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, 2000
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 No. 0-6729
FIRST MONTAUK FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
New Jersey 22-1737915
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Parkway 109 Office Center, 328 Newman Springs Rd., Red Bank, NJ 07701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 842-4700
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the Registrant (l) 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
9,482,493 Common Shares, no par value were outstanding as of
August 14, 2000.
Page 1 of 12
<PAGE>
02
FIRST MONTAUK FINANCIAL CORP.
FORM 10-Q
JUNE 30, 2000
INDEX
Page
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Statements of Financial Condition
as of June 30, 2000 and December 31, 1999 ....... 3
Consolidated Statements of Income for the
Six Months ended June 30, 2000 and 1999
and Three months ended June 30, 2000 and 1999 ..... 4
Consolidated Statements of Cash Flows for the
Six Months ended June 30, 2000 and 1999 ... 5
Notes to Financial Statements ..................... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations .... 7-9
PART II. OTHER INFORMATION:
Item 4. Submission of Matters to a Vote of
Security-Holders ........................... 10
Item 5. Other Information........................... 10
Item 6. Exhibits and Reports on Form 8-K............ 10
Signatures .......................................... 11
<PAGE>
03
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
June 30, December 31,
ASSETS 2000 1999
Cash $ 4,407,494 $ 686,980
Due from clearing firm 1,154,454 6,462,346
Trading and investment account securities 5,744,034 3,475,891
Commissions receivable 58,843 345,996
Global leases receivable 449,751 824,313
Notes receivable 330,884 482,531
Employee and broker receivables 1,017,134 452,285
Property and equipment - net 2,512,186 2,193,506
Due from officers 130,606 132,754
Deferred tax asset-net 849,884 664,256
Other assets 1,174,689 1,338,326
---------- ----------
Total assets $17,829,959 $ 17,059,184
========== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Securities sold, but not yet
purchased, at market $ 382,201 $ 180,280
Notes payable 691,340 1,477,428
Commissions payable 1,576,643 2,710,736
Accounts payable 646,791 525,809
Accrued expenses 1,287,629 1,072,552
Income taxes payable 1,451,656 510,226
Other liabilities 832,999 952,015
----------- --------------
Total liabilities 6,869,259 7,429,046
----------- --------------
Common stock issued with guaranteed
selling price - no par value,
18,000 shares issued and outstanding 36,500 36,500
Commitments and contingencies (See Notes)
Stockholders' equity
Convertible preferred stock, 5,000,000
shares authorized, $.10 par value,
349,511 shares issued and outstanding
respectively;
stated at liquidation value. 1,747,555 1,747,555
Common Stock, no par value, 30,000,000
shares authorized, 10,052,943 and 10,035,943
shares issued and outstanding, respectively 5,206,538 5,185,818
Additional paid-in capital 2,452,993 2,368,126
Retained earnings 2,969,945 1,023,057
Less: Deferred compensation (488,168) (508,294)
Less: Treasury stock (628,434 and
180,500 shares, respectively) (964,663) (222,624)
----------- ---------------
Total stockholders' equity 10,924,200 9,593,638
----------- ---------------
Total liabilities and stockholders'
equity $17,829,959 $ 17,059,184
=========== ===============
See notes to financial statements.
