SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 22, 2008
Timberland Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Washington 0-23333 91-1863696
--------------------------- ------------ ---------------
State or other jurisdiction Commission (I.R.S. Employer
Of incorporation File Number Identification No.)
624 Simpson Avenue, Hoquiam, Washington 98550
--------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (including area code) (360) 533-4747
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions.
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On January 22, 2008, Timberland Bancorp, Inc. issued its earnings release
for the quarter ended December 31, 2007. A copy of the earnings release is
attached hereto as Exhibit 99.1, which is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release of Timberland Bancorp, Inc. dated January 22,
2008
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
TIMBERLAND BANCORP,INC.
DATE: January 22, 2008 By: /s/Dean J. Brydon
--------------------------
Dean J. Brydon
Chief Financial Officer
Exhibit 99.1
Contact: Michael R. Sand
President & CEO
Dean J. Brydon, CFO
(360)533-4747
www.timberlandbank.com
----------------------
Timberland Bancorp Earns $1.6 Million or $0.24 per Share
in Fiscal First Quarter 2008
-- The Company Increases Quarterly Cash Dividend by 10%
-- The Bank Incurred No Charge-Offs in the Quarter
HOQUIAM, WA--January 22, 2008 -- Timberland Bancorp, Inc. (NasdaqGM:TSBK)
("Timberland"), the holding company for Timberland Bank ("Bank"), today
reported solid fiscal first quarter profits of $1.6 million after a $1.2
million addition to its loan loss reserves as a result of continued loan
growth and the reclassification of certain loans. In the first quarter of
fiscal 2008, Timberland earned $1.6 million, or $0.24 per diluted share,
compared to $2.0 million, or $0.27 per diluted share, in the first quarter one
year ago. All per share data has been adjusted to reflect the 2-for-1 stock
split in the form of a 100% stock dividend paid on June 5, 2007.
Fiscal First Quarter 2008 Highlights: (quarter ended December 31, 2007
compared to the quarter ended December 31, 2006)
-- The loan portfolio increased 19% to $537 million from $452 million.
-- Total assets increased 9% to $647 million from $594 million.
-- Revenue increased 8% due to solid loan growth and above average net
interest margin.
-- Non-performing assets (NPA) are 0.60% of total assets.
-- There were no charge-offs in the quarter.
-- With the addition of $1.2 million, loan loss reserves grew to 1.11%
of total loans and 153% of NPAs.
-- Michael Scott joined the Company in the position of Chief Credit
Administrator.
-- Cash dividends per share increased 10% to $0.11 per share bringing
the annualized yield at current prices to 3.48%.
"Headwinds in the financial markets along with windstorms and flooding in the
Northwest dominated the regional headlines this past quarter," said Michael R.
Sand, President and Chief Executive Officer. "While a few of our offices were
impacted by December's flooding and power outages our banking operations were
able to remain open with only minor interruptions. Our emergency response
systems functioned well and our people continued to meet the needs of our
customers during this difficult storm. Some of the sluggishness that has
affected real estate markets outside the Northwest is beginning to be noted in
our region. While we don't expect the Northwest to exhibit the price
depreciation and market issues of the same magnitude realized in other parts
of the country we believe it is prudent to add to reserves at this time in
part because we are a company that has assets associated with the construction
and development sector. This is a sector in which we have had significant and
long-term management experience. As detailed below, our revenues continue to
grow, our net interest margin is solid, our profitability is good, and our
people continue to work diligently to build a prosperous and sound Northwest
franchise."
Operating Results
Fiscal first quarter revenue (net interest income before provision for loan
losses plus non-interest income) increased 8% to $8.4 million from $7.8
million in the like quarter one year ago. Net interest income before the
provision for loan losses for the first quarter of fiscal 2008 increased 10%
to $6.9 million compared to the like quarter one year ago with interest income
increasing 18% and interest expense increasing 31%. Strong loan growth
contributed to the increase in net interest income and offset increased
funding costs. Timberland's net interest margin was 4.59% for the first
quarter of fiscal 2008 compared to 4.60% for the fourth quarter of fiscal 2007
and 4.74% for the first quarter one year ago.
