REPORT FROM THE INVESTMENT COMMITTEE THURSDAY APRIL 12, 2001

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REPORT FROM THE INVESTMENT COMMITTEETHURSDAY
APRIL 12, 2001
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Fixed Income Market ReviewFirst Quarter 2001

• Jim Fields
• April 2001

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Fixed Income Market ReviewFirst Quarter
2001March 31, 2001

• Three Fed easing moves totaling 150bp and
  flight-to-quality trades by equity investors
  pushed short U.S. Treasury yields lower in the
  first quarter.

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Fixed Income Market ReviewU.S. Investment Grade
Bond Market Performance By Sector March 31,
2001
2001 Performance -Rebound in Corporates in
1Q-2001
2 - 3
Source Lehman Brothers
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Fixed Income Market Review Treasury Markets
March 31, 2001

• Three Fed easing moves totaling 150bp in the
  first quarter.
• Flight-to-quality trades by equity investors
  helped push short U.S. Treasury yields lower.

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Fixed Income Market ReviewU.S.
Treasuries-Performance By Maturity March 31, 2001
2001 Performance -Strong performance from Five
Year Treasuries
2 - 5
Source Lehman Brothers
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Fixed Income Market ReviewMarch 31, 2001

• Corporates rebound off a dismal 2000 as the Fed
  lowered rates and investors became more
  aggressive towards taking on credit risk.
• Agencies out-perform Treasuries for the quarter.
  Political rhetoric will pick as Rep. Baker
  introduces a bill in early April targeting the
  Fed as the the new regulator of the GSEs.

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Fixed Income Market ReviewMortgage MarketsMarch
31, 2001

• Mortgage spreads remain under pressure from
  declining interest rates and increased mortgage-
  refinancing.

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Plotted Weekly
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Fixed Income Market Review Absolute Returns
First Quarter 2001
Corporate Bonds
Mortgage-Backed Securities
2001 Performance Conventional Mortgages slightly
out-perform
2001 Performance Lower Quality Issues Outperform
2 - 8
Source Lehman Brothers
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Fixed Income Market Review Bond Performance By
Sector (Curve-Adjusted Excess Returns Over
Treasuries)March 31, 2001

• Spread sectors (except MBS) out perform, on an
  excess return basis, U.S. Treasuries in the first
  quarter of 2001.
• Corporate bonds, coming off a dismal year 2000,
  out perform U.S. Treasuries in the first quarter.
  As the Fed lowers interest rates, market
  sentiment towards taking on credit risk improved.

Source Lehman Brothers
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Fixed Income Market ReviewFirst Quarter 2001
March 31, 2001

• Lehman U.S. Aggregate Index Absolute Returns of
  3 in 1Q-2001
• Spread Sectors Rebound Positive ResultsBeat
  Stocks Treasuries
• Major Themes in 1Q-2001
• Fed lowers rates three times totaling 150bp.
• More Fed moves expected.
• Mortgage rates fall.
• Poor Equity returns.
• Slowing U.S. economy
• Inflation remains under control.

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Fixed Income Market Review WIS Total Return
Bond FundMarch 2001

• First Quarter 2001
• -Increased Corporates
• -Decreased MBS
• Second Quarter Outlook
• Overweight Spread Products
• Duration Slightly Longer Vs. Benchmark

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Fixed Income Market Review WIS Current Income
Fund March 2001

• First Quarter 2001
• -Bias Towards Lower Coupon Issues
• Second Quarter Outlook
• Re-financing and Volatility Continues

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Fixed Income Market Review U.S. Government Near
Term FundMarch 31, 2001

• First Quarter 2001
• Agency Redemptions
• Second Quarter Outlook
• Favor Spread Product

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OutlookSecond Quarter 2001
Economy Soft Landing More Likely Than Recession
(33 Probability) Inflation Productivity Keeps
Inflation In Check. Core
Rate Targeted At 2-2.5 For 2001 Interest
Rates More Fed Rate Cuts Expected (100 b.p.?)
Bond Yields Move Somewhat
Lower Stocks Becoming More Positive As Feds
Easing Offsets Risk Of Lower Corporate Profit
Growth Rates. Long-Term Fundamentals Are
Attractive

• Bond Strategy
• Duration Slightly Longer Than Benchmarks
• Overweight Spread Products
• Corporates
• Agencies
• Monitor Mortgages

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International Equity ManagementReport for
Quarter 1, 2001

• Amit S. Khandwala
• Senior Vice President
• April 12, 2001

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WIBC Investment Performance
Q1 2001
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Return Attribution AnalysisQ4 2000
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Countries in Q1 2001

• Top 5 Positive Contributors
• Japan
• Ireland
• Spain
• Brazil
• Thailand
• Bottom 5 Negative Contributors
• U.K.
• Swiss
• France
• Sweden
• Canada

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Sectors in Q1 2001

• Top 3 Contributors
• Energy
• Industrials
• Health Care
• Bottom 3 Detractors
• Information Technology
• Finance
• Materials

