<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from________________to________________
Commission file number 000-22249
INTERNATIONAL AIRCRAFT INVESTORS
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4176107
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3655 TORRANCE BOULEVARD, SUITE 410 TORRANCE, CALIFORNIA 90503
(Address of principal executive offices) (Zip Code)
(310) 316-3080
(Registrant's telephone number, including area code)
N/A
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
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 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 10, 1999
- ---------------------------- ---------------------------
COMMON STOCK, $.01 PAR VALUE 4,212,284
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<PAGE> 2
INTERNATIONAL AIRCRAFT INVESTORS
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page No.
--------
<S> <C> <C>
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets
As of March 31, 1999 and December 31, 1998..................................................... 3
Condensed Consolidated Statements of Income
Three months ended March 31, 1999 and 1998..................................................... 4
Condensed Consolidated Statements of Cash Flows
Three months ended March 31, 1999 and 1998..................................................... 5
Notes to Condensed Consolidated Financial Statements........................................... 6
Item 2. Management's Discussion and Analysis of Financial Condition
And Results of Operations...................................................................... 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................................................... 12
Signatures..................................................................................... 13
</TABLE>
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<PAGE> 3
INTERNATIONAL AIRCRAFT INVESTORS AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
------------- -------------
<S> <C> <C>
(UNAUDITED)
ASSETS
Cash and cash equivalents ................................ $ 15,692,348 $ 15,923,982
Flight equipment, at cost less accumulated depreciation of
$39,459,484 at March 31, 1999 and $36,099,484
at December 31, 1998 .................................. 233,548,773 236,908,773
Cash, restricted ......................................... 14,024,797 13,387,878
Other assets ............................................. 1,542,078 1,670,383
------------- -------------
$ 264,807,996 $ 267,891,016
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued interest and other accrued expenses .............. $ 1,370,678 $ 1,000,291
Notes payable ............................................ 204,649,508 208,001,908
Lease and other deposits ................................. 18,261,757 18,629,524
Deferred rent ............................................ 1,725,834 3,030,812
Deferred taxes, net ...................................... 3,060,265 2,477,876
------------- -------------
229,068,042 233,140,411
Commitments and contingencies
Shareholders' equity
Preferred stock, $.01 par value. Authorized 15,000,000
shares; none issued and outstanding .................... -- --
Common stock, $.01 par value. Authorized
20,000,000 shares; issued and outstanding
4,212,284 at March 31, 1999 and
4,412,284 shares at December 31, 1998 .................. 42,123 42,163
Additional paid-in capital ............................... 31,268,986 31,292,324
Deferred compensation .................................... (437,500) (500,000)
Retained earnings ........................................ 4,866,345 3,916,118
------------- -------------
Net shareholders' equity ....................... 35,739,954 34,750,605
------------- -------------
$ 264,807,996 $ 267,891,016
============= =============
</TABLE>
See accompanying notes to condensed consolidated financial statements
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<PAGE> 4
INTERNATIONAL AIRCRAFT INVESTORS AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
------------------------------
1999 1998
---------- ----------
<S> <C> <C>
(UNAUDITED)
REVENUES:
Rental of flight equipment ................................... $8,873,657 $6,140,426
Interest income .............................................. 370,968 431,542
---------- ----------
Total revenues ........................................ 9,244,625 6,571,968
EXPENSES:
Interest ..................................................... 3,807,714 2,788,177
Depreciation ................................................. 3,360,000 2,454,000
General and administrative ................................... 481,795 337,124
Stock compensation ........................................... 62,500 62,500
---------- ----------
Total expenses ......................................... 7,712,009 5,641,801
---------- ----------
Income before income taxes and cumulative effect of accounting
change ....................................................... 1,532,616 930,167
Income tax expense ............................................. 582,389 373,000
---------- ----------
Net income before cumulative effect of accounting change ....... 950,227 557,167
Cumulative effect of change in accounting for ancillary
payments under lease agreements, net of income tax expense
of $139,000 ................................................... -- 209,000
---------- ----------
Net income ............................................. $ 950,227 $ 766,167
========== ==========
Basic earnings share:
Net income before cumulative effect of accounting change $ .23 $ .12
