10-Q 1 b39301tae10-q.txt TUCKER ANTHONY SUTRO 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES X EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001 ----- OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________________ TO _________________ ----- Commission File Number 1-13993 TUCKER ANTHONY SUTRO -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 04-3335712 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Beacon Street Boston, Massachusetts 02108 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (617) 725-2000 Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No As of May 7, 2001 the Company had 24,450,441 shares of common stock outstanding. 2 TABLE OF CONTENTS PAGE PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Financial Condition - March 31, 2001 and December 31, 2000 3 Consolidated Statements of Income - Three months ended March 31, 2001 and 2000 4 Consolidated Statements of Cash Flows - Three months ended March 31, 2001 and 2000 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk 13 PART II. OTHER INFORMATION Item 1. Legal Proceedings 13 Item 2. Changes in Securities and Use of Proceeds 14 Item 3. Defaults Upon Senior Securities 14 Item 4. Submission of Matters to a Vote of Security Holders 14 Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 14 SIGNATURES 15 2 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS TUCKER ANTHONY SUTRO CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Amounts in thousands, except share data)

See accompanying notes. 3 4 TUCKER ANTHONY SUTRO CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Amounts in thousands, except per share data)

See accompanying notes. 4 5 TUCKER ANTHONY SUTRO CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in thousands)

See accompanying notes. 5 6 TUCKER ANTHONY SUTRO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2001 (UNAUDITED) 1. BASIS OF PRESENTATION Tucker Anthony Sutro is a holding company which together with its wholly-owned subsidiaries (collectively, the "Company") is a full-service retail brokerage, asset management and investment banking firm. The consolidated financial statements include the accounts of the Company and its operating subsidiaries: Tucker Anthony Incorporated ("Tucker Anthony"), a full-service brokerage and investment firm, Sutro & Co. Incorporated ("Sutro"), a West Coast brokerage and investment banking firm; Hill, Thompson, Magid LP ("Hill Thompson"), a New Jersey-based over-the-counter trading firm; Freedom Capital Management Corporation ("Freedom Capital"), a Boston-based asset management firm; and Cleary Gull Investment Management Services, Inc. ("Cleary Gull IMS"), a Milwaukee-based asset management firm. On October 2, 2000, the Company acquired Branch Cabell & Co. Inc. ("Branch Cabell"), a Richmond, Virginia-based regional brokerage and investment firm, in an all-stock transaction that was accounted for as a pooling of interests. Accordingly, quarter ended March 31, 2000 results have been restated as if the Company and Branch Cabell had always been combined. As of March 31, 2001, Branch Cabell operated as a division of Tucker Anthony. All significant intercompany accounts and transactions have been eliminated in consolidation. The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Management believes that the estimates utilized in preparing its financial statements are reasonable and prudent. Actual results could differ from these estimates. Certain prior period amounts have been reclassified to conform with the current period's financial statement presentation. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for audited financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2001 are not necessarily indicative of the results that may be expected for the year ending December 31, 2001. The information included in this Form 10-Q should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000. 2. NET CAPITAL REQUIREMENTS Certain subsidiaries of the Company are subject to the net capital requirements of the New York Stock Exchange, Inc. ("Exchange") and the Uniform Net Capital requirements of the Securities and Exchange Commission ("Commission") under Rule 15c3-1. The Exchange and the Commission rules also provide that equity capital may not be withdrawn or cash dividends paid if certain minimum net capital requirements are not met. The Company's principal regulated subsidiaries are discussed below. Tucker Anthony is a registered broker and dealer. At March 31, 2001, Tucker Anthony had net capital of approximately $37.8 million which was $36.8 million in excess of the $1.0 million amount required to be maintained at that date. 6 7 2. NET CAPITAL REQUIREMENTS (CONTINUED) Sutro is a registered broker and dealer. At March 31, 2001, Sutro had net capital of approximately $7.5 million which was $6.5 million in excess of the $1.0 million amount required to be maintained at that date. Hill Thompson is a registered broker and dealer. At March 31, 2001, Hill Thompson had net capital of approximately $21.4 million which was $20.4 million in excess of the $1.0 million amount required to be maintained at that date. In addition, at March 31, 2001, Hill Thompson had $0.2 million in cash segregated in a special reserve bank account for the exclusive benefit of customers pursuant to the reserve formula requirements of Rule 15c 3-3. Cleary Gull IMS is a registered broker and dealer. At March 31, 2001, Cleary Gull IMS had net capital of approximately $0.5 million which was $0.2 million in excess of the $0.3 million amount required to be maintained at that date. Freedom Trust Company ("FTC") is a subsidiary of Freedom Capital and is a limited purpose trust company. Pursuant to state regulations, FTC is required to meet and maintain certain capital minimums and ratios. At March 31, 2001, FTC's regulatory capital, as defined, was $1.4 million and FTC was in compliance with all such requirements. Under a clearing arrangement with Wexford Clearing Services Corporation ("Wexford"), Tucker Anthony, Sutro and Cleary Gull IMS are required to maintain certain minimum levels of net capital and comply with other financial ratio requirements. At March 31, 2001, Tucker Anthony, Sutro and Cleary Gull IMS were in compliance with all such requirements. 