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: September 30, 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: 0-11774
-----------
INVESTORS TITLE COMPANY
------------------------
(Exact name of registrant as specified in its charter)
North Carolina 56-1110199
-------------- ----------
(State of Incorporation) (I.R.S. Employer)
121 North Columbia Street, Chapel Hill, North Carolina 27514
- -------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(919) 968-2200
--------------
(Registrant's Telephone Number Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 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 of each of the issuer's classes of common stock as of
September 30, 1999:
Common Stock, no par value 2,770,765
-------------------------- ---------
Class Shares Outstanding
1
<PAGE>
INVESTORS TITLE COMPANY AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of September 30, 1999 and December 31, 1998...3
Consolidated Statements of Income:
Three and Nine Months Ended September 30, 1999 and September 30, 1998....4
Consolidated Statements of Cash Flows:
Nine Months Ended September 30, 1999 and September 30, 1998.............5
Notes to Consolidated Financial Statements...................................6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations..............................................7
Item 3. Quantitative and Qualitative Disclosures About Market Risk .........11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K....................................12
SIGNATURES...................................................................13
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
- ------------------------------
Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of September 30, 1999 and December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
September 30, 1999 December 31, 1998
--------------------- -----------------------
<S> <C> <C>
Assets
Cash and Cash Equivalents $ 8,560,994 $ 8,141,354
Investments in securities:
Fixed maturities:
Held-to-maturity, at amortized cost 4,644,209 5,287,458
Available-for-sale, at fair value 26,000,644 23,235,754
Equity securities, at fair value 4,826,765 5,275,912
-------------------- -----------------------
Total investments 35,471,618 33,799,124
Premiums receivable
(less allowance for doubtful accounts: 1999 and 1998: $775,000) 3,930,653 5,357,000
Accrued interest and dividends 510,182 481,741
Prepaid expenses and other assets 621,370 410,778
Property acquired in settlement of claims 191,617 108,500
Property, net 5,241,291 3,299,315
Prepaid federal income taxes 221,547 -
Deferred income tax asset, net 807,520 -
------------------ ------------------------
Total Assets $ 55,556,792 $ 51,597,812
===================== ===========================
Liabilities and Stockholders' Equity
Liabilities:
Reserves for claims (Note 2) $ 15,562,665 $ 13,362,665
Accounts payable and accrued liabilities 1,874,237 1,258,802
Commissions and reinsurance payables 235,661 84,598
Premium taxes payable 72,660 277,887
Current income taxes payable - 207,350
Deferred income taxes, net - 77,845
------------------ ------------------------
Total liabilities 17,745,223 15,269,147
------------------ ------------------------
Stockholders' Equity:
Common stock-no par value (shares authorized 6,000,000;
2,855,744 and 2,855,744 shares issued; and 2,770,765 and
2,809,123 shares outstanding 1999 and 1998, respectively) 1 732,453
Retained earnings 36,488,253 33,050,508
Accumulated other comprehensive income (net unrealized gain
on investments) (net of deferred taxes: 1999: $682,280;
1998: $1,311,995) (Note 3) 1,323,315 2,545,704
------------------- ------------------------
Total stockholders' equity 37,811,569 36,328,665
------------------- ------------------------
Total Liabilities and Stockholders' Equity $ 55,556,792 $ 51,597,812
===================== ===========================
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
Investors Title Company and Subsidiaries
Consolidated Statements of Income
September 30, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
For The Three For The Nine
Months Ended Months Ended
September 30 September 30
------------------------------------ ------------------------------------
1999 1998 1999 1998
---------- ----------- ------------ --------------
<S> <C> <C> <C> <C>
Revenues:
Underwriting income:
Premiums written $ 11,363,766 $ 11,721,247 $ 34,599,158 $ 32,681,945
Less-premiums for reinsurance ceded 105,686 42,729 261,954 255,528
---------- ----------- ----------- -------------
Net premiums written 11,258,080 11,678,518 34,337,204 32,426,417
Investment income-interest and dividends 544,322 459,947 1,513,099 1,325,724
