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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
AMENDED
For the Quarter Ended September 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from______to_____ .
Commission File No. 0-16880
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BNL FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
IOWA 42-1239454
(State of incorporation) (I.R.S. Employer Identification No.)
2100 W. William Cannon, Suite L
Austin, Texas 78745
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (512) 383-0220
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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____
As of September 30, 1998, the Registrant had 23,311,944 shares of Common Stock,
no par value, outstanding.
Transitional Small Business Disclosure Format (check one) Yes___ No__X__
<PAGE>
BNL FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30, 1998 December 31,
(Unaudited) 1997
------------------ ---------------
<S> <C> <C>
ASSETS
Investments:
Investments available for sale, at
fair value ....................... $10,021,817 $11,765,947
Equity securities, common stock ....... 2,838 20,438
Cash and cash investments ............. 2,449,442 714,539
----------- -----------
Total Investments 12,474,097 12,500,924
Accrued investment income ................ 182,549 225,042
Furniture and equipment .................. 227,895 261,312
Deferred policy acquisition costs ........ 413,081 433,695
Receivable from reinsurer ................ 26,677 26,677
Premiums due and unpaid................... 488,858 355,793
Other assets ............................. 312,687 344,410
----------- ----------
TOTAL ASSETS $14,125,844 $14,147,853
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Liability for future policy benefits . $1,404,608 $1,352,555
Policy claims payable................. 1,940,000 1,368,630
Premium deposit fund ................. 122,221 127,697
Annuity deposits ..................... 3,260,519 3,336,323
Deferred annuity profits ............. 617,872 615,737
Supplementary contracts without
life contingencies ............... 135,611 56,031
Advanced and unallocated premium...... 379,276 328,814
Commissions payable................... 239,661 184,677
Other liabilities .................... 429,583 364,429
---------- ----------
Total liabilities 8,529,351 7,734,893
---------- ----------
SHAREHOLDERS' EQUITY:
Common stock ......................... 466,239 466,239
Additional paid-in capital ........... 14,308,230 14,308,230
Accumulated other comprehensive
income........................... 268,558 170,530
Treasury stock ....................... (64,105) (64,105)
Accumulated deficit .................. (9,382,429) (8,467,934)
---------- -----------
Total shareholders' equity 5,596,493 6,412,960
---------- ----------
TOTAL LIABILITIES & SHAREHOLDER'S EQUITY $14,125,844 $14,147,853
========== ==========
<FN>
(See Notes to Consolidated Financial Statements)
</FN>
</TABLE>
-2-
<PAGE>
BNL FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- -----------------------------
1998 1997 1998 1997
------------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Premium income .................................. $5,649,343 $3,042,004 $ 15,041,756 $ 7,864,273
Investment income ............................... 204,120 213,311 621,118 652,818
Realized gains on investments ................... 7,411 33,843 61,929 75,754
------------- ------------ ----------- -----------
Total income ................................... 5,860,874 3,289,158 15,724,803 8,592,845
------------- ------------ ----------- -----------
EXPENSES:
Policy benefits and other insurance costs ....... 5,276,681 2,679,266 13,501,308 6,826,907
Increase in liability for future policy benefits. 11,670 7,325 52,053 11,466
Amortization of deferred policy acquisition costs 6,012 8,089 20,614 32,930
Operating expenses .............................. 878,365 663,104 2,570,398 2,022,335
Taxes, other than on income ..................... 172,836 94,471 494,925 294,111
------------- ------------ ----------- -----------
Total expenses ................................. 6,345,563 3,452,255 16,639,297 9,187,749
------------- ------------ ----------- -----------
OPERATING LOSS ................................. ($484,690) ($163,097) (914,495) (594,904)
Provision for income taxes ......................... 0 0 0 0
------------- ------------ ----------- -----------
NET LOSS ....................................... ($484,690) ($163,097) ($914,495) ($594,904)
============= ============ =========== ===========
Other comprehensive income, net of tax:
Unrealized gains on securities:
Unrealized holding gains arising during
period..................................... $149,416 $84,066 $159,957 $128,134
Reclassification adjustment for gains
included in net income..................... (7,411) (33,843) (61,929) (75,754)
------------- ------------ ----------- -----------
Other comprehensive income (loss)................... 142,005 50,223 98,028 52,380
------------- ------------ ----------- -----------
COMPREHENSIVE LOSS ............................ ($342,685) ($112,874) ($816,467) ($542,524)
============= ============ =========== ===========
Net loss per share .............................. ($0.02) ($0.01) ($0.04) ($0.03)
============= ============ =========== ===========
Weighted average number
of shares ...................................... 23,311,944 23,311,944 23,311,944 23,311,944
============= ============ =========== ===========
