<PAGE>
================================================================================
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarter Ended MARCH 31, 1996
[ ] 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: 0-10443
UNITED FINANCIAL GROUP, INC.
(Exact Name of Registrant as specified in its Charter)
<TABLE>
<S> <C>
DELAWARE 74-2029669
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
5847 SAN FELIPE, SUITE 2600 77057
HOUSTON, TEXAS (Zip Code)
(Address of principal executive offices)
</TABLE>
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 [ ]
Indicate number of shares outstanding of the Registrant's Common Stock at
April 30, 1996: 8,073,620
The Exhibit Index is located on page 13.
The total number of sequentially numbered pages is 14.
================================================================================
<PAGE>
UNITED FINANCIAL GROUP, INC.
FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
________________________________________________________________________________
<C> <S> <C>
PART I
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Statements of Financial Condition
as of March 31, 1996 and December 31, 1995 3
Condensed Consolidated Statements of Operations
for the Three Months Ended March 31, 1996 and 1995 4
Condensed Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 1996 and 1995 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II - OTHER INFORMATION
Item 3. Default Upon Senior Securities 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
________________________________________________________________________________
2
<PAGE>
UNITED FINANCIAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
FINANCIAL CONDITION
(UNAUDITED)
<TABLE>
<CAPTION>
In Thousands
- --------------------------------------------------------------------
March 31, December 31,
1996 1995
- ---------------------------------------------------------------------
<S> <C> <C>
Assets:
Cash and cash equivalents $ 519 348
Short-term investments 10,873 10,741
Loans and notes receivable 7 19
Other investments 92 344
Other assets 189 211
- ---------------------------------------------------------------------
Total assets $ 11,680 11,663
=====================================================================
Liabilities:
Accounts payable and accrued liabilities $ 840 739
Notes payable and other borrowings 4,671 4,671
Other liabilities 6,239 6,243
- ---------------------------------------------------------------------
Total liabilities $ 11,750 11,653
- ---------------------------------------------------------------------
Cumulative preferred dividends in $ 6,108 5,917
arrears
Redeemable preferred stock, no par value 16,404 16,404
Common stockholders' equity (deficit):
Common stock, no par value; 12,000,000
shares authorized at March 31, 1996
and December 31, 1995; 8,073,620
shares issued and outstanding, net of
115,750 shares in treasury 56,289 56,289
Retained deficit (78,871) (78,600)
- ---------------------------------------------------------------------
Total common stockholders' equity
(deficit) (22,582) (22,311)
- ---------------------------------------------------------------------
$ 11,680 11,663
=====================================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
UNITED FINANCIAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
In Thousands
Except Per Share Data
- ----------------------------------------------------------------
Three Months Ended March 31, 1996 1995
- ----------------------------------------------------------------
<S> <C> <C>
Interest income $ 160 188
- ----------------------------------------------------------------
160 188
General and administrative expenses 135 210
Interest expense 105 105
- ----------------------------------------------------------------
240 315
Loss before income taxes (80) (127)
Income taxes - -
- ----------------------------------------------------------------
Net loss $ (80) (127)
================================================================
Net loss applicable to common stock
after reductions for preferred stock
dividends and accretion $ (271) (317)
Loss per common and common
equivalent share $(0.03) (0.04)
================================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
UNITED FINANCIAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
In Thousands
Except Per Share Data
- ----------------------------------------------------------------
Three Months Ended March 31, 1996 1995
- ----------------------------------------------------------------
<S> <C> <C>
Operating Activities:
Net loss $ (80) (127)
Adjustments to reconcile net income to
net cash provided (used) by operating
activities:
Depreciation and amortization - (11)
Changes in assets and liabilities
related to operations:
Decrease (increase) in other 22 (32)
assets
Increase (decrease) in accounts
payable and accrued liabilities 101 93
- -----------------------------------------------------------------
Cash from (for) operating activities $ 43 (77)
- -----------------------------------------------------------------
Investing Activities:
Sales and maturities of short-term
investments $ 8,805 12,654