Net realized gain on sales of investments 138,037 134,938 418,395 256,988
Other 244,525 238,231 629,593 613,791
----------- ----------- ----------- ------------
Total 12,184,964 12,511,634 36,898,291 34,622,920
----------- ----------- ----------- ------------
Operating Expenses:
Commissions to agents 4,389,572 4,425,467 13,199,680 12,132,478
Provision for claims (Note 2) 1,586,490 2,123,924 4,880,219 5,816,214
Salaries 1,917,355 1,696,148 5,622,950 4,393,726
Employee benefits and payroll taxes 505,475 331,321 1,880,972 1,659,236
Office occupancy and operations 1,072,773 817,000 2,980,141 2,356,063
Business development 346,907 248,517 985,391 882,723
Taxes, other than payroll and income 86,845 123,422 234,786 227,555
Premium and retaliatory taxes 209,290 219,380 687,490 645,952
Professional fees 122,587 137,232 514,093 346,252
Other 49,604 146,113 152,858 390,154
----------- ----------- ----------- ------------
Total 10,286,898 10,268,524 31,138,580 28,850,353
----------- ----------- ----------- ------------
Income Before Income Taxes 1,898,066 2,243,110 5,759,711 5,772,567
Provision For Income Taxes 594,550 696,170 1,807,850 1,782,707
----------- ----------- ----------- ------------
Net Income $ 1,303,516 $ 1,546,940 $ 3,951,861 $ 3,989,860
=========== =========== =========== ============
Basic Earnings per Common Share (Note 4) $ 0.47 $ 0.55 $ 1.42 $ 1.42
=========== =========== =========== ============
Weighted Average Shares Outstanding-Basic
(Note 4) 2,771,607 2,805,409 2,786,488 2,805,791
=========== =========== =========== ============
Diluted Earnings per Common Share (Note 4) $ 0.47 $ 0.55 $ 1.41 $ 1.40
=========== =========== =========== ============
Weighted Average Shares Outstanding-Diluted
(Note 4) 2,777,351 2,837,389 2,796,847 2,844,266
=========== =========== =========== ============
Dividends Paid $ 85,672 $ 85,672 $ 257,017 $ 257,017
=========== =========== =========== ============
Dividends per Share $ 0.03 $ 0.03 $ 0.09 $ 0.09
=========== =========== =========== ============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
Investors Title Company and Subsidiaries
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Operating Activities:
Net income $ 3,951,861 $ 3,989,860
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 318,900 283,761
Net (accretion) discount amortization 45,161 (3,421)
Provision for losses on premiums receivable - 325,000
Net gain on disposals of property (524) (16,884)
Net realized gain on sales of investments (418,395) (256,988)
Benefit for deferred income taxes (255,650) (671,728)
Provision for claims 4,880,219 5,816,214
Payments of claims, net of recoveries (2,680,219) (2,060,689)
Changes in assets and liabilities:
Decrease (increase) in receivables and other assets (1,104,197) (1,595,639)
Increase in accounts payable and accrued liabilities 615,435 96,851
Increase in commissions and reinsurance payables 151,063 7,110
Increase (decrease) in premium taxes payable (205,227) 50,488
Increase (decrease) in current income taxes payable (428,897) 226,542
----------------- --------------
Net cash provided by operating activities 7,077,924 6,190,477
----------------- --------------
Investing Activities:
Purchases of available-for-sale securities (5,578,381) (3,869,637)
Purchases of held-to-maturity securities (100,986) (1,025,057)
Proceeds from sales of available-for-sale securities 1,850,917 1,921,332
Proceeds from sales of held-to-maturity securities 677,086 425,974
Purchases of property (2,270,227) (775,567)
Proceeds from sales of property 9,875 30,909
----------------- --------------
Net cash used in investing activities (5,411,716) (3,292,046)
----------------- --------------
Financing Activities:
Repurchases of common stock (net of distributions) (989,551) (178,266)
Dividends paid (257,017) (257,017)
----------------- --------------
Net cash used in investing activities (1,246,568) (435,283)
----------------- --------------
Net Increase in Cash and Cash Equivalents 419,640 2,463,148
Cash and Cash Equivalents, Beginning of Year 8,141,354 2,823,177
----------------- ---------------
Cash and Cash Equivalents, End of Period $ 8,560,994 $ 5,286,325
================= ===============
Supplemental Disclosures:
Cash Paid During the Year for:
Interest $ 3,238 $ 6,052
================= ===============
Income Taxes $ 2,482,297 $ 2,229,061
================= ===============
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
INVESTORS TITLE COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1999
(Unaudited)
Note 1 - Basis of Presentation
- ------------------------------
The consolidated financial statements include Investors Title Company and
its subsidiaries, and have been prepared in conformity with generally
accepted accounting principles.
