quantify the
effect of inflation in this respect.

Asset/Liability Management

As most of the Company's assets and liabilities are financial in
nature, the Company is subject to interest rate risk. Currently, the
Company's financial assets (primarily Receivables and fixed income
investments) reprice faster than its financial liabilities (primarily
Investment Certificates). In a rising rate environment, this will tend
to increase earnings, while in a falling rate environment, earnings
will decrease. However, yields on Receivables have not been as
sensitive to rate fluctuations as have Investment Certificate rates.

During fiscal 1994, approximately $5.8 million of interest
sensitive assets (cash and Receivables) are expected to reprice or
mature.

For liabilities, approximately $2.0 million of Investment
Certificates will mature during fiscal 1994, along with about $5,000 of
other debt payable.

<PAGE>

These estimates result in a one year interest rate mismatch
(interest sensitive assets less interest sensitive liabilities) of
approximately $3.8 million, or a ratio of interest sensitive assets to
interest sensitive liabilities of approximately 290%.

New Accounting Rules

In the fourth quarter of fiscal 1993, the Company adopted the
provisions of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" (SFAS No. 109), retroactive to October 1,
1992 and resulted in no significant affect on the Company's financial
position. SFAS No. 109 requires a company to recognize deferred tax
assets and liabilities for the expected future income tax consequences
of events that have been recognized in a company's financial
statements. Under this method, deferred tax liabilities and assets are
determined based on the temporary differences between the financial
statement carrying amounts and tax bases of assets and liabilities
using enacted tax rates in effect in the years in which the temporary
differences are expected to reverse. In 1992 and 1991, the Company
accounted for income taxes as required by Accounting Principles Board
Opinion No. 11. See Note 1 to Financial Statements.

In May, 1993, Statement of Financial Accounting Standards No. 114
(SFAS No. 114) "Accounting by Creditors for Impairment of a Loan" was
issued. SFAS No. 114 requires that certain impaired loans be measured
based on the present value of expected future cash flows discounted at
the loans' effective interest rate or the fair value of the collateral.
The Company is required to adopt this new standard by October 1, 1995.
The Company does not anticipate that the adoption of SFAS No. 114 will
have a material effect on the financial statements.

In December 1991, Statement of Financial Accounting Standards No.
107 (SFAS No. 107), "Disclosures about Fair Value of Financial
Instruments," was issued. SFAS No. 107 requires disclosures of fair
value information about financial instruments, whether or not
recognized in the balance sheet, for which it is practicable to
estimate that value. SFAS No. 107 is effective for financial statements
issued for fiscal years ending after December 31, 1995 (Summit's fiscal
year ending September 30, 1996) for entities with less than $150
million in total assets. This pronouncement does not change any
requirements for recognition, measurement or classification of
financial instruments in the Company's financial statements.

Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions" and SFAS
No. 112 "Employers' Accounting for Postretirement Benefits" are not
applicable because the Company maintains no programs designed to
provide employees with post-retirement or post-employment benefits.

Liquidity and Capital Resources

As a financial institution, the Company's liquidity is largely
tied to its ability to renew, maintain or obtain additional sources of
cash. The Company has successfully performed this task during the past
three years and has continued to invest funds generated by operations
and financing activities.

The Company has continued to generate cash from operations with
<PAGE>

net cash provided of $1.4 million in 1993; $1.4 million in 1992; and
$.5 million in 1991. Cash utilized by the Company in its investing
activities increased to $9.2 million in 1993 from $2.6 million in 1992
and $14.1 million in 1991. Cash provided by the Company's financing
activities was $5.8 million in 1993 compared to $5.0 million in 1992
and $13.4 million in 1991. These cash flows have resulted in year end
cash and cash equivalent balances of $3.6 million in 1993; $5.6 million
in 1992; and $1.8 million in 1991. Management considers the cash
balance at September 30, 1993 of $3.6 million to be adequate to finance
any required debt retirements or planned asset additions.

During 1993, the $2.1 million decrease in cash and cash
equivalents resulted from cash provided by operating activities of $1.4
million less cash used in investing activities of $9.2 million plus
cash provided by financing activities of $5.7 million. Cash from
operating activities resulted primarily from net income of $.3 million
and the increase in compound and accrued interest on Investment
Certificates of $1.0 million. Cash used in investing activities
primarily included: (1) acquisition of real estate Receivables net of
payments and sales, of $7.6 million; and (2) an advance to its parent
company of $1.7 million for the purchase of Receivables. Cash provided
by financing activities included: (1) issuance of Investment
Certificates, net of repayments and related debt issue costs, of $7.0
million; less (2) repayment of amounts due its parent of $.4 million;
and (3) repayment to banks and others of $.9 million.

The Company's investing activities during 1993 were supported by
cash from operations and external financing. The Company's increases
in Receivables were primarily funded by sales of Investment
Certificates. During 1992, the $3.9 million increase in cash and cash
equivalents resulted from cash provided by operating activities of $1.4
million less cash used in investing activities of $2.5 million plus
cash provided by financing activities of $5.0 million. Cash from
operating activities resulted primarily from net income of $.7 million
and the increase in compound and accrued interest on Investment
Certificates of $.7 million. Cash used in investing activities
primarily included the acquisition of real estate Receivables net of
payments and sales, of $3.0 million less $.5 million advance repaid by
its parent. Cash provided by financing activities included: (1)
issuance of Investment Certificates, net of repayments and related debt
issue costs, of $4.7 million; (2) borrowings from its parent of $.4
million; less (3) repayment to banks and others of $.1 million.

Thus, during 1992, the Company's investing activities were
supported by internal cash from operations and external cash from
financing. The Company's increases in Receivables were primarily
funded by sales of Investment Certificates.

During 1991, the $.2 million decrease in cash and cash equivalents
resulted from cash provided by operating activities of $.5 million less
cash used in investing activities of $14.1 million plus cash provided
by financing activities of $13.4 million. Cash from operating
activities resulted primarily from net income of $.2 million and the
increase in compound and accrued interest on Investment Certificates of
$.2 million. Cash used in investing activities primarily included the
acquisition of real estate Receivables net of payments, of $7.7
million, while the total advanced to or invested in affiliates was $6.5
million. Cash provided by financing activities included: (1) issuance
<PAGE>

of Investment Certificates, net of repayments and related debt issue
costs, of $7.4 million; and (2) borrowings from parent of $6.0 million.

Thus, during 1991 as in 1992 and 1993, the Company's investing
activities were supported by internal cash from operations and external
cash from financing. The Company's increases in Receivables were
primarily funded by sales of Investment Certificates.

Management believes that cash flow from operating activities and
financing activities will be sufficient for the Company to conduct its
business and meet its anticipated obligations as they mature during
fiscal 1994. The Company has not defaulted on any of its obligations
since its founding in 1990.
<PAGE>

BUSINESS

General

The Company's business activities consist primarily of investment
of the net proceeds of the public sale of its debt securities
("Investment Certificates") and Preferred Stock in Receivables or other
investments which could be expected to generate returns higher than the
Company's cost of its capital. There are no preestablished standards
by which such investment determinations are to be made. The Company's
business also involves the servicing of its investments and other
functions related to such activity. The Company may also engage in
other businesses or activities without restriction in accordance with
the provisions of its Articles of Incorporation.

Employees

As of September 30, 1993, the Company's personnel consisted of its
officers and directors, See "Management", an accountant and an
attorney. Each of those individuals are also employed by Metropolitan.
It is anticipated that they will continue to devote substantially all
of their time to their duties related to their respective positions
with Metropolitan and its other affiliates subject to the necessary
commitment of time to ensure that the Company fulfills its obligations
to Preferred shareholders and its duties under the Indenture pursuant
to which it issues Investment Certificates and such other duties and
responsibilities as the Company may undertake in the conduct of its
business or as may be required by law. No additional employees are
expected to be necessary or hired during the foreseeable future.

Properties

The Company owns various repossessed properties held for sale. At
September 30, 1993, two properties, acquired in satisfaction of debt,
with a combined carrying amount of approximately $61,000 were held.
The Company rents office space consisting of approximately 200 square
feet from an affiliate, at 1000 Hubbard, Coeur d'Alene, Idaho. The
rental terms are month to month at $150 per month. The Company
believes such terms to be at least as fair as those which could have
been obtained from unaffiliated third parties.

Investment In Real Estate Receivables

Receivables include contracts for the sale of real estate and
promissory notes secured by mortgages or deeds of trust on primarily
single-family residential real estate including timeshares. The
Company invests in Receivables that meet its yield requirements (as
established from time to time by its Board of Directors) and its
investment guidelines as funds become available to it from the sale of
its securities to the public. The Company's yield requirements are
expected to fluctuate depending on real estate market conditions, its
cost of investment capital, the rate of growth of the Company and its
operating expenses. During fiscal 1993 the average initial yield
requirement was 13.75% per annum while actual average yield was
approximately 2% to 3% over the Company's initial yield projections.
The Company's investment guidelines are substantially the same as
Metropolitan's as described below. To facilitate such investments, the
Company has contracted with Metropolitan to provide a non-exclusive
<PAGE>

means for the acquisition of Receivables. The agreement with
Metropolitan effectively permits the Company to invest in Receivables
acquired by Metropolitan in the normal course of its business at
Metropolitan's cost with no underwriting fees charged to the Company
through September 30, 1993, although underwriting fees could be charged
in the future. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations". Structured as an option
agreement, it allows the Company to purchase those Receivables which
are in excess of Metropolitan's needs. Metropolitan's Evaluation
Committee, the team of officers and employees which routinely
underwrites Metropolitan's Receivable investments, designates the
Receivables that are available to the Company for purchase. The
Company is under no obligation to purchase any specific amount or
number of such Receivables.

During fiscal 1993, the Company purchased, from an affiliate,
approximately $6.0 million of timeshare Receivables, of which
approximately $5.5 million were outstanding at September 30, 1993.
These Receivables were originated by another affiliate of Metropolitan
in connection with sales of its timeshare resort condominiums in
Hawaii. These Receivables have an approximate contractual interest
rate of 13% and were purchased at par from the affiliate. In
conjunction with the purchase, the Company withheld a 10% performance
holdback of $600,000 to cover any realized losses from these
Receivables. The holdback will be maintained at a balance of
approximately 10% of the outstanding timeshare Receivables and will be
released as principal is paid down. At September 30, 1993, the Company
held approximately $680,000 of delinquent timeshare contracts purchased
from the affiliate. The Company believes that the performance holdback
of $600,000 is adequate to cover any losses related to these certain
timeshare Receivables. At September 30, 1993, timeshare Receivables
represented approximately 27% of the total outstanding principal for
Receivables owned by the Company.

The supply of Receivables available for purchase has continued at
a relatively high level during the period since the Company's formation
and has not caused restrictions on such investments by the Company or
by Metropolitan. Accordingly, the Company is able to invest in
Receivables all of the funds available to it to the extent deemed
appropriate by the Company's management and the investment designations
made by Metropolitan's Evaluation Committee are based primarily on the
availability of such funds.

Metropolitan, through a subsidiary, has also contracted to provide
servicing for the Company's Receivables. The function of "servicing"
primarily involves the collection, application and remittance of
receipts; the maintenance of account records; and, as directed by the
Company when deemed necessary, the maintenance of foreclosure or other
legal action and the repossession or other disposition of properties
securing Receivables. The terms of the servicing contract provides
that Metropolitan will perform, on a non-exclusive basis, the servicing
functions for all Receivables which the Company designates for a fee
equal to $6.00 per month for each Receivable. The Company is also
required to reimburse Metropolitan for its out-of-pocket expenses and
costs, including attorney fees, in the performance of collection and
foreclosure activities with respect to such Receivables. Management
believes that there would not be a material difference in the Company's
cost for such services if the servicing fee were structured as a
<PAGE>

percentage of the unpaid balances of the serviced Receivables since the
fee, in either case, is based on an estimate of Metropolitan's actual
cost of providing the service.

The terms and conditions of the agreements with Metropolitan are
believed by management to be at least as favorable as those that could
be obtained from a non-affiliated third party. The agreements may be
terminated by either party upon a maximum of 90 days notice. No
assurance is made that the terms of these agreements will not be
modified in the future.

Metropolitan

The following discussion of Metropolitan's Receivable investment
activity is provided because the Company relies on Metropolitan's
resources and experience for its Receivable investments. Metropolitan
has been investing in Receivables for its own account for approximately
forty years. During the past ten years, it has expanded its Receivable
purchasing activity from the northwestern U.S. to the entire country to
avoid concentration of its investments in any particular state or
region. Metropolitan currently maintains twelve branch offices in
seven states in the continental U.S. supporting this activity. The
Receivable evaluation, underwriting, closing, collection and servicing
functions are performed at Metropolitan's headquarters in Spokane,
Washington. As of September 30, 1993, Metropolitan's consolidated
assets were $1,031,958,000, of which $562,440,000 were invested in
Receivables.

Sources of Receivables

Approximately 85% of Metropolitan's Receivables are acquired by it
through independent brokers around the country. These brokers
typically deal directly with individuals or organizations who wish to
sell a Receivable owned by them. These brokers contact one of
Metropolitan's offices to submit the Receivable for evaluation and
consideration by Metropolitan. In cases where a broker is not involved
in the transaction, Metropolitan is usually approached directly by a
prospective seller of a Receivable as a result of a referral or a
previous business contact. Metropolitan also actively seeks and
acquires portfolios of Receivables from banks, savings and loan
organizations, the Resolution Trust Corporation and the Federal Deposit
Insurance Corporation.

Yield and Discount Considerations

Metropolitan invests in Receivables at prices less than their
unpaid balances (i.e. at a discount). The difference between the
investment price and the unpaid balance is the "discount". The amount
of the discount will vary in any given transaction depending upon the
Receivable's characteristics and Metropolitan's yield requirements at
the time of purchase. Yield requirements are established in light of
capital costs, market conditions, the characteristics of particular
classes or types of Receivables and the risk of default by the payor on
any given Receivable. The risk of default can be affected by changes
in general or local economic conditions, neighborhood values, the value
of the specific real estate collateral and by changes in zoning, land
use and environmental laws. Discounts originating at the time of
purchase, net of capitalized acquisition costs are amortized using the
<PAGE>

level yield (interest) method. For contracts acquired after September
30, 1992, net purchase discounts are amortized on an individual
contract basis using the level yield method over the remaining
contractual term of the contract. For contracts acquired before October
1, 1992 discounted contracts are pooled by the fiscal year of purchase
and by similar contract types. The amortization period, which is
approximately 78 months, estimates a constant prepayment rate of 10-12
percent per year on scheduled payments, which is consistent with the
Company's prior experience with similar loans and Metropolitan's
expectations.

YIELD CHART: REFER TO GRAPH APPENDIX ITEM 3

<PAGE>

Management establishes the yield requirements for its Receivable
investments by assuming that all payments on the Receivables will be
paid as scheduled. During fiscal 1993, Metropolitan's average initial
yield requirement was 13.75%. However, to the extent that payments are
received earlier than anticipated by Metropolitan, the discount is
earned more quickly resulting in an increase in the yield. The
effective yield realized by Metropolitan as a result of actual
prepayments during the three year period ended September 30, 1993 was
2% to 3% over Metropolitan's initial yield projections.

Metropolitan can also experience greater effective yields through
negotiating amendments to the Receivable agreements. These amendments
may involve adjusting the interest rate and/or monthly payments,
extension of financing in lieu of a required balloon payment or other
adjustments in cases of delinquencies where the payor appears able to
resolve the delinquency. As a result of these amendments, the cash
flow may be maintained or accelerated, the latter of which increases
the yield realized on the Receivable.

Underwriting

When Metropolitan is offered a Receivable an initial study of the
terms of the Receivable, including any associated documents, is
performed by Metropolitan's underwriting and closing staff. If the
Receivable appears acceptable to Metropolitan, the purchase price for
the Receivable is calculated based on Metropolitan's yield requirements
at that time. If the broker and/or seller accepts the proposed
purchase price, a written agreement to purchase is executed, subject to
Metropolitan's full underwriting requirements. Metropolitan also
purchases "partial" interests in Receivables whereby it acquires the
right to receive a portion of the Receivable's balance, and where the
seller's right to the unsold portion of the Receivable is subordinated
to the interest acquired by Metropolitan. These "partials" generally
result in a reduced level of investment risk to Metropolitan than if
the entire Receivable cash flow is purchased.

The underwriting guidelines adopted by Metropolitan include a
requirement that the ratio of Metropolitan's investment in a Receivable
compared to the appraised value of the property which secures the
Receivable may not exceed 75% on Receivables secured by single family
residences; and that the ratio of the investment to the property's
appraised value may not exceed 70% on Receivables secured by other
types of improved property; and 55% on unimproved raw land. These
higher than conventional investment to collateral ratios provide higher
than conventional levels of collateral to protect Metropolitan's
investment in the event of a default on a Receivable.

For each Receivable, a current market value appraisal of the real
estate providing security is obtained. These appraisals are obtained
through licensed independent appraisers or through one of
Metropolitan's licensed staff appraisers. These appraisals are based
on drive-by and comparative sales analysis. Each independent appraisal
is also subject to review by a staff appraiser. Metropolitan is
currently exploring the use of computerized appraisals.

Members of Metropolitan's Underwriting Committee review and
approve each Receivable prior to purchase. Additionally, every proposed
investment in a Receivable is evaluated by Metropolitan's demography
<PAGE>

department utilizing computerized data which identifies local trends in
property values, personal income, population and other social and
economic indicators. Other underwriting functions may include
obtaining and evaluating credit reports on the Receivable payors;
evaluation of the potential for environmental risks; verifying payment
histories and current payment status; and obtaining title reports to
verify the record status of the Receivables and other matters of
record. Receivable investments which the Underwriting Committee
identifies for legal review are referred to Metropolitan's in-house
legal department which currently includes a staff of four attorneys.
All Receivable purchases which involve investments greater than
$150,000 ($100,000 or more if the real property collateral is other
than an owner-occupied single family residence) are submitted to an
additional special risk evaluation committee, are subject to legal
department review, and subject to the approval of Metropolitan's
president. In addition, transactions involving investments of more
than $500,000 are subject to approval by Metropolitan's Board of
Directors.

Upon completion of the underwriting process and the approval of
the investment, appropriate documents are executed by the seller and/or
broker transferring the Receivable to Metropolitan, and the transaction
is funded.

Management believes that the underwriting functions that are
employed in its Receivable investment activity are as thorough as
reasonably possible considering the nature of Metropolitan's business.
Metropolitan's Receivable acquisition business should be distinguished
from the conventional mortgage lending business which involves
substantial first-hand contact by lenders with each borrower and the
ability to obtain an interior inspection appraisal prior to granting a
loan.

Management continually monitors branch office activity as well as
economic and demographic conditions in all areas of the country in
order to avoid a concentration of its Receivable investments in those
areas in economic decline which could result in higher default rates
and subsequent investment losses.

Additional Information Regarding Summit

The Company's investments in Receivables are secured by first or
second liens primarily on single family residential property (including
residential timeshare units). The Company believes that these
Receivables present lower credit risks than a portfolio of mortgages
secured by commercial property or raw land, and that much of the risk
in the portfolio is dissipated by the large numbers of relatively small
individual Receivables and their geographic dispersion.

The following table presents information about the Company's
investments in Receivables as of September 30, 1993 and 1992:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Face value of discounted
receivables $14,416,037 $12,108,904

<PAGE>

Face value of originated
and non-discounted
receivables 6,285,706 398,999

Unrealized discounts,
net of amortized
acquisition costs (1,076,488) (1,116,522)

Allowance for losses (96,654) (59,244)

Performance Holdback on
Receivable Purchase (600,000)

Accrued interest
receivable 598,624 264,593
----------- -----------
Carrying value $19,527,225 $11,596,730
=========== ===========
</TABLE>

Approximately 67% of the Company's investments in Receivables are
in first lien position Receivables with the balance in second lien
positions. The Receivables are secured by residential, timeshare,
business and commercial properties with residential and timeshare
properties securing approximately 90% of such investments. The
Receivables acquired by the Company for investment purposes are
generated primarily by private individuals or businesses and are
therefore not government insured loans.