Purchases of short-term investments (8,937) (12,454)
Maturities of investments in debt
securities 264 47
- ----------------------------------------------------------------
Cash from (for) investing activities $ 132 247
- ----------------------------------------------------------------
Financing Activities:
Payment of post-employment benefits
liabilities $ (4) (4)
- ----------------------------------------------------------------
Cash from (for) financing activities $ (4) (4)
- ----------------------------------------------------------------
Increase (decrease) in cash and cash
equivalents 171 166
Cash and cash equivalents, beginning of
period 348 269
- ----------------------------------------------------------------
Cash and cash equivalents, end of period $ 519 435
================================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
UNITED FINANCIAL GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(Unaudited)
1. BASIS OF PRESENTATION
Principles of consolidation and presentation
The unaudited condensed consolidated financial statements include the
accounts of United Financial Group, Inc. and its subsidiaries ("UFGI" or the
"Company"), all of which are wholly owned. Prior to December 30, 1988, UFGI
was in the business of offering products and services in the mortgage lending
and savings industries and engaged in an array of investment activities,
primarily through its most significant subsidiary, United Savings Association
of Texas ("USAT"), and USAT's wholly owned subsidiaries. On December 30,
1988, USAT was placed into receivership by the Federal Deposit Insurance
Corporation ("FDIC" which term, as used herein, includes its predecessor, the
Federal Savings and Loan Insurance Corporation, "FSLIC"), and the Company's
net liabilities related to its investment in USAT were written off at that
time. Since December 30, 1988, management of the Company has concentrated its
efforts on the resolution of issues with the FDIC, the Office of Thrift
Supervision ("OTS"), and other claimants, and the Company's business
activities have been limited to the management of investments.
All material intercompany transactions are eliminated in consolidation. The
unaudited condensed consolidated financial statements included herein reflect
all adjustments necessary to present fairly the financial position and
results of operations for the periods indicated. The results of operations
for the interim periods are not necessarily indicative of results to be
expected for the year.
Earnings (loss) per common and common equivalent share
Earnings (loss) per common and common equivalent share is computed using
UFGI's net income (loss), adjusted for redeemable preferred stock dividends.
The adjusted net income (loss) is then divided by the weighted average number
of common shares outstanding during the period, including any dilutive common
stock equivalents resulting from common stock options and redeemable
preferred stock outstanding. There were no dilutive common stock equivalents
in the three-month periods ended March 31, 1996 and 1995. Average common and
common equivalent shares were 8,073,620 for the three-month periods ended
March 31, 1996 and 1995.
2. COMMITMENTS AND CONTINGENT LIABILITIES
In connection with its actions placing USAT into receivership on December 30,
1988, the FDIC made claims against the Company for damages equal to
approximately $548 million (the "FDIC Claims"). The FDIC alleged that it was
damaged by the Company's failure to maintain USAT's net worth in accordance
with Federal Home Loan Bank Board regulations. Additionally, the FDIC claimed
that, as a result of the Company's utilization of the benefits of certain tax
losses incurred by USAT, the Company was obligated to USAT for amounts
related to federal income tax refunds allegedly obtained. The Company has
denied the merits of any potential claim alleged by the FDIC. In 1991, the
Company entered an agreement to toll the running of the statute of
limitations and certain other equitable defenses in order to delay final
litigation decisions and to permit additional time for negotiation of a
settlement of the FDIC Claims. Such agreement was amended several times to
postpone its expiration, and negotiations with the FDIC continued through
December 1995.
In mid-1994, settlement discussions relating to the FDIC Claims were joined
by the Office of Thrift Supervision ("OTS"), a separate agency whose
jurisdiction covers areas not included within the scope of the FDIC's
jurisdiction. The OTS is investigating the possibility of certain regulatory
violations (the "OTS Claims") by the Company and others, including current
and former officers and directors of the Company. The Company denies any such
violations and has been in negotiations with the OTS since September 1994
concerning possible settlement of the OTS Claims. The Company entered an
agreement with the OTS to toll the running of the statute of limitations,
subject to the right of the OTS to terminate such agreements with 10 days'
notice. That agreement was amended several times to postpone its expiration,
and negotiations with the OTS continued through December 1995.
