Summit Securities Inc/ID · 10-K · For 9/30/93

Filed On 1/13/94   ·   SEC File 33-36775   ·   Accession Number 868016-94-2

Annual Report   ·   Form 10-K
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 1: 10-K        Annual Report                                         71    274K 

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    SECURITIES AND EXCHANGE COMMISSION
    Washington, D.C. 20549

     FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES             
EXCHANGE ACT OF 1934 (FEE REQUIRED)                                             

     For the fiscal year ended September 30, 1993.

    OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES         
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)                                          

     For the transition period from ________ to ________

    Commission file number 33-36775.

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

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

    WEST 929 SPRAGUE AVENUE, SPOKANE, WASHINGTON   99204
     (Address of principal executive offices)       (Zip Code)

Registrant's telephone number, including area code: (509)838-3111               

Securities registered pursuant to Section 12(b) of the Act: None                

Securities registered pursuant to Section 12(g) of the Act: None                

Indicate by check mark whether the registrant (1) has filed all reports         
required to be filed by Section 13 or 15(d) of the Securities Exchange          
Act of 1934 during the preceding 12 months (or for such shorter period          
that the registrant was required to file such reports), and (2) has             
been subject to such filing requirements for the past 90 days.  Yes X           
No                                                                              

Indicate by check mark if disclosure of delinquent filers pursuant to           
Item 405 of Regulation S-K is not contained herein, and will not be             
contained, to the best of registrant's knowledge, in definitive proxy           
or information statements incorporated by reference in Part III of this         
Form 10-K or any amendment to this Form 10-K. [x]                               

State the aggregate market value of the voting stock held by                    
non-affiliates of the registrant: Not Applicable                                

Indicate the number of shares outstanding of each of the issuer's               
classes of common stock, as of September 30, 1993                               
Single Class: 20,000                                                

Documents incorporated by reference:  None.                                     

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    PART I

BUSINESS                                                                        

General                                                                         

Summit Securities, Inc. (the Company) was incorporated under the    
laws of the State of Idaho on July 25, 1990. The Company is a wholly            
owned subsidiary of Metropolitan Mortgage & Securities Co., Inc., a             
Washington corporation (Metropolitan). 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           

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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             
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         

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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                
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            

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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          
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.                                                                   

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           

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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            
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.                                               

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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:                   

                                                                · Download Table

                                                  1993            1992     
                                                                           
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 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 
                                              ===========      =========== 

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.                                         

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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         
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.          

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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              
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.               

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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 a Director of Summit from 1990 to August, 1993.  From August, 1993          
to the present, he is Secretary and Director of Summit.                         

MICHAEL BARCELO joined Metropolitan in August of 1992, as           

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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.                            

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    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.                                                          

                                                                · Download Table

                                      SHARES OF                  
NAME AND ADDRESS                    COMMON STOCK       % OF CLASS
                                                                 
Metropolitan Mortgage &                                          
Securities Co., Inc.                   20,000             100%   
W. 929 Sprague Ave.,                                             
Spokane, Washington                                              

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, 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          

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

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    PART I (cont.)

Item 2.     Properties.                                                         

See Item 1.                                                         

Item 3.     Legal Proceedings.                                                  

None.                                                               

Item 4.     Submission of Matters to a Vote of Security Holders.                

None.                                                               

     PART II

Item 5.     Market for the Registrant's Common Equity and Related               
Stockholder Matters.                                    

(a)   There is no market for the registrant's common stock.         

(b)   There was one Common stockholder at September 30, 1993.       

(c)   See "Item 6. Selected Financial Data."                        

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Item 6.     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 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.                                                         

                                                        · Enlarge/Download Table

                                                                                 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     
                                                                                              
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  
                              ==========       ===========       ==========       ==========  

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.                             

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Item 7.     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, Receivable 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.                    

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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:                   

                                                                · Download Table

                                         1993          1992          1991 
                                                                          
Beginning Balance                      $59,244       $50,000       $     -
   Provision                            15,000        18,762        50,000

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(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.                                      

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.                                                             

These estimates result in a one year interest rate mismatch         

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(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     
net cash provided of $1.4 million in 1993; $1.4 million in 1992; and            

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$.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          
of Investment Certificates, net of repayments and related debt issue            

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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.                                                     

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Item 8.     Financial Statements and Supplementary Data                         

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...........................                        