<FN>
(See Notes to Consolidated Financial Statements)
</FN>
</TABLE>
-3-
<PAGE>
<TABLE>
BNL FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months
Ended Ended
09/30/98 09/30/97
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net loss ...................................................($ 914,495) ($ 594,904)
Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:
Realized (gain) loss on investments ....................... (61,929) (79,833)
Realized (gain) loss on sale of furniture and equipment.... 0 4,079
Depreciation .............................................. 77,227 70,130
Amortization of deferred acquisition
costs and state licenses acquired ...................... 22,945 32,930
Accretion of bond discount ................................ (2,631) (2,711)
Change in assets and liabilities:
Decrease in accrued investment income ..................... 42,493 38,165
(Increase) decrease in receivable from reinsurer........... (133,065) 5,161
Decrease in premium deposit fund .......................... (5,476) (41,658)
Decrease in annuity deposits and deferred profits.......... (73,669) (64,757)
Increase in liability for future policy
benefits ............................................... 52,053 17,966
Increase in policy claims payable.......................... 571,370 328,500
Increase in advanced and unallocated premium............... 50,462 166,932
Increase in commissions payable............................ 54,984 67,681
Other net ................................................. 96,005 (70,590)
---------- ---------
Total Adjustments ..................................... 690,770 471,995
---------- ---------
Total cash provided by (used in)
operating activities .............................. (223,725) (122,909)
---------- ---------
Cash flows from investing activities:
Sales of debt securities ................................. 8,735,728 2,744,592
Sales of equity securities ............................... 0 0
Sales of furniture and equipment ......................... 0 201
Purchase of equity securities ............................ 0 0
Purchase of furniture and equipment ...................... (45,270) (68,812)
Purchase of fixed maturity securities .................... (6,811,410) (2,416,459)
--------- ---------
Net cash provided by (used in) investing activities 1,879,048) 259,522
--------- ---------
Cash flows from financing activities:
Payments on supplementary contracts ...................... 79,579 (10,787)
--------- ----------
Net cash provided by (used in) financing activities 79,579 (10,787)
--------- ----------
Net increase (decrease) in cash and cash equivalents ....... 1,734,902 125,826
Cash and cash equivalents, beginning of year ............ 714,539 702,769
--------- ---------
Cash and cash equivalents, end of period ................ $ 2,449,441 $ 828,595
========= =========
<FN>
(See notes to Consolidated Financial Statements)
</FN>
</TABLE>
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<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The financial statements included herein reflect all adjustments which are, in
the opinion of management, necessary to present a fair statement of the interim
results on a basis consistent with the prior period. The statements have been
prepared to conform to the requirements of Form 10-QSB and do not necessarily
include all disclosures required by generally accepted accounting principles
(GAAP). The reader should refer to the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1997, previously filed with the Commission, for
financial statements for the year ended December 31, 1997, prepared in
accordance with GAAP. Net income (loss) per share of common stock is based on
the weighted average number of outstanding common shares.
The Company adopted SFAS # 130 "Reporting Comprehensive Income" during the
second quarter of 1998. SFAS #130 requires the Company to report the year to
date change in unrealized gains or losses on its investments as comprehensive
income on the Statement of Income. Unrealized gains or losses reported in the
equity section of the balance sheet have been renamed "accumulated other
comprehensive income."
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
At September 30, 1998, the Company had liquid assets of $2,449,492 in cash,
money market savings accounts and short-term certificates of deposit, all of
which can readily be converted to cash.
The major components of operating cash flows are premium, annuity deposits and
investment income. In the first three quarters of 1998, BNLAC collected
$15,264,449 of premiums and annuity deposits (gross before reinsurance) and the
Company had consolidated investment income of $621,118.
The Company's investments are primarily in U.S. Government and Government
Agencies and other investment grade bonds which have been marked to market and
classified as available for sale.
The Company's insurance operations are conducted through its wholly owned
subsidiary, Brokers National Life Assurance Company (BNLAC). At September 30,
1998, BNLAC had statutory capital and surplus of $4,506,368. BNLAC is required
to maintain minimum levels of statutory capital and surplus as a condition to
conducting business in the states in which it is licensed. Each of these states
had different rules regarding the minimum level of capital and surplus required
in that state. The state of Arkansas, which is the legal domicile of BNLAC,
requires a minimum of $2,300,000 in capital and surplus.
Results of Operations
Premium income for the first three quarters of 1998 was $15,041,756 compared to
$7,864,273 for the same period in 1997. The increase of $7,177,483, or 91%, was
due to an increase in insurance premiums written during the first three quarters
of 1998.
Net investment income was $621,118 for the period ended September 30, 1998
compared to $652,818 for the same period in 1997. The decrease was due to
interest received on GIC bonds in 1997 but not received in 1998 and a reduction
in the bond inventory due to government agency bonds that were called and the
proceeds invested in short term investments with a lower yield.
Realized gains on investments were $61,929 in the first nine months of 1998
compared to $75,754 for the same period in 1997. The decrease in realized gains
was due to a decrease in bonds sold in the normal course of the Company's
investment activity.
In the first three quarters of 1998, policy benefits and other insurance costs
were $13,501,308 compared to $6,826,907 for the same period in 1997. The
increase was due to an increase in claims and commissions resulting from the
increase in insurance business in force. In addition, the claims ratio on dental
insurance was 3.2 percentage points higher at September 30, 1998 this year
compared to the same period last year. The increase in dental costs in the
dental insurance industry that became apparent in mid-1997 is continuing to
impact the company's claims ratio. The company is addressing the increase in the
claims ratio by increasing rates and modifying benefits and other actions
designed to reduce the claims ratio.
For the period ended September 30, 1998, the increase in liability for future
policy benefits was $52,053 compared to $11,466 in 1997. The increase in 1998
was due to an increase in unearned premium reserves.
Amortization of deferred policy acquisition costs were $20,614 and $32,930 for
the first three quarters of 1998 and 1997 respectively. Amortization of deferred
policy acquisition costs may vary in the future in relation to new life
insurance sales and lapses or surrenders of existing policies.
Operating expenses increased to $2,570,398 in the first three quarters of 1998
compared to $2,022,335 for the same period in 1997. The increase in operating
expenses was primarily due to an increase in data processing expense, payroll
and claims administrative expense - which are all attributable to the increased
volume of insurance in force. An increase in legal expense of approximately
$63,000 relating to legal proceedings described in Part II, Item 1, was another
primary factor in the increase in operating expense.
Taxes, other than on income, fees and assessments were $494,925 for the first
three quarters of 1998 compared to $294,111 for the same period in 1997. The
increase was primarily due to an increase in premium taxes on the increased
premiums collected.
The net loss from operations for the first three quarters of 1998 was $914,495
compared to $594,904 for the same period in 1997. The increase is primarily due
to the increase in the claims ratio described above.
The Company adopted SFAS # 130 "Reporting Comprehensive Income" during the
second quarter of 1998. SFAS #130 requires the Company to report the year to
date change in unrealized gains or losses on its investments as comprehensive
income on the Statement of Income. Unrealized gains or losses reported in the
equity section of the balance sheet have been renamed "accumulated other
comprehensive income." During the first three quarters of 1998 other
comprehensive income was $98,028 compared to $52,380 for the same period in
1997. The increase in 1998 was due to an increase in the market value of the
bond portfolio since December 31, 1997.
-6-
<PAGE>
The "Year 2000" Issue
The "Year 2000" (or "Y2K") Issue is the inability of computers and computing
technology to recognize correctly the Year 2000 date change. The problem arose
because many software programs were written using two digits for the year (e.g.
98) rather than four digits (e.g. 1998). These systems automatically assume that
the first two digits are "1" and "9", which will cause these programs to
misinterpret dates occurring after December 31, 1999.
The Company has 3 primary sources of computer data. They are:
1. VIP Systems, Inc. (VIP) - Independent provider of mainframe computer
support for all of the Company's data except dental insurance claims
payments.
2. ASO North America, Inc. (ASO) - Third Party Administrator (TPA) for the
Company's dental insurance claims payments and claims records.
3. In-house programs which provide a majority of the Company's management
reports.
The Y2K compliance status of each of these three systems is as follows:
VIP
All VIP application software programs were originally written with an
8-digit date field, including 4 digits for the year designation. As a
result, VIP has represented to the Company that its application software
is Y2K compliant.
VIP is in the process of converting its existing application software to
PC based hardware using Windows NT operating system (which is Y2K
compliant). The conversion process includes testing for Y2K compliance and
is scheduled for completion by mid-1999. On August 1, 1999, VIP will
decide which system (the current
mainframe system or the new PC system) will be in use at year end 1999.
BNL will perform final Y2K compliance verification tests at that time.
VIP's mainframe computer used an operating system that was not Y2K
compliant. VIP recently acquired and implemented all necessary program
"patches" required to make its mainframe operating system Y2K compliant.
On January 12, 1999, VIP informed the Company that tests have been
performed without problems and that the mainframe and operating system are
Y2K compliant.
ASO
In December 1998, ASO completed the first of a two step conversion to a
Y2K compliant computer system. The second step will be a system upgrade
and is scheduled for completion by July 1, 1999. ASO has represented to
BNL that the upgrade is fully Y2K compliant. BNL will perform final Y2K
compliance verification tests when the upgrade has been installed. In the
event the verification tests fail, the Company's backup alternative is to
retain a new TPA that is Y2K compliant.
In-House Programs
The Company's Internal Systems Management (ISM) department implemented a
year 2000 strategy in January 1998 to evaluate all hardware and in-house
program software to determine their Y2K readiness. The ISM department
identified the following hardware and software problems:
1. Computer system board BIOS's would not understand year 2000 date. 2. Some
computers were still using operating systems that were not Y2K compliant.
3. Internal network software was not Y2K compliant.
4. Internal databases had some Y2K issues.
The ISM department evaluated these problems and by January 1999 had taken the
following actions to correct the problems identified:
1. Replaced all computer system boards with boards Y2K approved by National
Software Testing Laboratories.
2. Upgraded all computers to a Y2K compliant operating system.
3. Converted the internal network to new network software with all appropriate
upgrades.
4. Upgraded the internal database with millennium edition software.
Full scale testing has been performed in a year 2000 environment with no
problems being found. As of February 1,1999 the Company's ISM department
believes that in-house programs are Y2K compliant.
The cost incurred to date by the Company to correct the Y2K problem has not been
material. The Company does not expect to incur any additional material costs to
become compliant nor does it foresee a need for any substantial amount of
in-house staff training.
-7-
<PAGE>
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
On April 30, 1996, Myra Jo Pearson and Paul Pearson filed a class action
complaint in the Circuit Court of Pulaski County, Arkansas (3rd Division) naming
the Company, BNL Equity Corporation and several officers of the Company, as
defendants. The plaintiffs have alleged that the defendants violated the
Arkansas Securities Act in several respects in connection with the public
offerings of securities made by United Arkansas Corporation ("UAC") (now known
as BNL Equity Corporation) during the period from January, 1989, until May,
1992. On August 27, 1998, the Court entered a ruling certifying the lawsuit as a
class action, with the class of plaintiffs including all Arkansas purchasers who
participated in the public offerings of securities by UAC during the stated time
frame. The Company believes that serious errors were made in certifying the
class, and the Company is in the process of filing an appeal of the
certification order.
The Company has retained the firm of Friday, Eldredge & Clark, Little Rock,
Arkansas, to handle the defense of the action on behalf of all defendants. The
company believes the action is frivolous and that substantial evidence exists
which directly refutes the allegations. The Company is vigorously defending the
matter and is in the process of seeking sanctions against appropriate parties.
Item 2. Changes in Securities.
None of the rights of the holders of any of the Company's securities were
materially modified during the period covered by this report. In addition, no
class of securities of the Company was issued or modified which materially
limited or qualified any class of its registered securities.
Item 3. Defaults Upon Senior Securities.
During the period covered by this report there was no material default in the
payment of any principal, interest, sinking or purchase fund installment, or any
other material default not cured within 30 days with respect to any indebtedness
of the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
No items were submitted to a vote of security holders during the current period.
Item 5. Other Information.
None
-8-
<PAGE>
<TABLE>
<CAPTION>
Item 6. Exhibits and Reports on Form 10-QSB
No. Description Page or Method of Filing
- --------- ---------------------------------------------------- ---------------------------------------------------
<S> <C> <C>
3.1 Articles of Incorporation of BNL Financial Incorporated by reference to Exhibit 3.1 of the
Corporation (formerly United Iowa Corporation), Company's Annual Report on Form 10-K for the dated
January 27, 1984 and Amendment to Articles period ending December 31, 1993.
of Incorporation of BNL Financial Corporation,
dated November 13, 1987.
3.2 Bylaws of BNL Financial Corporation Incorporated by reference to Exhibit 3.2 of the
Company's Registration Statement No. 33-70318
4.1 Instruments defining the rights of security Incorporated by reference to Exhibit 4 of the
holders, including indentures Company's Registration Statement No. 2-94538 and
Exhibits 3.5 and 4 of Post-Effective Amendment
No. 3 thereto.