In the opinion of management all necessary adjustments have been reflected
for a fair presentation of the financial position, results of operations
and cash flows in the accompanying unaudited consolidated financial
statements. All such adjustments are of a normal recurring nature.
Reference should be made to the "Notes to Consolidated Financial
Statements" of the Registrant's Annual Report to Shareholders for the year
ended December 31, 1998 for a description of accounting policies.
Note 2 - Reserves for Claims
- ----------------------------
Transactions in the reserves for claims for the nine months ended
September 30, 1999 were as follows:
Balance, beginning of year $ 13,362,665
Provision, charged to operations 4,880,219
Recoveries 211,874
Payments of claims (2,892,093)
------------------
Balance, September 30, 1999 $ 15,562,665
==================
In management's opinion, the reserves are adequate to cover claim losses
which might result from pending and possible claims.
Note 3 - Comprehensive Income
- -----------------------------
Total comprehensive income for the three months ended September 30, 1999
and 1998 was $757,070 and $1,299,446, respectively. Total comprehensive
income for the nine months ended September 30, 1999 and 1998 was
$2,729,472 and $3,888,487, respectively. Other comprehensive income is
comprised solely of unrealized gains or losses on the Company's
available-for-sale securities.
Note 4 - Earnings Per Common Share
- ----------------------------------
Employee stock options are considered outstanding for the diluted earnings
per common share calculation and are computed using the treasury stock
method. The total increase in the weighted average shares outstanding
related to these equivalent shares was 5,744 and 31,980 for the three
months ended September 30, 1999 and 1998, respectively and 10,359 and
38,475 for the nine months ended September 30, 1999 and 1998,
respectively. Options to purchase 59,806 and 48,350 shares of common stock
were outstanding for the three months ended September 30, 1999 and 1998,
respectively and 58,806 and 47,750 for the nine months ended September 30,
1999 and 1998, respectively but were not included in the computation of
6
<PAGE>
diluted EPS because the options' exercise prices were greater than the
average market price of the common shares.
Subsequent to September 30, 1999, the Company repurchased 10,000 common
shares at a price of $14.25 per share and 4,000 common shares at a price
of $14.75 per share under a stock repurchase program.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
---------------------------------------------------------------
The 1998 Form 10-K and the 1998 Annual Report should be read in
conjunction with the following discussion since they contain
important information for evaluating the Company's operating results
and financial condition.
Results of Operations:
---------------------
For the quarter ended September 30, 1999, net premiums written
decreased 4% to $11,258,080, investment income increased 18% to
$544,322, revenues decreased 3% to $12,184,964 and net income
decreased 16% to $1,303,516 all compared with the same quarter in
1998. Net income per basic and diluted common share both decreased
15% to $.47 as compared with the year ago period.
For the nine months ended September 30, 1999, net premiums written
increased 6% to $34,337,204, investment income increased 14% to
$1,513,099, revenues increased 7% to $36,898,291, net income
decreased 1% to $3,951,861 and net income per basic common share
remained at $1.42, while net income per diluted common share
increased 1% to $1.41, all compared with the same period in 1998.
The Company felt the effects of a slowdown in mortgage originations
which was exacerbated in some areas by Hurricane Floyd and the
lingering effects of extensive flooding. The Company has also seen a
reduction in refinancing due to the recent uptick in interest rates.
According to the Mortgage Bankers Association of America, the monthly
average 30-year fixed mortgage interest rates increased to 7.29% for
the nine months ended September 30, 1999 compared with 7% for the
nine months ended September 30, 1998. The volume of business
decreased in the third quarter of 1999 as the number of policies and
commitments issued declined to 63,481, a decrease of 10% compared
with 70,700 in the same period in 1998. Policies and commitments
issued for the nine months ended September 30, 1999 showed a slight
increase with a volume of 203,403 compared with 201,995 in 1998.