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     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                                                               

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    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                                                                

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     SUMMIT SECURITIES, INC.

    BALANCE SHEETS
     September 30, 1993 and 1992
    ____________

                                                                · Download Table

           ASSETS                                    1993             1992    
                                                    ______           ______   
                                                                              
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
                                                =============    =============

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

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     SUMMIT SECURITIES, INC.

    STATEMENTS OF INCOME
     For the Years Ended September 30, 1993, 1992 and 1991
    ____________

                                                                · Download Table

                                       1993            1992            1991  
                                      ______          ______          ______ 
                                                                             
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
                                  ===========     ===========     ===========

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

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     SUMMIT SECURITIES, INC.

    STATEMENTS OF STOCKHOLDER'S EQUITY
     For the Years Ended September 30, 1993, 1992 and 1991
    ____________

                                                                · Download Table

                                               Additional                        
                                     Common      Paid-In    Retained             
                             Shares   Stock      Capital    Earnings     Total   
                             ______  ______    __________   ________   ________  
                                                                                 
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
                             ======  ========  ==========  ==========  ==========

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

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     SUMMIT SECURITIES, INC.
    STATEMENTS OF CASH FLOWS
     For the Years Ended September 30, 1993, 1992 and 1991
    ____________

                                                                · Download Table

                                         1993            1992           1991   
                                        ______          ______         ______  
                                                                               
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)
                                   ------------   -------------   ------------ 

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     SUMMIT SECURITIES, INC.

     STATEMENTS OF CASH FLOWS, Continued
     For the Years Ended September 30, 1993, 1992 and 1991
    ____________

                                                                · Download Table

                                         1993            1992           1991   
                                        ______          ______         ______  
                                                                               
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.                             

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

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     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.                                     

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     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.                                           

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     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.                                    

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     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.                                         

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     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 contracts were          
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:                                        

                                                                · Download Table

                                                1993              1992   
                                               ______            ______  
                                                                         
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
                                            ===========       ===========

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:                                       

                                                                · Download Table

                                                1993              1992   
                                               ______            ______  
                                                                         
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
                                            ===========       ===========

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.                            

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     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:                                                     

                                                                · Download Table

                                               1993               1992    
                                              ______             ______   
                                                                          
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 
                                           ===========        =========== 

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:           

                                                                · Download Table

Fiscal year ending                                           
   September 30,                                             
 ________________                                            
                                                             
       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
                                                  ===========

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     SUMMIT SECURITIES, INC.

    NOTES TO FINANCIAL STATEMENTS, Continued
    ____________

3.    Debt Payable                                                              

At September 30, 1993 and 1992, debt payable consists of:           

                                                                · Download Table

                                                     1993           1992   
                                                    ______         ______  
                                                                           
  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
                                                    =======        ========

Aggregate amounts of principal payments due on debt payable at             
September 30, 1993 are as follows:                                         

Fiscal year ending                                                         
   September 30,                                                           
  _______________                                                          
                                                                           
       1994                                                       $   5,440
       1995                                                           1,958
       1996                                                           2,100
       1997                                                           2,251
       1998                                                           2,414
    Thereafter                                                        8,490
                                                                    -------
       Total                                                      $  22,653
                                                                    =======

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     SUMMIT SECURITIES, INC.

    NOTES TO FINANCIAL STATEMENTS, Continued
    ____________

4.    Investment Certificates                                                   

At September 30, 1993 and 1992, investment certificates consist     
of:                                                                 

                                                                · Download Table

       Annual                                                         
      Interest     Principally                                        
        Rates      Maturing In               1993               1992  
      _________    ___________              _______            ______ 
                                                                      
     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
                                       =============     =============

   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,                                                      
 ________________                                                     
                                                                      
       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
                                                          ============

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     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:                   

                                                                · Download Table

                                                       1993           1992   
                                                      ______         ______  
                                                                             
        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 
                                                    =========      ========= 

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
                                                     _______        _________
                                                                             
        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
                                                     ========        ========

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.                  

