<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 SEPTEMBER 30, 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)
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)
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
November 4, 1996: 8,073,620
The Exhibit Index is located on page 13.
================================================================================
<PAGE>
UNITED FINANCIAL GROUP, INC.
FORM 10-Q
TABLE OF CONTENTS
Section Page
________________________________________________________________________________
PART I
Item 1. Condensed Consolidated Financial Statements (Unaudited):
Condensed Consolidated Statements of Financial Condition
as of September 30, 1996 and December 31, 1995 3
Condensed Consolidated Statements of Operations
for the Three Months and Nine Months Ended September 30, 1996
and 1995 4
Condensed Consolidated Statements of Cash Flows
for the Nine Months Ended September 30, 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
- --------------------------------------------------------------------------------
2
<PAGE>
UNITED FINANCIAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
IN THOUSANDS
- ----------------------------------------------------------------------------
September 30, December 31,
1996 1995
- ----------------------------------------------------------------------------
Assets:
Cash and cash equivalents $ 1,840 348
Short-term investments 9,788 10,741
Loans and notes receivable -- 19
Other investments 83 344
Other assets 148 211
- ----------------------------------------------------------------------------
Total assets $ 11,859 11,663
============================================================================
Liabilities:
Accounts payable and accrued liabilities $ 1,045 739
Notes payable and other borrowings 4,671 4,671
Other liabilities 6,230 6,243
- ----------------------------------------------------------------------------
Total liabilities $ 11,946 11,653
- ----------------------------------------------------------------------------
Cumulative preferred dividends in
arrears $ 6,489 5,917
Redeemable preferred stock, no par value 16,404 16,404
Common stockholders' equity (deficit):
Common stock, no par value; 12,000,000
shares authorized; 8,073,620 shares
issued and outstanding, net of 115,750
shares in treasury 56,289 56,289
Retained deficit (79,269) (78,600)
- ----------------------------------------------------------------------------
Total common stockholders' equity
(deficit) (22,980) (22,311)
- ----------------------------------------------------------------------------
$ 11,859 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>
<S> <C> <C> <C> <C>
In Thousands
Except Per Share Data
- -------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------
Interest income $ 158 189 471 566
Other income 189 -- 189 --
- -------------------------------------------------------------------------------------------------------
347 189 660 566
General and administrative expenses 147 242 442 659
Interest expense 105 105 315 315
- -------------------------------------------------------------------------------------------------------
252 347 757 974
Income (loss) before income taxes 95 (158) (97) (408)
Income taxes -- -- -- --
- -------------------------------------------------------------------------------------------------------
Net income (loss) $ 95 (158) (97) (408)
=======================================================================================================
Net loss applicable to common stock
after reductions for preferred stock
dividends and accretion $ (96) (349) (670) (981)
Income (loss) per common and common
equivalent share $ (0.01) (0.04) (0.08) (0.12)
=======================================================================================================
</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
- ---------------------------------------------------------------
Nine Months Ended September 30, 1996 1995
- ---------------------------------------------------------------
<S> <C> <C>
Operating Activities:
Net loss $ (97) (408)
Adjustment to reconcile net income to
net cash used by operating activities:
Depreciation and amortization -- (36)
Changes in assets and liabilities
related to operations:
Decrease (increase) in other assets 63 (110)
Increase (decrease) in accounts
payable and accrued liabilities 306 312
- ---------------------------------------------------------------
Cash from (for) operating activities $ 272 (242)
- ---------------------------------------------------------------
Investing Activities:
Sales and maturities of short-term
investments $ 30,769 30,367
Purchases of short-term investments (29,816) (30,316)
Maturities of investments in debt
securities 280 140
- ---------------------------------------------------------------
Cash from investing activities $ 1,233 191
- ---------------------------------------------------------------
Financing Activities:
Payment of post-employment benefits $ (13) (13)
- ---------------------------------------------------------------
Cash from (for) financing activities $ (13) (13)
- ---------------------------------------------------------------
Increase (decrease) in cash and cash
equivalents 1,492 (64)
Cash and cash equivalents, beginning of
period 348 269
- ---------------------------------------------------------------
Cash and cash equivalents, end of period $ 1,840 205
===============================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
UNITED FINANCIAL GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 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
or nine-month periods ended September 30, 1996 and 1995. Average common and
common equivalent shares were 8,073,620 for the three-month and nine-month
periods ended September 30, 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,
the Company was allegedly obligated to USAT for amounts related to federal
income tax refunds 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 neither admits nor denies liability under claims by the OTS.
