=====================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities and 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 and Exchange Act of 1934 For the transition period
from _______ to _______
Commission File Number 0-22922
AMERICAN COUNTRY HOLDINGS INC.
(Exact Name of Registrant as specified in its charter)
Delaware 06-0995978
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
222 North LaSalle Street, Chicago, Illinois 60601-1105
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (312) 456-2000
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.
[x] Yes [ ] No
The aggregate number of shares of the Registrant's Common Stock,
$.01 par value, outstanding May 4, 1999 was 32,023,633.
=====================================================================<PAGE>
AMERICAN COUNTRY HOLDINGS INC.
PAGE
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets at March 31, 1999,
(Unaudited) and December 31, 1998 . . . . . . . . . . . . . 3
Consolidated Statements of Income (Unaudited) for the
Three Months Ended March 31, 1999 and 1998 . . . . . . . . 5
Consolidated Statements of Cash Flows (Unaudited) for the
Three Months Ended March 31, 1999 and 1998 . . . . . . . . 6
Consolidated Statements of Comprehensive Income (Unaudited)
at March 31, 1999 and March 31, 1998 . . . . . . . . . . . 7
Notes to Consolidated Financial Statements (Unaudited) . . . 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . 16
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . 16
Item 3. Defaults upon Senior Securities . . . . . . . . . . . . . 16
Item 4. Submission of Matters to a Vote of Security Holders . . . . 16
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . 16
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 16
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2<PAGE>
<TABLE>
<CAPTION>
AMERICAN COUNTRY HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C>
March 31, December 31,
1999 1998
---------- -----------
ASSETS
Investments:
Available-for-sale
Fixed maturities - At fair value
(amortized cost: 1999 - $124,733;
1998 - $122,010) . . . . . . . . . . . . . . $126,140 $125,086
Equity securities - At fair value
(cost: 1999 - $353; 1998 -
$353) . . . . . . . . . . . . . . . . . . . 399 402
Collateral loans (at amortized cost, which approximate fair
value) . . . . . . . . . . . . . . . . . . . . . . . . . . . 885 540
-------- --------
Total investments . . . . . . . . . . . . . . . . . . . . . . 127,424 126,028
Cash and cash equivalents . . . . . . . . . . . . . . . . . . 7,554 10,353
Premiums receivable (net of allowance: 1999 - $293; 1998 -
$262) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,227 7,378
Reinsurance recoverable . . . . . . . . . . . . . . . . . . . 13,319 13,402
Deferred income taxes . . . . . . . . . . . . . . . . . . . . 2,950 3,624
Deferred policy acquisition cost . . . . . . . . . . . . . . 3,999 2,355
Accrued investment income . . . . . . . . . . . . . . . . . . 1,705 1,705
Property and equipment . . . . . . . . . . . . . . . . . . . 813 820
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 2,806 2,640
--------- --------
Total assets $190,797 $168,305
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Unpaid losses and loss adjustment expense . . . . . $92,260 $92,417
Unearned premiums . . . . . . . . . . . . . . . . . 40,298 14,461
Note payable . . . . . . . . . . . . . . . . . . . . 9,300 9,300
Accrued expenses . . . . . . . . . . . . . . . . . . 3,796 3,854
Premium deposits . . . . . . . . . . . . . . . . . . 6 2,894
Drafts outstanding . . . . . . . . . . . . . . . . . 2,802 3,792
Income taxes payable . . . . . . . . . . . . . . . . 0 465
Payable for securities . . . . . . . . . . . . . . 2,187 0
-------- --------
Total liabilities 150,649 127,183
3<PAGE>
March 31, December 31,
1999 1998
---------- ------------
Commitments and contingent liabilities
Stockholders' equity:
Common stock - $.01 par value:
Authorized - 60,000,000 shares
Issued and outstanding - shares: 1999 -
32,023,627; 1998 - 32,045,214 . . . . . . . 320 320
Preferred stock: Authorized - 2,000,000
shares; issued and outstanding - 0 shares . --- ---
Additional paid-in capital . . . . . . . . . . . . . 36,864 36,864
Accumulated other comprehensive income . . . . . . . 1,054 2,553
Retained earnings . . . . . . . . . . . . . . . . . 1,910 1,385
------- ------
Total stockholders equity . . . . . . . . . . . . . . . . . 40,148 41,122
------- ------
$190,797 $168,305
======== ========
See Notes to the Consolidated Financial Statements.
