SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended January 31, 1997 Commission File No. 1-8100
EATON VANCE CORP.
(Exact name of registrant as specified in its charter)
MARYLAND 04-2718215
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
(Address of principal executive offices) (Zip Code)
(617) 482-8260
(Registrant's telephone number, including area code)
NONE
(Former name, address and former fiscal year,
if changed since last record)
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 [ ]
Shares outstanding as of January 31, 1997:
Voting Common Stock - 19,360 shares
Non-Voting Common Stock - 9,415,146 shares
Page 1 of 19 pages
PART I
FINANCIAL INFORMATION
-2-
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
Consolidated Balance Sheets (unaudited)
January 31, October 31,
1997 1996
ASSETS: (in thousands)
CURRENT ASSETS:
<S> <C> <C>
Cash and equivalents $ 40,593 $ 55,583
Short-term investments 76,464 60,792
Investment adviser fees and other
receivables 9,658 7,650
Asset held for sale 2,500 2,500
Other current assets 3,348 3,547
Total current assets 132,563 130,072
OTHER ASSETS:
Investments:
Real estate 18,465 18,541
Investments in affiliates 9,668 9,565
Investment companies 9,974 8,965
Other investments 5,139 5,763
Notes receivable and receivables
from affiliates 1,190 1,241
Deferred sales commissions 174,290 180,283
Equipment and leasehold improvements,
net of accumulated depreciation and
amortization of $4,915 and $4,713,
respectively 2,851 2,828
Goodwill, net of accumulated
amortization of $3,083 and $2,924,
respectively 2,845 3,004
Total other assets 224,422 230,190
Total assets $ 356,985 $ 360,262
See notes to consolidated financial statements
</TABLE>
-3-
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
Consolidated Balance Sheets (unaudited) (continued)
January 31, October 31,
1997 1996
LIABILITIES AND SHAREHOLDERS' EQUITY (in thousands, except
share figures)
CURRENT LIABILITIES:
<S> <C> <C>
Accrued compensation $ 3,709 $ 10,981
Accounts payable and accrued
expenses 8,209 7,839
Dividend payable 1,890 1,881
Current portion of mortgage notes 1,536 1,545
payable
Other current liabilities 1,497 1,835
Total current liabilities 16,841 24,081
OTHER LIABILITIES:
6.22% Senior Note 50,000 50,000
Mortgage notes payable 4,499 4,549
Total other liabilities 54,499 54,549
Deferred income taxes 68,581 70,852
Commitments and contingencies - -
SHAREHOLDERS' EQUITY:
Common stock, par value $.0625 per
share - Authorized, 80,000 shares,
Issued, 19,360 shares 1 1
Non-voting common stock, par value
$.0625 per share - Authorized,
11,920,000 shares, Issued,
9,415,146 and 9,364,788 shares,
respectively 588 585
Additional paid-in capital 35,362 36,788
Notes receivable from stock option
exercises (3,365) (3,221)
Unrealized gain on investments 3,312 3,598
Retained earnings 181,166 173,029
Total shareholders' equity 217,064 210,780
Total liabilities and
shareholders' equity $ 356,985 $ 360,262
See notes to consolidated financial statements
</TABLE>
-4-
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
Consolidated Statements of Income (unaudited)
Three Months Ended
January 31,
1997 1996
REVENUE: (in thousands, except per
share figures)
<S> <C> <C>
Investment adviser and
administration fees $ 27,472 $ 23,701
Distribution income 18,503 19,430
Income from real estate activities 763 901
Other income 854 466
Total revenue 47,592 44,498
EXPENSES:
Compensation of officers and
employees 11,488 10,472
Amortization of deferred sales
commissions 13,320 12,637
Other expenses 7,345 7,761
Total expenses 32,153 30,870
OPERATING INCOME 15,439 13,628
OTHER INCOME (EXPENSE):
Interest income 840 971
Interest expense (902) (941)
Gain on sale of investments 1,302 575
Equity in net income of affiliates 103 1,667
INCOME BEFORE INCOME TAXES 16,782 15,900
INCOME TAXES 6,755 6,102
NET INCOME $ 10,027 $ 9,798
Earnings per share $ 1.03 $ 1.04
Dividends declared, per share $ 0.20 $ 0.17
Average common shares outstanding 9,747 9,417
See notes to consolidated financial statements
</TABLE>
-5-
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
Consolidated Statements of Cash Flows (unaudited)
Three Months Ended
January 31,
1997 1996
(in thousands)
<S> <C> <C>
Cash and equivalents, beginning of $ 55,583 $ 67,650
period
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 10,027 9,798
Adjustments to reconcile net income
to net cash provided by operating
activities:
Equity in net income of affiliates (103) (1,667)
Deferred income taxes (2,025) (67)
Amortization of deferred sales 13,320 12,637
commissions
Depreciation and other
amortization 618 586
Payment of sales commissions (15,222) (14,545)
Capitalized sales charges received 7,850 8,589
Gain on sale of investments (1,302) (575)
Change in accrued compensation (7,272) (6,114)