6
<PAGE>
Effective December 1995, the Company entered into agreements with the OTS and
an agreement with the FDIC, the trustee for the 9% Secured Sinking Fund
Debentures (the "Debenture Trustee") and Nu-West Florida, Inc. ("Nu-West"),
as sole holder of the Company's Series B Preferred Stock (the "FDIC
Settlement"). Under these agreements, the Company neither admits nor denies
liability under claims by the FDIC and the OTS.
The FDIC Settlement is conditioned upon the Company obtaining a final order
of the Delaware Bankruptcy Court. and requires that the Company pay a minimum
of $9,450,000 to the FDIC, a minimum of $1,360,000 to the Debenture Trustee
and a minimum of $190,000 to Nu-West. The Company is required to proceed with
a plan of reorganization or liquidation in the Delaware Bankruptcy Court, and
payments would be made after the Delaware Bankruptcy Court has confirmed a
final plan. The FDIC Settlement specifies that the plan of bankruptcy must be
confirmed on or before June 30, 1996. A disclosure statement must be filed by
the Company with the Delaware Bankruptcy Court within sixty days of the
effective date of the agreement. Under the FDIC Settlement, and with some
exceptions, expenditures by the Company in excess of $300,000 from and after
the effective date are subject to approval by FDIC and OTS. Any assets of the
Company remaining after the payments and expenditures described above must be
paid to the FDIC, the Debenture Trustee and Nu-West in proportion to the
minimum settlement payments. The FDIC Settlement also provides that the
Company may not, except in limited circumstances, utilize the benefits of tax
losses carried forward from 1988 and prior years. In connection with the
agreements with the FDIC and OTS, the Company has agreed to toll the running
of the statute of limitations.
While the Company, the FDIC, the OTS, and others have been negotiating the
terms of a possible settlement of claims against the Company, there is no
assurance that the Company will be able to consummate such a settlement, nor
can the Company determine when, if ever, any settlement will be effected.
Included in other liabilities at March 31, 1996 and December 31, 1995 are
amounts accrued by the Company for contingent liabilities, including the FDIC
Claims and OTS Claims. Statement of Financial Accounting Standards No. 5,
Contingencies, requires that management of the Company recognize a liability
for estimated losses arising from asserted and unasserted claims when losses
from such claims are probable and reasonably estimable. Periodically,
management of the Company reviews its estimates of probable losses to
determine whether the liabilities accrued for contingencies require
adjustment.
3. FEDERAL INCOME TAXES
No tax benefits have been recognized in connection with the Company's net
losses in 1996 and 1995. At December 31, 1995, UFGI had a financial
accounting tax loss carryforward and a tax net operating loss carryforward of
approximately $6,590,000 which, if not utilized to offset future taxable
income, will expire in the period from 1999 to 2010.
Under provisions of the Internal Revenue Code, a parent corporation that
joins in filing a consolidated federal income tax return with its subsidiary
must make certain annual adjustments to the tax basis of stock it owns in
such subsidiary. The required adjustments include, among other things, a
decrease in the tax basis for tax losses of a subsidiary utilized to offset
income of the parent and for dividend payments made by a subsidiary to its
parent corporation. If a parent has a negative tax investment basis (referred
to as an "excess loss account") with respect to the stock of the subsidiary,
the occurrence of certain events, including the determination that the stock
of the subsidiary is "worthless", results in the recognition of the excess
loss account in taxable income. Prior to USAT being placed into receivership,
UFGI had an excess loss account with respect to its investment in USAT of
approximately $75 million.
