<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
- -----
Exchange Act of 1934
For the quarterly period ended March 31, 1998
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 0-8628
---------------------------------------------------------
FOUR CORNERS FINANCIAL CORPORATION (as of April 12,1988)
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 22-2044086
- --------------------------------------------------------------------------------
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
370 East Avenue, Rochester, New York 14604
- --------------------------------------------------------------------------------
(Address of principal executive offices - Zip Code)
(716) 454-2263
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, including Area Code)
(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 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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
------------------------------------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
At May 13, 1998 there were 3,293,733 of the registrant's $.04 par value common
stock outstanding.
<PAGE>
FOUR CORNERS FINANCIAL CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of 1-2
March 31, 1998 (Unaudited) and
December 31, 1997
Consolidated Statements of Operations for the 3
Three Months Ended March 31, 1998 and 1997
(Unaudited)
Consolidated Statements of Changes in 4
Stockholders' Investment for the Three Months
Ended March 31, 1998 and 1997 (Unaudited)
Consolidated Statements of Cash Flows for the 5
Three Months Ended March 31, 1998 and 1997
(Unaudited)
Notes to Condensed Consolidated Financial 6-12
Statements (Unaudited)
Item 2. Management's Discussion and Analysis of 13-14
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Default Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of 15
Security Holders
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURE 16
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
--------- --------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and equivalents $ 29,074 $ 92,623
Cash - escrow deposits 32,662 240,465
Accounts receivable - trade, net of
allowance for doubtful accounts of $90,000
in 1998 and 1997 670,251 573,623
Prepaid expenses 5,983 7,819
Current portion of note receivable 2,500 3,750
---------- ----------
Total current assets 740,470 918,280
---------- ----------
TITLE PLANT 419,905 419,905
---------- ----------
PROPERTY AND EQUIPMENT, net of accumulated
depreciation 114,663 110,240
---------- ----------
OTHER ASSETS 6,627 6,627
---------- ----------
$1,281,665 $1,455,052
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
- 1 -
<PAGE>
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
LIABILITIES AND STOCKHOLDERS' INVESTMENT
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
--------- --------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Line-of-credit $ 100,000 $ 100,000
Current portion of notes payable 107,205 102,559
Notes payable to officers/principal
stockholders 18,000 18,000
Accounts payable 374,969 373,843
Accounts payable - related parties 14,086 19,907
Escrow deposits 32,662 240,465
Accrued income taxes 3,296 3,296
Other accrued expenses 38,967 107,779
---------- ----------
Total current liabilities 689,185 965,849
---------- ----------
LONG-TERM LIABILITIES:
Notes payable, net of current portion 67,185 91,642
Due to officer/principal stockholder 74,500 79,000
---------- ----------
Total long-term liabilities 141,685 170,642
---------- ----------
Total liabilities 830,870 1,136,491
---------- ----------
STOCKHOLDERS' INVESTMENT:
Common stock, $.04 par value, 15,000,000
shares authorized, 3,348,733 issued and
3,293,733 outstanding in 1998 and 1997 133,752 133,752
Additional paid-in-capital 835,402 835,402
Accumulated deficit (487,734) (619,968)
---------- ----------
481,420 349,186
Less: Treasury stock at cost ( 30,625) ( 30,625)
---------- ----------
Total stockholders' investment 450,795 318,561
---------- ----------
$1,281,665 $1,455,052
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
- 2 -
<PAGE>
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
REVENUE:
Title insurance premiums $ 355,508 $ 243,400
Abstract and appraisal fees 734,210 541,049
---------- ----------
1,089,718 784,449
---------- ----------
DIRECT COSTS OF REVENUE:
Title insurance ( 78,792) ( 68,572)
Abstract and appraisal services (130,273) ( 91,856)
---------- -----------
(209,065) (160,418)
---------- -----------
Gross profit 880,653 624,031
OPERATING EXPENSES: (738,786) (671,330)
---------- ----------
Profit/(Loss) from operations 141,867 ( 47,299)
---------- ----------
INTEREST, NET: ( 9,633) ( 13,624)
---------- ----------
NET PROFIT/(LOSS) $ 132,234 $ ( 60,923)
========== ==========
NET PROFIT/(LOSS) PER SHARE $ .04 $ (.02)
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
- 3-
<PAGE>
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' INVESTMENT
