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: June 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
July 19, 1999:
Common Stock, no par value 2,776,575
-------------------------- ---------
Class Shares Outstanding
1
<PAGE>
INVESTORS TITLE COMPANY AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of June 30, 1999 and December 31, 1998......3
Consolidated Statements of Income:
Three and Six Months Ended June 30, 1999 and June 30, 1998.........4
Consolidated Statements of Cash Flows:
Six Months Ended June 30, 1999 and June 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 4. Submission of Matters to a Vote of Security Holders...............12
Item 6. Exhibits and Reports on Form 8-K................................. 12
SIGNATURES.................................................................13
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
- ------------------------------
Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of June 30, 1999 and December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
June 30, 1999 December 31, 1998
------------------ --------------------
<S> <C> <C>
Assets
Cash and Cash Equivalents $ 8,851,471 $ 8,141,354
Investments in securities:
Fixed maturities:
Held-to-maturity, at amortized cost 4,871,686 5,287,458
Available-for-sale, at fair value 24,345,874 23,235,754
Equity securities, at fair value 5,194,177 5,275,912
------------------ --------------------
Total investments 34,411,737 33,799,124
Premiums (less allowance for doubtful accounts: 1999 and 1998: $775,000) 4,542,346 5,357,000
Accrued interest and dividends 482,838 481,741
Prepaid expenses and other assets 642,811 410,778
Property acquired in settlement of claims 191,617 108,500
Property, net 4,175,397 3,299,315
Deferred income tax asset, net 548,368 -
------------------ --------------------
Total Assets $ 53,846,585 $ 51,597,812
================== ====================
Liabilities and Stockholders' Equity
Liabilities:
Reserves for claims (Note 2) $ 15,152,665 $ 13,362,665
Accounts payable and accrued liabilities 1,209,714 1,258,802
Commissions and reinsurance payables 179,501 84,598
Premium taxes payable - 277,887
Current income taxes payable 49,723 207,350
Deferred income taxes, net - 77,845
------------------ --------------------
Total liabilities 16,591,603 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 2,776,301 and
2,809,123 shares outstanding 1999 and 1998, respectively) 1 732,453
Retained earnings 35,385,220 33,050,508
Accumulated other comprehensive income (net unrealized gain on investments)
(net of deferred taxes: 1999: $963,782; 1998: $1,311,995) (Note 3) 1,869,761 2,545,704
------------------ --------------------
Total stockholders' equity 37,254,982 36,328,665
------------------ --------------------
Total Liabilities and Stockholders' Equity $ 53,846,585 $ 51,597,812
================== ====================
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
Investors Title Company and Subsidiaries
Consolidated Statements of Income
June 30, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
For The Three For The Six
Months Ended Months Ended
June 30 June 30
------------------------------- --------------------------------
------------- ------------ ------------- -------------
1999 1998 1999 1998
------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Underwriting income:
Premiums written $ 12,463,764 $ 11,443,747 $ 23,235,392 $ 20,960,698
Less-premiums for reinsurance ceded 78,877 137,696 156,268 212,799
------------- ------------ ------------- -------------
Net premiums written 12,384,887 11,306,051 23,079,124 20,747,899
Investment income-interest and dividends 498,650 445,491 968,777 865,777
Net realized gain on sales of investments 88,953 51,875 280,358 122,050
Other 224,521 225,549 385,068 375,560
------------- ------------ ------------- -------------
Total 13,197,011 12,028,966 24,713,327 22,111,286
------------- ------------ ------------- -------------
Operating Expenses:
Commissions to agents 4,818,820 4,175,171 8,810,108 7,707,011
Provision for claims (Note 2) 1,712,861 2,127,920 3,293,729 3,692,290
Salaries 1,912,818 1,471,519 3,705,595 2,697,578
Employee benefits and payroll taxes 625,522 516,881 1,375,497 1,327,915
Office occupancy and operations 1,019,035 879,329 1,907,368 1,539,063
Business development 363,574 326,431 638,484 634,206
Taxes, other than payroll and income 105,533 58,519 147,941 104,133
Premium and retaliatory taxes 216,290 229,746 478,200 426,572
Professional fees 225,348 119,884 391,506 209,020
Other 55,385 120,227 103,254 244,041
------------- ------------ ------------- -------------
Total 11,055,186 10,025,627 20,851,682 18,581,829