In connection with the FDIC placing USAT in receivership and the subsequent
sale of USAT's assets, the FDIC provided a note (the "FSLIC Note") in the
approximate amount of $261 million to USAT. A subsequent audit resulted in an
increase of the FSLIC Note to $309 million. UFGI received a ruling from the
Internal Revenue Service that UFGI's tax basis in USAT's stock was increased
by the amount of the FSLIC Note. On December 30, 1988, UFGI's adjusted basis
in USAT's stock was written off. The amount of such basis was either $186
million or $234 million, depending on the treatment of the subsequent
increase of the FSLIC Note. As a result, the Company has additional loss
carryforward benefits estimated at $156 million arising from 1988 losses,
including the write-off of basis in the USAT stock. Based on a review of
Internal Revenue Service rulings in matters unrelated to the Company, the
Company believes those carryforward deductions may be characterized as
ordinary losses, rather than capital losses. If so, those carryforward
deductions will expire at the end of the fifteenth tax year after the year in
which the loss was incurred. The Company may not, however, rely on Internal
Revenue Service rulings to which the Company is not a party. If the 1988
losses were characterized as capital losses, the right to utilize loss
carryforward deductions would have expired in 1993.
7
<PAGE>
Under the terms of a tentative agreement to settle claims against the Company
by the FDIC and the OTS, the Company would, except under limited
circumstances, be unable to utilize the tax benefits of any net operating
losses carried over from 1988 and prior years. That tentative agreement and
plan of bankruptcy are discussed further in Note 2.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion provides information which management believes is
relevant to an assessment and understanding of the Company's operations and
financial condition. This discussion should be read in conjunction with the
Condensed Consolidated Financial Statements (unaudited) and accompanying
Notes included in Item 1.
FINANCIAL CONDITION
At March 31, 1996, cash, cash equivalents and short-term investments made up
approximately 98% of the Company's assets. At December 31, 1995 cash, cash
equivalents and short-term investments were 95% of total assets. Mortgage-
backed securities and a note receivable were the Company's only other income-
earning assets at March 31, 1996. Mortgage-backed securities, a note
receivable and bonds made up the remainder of the Company's income-earning
assets at December 31, 1995. Included in the $10.9 million total for "Short-
term investments" at March 31, 1996 are certificates of deposit with one-year
or shorter maturities, U.S. Treasury Bills and an investment portfolio of
government securities and commercial paper. At December 31, 1995 and March
31, 1995, the Company's assets were similarly invested.
The Company's significant remaining liabilities at March 31, 1996 and
December 31, 1995 include the Company's 9% Secured Sinking Fund Debentures
(the "Debentures") which matured August 1, 1993 and amounts accrued for
contingencies, as discussed in Note 2 of Notes to Condensed Consolidated
Financial Statements, included herein. For information concerning an event of
default relating to the Debentures, see "Item 3. Defaults Upon Senior
Securities."
Accrued dividends in arrears on the Company's Series B $13 Cumulative
Preferred Stock also represented a significant commitment at March 31, 1996
and December 31, 1995.
RESULTS OF OPERATIONS
Interest income and investment income (loss)
Interest income for the three months ended March 31, 1996 was $160,000,
compared to $188,000 in the first three months of 1995. That decrease is
attributable, in part, to lower interest rates earned by the Company's short-
term investments. Average amounts invested short term were approximately
$1,000,000 higher during the quarter ended March 31, 1996, compared to the
same period in 1995, but interest rates on the Company's short-term
investments were lower. The average yield on those assets was approximately
5.5% in the first quarter of 1996, compared to 6.0% in the first quarter of
1995. Additionally, a note receivable by the Company was prepaid in December
1995, and an investment in bonds was redeemed in February 1996. Those assets
had earned higher interest rates than the Company's short-term investments,
and the proceeds from their repayment and redemption were re-invested at
significantly lower rates.