4.2 Articles of Incorporation of BNL Financial Incorporated by reference to Exhibit 3.1 of the
Corporation (formerly United Iowa Corporation), Company's Annual Report on Form 10-K for the
dated January 27, 1984 and Amendment to Articles period ending December 31, 1993.
of Incorporation on BNL Financial Corporation,
dated November 13, 1987.
10.1 Form of Agreement between Commonwealth Industries Filed with 10-QSB for the period ended September
Corporation, American Investors Corporation and 30, 1994.
Wayne E. Ahart regarding rights to purchase shares
of the Company.
10.2 Agreement dated December 21, 1990 between Filed with 10-QSB for the period ended March 31,
Registrant and C. Donald Byrd granting Registrant 1996.
right of first refusal as to future transfers of
Mr. Byrd's shares of the Company's common stock.
10.3 Subscription Agreement dated March 2, 1994 Incorporated by reference to S-4 Registration
Statement No. 33-70318
10.4 Stock Escrow Agreement dated February 28, 1994 Incorporated by reference to S-4 Registration
Statement No. 33-70318
10.5 Merger Agreement between United Arkansas Incorporated by reference to S-4 Registration
Corporation and USSA Acquisition Inc. dated Statement No. 33-70318
February 11, 1994
10.6 Merger Agreement between Iowa Life Assurance Filed with 10-QSB for the period ended March 31,
Company and United Arkansas Life Assurance Company 1994
dated March 2, 1994
10.7 Office lease dated March 24, 1994, between Brokers Filed with 10-QSB for the period ended September
National Life Assurance Company (formerly Iowa 30, 1994
Life Assurance Company) and Enclave KOW, Ltd., for
premises in Austin, Texas.
10.8 Amendment Number Two to the Quota Share Filed with Form 8-K dated January 18, 1995
Reinsurance Agreement dated 8/10/91 between
Registrant and UniLife Insurance Co. of San
Antonio, Texas
10.9 Stock Bonus Agreement between BNL Financial Filed with 10-QSB for the period ended June
Corporation and C. Donald Bryd and Kenneth Tobey 30, 1997
11 Statement re computation of per share earnings Not applicable
12 Statements re computation of ratios Not applicable
22 BNL Brokerage Corporation, Brokers National
Life Assurance Company and BNL Equity
Corporation, all wholly owned by Registrant
</TABLE>
(b) Reports on Form 8-K
On September 25, 1998, the Company filed a form 8-K that disclosed the Court had
entered a ruling on August 27, 1998, certifying the lawsuit mentioned in Part 2,
Item 1 as a class action suit. The class of plaintiffs includes all Arkansas
purchasers who participated in the public offerings of securities by UAC during
the stated time frame. The company believes that serious errors were made in
certifying the class, and the Company is in the process of filing an appeal of
the certification order.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BNL FINANCIAL CORPORATION
(Registrant)
Date: November 14, 1998 /s/ Wayne E. Ahart
--------------------------------
By: Wayne E. Ahart, Chairman of the Board
(Chief Executive Officer)
Date: November 14, 1998 /s/ Barry N. Shamas
---------------------------------
By: Barry N. Shamas, Executive V.P.
(Chief Financial Officer)
-9-
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<DEBT-HELD-FOR-SALE> 10021817
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 2838
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 10024655
<CASH> 2449442
<RECOVER-REINSURE> 26677
<DEFERRED-ACQUISITION> 413081
<TOTAL-ASSETS> 14125844
<POLICY-LOSSES> 3248394
<UNEARNED-PREMIUMS> 96214
<POLICY-OTHER> 3878391
<POLICY-HOLDER-FUNDS> 257832
<NOTES-PAYABLE> 0
0
0
<COMMON> 466239
<OTHER-SE> 5130254
<TOTAL-LIABILITY-AND-EQUITY> 14125844
15041756
<INVESTMENT-INCOME> 621118
<INVESTMENT-GAINS> 61929
<OTHER-INCOME> 0
<BENEFITS> 11475946
<UNDERWRITING-AMORTIZATION> 20614
<UNDERWRITING-OTHER> 2077415
<INCOME-PRETAX> (630422)
<INCOME-TAX> 0
<INCOME-CONTINUING> (630422)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (630422)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
<RESERVE-OPEN> 1340630
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 9450553
<PAYMENTS-PRIOR> 1304636
<RESERVE-CLOSE> 1940000
<CUMULATIVE-DEFICIENCY> 35994
</TABLE>