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     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:                                                            

                                                                · Download Table

                                      1993          1992           1991   
                                     ______        ______         ______  
                                                                          
  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)
                                    ========      =========      ======== 

The components of the allocated provision for income taxes from           
Metropolitan are as follows:                                              
                                      1993          1992           1991   
                                     ______        ______         ______  
                                                                          
  Current                                       $     1,917    $   (2,689)
  Deferred                        $  145,951        126,072               
                                    --------      ---------     --------- 
                                  $  145,951    $   127,989    $   (2,689)
                                    ========      =========      ======== 

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   
                                     ______        ______         ______  
                                                                          
  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 
                                    ========      =========      ======== 

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     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.             

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     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:            

                                                                · Download Table

                                               1993              1992    
                                              ______            ______   
                                                                         
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


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.              

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     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:    

                                                                · Download Table

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


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   
                                    ______         ______           _____  
                                                                           
  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               

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Item 9.     Changes in and Disagreements with Accountants on Accounting         
and Financial Disclosure.                               

 N/A.  The Company reported a change in accountants in its
Form 8-K dated June 25, 1993.                           

    PART III

Item 10.    Directors and Executive Officers of Registrant.                     

See "Management" under Item 1.                          

Item 11.    Executive Compensation.                                             

See "Executive Compensation" under Item 1.              

Item 12.    Security Ownership of Certain Beneficial Owners and                 
Management.                                             

See "Principal Shareholders" under Item 1.              

Item 13.    Certain Relationships and Related Transactions.                     

See "Certain Transactions" under Item 1.                

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     PART IV

Item 14.      Exhibits, Financial Statement Schedules and Reports on Form       
8-K.                                                

(a)         1.   Financial Statements                                       
 Included in Part II, Item 8 of this report:

                 Reports of Independent Certified Public Accountants
            Balance Sheets at September 30, 1993, and 1992
      Statements of Income for the Years Ended
        September 30, 1993, 1992 and 1991.
        Statements of Stockholder's Equity for the
                   years Ended September 30, 1993, 1992 and 1991
          Statements of Cash Flows for the Years Ended
       September 30, 1993, 1992 and 1991
Notes to Financial Statements     

(b)         2.   Financial Statements Schedules                             

 Included in Part IV of this report:

                 Reports of Independent Certified Public Accountants
       on Financial Statement Schedules.

                     Schedule I       --   Summary of Investments other than
                                        Investments in Related Parties
                     Schedule VIII    --   Valuation and Qualifying Accounts
                      and Reserves
        Schedule XII     --   Loans on Real Estate

                Other Schedules are omitted because of the absence
            of conditions under which they are required or
              because the required information is given in the
                financial statements or notes thereto. Columns may
                have been omitted from schedules filed because the
information is not applicable.    

(c)         3.   Exhibits                                                   

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.                                    

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*4(e).    Form of Investment Certificate.                           

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 Financial
Statements.)                                    

* Filed herewith                                                                

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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 Form 10-K.  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                                                               

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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 Item 8 of this Form 10-K included the audits of the                
financial statement schedules listed in the accompanying index 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                                                                

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                                            SCHEDULE I

SUMMIT SECURITIES, INC.                                                         
SUMMARY OF INVESTMENTS                                                          
OTHER THAN INVESTMENTS IN RELATED PARTIES                                       
SEPTEMBER 30, 1993                                                              

                                                                · Download Table

    COLUMN A                  COLUMN B        COLUMN C         COLUMN D  
                                                               Amount at 
                                                              Which Shown
                                               Market         on Balance 
                                Cost            Value            Sheet   
                             __________      __________       __________ 
                                                                         
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 
                             ===========                     =========== 

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                                         SCHEDULE VIII

     SUMMIT SECURITIES, INC.
    VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
     YEARS ENDED SEPTEMBER 30, 1993, 1992 AND 1991

                                                                · Download Table

                                            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                                                               
                                                                               
                1993         $59,244         $15,000       $(22,410)   $96,654 
                1992          50,000          18,762          9,518     59,244 
                1991              --          50,000             --     50,000 


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

                                                                               
                1993          $   --         $36,012        $29,255    $ 6,757 
                1992              --              --             --         -- 
                1991              --              --             --         -- 

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                                                              Schedule XII

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

                                                        · Enlarge/Download Table

      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%.                    