The Company's receivable investments at September 30, 1993 were
secured by properties located throughout the United States with not
more than 3% (by dollar amount) in any single state except as follows:

Arizona . . . . . . 8%
California . . . . 9%
Hawaii . . . . . . 27%
Oregon . . . . . . 6%
Texas . . . . . . . 6%
Washington . . . . 14%

The Company held 1,231 Receivables as of September 30, 1993. The
average stated interest rate (weighted by principal balances) on
Receivables held by the Company on that date was approximately 10.0%.
See Note 2, to Financial Statements.

Delinquency Experience & Collection Procedures

The principal amount of Receivables held by the Company (as a
percentage of the total outstanding principal amount of Receivables)
which was in arrears for more than ninety days at September 30, 1993
was 8.0% as compared to 4.2% at September 30, 1992 and .6% at September
30, 1991. The increase in the amount for September 30, 1993 includes
approximately $680,000 of timeshare contracts purchased from an
affiliate. The Company has a performance holdback of $600,000 to cover
any losses related to certain contracts including these Receivables.
Because Receivables purchased by the Company are typically not of the
same quality as mortgages that are subsequently securitized and sold in
<PAGE>

the secondary market with government guarantees, higher delinquency
rates are expected. However, because these Receivables are purchased
at a discount, losses on sales after repossession are generally lower
than might otherwise be expected given these higher delinquency rates.
Management believes that the Company's credit experience is within
expectations, given the yields obtained on the performing Receivables.

Payors of the Receivables which become delinquent are initially
contacted by telephone. If the default is not promptly cured then
additional collection activity, including written correspondence and
further telephone contact, is pursued. If these collection procedures
are unsuccessful then foreclosure proceedings (either judicial or
non-judicial) are generally initiated within approximately ninety days
after the initial default. Collection activity may also involve the
initiation of legal proceedings against the payor of the Receivable to
recover past due payments. If accounts are reinstated prior to
completion of the action then attorney fees, costs, expenses and late
charges are generally collected from the payor as a condition of the
reinstatement.

Allowance for Losses on Real Estate Assets

The Company establishes an allowance for losses on Receivables
based on an evaluation of delinquent Receivables. During 1992, the
Company adopted an appraisal policy to require annual appraisals on
properties securing delinquent receivables when the Receivable balances
exceed a threshold equal to 1/2% of total assets of the Company.
Biannual appraisals are required on all other delinquent Receivables
with balances in excess of $50,000. The allowance for losses was .5%,
of the face value of Receivables at September 30, 1993, 1992 and 1991.

Method of Financing

The Company's continued growth is expected to depend on its
ability to market its securities to the public and to invest the
proceeds in higher-yielding investments. Financing needs are intended
to be met primarily by the sale of its Investment Certificates and
Preferred Stock. Such funds may be supplemented by short term bank
financing and borrowing from affiliates. As of the date of this
document the Company had not established any formal lines of credit
with banks or other lending institutions.

The availability of Receivables offered for investment in the
national market is believed by management to be adequate to meet the
needs of the Company which are in addition to the needs of
Metropolitan.

Competition

The Company's ability to compete for Receivable investments is
currently dependent upon its parent company. Metropolitan competes
with various real estate financing firms, real estate brokers, banks
and individual investors for the Receivables it acquires. The largest
single competitors are subsidiaries of much larger companies such as
Chrysler Financial and Fleet Mortgage while the largest number of
competitors are a multitude of individual investors. The primary
competitive factors are the amounts offered and paid to Receivable
sellers and the speed with which the processing and funding of the
<PAGE>

transaction can be completed. Competitive advantages enjoyed by
Metropolitan include its branch office system which allows it access to
markets throughout the country; its ability to purchase long-term
Receivables; availability of funds; its reputation for reliability
established by its long history in the business; and its in-house
capabilities for processing and funding transactions. Competitive
disadvantages include the length of time required to process and fund
approved transactions (up to thirty days); an investment policy which
excludes purchases of Receivables which involve discounts of less than
$3,500; and relatively high yield requirements.

Management is unaware of any competitors with acquisition networks
and Receivable investment portfolios comparable to Metropolitan's and
believes Metropolitan to be one of the largest purchasers of such
Receivables in the United States. Marketing research performed by
Metropolitan indicates that it has approximately 6% to 8% of the
national secondary market for seller-financed real estate Receivables.
Management does not anticipate that the Company will compete directly
in the marketplace for Receivables for the foreseeable future but will
continue to be dependent on Metropolitan's activity in the field.
<PAGE>

MANAGEMENT

Directors and Executive Officers
(As of December 31, 1993)

Name Age Position

C. Paul Sandifur, Sr. 90 Chairman of the Board

C. Paul Sandifur, Jr. 52 President, Director and Chief
Executive Officer

Alton Cogert 39 Assistant Vice President and
Chief Financial Officer

Irv Marcus 69 Sr. Vice President

Reuel Swanson 55 Secretary and Director

Michael Barcelo 43 Treasurer

C. PAUL SANDIFUR, SR. has been engaged in real estate financing,
insurance and other businesses for more than fifty years. He was one
of the founders of Summit's parent corporation, Metropolitan, in 1953.
He is the Chairman of the Board of Metropolitan. C. Paul Sandifur, Jr.
is his son.

C. PAUL SANDIFUR, JR. is the Chief Executive Officer of
Metropolitan and Summit. He has been President of Metropolitan since
1981 and has served as a Director of that company since 1975. He has
been a licensed real estate broker in the State of Washington since
1978. Mr. Sandifur also serves as President of Metropolitan Investment
Securities, Inc.

ALTON COGERT joined Metropolitan as Chief Financial Officer in
January 1991. From 1988 through 1991, he was Manager, Financial
Forecasting for Washington Mutual Savings Bank. From 1984 through
1988, he was Chief Financial Officer for CU Bancorp (formerly Lincoln
Bancorp). He is a CPA with a BS from the Wharton School of the
University of Pennsylvania and a MBA from the University of Southern
California. Mr. Cogert obtained his CFA (Chartered Financial Analyst)
designation in 1991. Mr. Cogert was designated Summit's Assistant Vice
President and Chief Financial officer in January 1992.

IRV MARCUS has served as a Vice President and Director of
Metropolitan since 1974. He supervises Metropolitan's and Summits's
real estate financing operations. He became an officer of Summit in
1991.

REUEL SWANSON has been employed continuously by Metropolitan since
1960 and has been a Director since 1969. From 1976 he has served as
Metropolitan's Secretary; and from 1976-1993 he also served as
Metropolitan's Treasurer. Mr. Swanson is also Secretary-Treasurer of
Metropolitan Investment Securities, Inc. He was Secretary/Treasurer
and Director of Summit from 1990 to August, 1993. From August, 1993 to
the present, he is Secretary and Director.

MICHAEL BARCELO joined Metropolitan in August of 1992, as
<PAGE>

Portfolio Manager and was promoted to Treasurer of Metropolitan and
Summit in August of 1993. Mr. Barcelo has over 12 years of experience
in managing investment portfolios and treasury functions which he
acquired at Pacific First Bank, Great Western Federal Savings Bank and
Washington Mutual Savings Bank. Mr. Barcelo received a B.A. in
Economics in 1974 and a C.F.A. (Chartered Financial Analyst)
designation in 1992.

The directors of the Company are elected for one-year terms at
annual shareholder meetings. The officers of the Company serve at the
direction of the Board of Directors.

The Company's officers and directors will continue to hold their
respective positions with Metropolitan and do not anticipate that their
responsibilities with the Company will involve a significant amount of
time. They will, however, devote such time to the business and affairs
of the Company as may be necessary for the proper discharge of their
duties.

EXECUTIVE COMPENSATION

The officers and directors do not receive any compensation for
services rendered on behalf of the Company but they are entitled to
reimbursement for any expenses incurred in the performance of such
services. Such expenses include only items such as travel expense
incurred for attendance at corporate meetings or other business. No
such expenses have been incurred to date.

INDEMNIFICATION

The Company's Articles of Incorporation provide for
indemnification of the Company's directors, officers and employees for
expenses and other amounts reasonably required to be paid in connection
with any civil or criminal proceedings brought against such persons by
reason of their service of or position with the Company unless it is
adjudged in such proceedings that the person or persons are liable due
to willful malfeasance, bad faith, gross negligence or reckless
disregard of his duties in the conduct of his office. Such right of
indemnification is not exclusive of any other rights that may be
provided by contract of other agreement or provision of law.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to the Company's officers,
directors or controlling persons pursuant to the foregoing provisions,
the Company has been informed 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.
<PAGE>

PRINCIPAL SHAREHOLDERS

The following table sets forth information with respect to the
beneficial owners of more than five percent of Summit's voting stock as
of September 30, 1993.
<TABLE>
<CAPTION>
SHARES OF
NAME AND ADDRESS COMMON STOCK % OF CLASS
<S> <C> <C>
Metropolitan Mortgage &
Securities Co., Inc. 20,000 100%
W. 929 Sprague Ave.,
Spokane, Washington
</TABLE>

CERTAIN TRANSACTIONS

C. Paul Sandifur, Sr., C. Paul Sandifur, Jr. and Reuel Swanson,
directors and officers of the Company, and Irv Marcus, Alton Cogert and
Michael Barcelo, officers of the Company, are also directors and/or
officers of Metropolitan. Metropolitan is a closely-held corporation in
which approximately 71% of the outstanding voting common stock is owned
or controlled by C. Paul Sandifur, Jr. and approximately 5% is owned by
C. Paul Sandifur, Sr. See also "Management".

Inter-company transactions between Metropolitan and the Company
take place in the normal course of the Company's business. Such
transactions include rental of office space, provision of
administrative and data processing support, accounting and legal
services and similar matters. Receivable acquisition and servicing
agreements have been entered into between the Company and Metropolitan
and are summarized under "Business". See Note 7, to Financial
Statements, for additional information. The Company believes that such
transactions are or will be made on terms at least as favorable as
could be obtained from non-affiliated parties.

Metropolitan Investment Securities, Inc. (MIS) is a securities
broker-dealer which is wholly-owned by Metropolitan. MIS is currently
the exclusive selling agent for securities issued by Metropolitan and
its affiliates, including the Company's Investment Certificates. The
Company has entered into Selling Agreements with MIS to provide for the
sale of the Certificates and Preferred Stock pursuant to which MIS will
be paid commissions ranging from .25% to 5% of the investment amount in
each transaction. During the fiscal year ended September 30, 1993, the
Company paid or accrued commissions to MIS in the amount of $276,060
upon the sale of $9,677,843 of Certificates (there were no Preferred
Stock sales in prior years). MIS also maintains, on behalf of the
Company, certain investor files and information pertaining to
investments in the Company's Certificates.

The Company's parent company and C. Paul Sandifur, Jr. are
currently negotiating a reorganization which would involve the sale of
Summit to C. Paul Sandifur, Jr. to be followed by the sale of Old
Standard (an insurance subsidiary of Metropolitan) to Summit. The
Company considers this reorganization to be in its best interest due to
regulatory considerations and other business considerations. The sale
prices are expected to be established through an independent appraisal
<PAGE>

of the subsidiary company's values and the transaction will be subject
to approval by the Company's Board of Directors.
<PAGE>

INDEX TO FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 1993, 1992 AND 1991

Page
Reports of Independent Certified
Public Accountants...................................

Balance Sheets...........................................

Statements of Income.....................................

Statements of Stockholder's Equity.......................

Statements of Cash Flows.................................

Notes to Financial Statements............................

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

The Directors and Stockholder
Summit Securities, Inc.

We have audited the accompanying balance sheet of Summit
Securities, Inc. (a wholly-owned subsidiary of Metropolitan Mortgage &
Securities Co., Inc.) as of September 30, 1993, and the related
statements of income, stockholder's equity and cash flows for the year
then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Summit
Securities, Inc. as of September 30, 1993 and the results of its
operations and its cash flows for the year then ended in conformity
with generally accepted accounting principles.

As discussed in Note 1, the Company changed its methods of
accounting for repossessed real property and income taxes in 1993.

/s/ Coopers & Lybrand

COOPERS & LYBRAND

Spokane, Washington
December 13, 1993
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors of
Summit Securities, Inc.

We have audited the accompanying balance sheet of Summit Securities,
Inc. (a wholly-owned subsidiary of Metropolitan Mortgage & Securities
Co., Inc.) as of September 30, 1992 and the related statements of
income, stockholder's equity, and cash flows for each of the two years
in the period ended September 30, 1992. These financial statements are
the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Summit
Securities, Inc. at September 30, 1992, and the results of its
operations and its cash flows for each of the two years in the period
ended September 30, 1992, in conformity with generally accepted
accounting principles.

/s/ BDO Seidman

BDO SEIDMAN

Spokane, Washington
December 7, 1992

<PAGE>

SUMMIT SECURITIES, INC.

BALANCE SHEETS
September 30, 1993 and 1992
____________
<TABLE>
<CAPTION>
ASSETS 1993 1992
______ ______
<S> <C> <C>
Cash and cash equivalents $ 3,594,472 $ 5,647,202
Real estate contracts and mortgage
notes receivable, net
(Notes 2, 3 and 7) 19,527,225 11,596,730
Real estate held for sale (Note 3) 60,816 95,000
Deferred costs (Note 5) 524,376 342,650
Advances to parent and affiliated
companies (Note 7) 1,710,743
Other assets 23,973 15,046
----------- -----------
Total assets $ 25,441,605 $ 17,696,628
=========== ===========

LIABILITIES AND STOCKHOLDER'S EQUITY

Liabilities:
Investment certificates and accrued
interest (Note 4) $ 21,959,425 $ 13,622,634
Debt payable (Note 3) 22,653 667,014
Accounts payable and accrued expenses 49,353 25,398
Accrued income taxes due parent
company (Note 6) 222,150 76,300
Advances and note payable to parent
and affiliated companies (Note 7) 400,365
----------- -----------
Total liabilities 22,253,581 14,791,711
----------- -----------
Stockholder's equity:
Common stock, $10 par; 2,000,000
shares authorized; 20,000 shares
issued and outstanding 200,000 200,000
Additional paid-in capital 1,800,000 1,800,000
Retained earnings 1,188,024 904,917
----------- -----------
Total stockholder's equity 3,188,024 2,904,917
----------- -----------
Total liabilities and
stockholder's equity $ 25,441,605 $ 17,696,628
=========== ===========
</TABLE>

The accompanying notes are an integral
part of the financial statements.
<PAGE>

SUMMIT SECURITIES, INC.

STATEMENTS OF INCOME
For the Years Ended September 30, 1993, 1992 and 1991
____________
<TABLE>
<CAPTION>
1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
Revenues:
Interest on receivables $ 1,938,206 $ 1,319,825 $ 334,164
Dividends (Note 7) 366,935 390,000
Earned discount on receivables 428,482 542,047 118,531
Other investment interest 120,998 87,447 159,930
Real estate sales 280,500 103,000
Realized net gains on sales
of investment securities 4,724 23,320
Other income 42,714 16,589 460
--------- --------- ---------
Total revenues 2,815,624 2,435,843 1,026,405
--------- --------- ---------
Expenses:
Interest expense 1,792,059 1,390,968 640,318
Cost of real estate sold 298,900 108,256
Provision for losses on
real estate assets 51,012 18,762 50,000
Operating expenses (Note 7) 244,595 178,273 100,571
--------- --------- ---------
Total expenses 2,386,566 1,696,259 790,889
--------- --------- ---------
Income before income taxes and
extraordinary item 429,058 739,584 235,516
Income tax (provision) benefit
(Note 6) (145,951) (127,989) 2,689
--------- --------- ---------
Income before extraordinary item 283,107 611,595 238,205

Extraordinary item - utilization
of net operating loss
carryforwards (Note 6) 49,772
--------- --------- ---------
Net income $ 283,107 $ 661,367 $ 238,205
========= ========= =========
Net income per common share:
Before extraordinary item $ 14.15 $ 30.58 $ 11.91
Extraordinary item 2.49
--------- --------- ---------
Net income per common share $ 14.15 $ 33.07 $ 11.91
========= ========= =========
Weighted average number of
shares of common stock
outstanding 20,000 20,000 20,000
========= ========= =========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>

SUMMIT SECURITIES, INC.

STATEMENTS OF STOCKHOLDER'S EQUITY
For the Years Ended September 30, 1993, 1992 and 1991
____________
<TABLE>
<CAPTION>
Additional
Common Paid-In Retained
Shares Stock Capital Earnings Total
______ _______ __________ _________ _____
<S> <C> <C> <C> <C> <C>
Balance, October 1, 1990 20,000 $200,000 $1,800,000 $ 5,345 $2,005,345
Net income 238,205 238,205
------ -------- ---------- ---------- ----------
Balance, September 30, 1991 20,000 200,000 1,800,000 243,550 2,243,550
Net income 661,367 661,367
------ -------- ---------- ---------- ----------
Balance, September 30, 1992 20,000 200,000 1,800,000 904,917 2,904,917
Net income 283,107 283,107
------ -------- ---------- ---------- ----------
Balance, September 30, 1993 20,000 $200,000 $1,800,000 $1,188,024 $3,188,024
====== ======== ========== ========== ==========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>

SUMMIT SECURITIES, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended September 30, 1993, 1992 and 1991
____________
<TABLE>
<CAPTION>
1993 1992 1991
______ ______ ______
<S> <C> <C> <C>
Operating activities:
Net income $ 283,107 $ 661,367 $ 238,205
Adjustments to reconcile net
income to net cash provided
by operating activities:
Gain on sale of investment
securities (4,724) (23,320)
Loss on sale of real estate 18,400 5,256
Provision for losses on
real estate assets 51,012 18,762 50,000
Amortization of deferred
costs 151,763 144,647 67,939
Changes in:
Compound and accrued
interest on investment
certificates
and debt payable 955,322 689,014 232,576
Accrued interest
receivable (175,460) (153,709) (110,884)
Accrued income taxes 145,850 76,300
Other 7,484 (19,054) 19,888
---------- ---------- ----------
Net cash provided by
operating activities 1,432,754 1,422,583 474,404
---------- ---------- ----------
Investing activities:
Investment in affiliate (6,000,000)
Advances to parent and
affiliated companies (1,710,743) (471,383)
Collection of advances to
parent company 471,383
Principal payments on real
estate contracts and
and mortgage notes receivable 8,083,497 2,245,740 92,144
Purchases of real estate
contracts and mortgage
notes receivable (15,667,120) (5,274,528) (7,760,198)
Proceeds from real estate sales 75,008 6,283
Additions to real estate held (24,155) (8,400)
Purchase of investment
securities (2,047,812) (5,630,039)
Proceeds from sale of
investment securities 2,052,187 5,653,359
---------- ---------- -----------
Net cash used in
investing activities (9,239,138) (2,559,522) (14,116,117)
---------- ---------- -----------
</TABLE>
<PAGE>

SUMMIT SECURITIES, INC.

STATEMENTS OF CASH FLOWS, Continued
For the Years Ended September 30, 1993, 1992 and 1991
____________
<TABLE>
<CAPTION>
1993 1992 1991
______ ______ ______
<S> <C> <C> <C>
Financing activities:
Repayment of amounts due to
parent company $ (400,365) $ (22,010)
Borrowings from parent company $ 400,365 6,000,000
Proceeds from investment
certificates 9,677,843 5,864,051 8,070,558
Repayments of investment
certificates (2,300,088) (903,226) (326,637)
Repayments to banks and others (890,247) (99,182) (30,184)
Debt issuance costs (333,489) (240,490) (295,620)
---------- ---------- -----------
Net cash provided by
financing activities 5,753,654 5,021,518 13,396,107
---------- ---------- -----------
Net increase (decrease) in
cash and cash
equivalents (2,052,730) 3,884,579 (245,606)

Cash and cash equivalents,
beginning of year 5,647,202 1,762,623 2,008,229
---------- ---------- ----------
Cash and cash equivalents,
end of year $ 3,594,472 $ 5,647,202 $ 1,762,623
========== ========== ==========
<FN>
See Note 8 for supplemental cash flow information.
</TABLE>

The accompanying notes are an integral
part of the financial statements.
<PAGE>

SUMMIT SECURITIES, INC.

NOTES TO FINANCIAL STATEMENTS
____________

1. Summary of Accounting Policies

Business

Summit Securities, Inc., d/b/a National Summit Securities, Inc.
in the states of New York and Ohio ("Summit" or "the Company"),
a wholly-owned subsidiary of Metropolitan Mortgage & Securities
Co., Inc. ("Metropolitan") was incorporated on July 25, 1990.
Summit purchases contracts and mortgage notes collateralized by
real estate, with funds generated from the public issuance of
debt securities in the form of investment certificates, cash
flow from receivables and sales of real estate.

Cash and Cash Equivalents

For purposes of balance sheet classification and the statement
of cash flows, the Company considers all highly liquid debt
instruments purchased with a remaining maturity of three months
or less to be cash equivalents. Cash includes all balances on
hand and on deposit in banks and financial institutions. The
Company periodically evaluates the credit quality of its
financial institutions. Substantially all cash and cash
equivalents are on deposit with one financial institution and
balances periodically exceed the FDIC insurance limit.

Real Estate Contracts and Mortgage Notes Receivable

Real estate contracts and mortgage notes held for investment
purposes are carried at amortized cost. Discounts originating
at the time of purchase net of capitalized acquisition costs are
amortized using the level yield (interest) method. For
contracts acquired after September 30, 1992, net purchase
discounts are amortized on an individual contract basis using
the level yield method over the remaining contractual term of
the contract. For contracts acquired before October 1, 1992,
the Company accounts for its portfolio of discounted loans using
anticipated prepayment patterns to apply the level yield
(interest) method of amortizing discounts. Discounted contracts
are pooled by the fiscal year of purchase and by similar
contract types. The amortization period, which is approximately
78 months, estimates a constant prepayment rate of 10-12 percent
per year and scheduled payments, which is consistent with the
Company's prior experience with similar loans and the Company's
expectations.
<PAGE>

SUMMIT SECURITIES, INC.

NOTES TO FINANCIAL STATEMENTS, Continued
____________

1. Summary of Accounting Policies, Continued

Real Estate Contracts and Mortgage Notes Receivable, Continued

In May 1993, Statement of Financial Accounting Standards No. 114
(SFAS No. 114), "Accounting by Creditors for Impairment of a
Loan," was issued. SFAS No. 114 requires that certain impaired
loans be measured based on the present value of expected future
cash flows discounted at the loan's effective interest rate or
the fair value of the collateral. The Company is required to
adopt this new standard by October 1, 1995. The Company does
not anticipate that the adoption of SFAS No. 114 will have a
material effect on the financial statements.

Real Estate Held for Sale

Real estate is valued at the lower of cost or market. The
Company principally acquires real estate through foreclosure or
forfeiture. Cost is determined by the purchase price of the
real estate or, for real estate acquired by foreclosure, at the
lower of (a) the fair value of the property at date of
foreclosure less estimated selling costs, or (b) cost (unpaid
contract carrying value).

Profit on sales of real estate is recognized when the buyers'
initial and continuing investment is adequate to demonstrate
that (1) a commitment to fulfill the terms of the transaction
exists, (2) collectibility of the remaining sales price due is
reasonably assured, and (3) the Company maintains no continuing
involvement or obligation in relation to the property sold and
transfers all the risks and rewards of ownership to the buyer.

In April 1992, the Accounting Standards Division of the American
Institute of Certified Public Accountants issued Statement of
Position (SOP) No. 92-3, "Accounting for Foreclosed Assets,"
which provides guidance on determining the accounting treatment
of foreclosed assets. SOP 92-3 requires that foreclosed assets
be carried at the lower of (a) fair value minus estimated costs
to sell, or (b) cost. The Company applied the provisions of SOP
92-3 effective October 1, 1992. The application of SOP 92-3,
estimated to be approximately $10,000 before the application of
related income taxes, is included in continuing operations for
the year ended September 30, 1993.

<PAGE>

SUMMIT SECURITIES, INC.

NOTES TO FINANCIAL STATEMENTS, Continued
____________

1. Summary of Accounting Policies, Continued

Allowance for Losses on Real Estate Assets

The established allowances for losses on real estate assets
include amounts for estimated probable losses on both real
estate held for sale and real estate contracts and mortgage
notes receivable. Specific allowances are established for all
delinquent contract receivables with net carrying values in
excess of $100,000. Additionally, the Company establishes
general allowances, based on prior actual delinquency and loss
experience, for currently performing receivables and smaller
delinquent receivables. Allowances for losses are determined on
net carrying values of the contracts, including accrued
interest. Accordingly, the Company continues interest accruals
on delinquent loans until foreclosure, unless the principal and
accrued interest on the loan exceed the fair value of the
collateral, net of estimated selling costs.

Deferred Costs

Commission and other expenses incurred in connection with the
registration and public offering of investment certificates are
capitalized and amortized using the interest method over the
estimated life of the related investment certificates, which
range from 6 months to 5 years.

Income Taxes

The Company is included in the group of companies which file a
consolidated income tax return with Metropolitan. The Company
is allocated a current and deferred tax provision from
Metropolitan as if the Company filed a separate tax return.
Effective October 1, 1992, Metropolitan adopted the provisions
of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" (SFAS No. 109). Under this
method, deferred tax liabilities and assets are determined on
temporary differences between the financial statement carrying
amounts and tax bases of assets and liabilities using enacted
tax rates in effect in the years in which the temporary
differences are expected to reverse. There was no effect on the
Company's financial statements of adopting SFAS No. 109. In
1992 and 1991, Metropolitan and the Company accounted for income
taxes as required by Accounting Principles Board Opinion No. 11.

<PAGE>

SUMMIT SECURITIES, INC.

NOTES TO FINANCIAL STATEMENTS, Continued
____________

1. Summary of Accounting Policies, Continued

Financial Instruments

In December 1991, Statement of Financial Accounting Standards
No. 107 (SFAS No. 107), "Disclosures about Fair Value of
Financial Instruments," was issued. SFAS No. 107 requires
disclosures of fair value information about financial
instruments, whether or not recognized in the balance sheet, for
which it is practicable to estimate that value. SFAS No. 107 is
effective for financial statements issued for fiscal years
ending after December 31, 1995 (Summit's fiscal year ending
September 30, 1996) for entities with less than $150 million in
total assets. This pronouncement does not change any
requirements for recognition, measurement or classification of
financial instruments in the Company's financial statements.

Reclassifications

Certain amounts in the 1992 and 1991 financial statements have
been reclassified to conform with the current year's
presentation. These reclassifications had no effect on net
income or retained earnings as previously reported.

2. Real Estate Contracts and Mortgage Notes Receivable

Real estate contracts and mortgage notes receivable include
mortgages collateralized by property located throughout the United
States. At September 30, 1993, the Company held first position
liens associated with contract and mortgage notes receivable with
a face value of approximately $13,800,000 and second position
liens of approximately $6,900,000. Approximately 21% of the face
value of the Company's real estate contracts and mortgage notes
receivable are collateralized by property located in the Pacific
Northwest (Washington, Idaho, Montana and Oregon), approximately
9% by property located in California and approximately 27% by
property located in Hawaii.

<PAGE>

SUMMIT SECURITIES, INC.

NOTES TO FINANCIAL STATEMENTS, Continued
____________

2. Real Estate Contracts and Mortgage Notes Receivable, Continued

Contracts totaling approximately $6,000,000 which are
collateralized by property in Hawaii were purchased from a
Metropolitan affiliated company during fiscal 1993. At September
30, 1993, approximately $5,500,000 of these Receivables are
outstanding. These contracts relate to the sale of time share
units in a condominium resort development which is owned by a
Metropolitan affiliated company.

The face value of the Company's real estate contracts and mortgage
notes receivable as of September 30, 1993 and 1992 are grouped by
the following dollar ranges:
<TABLE>
<CAPTION>
1993 1992
______ ______
<S> <C> <C>
Under $15,001 $ 5,210,788 $ 734,335
$15,001 to $40,000 7,649,859 6,543,583
$40,001 to $80,000 4,609,278 4,701,063
$80,001 to $150,000 2,324,242 528,922
Greater than $150,000 907,576
------------ ------------
$ 20,701,743 $ 12,507,903
============ ============
</TABLE>
Contractual interest rates on the face value of the Company's real
estate contracts and mortgage notes receivable as of September 30,
1993 and 1992 are as follows:
<TABLE>
<CAPTION>
1993 1992
______ ______
<S> <C> <C>
Less than 8.00% $ 1,433,022 $ 785,094
8.00% to 8.99% 1,664,066 958,637
9.00% to 9.99% 3,232,543 2,480,986
10.00% to 10.99% 6,342,842 5,682,197
11.00% to 11.99% 1,799,826 1,369,142
12.00% to 12.99% 2,189,840 1,046,802
13% or higher 4,039,604 185,045
------------ ------------
$ 20,701,743 $ 12,507,903
============ ============
</TABLE>
The weighted average contractual interest rate on these
receivables at September 30, 1993 is approximately 10.5%.
Maturity dates range from 1993 to 2023. The constant effective
yield on contracts purchased in fiscal 1993 and 1992 was
approximately 12% and 15%, respectively.

<PAGE>

SUMMIT SECURITIES, INC.

NOTES TO FINANCIAL STATEMENTS, Continued
____________

2. Real Estate Contracts and Mortgage Notes Receivable, Continued

The following is a reconciliation of the face value of the real
estate contracts and mortgage notes receivable to the Company's
carrying value:
<TABLE>
<CAPTION>
1993 1992
______ ______
<S> <C> <C>
Face value of discounted
receivables $ 14,416,037 $ 12,108,904
Face value of originated and
non-discounted receivables 6,285,706 398,999
Unrealized discounts, net
of unamortized acquisition
costs (1,076,488) (1,116,522)
Allowance for losses (96,654) (59,244)
Performance holdback on
receivable purchase (600,000)
Accrued interest receivable 598,624 264,593
------------ ------------
Carrying value $ 19,527,225 $ 11,596,730
============ ============
</TABLE>
The principal amount of receivables with required principal or
interest payments being in arrears for more than three months was
approximately $1,662,000 and $529,000 at September 30, 1993 and
1992, respectively. Included in the amount for September 30, 1993
is approximately $680,000 of delinquent contracts purchased from
an affiliate during 1993. The Company has a performance holdback
of $600,000 to cover any losses related to certain timeshare unit
contracts, including these delinquent contracts.

Aggregate amounts of receivables (face amount) expected to be
received, based upon prepayment patterns, are as follows:
<TABLE>
<CAPTION>
Fiscal year ending
September 30,
_____________
<S> <C>
1994 $ 2,216,000
1995 2,124,000
1996 2,039,000
1997 1,961,000
1998 1,889,000
Thereafter 10,472,743
-----------
$ 20,701,743
===========
</TABLE>
<PAGE>

SUMMIT SECURITIES, INC.

NOTES TO FINANCIAL STATEMENTS, Continued
____________

3. Debt Payable

At September 30, 1993 and 1992, debt payable consists of:
<TABLE>
<CAPTION>
1993 1992
______ ______
<S> <C> <C>
Real estate contracts and
mortgage notes payable,
interest rates ranging
from 7% to 11%, due in
installments through 2002;
collateralized by senior
liens on the Company's
real estate contracts,
mortgage notes and
real estate held for sale $ 22,653 $ 663,312
Accrued interest payable 3,702
--------- ---------
$ 22,653 $ 667,014
========= =========
<CAPTION>
Aggregate amounts of principal payments due on debt payable at
September 30, 1993 are as follows:

Fiscal year ending
September 30,
_____________
<S> <C>
1994 $ 5,440
1995 1,958
1996 2,100
1997 2,251
1998 2,414
Thereafter 8,490
---------
Total $ 22,653
=========
</TABLE>

<PAGE>

SUMMIT SECURITIES, INC.

NOTES TO FINANCIAL STATEMENTS, Continued
____________

4. Investment Certificates

At September 30, 1993 and 1992, investment certificates consist
of:
<TABLE>
<CAPTION>
Annual
Interest Principally
Rates Maturing In 1993 1992
________ ___________ ______ ______
<S> <C> <C> <C>
6% to 7% 1994 $ 1,265,000 $ 388,288
7% to 8% 1995 and
1996 1,018,000 166,832
8% to 9% 1998 7,947,000 2,009,301
9% to 10% 1995, 1996
and 1997 3,624,000 3,869,389
10% to 11% 1996 6,228,501 6,270,936
----------- -----------
20,082,501 12,704,746
Compound
and accrued
interest 1,876,924 917,888
----------- -----------
Total $ 21,959,425 $ 13,622,634
=========== ===========
<CAPTION>
The weighted average interest rate on outstanding investment
certificates at September 30, 1993 and 1992 was approximately 9.1%
and 9.5%, respectively.

Investment certificates and compound and accrued interest at
September 30, 1993 mature as follows:

Fiscal year ending
September 30,
_____________
<S> <C>
1994 $ 1,988,000
1995 988,000
1996 7,792,000
1997 3,725,000
1998 7,181,000
Thereafter 285,425
-------------
Total $ 21,959,425
=============
</TABLE>
<PAGE>

SUMMIT SECURITIES, INC.
NOTES TO FINANCIAL STATEMENTS, Continued
____________

5. Deferred Costs

Unamortized commissions and other capitalized expenses incurred in
connection with the sale of investment certificates aggregated
$524,376 and $342,650 at September 30, 1993 and 1992,
respectively, and are shown as deferred costs on the balance
sheets.

An analysis of such deferred costs is as follows:
<TABLE>
<CAPTION>
1993 1992
______ ______
<S> <C> <C>
Balance at the beginning of
the year $ 342,650 $ 246,807
Deferred during the year:
Commissions 276,060 168,089
Other expenses 57,429 72,401
--------- ---------
Total deferred 676,139 487,297

Amortized during the year (151,763) (144,647)
--------- ---------
Balance at the end of the year $ 524,376 $ 342,650
========= =========
<CAPTION>
6. Income Taxes

The tax effect of the primary temporary differences giving rise to
the Company's deferred tax assets and liabilities as of September
30, 1993 is as follows:

Asset Liability
_______ _________
<S> <C> <C>
Allowance for losses on real
estate assets $ 35,139
Deferred loan fees $ 481,472
Net operating loss carryforwards 224,183
-------- --------
Total deferred income taxes $ 259,322 $ 481,472
======== ========
</TABLE>

No valuation allowance has been established to reduce the deferred
tax assets, as it is more likely than not that these assets will
be realized due to the future reversals of existing taxable
temporary differences. As of September 30, 1993, the Company's
share of the consolidated group's net operating loss carryforwards
was approximately $659,000, which expires in 2005.
<PAGE>

SUMMIT SECURITIES, INC.
NOTES TO FINANCIAL STATEMENTS, Continued
____________

6. Income Taxes, Continued

The provision for income taxes is computed by applying the
statutory federal income tax rate to income before income taxes as
follows:
<TABLE>
<CAPTION>
1993 1992 1991
______ ______ ______
<S> <C> <C> <C>
Computed federal tax $ 145,880 $ 251,458 $ 80,075
Affiliate corporate
dividend received
deduction (124,758) (92,820)
Other 71 1,289 10,056
-------- --------- --------
Income tax expense
(benefit) $ 145,951 $ 127,989 $ (2,689)
======== ========= ========
<CAPTION>
The components of the allocated provision for income taxes from
Metropolitan are as follows:
1993 1992 1991
______ ______ ______
<S> <C> <C> <C>
Current $ 1,917 $ (2,689)
Deferred $ 145,951 126,072
-------- --------- ---------
$ 145,951 $ 127,989 $ (2,689)
======== ========= ========
<CAPTION>
The deferred provision for income taxes for each of the fiscal
years ended September 30, 1993, 1992 and 1991 results from the
following:
1993 1992 1991
______ ______ ______
<S> <C> <C> <C>
Earned discounts $ 69,081 $ 200,532 $ 54,284
Contract acquisition
costs 15,400 52,342 199,185
Allowance for possible
losses (13,976) (3,127) (17,000)
Net operating losses used
to reduce deferred tax
credits (123,675) (236,469)
Realization of net
operating loss
carryforwards to
reduce current
taxes payable 75,446
-------- --------- --------
$ 145,951 $ 126,072 $ 0
======== ========= ========
</TABLE>
<PAGE>

SUMMIT SECURITIES, INC.

NOTES TO FINANCIAL STATEMENTS, Continued
____________
6. Income Taxes, Continued

During the year ended December 31, 1992, the Company recognized an
extraordinary credit of $49,772 by the utilization of net
operating loss carryforwards of approximately $146,000.

7. Related Party Transactions

Summit receives accounting, data processing, contract servicing
and other administrative services from Metropolitan. Charges for
these services were approximately $97,000 in fiscal 1993, $50,000
in fiscal 1992 and $0 in fiscal 1991 and were assessed based on
the number of real estate contracts and mortgage notes receivable
serviced by Metropolitan on Summit's behalf. Other indirect
services provided by Metropolitan to Summit, such as management
and regulatory compliance, are not directly charged to Summit.

Management believes that this allocation is reasonable and results
in the reimbursement to Metropolitan of all significant direct
expenses incurred on behalf of Summit. Management does not
believe that Summit could obtain these services from outside
sources for less than the allocated costs, or that these costs
would be significantly higher if Summit operated alone.

<PAGE>

SUMMIT SECURITIES, INC.

NOTES TO FINANCIAL STATEMENTS, Continued
____________

7. Related Party Transactions, Continued

Summit had the following related party transactions with
Metropolitan and affiliates during fiscal 1993 and 1992:
<TABLE>
<CAPTION>
1993 1992
______ ______
<S> <C> <C>
Real estate contracts and mortgage
notes purchased through
Metropolitan or affiliates $ 15,423,706 $ 4,792,398
Contract acquisition costs
charged to Summit on
purchased real estate
contracts and mortgage notes 243,414 347,021
----------- ----------
Total cost of real estate contracts
and mortgage notes purchased
through Metropolitan $ 15,667,120 $ 5,139,419
=========== ==========
Dividends received from Western
United Life Assurance Company $ 366,935
Interest expense paid to parent
and affiliated companies $ 6,000 $ 243,306
Commissions capitalized as
deferred costs, paid to an
affiliate on sale of
investment certificates $ 276,060 $ 168,089

</TABLE>

Advances to parent of $1,710,743 at September 30, 1993 represent
advances to Metropolitan for the purchase of Summit's investments
in real estate contracts and mortgage notes receivable. Advances
from parent of $400,365 at September 30, 1992 represent real
estate contracts and mortgage notes and related costs advanced by
Metropolitan on behalf of Summit. These advances to and from
Metropolitan are non-interest bearing.

On March 31, 1991, the Company borrowed $6,000,000 from
Metropolitan, which was payable on demand and required monthly
interest-only payments. The stated note rate was equal to the
prime rate as quoted monthly by the Seattle-First National Bank
plus 1.5%. Summit used the funds borrowed from Metropolitan to
purchase preferred stock issued by Western United Life Assurance
Company ("Western"), a full service life insurance company.
Metropolitan also owns approximately 96% of the outstanding stock
of Western. In March 1992, the Company repaid the $6,000,000 note
payable to Metropolitan through the transfer of the Company's
preferred stock investment in Western to Metropolitan.

<PAGE>

SUMMIT SECURITIES, INC.