Cumulative effect of accounting change ................. -- .05
---------- ----------
Net income ............................................. $ .23 $ .17
========== ==========
Diluted earnings per share:
Net income before cumulative effect of accounting change $ .22 $ .12
Cumulative effect of accounting change ................. -- .05
---------- ----------
Net income ............................................. $ .22 $ .17
========== ==========
Weighted average common shares outstanding:
Basic .................................................... 4,212,462 4,497,584
========== ==========
Assuming dilution ........................................ 4,326,277 4,627,244
========== ==========
Pro forma effect assuming the change in accounting principle
is applied retroactively:
Net income ............................................. $ 950,227 $ 557,167
Earnings per share:
Basic ............................................. $ .23 $ .12
Diluted ........................................... $ .22 $ .12
</TABLE>
See accompanying notes to condensed consolidated financial statements
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<PAGE> 5
INTERNATIONAL AIRCRAFT INVESTORS AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------------
1999 1998
------------ ------------
<S> <C> <C>
(UNAUDITED)
Cash flows from operating activities:
Net income ............................................. $ 950,227 $ 766,167
Adjustments to reconcile net income to cash
provided by operating activities:
Cumulative effect of accounting change ............. -- (209,000)
Depreciation of flight equipment ................... 3,360,000 2,454,000
1,380,000
Amortization of deferred fees ...................... 106,418 62,064
Deferred taxes, net of effect of accounting change . 582,389 504,000
Stock compensation ................................. 62,500 62,500
(Increase) decrease in assets:
Cash, restricted ................................... (636,919) (566,612)
Other assets ....................................... 21,887 47,999
Increase (decrease) in liabilities:
Accrued interest and other accrued liabilities ..... 370,387 22,456
Lease and other deposits ........................... (367,767) 308,530
Deferred rent ...................................... (1,304,978) (1,086,576)
------------ ------------
Net cash provided by operating activities .......... 3,144,144 2,365,528
Cash flows from financing activities:
Repayment of notes payable ......................... (1,874,869) (1,704,652)
Repayment of notes payable to ILFC ................. (1,477,531) (494,984)
Repayment of notes payable to GLH .................. -- --
Repurchase of common stock ......................... (23,378) (41,500)
------------ ------------
Net cash used in financing activities .............. (3,375,778) (2,241,136)
------------ ------------
Net increase (decrease) in cash and cash equivalents (231,634) 124,392
Cash and cash equivalents at beginning of period ....... 15,923,982 23,838,306
------------ ------------
Cash and cash equivalents at end of period ............. $ 15,692,348 $ 23,962,698
============ ============
Supplemental disclosure of cash flow information
Cash paid for interest ............................. $ 3,462,327 $ 2,714,206
</TABLE>
See accompanying notes to condensed consolidated financial statements
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<PAGE> 6
INTERNATIONAL AIRCRAFT INVESTORS AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and in accordance with the instructions to Form
10-Q. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. The accompanying unaudited interim condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto, together with management's discussion and analysis
of financial condition and results of operations, contained in the Company's
Annual Report on Form 10-K.
Certain reclassifications have been made to prior period amounts to conform
to the current period presentation.
In the opinion of management, the accompanying condensed consolidated
financial statements contain all adjustments (consisting of normal and recurring
accruals) necessary for a fair presentation of the financial position of the
Company as of March 31, 1999 and December 31, 1998 and the results of its
operations for the three month periods ended March 31, 1999 and 1998 and its
cash flows for the three months ended March 31, 1999 and 1998. Operating results
for the three month period ended March 31, 1999 are not necessarily indicative
of the results that may be expected for the year ended December 31, 1999.
2. ACCOUNTING CHANGE
Effective January 1, 1998, the Company changed its method of accounting for
income recognition of ancillary payments under lease agreements to a full
accrual method from recognition upon lease termination. This new method, which
was accounted for as a change in accounting method, was made to better reflect
the earnings process under lease agreements. The effect of this change on net
earnings and earnings per share, before cumulative effect of accounting change,
for the three month period ended March 31, 1999 and 1998 was an increase of
$480,000 ($.11 per basic share and dliuted share) and $157,000 ($.03 per basic
and diluted share), respectively. The cumulative effect on retained earnings at
January 1, 1998 of the accounting change was an increase of approximately
$209,000 ($.05 per basic and diluted share), net of related income taxes of
$139,000. The pro forma amounts shown on the condensed consolidated statements
of income have been adjusted for the effect of retroactive application.