3. COMMITMENTS AND CONTINGENCIES The Company leases office space and various types of equipment under noncancelable leases generally varying from one to ten years, with certain renewal options for like terms. The Company has been named as a defendant in a number of civil actions and arbitrations primarily relating to its broker-dealer activities. The Company is also involved, from time to time, in proceedings with, and investigations by, governmental agencies and self regulatory organizations. While the ultimate outcome of litigation involving the Company cannot be predicted with certainty, management believes, based on currently available information, that it has meritorious defenses to all such actions and intends to defend each of these vigorously. While there can be no assurance that such actions, proceedings, investigations and litigation will not have a material adverse effect on the financial position or results of operations of the Company in any future period, it is the opinion of management that the resolution of any such actions, proceedings, investigations and litigation will not have a material adverse effect on the consolidated financial position and results of operations of the Company. The Company has outstanding when-issued contracts which commit it to purchase securities at specified future dates and prices. The Company presells such issues to manage risk exposure related to these off-balance sheet commitments. Transactions which were open at March 31, 2001 have subsequently settled and had no material effect on the consolidated statements of income and financial condition. 7 8 4. EARNINGS PER SHARE The Company computes its earnings per share in accordance with Statement of Financial Accounting Standards ("SFAS") 128, "Earnings Per Share." The following table sets forth the computation for basic and diluted earnings per share (in thousands, except per share amounts):

(a) Options to purchase 1,000 shares and 743,339 shares of the Company's common stock were outstanding at March 31, 2001 and March 31, 2000, respectively, but were not included in the computation of diluted earnings per share. Also excluded from the computation were 666,667 shares of restricted stock that were not vested at March 31, 2000. The inclusion of such options and restricted stock would have had an antidilutive effect on the diluted earnings per share calculation because the options' exercise prices and restricted stock prices were greater than the average market price of the Company's common shares for the 2001 first quarter and 2000 first quarter. 5. SEGMENT REPORTING DATA SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information" requires segment information to be reported based on how management internally evaluates the operating performance of its business units. Thus, from time to time, segment reporting may change to reflect how management currently views its businesses. Accordingly, the Company has changed from three to five reportable segments. The Company's five reportable segments are as follows: retail services, capital markets, proprietary trading, asset management and corporate. In its retail operations, the Company provides its clients with a broad range of services delivered through its branch distribution network, including equity and fixed income securities, mutual funds, insurance products, options, U.S. government securities, municipal securities and investment management services. In addition to recommending and effecting transactions in securities, the Company makes available equity research reports and offers services such as financial and tax planning, and trust and estate planning to its retail clients. The Company's capital markets segment consists of equity research, investment banking, institutional sales, trading and syndication services. This business segment offers various investment banking services, including merger and acquisition services, public offerings and private placements to clients. The capital markets segment provides clients access to a range of fixed income products and executes securities transactions for institutional investors such as banks, mutual funds, insurance companies and pension and profit-sharing plans. In its proprietary trading business, the Company makes markets, buying and selling as principal, in common stocks, convertible preferred stocks, warrants and other securities traded on Nasdaq or other over-the-counter markets. The asset management segment includes Freedom Capital and Cleary Gull IMS. The Company offers its asset management clients investment advisory, portfolio management and custodial services. Substantially all of the Company's business is transacted in the United States. The corporate segment consists of the activities of the Company's holding companies including amortization of goodwill and acquisition interest expense. The following table presents information about reported segments (amounts in thousands): 8 9