Branch net premiums written as a percentage of total net premiums
written were 45% and 48% for the three months ended September 30,
1999 and 1998, respectively, and 46% and 48% for the nine months
ended September 30, 1999 and 1998, respectively. Net premiums written
from branch operations decreased 9% and increased 32% for the three
months ended September 30, 1999 and 1998, respectively, as compared
with the same periods in the prior year. For the nine months ended
September 30, 1999 and 1998, net premiums written from branch
operations increased 1% and 39%, respectively, as compared with the
same prior year periods.
7
<PAGE>
Agency net premiums written as a percentage of total net premiums
written were 55% and 52% for the three months ended September 30,
1999 and 1998, respectively, and 54% and 52% for the nine months
ended September 30, 1999 and 1998, respectively. Due to the Company's
efforts to achieve geographic expansion through agents, agency net
premiums increased 1% and 57% for the three months ended
September 30, 1999 and 1998, respectively, as compared with the
same periods in the prior year. For the nine months
ended September 30, 1999 and 1998, net premiums written from agency
operations increased 10% and 69%, respectively, as compared with the
same prior year periods.
Shown below is a schedule of title premiums written for the nine
months ended September 30, 1999 and 1998 in all states where the
Company's two insurance subsidiaries, Investors Title Insurance
Company and Northeast Investors Title Insurance Company, currently
underwrite insurance:
1999 1998
Arkansas $ - $ 17,711
Florida - 67,022
Georgia 396,232 382,641
Indiana 298,717 109,128
Kentucky 4,321 177
Maryland 480,765 313,734
Michigan 5,239,894 6,474,095
Minnesota 1,431,136 731,368
Mississippi 15,605 28,172
Nebraska 853,037 631,351
New York 429,763 386,854
North Carolina 15,742,671 15,622,885
Pennsylvania 2,902 250
South Carolina 3,682,553 2,494,285
Tennessee 437,351 144,444
Virginia 4,891,812 5,180,644
West Virginia 648,591 35,453
Wisconsin 5,802 -
---------------------- -------------------
Direct Premiums 34,561,152 32,620,214
Reinsurance, net (223,948) (193,797)
---------------------- -------------------
Net Premiums $ 34,337,204 $ 32,426,417
====================== ===================
Total operating expenses increased less than 1% and 8% for the three
and nine-month periods ended September 30, 1999, respectively,
compared with the same periods in 1998. Salaries and employee
benefits, office occupancy and operations, and business development
increased due to investments in technology and costs associated with
entering and supporting new marketing areas.
8
<PAGE>
The provision for claims as a percentage of net premiums written was
14% for the three and nine months ended September 30, 1999, versus
18% for the same periods in 1998. The decrease in the percentage of
the provision for claims to net premiums written is the result of
management's current assessment of the Company's claims experience.
Liquidity and Capital Resources:
-------------------------------
Net cash provided by operating activities for the nine months ended
September 30, 1999, amounted to $7,077,924 compared with $6,190,477
for the same nine-month period during 1998. This increase is
primarily the result of decreases in accounts receivable and
the benefit for deferred income taxes and an increase in accounts
payable, partially offset by decreases in the provision for losses
on premiums receivable, current taxes payable and the provision for
claims, net of payments.
On December 9, 1996, the Board of Directors approved the repurchase
by the Company of shares of the Company's common stock from time to
time at prevailing market prices. The purpose of the repurchases is
to avoid dilution to existing shareholders as a result of issuances
of stock in connection with stock options and stock bonuses. Pursuant
to this approval, the Company has repurchased 106,134 shares at an
average price of $20.63 per share as of September 30, 1999, including
7,110 shares purchased at an average purchase price of $18.63 during
the quarter ended September 30, 1999 and 61,990 purchased at an
average price of $20.84 for the nine months ended September 30, 1999.
The Board has authorized management to repurchase up to an additional
43,866 shares.
On May 11, 1999, the Board of Directors also approved the repurchase
of an additional 200,000 shares of the Company's common stock.
During the nine months ended September 30, 1999, the Company
repurchased common stock valued at $1,291,689 and redistributed
previously acquired common stock valued at $302,138 in satisfaction
of stock option exercises and stock bonuses under the Company's Long
Term Incentive Plans. Although there was a net increase in retained
earnings for the nine months ended September 30, 1999, these
repurchases and distributions negatively affected retained earnings
and common stock by $257,099 and $732,452, respectively.
Management believes that funds generated from operations (primarily
underwriting and investment income) will enable the Company to
adequately meet its operating needs during the next twelve months. In
addition to operational liquidity, the Company maintains a high
degree of liquidity within the investment portfolio in the form of
short-term investments and other readily marketable securities.
9
<PAGE>
Other Matters
-------------
Year 2000 Issues
----------------
The Company's Year 2000 Project Committee (the "Committee") is
comprised of department heads and high-level managers representing
each of the Company's departments. Under the leadership of the Vice
President of Information Systems, the Committee has continued its
efforts to ensure that all aspects of the Company's business and
operations are adequately addressed in the Company's Year 2000
readiness efforts.
The Committee adopted a three-phase approach with estimated
completion dates as follows: awareness (fourth quarter 1998),
assessment (first quarter 1999) and implementation (third and fourth
quarters 1999). In the awareness phase, the Committee and the Company
as a whole became educated about the nature of the Year 2000 problem,
particularly as applied to the Company's business circumstances.
During the assessment phase, the Committee identified potential
points of failure and evaluated Year 2000 compliance status of such
functions. The implementation phase has focused on modifying
non-compliant systems that serve critical business needs. Less
critical systems will be addressed once the primary systems have been
remediated.
The Company has inventoried all hardware and software for
date-sensitive function. As part of a regular technology refresh
cycle, the Company has replaced 90% of existing PC workstations and
servers and will replace the remaining PC workstations and servers
before November 30, 1999. Desktop operating systems, network
operating systems and commercial off-the-shelf application suites are
also being standardized and upgraded to Year 2000 compliant versions.
This replacement strategy will have the added benefit of obtaining
vendor representations that all hardware and operating system
software being purchased are Year 2000 compliant. The Company
previously budgeted for these technology upgrades; therefore,
additional costs specifically allocated to Year 2000 compliance
efforts are expected to be minimal. The Company currently estimates
that costs directly attributable solely to its Year 2000 compliance
program will be less than $175,000. The Company has lowered its
original cost estimate as stated in the third quarter 1998 as a
result of its evaluation of the assessment phase. The Company
has incurred $20,000 in costs directly related to its Year 2000
compliance program as of September 30, 1999.
10
<PAGE>
The Company is in contact with its third-party business partners and
vendors to insure they are addressing, or have addressed, any Year
2000 problems that might affect the Company's systems or business
processes. The Company continues assessing all third party vendors,
to mitigate risks with respect to the failure of any mission critical
third-party business partners and vendors to be Year 2000 ready.
The Company's preparation of contingency plans for Year 2000-related
occurrences is ongoing and will continue throughout 1999. The
elements of the contingency plan are focused to ensure that each
operational aspect of the Company is addressed.
The Company's current assessment of the most likely Year 2000-related
worst case scenario is that it may experience a decline in its volume
of business or a delay in its ability to write title insurance as a
result of failures in various functions and services in the real
estate transaction business.
Although the Company believes it will have completed all the
remaining phases of its Year 2000 initiative in sufficient time to
identify and remedy any non-compliant programs and systems and avoid
any material adverse impact on its business, failure of third-party
business partners and governmental services to be Year 2000
compliant, as well as a possible downturn in the economy due to Year
2000-related failures, could have a material adverse effect on the
Company's operations.