Changes in other assets and
liabilities (1,694) (1,570)
Net cash provided by operating
activities 4,197 7,072
CASH FLOWS FROM INVESTING
ACTIVITIES:
Additions to real estate, equipment
and leasehold improvements (529) (375)
Net increase in notes and
receivable from affiliates (93) (350)
Net increase in investment
companies and other investments (202) (658)
Proceeds from sale of investments 61,240 11,796
Purchase of short-term investment (76,240) (11,575)
Net cash used for investing
activities (15,824) (1,162)
See notes to consolidated financial statements
</TABLE>
-6-
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
Consolidated Statements of Cash Flows (unaudited) (continued)
Three Months Ended
January 31,
1997 1996
(in thousands)
CASH FLOWS FROM FINANCING
ACTIVITIES:
<S> <C> <C>
Payments on notes payable (59) (57)
Proceeds from the issuance of non-
voting common stock 2,314 1,544
Dividends paid (1,881) (1,590)
Repurchase of non-voting common
stock (3,737) (1,360)
Net cash used for financing
activities (3,363) (1,463)
Net (decrease) increase in cash and
equivalents (14,990) 4,447
Cash and equivalents, end of period $ 40,593 $ 72,097
SUPPLEMENTAL INFORMATION:
Interest paid $ 121 $ 162
Income taxes paid $ 9,153 $ 9,302
See notes to consolidated financial statements
</TABLE>
-7-
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(1) Basis of Presentation
In the opinion of management, the accompanying unaudited interim
consolidated financial statements of Eaton Vance Corp. (the
"Company") include all adjustments, consisting of normal
recurring adjustments, necessary to present fairly the results
for the interim periods in accordance with generally accepted
accounting principles. Such financial statements have been
prepared in accordance with the instructions to Form 10-Q
pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote
disclosures have been omitted pursuant to such rules and
regulations. As a result, these financial statements should be
read in conjunction with the audited consolidated financial
statements and related notes included in the Company's latest
annual report on Form 10-K.
(2) Investments in Affiliates
The Company has a 23 percent investment in Lloyd George
Management (BVI) Limited (LGM), an independent investment
management company based in Hong Kong that manages a series of
emerging market mutual funds sponsored by the Company. The
Company's investment in LGM was $8.4 million at January 31, 1997
and October 31, 1996. At January 31, 1997, the Company's
investment exceeded its share of the underlying net assets of LGM
by $6.5 million. This excess is being amortized over a twenty-
year period.
The Company also maintains an 82 percent general partnership
interest in Fulcrum Management Partners II, L.P. (FMPII), a
Delaware limited partnership of which a principal officer of the
Company is the other general partner. FMPII is a 20 percent
general partner of VenturesTrident II, L.P. (VTII), a Delaware
limited partnership formed to invest in equity securities of
public and private gold mining ventures. In addition to its
general partnership interest in FMPII, the Company maintains a 3
percent limited partnership interest in VTII. The Company's
investment in VTII was $1.3 million and $1.2 million at January
31, 1997 and October 31, 1996, respectively. VTII will complete
its tenth and final year in 1997 and is scheduled for termination
effective December 31, 1997.
In the first quarter of fiscal 1996, the Company received gold
mining securities with a value of approximately $0.3 million
resulting from the termination of a second gold mining
partnership (VenturesTrident, L.P.) and the subsequent
distribution of that partnership's assets. The Company also
received gold mining securities with a value of approximately
$1.8 million in settlement of notes receivable for management
services provided to the partnership.
-8-
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(3) Stock Option Plans
Outstanding options to subscribe to shares of non-voting common
stock issued under the Company's stock option plans are
summarized as follows:
<TABLE>
Shares Under Option Price
Option Range
<S> <C> <C>
Balance, October 31, 1995 669,721 $ 8.75 - 34.00
Adjustment for distribution
of IB&T 139,408
Adjusted balance 809,129 7.24 - 28.14
Exercised (166,360) 7.24 - 28.14
Granted 141,270 28.25 - 31.08
Cancelled/Expired (67,392) 22.55 - 28.25
Balance, October 31, 1996 716,647 13.04 - 31.08
Exercised (118,067) 13.04 - 28.25
Granted 243,198 41.75 - 45.93
Cancelled/Expired (30,094) 22.55 - 28.25
Balance, January 31, 1997 811,684 $22.55 - 45.93
</TABLE>
At January 31, 1997, options to purchase 470,938 shares were
exercisable. Options to purchase 340,746 additional shares will
become exercisable over the next four years.