------------- ------------ ------------- -------------
Income Before Income Taxes 2,141,825 2,003,339 3,861,645 3,529,457
Provision For Income Taxes 669,798 628,040 1,213,300 1,086,537
------------- ------------ ------------- -------------
Net Income $ 1,472,027 $ 1,375,299 $ 2,648,345 $ 2,442,920
============= ============ ============= =============
Basic Earnings per Common Share (Note 4) $ 0.53 $ 0.49 $ 0.95 $ 0.87
============= ============ ============= =============
Weighted Average Shares Outstanding-Basic (Note 4) 2,782,431 2,808,935 2,793,929 2,805,982
============= ============ ============= =============
Diluted Earnings per Common Share (Note 4) $ 0.53 $ 0.48 $ 0.94 $ 0.86
============= ============ ============= =============
Weighted Average Shares Outstanding-Diluted (Note 4) 2,791,298 2,848,202 2,806,542 2,847,698
============= ============ ============= =============
Dividends Paid $ 85,673 $ 85,673 $ 171,345 $ 171,345
============= ============ ============= =============
Dividends per Share $ 0.03 $ 0.03 $ 0.06 $ 0.06
============= ============ ============= =============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
Investors Title Company and Subsidiaries
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
-------------- -----------------
<S> <C> <C>
Operating Activities:
Net income $ 2,648,345 $ 2,442,920
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 192,810 181,911
Net (accretion) discount amortization 46,965 (3,039)
Provision for losses on premiums receivable - 175,000
Net (gain) loss on disposals of property 2,431 (18,721)
Net realized gain on sales of investments (280,358) (122,050)
Benefit for deferred income taxes (278,000) (384,203)
Provision for claims 3,293,729 3,692,290
Payments of claims, net of recoveries (1,503,729) (1,312,265)
Changes in assets and liabilities:
Decrease (increase) in receivables and other assets 562,146 (1,183,053)
Increase (decrease) in accounts payable and accrued liabilities (49,088) 1,179,377
Increase in commissions and reinsurance payables 94,903 78,847
Decrease in premium taxes payable (341,626) (86,555)
Increase (decrease) in current income taxes payable (157,627) 258,782
-------------- -----------------
Net cash provided by operating activities 4,230,901 4,899,241
-------------- -----------------
Investing Activities:
Purchases of available-for-sale securities (3,077,623) (3,046,749)
Purchases of held-to-maturity securities (100,986) (1,025,057)
Proceeds from sales of available-for-sale securities 1,326,147 1,231,190
Proceeds from sales of held-to-maturity securities 449,086 390,974
Purchases of property (1,076,198) (388,020)
Proceeds from sales of property 4,875 27,621
-------------- -----------------
Net cash used in investing activities (2,474,699) (2,810,041)
-------------- -----------------
Financing Activities:
Distributions (repurchases) of common stock (874,740) 23,330
Dividends paid (171,345) (171,345)
-------------- -----------------
Net cash used in investing activities (1,046,085) (148,015)
-------------- -----------------
Net Increase in Cash and Cash Equivalents 710,117 1,941,185
Cash and Cash Equivalents, Beginning of Year 8,141,354 2,823,177
-------------- -----------------
Cash and Cash Equivalents, End of Period $ 8,851,471 $ 4,764,362
============== =================
Supplemental Disclosures:
Cash Paid During the Year for:
Income Taxes $ 1,638,827 $ 1,216,748
============== =================
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
INVESTORS TITLE COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 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 six months ended June 30,
1999 were as follows:
Balance, beginning of year $ 13,362,665
Provision, charged to operations 3,293,729
Recoveries 167,455
Payments of claims (1,671,184)
------------------
Balance, June 30, 1999 $ 15,152,665
==================
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 June 30, 1999 and
1998 was $963,831 and $1,331,949, respectively. Total comprehensive income
for the six months ended June 30, 1999 and 1998 was $1,972,402 and
$2,589,041, 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 8,867 and 39,267 for the three
months ended June 30, 1999 and 1998, respectively and 12,613 and 41,716
for the six months ended June 30, 1999 and 1998, respectively. Options to
purchase 59,106 and 42,550 shares of common stock were outstanding for the
three months ended June 30, 1999 and 1998, respectively and 54,606 and
43,050 for the six months ended June 30, 1999 and 1998, respectively but
were not included in the computation of diluted EPS because the options'
exercise prices were greater than the average market price of the common
shares.