6. RESTRUCTURING CHARGES During the first quarter 2001 the Company recognized $9.0 million of pre-tax restructuring charges in connection with the merger of its two principal broker-dealer subsidiaries, Tucker Anthony and Sutro. The restructuring charges primarily consist of severance payments, lease terminations and related leasehold improvement write-offs. The merger is expected to be completed in September 2001. 7. ACCOUNTING PRONOUNCEMENTS Effective January 1, 2001 the Company was required to adopt SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities." This statement establishes accounting and reporting standards requiring that all derivative instruments are recorded on the balance sheet as either an asset or a liability, measured at its fair value. The statement requires that changes in the derivative's fair value are recognized currently in earnings unless specific hedge accounting criteria are met and such hedge accounting treatment is elected. The adoption of this statement did not have a material impact on the Company's financial position, results of operations, earnings per share or cash flows. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the Company's consolidated financial statements and notes thereto appearing in Item 1 of this report. This Form 10-Q may contain statements which constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Prospective investors are cautioned that any such forward-looking statements are not guarantees for future performance and involve risks and uncertainties, including but not limited to those identified in the following paragraph, and that actual results may differ materially from those contemplated by such forward-looking statements. BUSINESS ENVIRONMENT The Company's retail securities brokerage activities, as well as its investment banking, asset management, institutional sales, trading and equity research services, are in highly competitive markets and subject to various risks including volatile trading markets and fluctuations in the volume of market activity. These markets are affected by general economic and market conditions, including fluctuations in interest rates, volume and price levels of securities, flows of investor funds into and out of mutual funds and pension plans and by factors that apply to particular industries such as technological advances and changes in the regulatory environment. The Company's financial results have been and may continue to be subject to fluctuations due to these and other factors. Consequently, the results of operations for a particular period may not be indicative of results to be expected for other periods. 9 10 COMPANY DEVELOPMENTS During the first quarter 2001 the Company recognized $9.0 million of pre-tax restructuring charges in connection with the merger of its two principal broker-dealer subsidiaries, Tucker Anthony and Sutro. The restructuring charges primarily consist of severance payments, lease terminations and related leasehold improvement write-offs. The merger, which is expected to be completed in September 2001, will create a more efficient and cost effective approach to running the Company's business. In October 2000, the Company acquired Branch Cabell & Co. Inc. ("Branch Cabell"), a regional brokerage firm based in Richmond, Virginia. The transaction was recorded as a pooling of interests for accounting purposes. Accordingly, quarter ended March 31, 2000 results have been restated as if the Company and Branch Cabell had always been combined. COMPONENTS OF REVENUES AND EXPENSES REVENUES Commission revenues include retail and institutional commissions received by the Company as an agent in securities transactions, including all exchange listed, over-the-counter agency, mutual fund, insurance and annuity transactions. Principal transactions revenues include principal sales credits as well as gains and losses from the trading of securities by the Company. Investment banking revenues include selling concessions, underwriting fees and management fees received from the underwriting of corporate or municipal securities as well as fees earned from providing merger and acquisition and other financial advisory services. Asset management revenues include fees generated from providing investment advisory, portfolio management and custodial services to clients, as well as managed account fees and 12b-1 distribution fees. Other revenues primarily consist of retirement plan revenue, third party correspondent clearing fees and other transaction fees. Net interest income equals interest income less interest expense. Interest income primarily consists of interest earned on margin loans made to customers, securities purchased under agreements to resell and fixed income securities held in the Company's trading accounts as well as dividends earned on proprietary arbitrage positions. Interest expense includes interest paid under its Wexford financing arrangement and on bank borrowings, securities sold under agreements to repurchase and cash balances in customer accounts held by Wexford. EXPENSES Compensation and benefits expense includes sales, trading and incentive compensation, which are primarily variable based on revenue production and/or business unit profit contribution, and salaries, payroll taxes and employee benefits which are relatively fixed in nature. Occupancy and equipment expense includes rent and operating expenses for facilities, expenditures for repairs and maintenance, and depreciation and amortization of furniture, fixtures and leasehold improvements. Communications expense includes charges for telecommunications, news and market data services. Brokerage and clearance expense includes the cost of securities clearance, floor brokerage and exchange fees. Promotional expense includes travel, entertainment and advertising. Other expenses include general and administrative expenses, such as professional services, litigation expenses, goodwill amortization, data processing and other miscellaneous expenses. 10 11 RESULTS OF OPERATIONS The following table compares first quarter results (amounts in millions) in 2001 and 2000:

(a) Quarter ended March 31, 2000 has been restated to reflect the Company's October 2, 2000 acquisition of Branch Cabell & Co. Inc. which was accounted for as a pooling of interests. (b) Net interest income is net of interest expense of $13.3 million in 2001 and $16.5 million in 2000. (c) Not meaningful. THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000 Net income for the first quarter ended March 31, 2001, after giving effect to pre-tax restructuring charges of $9.0 million, decreased 90% to $2.2 million compared with $21.6 million in the same quarter in 2000, which was a record one for the industry. Earnings per share (diluted) for the quarter were $0.09, down from $0.92 in the first quarter of last year. The restructuring charges resulted from the Company's recently announced decision to merge its two largest broker-dealer subsidiaries, Tucker Anthony and Sutro, which is expected to be completed in September 2001. Excluding these restructuring charges, net income for the quarter totaled $7.5 million and earnings per share (diluted) totaled $0.30. Net revenues were $168.6 million in this year's first quarter, down $81.1 million or 32% from $249.7 million a year ago, reflecting the very challenging market conditions during the first quarter of 2001, as well as the record conditions in the first quarter of 2000. Commission revenues were down 33% to $63.0 million in the 2001 first quarter from $94.0 million in the same period a year ago. The lower commission revenues stem from very difficult market conditions in February and March of 2001 compared to the robust market conditions in the first quarter of 2000 when equity markets soared to record highs. Revenues from principal transactions were $52.2 million in the first quarter of 2001, down $37.0 million or 41% from $89.2 million a year ago. Approximately $36.0 million of this decrease was attributable to Hill Thompson Magid, a wholesale OTC bulletin board market maker, whose revenues were down compared to its record first quarter 2000 levels. 11 12 Investment banking revenues decreased 58% to $13.3 million in the current quarter from $31.3 million in the first quarter of 2000, primarily due to decreased advisory, merchant banking and private placement transactions in 2001. Asset management revenues grew 19% to $23.0 million in the first quarter of 2001 compared with $19.4 million in the first quarter of 2000, mainly due to growth in assets under management, which grew to $13.3 billion at March 31, 2001 from $12.4 billion in 2000. This reflects strong growth in money market fund assets. Net interest income was $12.5 million for the current quarter, up $0.6 million or 5% from $11.9 million in the 2000 first quarter. Other revenues in the first quarter of 2001 included $1.6 million from the sale of a New York Stock Exchange seat. Non-interest expenses were $165.0 million in the first quarter of 2001, a decrease of 23% from the $213.5 million in the first quarter of 2000. Compensation and benefits expense as a percentage of net revenues was up to 67% from 65% in the prior year quarter, as the mix in revenues shifted to higher payout retail business from lower payout trading business. Non-compensation operating expenses, including the restructuring charges, were $52.8 million in the first quarter of 2001 up slightly from $52.3 million a year ago. Excluding the restructuring charges, non-compensation operating expenses decreased by $8.5 million or 16% to $43.8 million. The Company's income tax provisions for the quarters ended March 31, 2001 and 2000 were $1.4 million and $14.6 million, respectively. The effective tax rate was 39% for the first quarter of 2001, down from 40% for the same period last year mainly due to an increase in transactions that are subject to preferential tax treatment. LIQUIDITY AND CAPITAL RESOURCES The Company receives dividends, interest on loans and other payments from its subsidiaries, which are the Company's main source of funds to pay expenses, service debt and pay dividends. Distributions and interest payments to the Company from its registered broker-dealer subsidiaries, the Company's primary sources of liquidity, are restricted as to amounts which may be paid by applicable law and regulations. The net capital rules are the primary regulatory restrictions regarding capital resources. The Company's rights to participate in the assets of any subsidiary are also subject to prior claims of the subsidiary's creditors, including customers of the broker-dealer subsidiaries. The assets of the Company's primary operating subsidiaries are highly liquid with the majority of their assets consisting of securities inventories and collateralized receivables, both of which fluctuate depending on the levels of customer business. Collateralized receivables consist mainly of securities purchased under agreements to resell, which are secured by U.S. government and agency securities. The majority of the subsidiaries' assets are financed through Wexford, by securities sold under repurchase agreements and by securities sold, not yet purchased. The Company's principal source of short-term financing stems from its clearing arrangement with Wexford under which the Company can borrow on an uncommitted, collateralized basis against its proprietary inventory positions. This financing generally is obtained from Wexford at rates based upon prevailing market conditions. The Company monitors overall liquidity by tracking the extent to which unencumbered marketable assets exceed short-term unsecured