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
----- Common Stock ----- Additional
Paid-in-
Shares Amount Capital
------ ------ -------
<S> <C> <C> <C>
BALANCE, December 31, 1996 3,293,733 $ 133,752 $ 835,402
Net loss for the three months ended
March 31, 1997 (Unaudited) --- --- ---
---------- --------- ---------
BALANCE, March 31, 1997 (Unaudited) 3,293,733 $ 133,752 $ 835,402
========== ========= =========
BALANCE, December 31, 1997 3,293,733 $ 133,752 $ 835,402
Net profit for the three months ended
March 31, 1998 (Unaudited) --- --- ---
---------- --------- ---------
BALANCE, March 31, 1998 (Unaudited) 3,293,733 $ 133,752 $ 835,402
========== ========= =========
<CAPTION>
Total
Accumulated Treasury Stockholders'
Deficit Stock Investment
------- ----- ----------
<S> <C> <C> <C>
BALANCE, December 31, 1996 $( 822,206) $ (30,625) $ 116,323
Net loss for the three months ended
March 31, 1997 (Unaudited) ( 60,923) --- ( 60,923)
----------- --------- -----------
BALANCE, March 31, 1997 (Unaudited) $( 883,129) $ (30,625) $ 55,400
=========== ========== ==========
BALANCE, December 31, 1997 $( 619,968) $ (30,625) $ 318,561
Net profit for the three months ended
March 31, 1998 (Unaudited) 132,234 --- 132,234
----------- ---------- ----------
BALANCE, March 31, 1998 (Unaudited) $( 487,734) $ (30,625) $ 450,795
=========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
- 4 -
<PAGE>
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOW OPERATING ACTIVITIES:
Net profit/(loss) $ 132,234 $ ( 60,923)
Adjustments to reconcile net loss to
net cash flow from operating activities:
Depreciation and amortization 12,680 17,377
Decrease/(increase) in accounts receivable (96,628) 17,366
Decrease/(increase) in other current assets 3,086 ( 2,977)
Increase/(decrease) in accounts payable (4,695) 69,970
Decrease in other current liabilities (68,812) (31,707)
---------- ----------
Net cash flow from operating activities (22,135) 9,106
----------- ----------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of property and equipment,
net of disposals (17,103) ---
Decrease in other assets --- 2,383
---------- ----------
Net cash flow from investing activities (17,103) 2,383
----------- ----------
CASH FLOW FROM FINANCING ACTIVITIES:
Decrease in notes payable, net (19,811) (25,246)
Decrease in amount due to
officer/principal stockholder ( 4,500) ( 4,500)
----------- -----------
Net cash flow from financing activities (24,311) (29,746)
----------- -----------
NET DECREASE IN CASH AND EQUIVALENTS: (63,549) (18,257)
CASH AND EQUIVALENTS - beginning of period 92,623 36,612
---------- ----------
CASH AND EQUIVALENTS - end of period $ 29,074 $ 18,355
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
- 5 -
<PAGE>
FOUR CORNERS FINANCIAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998 AND 1997
(Unaudited)
(1) General
The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate in order that
the information presented is not misleading. All adjustments for a fair
presentation of financial information contained herein have been made.
(2) Organization
The Company -
Four Corners Financial Corporation (FCFC) and its Subsidiaries, Four
Corners Abstract Corporation (FCAC) and Proper Appraisal Specialists,
Inc. provide services and products including real estate title
searching, preparation of abstracts of title, issuance of title
insurance as an agent for certain national underwriting companies and
real estate appraisals, primarily in western and central New York
State. All of these services and products are required in connection
with the mortgaging, sale or purchase of real property.
Unless otherwise indicated, the term "Company" refers to Four Corners
Financial Corp. and its Subsidiaries. The Company operates in one
business segment.
(3) Summary of Significant Accounting Policies
Principles of Consolidation -
The consolidated financial statements include the accounts of FCFC and
all of its subsidiaries. All significant intercompany transactions and
balances have been eliminated.
Cash and Equivalents -
Cash and equivalents include time deposits and other instruments with a
maturity of three months or less at the time of purchase. The Company
maintains cash balances at several banks. Accounts at each institution
are insured by The Federal Deposit Insurance Corporation up to
$100,000.
- 6 -
<PAGE>
(3) Summary of Significant Accounting Policies (Continued)
Property and Equipment -
Property and equipment is stated at cost and is depreciated using
accelerated and straight-line methods over the following useful lives:
Buildings 15 - 31.5 years
Furniture and Equipment 3 - 10 years
Vehicles 5 years
Leasehold Improvements Life of lease
At the time of retirement or other disposition of property, the cost
and accumulated depreciation are removed from the accounts and any gain
or loss is reflected in the statements of operations. Repairs and
maintenance costs are charged to expense when incurred.
Intangible Assets -
Intangible assets consist of goodwill and covenants not-to-compete
resulting from the 1987 acquisition of the Albany branch, the 1989
acquisition of Livingston Abstract Corporation, the 1990 acquisition of
Picciano Abstract Company, Inc. and the 1991 acquisition of Proper
Appraisal Specialists, Inc. These assets were fully amortized during
1995.
Title Plant -
Title plant consists of copies of public records, maps and other
relevant historical documents which facilitate the preparation of title
abstract reports without the necessity of manually searching official
public records.
The Company has incurred identifiable costs related to the activities
necessary to construct a title plant which are reflected as assets. A
title plant is regarded as a tangible asset having an indefinite
economic life; accordingly, title plant costs are not depreciated.
Revenue Recognition -
Title insurance is provided to purchasers or financiers of real
property purchases. The related revenue is recognized when policies
become effective, generally at the property or mortgage loan closing.
Under terms of the Company's agreements with its title insurance
underwriters, a commission of 15% to 20% is paid to its underwriter on
all title insurance policies written. Pricing is based on a rate
schedule established by the Insurance Department of the State of New
York which provides for varying rates for services rendered. Commission
expense is reflected as a direct cost of title insurance revenue in the
statement of operations.
- 7 -
<PAGE>
(3) Summary of Significant Accounting Policies (Continued)
Revenue Recognition - (Continued)
The Company also performs title abstract research and provides
appraisals on real properties under an exclusive arrangement with a
local appraisal company. Abstract and appraisal revenue is recognized
as earned. Direct costs of abstract and appraisal revenue reflects the
cost of work performed by subcontractors in geographical areas where
the Company does not maintain an office, among other direct costs.
(4) Acquisitions
The Company acquired Proper Appraisal Specialists, Inc. (1991),
Picciano Abstract Company, Inc. (1990), Livingston Abstract Corporation
(1989) and Mid-State (1988) for cash, notes and common stock totalling
approximately $185,000. These acquisitions were accounted for as
purchases. Goodwill, representing the excess of purchase price over the
fair value of tangible assets acquired related to these acquisitions,
totalled approximately $66,000 and is being amortized over five years.
These companies were subsequently merged into FCAC.
(5) Income Taxes
During 1993, the Company adopted Statement of Financial Accounting
Standards No. 109 (SFAS 109), "Accounting for Income Taxes". SFAS 109
requires an asset and a liability approach to measuring deferred income
taxes. Previous standards required an income statement approach.
There were no material temporary differences at December 31, 1997 or at
March 31, 1998. Therefore, no deferred taxes have been provided.
(6) Escrow Deposits
As a service to its customers, FCAC administers escrow deposits
representing undisbursed amounts received for settlements of mortgage
loans or property sales and indemnities against specific title risks.
These funds, totalling $32,662 and $240,465 at March 31, 1998 and
December 31, 1997, respectively, are recorded as both a current asset
and a current liability in the accompanying consolidated balance
sheets.
- 8 -
<PAGE>
(7) Notes Payable
The note payable to the bank requires the company to meet certain
financial covenants at December 31, 1996 as follows:
a. Working capital of at least $20,000
b. Current ratio of 1.1 to 1
c. Minimum tangible net worth of at least $400,000
d. Total liabilities to tangible net worth of not more than 1.9 to 1.
e. Net income before taxes of $110,000, and f. Debt service ratio of
not less than 1.75 to 1.
The agreement also limits the Company's ability to make acquisitions,
pay dividends and make capital expenditures, and requires the Company
to submit certain financial information. At December 31, 1997 and 1996
the Company was not in compliance with certain of the covenants.
Subsequent to year end, the Company obtained a waiver from the bank for
these covenants as of December 31, 1997 and 1996.