Subsequent to June 30, 1999, the Company repurchased 4,000 common shares
at a price of $18.25 per share under a stock repurchase program.
6
<PAGE>
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 June 30, 1999, net premiums written increased
10% to $12,384,887, investment income increased 12% to $498,650,
revenues increased 10% to $13,197,011 and net income increased 7% to
$1,472,027 all compared with the same quarter in 1998. Net income per
basic and diluted common share increased 8% to $.53 and 10% to $.53,
respectively, as compared with the year ago period.
For the six months ended June 30, 1999, net premiums written
increased 11% to $23,079,124, investment income increased 12% to
$968,777, revenues increased 12% to $24,713,327, net income increased
8% to $2,648,345 and both net income per basic and diluted common
share increased 9% to $0.95 and $0.94, respectively, all compared
with the same period in 1998.
The Company continues to benefit from a healthy economy. Mortgage
lending remains strong overall, although the recent uptick in
interest rates has reduced the demand for refinancing. According to
the Mortgage Bankers Association of America, the monthly average
30-year fixed mortgage interest rates declined to 7.04% for the six
months ended June 30, 1999 compared with 7.07% for the six months
ended June 30, 1998. The volume of business continued to increase in
the second quarter of 1999 as the number of policies and commitments
issued rose to 71,731, an increase of 4% compared with 68,932 in the
same period in 1998. Policies and commitments issued for the six
months ended June 30, 1999 were 139,922 compared with 131,295 in
1998.
Branch net premiums written as a percentage of total net premiums
written were 45% and 49% for the three months ended June 30, 1999 and
1998, respectively and 47% and 49% for the six months ended June 30,
1999 and 1998, respectively. Net premiums written from branch
operations increased 2% and 38% for the three months ended June 30,
1999 and 1998, respectively, as compared with the same periods in the
prior year. For the six months ended June 30, 1999 and 1998, net
premiums written from branch operations increased 7% and 44%,
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 51% for the three months ended June 30, 1999 and
1998, respectively, and 53% and 51% for the six months ended June 30,
1999 and 1998, respectively. Due to the Company's efforts to increase
the distribution of its products through an agency network, agency
net premiums increased 17% and 58% for the three months ended June
30, 1999 and 1998, respectively, as compared with the same periods in
the prior year. For the six months ended June 30, 1999 and 1998, net
premiums written from agency operations increased 16% and 76%,
respectively, as compared with the same prior year periods.
Shown below is a schedule of title premiums written for the six
months ended June 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:
<TABLE>
<CAPTION>
1999 1998
---------------------- -----------------------
<S> <C> <C>
Arkansas $ - $ 17,711
Florida - 46,616
Georgia 261,038 283,090
Indiana 167,864 66,287
Kentucky 3,833 102
Maryland 288,138 178,434
Michigan 3,675,834 4,179,738
Minnesota 907,518 416,476
Mississippi 11,268 24,063
Nebraska 525,574 402,135
New York 287,743 238,619
North Carolina 10,698,551 10,117,116
Pennsylvania - 250
South Carolina 2,302,900 1,438,686
Tennessee 258,146 83,534
Virginia 3,352,962 3,422,536
West Virginia 468,504 -
Wisconsin 1,433 -
---------------------- -----------------------
Direct Premiums 23,211,306 20,915,393
Reinsurance, net (132,182) (167,494)
---------------------- -----------------------
Net Premiums $ 23,079,124 $ 20,747,899
====================== =======================
</TABLE>
Total operating expenses increased 10% and 12% for the three and
six-month periods ended June 30, 1999, respectively, compared with
the same periods in 1998. The increase in commissions is the result
of the Company's expansion into new markets primarily by continuing
to develop agency relationships. Salaries and employee benefits
increased primarily due to additional staffing needed to process the
increase in premium volume. Office occupancy and operations and
business development rose primarily due to the increase in premium
volume. Professional fees increased primarily as a result of payment
of employee recruitment fees and consulting fees during the six
months ended June 30, 1999 as compared with the same period in 1998.
8
<PAGE>
The provision for claims as a percentage of net premiums written was
14% for the three and six months ended June 30, 1999, versus 19% and
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 six months ended
June 30, 1999, amounted to $4,230,901 compared with $4,899,241 for
the same six-month period during 1998. This decrease is primarily the
result of decreases in the provision for possible claims, accounts
payable and accrued liabilities and premium taxes payable, partially
offset by a decrease in receivables and other assets.