borrowings. Repurchase agreements are used primarily for customer accommodation purposes and to finance the Company's inventory positions in U.S. government and agency securities. These positions provide products and liquidity for customers and are not maintained for the Company's investment or market speculation. The level of activity fluctuates depending on customer and inventory needs; however, these fluctuations have not materially affected liquidity or capital resources. The Company monitors the collateral position and counterparty risk of these transactions daily. The subsidiaries' total assets and short-term liabilities and the individual components thereof may vary significantly from period to period because of changes relating to customer needs and economic and market conditions. The Company's operating activities generate cash resulting from net income earned during the period and fluctuations in its current assets and liabilities. 12 13 In addition to normal operating requirements, capital is required to satisfy financing and regulatory requirements. The Company's overall capital needs are continually reviewed to ensure that its capital base can appropriately support the anticipated capital needs of the subsidiaries. The excess regulatory net capital of the Company's broker-dealer subsidiaries may fluctuate throughout the year reflecting changes in inventory levels and/or composition, investment banking commitments and balance sheet components. For a description of the Company's net capital requirements, see Note 2 of the Notes to the Financial Statements. Management believes that existing capital, funds provided by operations, the credit arrangement with Wexford and funds available from a revolving credit agreement will be sufficient to finance the operating subsidiaries' ongoing businesses. The Company maintains a revolving credit agreement (the "Credit Agreement") whereby participating banks have made commitments totaling $100 million. At March 31, 2001, the Company had borrowings of $50 million at interest rates ranging from 1% to 1.45% above the federal funds rate. In addition, the Company must pay a commitment fee of 0.20% on the unused available credit. The Credit Agreement matures in November 2003 with all outstanding notes payable at that date. The Company must comply with certain financial covenants under the Credit Agreement and was in compliance with such covenants at March 31, 2001. The Company maintains, through two subsidiaries, a fixed asset credit facility (the "Fixed Asset Facility") secured by certain of the Company's fixed assets. At March 31, 2001, the Company had borrowings outstanding under the Fixed Asset Facility of $5.0 million, of which $3.6 million is payable in monthly installments until December 2001 and $1.4 million is payable in monthly installments through June 2003. The Company has historically financed capital expenditures through internal cash generation and through the Fixed Asset Facility. For the three months ended March 31, 2001 and 2000, the Company had capital expenditures of $4.7 million and $3.3 million, respectively, which were funded from operations. CASH FLOWS For the three months ended March 31, 2001, cash and cash equivalents increased $9.9 million. Funds generated from operating activities were $14.9 million including net income of $2.2 million and depreciation, amortization and other non-cash charges to net income of $11.9 million. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Information about market risks for the three months ended March 31, 2001 does not differ materially from that discussed under Item 7a of the Company's Annual Report on Form 10-K for the year ended December 31, 2000. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company has been named as defendant in a number of civil actions and arbitrations primarily relating to its broker-dealer activities. The Company is also involved, from time to time, in proceedings with, and investigations by, governmental agencies and self regulatory organizations. While the ultimate outcome of litigation involving the Company cannot be predicted with certainty, management believes, based on currently available information, that it has meritorious defenses to all such actions and intends to defend each of these vigorously. While there can be no assurance that such actions, proceedings, investigations and litigation will not have a material adverse effect on the financial position or results of operations of the Company in any future period, it is the opinion of management that the resolution of any such actions, proceedings, investigations and litigation will not have a material adverse effect on the consolidated financial position and results of operations of the Company. 13 14 ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS (c) Unregistered Securities: During the first quarter of 2001 the Company issued 1,688 shares of common stock in private placement transactions exempt under section 4(2) of the Securities Act to John Hancock Subsidiaries, Inc. pursuant to the Additional Share Agreement entered into in connection with the acquisition of the Company's subsidiaries from John Hancock in 1996. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits - None. (b) Reports on Form 8-K None 14 15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TUCKER ANTHONY SUTRO (REGISTRANT) DATE: May 14, 2001 BY: /s/ JOHN H. GOLDSMITH ------------------------------------------- JOHN H. GOLDSMITH CHAIRMAN AND CHIEF EXECUTIVE OFFICER DATE: May 14, 2001 BY: /s/ KENNETH S. KLIPPER ------------------------------------------- KENNETH S. KLIPPER EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER 15

TUCKER ANTHONY SUTRO 10-Q