</TABLE>
4<PAGE>
<TABLE>
<CAPTION>
AMERICAN COUNTRY HOLDINGS INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C>
Three Months Ended
March 31,
1999 1998
---- ----
REVENUES:
Premiums earned $14,552 $13,129
Net investment income 1,836 1,747
Net realized gains on investments 365 373
Other income 66 148
----------- -----------
Total revenues 16,819 15,397
LOSSES AND EXPENSES:
Losses and loss adjustment expenses 13,390 10,177
Amortization of deferred policy acquisition costs 2,706 3,026
Administrative and general expenses 286 540
----------- -----------
Total losses and expenses 16,382 13,743
----------- -----------
Income before income taxes 437 1,654
Provision for income tax
Current (758) 209
Deferred 670 265
----------- -----------
Total provision for income tax (88) 474
----------- -----------
Net income $525 $1,180
==== ======
Basic and dilutive earnings per share $0.02 $0.04
===== =====
See Notes to the Consolidated Financial Statements
</TABLE>
5<PAGE>
<TABLE>
<CAPTION>
AMERICAN COUNTRY HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Three Months Ended
March 31,
1999 1998
---- ----
Net cash provided (used) by operating activities $2 ($2,755)
INVESTING ACTIVITIES
Fixed maturities - available-for-sale:
Purchases (56,038) (52,107)
Sales 51,463 50,887
Maturities, calls, and prepayments 2,186 2,391
Equity securities - available-for-sale:
Maturities, calls, and prepayments -- 602
Sale or maturity of other investments 60 --
Property, equipment and other (472) (201)
-------- ---------
Net cash provided (used) by investing activities (2,801) 1,572
FINANCING ACTIVITIES
Proceeds from note payable -- 3,000
Issuance of options and warrants -- 12
--------- --------
Net cash provided by financing activities -- 3,012
--------- --------
Net increase (decrease) in cash (2,799) 1,829
Cash at beginning of period 10,353 8,499
--------- --------
Cash at end of period $7,554 $10,328
======= =======
See Notes to the Consolidated Financial Statements
</TABLE>
6<PAGE>
<TABLE>
<CAPTION>
AMERICAN COUNTRY HOLDINGS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Three Months Ended
March 31,
1999 1998
---- ----
Net income $525 $1,180
Other comprehensive income:
Unrealized depreciation of investments-
net of reclassification adjustments (2,271) (105)
Deferred income tax benefit on changes 772 36
Other 0 (78)
------- -------
Other comprehensive income (1,499) (147)
-------- -------
Comprehensive income (974) 1,033
===== =====
See Notes to the Consolidated Financial Statements
</TABLE>
7<PAGE>
AMERICAN COUNTRY HOLDINGS INC.
PART I
FINANCIAL INFORMATION
(See Financial Statements and Exhibits Attached)
Notes to the Consolidated Financial Statements
(Unaudited)
A. NATURE OF OPERATIONS
American Country Holdings Inc. (the "Company") is an insurance
holding company which operates through its direct subsidiaries
American Country Insurance Company ( American Country ), American
Country Financial Services Corp. ("Financial Services")and American
Country Professional Services Corp. ("Professional Services").
American Country is an Illinois domestic property and casualty
insurance company that specializes in the underwriting and marketing
of commercial property and casualty insurance for a focused book of
business. American Country concentrates on types of insurance in
which it has expertise: transportation, hospitality and other
commercial lines. American Country also writes a nominal amount of
personal lines, automobile and homeowners insurance. Financial
Services operates principally as a premium finance company and also
provides secured loans for certain of American Country's larger
customers. Professional Services is a third-party administrator
claims processing service for American Country s insurance customers.
B. ACCOUNTING PRINCIPLES
The accompanying financial statements have been prepared in
accordance with the instructions to Form 10-Q and Article 10 of
Regulation S-X and, accordingly, do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. The accompanying financial statements
should be read in conjunction with the consolidated financial
statements of the Company included in the Company's Annual Report on
Form 10-K filed on March 31, 1999.