<TABLE>
<CAPTION>
March 31, December 31,
Notes payable consisted of the following: 1998 1997
--------- ------------
<S> <C> <C>
Note payable to Marine Midland Bank, due in monthly installments of $7,674
through October, 1997 and $6,230 through October, 1999 plus interest at the
bank's prime rate plus 1.25%. This note is guaranteed by the officers/
stock-holders of the Company and is collateralized by substantially all of the
Company's assets. $ 111,146 $ 134,167
Term note payable to a bank with monthly principal payment of $1,542 through
October, 1999, plus interest at the bank's prime rate plus 1%. The note is also
guaranteed by the officers/stockholders of the Company and is collateralized by
substantially all of the Company's assets. $ 26,912 $ 30,000
Various notes payable in aggregate monthly installments of $1,116 and $1,425 for
December 1997 and March 1998 respectively, including interest at rates ranging
from 9.5% to 11.5%. These notes mature through October 2000 and are
collateralized by the related equipment. 36,332 30,034
----------- ----------
174,390 194,201
Less: Current Portion (107,205) (102,559)
----------- ----------
$ 67,185 $ 91,642
=========== ==========
</TABLE>
- 9 -
<PAGE>
(8) Lines-of-Credit
The Company may borrow up to $100,000 under the terms of an unsecured
line-of-credit. Amounts borrowed bear interest at the bank's prime
interest rate plus 1%. Borrowings under this line-of-credit are
personally guaranteed by the Company's principal officers/stockholders.
At December 31, 1997 and March 31, 1998, there was $100,000 outstanding
under the terms of this line-of-credit.
During 1997 the Company had a second line-of-credit for $50,000 with
another bank. The $37,000 outstanding principal balance was
restructured during November, 1997 into a term note payable.
(9) Stockholders' Investment
Stock Options -
In July, 1992, the Company's Board of Directors adopted and the
stockholders approved the 1992 Stock Option Plan (1992 Plan) which
replaced the 1988 Stock Incentive Plan (1988 Plan).
Under the 1992 Plan, the Company may issue incentive stock options,
non-statutory options, non-employee director options and reload
options. The exercise price of incentive, non-statutory and reload
options will not be less than fair market value at date of grant.
Incentive and non-statutory options will generally expire ten years
from date of grant. Reload options will have a term equal to the
remaining option term of the underlying option.
The 1992 Plan also provides for annual grants of stock options to
purchase 500 shares of the Company's common stock to non-employee
directors of the Company with an exercise price not less than fair
market value at date of grant. These options will expire ten years from
date of grant.
Options issued under the 1992 and 1988 Plans expire in 1995. No further
options will be granted under the 1988 Plan.
The Company has reserved 647,500 common shares for issuance under the
1992 plan.
The Company did not have any outstanding options under the 1992 plan as
of March 31, 1998 and December 31, 1997.
- 10 -
<PAGE>
(10) Related Party Transactions
Due to Officers/Principal Stockholders -
During 1997, 1996 and 1995, one of the Company's principal officers/
stock-holders made advances to the Company. These advances were
$97,000, $234,500 and 227,500 at December 31, 1997, 1996 and 1995,
respectively. Amounts borrowed bear interest at the prime rate plus 3%
and repayment is subordinated to the amounts outstanding under all
other bank debt agreements. Principal repayment in future years is
scheduled for $18,000 per year.
Note Payable to Officers/Principal Stockholders -
At December 31, 1997 and 1996 the Company owed approximately $4,907 and
$3,300 respectively to a law firm for which the Company's principal
stockholder is a partner for legal fees paid on behalf of the Company.
These amounts have been included in accounts payable to related parties
for these periods on the accompanying balance sheets.
Office Lease Commitment -
The Company leases its Rochester facility from a party related through
common management. The Company has a five year lease agreement through
June 30, 2000 at an annual rental of $72,000. Rent and common area
charges were approximately $72,000 in 1997, 1996 and 1995,
respectively. The Company owed approximately $15,000 and $18,100 for
unpaid rent at December 31, 1997 and 1996, respectively. During 1997,
total unpaid rent of $18,100 was forgiven by another related party.
This amount has been reflected as an extraordinary item, net of income
taxes, of $4,000.
Significant Customer -
In each of 1997, 1996 and 1995, approximately 8%, 4% and 4%
respectively of revenue was derived from a related party.
(11) Lease Commitments
FCAC leases other office facilities under lease agreements expiring
through December, 2002.
Minimum lease payments under non-cancelable lease agreements are as
follows at December 31, 1996:
1998........................................ 103,101
1999........................................ 42,771
2000 ....................................... 28,046
2001 ....................................... 28,046
2002........................................ 28,046
---------
$ 230,010
=========
- 11 -
<PAGE>
Rent expense related to these operating leases was approximately
$126,101, $121,000 and $124,000 for the years ended December 31, 1997,
1996 and 1995, respectively.
(12) Reverse Stock Split
In July, 1992, the Company's stockholders approved a one-for-four
reverse stock split. In conjunction with this reverse stock split, the
authorized number of shares was reduced to 15,000,000 and par value was
increased to $.04 per share. These actions have been retroactively
reflected in the financial statements.