The FDIC Settlement is conditioned upon the Company obtaining a final order of
the Delaware Bankruptcy Court, and requires that a minimum payment of $9,450,000
to the FDIC, a minimum payment of $1,360,000 to the Debenture Trustee and a
minimum payment of $190,000 to Nu-West be made from the Company's assets. 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. Since its original execution, the
FDIC Settlement has been amended on several occasions to extend certain dates
for filing, receipt of payments, etc. The FDIC Settlement, as amended, specifies
that the minimum payments must be received by January 31, 1997. A disclosure
statement is required to be filed by the Company with the Delaware Bankruptcy
Court on or before November 8, 1996. 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 and
pursuant to the confirmed final plan of bankruptcy 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 September 30, 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 September 30, 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 September 30, 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 $9.8 million total for "Short-term investments" at
September 30, 1996 are certificates of deposit with one-year or shorter
maturities and an investment portfolio of government securities and commercial
paper. At December 31, 1995 and September 30, 1995, the Company's assets were
similarly invested.
The Company's significant remaining liabilities at September 30, 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 September 30, 1996 and
December 31, 1995.
RESULTS OF OPERATIONS
Interest income and investment income (loss)
Interest income for the three months ended September 30, 1996 was $158,000,
compared to $189,000 in the third quarter of 1995. That decrease is attributable
to lower interest rates earned by the Company's short-term investments. Average
amounts invested short term were approximately $1.0 million higher during the
quarter ended September 30, 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 5.4% in the third quarter of 1996,
compared to 6.0% in the third quarter of 1995. Additionally, a note receivable
held 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.
Year to date interest income at September 30, 1996 was $471,000, compared to
$566,000 for the same period in 1995. Interest rates on short-term investments
averaged 5.4% for the first nine months of 1996, but 6.0% for the same period in
1995. As described above, prepayment of a note receivable and redemption of an
investment in bonds increased the Company's liquidity, but the proceeds were re-
invested at lower rates of return.
Other income
In August 1996, the Company sold to an unrelated third party all 1,000 shares of
Southwestern Group Agency, Inc. ("SWGA"), a wholly-owned subsidiary. Although
SWGA was an inactive company with no significant assets, certain licenses it
held had value to the purchaser. The Company received $210,000 and paid a
commission of $21,000 to the broker who arranged the sale. The net gain of
$189,000 was recognized as "other income."
General and administrative expenses
General and administrative expenses were $95,000 lower in the third quarter of
1996, compared to the same period in 1995; in both periods, the largest
component of general and administrative expenses was legal fees related to the
negotiation of settlements of the claims described in Note 2 of Notes to
Condensed Consolidated Financial Statements included herein and other matters
connected with the FDIC Claims and the OTS Claims. A comparison of the
components of general and administrative expenses for the third quarter in 1996
and the same period in 1995 is presented below.
9
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Percent of total general and
administrative expenses for the
quarter ended September 30: 1996 1995
- -------------------------------------------------------
Legal fees 56.1% 73.7%
Other professional fees 23.9% 11.8%
Printing and distribution of annual
reports 2.9% 4.3%
Franchise taxes 12.9% 7.3%
Other 4.2% 2.9%
=======================================================
</TABLE>
For the first nine months of 1996, general and administrative expenses were
$442,000, 32.8% lower than the $658,000 for the first three quarters of 1995.