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 ending December 31, 1999.
Earnings per share information is presented on the basis of
weighted average shares outstanding for the period.
C. CAPITAL STOCK
No dividends have been declared or paid by the Company during the
periods presented in the accompanying financial statements. At March
31, 1999, the Company had 2,054,129 warrants outstanding. The
8<PAGE>
warrants allow each warrant holder to purchase 2.19 shares of Common
Stock at a price of $1.83 per share through August 31, 1999.
D. STOCK OPTION PLAN
The Company has established a Stock Option Plan (the "Plan"), as
amended, under which options to purchase up to a total of 750,000
shares of common stock may be granted to officers and other key
employees. Stock options granted under this Plan, which may be either
incentive stock options or nonqualified stock options for federal
income tax purposes, expire up to ten years after date of grant and
become exercisable over a three year period. Employees who have left
the Company have 90 days to exercise their options. In December 1996,
the stockholders agreed to an amendment to the Plan, whereby in the
event of a sale of the assets of the Company, all options outstanding
would become immediately exercisable without regard to any vesting
provisions. In January 1998, additional stock options were granted to
employees of the Company. These additional options have five-year
terms and vest at 20% per year and become fully exercisable five years
after the date of grant. At March 31, 1999, the Company had 634,968
options outstanding with exercise prices ranging from $0.60 per share
to $3.75 per share.
The Company has elected to follow Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees ( APB 25")
and related interpretations in accounting for its employee stock
options rather than the alternative fair value accounting provided for
under Financial Accounting Standards Board ( FASB ) Statement No. 123,
Accounting for Stock-Based Compensation. Under APB 25, because the
exercise price of the Company s employee stock options equals the
market price of the underlying stock on the date of grant, no
compensation expense is recognized.
E. REINSURANCE
The components of the net reinsurance recoverable balances in the
accompanying balance sheets were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
March 31, 1999 December 31, 1998
-------------- -----------------
(In thousands)
Ceded paid losses recoverable $ 224 $ 425
Ceded unpaid losses and loss
adjustment expenses ("LAE") 11,792 11,952
Ceded unearned premiums 1,303 1,025
--------- ----------
Total $ 13,319 $ 13,402
======== =========
</TABLE>
9<PAGE>
The reinsurance ceded components of the amounts relating to the
accompanying statement of income were as follows:
<TABLE>
<CAPTION>
Three months ended March 31,
<S> <C> <C>
1999 1998
---- ----
(In thousands)
Ceded premiums earned $1,399 $3,431
Ceded incurred losses 2,844 1,465
Ceded incurred LAE 287 14
</TABLE>
The effect of reinsurance on premiums written and earned for the
three months ended March 31, 1999, and 1998 was as follows:
<TABLE>
<CAPTION>
Three months ended March 31,
<S> <C> <C> <C> <C>
1999 1998
---- ----
(In Thousands)
Premiums Premiums
-------- --------
Written Earned Written Earned
------- ------ ------- ------
Direct $40,925 $15,282 $37,901 $16,397
Assumed 663 669 124 163
Ceded (1,678) (1,399) (5,910) (3,431)
------- ------ ------ ------
Net $39,910 $14,552 $32,115 $13,129
======== ======= ======= ======
</TALBE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
The following discussion and analysis should be read in
conjunction with the consolidated financial statements and notes
thereto included elsewhere in this Report.
Overview
American Country Holdings Inc. (the "Company") is an insurance
holding company which operates through its direct subsidiaries
American Country Insurance Company ("American Country"), American
10<PAGE>
Country Financial Services Corp. ("Financial Services")and American
Country Professional Services Corp. ("Professional Services").
American Country is an Illinois domestic property and casualty
insurance company that specializes in the underwriting and marketing
of commercial property and casualty insurance for a focused book of
business. American Country concentrates on types of insurance in
which it has expertise: transportation, hospitality and other
commercial lines. American Country also writes a nominal amount of
personal lines, automobile and homeowners insurance. Financial
Services operates principally as a premium finance company and also
provides secured loans for certain of American Country's larger
customers. Professional Services is a third-party administrator
claims processing service for American Country s insurance customers.