<PAGE>
04
<TABLE>
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<S> <C> <C> <C> <C>
Six months ended June 30, Three months ended June 30,
2000 1999 2000 1999
Revenues:
Commissions $ 27,642,745 $ 19,977,955 $ 10,678,167 $ 10,200,487
Principal transactions 6,804,621 6,540,243 1,367,369 4,274,159
Investment banking 1,778,826 182,161 547,649 105,137
Interest and other income 1,606,974 889,356 753,075 488,632
----------- ------------ ----------- ------------
37,833,166 27,589,715 13,346,260 15,068,415
----------- ------------ ----------- ------------
Expenses:
Commissions, employee compensation and benefits 27,645,742 20,319,229 10,063,240 10,828,950
Clearing and floor brokerage 2,399,675 2,265,776 1,004,545 1,156,841
Communications and occupancy 1,481,633 1,290,767 770,076 649,732
Legal matters and related costs 322,860 662,254 90,355 615,696
Other operating expenses 2,505,633 1,496,559 1,146,991 955,714
Interest 114,456 82,794 66,512 40,067
---------- ------------ ----------- ------------
34,469,999 26,117,379 13,141,719 14,247,000
----------- ------------ ----------- ------------
Income before income taxes 3,363,167 1,472,336 204,541 821,415
Income taxes 1,331,000 115,298 60,694 112,346
----------- ------------ ----------- ------------
Net income before extraordinary items 2,032,167 1,357,038 143,847 709,069
Extraordinary loss-extinguishment of debt, net of tax (34,200) - (34,200) -
----------- ------------ ----------- ------------
Net income $ 1,997,967 $ 1,357,038 $ 109,647 $ 709,069
=========== ============ =========== ============
Net income available to common stockholders $ 1,946,888 $ 1,357,038 $ 84,107 $ 709,069
=========== ============ =========== ============
Per share of Common Stock:
Basic:
Before extraordinary loss $ 0.20 $ 0.14 $ 0.01 $ 0.07
Extraordinary loss - - - -
----------- ------------ ----------- ------------
Net income $ 0.20 $ 0.14 $ 0.01 $ 0.07
=========== ============ =========== ============
Diluted:
Before extraordinary loss $ 0.18 $ 0.13 $ 0.01 $ 0.07
Extraordinary loss - - - -
----------- ------------ ----------- ------------
Net income $ 0.18 $ 0.13 $ 0.01 $ 0.07
=========== ============ =========== ============
Weighted average common shares outstanding-basic 9,644,264 9,866,057 10,005,903 9,895,643
=========== ============ =========== ============
Weighted average common shares outstanding-diluted 11,405,344 10,605,811 11,612,328 10,697,933
=========== ============ =========== ============
See notes to financial statements.
</TABLE>
<PAGE>
05
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<S> <C> <C>
Six months ended June 30,
2000 1999
INCREASE (DECREASE) IN CASH Cash flows from
operating activities:
Net income $ 1,997,967 $ 1,357,038
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 311,564 201,192
Amortization 122,506 97,650
Bad debt reserves 149,640 -
Increase (decrease) in cash attributable to
changes in operating assets and liabilities:
Due from clearing firm 5,307,892 1,451,755
Trading and investment account securities (2,268,143) (3,384,127)
Commissions receivable 287,153 186,512
Due from officers 2,148 93
Employee and broker receivables (564,849) 153,238
Other assets 163,637 17,904
Deferred income taxes (185,628) (511,331)
Securities sold but not yet purchased 201,921 67,355
Commissions payable (1,134,093) 284,249
Accounts payable 120,982 (42,562)
Accrued expenses 215,077 25,066
Income taxes payable 941,430 623,417
Other liabilities (112,712) 200,896
----------- ------------
Total adjustments 3,558,525 (628,693)
----------- ------------
Net cash provided by operating activities 5,556,492 728,345
----------- ------------
Cash flows from investing activities:
Issuance of notes receivable - (243,616)
Collection of notes receivable 2,007 73,884
Collection of Global leases receivable 374,562 -
Additions to property and equipment (643,095) (243,855)
Dispositions of property and equipment 12,851 -
----------- ------------
Net cash used in investing activities (253,675) (413,587)
----------- ------------
Cash flows from financing activities:
Payment of notes payable (699,981) (47,963)
Payment of subordinated notes payable (50,000) (50,000)
Payment of capital lease payable (59,925) (54,678)
Payment of preferred stock dividend (51,078) -
Exercise of stock options 20,720 86,346
Repurchase of common stock (742,039) -
----------- -------------
Net cash used in financing activities (1,582,303) (66,295)
----------- -------------
Net increase in cash 3,720,514 248,463
Cash at beginning of 686,980 613,513
----------- -------------
Cash at end of period $ 4,407,494 $ 861,976
=========== =============
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Interest $ 114,456 $ 82,794
=========== =============
Income taxes $ 575,147 $ 2,952
=========== =============
</TABLE>
See notes to financial statements.