- 12 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
The Company's cash flow results from operations, bank loans, advances made by
principal stockholders and from sales of common stock.
During the first three months of 1998, cash reserves of $92,623 were sufficient
to fund negative cash flows from operating, investing and financing activities
of $22,135, $17,103 and $24,311, respectively.
Cash Flow from Operations: The Company had a negative cash flow from operating
activities through the first three months of 1998 of $22,135 compared to a
positive cash flow of $9,106 for the same period in 1997. Despite the
significant amount of net profit shown in the first three months of 1998, a
sizeable increase in accounts receivable and a corresponding decrease in
accounts payable more than offset the positive cash flow effect from net income.
Cash Flow from Investing Activities: The Company incurred capital expenditures
of $17,103 during the first three months of 1998 related to capital improvements
or equipment for the Rochester corporate office building. The Company made no
title plant investment during the first quarter of 1998. At March, 31, 1998, the
Company had no material purchase commitments.
Cash Flow from Financing Activities: Primary cash flows from financing
activities relate to changes in financing under lines-of-credit, notes payable
and advances made by principal stockholders. Despite the effort to support the
ongoing operations during the first quarter of 1998, the Company was able to
repay a portion of its borrowings from its principal officer/stockholder by
$4,500. Additional borrowings of $19,811 were repaid during the same period of
the 1998 calendar year. Approximately the same amounts were repaid for the same
period of the previous year. This negative cash flow was adequately funded
through the cash reserve available at the beginning of 1998.
The Company expects that the cash flow generated from operations and bank
lines-of-credit currently available will be adequate to meet its working capital
and capital expenditure needs for the remainder of 1998.
- 13 -
<PAGE>
Results of Operations
Total revenue for the first three months of 1998 were $1,089,718 as compared to
$784,449 for the same three month period in 1997. This increase of $305,269 or
39% resulted from the recent activity upstart in housing sales and other general
economic conditions. The revenues generated from title insurance premiums
increased by 46% to $355,508 for the first quarter. A similar increase was
recognized in the area of abstract and appraisal fees. These revenues increased
36% from $541,049 in 1997 to $734,210 in 1998.
Due to the increased sales order volume in areas where the Company does
business, as well as a reduction in internal staffing, the need for
subcontractor services for title abstract and appraisal orders escalated during
the first three months of 1998. Accordingly, total direct costs of revenues
increased by 30% from $160,418 in 1997 to $209,065 in 1998. As a result of the
large increase in revenues, gross profit for the quarter ended March 31, 1998
was $880,653 or 80.8% of revenues as compared to $624,031 or 79.6% of revenues
for the same quarter of the preceding year. Operating expenses for the quarter
ended March 31, 1998 were $738,786 as compared to $671,330 for the same period
in 1996. This increase of 10% is primarily due to an increase in the variable
expenses which are driven by increased sales volumes. The Company anticipates an
increase in revenues and stable operating costs during the remaining quarters of
1998 which would further enhance the sizeable net profit incurred in the first
quarter of the 1998 calendar year.
The Company's ratio of current assets to current liabilities at March 31, 1998
and December 31, 1997 was 1.07:1 and .95:1, respectively. Accordingly, the
Company had a working capital surplus of $51,285 as of March 31, 1998 compared
to a deficit of $47,569 as of December 31, 1997.
- 14 -
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Default Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
None
b. Reports on Form 8-K
None
- 15 -
<PAGE>
SIGNATURE
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.
FOUR CORNERS FINANCIAL CORPORATION
Date May 15, 1998 By /s/ William S. Gagliano
-------------------- -------------------------------------
William S. Gagliano
Executive Vice President and
Chief Accounting Officer
- 16 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 29,074
<SECURITIES> 0
<RECEIVABLES> 760,251
<ALLOWANCES> 90,000
<INVENTORY> 0
<CURRENT-ASSETS> 740,470
<PP&E> 1,055,331
<DEPRECIATION> 940,668
<TOTAL-ASSETS> 1,281,665
<CURRENT-LIABILITIES> 689,185
<BONDS> 0
0
0
<COMMON> 133,752
<OTHER-SE> 317,043
<TOTAL-LIABILITY-AND-EQUITY> 1,281,665
<SALES> 1,089,718
<TOTAL-REVENUES> 1,089,718
<CGS> 209,065
<TOTAL-COSTS> 738,786
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,633
<INCOME-PRETAX> 132,234
<INCOME-TAX> 0
<INCOME-CONTINUING> 132,234
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 132,234
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