                                                                 Carrying         Delinquent               
                                     Interest      Maturity      Amount of         Principal               
Description                            Rates         Dates      Receivables         Amount                 
                                     --------      --------     -----------       ----------               
RESIDENTIAL                         Principally                                                            
                                                                                                           
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                                                                                  

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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.                                                                                                 

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                                                    Schedule XII Continued

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

                                                                · Download Table

                                              For the Years Ended          
                                                 September 30,             

                                      1993           1992           1991   
                                                                           
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
                                  ===========     ==========     ==========

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    SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.                                                                     

SUMMIT SECURITIES, INC.         

     /S/ C. PAUL SANDIFUR, JR.

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

Pursuant to the requirements of the Securities Exchange Act of      
1934, this report has been signed below 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.                                                   
                              President, Director and              1/13/94
_________________________        Chief Executive Officer             _________  
C. Paul Sandifur, Jr.                                                       

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

/S/ MICHAEL BARCELO                                                         
                                                                   1/13/94
________________________         Treasurer                           _________  
Michael Barcelo                                                             

/S/ STEVEN CROOKS                                                           
                              Controller and Principal             1/13/94
________________________         Accounting Officer                  _________  
Steven Crooks                                                               

/S/ ALTON R. COGERT                                                         
                              Chief Financial Officer              1/13/94
________________________         and Assistant Vice President        _________  
Alton R. Cogert                                                             

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As filed with the Securities and Exchange Commission on January 13,             
1994.                                                                           

SECURITIES AND EXCHANGE COMMISSION                                              
WASHINGTON, D.C. 20549                                                          

__________________________________                                              

FORM 10-K                                                                       

ANNUAL REPORT                                                                   

Under                                                                           

THE SECURITIES EXCHANGE ACT OF 1934                                             

__________________________                                                      

(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                                                                  

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   EXHIBIT INDEX

                                                                          Page
                                                                          Number
*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.                           

* Filed herewith                                                                

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                                      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                                                        

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                                        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            

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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.                     

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            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            

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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              

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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          

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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.             

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EXHIBIT A                                                                       

Treasury Bill Rate                                                  

Except as provided below in this paragraph, the "Treasury Bill      
Rate" for each dividend 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 Calendar Period (as defined below)) for           
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 dividend               
period for which the dividend rate on Preferred Stock Series E-5, 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 dividend           
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 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                
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 dividend 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 no such U.S. Treasury bill         
rates are published as provided above during such Calendar Period, then         
the Treasury Bill Rate for such dividend period shall be the arithmetic         
average of the per annum market discount rates based upon 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 dividend period as provided above in this            
paragraph, the Treasury Bill Rate for such dividend 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.                                     

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Ten Year Constant Maturity Rate                                     

Except as provided below in this paragraph, the "Ten Year Constant  
Maturity Rate" for each dividend 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 dividend period for which the dividend           
rate on Preferred Stock, Series E-5 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 dividend 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 dividend              
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 tan           
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 o 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            
dividend period as provided above in this paragraph, then the Ten Year          
Constant Maturity Rate for such dividend 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 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.                                     

Twenty Year Constant Maturity Rate                                  

Except as provided below in this paragraph, the "Twenty Year        
Constant Maturity Rate" for each dividend 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 dividend period for which the dividend           
rate on Preferred Stock, Series E-5 is being determined. In the event           

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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 dividend 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           
dividend 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 in this paragraph, then the Twenty            
Year Constant Maturity Rate for such dividend 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 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 to maturity for actively traded                  
marketable U.S. Treasury fixed interest rate securities (adjusted to            
constant maturities of 20 years).                                               

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                                      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           

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                                          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          

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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                                         

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     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

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(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                  

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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.                                      

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 10-K Filing		Date		First		Last			Other Filings
		9/30/92		5		49
		10/1/92		5		32
		12/7/92		24		47
		12/31/92		40
		6/1/93		57
		6/25/93		43
For The Period Ended		9/30/93		1		52
		12/13/93		23		46
		12/31/93		10					NTN 10Q
Filed On / Filed As Of		1/13/94		54
Corrected On		6/27/94
		12/31/94		58					10-Q, 10-Q/A
		1/1/95		58
		10/1/95		19		31
		12/31/95		19		33			10-Q
		9/30/96		19		33			NT 10-K, 10-K405, 10-K/A
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