3. MANAGEMENT ESTIMATES
The preparation of condensed consolidated financial statements in
conformity with generally accepted accounting principles requires management to
make certain estimates and assumptions. These affect the reported amounts of
assets, liabilities, revenues and expenses and the amount of any contingent
assets or liabilities disclosed in the condensed consolidated financial
statements. Actual results could differ from estimates made.
The Company leases flight equipment to various commercial airline fleets on
short-term to medium-term operating leases, generally three to five years. The
related flight equipment is generally financed by borrowings that become due at
or near the end of the lease term through a balloon payment. As a result, the
Company's operating results depend on management's ability to roll over debt
facilities, renegotiate favorable leases and realize estimated residual values.
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<PAGE> 7
INTERNATIONAL AIRCRAFT INVESTORS AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted
earnings per share:
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
---------------------------------
1999 1998
------------- -------------
<S> <C> <C>
Numerator:
Net income before cumulative effect of accounting change $ 950,227 $ 557,167
Cumulative effect of accounting change .................. -- 209,000
------------- -------------
Net income .............................................. $ 950,227 $ 766,167
============= =============
Denominator:
Denominator for basic earnings per share-weighted average
shares outstanding .................................... 4,212,462 4,497,584
Effect of dilutive securities:
Employee stock options .................................. 113,815 129,660
------------- -------------
Denominator for diluted earnings per share-adjusted
weighted average shares and assumed conversions ....... 4,326,277 4,627,244
============= =============
Basic earnings per share:
Net income before cumulative effect of accounting change $ .23 $ .12
Cumulative effect of accounting change .................. -- .05
------------- -------------
Net income .............................................. $ .23 $ .17
============= =============
Diluted earnings per share:
Net income before cumulative effect of accounting change $ .22 $ .12
Cumulative effect of accounting change .................. -- .05
------------- -------------
Net income .............................................. $ .22 $ .17
============= =============
</TABLE>
The Company issued its underwriters warrants to purchase 260,000 shares of
its common stock at $12 per share in connection with its initial public
offering. These warrants were excluded from the computation of diluted net
income per common share because they were anti-dilutive. The warrants are
exercisable through November 5, 2000.
The Company issued options to purchase 25,000 shares of common stock at
$10.25 per share under its Eligible Directors Option Plan. These options were
excluded from the computation of diluted net income per common share because
they were anti-dilutive.
5. NOTES PAYABLE
The Company extended notes due March 1999 with balances totaling $2,017,000
to May 1999.
6. SHAREHOLDERS' EQUITY
The Company granted options to purchase 45,000 shares of common stock at an
exercise price of $7.25 under the 1997 Employee Stock Option and Award Plan.
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<PAGE> 8
INTERNATIONAL AIRCRAFT INVESTORS AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. SUBSEQUENT EVENTS
During April 1999, the Company entered into an agreement to re-lease its
Boeing Model 737-300QC. The noncancellable lease term runs through December 31,
1999.
During April 1999, the Company extended a note due April 1999 with a
balance of $17,660,339 to July 1999.
-8-
<PAGE> 9
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
OVERVIEW
We are primarily engaged in the acquisition of used, single-aisle jet
aircraft for lease and sale to domestic and foreign airlines and other
customers. We lease aircraft under short-term to medium-term operating leases
where the lessee is responsible for all operating costs, including major
overhauls and we retain the potential benefit or risk of the residual value of
the aircraft, as distinct from finance leases where the full cost of the
aircraft is generally recovered over the term of the lease.
Rental amounts are accrued evenly over the lease term and are recognized as
revenue from the rental of flight equipment. Our flight equipment is recorded on
the balance sheet at cost and is depreciated on a straight-line basis over the
estimated useful life to our estimated salvage value. Revenue, depreciation
expense and resultant profit for operating leases are recorded evenly over the
life of the lease. Initial direct costs related to the origination of leases are
capitalized and amortized over the lease terms.
This Report on Form 10-Q contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and are intended to be covered by
the safe harbors created thereby. Reference is made to the cautionary statements
made in our Report on Form 10-K for the year ended December 31, 1998 which
should be read as being applicable to all related forward- looking statements
wherever they appear in this Report on Form 10-Q. Our actual results could
differ materially from those discussed herein. Factors that could cause or
contribute to such differences include those discussed below, as well as those
discussed elsewhere in the Form 10-K.