<PAGE>
06
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
NOTE 1 - MANAGEMENT REPRESENTATION
The accompanying financial statements are unaudited for the interim
period, but include all adjustments (consisting only of normal recurring
accruals) which management considers necessary for the fair presentation of
results at June 30, 2000 and 1999. The preparation of financial statements in
conformity with GAAP requires the Company to make estimates and assumptions that
affect the reported amounts of revenues and expenses during the reporting
period. Actual results could vary from these estimates. These financial
statements should be read in conjunction with the Company's Annual Report at,
and for the year ended December 31, 1999, as filed with the Securities and
Exchange Commission on Form 10-K.
The results reflected for the six-month and three-month periods ended June
30, 2000, are not necessarily indicative of the results for the entire fiscal
year to end on December 31, 2000.
NOTE 2 - EARNINGS PER SHARE
Basic EPS is computed by dividing net income by the weighted-average
number of common shares outstanding for the period. Diluted EPS reflects the
potential dilution from the exercise of stock options and the deemed conversion
of preferred stock and convertible debt. The EPS calculations do not include
warrants to purchase approximately 9,240,000 common shares because they are
anti-dilative.
NOTE 3 - SHARE REPURCHASE
During the six months ended June 30, 2000, the Company repurchased
447,934 shares of its common stock for $742,039 under a share repurchase program
authorized in 1999.
NOTE 4 - NEW CLEARING/FINANCIAL AGREEMENT
In May 2000, the Company entered into a 10-year clearing agreement with
Fiserv Securities, Inc. under which Fiserv will act as the Company's primary
clearing broker. In connection with the clearing agreement, the Company and
Fiserv also entered into a financial agreement under which Fiserv will provide a
cash advance of $4,000,000 to the Company upon the date of conversion to Fiserv.
The funds, net of federal and state income taxes, will be used primarily to
enable the Company to pay for the cost of conversion to Fiserv and expand the
Company's business. For financial reporting purposes, the Company will earn the
advance in accordance with an amortization schedule established by the parties;
however, the Company will incur an income tax liability at its effective tax
rate on the entire advance in the year in which it is received. The Company is
required to repay any unearned portion of the $4,000,000 in the event it fails
to achieve certain minimum performance criteria or terminates the agreement
under certain circumstances prior to the expiration date, and could also be
subject to monetary penalties for nonperformance. Fiserv has also agreed to
provide certain additional advances to the Company in the second, third and
fourth years of the agreement under similar conditions, provided the Company
achieves certain performance criteria and subject to certain other conditions.
These advances, if received, will also be amortized to income as earned during
the term of the clearing agreement. The Company believes that the advance
received net of taxes will be sufficient to pay for the anticipated costs of
conversion.
NOTE 5 - DEBT PREPAYMENT
In May 2000, the Company prepaid $570,000 of convertible notes for 110% of
face value, or $627,000. The $57,000 premium was recorded as an extraordinary
loss, net of income taxes of $22,800.
<PAGE>
07
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three Months Ended June 30, 2000 (The "2000 Period") vs. June 30, 1999 (The
"1999 Period")
Total revenues decreased during the 2000 period by $1,722,000, or 11%
to $13,346,000. During this period, the U.S. stock markets experienced
significant price and volume declines, as well as a loss of liquidity resulting
from a more cautious investor outlook. In addition, interest rate hikes
negatively impacted the Company's resulting revenues. As anticipated, these
factors have slowed the unprecedented pace of revenue and income growth that the
Company experienced in the first quarter of 2000.