NOTES TO FINANCIAL STATEMENTS, Continued
____________

8. Supplemental Disclosures for Statements of Cash Flows

Supplemental information on interest and income taxes paid during
the years ended September 30, 1993, 1992 and 1991 is as follows:
<TABLE>
<CAPTION>

1993 1992 1991
______ ______ ______
<S> <C> <C> <C>
Interest paid $ 836,737 $ 701,955 $ 407,742
Income taxes paid 101 1,917 61

<CAPTION>
Non-cash investing and financing activities of the Company during
the years ended September 30, 1993, 1992 and 1991 are as follows:

1993 1992 1991
______ ______ ______
<S> <C> <C> <C>
Assumption of other debt
payable in conjunction
with purchase of real
estate contracts and
mortgage notes
receivable $ 235,374 $ 259,116 $ 504,793
Assumption of other debt
payable in conjunction
with acquisition of
real estate held
for sale 14,225 28,769
Transfer of investment
in affiliate as full
consideration for
amount due on
note payable to
parent company 6,000,000
Real estate held for sale
acquired through
foreclosure 276,573 194,856
Loans to facilitate
the sale of
real estate 205,492 96,717
</TABLE>
<PAGE>

INSIDE BACK COVER PAGE: REFER TO APPENDIX ITEM 4
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the estimated expenses in
connection with the issuance and distribution of the Certificates,
other than selling commissions:

SEC Registration Fee .................... $ 12,068.97
NASD Filing Fee ......................... 6,000.00
Independent Underwriter Fee.............. 43,500.00
*Printing ............................... 10,000.00
*Legal Fees and Expenses ................ 10,000.00
*Accounting Fees and Expenses ........... 10,000.00
*Trustee's Fees and Expenses ............ 5,000.00
*Blue Sky Fees and Expenses ............. 20,000.00
*Miscellaneous .......................... 3,431.03

TOTAL ............................. $165,000.00
-----------

*Estimated

Item 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Item 15. RECENT SALES OF UNREGISTERED SECURITIES.

None.

Item 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a). Exhibits:

*1(a)(i). Form of Selling Agreement between Summit and
Metropolitan Investment Securities, Inc. with respect
to Certificates.

*1(a)(ii). Form of Selling Agreement between Summit and
Metropolitan Investment Securities, Inc. with respect
to Preferred Stock Series S-1.

*1(b)(i). Form of Agreement to Act as Qualified Independent
Underwriter between Summit, Metropolitan Investment
Securities, Inc. and Welco Securities, Inc. with
respect to Certificates to be registered.
<PAGE>

*1(c)(i). Form of Pricing Opinion of Welco Securities, Inc. with
respect to Certificates to be registered.

*1(c)(ii). Form of Pricing Opinion of Welco Securities, Inc. with
respect to Preferred Stock to be registered.

*1(d). Form of Selected Dealer's Agreement.

3(a). Articles of Incorporation of the Company. (Exhibit
3(a) to Registration No. 33-36775).

3(b). Bylaws of the Company. (Exhibit 3(b) to Registration
No. 33-36775).

4(a). Indenture dated as of November 15, 1990 between Summit
and West One Bank, Idaho, N.A., Trustee. (Exhibit 4(a)
to Registration No. 33-36775).

4(b). Amendment to Indenture dated as of November 15, 1990
between Summit and West One Bank, Idaho, N.A.,
Trustee. (Exhibit 4(b) to Registration No. 33-36775).

*4(c). Form of Statement of Rights, Designations and
Preferences of Variable Rate Cumulative Preferred
Stock Series S-1.

*4(d). Form of Variable Rate Cumulate Preferred Stock
Certificate.

*4(e). Form of Investment Certificate.

*5(a). Opinion of Susan A. Thomson, Attorney at Law, as to
validity of Investment Certificates. (Includes
consent.)

*5(b). Opinion of Susan A. Thomson, Attorney at Law, as to
validity of Preferred Stock. (Includes consent.)

10(a). Receivable Purchase Option Agreement between Summit
and Metropolitan Mortgage & Securities Co., Inc. dated
November 15, 1990. (Exhibit 10(a) to Registration No.
33-36775).

10(b). Service Contract between Summit and Metropolitan
Mortgage & Securities Co., Inc. dated November 15,
1990. (Exhibit 10(b) to Registration No. 33-36775).

10(c). Promissory Note dated March 31, 1991 between Summit
and Metropolitan Mortgage & Securities Co., Inc.
(Exhibit 10 to registrant's Annual Report on Form 10-K
for the year ended September 30, 1991.)

11. Computation of Earnings Per Common Share. (See
<PAGE>

Financial Statements.)

*12. Computation of Ratio of Earnings to Fixed Charges.

*23(a)(i). Consent of Coopers & Lybrand, Independent Certified
Public Accountants.

*23(a)(ii). Consent of BDO Seidman, Independent Certified Public
Accountants.

23(b). Consent of Susan A. Thomson, Attorney. (Included in
opinion furnished as Exhibit 5.)

*25. Statement on Form T-1 of West One Bank, Idaho, N.A.,
Trustee.

*Filed herewith

(b) Financial Statement Schedules:

Reports of Independent Certified Public
Accountants on Financial Statement Schedules
I Summary of Investments Other Than Investments in Related
Parties
VIII Valuation and Qualifying Accounts and Reserves
XII Loans on Real Estate

Schedules other than those listed above are omitted for the reason that
they are not required or are not applicable, or the required
information is shown in the financial statements or notes thereto.
Columns omitted from schedules filed have been omitted because the
information is not applicable.

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;

(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;

<PAGE>

(2) That, for the purpose of determining any
liability under the Securities Act of 1933, 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.

(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 Securities Act of 1933 may be
permitted to directors, officers, and controlling
persons of the Registrant pursuant to the
provisions described in Item 15 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.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, the registrant 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 January 13, 1994.

SUMMIT SECURITIES, INC.

/S/ C. PAUL SANDIFUR, JR.

By:
_________________________________________________
C. Paul Sandifur, Jr., President and
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment to Registration Statement has been signed by
the following persons in the capacities and on the dates indicated:

Signature Title Date

/S/ C. PAUL SANDIFUR, SR.
1/13/94
_________________________ Chairman of the Board ________
C. Paul Sandifur, Sr.

/S/ C. PAUL SANDIFUR, JR.
1/13/94
_________________________ President, Director and Chief ________
C. Paul Sandifur, Jr. Executive Officer

/S/ REUEL SWANSON
1/13/94
_________________________ Director and Secretary ________
Reuel Swanson

/S/ ALTON COGERT
1/13/94
_________________________ Chief Financial Officer and ________
Alton Cogert Assistant Vice President

/S/ STEVEN CROOKS
1/13/94
_________________________ Controller and Principal ________
Steven Crooks Accounting Officer

<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

ON FINANCIAL STATEMENT SCHEDULES

The Directors and Stockholders
Summit Securities, Inc.

The audits referred to in our report dated December 7, 1992,
relating to the financial statements of Summit Securities, Inc., as of
September 30, 1992 and for the two years in the period then ended,
which is contained in the Prospectus constituting part of this
Registration Statement, included the audits of the financial statement
schedules listed under Item 16(b) for each of the two years in the
period ended September 30, 1992. These financial statement schedules
are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statement schedules based
upon our audits.

In our opinion, such financial statement schedules present fairly,
in all material respects, the information set forth therein.

/s/ BDO SEIDMAN

BDO Seidman

Spokane, Washington
December 7, 1992

<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

ON FINANCIAL STATEMENT SCHEDULES

The Directors and Stockholder
Summit Securities, Inc.

In connection with our audit of the financial statements of Summit
Securities, Inc. as of September 30, 1993 and for the year then ended,
included herein, we have issued our report thereon, which includes an
explanatory paragraph describing changes in the Company's methods of
accounting for repossessed real property and income taxes, which
financial statements are included in the Prospectus. We have also
audited the 1993 financial statement schedules listed in Item 16
herein.

In our opinion, these 1993 financial statement schedules, when
considered in relation to the basic 1993 financial statements taken as
a whole, present fairly, in all material respects, the information
required to be included therein.

/s/ COOPERS & LYBRAND

Coopers & Lybrand

Spokane, Washington
December 13, 1993

<PAGE>

SCHEDULE I

SUMMIT SECURITIES, INC.
SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES
SEPTEMBER 30, 1993
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D
Amount at
Which Shown
Market on Balance
Cost Value Sheet
__________ __________ __________
<S> <C> <C> <C>
Type of Investment:
Real Estate
Contracts
and Mortgage Notes
Receivables $19,623,879 $19,623,879

Less Allowance for
Losses -- (96,654)
----------- -----------
TOTAL INVESTMENTS $19,623,879 $19,527,225
=========== ===========
</TABLE>

<PAGE>

SCHEDULE VIII

SUMMIT SECURITIES, INC.
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEARS ENDED SEPTEMBER 30, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
Additions
(Reductions) Deductions
Balance at Charged to and Balance
Beginning Costs and Accounts at end of
Description of Year Expenses Written Year
Off
(Recovery)
__________ __________ _________ _________
Allowance for Losses
Deducted from Real
Estate Contracts and
Mortgage Notes Receivable
on Balance Sheet
<S> <C> <C> <C> <C>
1993 $59,244 $15,000 $(22,410) $96,654
1992 50,000 18,762 9,518 59,244
1991 -- 50,000 -- 50,000
<CAPTION>

Allowances for Losses
Deducted from Real
Estate Held for Sale
on Balance Sheet

Schedule XII

SUMMIT SECURITIES, INC.
LOANS ON REAL ESTATE
September 30, 1993

Real estate contracts and mortgage notes ("Receivables) are located
throughout the United States. Approximately 21% of the Company's Receivables
are collateralized by property located in the Pacific Northwest (Washington,
Idaho, Montana and Oregon), approximately 9% by property located in California
and approximately 27% by property located in Hawaii. Less than 1% of the
Contracts are subject to variable interest rates. Interest rates range from
4% to 15%.
<TABLE>
<CAPTION>
Carrying Delinquent
Interest Maturity Amount of Principal
Description Rates Dates Receivables Amount
-------- -------- ----------- ----------
RESIDENTIAL Principally
<S> <C> <C> <C> <C>
First Mortgage > $ 50,000 9% to 12% 1993-2023 $ 3,725,561 $ 121,001
First Mortgage > $ 25,000 9% to 12% 1993-2023 2,508,012 113,233
First Mortgage < $ 25,000 9% to 12% 1993-2023 6,747,806 848,667
Second or Lower> $ 50,000 9% to 12% 1993-2023 1,199,410 ---
Second or Lower> $ 25,000 9% to 12% 1993-2023 3,016,995 48,886
Second or Lower< $ 25,000 9% to 12% 1993-2023 1,480,524 68,514

COMMERCIAL
First Mortgage > $ 50,000 9% to 12% 1993-2023 253,291 ---
First Mortgage > $ 25,000 9% to 12% 1993-2023 46,942 46,942
First Mortgage < $ 25,000 9% to 12% 1993-2023 23,021 ---
Second or Lower> $ 50,000 9% to 12% 1993-2023 148,720 ---
Second or Lower> $ 25,000 9% to 12% 1993-2023 363,431 31,596
Second or Lower< $ 25,000 9% to 12% 1993-2023 40,323 ---

FARM, LAND AND OTHER
First Mortgage > $ 50,000 9% to 12% 1993-2023 64,052 ---
First Mortgage > $ 25,000 9% to 12% 1993-2023 268,595 ---
First Mortgage < $ 25,000 9% to 12% 1993-2023 145,371 46,425
Second or Lower> $ 50,000 9% to 12% 1993-2023 568,615 326,433
Second or Lower> $ 25,000 9% to 12% 1993-2023 -- --
Second or Lower< $ 25,000 9% to 12% 1993-2023 101,074 10,303
Unrealized discounts, net
<PAGE>

of unamortized acquisition
costs, on receivables
purchased at a discount (1,076,488)

Accrued Interest Receivable 598,624

Performance Holdback on Receivable
Purchase (600,000)

Allowance for Losses (96,654)
----------- -----------
TOTAL $ 19,527,225 $1,662,000
=========== ===========

<FN>
The principal amount of Receivables subject to delinquent principal or interest is defined as
being in arrears for more than three months. Included in the delinquent principal amounts for
September 30, 1993 is approximately $680,000 of timeshare contracts purchased form an affiliate
during the current year. The Company has a performance holdback of $600,000 to cover losses
related to certain contracts including these contracts.
</TABLE>
<PAGE>

Schedule XII Continued

SUMMIT SECURITIES, INC.
LOANS ON REAL ESTATE
September 30, 1993
<TABLE>
<CAPTION>
For the Years Ended
September 30,

1993 1992 1991
<S> <C> <C> <C>
Balance at beginning
of period $11,596,730 $ 8,233,732 $ ---
----------- ---------- ----------
Additions during period

New receivables - cash 15,667,120 5,274,528 7,760,199

Loans to facilitate the
sale of real estate
held - non cash 205,492 96,717 ---

Assumption of other debt
payable in conjunction
with acquisition
of new receivables
- non cash 235,374 259,116 504,793

Increase in Accrued
Interest 154,034 153,709 110,884
---------- ---------- ----------
Total Additions 16,262,020 5,784,070 8,375,876
---------- ---------- ----------
Deductions During Period

Collections of Principal
- cash 8,083,497 2,245,741 92,144

Foreclosures - non
cash 210,618 166,087 ---

Increase in Allowances
for Losses 37,410 9,244 50,000
---------- ---------- ----------
Total Deductions 8,331,525 2,421,072 142,144
---------- ---------- ----------
Balance at End of Period $19,527,225 $11,596,730 $8,233,732
=========== ========== ==========
</TABLE>

<PAGE>

GRAPHS APPENDIX

1. INSIDE FRONT COVER PAGE:

A full color page with the registrants name and logo. the full color
back ground is the image of a mountain range which matches the cover of
the company's annual report.

2. A circular diagram with an arrow from one paragraph to the next,
depicting how the investor's proceeds are used. The graphic contains
the following introductory statement: "The following diagram depicts
a standard model for how an investor's money is used by the Company for
investment in Receivables. This model is for illustrative purposes,
and is not intended to be exhaustive. It is qualified in its entirety
and should be read in conjunction with the detailed information
provided elsewhere in the prospectus."

The graphic includes the following paragraphs within the circular
diagram. The diagram contains an arrow from one paragraph to the next:
Election is made to invest/reinvest in Preferred Stock. The Company
invests the money in Receivables secured by real estate. The Receivable
obligors make principal and interest payments to the Company. Some of
the money received as payment is used to finance the cost of doing
business. Dividend payments are paid or reinvested at the direction of
the investor.

The graphic contains the following statement in bold in the center of
the circular diagram: DIAGRAM SHOWING HOW INVESTORS' MONEY IS USED IN
THE PURCHASE OF RECEIVABLES.

3. Two graphs depicting how the Company earns a greater yield on a
Receivable through purchasing the Receivables at a discount from the
face amount. Both graphs have a vertical axis which show the Company's
investment in the receivable, the face value and the interest earned.
The horizontal axis shows years. A line is drawn from each of the
three points on the vertical axis, sloping down to the 15 year mark on
the horizontal axis. The areas between these lines are identified as
A, B and C.

The first graph contains the following explanatory heading: Receivable
Purchased At a Discount - Example of a $50,000 Receivable purchased
at a discount. Interest rate is 10%, term is 15 years. The Company
pays A and receives B &C as income.

The second graph contains the following explanatory heading:
Receivable Purchased Without a Discount - Example of a $50,000
Receivable purchased without a discount. Interest rate if 10%, term is
15 years. The Company pays A & B. The Company receives C as income.

4. INSIDE BACK COVER:

A full color page containing the company name and logo. The center of
the page contains a color map of the U.S. and indicates the locations
of the headquarters and branch offices of Metropolitan. The copy reads:

The source for Summit Securities' Receivables Investments is: The
Metropolitan Receivable Acquisition Network. Location of home and
branch offices: Metropolitan Mortgage & Securities Co., Inc. *
<PAGE>

home office. Branch office.

The full color back ground is the image of a mountain range which
matches the cover of the Company's annual report.
<PAGE>

As filed with the Securities and Exchange Commission on January 13,
1994. Registration No. 33-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

__________________________________

FORM S-1

REGISTRATION STATEMENT

Under

THE SECURITIES ACT OF 1933

__________________________

(Exact name of registrant as specified in charter)

__________________________

Idaho 6799

(State or other jurisdiction of (Primary Standard Industrial
incorporation or organization Classification Code Number)

West 929 Sprague Avenue
Spokane, Washington 99204
82-0438135 (509) 838-3111
(I.R.S. Employer (Address, including zip code
Identification No.) and telephone number, including
area code, of registrant's
principal executive offices)

C. Paul Sandifur, Jr.
President
Summit Securities, Inc.
W. 929 Sprague Avenue
Spokane, WA 99204
Telephone No. (509) 838-3111
_____________________________________
(Name, address, including zip code,
and telephone number, including area
code, of agent for service)
_____________________________________

EXHIBIT VOLUME

<PAGE>
EXHIBIT INDEX
Page
Number
1(a)(i). Form of Selling Agreement between Summit and
Metropolitan Investment Securities, Inc. with
respect to Certificates.

*1(a)(ii). Form of Selling Agreement between Summit and
Metropolitan Investment Securities, Inc. with
respect to Preferred Stock Series S-1.

*1(b)(i). Form of Agreement to Act as Qualified
Independent Underwriter between Summit,
Metropolitan Investment Securities, Inc. and
Welco Securities, Inc. with respect to
Certificates to be registered.

*1(b)(ii). Form of Agreement to Act as Qualified
Independent Underwriter between Summit,
Metropolitan Investment Securities, Inc. and
Welco Securities, Inc. with respect to Preferred
Stock to be registered.
*1(c)(i). Form of Pricing Opinion of Welco Securities,
Inc. with respect to Certificates to be
registered.

*1(c)(ii). Form of Pricing Opinion of Welco Securities,
Inc. with respect to Preferred Stock to be
registered.

*1(d). Form of Selected Dealer's Agreement.

*4(c). Form of Statement of Rights, Designations and
Preferences of Variable Rate Cumulative
Preferred Stock Series S-1.

*4(d). Form of Variable Rate Cumulate Preferred Stock
Certificate.

*4(e). Form of Investment Certificate.

*5(a). Opinion of Susan A. Thomson, Attorney at Law, as
to validity of Investment Certificates.
(Includes consent.)

*5(b). Opinion of Susan A. Thomson, Attorney at Law, as
to validity of Preferred Stock. (Includes
consent.)

*12. Computation of Ratio of Earnings to Fixed
Charges.

*23(a)(i). Consent of Coopers & Lybrand, Independent
Certified Public Accountants.

*23(a)(ii). Consent of BDO Seidman, Independent Certified
Public Accountants.

*25. Statement on Form T-1 of West One Bank, Idaho,
N.A., Trustee.

* Filed herewith
<PAGE>

Exhibit 1(a)(i)

SELLING AGREEMENT

This Agreement made as of the , by and
between SUMMIT SECURITIES, INC., an Idaho corporation ("Summit") and
METROPOLITAN INVESTMENT SECURITIES, INC., a Washington corporation (the
"Selling Agent").

WITNESSETH:

WHEREAS, Summit proposes to issue and sell $40,000,000 principal
amount of its Investment Certificates, Series A (the "Certificates")
pursuant to a Registration Statement (or Registration Statements) and
a Prospectus (or Prospectuses) filed under the Securities Act of 1933;
and

WHEREAS, the Selling Agent, an affiliate of Summit, for good and
valuable consideration the receipt of which is hereby acknowledged,
desires to assist in the sale of the Certificates upon the terms and in
reliance upon the representations, warranties and agreements set forth
herein;

NOW, THEREFORE, the parties hereto agree as follows:

1. Appointment of Selling Agent.

Summit hereby appoints the Selling Agent as its managing agent to
offer and sell the Certificates at the prices and in the manner
described in the Registration Statement and the Prospectus and in
compliance with the terms and conditions thereof. Summit agrees to
provide the Selling Agent with such number of Registration Statements
and Prospectuses as it reasonably requests to enable it to offer the
Certificates and authorizes the Selling Agent to distribute the
Registration Statements and Prospectuses.

2. Undertaking of Selling Agent.

The Selling Agent agrees to use its best efforts to sell the
Certificates on the terms stated herein and in the Registration
Statement and Prospectus and to notify Summit of the number of
Certificates with respect to which subscription agreements have been
executed by subscribers. It is understood that the Selling Agent has
no commitment to sell the Certificates other than to use its best
efforts. The Selling Agent will deliver all cash and checks received
from the subscribers to Summit by noon of the next business day. All
checks received by the Selling Agent from subscribers shall be made
payable to Summit. The Selling Agent will not maintain discretionary
customer accounts and undertakes that it will not, in any event make
discretionary purchases for the accounts of customers.