The increase in net interest income was offset by a $1.2 million increase in
the provision for loan loss due to a slowdown in the real estate market,
continued loan growth and an increase in the level of classified loans.
"Although our non-performing assets are moderate at 60 basis points of the
total portfolio, the ratio is higher than we have seen in the recent past,"
said Dean Brydon, Chief Financial Officer. "We added significantly to our
reserves this quarter to increase our reserve levels and are continuing to
proactively monitor economic conditions and our loan portfolio." A provision
for loan losses of $1.2 million was made during the current quarter compared
to no provision made during the first quarter of fiscal 2007. There were no
charge-offs made during the quarter ended December 31, 2007.
Timberland Q1 Earnings
January 22, 2008
Page 2
Non-interest income increased 1% to $1.50 million for the first quarter from
$1.48 million for the first quarter of fiscal 2007. Strong growth in ATM
transaction fees more than offset lower gains from the sale of loans and a
reduction in loan servicing income. "The early success of our Smart Money
checking account program is generating increased usage of our banking
services, particularly Debit card usage with our customers," Sand explained.
"The Smart Money program provides an attractive rate of return to customers
who actively use their ATM / Debit cards, sign on to internet banking and
receive E-mailed checking statements each month. This combination of services
is designed to build and deepen our relationship with customers, and to share
with them through higher interest rates the rewards we earn from the program's
fee income. It is truly a win-win program for both our customers and the
Bank."
Timberland's total operating (non-interest) expenses decreased to $4.85
million for the first quarter from $4.90 million for the first quarter of
fiscal 2007 due to a decrease in premises and equipment expenses and
professional fee expenses. The decrease in premises and equipment expenses was
primarily due to an insurance settlement for damage to the Bank's previous
data center facility. This settlement reduced expenses by $172,000 ($112,000
net of income tax) during the current quarter. The lower premises and
equipment expenses were partially offset by increased salaries and employee
benefits expenses. As a result of the lower expenses and increased revenue,
the efficiency ratio improved to 57.64% for the first quarter compared to
63.13% for the same quarter one year ago.
Asset Quality
The non-performing assets (NPAs) to total assets ratio was 0.60% at December
31, 2007, with no charge-offs during the quarter. The allowance for loan
losses totaled $6.0 million at December 31, 2007, or 1.11% of loans receivable
and 153% of non-performing loans (NPL). The allowance for loan losses was $4.8
million, or 0.92% of loans receivable at September 30, 2007 and $4.1 million,
or 0.90% at December 31, 2006. NPLs totaled $3.9 million at December 31, 2007,
and were comprised of 15 loans including eight single family speculative home
loans totaling $3.2 million, two home equity consumer loans totaling $293,000,
three land loans totaling $212,000, one commercial business loan for $119,000,
and one commercial real estate loan for $90,000. "The majority of our
non-performing loans are in Pierce County, which has been an area of strong
franchise growth for the Bank in the past few years," Sand noted. "In January,
we hired Michael Scott, a veteran banker with more than 34 years of industry
experience, to fill the role of Chief Credit Administrator. His broad
experience at Bank of America included positions in branch management,
personnel, special credits, and commercial banking. Most recently, he was
involved with the marketing, structuring, underwriting and monitoring of
credit products offered by that bank. With our growing commercial lending
business and our expansion into the Puget Sound market, we believe Mike's
expertise will provide another layer of experience and oversight as we
continue to emphasize and maintain strong credit quality."
The majority (34 basis points) of the 37 basis point increase in the NPA ratio
over the prior quarter was the result of loans to two builders becoming
delinquent. One builder has six loans ($343,000 average per loan) that became
90 days delinquent while the other builder has one loan ($524,000) that became
delinquent. "Timberland Bank has provided funding for builders and developers
in Western Washington for well over 30 years. We have provided such funding
during both good and challenging economic times. Our loss experience has been
minimal. A basic strategy that we have employed to control risk has been to
limit the number of loans we make to individual builders. The amount of credit
extended is dependent on our judgment of the customer's capacity to repay.