(4) Common Stock Repurchases
In the first quarter of fiscal 1997 the Company purchased 84,000
shares of its non-voting common stock under its current share
repurchase authorization. The total cost of this repurchase was
$3.7 million.
(5) Regulatory Requirements
A subsidiary of the Company is subject to the Securities and
Exchange Commission uniform net capital rule (Rule 15c3-1) which
requires the maintenance of minimum net capital. For purposes of
this rule the subsidiary had net capital of $22.7 million at
January 31, 1997, which exceeded the net capital requirement of
$0.3 million as of that date. The ratio of aggregate
indebtedness to net capital at January 31, 1997 was 0.20 to 1.
-9-
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)
(6) Real Estate Investments
Real estate investments held at January 31, 1997 and October 31,
1996 follow:
<TABLE>
January 31, October 31,
1997 1996
(in thousands)
<S> <C> <C>
Buildings $ 24,937 $ 24,632
Land 1,721 1,721
Total 26,658 26,353
Less: Accumulated depreciation 7,733 7,534
Net book value 18,925 18,819
Share of accumulated losses in
excess of partnership interest (460) (278)
Total $ 18,465 $ 18,541
</TABLE>
(7) Unrealized Securities Holding Gains and Losses
The Company has classified as available-for-sale securities
having an aggregate fair value of approximately $90.4 million and
$74.4 million at January 31, 1997 and October 31, 1996,
respectively. These securities are classified as "Short-term
investments," "Investments in investment companies," and "Other
investments" on the Company's consolidated balance sheets. Gross
unrealized gains of approximately $5.6 million at January 31,
1997 and October 31, 1996 and gross unrealized losses of
approximately $532,000 and $44,000 at January 31, 1997 and
October 31, 1996, respectively, have been excluded from earnings
and reported as a separate component of shareholders' equity, net
of deferred taxes.
(8) Earnings Per Common and Common Equivalent Share
Earnings per share for the three months ended January 31, 1997
are based upon the weighted average number of common, non-voting
common and non-voting common equivalent shares outstanding of
9,747,000. Earnings per share assuming full dilution have not
been presented because the dilutive effect is immaterial.
Earnings per share for the three months ended January 31, 1996
are based upon the weighted average number of common and non-
voting common shares outstanding of 9,417,000. Earnings per
share assuming primary and full dilution have not been presented
because the dilutive effect is immaterial.
-10-
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(continued)
(9) Stock-Based Compensation
Effective November 1, 1996, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation." SFAS No. 123 encourages, but does not
require, the recognition of compensation expense for the fair
value of stock options and other equity instruments issued to
employees. The Company does not intend to adopt the fair-value
provisions of SFAS No. 123. The Company will provide footnote
disclosure in its 1997 annual report presenting pro forma net
income and earnings per share amounts as if the fair value of
employee stock options, determined on the date of grant, had been
included in compensation expense.
(10) Subsequent Event
On March 7, 1997, a subsidiary of the Company acquired the
remaining 50 percent interest in a partnership which owns an
office building in Boston, Massachusetts in exchange for $0.6
million in cash and the assumption of $3 million in partnership
liabilities. Prior to the purchase, the subsidiary owned a 2
percent general and 48 percent limited partnership interest in
the partnership. The acquisition will be accounted for using the
purchase method of accounting.
-11-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS
The Company's primary sources of revenue are investment adviser
fees and distribution fees received from the Eaton Vance funds
and adviser fees received from separately managed accounts.
These fees are generally based on the net asset value of the
investment portfolios managed by the Company and fluctuate with
changes in the total value of the assets under management. The
Company's major expenses, other than the amortization of deferred
sales commissions, include employee compensation, occupancy
costs, service fees and other marketing costs.
Results of Operations
Quarter Ended January 31, 1997 Compared to Quarter Ended January
31, 1996
Assets under management of $18.0 billion on January 31, 1997 were
4 percent higher than the $17.3 billion on October 31, 1996 and 8
percent higher than the $16.7 billion reported a year earlier.
Mutual fund sales for the quarter ended January 31, 1997 of $0.8
billion were 14 percent higher than the $0.7 billion reported in
the first quarter of fiscal 1996. Fund redemptions in the first
quarter of 1997 were $0.7 billion compared to $0.5 billion in the
first quarter of 1996.
Investment adviser and administration fees increased by 16
percent to $27.5 million in the first quarter of fiscal 1997 from
$23.7 million in the first quarter of fiscal 1996. The increase
can be attributed to the increase in total assets under
management as well as to the continued growth in the Company's
Senior Debt Portfolio and equity portfolios which have higher
management and administration fee rates than the Company's other
portfolios.
Distribution income decreased by $0.9 million or 5 percent to
$18.5 million in the first quarter of 1997 from $19.4 million a
year earlier. The decrease in distribution fees can be
attributed to a decrease in average assets under management in
the Company's spread-commission funds.
Total operating expenses of $32.2 million in the first quarter of
1997 were 4 percent greater than the $30.9 million recorded in
the first quarter of 1996. Compensation expense increased by
$1.0 million to $11.5 million in the first quarter of 1997,
primarily as a result of an increase in sales incentives
associated with the increase in mutual fund sales. Amortization
expense increased by $0.7 million, or 6 percent, to $13.3 million
primarily as a result of the increase in gross sales of Eaton
Vance Prime Rate Reserves, a spread-commission fund which invests
in the Company's Senior Debt Portfolio.
The Company's gold mining partnership, VenturesTrident II, L.P.,
contributed income of $61,000 in the first quarter of 1997
compared to $1.6 million in the first quarter of 1996. The
income in both quarters resulted primarily from increases in
portfolio valuations of the partnership. The partnership is
scheduled for termination effective December 31, 1997.
In fiscal 1997, the Company will be required to adopt Statement
of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation." In accordance with the statement, the
Company will provide new footnote disclosures in its 1997 annual
report presenting pro forma net income and earnings per share
amounts as if stock options had been expensed based on their
estimated fair value on the grant date, determined by using
certain option pricing models.
-12-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Liquidity and Capital Resources
Cash and equivalents and short-term investments aggregated $117.1
million at January 31, 1997, an increase of $0.7 million from
October 31, 1996.
Operating activities generated cash of $4.2 million in the first
quarter of 1997 compared to $7.1 million in the first quarter of
1996. The decrease in cash provided by operating activities can
primarily be attributed to an increase in commissions paid to
brokers in connection with the sale of the Company's spread-
commission funds and a decrease in the collection of capitalized
sales charges received on early redemptions. In the first
quarter of 1997, the Company paid $15.2 million in sales
commissions associated with the sale of spread-commission mutual
funds, compared to $14.5 million in the same quarter a year ago.
Capitalized sales charges collected decreased to $7.9 million in
the first quarter of 1997 from $8.6 million a year ago.
Investing activities for the Company reduced cash and equivalents
by $15.8 million in the first quarter of 1997 compared to $1.2
million in the first quarter of 1996. The primary use of cash in
the first quarter of 1997 was the purchase of $76.2 million in
short-term investments following the sale of certain short-term
marketable securities.
Significant financing activities during the first quarter of 1997
included the repurchase of 84,000 shares of the Company's non-
voting common stock under its stock repurchase authorization.
At January 31, 1997, the Company had no borrowings under its
$50.0 million senior unsecured revolving credit facility.
The Company anticipates that cash flows from operations and
available debt will be sufficient to meet the Company's
foreseeable cash requirements and provide the Company with the
financial resources to take advantage of strategic growth
opportunities.
Certain Factors That May Affect Future Results
From time to time, information provided by the Company or
information included in its filings with the Securities and
Exchange Commission may contain statements which are not
historical facts, for this purpose referred to as "forward-
looking statements." The Company's actual future results may
differ significantly from those stated in any forward-looking
statements (including this Quarterly Report on Form 10-Q).
Important factors that could cause actual results to differ
materially from those indicated by such forward-looking
statements include, but are not limited to, the factors discussed
below.
The Company is subject to substantial competition in all aspects
of its business. The Company's ability to market investment
products is highly dependent on access to the retail distribution
systems of national and regional securities dealer firms, which
generally offer competing internally and externally managed
investment products. Although the Company has historically been
successful in gaining access to these channels, there can be no
assurance that it will continue to do so. The inability to have
such access could have a material adverse effect on the Company's
business.
-13-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
There are few barriers to entry by new investment management
firms. The Company's funds compete against an ever increasing
number of investment products sold to the public by investment
dealers, banks, insurance companies and others that sell tax-free
investments, taxable income funds, equity funds and other
investment products. Many institutions competing with the
Company have greater resources than the Company. The Company
competes with other providers of investment products on the basis
of the range of products offered, the investment performance of
such products, quality of service, fees charged, the level and
type of sales representative compensation, the manner in which
such products are marketed and distributed and the services
provided to investors.
The Company derives almost all of its revenues from investment
adviser and administration fees and distribution income received
from the Eaton Vance funds and separately managed accounts. As a
result, the Company is dependent upon the contractual
relationships it maintains with these funds and separately
managed accounts. In the event that any of the management
contracts, administration contracts, underwriting contracts or
service agreements are not renewed pursuant to the terms of these
contracts or agreements, the Company's financial results may be
adversely affected.
The major sources of revenue for the Company - i.e., investment
adviser fees, administration fees and distribution fees - are
calculated as percentages of assets under management. A decline
in securities prices in general would reduce fee income. If, as
a result of inflation, expenses rise and assets under management
decline, lower fee income and higher expenses will reduce or
eliminate profits. If expenses rise and assets rise, bringing
increased fees to offset the increased expenses, profits may not
be affected by inflation. There is no predictable relationship
between changes in financial assets under management and the rate
of inflation. If inflation leads to increases in the price of
gold or in the price of real estate, the value of the Company's
investments in gold mining securities or real estate may be
increased.
-14-
PART II
OTHER INFORMATION
-15-
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A special meeting in lieu of the annual meeting of Eaton Vance
Corp. was held at the principal office of the corporation on
January 8, 1997. All of the outstanding Voting Common Stock,
namely 19,360 shares, was represented in person or by proxy at
the meeting.
The following matters received the affirmative vote of all of the
outstanding Voting Common Stock. No shares abstained or were
withheld or were voted against any such matter.
1)The Annual Report to Stockholders of the corporation for the
fiscal year ended October 31, 1996 was received and approved.
2)The following individuals were elected as directors for the
ensuing corporate year to hold office until the next annual
meeting and until their successors are elected and qualify:
John G. L. Cabot
Landon T. Clay
M. Dozier Gardner
James B. Hawkes
Benjamin A. Rowland, Jr.
Ralph Z. Sorenson
3)The firm of Deloitte & Touche LLP was selected as the auditors
to audit the books of the corporation for its fiscal year
ended October 31, 1997.
4)The acts of the Directors since the previous special meeting
in lieu of the annual meeting of stockholders held on April
10, 1996 were ratified.
-16-
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Each Exhibit is listed in this index according to the number
assigned to it in the exhibit table set forth in Item 601 of
Regulation S-K. The following Exhibits are filed as a part
of this Report or incorporated herein by reference pursuant
to Rule 12b-32 under the Securities Exchange Act of 1934:
Exhibit No. Description
11.1 Statement of Computation of average number of
Shares outstanding (filed herewith).
27.1 Financial Data Schedule as of October 31, 1996
(filed herewith - electronic filing only).
(b) Reports on Form 8-K
None.
-17-
SIGNATURES
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.
EATON VANCE CORP.
(Registrant)
DATE: March 13, 1997 /s/William M. Steul
(Signature)
William M. Steul
Chief Financial Officer
DATE: March 13, 1997 /s/John P. Rynne
(Signature)
John P. Rynne
Corporate Controller
-18-
EXHIBIT 11.1
Computation of average number of shares outstanding in accordance
with Securities and Exchange Commission Act of 1934, Release No.
9083
<TABLE>
January 31,
1997 1996
Primary:
<S> <C> <C>
Weighted average number of voting and
non-voting common shares outstanding 9,432,180 9,416,660
Assumed exercise of certain non-voting
stock options based on average market
value and shares reserved for issuance
under employee stock purchase plan 315,002 214,549
Weighted average number of shares used
in primary per share computations 9,747,182 9,631,209
Fully diluted:
Weighted average number of voting and
non-voting common shares outstanding 9,432,180 9,416,660
Assumed exercise of certain non-voting
stock options based on higher of
average or closing market value and
shares reserved for issuance under
employee stock purchase plan 323,290 261,717
Weighted average number of shares used
in fully diluted per share computations 9,755,470 9,678,377
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> JAN-31-1997
<CASH> 40593
<SECURITIES> 76464
<RECEIVABLES> 9658
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 132563
<PP&E> 2851
<DEPRECIATION> 0
<TOTAL-ASSETS> 356985
<CURRENT-LIABILITIES> 16841
<BONDS> 0
<COMMON> 589
0
0
<OTHER-SE> 216475
<TOTAL-LIABILITY-AND-EQUITY> 356985
<SALES> 0
<TOTAL-REVENUES> 47592
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 32153
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 902
<INCOME-PRETAX> 16782
<INCOME-TAX> 6755
<INCOME-CONTINUING> 10027
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10027
<EPS-PRIMARY> 1.03
<EPS-DILUTED> 1.03
</TABLE>