3. Amendment of the Registration Statement and Prospectus.

Summit agrees, at its expense, to amend or supplement the
Registration Statement or the Prospectus and to provide the Selling
Agent with sufficient copies thereof for distribution as contemplated
<PAGE>

in the Registration Statement or the Prospectus or otherwise for
purposes contemplated by federal and state securities laws, if (i) the
Selling Agent advises Summit that in its opinion and that of its
counsel, such amendment or supplement is necessary or advisable, or
(ii) such amendment or supplement is necessary to comply with federal
or state securities laws or the rules or regulations promulgated
thereunder or is necessary to correct any untrue statement therein or
eliminate any material omissions therein or any omissions therein which
make any of the statements therein misleading. The representations,
warranties and obligations to indemnify all parties hereto contained
herein relating to the Registration Statement or the Prospectus shall
attach to any such amendment or supplement.

4. Undertakings of Summit.

Summit will promptly notify the Selling Agent in the event of the
issuance by the Securities and Exchange Commission ("SEC") of any stop
order or other order suspending the Registration of the Certificates,
or in the event of the institution or intended institution of any
action or proceeding for that purpose. In the event that the SEC shall
enter a stop order suspending or otherwise suspend the Registration of
the Certificates, Summit will make every reasonable effort to obtain as
promptly as possible the entry of an appropriate order setting aside
such stop order or otherwise reinstating the Registration of the
Certificates.

5. Representations and Warranties.

Summit represents and warrants to the Selling Agent that:

(i) The Registration Statement and the Prospectus comply as to
form in all material respects with the Securities Act of 1933 and the
rules and regulations of the SEC thereunder, accurately describe the
operations of Summit and do not contain any misleading or untrue
statements of a material fact or omit to state a material fact which is
necessary to prevent the statements therein from being misleading.

(ii) Summit is a corporation duly organized and validly existing
under the laws of the State of Idaho with full corporate power to
perform its obligations as described in the Registration Statement and
the Prospectus.

(iii) The Certificates, when issued and sold pursuant to the
terms hereof and of the Registration Statement, Prospectus and
subscription agreements, will constitute valid, binding and legal
outstanding obligations of Summit, in accordance with their terms.

(iv) This Agreement has been duly and validly authorized,
executed and delivered on behalf of Summit and is a valid and binding
agreement in accordance with its terms.

6. Indemnification.

Summit and the Selling Agent each (a) agree to indemnify and hold
harmless the other (and each person, if any, who controls the other)
against any loss, claim, damage, charge or liability to which the other
(or such controlling persons) may become subject, insofar as such loss,
claim, damage, charge or liability (or actions in respect thereof) (i)
<PAGE>

arises out of or is based upon any misrepresentation or breach of
warranty of such party herein or any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement
or the Prospectus (or any amendment or supplement thereto) which
relates to or was supplied by such party, or (ii) arises out of or is
based upon the omission or alleged omission to state therein a material
fact relating to such party required to be stated therein or necessary
to make the statements therein not misleading, including liabilities
under the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, and (b) agree to reimburse such other
party (and any controlling persons) for any legal or other fees or
expenses reasonably incurred in connection with investigating or
defending any action or claim arising out of or based upon any of the
foregoing.

7. Fees and Expenses.

Summit will pay all expenses incurred in connection with the
offering and sale of the Certificates, including without limitation,
fees and expenses of counsel, blue sky fees and expenses (including
legal fees), printing expenses, accounting fees and expenses, and fees
and expenses of West One Bank, Idaho, N.A., as Trustee.

In the event of termination of the offering, Selling Agent will be
reimbursed only for its actual accountable out-of-pocket expenses.

The maximum commissions payable upon sale of the Certificates
shall be 5% of the investment amount.

8. Governing Law.

This Agreement shall be deemed to be made under and governed by
the laws of the State of Idaho.

IN WITNESS WHEREOF, this Agreement has been executed by the
parties hereto as of the day and year first above mentioned.

SUMMIT SECURITIES, INC.

/S/ PAUL SANDIFUR JR.

By:___________________________________
C. Paul Sandifur Jr., President

METROPOLITAN INVESTMENT SECURITIES, INC.

/S/ SUSAN A. THOMSON

By_____________________________________
Susan A. Thomson, Vice President

<PAGE>

Exhibit 1(a)(ii)

FORM OF

VARIABLE RATE CUMULATIVE PREFERRED STOCK

SELLING AGREEMENT

This Agreement made as of the day of January, 1994, by and
between SUMMIT SECURITIES, INC., an Idaho corporation ("Summit") and
METROPOLITAN INVESTMENT SECURITIES, INC., a Washington corporation (the
"Selling Agent").

WHEREAS, Summit proposes to issue and sell 150,000 shares of

WITNESSETH:
Variable Rate Cumulative Preferred Stock, Series S-1 (par value $10.00
per share) ("Preferred Stock") pursuant to a Registration Statement (or
Registration Statements) and a Prospectus (or Prospectuses) filed under
the Securities Act of 1933; and

WHEREAS, the Selling Agent, an affiliate of Summit, for good and
valuable consideration the receipt of which is hereby acknowledged,
desires to assist in the sale of the Preferred Stock upon the terms and
in reliance upon the representations, warranties and agreements set
forth herein;

NOW, THEREFORE, the parties hereto agree as follows:

1. APPOINTMENT OF SELLING AGENT.

Summit hereby appoints the Selling Agent as its exclusive agent to
offer and sell the Preferred Stock at the prices and in the manner
described in the Registration Statement and the Prospectus and in
compliance with the terms and conditions thereof. Summit agrees to
provide the Selling Agent with such number of Registration Statements
and Prospectuses as it reasonably requests to enable it to offer the
Preferred Stock and authorizes the Selling Agent to distribute the
Registration Statements and Prospectuses.

2. UNDERTAKING OF SELLING AGENT.

The Selling Agent agrees to use its best efforts to sell the
Preferred Stock on the terms stated herein and in the Registration
Statement and Prospectus and to notify Summit of the number of shares
of Preferred Stock with respect to which subscription agreements have
been executed by subscribers. It is understood that the Selling Agent
has no commitment to sell the Preferred Stock other than to use its
best efforts. The Selling Agent will deliver all cash and checks
received from subscribers to Summit by noon of the next business day.
All checks received by the Selling Agent from subscribers shall be made
payable to Summit.

The Selling Agent will not maintain discretionary customer
accounts and undertakes that it will not in any event make
discretionary purchases of the Preferred Stock for the accounts of
customers.

<PAGE>

3. AMENDMENT OF THE REGISTRATION STATEMENT AND PROSPECTUS.

Summit agrees, at its expense, to amend or supplement that
Registration Statement or the Prospectus and to provide the Selling
Agent with sufficient copies thereof for distribution as contemplated
in the Registration Statement or the Prospectus or otherwise for
purposes contemplated by federal and state securities laws, it (i) the
Selling Agent advises Summit that in its opinion and that of its
counsel, such amendment or supplement is necessary or advisable, or
(ii) such amendment or supplement is necessary to comply with federal
or state securities laws or the rules or regulations promulgated
thereunder or is necessary to correct any untrue statement therein or
eliminate any material omissions therein which make any of the
statement s therein misleading. The representation, warranties, and
obligations to indemnify all parties thereto contained herein relating
to the Registration Statement or the Prospectus shall attach to any
such amendment or supplement.

4. UNDERTAKINGS OR SUMMIT.

Summit will promptly notify the Selling Agent in the event of the
issuance by the Securities and Exchange Commission ("SEC") of any stop
order or other orders us pending the Registration of the Preferred
Stock, or in the event of the institution or intended institution of
any action or preceding for that purpose. In the event that the SEC
shall enter a stop order suspending or otherwise suspend the
Registration of the Preferred Stock, Summit will make every reasonable
effort to obtain as promptly as possible the entry of an appropriate
order setting aside such stop order or otherwise reinstate the
Registration of the Preferred Stock.

5. REPRESENTATIONS AND WARRANTIES.

Summit represents and warrants to the Selling Agent that:

(i) The Registration Statement and the Prospectus comply as to
form in all material respects with the Securities Act of
1933; and the rules and regulations of the SEC thereunder,
accurately describe the operations of Summit and do not
contain any misleading or untrue statements of a material
fact or omit to state a material fact which is necessary to
prevent the statements therein from being misleading.

(ii) Summit is a corporation duly organized and validly existing
under the Washington Business Corporation Act with full
corporate power to perform its obligations as described int
he Registration Statement and the Prospectus.

(iii) The Preferred Stock, when issued and sold pursuant to the
terms hereof and of the Registration Statement, Prospectus
and subscription agreements, will be legally issued, fully
paid and nonassessable.

(iv) This Agreement has been duly and validly authorized,
executed, and delivered on behalf of Summit and is a valid
and binding agreement of Summit in accordance with its
terms.

<PAGE>

6. INDEMNIFICATION.

Summit and the Selling Agent each (a) agree to indemnify and hold
harmless the other (and each person, if any, who controls the other)
against any loss, claim, damage, charge or liability to which the other
or such charge or liability (or actions in respect thereof) (i) arises
out of or is based upon any misrepresentation or breach of warranty of
such party herein or any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement or the
Prospectus (or any amendment or supplement thereto) which relates to or
was supplied by such party, or (i) arises out of or is based upon the
omission or alleged omission to state therein a material fact relating
to such party required to be stated therein or necessary to make the
statements therein not misleading, including liabilities under the
Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended, and (b) agree to reimburse such other party (and any
controlling persons) for any legal or other fees or expenses reasonably
incurred in connection with investigating or defending any action or
claim arising out of or based upon any of the foregoing.

7. FEES AND EXPENSES.

Summit will pay all expenses incurred in connection with the
offering and sale of the Preferred Stock, including without limitation,
fees and expenses of counsel, blue sky fees and expenses (including
legal fees), printing expenses, and accounting fees and expenses.
Provided, however, that in the event of termination of the offering,
Selling Agent will only be reimbursed for its actual, accountable,
out-of-pocket expenses.

The maximum commissions payable upon sale of the Preferred Stock
shall be 5% of the investment amount.

8. This agreement shall not in any way affect, modify or change
the terms of that certain Selling Agreement, dated
between the parties hereto which provides
for the sale of Investment Certificates.

9. GOVERNING LAW.

This Agreement shall be deemed to be made under and governed by
the laws of the State of Washington.

<PAGE>

IN WITNESS WHEREOF, this Agreement has been executed by the
parties hereto as of the day and year first above mentioned.

SUMMIT SECURITIES, INC.

/S/ C. PAUL SANDIFUR, JR.

By ______________________________________________
C. Paul Sandifur, Jr., President

METROPOLITAN INVESTMENT SECURITIES, INC.

/S/ SUSAN A. THOMSON

By ______________________________________________
Susan A. Thomson, Vice President
<PAGE>

Exhibit 1(b)(i)

FORM OF
AGREEMENT TO ACT AS "QUALIFIED INDEPENDENT UNDERWRITER"

This agreement made as of the , by and
between Summit Securities, Inc., an Idaho corporation ("Summit"),
Metropolitan Investment Securities, Inc., a Washington corporation
("MIS"), and Welco Securities, Inc., a Nevada Corporation ("Welco").

WITNESSETH:

WHEREAS, Summit intends to offer $40,000,000 of Investment
Certificates Series A (hereinafter referred to as "Certificates"),
which will be offered in reliance on registration statement filed on
Form S-1, bearing SEC file number ; and,
WHEREAS, MIS, an affiliate of Summit and a member of the National
Association of Securities Dealers ("NASD"), will be engaged as the
managing sales agent for Summit; and,
WHEREAS, pursuant to Section 3 of Schedule E of the Bylaws of the
NASD, MIS, as a NASD member, may participate in such underwriting only
if the yield at which the Certificates offered to the public is not
lower than the yield recommended by a "Qualified Independent
Underwriter" as that term is defined in Section 2(l) (1) through 2(l)
(7) of Schedule E to the Bylaws 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
Summit is retaining Welco to serve as such a "Qualified Independent
Underwriter" in connection with this offering of Certificates;
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-1 (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 Certificates 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 (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. SCHEDULE E REQUIREMENT. Welco hereby confirms its agreement
as set forth in clause (6) of paragraph (l) of Section 2 of Schedule E
of the Bylaws of the NASD and represents that, as appropriate, Welco
satisfies or at the times designated in such paragraph (l) will satisfy
the other requirements set forth therein or will receive an exemption
from such requirements from the NASD.
2. CONSENT. Welco hereby consents to be named in the
Registration Statement and Prospectus as having acted as a "Qualified
Independent Underwriter" solely for the purposes of Schedule E
<PAGE>

referenced herein. Except as permitted by the immediately preceding
sentence or to the extent required by law, all references to Welco 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 Summit or any
corporation controlling, controlled by or under common control with
Summit, or by any director, officer, employee, representative or agent
of any thereof, shall be subject to Welco's prior written consent with
respect to form and substance.
3. PRICING FORMULA AND OPINION. Welco agrees to render a
written opinion as to the yields below which Summit's Certificates may
not be offered based on the pricing formula that is set forth in
Exhibits "A" and "B," attached hereto and incorporated herein by
reference. It is understood and agreed that the securities to which
this Agreement relates will be offered on a continuous, best efforts
basis by MIS, as the managing sales agent of Summit pursuant to the
Selling Agreement in effect between MIS and Summit which is filed as an
exhibit to the Registration Statement referred to above. Summit, will
continue to offer the Certificates according to the terms and
conditions of said Selling Agreement in accordance with this Agreement,
including, without limitation, Exhibits "A" and "B". Welco reserves
the right to review and amend its opinion upon the filing of any
post-effective amendment to the 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 shall terminate
or otherwise lapse under operation of law.
4. FEES AND EXPENSE. It is understood that Summit shall
reimburse Welco for its expenses on a nonaccountable basis in the
amount of $5,000 the receipt of which is hereby acknowledged. It is
further agreed that Welco shall be paid an additional amount of $18,500
at the time the pricing opinion and pricing formula are rendered,
concurrent with the closing. Welco agrees to pay all fees and expenses
to any legal counsel whom it may employ to represent it separately in
connection with or on account of its actions contemplated herein. All
mailing, telephone, travel, hotel, meals, clerical, or other office
costs incurred or to be incurred by Welco in conjunction with Summit's
proposed offering which is the subject of this Agreement shall be
reimbursed to Welco by Summit at closing on an accountable basis upon
receipt of an itemization of said expenses.
5. MATERIAL FACTS. Summit represents and warrants to Welco that
at the time the Registration Statement or any amendment thereto becomes
effective, 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, 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 said registration
statement have been filed. Summit further represents and warrants that
any further filing, report, document, release or communication which in
any way refers to Welco or to the services to be performed by Welco
pursuant to this Agreement will not contain any untrue or misleading
statement of a material fact or omit to state a material fact required
<PAGE>

to be stated therein or necessary to make the statements therein not
misleading.
Summit further warrants and represents that:
(a) All leases, contracts and agreements referred to in or filed
as exhibits to the Registration Statement to which Summit is a party or
by which it is bound are in full force and effect.
(b) Summit 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 Statement and Prospectus; and that
Summit has no material leased properties except as disclosed in the
Prospectus.
(c) Summit is duly organized under the laws of the State of Idaho
and, as of the effective date of the Registration Statement, Summit
will be validly existing and in good standing under the laws of the
State of Idaho with full corporate power and authority to own its
properties and conduct its business to the extent described in the
Registration Statement and Prospectus; Summit 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 Summit is as set forth
in the Prospectus and the description in the Prospectus of the capital
stock of Summit conforms with and accurately describes the rights set
forth in the instruments defining the same;
(d) Summit 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
Summit 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 Summit or MIS, or any deed of trust, lease, sublease, indenture,
mortgage, or other agreement or instrument to which Summit 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 Summit 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 Blue Sky Laws.
(f) Any certificate signed by an officer of Summit and delivered
to Welco pursuant to this Agreement shall be deemed a representation
and warranty by Summit to Welco, to have the same force and effect as
stated herein, as to the matters covered thereby.
(g) If any event relating to or affecting Summit shall occur as
a result of which it is necessary, in Welco's opinion, to amend or
supplement the Prospectus in order to make the Prospectus not
<PAGE>

misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, Summit undertakes to inform MIS of such
events within a reasonable time thereafter, and will forthwith prepare
and furnish to MIS, 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 Welco) 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) Summit hereby warrants and represents that it will offer the
Certificates described herein in accordance with the pricing formula
set forth in Exhibits "A" and "B" hereto.
(i) All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of Summit
submitted pursuant hereto, shall remain operative and in full force and
effect, surviving the date of this Agreement.
6. AVAILABILITY OF INFORMATION. Summit hereby agrees to provide
Welco, at its expense, with all information and documentation with
respect to its business, financial condition and other matters as Welco
may deem relevant based on the standards of reasonableness and good
faith and shall request in connection with Welco'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 Welco as Welco may request on the effective date
of the Registration Statement. Summit will make reasonably available
to Welco, its auditors, counsel, and officers and directors to discuss
with Welco any aspect of Summit which Welco may deem relevant. In
addition, Summit, at Welco's request, will cause to be delivered to
Welco 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 Welco to rely
thereon to the same extent as if addressed directly to Welco. Summit
represents and warrants to Welco 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, Summit will promptly advise Welco 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
Welco may be entitled pursuant to any agreement among underwriters,
underwriting agreement or otherwise, and to the extent allowed by law,
Summit hereby agrees that it will indemnify and hold Welco and each
person controlling, controlled by or under common control with Welco
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
<PAGE>

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 Summit or based upon written information furnished by
Summit filed in any jurisdiction in order to qualify the Certificates
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 Summit in
this Agreement. Summit 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 Summit has indemnified such
person pursuant hereto. Notwithstanding the foregoing provisions of
this paragraph 7, any such payment or reimbursement by Summit 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 willful misfeasance will be promptly
repaid to Summit. In addition, anything in this paragraph 7 to the
contrary notwithstanding, Summit 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 Summit under paragraph (a), notify Summit in writing of
the commencement thereof; but the omission to so notify Summit will not
relieve Summit 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 Summit'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 Summit of the
commencement thereof, Summit 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 Summit or any corporation controlling, controlled by or
under common control with Summit, or any director, officer, employee,
representative or agent of any thereof, or any other "Qualified
Independent Underwriter" retained by Summit 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 Summit to such Indemnified
Person of its election so to assume the defense of such action and
approval by the Indemnified Person of counsel, Summit will not be
liable to such Indemnified Person under this paragraph 7 for any fees
of counsel subsequently incurred by such Indemnified Person in
<PAGE>

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 Summit 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 Welco), (ii)
Summit, 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) Summit
shall have authorized in writing the employment of counsel for the
Indemnified Person at the expense of Summit, 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).
(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 Summit to Welco on grounds of policy or
otherwise, Summit and Welco 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 Summit and Welco may be subject in such proportion so that
Welco 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 Summit is responsible
for the balance, except as Summit 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 Welco 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 Welco, or any
partner, director, officer, employee, representative or any agent of
any thereof, shall have the same rights to contribution as Welco and
each person who controls Summit within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, each officer of Summit who shall
have signed the Registration Statement and each director of Summit
shall have the same rights to contribution as Summit, 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 SUMMIT. Summit represents and warrants to
Welco that this Agreement has been duly authorized, executed and
delivered by Summit and constitutes a valid and binding obligation of
Summit.
9. AUTHORIZATION BY MIS. MIS represents and warrants to Welco
<PAGE>

that this Agreement has been duly authorized, executed and delivered by
MIS and constitutes a valid and binding obligation of MIS.
10. AUTHORIZATION BY WELCO. Welco represents and warrants to
Summit that this Agreement has been duly authorized, executed and
delivered by Welco and constitutes a valid and binding obligation of
Welco.
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 Welco, at 101
West City Avenue, Suite 2130, Bala Cynwyd, PA 19004-9967, Attention:
Kenneth S. Shapiro, and (b) if to Summit, at W. 929 Sprague Ave.,
Spokane, WA 99204 Attention: Susan A. Thomson.
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 Idaho 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.

SUMMIT SECURITIES, INC.

/S/ C. PAUL SANDIFUR, JR.

By: ______________________________________________
C. Paul Sandifur Jr., President

/S/ REUEL SWANSON

By: ______________________________________________
Reuel Swanson, Secretary

METROPOLITAN INVESTMENT SECURITIES, INC.

/S/ SUSAN A. THOMSON

By: ______________________________________________
Susan A. Thomson, Vice President

/S/ REUEL SWANSON

By: ______________________________________________
Reuel Swanson, Secretary

WELCO SECURITIES, INC.

/S/ KENNETH S. SHAPIRO

By: _____________________________________________
Kenneth S. Shapiro, President
<PAGE>

EXHIBIT A

The opinion of Welco is conditioned upon Summit's undertaking to
maintain the rates on its Certificates at least equal to an "assumed
floor." Based upon the pricing formula described below:

1. The interest rate to be paid on the Certificates shall be
fixed by Summit from time to time. However, the rate shall
not be lower than the computation made per the worksheet on
Exhibit B, which is attached and incorporated by reference
herein.

2. The "assumed floor" for 6 to 11 month Certificates 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. First Interstate Bank of Washington
b. Great American Bank
c. West One Bank, Idaho, N.A.
d. U.S. Bank of Washington
e. Security Pacific Bank of Washington
f. Seattle First National Bank
g. Washington Mutual Savings Bank
h. Washington Trust Bank

Welco and Summit 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 Certificates 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 Certificates shall be at least equal to the
interpolated differences between the computation of the
"assumed floor" of 6 to 11 month Certificates and 60 to 120
month Certificates, based upon the computation set forth in
Exhibit B.

5. Rates on Certificates payable in installments of principal
and interest shall be no lower than .25% below the "assumed
floor" for 60 to 120 month Certificates.

<PAGE>

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 Summit causes the offering rates to
change from those in effect on the first Tuesday of each
month ("the computation date"). Summit agrees to furnish
Welco with a computation of the "assumed floor" by completing
the worksheet on Exhibit B. Should the offering rates at
that time on Summit's Certificates be less than the "assumed
floor" as computed, Summit agrees to raise the rates on its
Certificates to at least the "assumed floor" within 10
calendar days of the computation date. Should Summit fail to
raise its offering rates within the 10 day period referred to
above, Welco reserves the right, in its uncontrolled
discretion, to withdraw its opinion regarding the offering
rates on the Certificates.
<PAGE>

EXHIBIT B

SUMMIT SECURITIES
PRICING FORMULA
<TABLE>
<CAPTION>
C.D. RATE GOVERNMENT RATE

Average rate between a composite of 8 selected Most current of 8 selected auction rate
Banks and Savings and Loans as of the 1st Tuesday available on the 1st Tuesday of each month.

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E

CERTIFICATE OF DEPOSIT GOVERNMENT RATE ENTER LESSER SUMMIT'S
(CD) CALCULATION CALCULATION OF COLUMN A OR B ASSUMED FLOOR CURRENT RATE

<S> <C> <S> <C> <C> <C> <C> <C>
5 yr CD rate = ________ 5 yr Govt Rate = ________

6 mo CD Rate = ________ 6 mo Govt Rate = ________

DIFFERENCE = ________ DIFFERENCE = ________
x .20 x .20
________ ________

Differential = ________ Differential = ________

(enter in (a) (enter in (a)
below) below)

6 mo (actual) 6 mo (actual)
rate = ________ rate = ________ ____________________ + 1% ____________________ ___________
(a) + (a) + 6-11 mos.
________ ________

1 year rate = ________ 1 year rate = ________ ____________________ + 1% ____________________ ___________
(a) + (a) + 12-23 mos.
________ ________

2 year rate = ________ 2 year rate = ________ ____________________ + 1% ____________________ ___________
(a) + (a) + 24-35 mos.
________ ________

3 year rate = ________ 3 year rate = ________ ____________________ + 1% ____________________ ___________
(a) + (a) + 36-47 mos.
________ ________

<PAGE>

4 year rate = ________ 4 year rate = ________ ____________________ + 1% ____________________ ___________
(a) + (a) + 48-59 mos.
________ ________

5 - 10 year 5 year
(actual) rate ________ (actual) rate ________ ____________________ + 1% ____________________ ___________
60-120 mos.
- .25
____________________
<CAPTION>
<S> <C> <C>
INSTALLMENT PAYMENTS (Floor equal to Five Yr. rate MINUS .25)......................... ____________________ ___________*
Install.

* The rate for installment payment bonds is .5% less than those specified for comparable terms.
</TABLE>
<PAGE>

Exhibit b(ii)
FORM OF
AGREEMENT TO ACT AS "QUALIFIED INDEPENDENT UNDERWRITER"

This agreement made as of the day of January, 1994, by
and between Summit Securities, Inc., an Idaho corporation ("Summit"),
Metropolitan Investment Securities, Inc., a Washington corporation
("MIS"), and Welco Securities, Inc., a Nevada Corporation ("Welco").
WITNESSETH:
WHEREAS, Summit intends to offer 150,000 shares of Preferred
Stock, designated as "Variable Rate Cumulative Preferred Stock, Series
S-1," (hereinafter referred to as the "Preferred Stock"), which will be
offered in reliance on a post-effective amendment to a registration
statement filed on Form S-1, bearing SEC file number 33-
; and,
WHEREAS, MIS, a wholly-owned broker/dealer an affiliate of Summit
and a member of the National Association of Securities Dealers
("NASD"), will be engaged as the sole selling agent for its affiliate,
Summit,
WHEREAS, pursuant to Section 3 of Schedule E of the Bylaws of the
NASD, MIS, as a NASD member, may participate in such underwriting only
if the price at which the Preferred Stock is offered to the public is
no higher than the price recommended by a "Qualified Independent
Underwriter" as that term is defined in Section 2(l) (1) through 2(l)
(6) of Schedule E to the Bylaws 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
Summit is retaining Welco to serve as such a "Qualified Independent
Underwriter" in connection with this offering of Preferred Stock;
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-1 (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 preferred stock 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 (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. SCHEDULE E REQUIREMENT. Welco hereby confirms its agreement
as set forth in clause (6) of paragraph (l) of Section 2 of Schedule E
of the Bylaws of the NASD and represents that, as appropriate, Welco
satisfies or at the times designated in such paragraph (l) satisfies
the other requirements set forth therein or will receive an exemption
from such requirements from the NASD.
2. CONSENT. Welco hereby consents to be named in the
Registration Statement and Prospectus as having acted as a "Qualified
Independent Underwriter" solely for the purposes of Schedule E
<PAGE>

referenced herein. Except as permitted by the immediately preceding
sentence or to the extent required by law, all references to Welco 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 Summit or any
corporation controlling, controlled by or under common control with
Summit, or by any director, officer, employee, representative or agent
of any thereof, shall be subject to Welco's prior written consent with
respect to form and substance.
3. PRICING FORMULA AND OPINION. Welco agrees to render a
written opinion as to the price above which Summit's Preferred Stock
may not be offered based on the computation of dividends to be declared
on those shares that is set forth in Schedule "A," a copy of which is
attached hereto, and incorporated herein by reference. It is
understood and agreed by Welco that the securities to which this
Agreement relates will be offered on a best efforts basis by MIS, as
the sole selling agent of Summit pursuant to the selling agreement to
be entered into between MIS and Summit which is filed as exhibit to the
Registration Statement referred to above. Summit, through MIS, will
continue to offer the preferred stock according to the terms and
conditions of said agreement, in accordance with this Agreement. Welco
reserves the right to review and amend its opinion 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 understood that Summit shall
reimburse Welco for its expenses on a nonaccountable basis in the
amount of $5,000 to be paid irrespective of closing at the request of
Welco. It is further agreed that Welco shall be paid an additional
amount of $15,000 at the time the pricing opinion is rendered,
concurrent with the closing. Welco agrees to pay all fees and expenses
to any legal counsel whom it may employ to represent it separately in
connection with or on account of its actions contemplated herein. All
mailing, telephone, travel, hotel, meals, clerical, or other office
costs incurred or to be incurred by Welco in conjunction with Summit's
proposed offering which is the subject of this Agreement shall be
reimbursed to Welco by Summit at closing on an accountable basis upon
receipt of an itemization of said expenses.
5. MATERIAL FACTS. Summit represents and warrants to Welco 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 Preferred Stock to be sold
in the Offering is made by the underwriter or underwriters, as the case
may be, participating in the Offering and by Summit (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 said registration
statement have been filed. Summit further represents and warrants that
any further filing, report, document, release or communication which in
<PAGE>

any way refers to Welco or to the services to be performed by Welco
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.
Summit further warrants and represents that:
(a) All leases, contracts and agreements referred to in or filed
as exhibits to the Registration Statement to which Summit or its
subsidiaries is a party or by which it is bound are in full force and
effect.
(b) Summit has good and marketable title, except as otherwise
indicated in the Registration Statement and Prospectus, to all of their
assets and properties described therein as being owned by them, 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 Statement and Prospectus;
and Summit has no material leased properties except as disclosed in the
Prospectus.
(c) Summit is duly organized under the laws of the State of Idaho
and, as of the effective date of the Registration Statement and at
Closing Summit will be validly existing and in good standing under the
laws of the State of Idaho with full corporate power and authority to
own its properties and conduct its business to the extent described in
the Registration Statement and Prospectus; Summit is duly qualified to
do business as foreign corporations and in good standing in all
jurisdictions in which the nature of the business transacted by them or
their ownership of properties or assets makes their qualification
necessary; the authorized and outstanding capitalization of Summit is
as set forth in the Prospectus and the description in the Prospectus of
the capital stock of Summit conforms with and accurately describes the
rights set forth in the instruments defining the same;
(d) Summit is not in violation of their respective certificates
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 any of them is a party or by which any of them is bound.
(e) The execution, delivery and performance of this Agreement has
been duly authorized by all necessary corporate action on the part of
Summit 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 Summit or MIS, or any deed of trust, lease, sublease, indenture,
mortgage, or other agreement or instrument to which Summit or MIS is a
party or by which any 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 Summit 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 Blue Sky Laws.
(f) Any certificate signed by an officer of Summit and delivered
to Welco pursuant to this Agreement shall be deemed a representation
and warranty by Summit to Welco, to have the same force and effect as
<PAGE>

stated herein, as to the matters covered thereby.
(g) If any event relating to or affecting Summit or any of its
subsidiaries shall occur as a result of which it is necessary, in
Welco'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, Summit undertakes
to inform Welco of such events within a reasonable time thereafter, and
will forthwith prepare and furnish to Welco, 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 Welco) 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) Summit hereby warrants and represents that it will offer the
preferred stock in accordance with the pricing formula set forth in
Schedule "A" which is incorporated by reference herein.
(i) All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of Summit
submitted pursuant hereto, shall remain operative and in full force and
effect, surviving the date of this Agreement.
6. AVAILABILITY OF INFORMATION. Summit hereby agrees to provide
Welco, at its expense, with all information and documentation with
respect to its business, financial condition and other matters as Welco
may deem relevant based on the standards of reasonableness and good
faith and shall request in connection with Welco'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 Welco as Welco may request on the effective date
of the Registration Statement and on the Closing Date. Summit will
make reasonably available to Welco, its auditors, counsel, and officers
and directors to discuss with Welco any aspect of Summit which Welco
may deem relevant. In addition, Summit, at Welco's request, will cause
to be delivered to Welco 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 Welco
to rely thereon to the same extent as if addressed directly to Welco.
Summit represents and warrants to Welco 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, Summit will promptly advise Welco 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
Welco may be entitled pursuant to any agreement among underwriters,
underwriting agreement or otherwise, and to the extent allowed by law,
Summit hereby agrees that it will indemnify and hold Welco and each
person controlling, controlled by or under common control with Welco
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
<PAGE>

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 Summit or based
upon written information furnished by Summit 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 Summit in this Agreement. Summit
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 Summit has indemnified such person pursuant hereto.
Notwithstanding the foregoing provisions of this paragraph 7, any such
payment or reimbursement by Summit 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
willful misfeasance will be promptly repaid to Summit. In addition,
anything in this paragraph 7 to the contrary notwithstanding, Summit
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
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 Summit under paragraph (a), notify Summit in writing of the
commencement thereof; but the omission to so notify Summit will not
relieve Summit 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 Summit'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 Summit of the
commencement thereof, Summit 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 Summit or any corporation controlling, controlled by or
under common control with Summit, or any director, officer, employee,
representative or agent of any thereof, or any other "Qualified
Independent Underwriter" retained by Summit 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 Summit to such Indemnified
<PAGE>

Person of its election so to assume the defense of such action and
approval by the Indemnified Person of counsel, Summit 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 Summit 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 Welco), (ii)
Summit, 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) Summit
shall have authorized in writing the employment of counsel for the
Indemnified Person at the expense of Summit, 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).
(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 Summit to Welco on grounds of policy or
otherwise, Summit and Welco 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 Summit and Welco may be subject in such proportion so that
Welco 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 Summit is responsible
for the balance, except as Summit 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 Welco 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 Welco, or any
partner, director, officer, employee, representative or any agent of
any thereof, shall have the same rights to contribution as Welco and
each person who controls Summit within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, each officer of Summit who shall
have signed the Registration Statement and each director of Summit
shall have the same rights to contribution as Summit, 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 SUMMIT. Summit represents and warrants to
<PAGE>

Welco that this Agreement has been duly authorized, executed and
delivered by Summit and constitutes a valid and binding obligation of
Summit.
9. AUTHORIZATION BY MIS. MIS represents and warrants to Welco
that this Agreement has been duly authorized, executed and delivered by
MIS and constitutes a valid and binding obligation of MIS.
10. AUTHORIZATION BY WELCO. Welco represents and warrants to
Summit that this Agreement has been duly authorized, executed and
delivered by Welco and constitutes a valid and binding obligation of
Welco.
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 Welco, at 101
West City Avenue, Suite 2130, Bala Cynwyd, PA 19004-9967, Attention:
Kenneth S. Shapiro, and (b) if to Summit, at West 929 Sprague Avenue,
Spokane, Washington 99204, Attention: Susan A. Thomson.
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.

SUMMIT SECURITIES, INC.

By:__________________________________________
C. Paul Sandifur, Jr., President

By:__________________________________________
Reuel Swanson, Secretary

METROPOLITAN INVESTMENT SECURITIES, INC.

By:__________________________________________
Susan A. Thomson, Vice President

By:__________________________________________
Reuel Swanson, Secretary

WELCO SECURITIES, INC.

By:__________________________________________
Kenneth S. Shapiro, President
<PAGE>

SCHEDULE A

The opinion of Welco is conditioned upon Summit's undertaking to
maintain the distribution rate of the Preferred Stock in accordance
with the formula set forth below:

Notwithstanding anything to the contrary herein the Applicable
Rate for any monthly distribution period shall not, in any event, be
less than 6% or greater than 14% per annum. The Board of Directors
may, however, by resolution, authorized distributions in excess of the
Applicable Rate. The Applicable Rate for any monthly distribution
period shall be the highest of the Treasury Bill Rate, the Ten Year
Constant Maturity Rate and the Twenty Year Constant Maturity Rate (each
as hereinafter defined) plus one half of one percentage point for such
dividend period. In the event that the Company determines in good
faith that for any reason one or more of such rates cannot be
determined for any distribution period, then the Applicable Rate for
such period shall be the higher of whichever of such rates can be so
determined.
<PAGE>

EXHIBIT B

VARIABLE RATE, CUMULATIVE

PREFERRED STOCK, SERIES S-1
PRICING

For Distributions Payable On: ________________________________________

Distributions Record Date: ________________________________________

Effective
Date Date Average Rate

3 Mo. Treasury Bill ________________________________ +1.5%

10 Yr Constant Rate ________________________________ +1.5%

20 Year Alternative as provided for
in the Prospectus

________________________________ +1.5%

HIGHEST EFFECTIVE RATE: _______________________________
MONTHLY DISTRIBUTION PER SHARE: _______________________
As resolved by the Board of Directors, distribution will be deemed
declared on the 1st day of each month, payable on the 20th of each
month to the holders of record on the 5th of each month.

_______________________________________________________
Reuel Swanson, Secretary

<PAGE>

Exhibit 1(c)(i)

Form of
Pricing Opinion of Welco Securities, Inc.

Welco Securities, Inc.
P.O. Box 688
101 West City, Avenue, Suite 2130
Bala Cynwyd, PA 19004-9967

January , 1994

C. Paul Sandifur Jr., President
Metropolitan Investment Securities, Inc.
917 W. Sprague Avenue
Spokane, Washington 99210

Re: Summit Securities, Inc., Offering of $40,000,000 in
Principal Amount of Investment Certificates, Series A

Dear Mr. Sandifur:

This letter will serve to confirm our engagement as a "qualified
independent underwriter" as that term is defined in Sections 2(l) (1)
through (7) of Schedule E to the NASD bylaws, as amended ("Schedule
E").

Based upon our review of the registration statement, and the
performance of "due diligence" as required in Section 3 (c) (1) to
Schedule E, it appears that the yields on the Certificates (which are
based upon the computation set forth in Exhibits A and B to the
Agreement to Act as "Qualified Independent Underwriter" dated
, which is filed as Exhibit 1(b)(i) to the registration
statement referred to hereafter,) 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 (SEC File No.
33- ).

Very truly yours,

WELCO SECURITIES, INC.

/s/ KENNETH S. SHAPIRO

By: ________________________________________
Kenneth S. Shapiro, President

cc: National Association of Securities Dealers, Inc.
<PAGE>

Exhibit 1(c)(ii)

Form of
Pricing Opinion of Welco Securities, Inc.

January , 1994

C. Paul Sandifur, Jr., President
Metropolitan Investment Securities, Inc.
917 W. Sprague Avenue
Spokane, Washington 99210

Re: Summit Securities, Inc. Offering of $15,000,000 of Variable
Rate Cumulative Preferred Stock, Series S-1

Dear Mr. Sandifur:

This letter will serve to confirm our engagement as a "qualified
independent underwriter" as that term is defined in Sections 2(l)
(1) through (7) of Schedule E to the NASD bylaws, as amended ("Schedule
E").

Based upon our review of the registration statement, and the
performance of "due diligence" as required in Section 3 (c) (1) to
Schedule E, it appears that the price of $100.00 per share on the
Variable Rate Cumulative Preferred Stock, Series S-1 (provided that the
manner in which the computation of dividends are those set forth in
Exhibit A to the Agreement to Act as "Qualified Independent
Underwriter" dated January , 1994, which is filed as Exhibit
1(b)(ii) to the registration statement referred to hereafter,) is no
higher than that which we would recommend.

We hereby consent to the use of our name as a "qualified
independent underwriter," to the Registration Statement (SEC File No.
33- ).

Very truly yours,

WELCO SECURITIES, INC.

By:_______________________________________
Kenneth S. Shapiro, President

KSS/mm
cc: National Association of Securities Dealers, Inc.
<PAGE>

Exhibit 4(c)

FORM OF
STATEMENT OF RIGHTS, DESIGNATIONS AND PREFERENCES OF VARIABLE RATE
CUMULATIVE PREFERRED STOCK, SERIES S-1 PURSUANT TO

1. Name of Corporation: Summit Securities, Inc.

2. Copy of resolution establishing and designating Variable Rate
Cumulative Preferred Stock, Series S-1, and determining the
relative rights and preferences thereof: Attached hereto.

3. The undersigned does hereby certify that the attached resolution
was duly adopted by the Board of Directors of the corporation on
January , 1994.

______________________________________
Reuel Swanson, Secretary
<PAGE>

Exhibit 4(c) continued

SUMMIT SECURITIES, INC.
PREFERRED STOCK SERIES S-1 AUTHORIZING RESOLUTION

Resolved, that pursuant to the authority expressly granted and
vested in the Board of Directors (the "Board") of this Corporation by
its Articles of Incorporation, as amended, a sub-series of Preferred
Stock, Series S-1 of the Corporation be, and is hereby, established
which will consist of 150,000 shares of the par value of $10.00 per
share ($15,000,000), shall be designated "Variable Rate Cumulative
Preferred Stock, Series S-1" (hereafter called "Preferred Stock"),
shall be offered at $100.00 per share and which shall have rights,
preferences, qualifications and restrictions as follows:

1. DIVIDENDS.

a) Dividends (or other distributions deemed dividends for
purposes of this resolution) on the issued and outstanding shares of
Preferred Stock shall be declared and paid monthly at a percentage rate
per annum of the liquidation preference of $100.00 per share equal to
the "Applicable Rate," as hereinafter defined, or such greater rate as
may be determined by the Board. Notwithstanding the foregoing, the
Applicable Rate for any monthly dividend period shall, in no event, be
less than 6% per annum or greater than 14% per annum. Such dividends
shall be cumulative from the date of original issue of such shares and
shall be payable, when and as declared by the Board, on such dates as
the Board deems advisable, but at least once a year, commencing June 1,
1993. Each such dividend shall be paid to the holders of record of
shares of Preferred Stock as they appear on the stock register of the
Corporation on such record date as shall be fixed by the Board in
advance of the payment date thereof. Dividends on account of arrears
for any past Dividend Periods may be declared and paid at any time,
without reference to any regular dividend payment date, to holders of
record on such date as shall be fixed by the Board in advance of the
payment date thereof.

b) Except as provided below in this section, the Applicable
Rate for any monthly dividend period shall be the highest of the
Treasury Bill Rate, the Ten Year Constant Maturity Rate and the Twenty
Year Constant Maturity Rate (each as defined in Exhibit A attached
hereto and incorporated by reference herein) plus one half of one
percentage point. In the event that the Board determines in good faith
that for any reason one or more of such rates cannot be determined for
any dividend period, than the Applicable Rate for such dividend period
shall be the higher of whichever of such rates can be so determined.
In the event that the Board determines in good faith that none of such
rates can be determined for any dividend period, then the Applicable
Rate in effect for the preceding dividend period shall be continued for
such dividend period. The Treasury Bill Rate, the Ten Year Constant
Maturity Rate and the Twenty Year Constant Maturity Rate shall each be
rounded to the nearest five hundredths of a percentage point.

c) No dividend shall be paid upon, or declared or set apart
for, any share of Preferred Stock for any Dividend Period unless at the
same time a like dividend shall be paid upon, or be declared and set
apart for, all shares of Preferred Stock then issued and outstanding
<PAGE>

and all shares of all other series of preferred stock then issued and
outstanding and entitled to receive dividends. Holders of Preferred
Stock shall not be entitled to any dividend, whether payable in cash,
property or stock, in excess of full cumulative dividends as herein
provided. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments which may be in
arrears on Preferred Stock.

d) Dividends payable for each full monthly Dividend Period
shall be computed by dividing the Applicable Rate for such monthly
Dividend Period by twelve and applying such rate against the
liquidation preference of $100.00 per share. Dividends shall be
rounded to the nearest whole cent. Dividends payable for any period
less than a full monthly Dividend Period shall be computed on the basis
of 30 day months and a 360 day year. The Applicable Rate with respect
to each monthly Dividend Period shall be calculated as promptly as
practicable by the Corporation according to the method provided herein.
The Corporation will cause notice of such Applicable Rate to be
enclosed with the dividend payment check next mailed to the holders of
shares of Preferred Stock.

e) So long as any shares of Preferred Stock are outstanding,
(i) no dividend (other than a dividend in common stock or in any other
stock ranking junior to Preferred Stock as to dividends and upon
liquidation and other than as provided in the foregoing section 1(c))
shall be declared or paid or set aside for payment; (ii) no other
distribution shall be declared or made upon common stock or upon any
other stock ranking junior to or on a parity with Preferred Stock as to
dividends or upon liquidation; and (iii) no common stock or any other
stock of the Corporation ranking junior to or on a parity with
Preferred Stock as to dividends or upon liquidation shall be redeemed,
purchased or otherwise acquired by the Corporation for any
consideration (or any monies paid to or made available for a sinking
fund for the redemption of any shares of any such stock) except by
conversion into or exchange for stock of the Corporation ranking junior
to Preferred Stock as to dividends and upon liquidation unless, in each
case, the full cumulative dividends on all outstanding shares of
Preferred Stock shall have been paid or declared and set apart for all
past dividend payment periods.

f) The holders of Preferred Stock shall be entitled to
receive, when and as declared by the Board, dividend distributions out
of the funds of the Corporation legally available therefor. Any
distribution made which may be deemed to have been made out of the
capital surplus of Preferred Stock shall not reduce either the
redemption process or the liquidation rights as hereafter specified.

2. REDEMPTION.

a) The Corporation, at its option, may redeem shares of
Preferred Stock, in whole or in part, at any time or from time to time,
at redemption prices hereafter set forth plus accrued and unpaid
dividends to the date fixed for redemption.

i) In the event of a redemption of shares pursuant to
this subsection prior to January 1, 1995, the redemption price shall be
$102.00 per share; and the redemption price shall be $100.00 per share
in the event of redemption anytime after December 31, 1994.
<PAGE>

ii) In the event that fewer than all of the outstanding
shares of Preferred Stock are to be redeemed, the number of shares to
be redeemed shall be determined by the Corporation and the shares to be
redeemed shall be determined by lot, or pro rata, or by any other
method, as may be determined by the Corporation in its sole discretion
to be equitable.

iii) In the event that the Corporation shall redeem
shares hereunder, notice of such redemption shall be given by first
class mail, postage prepaid, mailed not less than 30 days or more than
60 days prior to he redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as it appears on the
stock register of the Corporation. Each such notice shall state: (i)
the redemption date; (ii) the number of shares to be redeemed and, if
fewer than all shares held by such holder are to be redeemed, the
number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such
shares are to be surrendered for payment of the redemption price; and
(v) that dividends on the shares to be redeemed will cease to accrue on
such redemption date.

iv) Notice having been mailed as aforesaid, from and
after the redemption date (unless default shall be made by the
Corporation in providing money for the payment of the redemption
price), dividends on the shares so called for redemption shall no
longer be deemed to be outstanding, and all rights of the holders
thereof as stockholders of the Corporation (except the right to receive
from the Corporation the redemption price) shall cease. Upon surrender
in accordance with said notice of the certificates representing shares
redeemed (properly endorsed or assigned for transfer, if the Board
shall so require and the notice shall so state), such shares shall be
redeemed by the Corporation at the redemption price aforesaid. In case
fewer than all of the shares represented by any such certificate are
redeemed, a new certificate shall be issued representing the unredeemed
shares without cost to the holder thereof.

b) Discretionary Redemption Upon Request of the Holder: The
shares of Preferred Stock are not redeemable at the option of the
holder. If, however, the Corporation receives an unsolicited written
request for redemption of a block of shares from any holder, the
Corporation may, in its sole discretion and subject to the limitations
described below, accept such shares for redemption. Any shares so
tendered, which the Corporation in its discretion, allows for
redemption, shall be redeemed by the Corporation directly, and not from
or through a broker or dealer, at a price equal to $97 per share, plus
any declared but unpaid dividends to date if redeemed during the first
year after the date of original issuance and $99 per share plus any
declared but unpaid dividends if redeemed thereafter. The Corporation
may change such optional redemption prices at any time with respect to
unissued shares.

For a period of three years from the date of initial sale of each
share of Preferred Stock, any such optional redemption of such share
shall occur only upon the death or major medical emergency of the
holder or any joint holder of the share requested to be redeemed. Any
optional redemption of a share in any calendar year after the third
year from the date of sale of the share, not arising from the death or
medical emergency of the holder or any joint holder shall occur only
<PAGE>

when the sum of all optional redemptions (including those arising out
of the death or medical emergency of the holder or any joint holder) of
shares of Preferred Stock during that calendar year shall not exceed
10% of the number of shares of Preferred Stock outstanding at the end
of the preceding calendar year. In the event the 10% limit is reached
in any calendar year, the only redemption which may thereafter occur
during that calendar year shall be those arising from the death or
medical emergency of the holder or any joint holder; provided, however,
that to the extent that total optional redemptions in any calendar year
do not reach the 10% limit, the amount by which such optional
redemptions shall fall short of the 10% limit may be carried over into
ensuing years; and provided further that to the extent that all
redemptions, including those involving the death or medical emergency
of the holder or any joint holder, exceed the 10% in any year, the
amount by which such redemptions exceed the 10% limit shall reduce the
limit in the succeeding year for limiting redemptions not involving the
death or medical emergency of a holder or any joint holder. In no
event shall such optional redemptions of all types in a single calendar
year exceed 20% of the number of shares of Preferred Stock outstanding
at the end of the preceding calendar year.

The Corporation may not redeem any such shares tendered for
redemption if to do so would be unsafe or unsound in light of the
Corporation's financial condition (including its liquidity position);
if payment of interest or principal on any outstanding instrument of
indebtedness is in arrears or in default; or if payment of any dividend
on Preferred Stock or share of any stock of the Company ranking at
least on a parity therewith is in arrears as to dividends.

c) Any shares of Preferred Stock which shall at any time have
been redeemed shall, after such redemption, have the status of
authorized but unissued shares of Preferred Stock, without designation
as to series until such shares are designated as part of a particular
series by the Board.

d) Notwithstanding the foregoing provisions of this Section
2, if any dividends on Preferred Stock are in arrears, no shares of
Preferred Stock shall be redeemed unless all outstanding shares of
Preferred Stock are simultaneously redeemed, and the Corporation shall
not purchase or otherwise acquire any shares of Preferred Stock;
provided, however, that the foregoing shall not prevent the purchase or
acquisition of shares of Preferred Stock pursuant to a purchase or
exchange offer made on the same terms to holders of all of the
outstanding shares of Preferred Stock.

3. CONVERSION OR EXCHANGE. The holders of shares of Preferred
Stock shall not have any rights to convert such shares into or exchange
such shares for shares of any other class or series of any class of
securities of the Corporation.

4. VOTING. Except as required from time to time by law, the
shares of Preferred Stock shall have no voting powers. Provided,
however, not withstanding the foregoing, that whenever and as often as
dividends payable on any shares of Preferred Stock shall be in arrears
in an amount equal to twenty four full monthly dividends or more per
share, the holders of Preferred Stock together with the holders of any
other preferred stock hereafter authorized, voting separately and as a
single class shall be entitled to elect a majority of the Board of
<PAGE>

Directors of the Corporation. Such right shall continue until all
dividends in arrears on preferred stock have been paid in full.

5. LIQUIDATION RIGHTS.

a) Upon the dissolution, liquidation or winding up of the
Corporation, the holders of the shares of Preferred Stock shall be
entitled to receive out of the assets of the Corporation, before any
payment or distribution shall be made on the Common Stock, or on any
other class of stock ranking junior to Preferred Stock, upon
liquidation, the amount of $100.00 per share, plus a sum equal to all
dividends (whether or not earned or declared) on such shares accrued
and unpaid thereon to the date of final distribution.

b) Neither the sale, lease or conveyance of all or
substantially all the property or business of the Corporation, nor the
merger or consolidation of the Corporation into or with any other
corporation or the merger or consolidation of any other corporation
into or with the Corporation, shall be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, for the purposes
of this Section.

c) After the payment to the holders of the shares of
Preferred Stock of the full preferential amounts provided for in this
Section, the holders of Preferred Stock as such shall have no right or
claim to any of the remaining assets of the Corporation.

d) In the event the assets of the Corporation available for
distribution to the holders of shares of Preferred Stock upon any
dissolution, liquidation or winding up of the Corporation, whether
voluntary or involuntary, shall be insufficient to pay in full all
amounts to which such holders are entitled pursuant to this Section, no
such distribution shall be made on account of any shares or any other
series of Preferred Stock or any other class of stock ranking on a
parity with the shares of Preferred Stock upon such dissolution,
liquidation or winding up, unless proportionate distributive amounts
shall be paid on account of the shares of Preferred Stock, ratably in
accordance with the sums which would be payable in such distribution if
all sums payable in respect of the shares of all series of Preferred
Stock and any such other class of stock as aforesaid were discharged in
full.

6. PRIORITIES. For purposes of this Resolution, any stock of any
class or classes of the Corporation shall be deemed to rank:

a) Prior to the shares of Preferred Stock, either as to
dividends or upon liquidation if the holders of such class or classes
shall be entitled to the receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the
holders of shares of Preferred Stock.

b) On a parity with shares of Preferred Stock, either as to
dividends or upon liquidation, whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share or
sinking fund provisions, if any, are different from those of Preferred
Stock, if the holder of such stock shall be entitled to the receipt of
dividends or of amounts distributable upon dissolution, liquidation or
<PAGE>

winding up of the Corporation, as the case may be, in proportion to
their respective dividend rates or liquidation prices, without
preference or priority, one over the other, as between the holder of
such stock and the holders of Preferred Stock; and

c) Junior to shares of Preferred Stock, either as to
dividends or upon liquidation, if the holders of shares of Preferred
Stock shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the
holders of shares of such class or classes.

7. SHARES NON-ASSESSABLE. Any and all shares of Preferred Stock
issued, and for which the full consideration has been paid or
delivered, shall be deemed fully paid stock and the holder of such
shares shall not be liable for any further call or assessment or any
other payment thereon.

8. PRE-EMPTIVE RIGHTS. Holders of Preferred Stock shall have no
pre-emptive rights to acquire additional shares of Preferred Stock.
<PAGE>

EXHIBIT A

Treasury Bill Rate

Except as provided below in this paragraph, the "Treasury Bill
Rate" for each distribution period will be the arithmetic average of
the two most recent weekly per annum market discount rates (or the one
weekly per annum market discount rate, if only one such rate shall be
published during the relevant weekly Calendar Period (as defined
below)) for the three-month U.S. Treasury Bills, as published weekly by
the Federal Reserve Board during the Calendar Period immediately prior
to the ten calendar days immediately preceding the first day of the
distribution period for which the distribution rate on Preferred Stock
is being determined. In the event that the Federal Reserve Board does
not publish such a weekly per annum market discount rate during any
such Calendar Period, then the Treasury Bill Rate for the related
distribution period shall be the arithmetic average of the two most
recent weekly per annum market discount rates (or the one weekly per
annum market discount rate, if only one such rate shall be published
during the relevant Calendar Period) for the three-month U.S. Treasury
Bills, as published weekly during such Calendar Period by any Federal
Reserve Bank, or by any U.S. Government department or agency selected
by the Company. In the event that a per annum market discount rate for
the three-month U.S Treasury Bills shall not be published by the
Federal Reserve Board or by any Federal Reserve Bank or by any U.S.
Government department or agency during such Calendar Period, then the
Treasury Bill Rate for such distribution period shall be the arithmetic
average of the two most recent weekly per annum market discount rates
(or the one weekly per annum market discount rate, if only one such
rate shall be published during the relevant Calendar Period) for all of
the U.S. Treasury bills then having maturities of not less than 80 nor
more than 100 days, as published during such Calendar Period by the
Federal Reserve Board or, if the Federal Reserve Board shall not
publish such rates, by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Company. In the event
that the Company determines in good faith that for any reason the
Company cannot determine the Treasury Bill Rate, for any distribution
period as provided above in this paragraph the Treasury Bill Rate for
such distribution period shall be the arithmetic average of the per
annum market discount rates based upon the closing bids during such
Calendar Period for each of the issues of marketable non-interest
bearing U.S. Treasury securities with a maturity of not less than 80
nor more than 100 days from the date of each such quotation, as quoted
daily for each business day in New York City (or less frequently if
daily quotations shall not be generally available) to the Company by at
least three recognized primary U.S. Government securities dealers
selected by the Company. In the event that the Company determines in
good faith that for any reason the Company cannot determine the
Treasury Bill Rate for any distribution period as provided above in
this paragraph, the Treasury Bill Rate for such distribution period
shall be the arithmetic average of the per annum market discount rates
based upon the closing bids during such Calendar Period for each of the
issues of marketable interest-bearing U.S. Treasury securities with a
maturity of not less than 80 nor more than 100 days from the date of
each such quotation, as quoted daily for each business day in New York
City (or less frequently if daily quotations shall not be generally
available) to the Company by at least three recognized primary U.S.
Government securities dealers selected by the Company.
<PAGE>

Ten Year Constant Maturity Rate

Except as provided below in this paragraph, the "Ten-Year Constant
Maturity Rate" for each distribution period shall be the arithmetic
average of the two most recent weekly per annum Ten Year Average Yields
(or the one weekly per annum Ten-Year Average Yield, if only one such
Yield shall be published during the relevant Calendar Period as
provided below, as published weekly by the Federal Reserve Board during
the Calendar Period immediately prior to the ten calendar days
immediately preceding the first day of the distribution period for
which the distribution rate on Preferred is being determined. In the
event that the Federal Reserve Board does not publish such a weekly per
annum Ten-Year Average Yield during such Calendar Period, then the
Ten-Year Constant Maturity Rate for such distribution period shall be
the arithmetic average of the two most recent weekly per annum Ten Year
Average Yields (or the one weekly per annum Ten-Year Average Yield, if
only one such Yield shall be published during such Calendar Period), as
published weekly during such Calendar Period by any Federal Reserve
Bank or by any U.S. Government department or agency selected by the
Company. In the event that a per annum Ten-Year Average Yield shall
not be published by the Federal Reserve Board or by any Federal Reserve
Bank or by any U.S. Government department or agency during such
Calendar Period, then the Ten-Year Constant Maturity Rate for such
distribution period shall be the arithmetic average of the two most
recent weekly per annum average yields to maturity (or the one weekly
average yield to maturity, if only one such yield shall be published
during the relevant Calendar Period) for all of the actively traded
marketable U.S. Treasury fixed interest rate securities (other than
Special Securities (as defined below)) then having maturities of not
less than eight nor more than twelve years, as published during such
Calendar Period by the Federal Reserve Board or, if the Federal Reserve
Board shall not publish such yields, by any Federal Reserve Bank or by
any U.S. Government department or agency selected by the Company. In
the event that the Company determines in good faith that for any reason
the Company cannot determine the Ten-Year Constant Maturity Rate for
any distribution period as provided above in this paragraph, then the
Ten-Year Constant Maturity Rate for such distribution period shall be
the arithmetic average of the per annum average yields to maturity
based upon the closing bids during such Calendar Period for each of the
issues of actively traded marketable U.S. Treasury fixed-interest rate
securities (other than Special Securities) with a final maturity date
not less than eight nor more than twelve years from the date of each
quotation, as quoted daily for each business day in New York City (or
less frequently if daily quotations shall not be generally available)
to the Company by at least three recognized primary U.S. Government
securities dealers selected by the Company.

Twenty Year Constant Maturity Rate

that the Federal Reserve Board does not publish such a weekly per annum
Twenty-Year Average Yield during such Calendar Period, then the Twenty
Year Constant Maturity Rate for such distribution period shall be the
arithmetic average of the two most recent weekly per annum Twenty-Year
Average Yields (or the one weekly per annum Twenty-Year Average Yield,
if only one such Yield shall be published during such Calendar Period),
as published weekly during such Calendar Period by any Federal Reserve
Bank or by any U.S. Government department or agency selected by the
Company. In the event that a per annum Twenty-Year Average Yield shall
not be published by the Federal Reserve Board or by any Federal Reserve
Bank or by any U.S. Government department or agency during such
Calendar Period, then the Twenty Year Constant Maturity Rate for such
distribution period shall be the arithmetic average of the two most
recent weekly per annum average yields to maturity (or the one weekly
average yield to maturity, if only one such yield shall be published
during such Calendar Period) for all of the actively traded marketable
U.S. Treasury fixed interest rate securities (other than Special
Securities) then having maturities of not less than eighteen nor more
than twenty-two years, as published during such Calendar Period by the
Federal Reserve Board or, if the Federal Reserve Board shall not
publish such yields, by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Company. In the event
that the Company determines in good faith that for any reason the
Company cannot determine the Twenty-Year Constant Maturity Rate for any
dividend period as provided above, then the Twenty-Year Constant
Maturity Rate for such distribution period shall be the arithmetic
average of the per annum average yields to maturity based upon the
closing bids during such Calendar Period for each of the issues of
actively traded marketable U.S. Treasury fixed-interest rate securities
(other than Special Securities) with a final maturity date of not less
than eighteen nor more than twenty-two years from the date of each such
quotation, as quoted daily for each business day in New York City (or
less frequently if daily quotations shall not be generally available)
to the Company by at least three recognized primary U.S. Government
securities dealers selected by the Company.

As used herein, the term "Calendar Period" means a period of 14
calendar days; the term "Special Securities" means securities which
may, at the option of the holder, be surrendered at face value in
payment of any federal estate tax or which provide tax benefits to the
holder and are priced to reflect such tax benefits or which were
originally issued at a deep or substantial discount; the term "Ten-Year
Average Yield" means the average yield to maturity for actively traded
marketable U.S. Treasury fixed-interest rate securities (adjusted to
constant maturities of ten years); and the term "Twenty-Year Average
Yield" means the average yield of maturity for actively traded
marketable U.S. Treasury fixed-interest rate securities (adjusted to
constant maturities of 20 years).
<PAGE>

Exhibit 4(d)

(FORM OF VARIABLE RATE CUMULATIVE
PREFERRED STOCK CERTIFICATE)

Certificate No. Shares

SUMMIT SECURITIES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF IDAHO

VARIABLE RATE CUMULATIVE PREFERRED STOCK
SERIES

(Par Value: $10.00 per share;
Liquidation Preference: $100.00 per share)

This certifies that is the
registered holder of shares of Variable Rate
Cumulative Preferred Stock, Series of Summit Securities, Inc.
transferable only on the books of the Corporation upon surrender of
this certificate properly endorsed by the holder hereof in person or by
attorney-in-fact.

The Corporation will provide to any registered holder of stock of
the Corporation, upon request and without charge, a full statement of
the designations, preferences, limitations and relative rights of the
shares of each class of stock authorized to be issued by the
Corporation, the variations in the relative rights and preferences
between the shares of each series of each class of stock so far as the
same have been fixed and determined, and the authority of the Board of
Directors to fix and determine the rights and preferences of subsequent
series.

In witness whereof the Corporation has caused this certificate to
be signed by its duly authorized officers and the facsimile of its
corporate seal imprinted hereon.

Issue Date:

________________________________ ________________________________
Secretary or Assistant Secretary President or Vice President

<PAGE>

Exhibit 4(e)

SUMMIT SECURITIES,INC.
HARBOR CENTER, 1000 WEST HUBBARD, SUITE 140
COEUR D' ALENE, ID 83814-2276

INVESTMENT CERTIFICATE, SERIES A

Principal Issue Maturity Interest Certificate
Amount Date Date Rate Number

Interest:
Amortization Term:
Months:

Issued To:

THE CERTIFICATE
This is a duly authorized Certificate of Summit Securities, Inc.
("Summit"). This Certificate is issued under an Indenture dated July
25, 1990 ("Indenture") between Summit and West One Bank, Idaho, N.A. as
Trustee ("Trustee"). The Indenture permits Summit to issue an unlimited
amount of Certificates, the terms of which may vary according to
series. This Certificate is of the series stated above; that series is
not limited in aggregate principal amount as stated in the Indenture
(or supplemental indentures). The Indenture (and supplemental
indentures) contains statements of the rights of the
Certificateholders, Summit and the Trustee and provision concerning
authentication and delivery of the Certificates. Definitions of
certain terms used in the Certificate are also found in the Indenture
(and supplemental indentures).

PAYMENT OF PRINCIPAL
For value received, Summit promises to pay the principal amount of
this Certificate at the maturity date stated above. Payment will be
made to the Person to whom this Certificate is issued or registered
assigns.

PAYMENT OF INTEREST
Summit promises to pay interest on the principal amount of this
Certificate from the issue date until the principal amount is paid or
made available for payment. Interest will be computed at the annual
interest rate stated above. Interest will be payable or compounded as
stated above or as otherwise elected by the Person entitled to payment
of interest. Summit will pay interest to the Person in whose name this
Certificate (or one or more Predecessor Certificates) is registered at
the close of business on the Regular Record Date for the payment of
interest. The Regular Record Date is the 15th date of the calendar
month immediately preceding an Interest Payment Date.

COMPOUNDING OF INTEREST
If the Person entitled to payment of interest so elects, Summit
will compound interest rather than pay interest in installments.
Interest will be compounded on a semiannual basis at the interest rate
<PAGE>

stated above from the Interest Payment Date immediately preceding
receipt by Summit of the compounding election. Interest will be
compounded from the issue date of the Certificate if Summit receives
the compounding election prior to the first Interest Payment Date.
Interest will be compounded until the maturity date stated above and
will be paid on such date. Prior to maturity, however, Summit will pay
at the Certificateholder's request the interest accumulated in the last
two semiannual compounding periods before Summit receives the request,
together with the interest accrued from the end of the last such
semiannual period. Interest compounded prior to the last two
semiannual compounding periods is payable only onthe maturity date
stated above.

ALTERNATIVE INSTALLMENT PAYMENTS OF PRINCIPAL AND INTEREST
If so elected by the Person to whom this Certificate is originally
issued, Summit promises, in lieu of the foregoing provisions for
payment of principal and interest, to pay equal monthly installments of
principal and interest, commencing thirty days from the issue date,
until the maturity date, at which time the remaining principal amount,
if any, together with all unpaid accrued interest, shall be paid. The
amount of each monthly installment shall be the amount necessary to
amortize the principal amount at the specified interest rate during the
specified amortization term.

PREPAYMENT ON DEATH
In the event of a Certificateholder's death, any person entitled
to receive some or all of the proceeds of this Certificate may elect to
have his or her share of the principal and any unpaid interest prepaid
in full in five consecutive equal monthly installments. Interest on
the declining principal balance of that share will continue to accrue
at the interest rate stated above. Any request for prepayment must be
made in writing to Summit. The request must be accompanied by the
Certificate and evidence, satisfactory to Summit, of the
Certificateholder's death. Before Summit prepays the Certificate, it
may require additional documents or other material it considers
necessary to establish the Persons entitled to receive some or all of
the proceeds of the Certificate. Metropolitan may also require proof
of other facts relevant to its obligation to prepay the Certificate in
the event of death.

MISCELLANEOUS
The provisions on the reverse are part of this Certificate.

This Certificate is not entitled to any benefit under the Indenture
nor is this Certificate valid or obligatory for any purpose unless the
certificate of authentication below has been executed by the Trustee by
manual signature.
This Certificate is not insured by the United States government,
the State of Idaho nor any agency thereof.
In witness whereof, Summit has caused this Certificate to be duly
executed under its corporate seal.

SUMMIT SECURITIES, INC.

Attest:_________________________ By:_______________________________
Secretary or Assistant Secretary Chairman of the Board,
President or Vice President

<PAGE>

CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to
in the within-mentioned Indenture

WEST ONE BANK, IDAHO, N.A.
as Trustee

By:_____________________________________
Authorized Signature

<PAGE>

(reverse of Certificate)

TRANSFER AND EXCHANGE
Transfer and exchange of this Certificate are conditioned by
certain provisions in the Indenture. To effect a transfer, the Holder
must surrender this Certificate at Summit's office or agency in Coeur
d'Alene, Idaho or such other place as may be designated by Summit. This
Certificate must be duly endorsed or accompanied by a written
instrument of transfer satisfactory to Summit. Upon transfer, one or
more new Certificates of the same series of authorized denominations
and for the same aggregate principal amount will be issued to the
designated transferee or transferrers. Prior to due presentment for
registration of transfer, Summit, the Trustee or any of their agents
may treat any Person in whose name this Certificate is registered as
the owner of this Certificate, regardless of notice to the contrary or
whether this Certificate might be overdue.
This Certificate is issuable only as a registered Certificate; it
does not bear coupons. As provided in the Indenture, this Certificate
is exchangeable for the other Certificates of the same series of
authorized denominations with the same aggregate principal amount. To
effect an exchange, the Holder must surrender this Certificate at
Summit's office or agency in Coeur d' Alene, Idaho or such other place
as may be designated by Summit. The Certificate must be duly endorsed
or accompanied by a written instrument of exchange satisfactory to
Summit.
No service charge will be made for a transfer or exchange, but
Summit may require payment of a sum sufficient to cover any
governmental charge in connection with such transaction.

AMENDMENT OF THE INDENTURE; WAIVER OF RIGHTS
With certain exceptions, the Indenture may be amended, the
obligations and rights of Summit may be modified and the rights of the
Certificateholders may be modified by Summit at any time with the
consent of the Holders of 66-2/3% in aggregate principal amount of the
Certificates at the time Outstanding. The Indenture allows the Holders
of specified percentages in aggregate principal amount of the
Certificates of a particular series to waive compliance by Summit with
certain indenture provisions and to waive past defaults and their
consequences on behalf of all the Holders of Certificates of that
series. Any such consent or waiver by the Holder of this Certificate
will be binding upon that Holder. The consent or waiver will also be
binding upon all future Holders of this Certificate and of any
Certificate issued upon the transfer of, or in exchange for or in lieu
of this Certificate, whether or not that consent or waiver is noted
upon the Certificate.

FAILURE TO PAY INTEREST OR INSTALLMENTS; EVENTS OF DEFAULT
If interest or any installment of principal and interest is not
punctually paid or duly provided for, it shall cease to be payable to
the registered Holder of this Certificate on the applicable Regular
Record Date. Instead, the Trustee will fix a Special Record Date for
payment of the Defaulted Interest or installments. The Trustee will
give the Certificateholders notice of the Special Record Date at lease
10 days prior to the Special Record Date. The Person in whose name
this Certificate (or one or more Predecessor Certificates) is
registered at the close of business on the Special Record Date will be
entitled to payment of the Defaulted Interest or installment. If the
Certificates are listed on a securities exchange, however, the
<PAGE>

Defaulted Interest or installment may be paid at any time and in any
lawful manner consistent with the requirements of the exchange.
If an Event of Default occurs, the principal of all the
Certificates may be declared due and payable as provided in the
Indenture.

FORM OF PAYMENT
Payment of principal and interest will be made at the office or
agency of Summit maintained for that purpose in Coeur d'Alene, Idaho or
such other place as may be designated by Summit. Payment will be made
in coin or currency of the United States of America that is legal
tender for payment of public and private debts at the time of payment.
At Summit's option, however, payment of interest may be made by check
mailed to the Person entitled to the interest at that Person's address
as it appears in the Certificate Register.

BUSINESS DAYS
Whenever any interest Payment Date, the Stated Maturity of this
Certificate or any date on which any Defaulted Interest or installment
is proposed to be paid is not a business day, the appropriate payment
or compounding of interest or principal may be made on the next
succeeding Business Day without accrual of additional interest.

CERTAIN DEFINITIONS
Summit is an Idaho corporation. The term "Summit" includes any
successor corporation under the Indenture. The term "Trustee: includes
any successor Trustee under the Indenture.
<PAGE>

Exhibit 5(a)

OPINION OF SUSAN A. THOMSON

January , 1994

The Directors and Stockholder
Summit Securities, Inc.
929 West Sprague Avenue
Spokane, WA 99204

Gentlemen:

I have acted as counsel to you in connection with the proceedings
for the authorization and issuance of $40,000,000 principal amount of
Investment Certificates of the Company and the preparation of a
Registration Statement (form S-1) under the Securities Act of 1933, as
amended, which you have filed with the Securities and Exchange
Commission with respect to the Certificates. (SEC Registration No.
33- ).

I have examined the Registration Statement referred to above and
such documents and records of the Company and other documents as I have
deemed necessary for the purpose of this opinion.

Based upon the foregoing, I am of the opinion that upon the
happening of the following events,

(a) due action by the Board of Directors of the Company
authorizing the issuance and sale of the Certificates
pursuant to the Indenture dated as of November 15, 1990,
between the Company and West One Bank, Idaho, N.A. as
Trustee;

(b) the Registration Statement referred to above becoming
effective;

(c) compliance with the terms and conditions of the Indenture
with respect to the creation, authentication and delivery of
the Certificates, the due execution by the Company and
authentication and delivery by the Trustee of the
Certificates, and the sale thereof by the Company as
contemplated in the Registration Statement and in accordance
with the above-mentioned corporate and governmental
authorizations;

The Certificates will constitute in the hands of the holders
thereof valid, binding and legal outstanding obligations of the
Company, in accordance with their terms, subject to applicable
bankruptcy and insolvency laws.

I hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to me in the Prospectus
under the caption "Legal Opinion".

<PAGE>

Sincerely,

/s/SUSAN A. THOMSON

Susan A. Thomson
Assistant Corporate Counsel

<PAGE>

Exhibit 5(b)

OPINION OF SUSAN A. THOMSON

January , 1994

The Directors and Stockholders
Summit Securities, Inc.
West 929 Sprague Avenue
Spokane, WA 99204

Gentlemen:

I have acted as counsel to Summit Securities, Inc. (the "Company")
in connection with the proceedings for the authorization and issuance
of 150,000 shares of Variable Rate Cumulative Preferred Stock, Series
S-1 ("Preferred Stock, Series S") including the preparation of a
Registration Statement (Form S-1) under the Securities Act of 1933, as
amended, which has been filed with the Securities and Exchange
Commission. (SEC Registration No. 33- )

I have examined the Registration Statement referred to above and
such other documents and records as I have deemed necessary for the
purpose of this opinion.

Based upon the foregoing, and subject to the Board of Directors'
adoption of Articles of Amendment to the Company's Article of
Incorporation which incorporate the Statement of Rights, Designation
and Preferences of variable Rate Cumulative Preferred Stock, Series
S-1, and the filing of same with the Secretary of State of the State of
Idaho in accordance with , I am of
the opinion that:

(1) the Preferred Stock, Series S-1 of the Company which is being
registered, when issued and sold in the manner and for the
consideration contemplated by the Registration Statement,
will be legally issued, fully paid and non-assessable; and

(2) in the event of dissolution, liquidation or winding up of the
affairs of the Company, whether voluntary or involuntary, the
holders of Preferred Stock, Series S-1 will be entitled to
receive, on parity with all other issued and outstanding
preferred stock, before any payment or distribution is made
on the Company's Class A or Class B Common Stock, the amount
of ($100.00 per share plus an amount equal to all accrued and
unpaid dividends thereon to the date of distribution or
payment.

This opinion is furnished pursuant to the requirements of Item
601(b)(5) of Regulation S-K.

<PAGE>

I hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to me in the Prospectus
under the caption "Legal Opinion."

Sincerely,

/s/ SUSAN A. THOMSON

Susan A. Thomson
Assistant Corporate Counsel

<PAGE>

EXHIBIT 12

SUMMIT SECURITIES, INC.
RATIO OF EARNING TO FIXED CHARGES

The ratio of adjusted earnings to fixed charges was computed using
the following tabulations to compute adjusted earnings and the defined
fixed charges.
<TABLE>
<CAPTION>
Year Ended
September 30, September 30, September 30,
1993 1992 1991
<S> <C> <C> <C>
Income (loss) before
extraordinary item..... $ 283,107 $ 611,595 $238,205

Add:
Interest............... 1,792,059 1,390,968 640,318
Taxes (benefit) on
income.............. 145,951 127,989 (2,689)
---------- -------- -------
Adjusted Earnings......... $2,221,117 $2,130,552 $875,834
========== ======== =======
Fixed Charges
Interest............... $1,792,059 $1,390,968 $640,318
========== ======== =======
Ratio of Adjusted Earnings
to Fixed Charges....... 1.24 1.53 1.37
========== ======== =======
</TABLE>

<PAGE>

Exhibit 23(a)(i)

CONSENT OF

INDEPENDENT PUBLIC ACCOUNTANTS

Summit Securities, Inc.
Spokane, Washington

We consent to the inclusion in this Registration Statement on Form
S-1 (File No. 33- ) of our report dated December 13,
1993 which includes an explanatory paragraph describing changes in the
Company's method of accounting for repossessed real property and income
taxes relating to our audit of the financial statements and financial
statement schedules of Summit Securities, Inc.

We also consent to the reference to our firm under the caption
"Experts".

/s/ COOPERS & LYBRAND

COOPERS & LYBRAND

Spokane, Washington
January 13, 1994

<PAGE>

Exhibit 23 (a)(ii)

CONSENT OF

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Summit Securities, Inc.
Spokane, Washington

We hereby consent to the use in the Prospectus constituting a part
of this Registration Statement of our report dated December 7, 1992,
relating to the financial statements of Summit Securities, Inc., which
is contained in that Prospectus, and of our report dated December 7,
1992, relating to the schedules, which is contained in Part II of the
Registration Statement.

We also consent to the reference to us under the caption
"Experts", Summary of Financial Data and Selected Financial Data in the
Prospectus.

/s/ BDO SEIDMAN

BDO SEIDMAN

Spokane, Washington
January 13, 1994
<PAGE>

Exhibit 25

FORM T-1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

_____________________________

Statement of Eligibility and Qualification
Under the Trust Indenture Act of 1939 of a
Corporation Designated to Act as Trustee

_____________________________

WEST ONE BANK, IDAHO
(Exact name of trustee as specified in its charter)

_____________________________

Idaho 82-0130211
(State of incorporation (I.R.S. Employer
if not a national bank) Identification No.)

101 S. Capitol Boulevard 83702
Boise, Idaho (Zip code)
(Address of Trustee's
principal executive offices)

______________________________

SUMMIT SECURITIES, INC.
(Exact name of obligor as specified in its charter)

Idaho 82-0438135
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1000 W. Hubbard 83814
Coeur d'Alene, Idaho (Zip code)
(Address of principal
executive offices)

_________________________________

INVESTMENT CERTIFICATES
(Title of the indenture securities)
<PAGE>

Item 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.

Name Address

Federal Reserve Bank of
San Francisco San Francisco, CA
Federal Deposit Insurance
Corporation Washington, D.C.

(b) Whether it is authorized to exercise corporate trust power.

Yes.

Item 2. Affiliations with Obligor and Underwriters.
If the obligor or any underwriter for the obligor is an
affiliate of the trustee, describe such affiliation.

None.

Item 3. Voting Securities of the Trustee.
Furnish the following information as to each class of voting
securities of the trustee:

As of December 3, 1993

Col. A Col. B
Title of Class Amount Outstanding
______________ __________________
Capital Stock (Common)
par value $2.50 per share 6,148,202 shares

Item 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 the 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.

Nonapplicable.

Item 5. Interlocking Directorates and Similar Relationships with the
<PAGE>

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.

Item 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.

As of December 3, 1993

The amount of voting securities of the trustee owned
beneficially by the obligor and its directors and executive
officers, taken as a group, does not exceed one percent of
the outstanding voting securities of the trustee.

Item 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 3, 1993.

None.

Item 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 3, 1993

None.

Item 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 such underwriter any of which
are so owned or held by the trustee.

As of December 3, 1993

None.
<PAGE>

Item 10. Ownership or Holdings by the Trustee of Voting Securities of
Certain Affiliates or Security Holders of the Obligors.

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
percent 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 3, 1993

None.

Item 11. Ownership or Holdings by the Trustee or any Securities of
Person Owning 50 percent or More of the Voting Securities of
the Obligor.

If the trustee owns beneficially or holds as collateral
security for obligations default any securities of a person
who, to the knowledge of the trustee, owns 50 percent or more
of the Voting Securities of the Obligor.

If the trustee owns beneficially or holds as collateral
security for obligations default any securities of a person
who, to the knowledge of the trust owns 50 percent 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 3, 1993

None.

Item 12. List of Exhibits.

Exhibit 1. Articles of Incorporation of the trustee, as
amended, and as now in effect.

Exhibit 2. Certificate of authority of the trustee to
commence business.

Exhibit 3. Authorization of the trustee to exercise
corporate trust powers.

Exhibit 4. Existing By-Laws of the trustee.

Exhibit 5. None.

Exhibit 6. Consent of the trustee required by Section
321(b) of the Act.

Exhibit 7. A copy of the latest report of condition of
the trustee published pursuant to law or the
requirements of its supervising or examining
authority.

<PAGE>

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act OF 1939
the trustee, West One Bank, Idaho, N.A. a corporation organized and
existing under the laws of the United States of America, 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 Boise, State of Idaho, on the 3rd day of December, 1993.

WEST ONE BANK, IDAHO

By:_________________________________________
Roger Wright
Vice President and Manager
Corporate Trust Department