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Companies in Q1 2001

• Top 5 Contributors
• Toyota Motors
• Elan
• Saipem
• Telmex
• Promise
• Bottom 5 Detractors
• Zurich Financial Services
• Alcatel
• Nokia
• Ericsson
• Nortel

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Country Shifts during Q1

• Increased Japan, Germany and France
• Sold out of Thailand
• Reduced Brazil, Canada and Sweden

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Sector Shifts during Q1

• Increased Consumer Discretionary by 3
• Financed that by trimming Staples 1 and
  Materials 2

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Sector Breakdown as of 3/31/00
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Summary

• European equities attractive relative to US
• Lower rates and revived risk appetite should
  provide support for the capital markets
• Euro likely to strengthen vs. the dollar
• Japan remains the wild card
• Sustained rally will require
• further easing
• bottoming out of leading indicators
• renewal in US consumer confidence

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Finance Dictionary Rewritten?

• Momentum Investing - The fine art of buying high
  and selling low.
• Value Investing - The art of buying low and
  selling lower.
• Bull Market - A random market movement causing an
  investor to mistake himself for a financial
  genius.
• Market Correction - The day after you buy stocks.
• Cash Flow - The movement your money makes as it
  disappears down the drain.
• Profit - Religious guy who talks to God.
• Bill Gates - Where God goes for a loan.
• Alan Greenspan - God.

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U.S. Managed Equity CoreFirst Quarter 2001

• Patricia Pierce, CFA
• Senior Vice President

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Performance Results Total Return as of March
31, 2001
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Managed Equity CoreFirst Quarter Sector
Strategies

• I. Materials
• from even
• to underweight
• II. Consumer Staples
• from overweight
• to even
• III. Consumer Discretionary
• from underweight
• to even
• IV. Telecommunication Services
• from underweight
• to even

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Managed Equity CoreEquity Sector Distribution
12/31/00 vs. 3/31/01

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Managed Equity CoreEquity Sector Distribution
vs. SP 500

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Managed Equity CoreFirst Quarter Transaction
Highlights

• I. Take profits in Vulcan Materials due to
  economic vulnerability
• II. Control risk of disappointment in Consumer
  Staples holdings
• Sell Proctor Gamble
• Cutback Avon Products
• III. Limit Consumer Discretionary positions to
  small ticket companies
• Sell Harley Davidson
• Buy McDonalds and Costco
• IV. Diversify Industrials to include Railroads
• Cutback Honeywell
• Buy Norfolk Southern
• V. Add Qwest to Telecom Services
• VI. Upgrade Technology holdings to Blue Chip
  names
• Sell Lucent and Palm
• Add to Intel

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Performance AttributesFirst Quarter 2001
Sector Allocation was minus 0.7 vs. SP 500
Stock Selection detracted in five sectors
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Significant Stocks in the Quarter
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SummaryHandle Change - Make

• Maintain discipline
• follow rules of portfolio construction
• concentrate on stock selection fundamentals
• Focus on long-term profits
• stay committed to large cap, quality
• always seek best opportunities

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Midcap Equity Management

• George F. Faherty
• April 12, 2001

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WSBC Investment Performance
Q1 2001
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Weakness Broadens Virtually All Sectors Decline
in First Quarter
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Sector Performance 1Q

• Outperformance
• Health Care (-6)
• Financials (-6)
• Energy (2)
• Cons. Discretionary (0)

• Underperformance
• Information Technology (-29)
• Industrials (-14)

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Return Attribution AnalysisQ1 2001
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First Quarter ResultsTop-down Strategies

• Net Result Lost 17 Basis Points

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Value Added in the Quarter The Top 10 Stock
Selections

• Sigma Aldrich
• Jones Apparel
• Liz Claiborne
• TJX Companies
• Vishay Intertechnology
• Autodesk
• Bed Bath Beyond
• Ambac Financial
• Novellus Systems
• Biogen

• Net Result Gained 40 Basis points

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WSBC Sector Weighting 12/31/2000 vs.. 3/31/2001
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Sector changes during Q4

• Increased Financials by 5.
• Increased Consumer Staples by 2
• Increased Materials by 1
• Increased Industrials by 5
• Reduced Information Technology by 5
• Reduced Utilities by 5

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Midcap BlendEquity Transaction Highlights
Buy Apollo GroupAtmel Corp.Best Buy
Co.Commerce BancorpGenzyme Corp.Integrated
Device TechnologiesIvax Corp.Mercantile
Bankshares Corp.North Fork Bancorp.Protective
LifeSCI SystemsSigma AldrichSouthtrust
Corp.Sungard Data SystemsUnivision
CommunicationsWaters Corp.Zions Bancorp

• Sell
• American Power ConversionsEnronQlogicTeco
  EnergyVishay IntertechnologyVitesse
  SemiconductorVulcan Materials

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Sector Weighting 3/31/2001
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Industry Weighting 3/31/2001
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