Commission revenues from the sale of listed and over-the-counter
securities and other agency transactions decreased to $7,158,000 ( 54% of total
revenues) during 2000, from $8,031,000 (53% of total revenues) during the 1999
period. Commission revenues from the sale of mutual funds, insurance products,
and fees from managed accounts rose to $3,520,000 (26% of total revenues) for
the 2000 period from $2,165,000 (14% of total revenues), an increase of 63%, for
1999.
Revenues from market-making activities and principal trading accounted
for the largest decrease in revenues. Revenues for the 2000 period were
$1,367,000, down from $4,274,000 in 1999. During 2000, results were negatively
impacted by a decline in the market value of securities held in the firm's
inventory account. The value of securities held in inventory can and do
fluctuate from period to period. Another factor contributing to the decline in
revenues was the loss of a large affiliate office whose business primarily
consisted of principal transactions.
Investment banking revenues increased by $443,000 from the 1999 period,
an increase of 420%. The increase is primarily attributable to the Company's
participation as part of an underwriting group in a secondary equity offering.
The Company does not expect that investment banking revenues will increase in
the near future due to the reduction of new offerings coming to the market in
which the Company participates.
Compensation and benefits remained fairly constant during the 2000
period. This category includes salaries, commission expense, payroll taxes and
fringe benefits for salaried employees. Commissions paid to registered
representatives for 2000 was $8,361,000 (63% of total revenues) as compared to
$9,292,000 (62% of total revenues) in 1999. This dollar decrease has a direct
relationship to the reduction in revenues during 2000. Commission expense as a
percentage of total revenues will fluctuate within a narrow range depending upon
the product mix of commission-based business and principal transactions.
For the 2000 period, the Company paid salaries of $1,573,000 for
management, operations and trading and clerical personnel, as compared to
$1,243,000 for the 1999 period. This increase reflects the overall growth of
support staff required for current operations.
Clearing costs decreased during the 2000 period. This cost, which is
associated with the level of transaction volume, decreased by $152,000 to
$1,005,000 (7% of total revenues) from $1,157,000 (8% of total revenues) during
the 1999 period. This is primarily a result of the decrease in transaction
volume. These clearing costs can and do fluctuate depending upon the product
mix. Some transactions, such as options and bonds, have a higher execution and
clearing cost than others.
Communications and occupancy costs were $770,000 (6% of total revenues)
for the 2000 period as compared to $650,000 (4% of total revenues) for the 1999
period. This is primarily due to increases in the areas of technology support,
data market services and software enhancements, offset by decreases in telephone
and equipment rental expenses.
Other operating expenses increased by $191,000 to $1,147,000 (9% of
total revenues) during the 2000 period when compared to the 1999 period. The
increase is due primarily to an increase in customer bad debt reserves and
depreciation expense. The Company has implemented stronger budgetary and fiscal
controls, which is anticipated to result in the reduction of overall expenses as
a percentage of total revenues.
<PAGE>
08
The Company experienced a major reduction in the category of legal fees
and settlements during the 2000 period. Whereas the total expense for the 1999
period was $616,000 or 4% of total revenues, the 2000 period declined to
$90,000, or less than 1% of total revenues. Enhanced supervision and compliance
measures resulted in the Company's progress towards reducing its expense in this
category. The Company is currently a respondent in various customer arbitrations
and lawsuits arising in the normal course of its securities business; however,
none of these claims is expected to have a material impact on its financial
condition or operating results.
The Company has filed suit against one of its insurance carriers to
compel coverage of several settled claims. There can be no assurance that the
Company will be successful in its efforts to recover funds from its insurers on
settled claims, or that monetary losses, if any, from future claims, settlements
or adverse awards or judgments will be covered under the Company's existing
insurance policies.
The effective income tax rates for the six months ended June 30, 2000
and 1999 were 39.6% and 7.8%, respectively. Tax provisions accrued at regular
statutory rates on 1999 income were offset in part by the reversal of valuation
allowances established in fiscal 1998, because profitable operations enabled the
Company to realize the tax benefits provided by deferred tax assets. There were
no such offsetting factors in 2000, resulting in federal and state tax
provisions at the higher rate.