General and administrative expenses
General and administrative expenses were $74,000 lower in the first quarter
of 1996, a 35% decrease compared to the same period in 1995. Such expenses
for the three-month periods ended March 31, 1996 and 1995 were dominated by
legal fees related to the negotiation of settlements of the claims described
in Note 2 of Notes to Condensed Consolidated Financial Statements, included
herein. In the three-month periods ended March 31, 1996 and 1995, legal fees
were 52% and 73% of total general and administrative expenses. Other
professional services - primarily audit and accounting fees - were 22% and
11% of total general and administrative expenses for the three-month periods
ended March 31, 1996 and 1995, respectively. Franchise tax expense was 13%
and 8% of total general and administrative expenses for the quarters ended
March 31, 1996 and 1995. No other expense type included in general and
administrative represented more than more than 10% of the total.
During 1991, the four full-time employees of the Company resigned. Since that
time, the Company has operated without employees and without incurring
salaries and related expenses. The Company has an outsourcing arrangement
with a former employee and a firm of certified public accountants to provide
for certain of the Company's accounting, financial reporting and
administrative functions. The cost of those services is included in general
and administrative expenses.
9
<PAGE>
Interest expense
Interest expense for the three months ended March 31, 1996 was unchanged from
the same period in 1995. The 9% Secured Sinking Fund Debentures, which
matured August 1, 1993, were the only interest-bearing debt of the Company
during both periods. Though interest payments are not made on the Company's
Debentures, interest is accrued on those matured Debentures at the same rate
as required before the maturity date. For information concerning an event of
default relating to the Debentures, see "Item 3. Defaults Upon Senior
Securities."
CASH FLOWS
In the first three months of 1996, cash and cash equivalents increased by
$171,000. Most of that increase was the result of sales and maturities of the
Company's investments. Operations generated a small amount of cash for the
period, in part, because certain of the Company's expenses are being accrued,
but not paid. Also a factor was the reduction in general and administrative
expenses, which exceeded the decrease in interest income, compared to the
figures for the same period in 1995.
During the quarter ended March 31, 1995, the use of cash for operating
activities of the Company was offset by reductions in investments, resulting
in a net increase of $166,000 in cash and cash equivalents for the quarter.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Since May 1, 1988, quarterly dividends on UFGI's Series B $13 Cumulative
Preferred Stock (the "Series B Preferred") in the amount of $190,856 have
been due and have not been paid. As of March 31, 1996, the total amount of
arrearages in the payment of the Series B Preferred dividends was $6,107,400
In addition, UFGI has been required to make sinking fund payments for the
redemption commencing May 1, 1989, of certain shares of such Series B
Preferred in the amount of $146,813 per quarter. As a result of UFGI's
capital position, and pursuant to Section 170 of the Delaware Corporation
Law, UFGI has not been legally permitted to make such sinking fund and
dividend payments. In addition, the Board of Directors of UFGI has determined
not to make any further preferred stock dividend or sinking fund payments on
any class of preferred stock until further action of the Board of Directors
changes such determination.
Pursuant to the terms of the Series B Preferred, any dividend not paid will
accumulate, and UFGI will be unable to pay dividends on its Common Stock
until all dividend arrearages are paid. In addition, since UFGI has failed to
make five dividend payments when due (whether consecutive or not), the holder
of the Series B Preferred is entitled to elect one person to the Board of
Directors at the next Annual Meeting of Stockholders of the Company. The
Series B Preferred holder has not opted to elect such a director.
In November 1992, the holder of the Company's Series B Preferred Stock, Nu-
West Florida, Inc. ("Nu-West") filed an involuntary petition (the "Petition")
against the Company under Chapter 11 of the United States Bankruptcy Code.
The Petition claims that Nu-West is a creditor of the Company and that the
Company has failed to pay Nu-West amounts allegedly due. The Company has
responded to such Petition, but no hearing is currently scheduled. While the
Company intends to allege certain substantive and procedural defenses to the
petition, the Company can make no assurances regarding the outcome of this
matter and the possible effects on the ongoing operations and financial
condition of the Company.
Under the terms of a tentative agreement to settle claims against the Company
through a plan of bankruptcy, the Company would pay a minimum of $190,000 to
Nu-West. That tentative agreement and plan of bankruptcy are discussed
further in Note 2 of Notes to Condensed Consolidated Financial Statements,
included herein.