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 99,024 shares at an
average price of $20.77 per share as of June 30, 1999, including
25,768 shares purchased at an average purchase price of $20.12 during
the quarter ended June 30, 1999 and 54,880 purchased at an average
price of $21.12 for the six months ended June 30, 1999. The Board has
authorized management to repurchase up to an additional 50,976
shares.
On May 11, 1999, the Board of Directors also approved the repurchase
of 200,000 shares of the Company's common stock.
During the six months ended June 30, 1999, the Company repurchased
common stock valued at $1,159,066 and redistributed previously
acquired common stock valued at $284,326 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 six months ended June 30, 1999, these repurchases
and distributions negatively affected retained earnings and common
stock by $142,288 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. 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.
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
9
<PAGE>
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 quarter
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 will focus 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 is currently replacing most existing PC
workstations and servers. 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. These funds will be used for
potential replacement of non computer-related equipment and other
Year 2000 needs. The Company has lowered its original cost estimate
as stated in the third quarter 1998 as a result of preliminary
evaluation of the assessment phase (see discussion below). The
Company has incurred no material costs directly related to its Year
2000 compliance program as of June 30, 1999.
The Company has completed a preliminary evaluation of the assessment
phase and observed that a common operating environment exists
throughout the Company. The existence of a common operating
environment has reduced the amount of product research and potential
remediation that may be required. The Company is beginning to
formalize testing procedures and remediation efforts.
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 will assess and attempt 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 will depend upon the continued
analysis of the Company's assessment phase as well as internal
Company meetings to ensure that each operational aspect of the
Company is addressed appropriately.
10
<PAGE>
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 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Investors Title Company's Annual Meeting of Shareholders was held May
11, 1999. The proposals voted upon and the results of the voting were
as follows:
Election of four Directors for a three-year term.
Broker
For Against Abstentions Withheld Non-votes
--- ------- ----------- -------- ---------
W. Morris Fine 2,486,243 N/A N/A 1,404 N/A
Loren B. Harrell, Jr. 2,485,460 N/A N/A 2,187 N/A
H. Joe King, Jr. 2,486,354 N/A N/A 1,293 N/A
William J. Kennedy III 2,484,573 N/A N/A 3,074 N/A
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: August 13, 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>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999
<PERIOD-END> MAR-31-1999 JUN-30-1999
<DEBT-HELD-FOR-SALE> 22,998,439 24,345,874
<DEBT-CARRYING-VALUE> 4,895,576 4,792,704
<DEBT-MARKET-VALUE> 0* 0*
<EQUITIES> 4,749,709 5,194,177
<MORTGAGE> 0 0
<REAL-ESTATE> 0 0
<TOTAL-INVEST> 32,722,706 34,411,737
<CASH> 10,250,583 8,851,471
<RECOVER-REINSURE> 0 0
<DEFERRED-ACQUISITION> 0 0
<TOTAL-ASSETS> 52,792,928 53,846,585
<POLICY-LOSSES> 14,187,665 15,152,665
<UNEARNED-PREMIUMS> 0 0
<POLICY-OTHER> 153,767 179,501
<POLICY-HOLDER-FUNDS> 0 0
<NOTES-PAYABLE> 0 0
0 0
0 0
<COMMON> 356,281 1
<OTHER-SE> 36,519,111 37,254,981
<TOTAL-LIABILITY-AND-EQUITY> 52,792,928 53,846,585
10,694,237 23,079,124
<INVESTMENT-INCOME> 470,127 968,777
<INVESTMENT-GAINS> 191,405 280,358
<OTHER-INCOME> 160,547 385,068
<BENEFITS> 1,580,868 3,293,729
<UNDERWRITING-AMORTIZATION> 0 0
<UNDERWRITING-OTHER> 8,215,628 17,557,953
<INCOME-PRETAX> 1,719,820 3,861,645
<INCOME-TAX> 543,502 1,213,300
<INCOME-CONTINUING> 1,176,318 2,648,345
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,176,318 2,648,345
<EPS-BASIC> .42 .95
<EPS-DILUTED> .42 .94
<RESERVE-OPEN> 0 0
<PROVISION-CURRENT> 0 0
<PROVISION-PRIOR> 0 0
<PAYMENTS-CURRENT> 0 0
<PAYMENTS-PRIOR> 0 0
<RESERVE-CLOSE> 0 0
<CUMULATIVE-DEFICIENCY> 0 0
</TABLE>