For the 2000 period, the Company reported net income, available to common
stockholders, of $84,000, or $.01 per basic and diluted share, as compared to
net income, available to common stockholders, of $709,000, or $.07 per basic and
diluted share for the 1999 period. Net income available to common stockholders
for the first six months of 2000 was $1,947,000, or $.20 and $.18 per basic and
diluted share, respectively, as compared to a net income available to common
stockholders of $1,357,000, or $.13 per basic and diluted share for the first
six months of 1999. Although the second quarter results of 2000 were
disappointing when compared with the 1999 period, the results of the first six
months of 2000 remained strong. Management has begun implementing several
initiatives that it believes will result in the streamlining of decision-making,
the use of stricter performance measurements, and a focus on new products and
services. It is anticipated, but cannot be assured, that these measures will
result in increased revenues and improved profitability in the future. However,
operating results will continue to be dependent upon general economic and
securities market conditions, and management's ability to continue to recruit
productive financial professionals and to contain administrative and legal
costs.
Liquidity and Capital Resources
The Company maintains a highly liquid balance sheet with the majority
of the Company's assets consisting of cash and cash equivalents; securities
owned which are marked to market; and receivables from brokers, dealers and the
Company's clearing firm arising from customer related securities transactions.
Market-making and other securities dealer activities require the Company to
carry significant levels of securities inventories in order to meet its customer
and internal trading needs. Accordingly, the Company's liquidity can and does
fluctuate significantly from day to day, depending largely upon general economic
and market conditions, daily trading activity, customer demand and investment
opportunities. The Company monitors these accounts on a daily basis in order to
ensure compliance with regulatory capital requirements and to preserve
liquidity.
Net cash provided by operating activities for the six months was
$5,556,000. Net income of $1,998,000, as well as a reduction in the amount owed
by the clearing firm of $5,308,000 contributed to the increase. The increase in
securities inventories of $2,268,000 and the decrease in commissions payable of
$1,134,000 was an offsetting factor.
Investing activities required cash of $254,000 over the last six
months. Additions to capital expenditures consumed $643,000, the majority of
which was in the first quarter of 2000. The Company projects additional
expenditures for infrastructure and technology, particularly in preparation for
the Company's move to the new clearing firm later this year, to be approximately
$500,000 for the remainder of fiscal 2000. The collection of Global leases
receivable provided cash of $375,000.
<PAGE>
09
Financing activities used cash of $1,582,000 during the first six
months of 2000. A total of $742,000 was used to repurchase 447,934 of the
Company's outstanding shares pursuant to a stock repurchase program authorized
by the board of directors in August 1999. In addition, the Company made notes
and capital lease repayments of $810,000 and dividend payments to preferred
shareholders of $51,000.
In October 1998, the Company issued a series of Convertible Promissory
Notes aggregating $570,000 to a private investor in consideration of $300,000 in
cash and an income stream from equipment lease investments with a remaining
balance of approximately $270,000. The notes carry interest at the rate of 10%
per annum, payable semi-annually on April 1 and October 1 of each year, and are
convertible into a maximum of 380,000 shares of the Company's Common Stock at
the rate of $1.50 per share. In May 2000, the Company prepaid the note in full
for 110% of face value, or $627,000. The $57,000 premium was recorded as an
extraordinary loss, net of income taxes of $22,800.
In May 2000, the Company entered into a 10-year clearing agreement with
Fiserv Securities, Inc. under which Fiserv will act as the Company's primary
clearing broker. In connection with the clearing agreement, the Company and
Fiserv also entered into a financial agreement under which Fiserv will provide a
cash advance of $4,000,000 to the Company upon the date of conversion to Fiserv.