During the past quarter we heightened our review of economic forecasts, and
sales activity for new homes in the markets we serve. It is clear that the
market for new home sales has weakened and the portfolios of banks involved in
construction and land development activities have therefore assumed a higher
risk profile. Our methodology for evaluating an appropriate level of loan loss
reserves depends in part on the risk classification of the loans in our
portfolio. During the quarter we downgraded several loans including certain
loans to borrowers that have had an excellent history with Timberland and have
maintained the current status of their loans. The fact remains, however that
we are operating in a more uncertain economic environment. Logically, a loan
portfolio assuming a higher risk profile due to a more challenging economic
environment deserves a higher level of reserves. We continue to monitor the
economy and our portfolio. We will make adjustments to reserves as our ongoing
analysis determines is appropriate. Future adjustments could include additions
to reserves, or no additions to reserves if we see signs of an improving
economic climate and determine that it is appropriate to upgrade the
classification of certain loans in our portfolio," stated Sand.
Balance Sheet Management
Total assets increased 9% year over year, growing to $647 million at December
31, 2007, from $645 million at September 30, 2007 and $594 million one year
ago primarily due to strong loan portfolio growth. "During the quarter we were
able to replace
Timberland Q1 Earnings
January 22, 2008
Page 3
nearly $19 million in securities with higher yielding loans following the call
or maturity of these investments," Brydon explained.
LOAN PORTFOLIO
($ in thousands) Dec. 31, 2007 Sept. 30, 2007 Dec. 31, 2006
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
Mortgage Loans:
One-to-four
family (1) $ 102,133 17% $ 102,434 17% $ 100,204 19%
Multi family 38,828 6 35,157 6 18,391 3
Commercial 124,634 20 127,866 22 139,700 27
Construction and
land development 205,943 34 186,261 32 170,788 33
Land 58,402 10 60,706 10 34,986 7
--------- --- --------- --- --------- ---
Total mortgage
loans 529,940 87 512,424 87 464,069 89
Consumer Loans:
Home equity and
second mortgage 47,071 8 47,269 8 38,434 7
Other 10,627 2 10,922 2 11,051 2
--------- --- --------- --- --------- ---
57,698 10 58,191 10 49,485 9
Commercial business
loans 18,642 3 18,164 3 12,136 2
--------- --- --------- --- --------- ---
Total loans $ 606,280 100% $ 588,779 100% $ 525,690 100%
Less:
Undisbursed portion
of construction
loans in process (60,708) (65,673) (66,810)
Unearned income (2,928) (2,968) (2,889)
Allowance for
loan losses (5,997) (4,797) (4,121)
--------- --------- ---------
Total loans
receivable, net $ 536,647 $ 515,341 $ 451,870
========= ========= =========
____________________
(1) Includes loans
held for sale
CONTRUCTION LOAN
COMPOSITION
($ in thousands) Dec. 31, 2007 Sept. 30, 2007 Dec. 31, 2006
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
Custom and
owner/builder $ 50,586 25% $ 52,375 28% $ 47,556 28%
Speculative 41,251 20 43,012 23 37,178 22
Commercial real estate 66,949 32 50,518 27 55,536 32
Multi-family 22,060 11 18,064 10 13,822 8
Land development 25,097 12 22,292 12 16,696 10
--------- --- --------- --- --------- ---
Total construction
loans $ 205,943 100% $ 186,261 100% $ 170,788 100%
"Loan demand continues to be strong in our primary markets, although
construction and land development lending is expected to moderate, at least in
the early part of the year," said Sand. Net loans receivable increased 17% on
an annualized basis during the quarter to $537 million at December 31, 2007,
and increased 19% from $452 million one year ago. During the past 12 months
the portfolio has increased by $85 million as construction and land
development loans (net of the undisbursed portion) increased $41 million, land
loans increased $23 million, multi-family loans increased $20 million,
consumer loans increased $8 million, and commercial business loans increased
$7 million. These increases were partially offset by a $15 million decrease in
commercial real estate loans.
"Demand for new and refinance residential loans has diminished this year, from
the very strong demand we've seen in the past few years," said Sand. "We
continue to originate and service mortgage loans in our market, which we
believe provides another very strong avenue for building deep relationships
with our customers. Particularly in the small markets in which we operate, we
believe our customers appreciate being able to confer with local bankers about
our mortgage products and that our retention of servicing on mortgages is a
competitive advantage. While we sell mortgage instruments into the secondary
market, we retain servicing on our loan originations. We are not, however,
lending in the subprime market and Timberland did not participate in the
aggressive marketing of alternative mortgage products to sub-prime borrowers
that has caused financial difficulties for many financial institutions in our
industry."
Loan originations decreased to $65.5 million for the quarter ended December
31, 2007 from $66.3 million for the quarter ended September 30, 2007 and from
$80.8 million for the quarter ended December 31, 2006. The Bank also continues
to sell fixed
Timberland Q1 Earnings
January 22, 2008
Page 4
rate one-to-four family mortgage loans into the secondary market for
asset-liability management purposes. Fixed rate one-to-four family mortgage
loan sales totaled $7.4 million for the first quarter of fiscal 2008 compared
to $7.2 million for the same period one year ago.
Total deposits decreased $5.5 million to $461.2 million at December 31, 2007
from $466.7 million at September 30, 2007. The Bank had a $4.4 million
decrease in non-interest bearing accounts, a $1.7 million decrease in savings
accounts and a $1.7 million decrease in certificate of deposit accounts, which
were partially offset by a $3.2 million increase in N.O.W. checking account
balances.
DEPOSIT BREAKDOWN
($ in thousands) Dec. 31, 2007 Sept. 30, 2007 Dec. 31, 2006
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
Non-interest bearing $ 50,590 11% $ 54,962 12% $ 55,121 13%
N.O.W. checking 83,594 18 80,372 17 88,428 21
Savings 54,738 12 56,412 12 61,324 14
Money market 47,102 10 48,068 10 44,660 10
Certificates of
deposit under $100 133,676 29 135,528 29 126,819 29
Certificates of
deposit $100 and over 68,527 15 67,316 15 57,897 13
Certificates of
deposit - brokered 23,020 5 24,077 5 -- --
--------- --- --------- --- --------- ---
Total deposits $ 461,247 100% $ 466,735 100% $ 434,249 100%
========= === ========= === ========= ===
Total shareholders' equity increased $442,000 to $75.0 million at December 31,
2007 from $74.5 million at September 30, 2007. Timberland continued to manage
its capital ratio through asset growth, stock repurchases and dividends.
During the quarter Timberland repurchased 50,000 shares for $703,000 (an
average price of $14.06 per share). There are 94,950 shares remaining to be
repurchased in the current stock repurchase plan. Cumulatively, Timberland has
repurchased 7.7 million shares at an average price of $8.93 per share. The
share repurchases equal approximately 58% of the 13.2 million shares that were
issued in Timberland's initial public offering in January 1998. A cash
dividend of $0.10 per share was paid during the quarter, which represented the
39th consecutive quarter a cash dividend was paid to shareholders. The Board
of Directors raised the cash dividend 10% to $0.11 per share to be paid
February 22, 2008 to shareholders of record as of February 8, 2008.
About Timberland Bancorp, Inc.
Timberland Bancorp operates 21 branches in the state of Washington in Hoquiam,
Aberdeen, Ocean Shores, Montesano, Elma, Olympia, Lacey, Tumwater, Yelm,
Puyallup, Edgewood, Tacoma, Spanaway (Bethel Station), Gig Harbor, Poulsbo,
Silverdale, Auburn, Winlock, and Toledo.
Timberland Q1 Earnings
January 22, 2008
Page 5
TIMBERLAND BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT Three Months Ended
($ in thousands, except per share) Dec. 31, Sept. 30, Dec. 31,
(unaudited) 2007 2007 2006
---------- ---------- ----------
Interest and dividend income
Loans receivable $ 10,764 $ 10,335 $ 8,786
Investments and mortgage-backed
securities 249 344 454
Dividends from mutual funds and
FHLB stock 423 433 420
Federal funds sold 31 69 65
Interest bearing deposits in banks 10 16 39
---------- ---------- ----------
Total interest and dividend income 11,477 11,197 9,764
Interest expense
Deposits 3,334 3,180 2,589
FHLB advances 1,216 1,262 882
Other borrowings 8 11 17
---------- ---------- ----------
Total interest expense 4,558 4,453 3,488
---------- ---------- ----------
Net interest income 6,919 6,744 6,276
Provision for loan losses 1,200 270 --
---------- ---------- ----------
Net interest income after
provision for loan losses 5,719 6,474 6,276
Non-interest income
Service charges on deposits 696 715 706
Gain on sale of loans, net 92 106 107
Bank owned life insurance
("BOLI") net earnings 120 120 114
Servicing income on loans sold 118 133 132
ATM transaction fees 299 307 263
Other 172 176 159
---------- ---------- ----------
Total non-interest income 1,497 1,557 1,481
Non-interest expense
Salaries and employee benefits 2,920 2,624 2,785
Premises and equipment 464 625 624
Advertising 182 274 177
Loss (gain) from other real
estate operations -- 1 (17)
ATM expenses 148 143 119
Postage and courier 118 131 105
Amortization of core
deposit intangible 62 71 72
State and local taxes 151 152 139
Professional fees 147 125 177
Other 659 708 716
---------- ---------- ----------
Total non-interest expense 4,851 4,854 4,897
Income before federal
income taxes 2,365 3,177 2,860
Federal income taxes 750 1,022 906
---------- ---------- ----------
Net income $ 1,615 $ 2,155 $ 1,954
========== ========== ==========
Earnings per common share:
Basic $ 0.25 $ 0.33 $ 0.28
Diluted $ 0.24 $ 0.32 $ 0.27
Weighted average shares
outstanding:
Basic 6,515,428 6,516,381 7,007,766
Diluted 6,674,773 6,690,048 7,246,216
Timberland Q1 Earnings
January 22, 2008
Page 6
TIMBERLAND BANCORP, INC.
CONSOLIDATED BALANCE SHEET
($ in thousands) (unaudited) Dec. 31, Sept. 30, Dec. 31,
Assets 2007 2007 2006
---------- ---------- ----------
Cash and due from
financial institutions:
Non-interest bearing $ 15,301 $ 10,813 $ 17,764
Interest-bearing deposits
in banks 502 2,082 2,747
Federal funds sold 1,015 3,775 4,655
---------- ---------- ----------
16,818 16,670 25,166
Certificate of deposits
("CDs") held for investment -- -- 100
Investments and mortgage-backed
securities:
Held to maturity 67 71 73
Available for sale 45,037 63,898 69,772
FHLB stock 5,705 5,705 5,705
---------- ---------- ----------
50,809 69,674 75,550
Loans receivable 542,644 519,381 454,736
Loans held for sale -- 757 1,255
Less: Allowance for loan losses (5,997) (4,797) (4,121)
---------- ---------- ----------
Net loans receivable 536,647 515,341 451,870
Accrued interest receivable 3,407 3,424 2,884
Premises and equipment 16,512 16,575 16,756
Other real estate owned ("OREO")
and other repossessed items -- -- 2
BOLI 12,535 12,415 12,065
Goodwill 5,650 5,650 5,650
Core deposit intangible 1,158 1,221 1,434
Mortgage servicing rights 1,071 1,051 964
Other assets 1,987 2,827 1,737
---------- ---------- ----------
Total Assets $ 646,594 $ 644,848 $ 594,178
========== ========== ==========
Liabilities and Shareholders' Equity
Non-interest-bearing deposits $ 50,590 $ 54,962 $ 55,121
Interest-bearing deposits 410,657 411,773 379,128
---------- ---------- ----------
Total deposits 461,247 466,735 434,249
FHLB advances 106,380 99,697 78,446
Other borrowings:
repurchase agreements 611 595 1,322
Other liabilities and
accrued expenses 3,367 3,274 2,881
---------- ---------- ----------
Total Liabilities 571,605 570,301 516,898
---------- ---------- ----------
Shareholders' Equity
Common stock- $.01 par value;
50,000,000 shares authorized;
December 31, 2007 - 6,917,675
shares issued and outstanding
September 30, 2007 - 6,953,360
shares issued and outstanding
December 31, 2006 - 3,670,861
shares issued and outstanding
on a pre-split basis 69 70 37
Additional paid in capital 9,314 9,923 17,147
Unearned shares- Employee Stock
Ownership Plan (2,974) (3,040) (3,239)
Retained earnings 69,300 68,378 64,209
Accumulated other
comprehensive loss (720) (784) (874)
---------- ---------- ----------
Total Shareholders' Equity 74,989 74,547 77,280
---------- ---------- ----------
Total Liabilities and
Shareholders' Equity $ 646,594 $ 644,848 $ 594,178
========== ========== ==========
Timberland Q1 Earnings
January 22, 2008
Page 7
KEY FINANCIAL RATIOS AND DATA
($ in thousands, except per share)
(unaudited) Three Months Ended
Dec. 31, Sept. 30, Dec. 31,
2007 2007 2006
---------- ---------- ----------
PERFORMANCE RATIOS:
Return on average assets (a) 0.99% 1.36% 1.35%
Return on average equity (a) 8.61% 11.66% 9.94%
Net interest margin (a) 4.59% 4.60% 4.74%
Efficiency ratio 57.64% 58.47% 63.13%
Dec. 31, Sept. 30, Dec. 31,
2007 2007 2006
---------- ---------- ----------
ASSET QUALITY RATIOS:
Non-performing loans $ 3,908 $ 1,490 $ 239
OREO and other
repossessed assets -- -- 2
---------- ---------- ----------
Total non-performing assets $ 3,908 $ 1,490 $ 241
Non-performing assets to
total assets 0.60% 0.23% 0.04%
Allowance for loan losses to
non-performing loans 153% 322% 1,724%
Restructured loans $ 2,462 $ -- $ --
Book value per share (b) $ 10.84 $ 10.72 $ 10.53
Book value per share (c) $ 11.50 $ 11.39 $ 11.19
Tangible book value per share(b)(d) $ 9.86 $ 9.73 $ 9.56
Tangible book value per share(c)(d) $ 10.46 $ 10.34 $ 10.16
(a) Annualized
(b) Calculation includes ESOP
shares not committed to
be released
(c) Calculation excludes ESOP
shares not committed to
be released
(d) Calculation subtracts goodwill
and core deposit intangible
from the equity component
AVERAGE BALANCE SHEET: Three Months Ended
Dec. 31, Sept. 30, Dec. 31,
2007 2007 2006
---------- ---------- ----------
Average total loans $ 538,284 $ 509,166 $ 439,294
Average total interest
earning assets 602,628 586,056 529,572
Average total assets 650,893 634,762 580,114
Average total interest
bearing deposits 411,766 405,078 376,365
Average FHLB advances and
other borrowings 106,937 96,442 65,970
Average shareholders' equity 75,002 73,916 78,646
Disclaimer
This report contains certain "forward-looking statements." The Company desires
to take advantage of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995 and is including this statement for the express
purpose of availing itself of the protection of such safe harbor with forward
looking statements. These forward-looking statements may describe future plans
or strategies and include the Company's expectations of future financial
results. Forward-looking statements are subject to a number of risks and
uncertainties that might cause actual results to differ materially from stated
objectives. These risk factors include but are not limited to the effect of
interest rate changes, competition in the financial services market for both
deposits and loans as well as regional and general economic conditions. The
words "believe," "expect," "anticipate," "estimate," "project," and similar
expressions identify forward-looking statements. The Company's ability to
predict results or the effect of future plans or strategies is inherently
uncertain and undue reliance should not be placed on such statements.