At March 31, 1996 and December 31, 1995, the Company's notes payable and
other borrowings consisted of $4,671,000 of 9% Secured Sinking Fund
Debentures due 1993 (the "Debentures"). While the Company continued to make
interest payments on the Debentures when due, pursuant to a decision of the
Company's Board of Directors, a sinking fund payment of approximately
$1,826,000 due August 1, 1992 under the terms of the Debentures and the full
principal payment of $4,671,000 due August 1, 1993 were not made by the
Company. As a result, the Indenture Trustee notified the Company that there
had occurred an event of default under the terms of the Indenture. The
Indenture Trustee or the beneficial owners of the Debentures may, therefore,
be entitled to take certain actions pursuant to the Indenture. The Company
continued to pay semi-annual interest on the Debentures at the stated rate of
9% and on the payment dates in effect prior to maturity of the Debentures
(February 1 and August 1) through August 1, 1994. In January 1995, the
Company was informed by the staff of the OTS and counsel to the FDIC that no
additional interest payments should be made to the Debentureholders.
Therefore, the Company has not made interest payments on the Debentures since
August 1994 and is not expected to make any future interest payments.
Under the terms of a tentative agreement to settle claims against the Company
through a plan of bankruptcy, the Company would pay a minimum of $1,360,000
to the trustee for the Debentureholders. That tentative agreement and plan of
bankruptcy are discussed further in Note 2 of Notes to Condensed Consolidated
Financial Statements, included herein.
ITEM 5. OTHER INFORMATION
The Company has received an exemption from the registration requirements of
the Investment Company Act of 1940. Such exemption will expire on December
30, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11.1 - Computation of Net Income (Loss) per Common and Common Equivalent
Share for the Three Months Ended March 31, 1996 and 1995.
(b) Reports on Form 8-K
On February 22, 1996, the Company reported on Item 5, "Other Events,"
concerning the OTS and FDIC Settlements.
11
<PAGE>
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.
United Financial Group, Inc.
_________________________________________
Registrant
By: /s/ Paul N. Schwartz
_________________________________________
May 7, 1996 Paul N. Schwartz
Chairman of the Board,
President, Chief Executive Officer and
Chief Financial Officer
12
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UNITED FINANCIAL GROUP, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Page
_________________________________________________________________
<S> <C>
11.1 Computation of Net Income (Loss) per Common and
Common Equivalent Share for the Three Months Ended
March 31, 1996 and 1995 14
_________________________________________________________________
</TABLE>
13
<PAGE>
UNITED FINANCIAL GROUP, INC. EXHIBIT 11.1
COMPUTATION OF NET INCOME (LOSS) PER COMMON
AND COMMON EQUIVALENT SHARE
(UNAUDITED)
(In Thousands Except Per Share Data)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
March 31, March 31,
Three Months Ended: 1996 1995
- --------------------------------------------------------------------
<S> <C> <C>
Computation of net income (loss)
applicable to common stock:
Net (income) loss $ (80) (127)
Redeemable preferred stock dividends
accrued (191) (190)
- --------------------------------------------------------------------
Net income (loss) applicable to common
stock $ (271) (317)
====================================================================
Computation of average common and
common equivalent shares:
Common stock outstanding at beginning
and end of period 8,074 8,074
Average common and common equivalent
shares 8,074 8,074
====================================================================
Net income (loss) per common and common
equivalent share $(0.03) (0.04)
====================================================================
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 519
<SECURITIES> 10,873
<RECEIVABLES> 7
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,581
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,680
<CURRENT-LIABILITIES> 840
<BONDS> 4,671
56,289
0
<COMMON> 16,401
<OTHER-SE> (78,871)
<TOTAL-LIABILITY-AND-EQUITY> 11,680
<SALES> 0
<TOTAL-REVENUES> 160
<CGS> 0
<TOTAL-COSTS> 135
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 105
<INCOME-PRETAX> (80)
<INCOME-TAX> (80)
<INCOME-CONTINUING> (80)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (80)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> 0
</TABLE>