The funds, net of federal and state income taxes, will be used primarily to
enable the Company to pay for the cost of conversion to Fiserv and expand the
Company's business. For financial reporting purposes, the Company will earn the
advance in accordance with an amortization schedule established by the parties;
however, the Company will incur an income tax liability at its effective tax
rate on the entire advance in the year in which it is received. The Company is
required to repay any unearned portion of the $4,000,000 in the event it fails
to achieve certain minimum performance criteria or terminates the agreement
under certain circumstances prior to the expiration date as well as penalties
for early termination. Fiserv has also agreed to provide certain additional
advances to the Company in the second, third and fourth years of the agreement
under similar conditions provided the Company achieves certain performance
criteria and subject to certain other conditions. These advances, if received,
will also be amortized to income as earned during the term of the clearing
agreement. The Company believes that the advance received net of taxes will be
sufficient to pay for the anticipated costs of conversion.
Management believes that operating income will satisfy the Company's
liquidity needs, at least through the current fiscal year.
<PAGE>
10
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders.
At the Company's Annual Meeting of Shareholders on June 23, 2000,
shareholders holding a majority of the voting shares approved the following:
1) A resolution to amend the Company's 1992 Incentive Stock Option Plan to
increase the number of shares reserved for issuance under the 1992
Incentive Stock Option Plan from 6,000,000 shares to 8,000,000 shares;
Votes Cast FOR Votes Cast AGAINST Votes ABSTAINING
3,111,988 752,160 72,257
2) A resolution to amend the Company's 1996 Senior Management Plan to increase
the number of shares reserved for issuance under the Senior Management Plan
from 2,000,000 shares to 4,000,000 shares; and
Votes Cast FOR Votes Cast AGAINST Votes ABSTAINING
3,040,501 821,221 74,683
3) A majority of votes entitled to vote elected the following Class III
Directors to serve for a term of 3 years to the Board of Directors:
Class III Votes Cast For Withhold Authority to Vote
Ward R. Jones 8,560,937 112,259
David I. Portman 8,566,237 106,959
Item 5. Other Information.
In May 2000, the Company entered into a 10-year clearing agreement with
Fiserv Securities, Inc. under which Fiserv will act as the Company's primary
clearing broker. In connection with the clearing agreement, the Company and
Fiserv also entered into a financial agreement under which Fiserv will provide a
cash advance of $4,000,000 to the Company upon the date of conversion to Fiserv.
The funds, net of federal and state income taxes, will be used primarily to
enable the Company to pay for the cost of conversion to Fiserv and expand the
Company's business. For financial reporting purposes, the Company will earn the
advance in accordance with an amortization schedule established by the parties;
however, the Company will incur an income tax liability at its effective tax
rate on the entire advance in the year in which it is received. The Company is
required to repay any unearned portion of the $4,000,000 in the event it fails
to achieve certain minimum performance criteria or terminates the agreement
under certain circumstances prior to the expiration date as well as penalties
for early termination. Fiserv has also agreed to provide certain additional
advances to the Company in the second, third and fourth years of the agreement
under similar conditions provided the Company achieves certain performance
criteria and subject to certain other conditions. These advances, if received,
will also be amortized to income as earned during the term of the clearing
agreement. The Company believes that the advance received net of taxes will be
sufficient to pay for the anticipated costs of conversion.
During the quarter ended June 30, 2000, the Company repurchased 153,734
shares of its common stock for $211,032 under a share repurchase program
authorized in 1999.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
None.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed.
<PAGE>
11
SIGNATURES
Pursuant to the requirements 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.
FIRST MONTAUK FINANCIAL CORP.
(Registrant)
Dated: August 14, 2000 /s/ William J. Kurinsky
----------------------------------
William J. Kurinsky
Secretary/Treasurer
Chief Financial Officer and
Principal Accounting Officer
/s/ Herbert Kurinsky
----------------------------------
Herbert Kurinsky
President
<PAGE>
12
EXHIBIT INDEX
-------------
Exhibit 11 - Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule