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED
MARCH 31, 1998
Overall premium revenues increased 10.8% in 1999 to $14.6 million
from $13.1 million for the same period in 1998.
The following table sets forth the net premiums earned by the
principal lines of insurance underwritten by American Country for the
periods indicated and the dollar amount and percentage of change
therein from period to period:
NET PREMIUMS EARNED
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended Increase (Decrease)
March 31, 1999 from 1998
--------- ---------
<S> <C> <C> <C> <C>
1999 1998 Amount Percent
---- ---- ------ -------
(in thousands)
Transportation lines . . . . . . . . . . . $8,638 $7,189 $ 1,449 20.1%
Hospitality lines . . . . . . . . . . . . . 1,367 947 420 44.4
Commercial lines . . . . . . . . . . . . . 4,521 4,934 ( 413) ( 8.4)
Personal lines . . . . . . . . . . . . . . 26 59 ( 33) (56.3)
----------- -------- --------- -----
Totals . . . . . . . . . . . . . . . . . . $14,552 $13,129 $1,423 10.8%
======= ======= ====== ====
</TABLE>
Compared to the first quarter in 1998, net premiums earned from
transportation lines, which consists of taxi and limousine liability
and physical damage insurance, increased by 20.1% to $8.6 million.
Nearly all of the insurance business written by American Country for
transportation lines generated premium revenue increases, especially
11<PAGE>
business generated outside its historical region of the Chicago
metropolitan area. This geographical expansion was accomplished
primarily by new underwriting programs in the states of Pennsylvania,
New York and Wisconsin.
Premium revenues for hospitality lines increased 44% to
approximately $1.4 million as compared to $947,000 for 1998. This
increase is attributable to the growth in the number of policies
written for multiple peril package and other liability products and
slightly offset by a decrease in revenues generated by American
Country s workers compensation policies.
Net premiums earned from commercial lines decreased as a result
of the continuing vigorous pricing competition industry-wide for this
line. Most severely affected was workers' compensation insurance,
which experienced a 16.1% decrease in 1999 to $2.4 million in premium
revenues from $2.9 million for the same period in 1998. American
Country also experienced a 4.1% decrease in premiums earned from
commercial multiple peril and a 1.2% increase for the automobile
liability insurance that is not classified as transportation.
The decrease of 56.3% in premiums earned from personal lines
reflects American Country s exit from personal lines in early 1998.
American Country entered into a reinsurance agreement with Ohio
Casualty Insurance Company under which Ohio Casualty reinsures one
hundred percent of the net liability of American Country for losses
occurring on or after January 1, 1998 with respect to American
Country s personal lines policies that are reinsured. The reinsurance
remains in full force and effect until the settlement of all
liabilities under the policies reinsured by Ohio Casualty. In the
event Ohio Casualty breaches or is in default with respect to any of
its obligations under the agreement, American Country remains
obligated and liable with respect to the reinsured policies. As part
of the reinsurance agreement Ohio Casualty receives nearly all of the
premiums generated for this line of business. As a result, premium
revenues from personal lines decreased from $59,000 for the 1998
period to $26,000 for 1999.
Investment income (net investment income and net realized gains
on investments) increased approximately 3.8%, to $2.2 million as
compared to $2.1 million for the same period in 1998. Interest income
increased by $90,000 during the first quarter of 1999, resulting in
total interest income earned of $1.8 million. Realized gains amounted
to $365,000 for the first quarter of 1999 compared to $373,000 during
the same period in 1998. In addition, costs relative to the
investment activities of the Company decreased 3%, resulting in
savings of $5,010.
Other income, which consists of interest and fees earned on the
Company's premium financing activities and fees earned in connection
with the reinsurance agreement with Ohio Casualty, decreased 55% in
the first quarter of 1999 to $66,000 compared to 1998. The decrease
12<PAGE>
is attributable to the lower volume of premium finance contracts
entered into during the first quarter of 1999 and to a reduction in
the fees received on the cession of the personal lines business
reinsured by Ohio Casualty.
Losses and loss adjustment expenses (LAE) increased 31.6% or $3.2
million for the 1999 period, from $10.2 million during 1998 to $13.4
million for 1999, resulting in a loss ratio of 92.0% for 1999 compared
to 77.5% for 1998, as a result of a substantial increase in the loss
ratio for commercial lines.
The loss ratio for transportation lines for 1999 declined to
57.8% compared to 83.4% for 1998. Losses and loss adjustment expenses
for transportation lines decreased in excess of $1 million or 16.7%
from 1998. This decline in the loss ratio was primarily due to a
decrease in loss severity and frequency of claims as well as increased
revenues due to the geographic expansion of the transportation line.
The loss ratio for hospitality lines decreased to 53.8% compared
to 89.9% in the same period in 1998, as a result of significantly
lower losses for multiple peril package policies.
Commercial lines experienced a significant increase in both its
losses and the resulting loss ratio during the 1999 quarter. The
increase, especially for workers' compensation and commercial multiple
peril business, resulted in a loss ratio of 161.0% compared to 65.9%
during 1998. This increase is attributable to poor weather conditions
in American Country s underwriting territories during the first
quarter of 1999 and to a higher severity of claims under workers
compensation policies.
The increase in the personal lines loss ratio is attributable to
the reduced premium volume that resulted from the reinsurance
agreement with Ohio Casualty referred to earlier.
Amortization of acquisition costs reflects a net decrease during
the 1999 period of $320,000 due to reduced commissions to producers,
particularly in relation to the incentive profit-sharing commission
program which was redesigned effective January 1, 1998. This decrease
was somewhat offset by commission expense incurred on particular
transportation products which had not been subject to these costs in
prior periods.
General and administrative costs, excluding interest on long-term
debt, decreased $294,000 in the 1999 period, primarily the result of
decreased operating costs.
Liquidity and Capital Resources
The Company is a holding company, receiving cash principally
through fees and dividends from its subsidiaries and borrowings.
American Country, the principal subsidiary of the Company, is the only
13<PAGE>
subsidiary of the Company subject to restrictions and regulatory
approval on fees and dividends. The ability of insurance and
reinsurance companies to underwrite insurance and reinsurance is based
on maintaining liquidity and capital resources sufficient to pay
claims and expenses as they become due. The primary sources of
liquidity for the Company's subsidiaries are funds generated from
insurance premiums, investment income, commission and fee income,
capital contributions from the Company and proceeds from sales and
maturities of portfolio investments. The principal expenditures are
for payment of losses and LAE, operating expenses, commissions and
dividends to shareholders.
On April 30, 1998, the Company entered into a $15 million
revolving loan credit facility pursuant to which the Company initially
borrowed $4.8 million at an initial interest rate of 6.47% to repay
the short-term note. The borrowing was subsequently increased to $9.3
million as of March 31, 1999. The line of credit agreement contains
various debt covenants including certain financial covenants and
commitment fees, which are .25% per annum of the unused line of
credit.
At March 31, 1999, the Company's total assets of $191 million
were comprised of the following: Cash and investments, 70.7%; premiums
receivable, 15.8%; reinsurance recoverables, 7.0%; deferred expenses
(policy acquisition costs and deferred taxes) 3.7%; fixed assets,
0.9%; and other assets, 1.9%.
The Company's subsidiaries seek to maintain liquid operating
positions and follow investment guidelines and state regulations for
investments that are intended to provide for an acceptable return on
investment while preserving capital, maintaining sufficient liquidity
to meet their obligations and, as to the Company's insurance
subsidiary, maintaining a sufficient margin of capital and surplus to
ensure its unimpaired ability to write insurance and assume
reinsurance.
The following table provides a profile of the Company's fixed
maturities investment portfolio by rating at March 31, 1999:
S&P/Moody s Rating(1) Fair Percent of
Value Total
------ -------
AAA/Aaa (including US
Treasuries of $4,308) $ 68,353 54.2%
AA/Aa 13,744 10.9%
A/A 29,767 23.6%
BBB/Ba 10,012 7.9%
All other 4,264 3.4%
---------- ------
Total $126,140 100.0%
======== ======
14<PAGE>
(1) Ratings are as assigned primarily by Standard & Poor s
Corporation, with remaining ratings as assigned by Moody s
Investors Service Inc.
Cash flow provided by operations for the quarter ended March 31,
1999 was $2,000 (the direct result of the large portion of
transportation revenues booked during the quarter) as compared to $2.8
million used by operations for the same period in 1998. Such amounts
were adequate to meet all obligations during the periods. The
increase in cash flow provided for the quarter ended March 31, 1999 as
compared to the 1998 three-month period is attributable to the
increase in premium volume for the first quarter of 1999.
Forward-Looking Statements
The Company cautions readers regarding certain forward-looking
statements contained in the foregoing and elsewhere and in any other
statements made by, or on behalf of, the Company, whether or not in
future filings with the Securities and Exchange Commission. Forward-
looking statements are statements not based on historical facts. In
particular, statements using verbs such as "expect," "intend," "plan,"
"anticipate," "believe" or similar words generally involve forward-
looking statements. Forward-looking statements also include but may
not be limited to, statements relating to future plans, targets and
objectives, financial results, cyclical industry conditions,
government and regulatory policies, the uncertainties of the reserving
process and the competitive environment in which the Company operates.
Forward-looking statements are based upon estimates and
assumptions that are subject to significant business, economic and
competitive uncertainties, many of which are beyond the Company's
control and subject to change. These uncertainties can affect actual
results and could cause actual results to differ materially from those
expressed in any forward-looking statements. Whether or not actual
results differ materially from forward-looking statements may depend
on numerous foreseeable and unforeseeable events or developments, some
of which may be national in scope, such as general economic conditions
and interest rates. Some of these events or developments may be
related to the insurance industry generally, such as pricing
competition, regulatory developments and industry consolidation.
Others may relate to the Company specifically, such as credit,
volatility and other risks associated with the Company's investment
portfolio, and other factors. Investors are also directed to consider
other risks and uncertainties discussed in documents filed by the
Company with the SEC, including Exhibit 99 to the Annual Report to the
Securities and Exchange Commission on Form 10-K for the year ended
15<PAGE>
December 31, 1998. The Company disclaims any obligation to update
forward-looking information.
16<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
There are no pending material legal proceedings to which the
Company or its subsidiaries is a party or of which any of the
properties of the Company or its subsidiaries is subject, except for
claims arising in the ordinary course of business. Most of these
proceedings involve claims under insurance policies issued by American
Country. These proceedings are considered by American Country in
estimating the reserves for losses and loss adjustment expenses. In
the opinion of management, the ultimate resolution of such litigation
will not have a material effect on the financial condition of the
Company.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits:
(27) Financial Data Schedule
b. Reports on Form 8-K:
None.
17<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Date: May 6, 1999
American Country Holdings Inc.
(Registrant)
By: /s/ James P. Byrne
----------------------------------
Treasurer, Vice President, Chief
Financial Officer and Principal
Accounting Officer
18
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<DEBT-HELD-FOR-SALE> 126,140
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 399
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 127,424
<CASH> 7,554
<RECOVER-REINSURE> 13,319
<DEFERRED-ACQUISITION> 3,999
<TOTAL-ASSETS> 190,797
<POLICY-LOSSES> 92,260
<UNEARNED-PREMIUMS> 40,298
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 9,300
0
0
<COMMON> 320
<OTHER-SE> 39,828
<TOTAL-LIABILITY-AND-EQUITY> 190,797
14,552
<INVESTMENT-INCOME> 1,836
<INVESTMENT-GAINS> 365
<OTHER-INCOME> 66
<BENEFITS> 13,390
<UNDERWRITING-AMORTIZATION> 2,706
<UNDERWRITING-OTHER> 286
<INCOME-PRETAX> 437
<INCOME-TAX> (88)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 525
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
<RESERVE-OPEN> 0 <F1>
<PROVISION-CURRENT> 0 <F1>
<PROVISION-PRIOR> 0 <F1>
<PAYMENTS-CURRENT> 0 <F1>
<PAYMENTS-PRIOR> 0 <F1>
<RESERVE-CLOSE> 0 <F1>
<CUMULATIVE-DEFICIENCY> 0 <F1>
<FN>
<F1> Available on an annual basis only.
</FN>
</TABLE>