ACCOUNTING CHANGE
Effective January 1, 1998, we changed our method of accounting for income
recognition of ancillary payments under lease agreements to a full accrual
method from recognition upon lease termination. This new method, which was
accounted for as a change in accounting method, was made to better reflect the
earnings process under lease agreements. The effect of this change on net
earnings, before cumulative effect of accounting change, for the three month
period ended March 31, 1999 and 1998 was an increase of $480 and $157,
respectively. The cumulative effect on retained earnings at January 1, 1998 of
the accounting change was an increase of approximately $209, net of related
income taxes of $139.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1999 and 1998
Revenues from rental of flight equipment increased by 45%, or $2,733, to
$8,873 in the three months ended March 31, 1999 compared to the same period in
1998 as a result of the acquisition of three additional aircraft on lease, an
acceleration of revenues on ancillary payments resulting from lease
terminations, as well as the impact of the change in accounting method discussed
above. Our lease portfolio consisted of thirteen aircraft on lease with a book
value of $233,549 at March 31, 1999 and ten aircraft on lease with a book value
of $170,052 at March 31, 1998.
Interest income decreased to $371 for the three months ended March 31, 1999
from $432 for the same period in 1998 principally as a result of a decrease in
interest rates from 1998 to 1999.
Expenses as a percent of total revenues were 83% and 86% during the three
months ended March 31, 1999 and 1998, respectively. The decrease in the
percentage is due to the effect of a 41% increase in total revenue while
expenses increased 37%. Interest expense increased to $3,808 for the three
months ended March 31, 1999 from $2,788 for the same period in 1998 principally
as a result of interest on financing related to the acquisition of three
additional aircraft, offset by the effect of loan paydowns. Our composite
interest rate was 7.1% and 7.3% at March 31, 1999 and 1998, respectively.
Depreciation expense increased to $3,360 in the first quarter of 1999 from
$2,454 in the first
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<PAGE> 10
quarter of 1998 primarily as a result of the acquisition of three additional
aircraft. General and administrative expenses increased $145 to $482 in the
three months ended March 31, 1999. The increase in general and administrative
expenses was primarily the result of additional compensation in 1999. During
both of the three month periods ended March 31, 1999 and 1998, we incurred $63
of non-cash stock compensation expense related to the vesting of options granted
to executive officers.
Income taxes increased to $582 from $373 as a result of the increase in
total revenues and reduction in total expenses as a percent of total revenues.
The $209 increase in income tax expense primarily represents a non-cash
provision for deferred income taxes at an effective rate of 38%. The Company
continues to generate substantial federal net operating loss carryforwards
resulting primarily from accelerated tax depreciation.
Net income before cumulative effect of accounting change increased to $950
for the three months ended March 31, 1999 from $557 for the same period in 1998
due to the factors described above.
LIQUIDITY AND CAPITAL RESOURCES
Our principal external sources of funds have been term loans from banks and
seller financing secured by flight equipment and the net proceeds from our
initial public offering. A substantial amount of our cash flow from rental of
flight equipment is applied to principal and interest payments on secured debt.
The terms of our loans generally require a substantial balloon payment at the
end of the noncancellable portion of the lease of the related flight equipment,
at which time we will be required to re-lease the flight equipment and
renegotiate the balloon amount of the loan or obtain other financing.
Refinancing of the balloon amount is dependent upon our re-leasing the related
flight equipment. Accordingly, we begin lease remarketing efforts well in
advance of the lease termination. The principal use of cash is for financing the
acquisition of our flight equipment portfolio, which is financed by loans
secured by the applicable flight equipment. As a result, we do not currently
maintain a line of credit.
For the three months ended March 31, 1999, net cash provided from operating
activities increased by $779 principally as a result of an increase of $184 in
net income, increases in a non-cash charge for depreciation and cumulative
effect of accounting change of $906 and $209, respectively and increase in
accrued interest and other accrued liabilities of $348, partially offset by
decreases lease deposits and deferred rent of $676 and $218, respectively.
Net cash used in financing activities increased to $3,376 in the three
months ended March 31, 1999 from $2,241 in the same period of 1998. In both
periods net cash used was principally due to loan paydowns.
Cash and cash equivalents vary from period to period principally as a
result of the timing of the purchase and sale of aircraft, as well as internally
generated cash.
We use interest swap arrangements to reduce the potential impact of
increases in interest rates on floating rate long-term debt and does not use
them for trading purposes. Premiums paid for purchased interest rate swap
agreements are amortized to interest expense over the terms of the swap
agreements.
Our ability to successfully execute our business strategy and to sustain
our operations is dependent, in part, on our ability to obtain financing and to
raise equity capital. There can be no assurance that the necessary amount of
such capital will continue to be available to us on favorable terms or at all.
If we were unable to continue to obtain any portion of required financing on
favorable terms, our ability to add new aircraft to its lease portfolio, extend
leases, release an aircraft, repair or recondition an aircraft if required, or
retain ownership of an aircraft on which financing has expired would be
impaired, which would have a material adverse effect on our business, financial
condition and results of operations. In addition, our financing arrangements to
date have been dependent in part upon International Lease Finance Corporation.
IMPACT OF YEAR 2000
The Year 2000 issue results from computer programs written using two digits
to identify the year in the date field. These computer programs were designed
and developed without consideration of the impact of the upcoming change in the
century. If not corrected, these programs could create erroneous information by
or at the Year 2000.
-10-
<PAGE> 11
We have performed a review and assessment of our internal computer systems
to determine the effect of the Year 2000 issue. Based on the results of this
review, we believe that the internal effects of the Year 2000 issue will not
materially affect our future financial results or financial condition.
Failure by our lessees, manufacturers of our aircraft and business partners
to properly comply with Year 2000 issues could result in lost revenues and
increased expenses. We have initiated formal communications with lessees,
manufacturers of our aircraft and business partners to determine the extent to
which we and our aircraft are vulnerable to those third parties' failure to
address their own Year 2000 issues. Based on the responses from third parties we
have received, we do not expect a material affect on our financial results or
our financial position. As such, no contingency plan has been developed. If
future responses indicate a material exposure as a result of third parties, we
will develop a contingency plan.
We expect to be Year 2000 compliant by December 31, 1999. We have incurred
no additional costs associated with the Year 2000 issue and estimate that no
additional costs will be incurred.
We will continue assessing our internal and external risk as we acquire
additional information systems and enter into business relationships with
additional lessees, manufacturers of aircraft and other business partners.
A possible scenario is that one or more of our lessees would be unable to
operate and generate revenues and as a result be unable to make lease payments.
At this time, we are unable to estimate the likelihood or the magnitude of the
resulting lost revenue.
-11-
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
NUMBER DESCRIPTION
------ -----------
3.1 Amended and Restated Articles of Incorporation of the
Company. Filed as Exhibit 3.1 to Form 10-Q for the quarterly
period ended September 30, 1997, and incorporated herein by
reference
3.2 Amended and Restated Bylaws of the Company. Filed as Exhibit
3.2 to Form 10-Q for the quarterly period ended September
30, 1997, and incorporated herein by reference
4.1 Senior Term Loan Agreement, dated December 10, 1997, between
IAI V, Inc. and City National Bank. Filed as Exhibit 4.11 to
Form 10-Q for the quarterly period ended September 30, 1997,
and incorporated herein by reference
4.2 The Company hereby agrees to furnish to the Commission upon
request a copy of any instrument with respect to long-term
debt where the total amount of securities authorized
thereunder does not exceed 10% of the consolidated assets of
the Company
27 Financial Data Schedule for the three months ended March 31,
1999
REPORTS ON FORM 8-K:
During the quarter ended March 31, 1999, we did not file any reports on Form
8-K.
-12-
<PAGE> 13
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERNATIONAL AIRCRAFT INVESTORS
May 12, 1999 by: /S/ Michael P. Grella
----------------------------------------
Michael P. Grella
President
May 12, 1999 by: /S/ Rick O. Hammond
----------------------------------------
Rick O. Hammond
Vice President-Finance
And Treasurer
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 15,692,348
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 273,008,257
<DEPRECIATION> 39,459,484
<TOTAL-ASSETS> 264,807,996
<CURRENT-LIABILITIES> 0
<BONDS> 204,649,508
0
0
<COMMON> 42,123
<OTHER-SE> 35,697,831
<TOTAL-LIABILITY-AND-EQUITY> 264,807,996
<SALES> 0
<TOTAL-REVENUES> 9,244,625
<CGS> 0
<TOTAL-COSTS> 3,904,295
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,807,714
<INCOME-PRETAX> 1,532,616
<INCOME-TAX> 582,389
<INCOME-CONTINUING> 950,227
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 950,227
<EPS-PRIMARY> .23
<EPS-DILUTED> .22
</TABLE>