Safe Harbor Statement
Except for the historical information presented, the matters
disclosed in the foregoing discussion and analysis and other parts of
this report include forward-looking statements. These statements
represent the Company's current judgment on the future and are
subject to risks and uncertainties that could cause actual results to
differ materially. Such factors include, without limitation: (i) that
the demand for title insurance will vary with factors beyond the
control of the Company such as changes in mortgage interest rates,
availability of mortgage funds, level of real estate activity, cost
of real estate, consumer confidence, supply and demand for real
estate, inflation and general economic conditions; (ii) that losses
from claims may be greater than anticipated such that reserves for
possible claims are inadequate; (iii) that unanticipated adverse
changes in securities markets could result in material losses on
investments made by the Company; and (iv) the dependence of the
Company on key management personnel the loss of whom could have a
material adverse affect on the Company's business. The Company's
discussion of Year 2000 issues under the heading "Other Matters"
contains forward-looking statements that are subject to risks and
uncertainties that could cause the actual results to differ from
those projected. These include the risks associated with unforeseen
technological issues associated with the Company's own Year 2000
compliance efforts and the compliance efforts of third parties on
whose systems the Company relies. Other risks and uncertainties may
be described from time to time in the Company's other reports and
filings with the Securities and Exchange Commission.
Item. 3. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
The Company's market risk exposure has not changed materially from
the exposure as disclosed in the Company's 1998 Annual Report on Form
10-K.
11
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
--------
(27) Financial Data Schedule included herewith.
(b) Reports on Form 8-K
-------------------
There were no reports filed on Form 8-K for this quarter.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this Report to be signed in its behalf by the
undersigned hereunto duly authorized.
INVESTORS TITLE COMPANY
(Registrant)
By: /s/ James A. Fine, Jr.
----------------------
James A. Fine, Jr.
President
By: /s/ Elizabeth P. Bryan
-----------------------
Elizabeth P. Bryan
Vice President
(Principal Accounting Officer)
Dated: November 12, 1999
13
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
*Not disclosed on a quarterly basis.
</LEGEND>
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999 DEC-31-1999
<PERIOD-END> MAR-31-1999 JUN-30-1999 SEP-30-1999
<DEBT-HELD-FOR-SALE> 22,998,439 24,345,874 26,000,644
<DEBT-CARRYING-VALUE> 4,895,576 4,792,704 4,545,227
<DEBT-MARKET-VALUE> 0* 0* 0*
<EQUITIES> 4,749,709 5,194,177 4,826,765
<MORTGAGE> 0 0 0
<REAL-ESTATE> 0 0 0
<TOTAL-INVEST> 32,722,706 34,411,737 35,471,618
<CASH> 10,250,583 8,851,471 8,560,994
<RECOVER-REINSURE> 0 0 0
<DEFERRED-ACQUISITION> 0 0 0
<TOTAL-ASSETS> 52,792,928 53,846,585 55,556,792
<POLICY-LOSSES> 14,187,665 15,152,665 15,562,665
<UNEARNED-PREMIUMS> 0 0 0
<POLICY-OTHER> 153,767 179,501 235,661
<POLICY-HOLDER-FUNDS> 0 0 0
<NOTES-PAYABLE> 0 0 0
0 0 0
0 0 0
<COMMON> 356,281 1 1
<OTHER-SE> 36,519,111 37,254,981 37,811,568
<TOTAL-LIABILITY-AND-EQUITY> 52,792,928 53,846,585 55,556,792
10,694,237 23,079,124 34,337,204
<INVESTMENT-INCOME> 470,127 968,777 1,513,099
<INVESTMENT-GAINS> 191,405 280,358 418,395
<OTHER-INCOME> 160,547 385,068 629,593
<BENEFITS> 1,580,868 3,293,729 4,880,219
<UNDERWRITING-AMORTIZATION> 0 0 0
<UNDERWRITING-OTHER> 8,215,628 17,557,953 26,258,361
<INCOME-PRETAX> 1,719,820 3,861,645 5,759,711
<INCOME-TAX> 543,502 1,213,300 1,807,850
<INCOME-CONTINUING> 1,176,318 2,648,345 3,951,861
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 1,176,318 2,648,345 3,951,861
<EPS-BASIC> .42 .95 1.42
<EPS-DILUTED> .42 .94 1.41
<RESERVE-OPEN> 0 0 0
<PROVISION-CURRENT> 0 0 0
<PROVISION-PRIOR> 0 0 0
<PAYMENTS-CURRENT> 0 0 0
<PAYMENTS-PRIOR> 0 0 0
<RESERVE-CLOSE> 0 0 0
<CUMULATIVE-DEFICIENCY> 0 0 0
</TABLE>