Legal fees were a substantial portion of the general and administrative expenses
for both periods. The components of general and administrative expenses for the
first nine months of 1996 and the same period in 1995 are summarized below.
<TABLE>
<CAPTION>
<S> <C> <C>
Percent of total general and
administrative expenses for the
nine-month periods ended September 30: 1996 1995
- --------------------------------------------------------
Legal fees 48.6% 67.6%
Other professional fees 21.8% 12.3%
Printing and distribution of annual
reports 12.3% 8.6%
Franchise taxes 12.5% 8.0%
Other 4.8% 3.5%
- --------------------------------------------------------
</TABLE>
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 professional services is included in general and administrative
expenses.
Interest expense
Interest expense for the three-month and nine-month periods ended September 30,
1996 was unchanged from the same periods in 1995. The 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 nine months of 1996, cash and cash equivalents increased by
$1,492,000. 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. The sale of all the shares of a wholly-owned subsidiary generated
net cash of $189,000, as discussed above under "Other income." 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 nine-month period ended September 30, 1995, the use of cash for
operating activities of the Company was partially offset by reductions in
investments, resulting in a net decrease of $64,000 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 September 30, 1996, the total amount of
arrearages in the payment of the Series B Preferred dividends was $6,489,113. 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
claimed that Nu-West was a creditor of the Company and that the Company failed
to pay Nu-West amounts allegedly due. In the second quarter of 1996 Nu-West
voluntarily dismissed the Petition.
Under the terms of a tentative agreement to settle claims against the Company
through a plan of bankruptcy, Nu-West would be paid a minimum of $190,000. That
tentative agreement and plan of bankruptcy are discussed further in Note 2 of
Notes to Condensed Consolidated Financial Statements, included herein.
At September 30, 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 Debentureholders would be paid a minimum of
$1,360,000. 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 and Nine Months Ended September 30, 1996 and 1995.
(b) Reports on Form 8-K
During the quarter ended September 30, 1996, no report on Form 8-K was filed
by the Company.
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: Paul N. Schwartz
___________________________
November 4, 1996
Paul N. Schwartz
Chairman of the Board,
President, Chief Executive Officer
and Chief Financial Officer
12
<PAGE>
UNITED FINANCIAL GROUP, INC.
EXHIBIT INDEX
Exhibit Number Page
- -------------------------------------------------------------------------------
11.1 Computation of Net Income (Loss) per Common and
Common Equivalent Share for the Three Months and Nine
Months Ended September 30, 1996 and 1995 14
- -------------------------------------------------------------------------------
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>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Computation of net income (loss)
applicable to common stock:
Income (loss) from continuing
operations before extraordinary items $ 95 (158) (97) (408)
Preferred stock dividends (191) (191) (573) (573)
- -------------------------------------------------------------------------------------------------
Net income (loss) applicable to common
stock $ (96) (349) (670) (981)
=================================================================================================
Computation of average common and
common equivalent shares:
Common shares outstanding at beginning
of period 8,074 8,074 8,074 8,074
- ------------------------------------------------------------------------------------------------
Average common and common equivalent
shares 8,074 8,074 8,074 8,074
================================================================================================
Net income (loss) per common and common
equivalent share $ (0.01) (0.04) (0.08) (0.12)
================================================================================================
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,840
<SECURITIES> 9,871
<RECEIVABLES> 148
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11,859
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,859
<CURRENT-LIABILITIES> 11,946
<BONDS> 0
0
22,893
<COMMON> 56,289
<OTHER-SE> (79,269)
<TOTAL-LIABILITY-AND-EQUITY> 11,859
<SALES> 0
<TOTAL-REVENUES> 660
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 442
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 315
<INCOME-PRETAX> (97)
<INCOME-TAX> 0
<INCOME-CONTINUING> (97)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (97)
<EPS-PRIMARY> (0.08)
<EPS-DILUTED> 0
</TABLE>
