<PAGE>
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 December 31, 1998
or
[ ]Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from ___________________
to __________________
Commission File Number 0-19847
FIRST MORTGAGE CORPORATION
(Exact name of registrant as specified in its charter)
California 95-2960716
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
3230 Fallow Field Drive
Diamond Bar, California 91765
(Address, including zip code, of principal executive offices)
(909) 595-1996
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 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 December 31, 1998, 5,355,197 shares of the registrant's common stock were
outstanding.
<PAGE>
FIRST MORTGAGE CORPORATION
FORM 10-Q
INDEX
Part I - Financial Information Page
Item 1. Financial Statements:
Balance Sheets
December 31, 1998 (Unaudited) and March 31, 1998 3
Unaudited Statements of Income
Three Months and Nine Months Ended December 31, 1998 and 1997 4
Unaudited Statements of Cash Flows
Nine Months Ended December 31, 1998 and 1997 5
Notes to Unaudited Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8-13
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
FIRST MORTGAGE CORPORATION
BALANCE SHEETS
<CAPTION>
December 31, 1998 March 31, 1998
(Unaudited)
<S> <C> <C>
ASSETS
Cash $8,873,000 $8,182,000
Mortgage loans held for sale 60,202,000 53,052,000
Other receivables and servicing
advances 7,746,000 10,566,000
Capitalized servicing rights 11,368,000 7,490,000
Property and equipment, net 672,000 664,000
Prepaid income taxes 413,000 -
Prepaid expenses and other assets 116,000 361,000
Note receivable 130,000 130,000
TOTAL ASSETS $89,520,000 $80,445,000
LIABILITIES AND STOCKHOLDERS'
EQUITY
LIABILITIES:
Notes payable, banks $41,801,000 $40,427,000
Sight drafts payable 12,177,000 9,372,000
Accounts payable and accrued 2,812,000 1,392,000
liabilities
Deferred income taxes 3,537,000 2,259,000
Total Liabilities 60,327,000 53,450,000
STOCKHOLDERS' EQUITY
Preferred stock, no par value:
Authorized shares - 1,000,000
Issued and outstanding shares - -
- None
Common stock, no par value:
Authorized shares -
10,000,000
Issued and outstanding shares
- 5,355,197 at 2,956,000 4,963,000
December 31, 1998 and
5,808,697 at March 31, 1998
Retained earnings 26,237,000 22,032,000
Total Stockholders' Equity 29,193,000 26,995,000
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $89,520,000 $80,445,000
</TABLE>
[FN]
<F1>
See accompanying notes
</FN>
<PAGE>
<TABLE>
FIRST MORTGAGE CORPORATION
UNAUDITED STATEMENTS OF INCOME
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
REVENUES:
Loan origination income $958,000 $716,000 $3,058,000 $2,228,000
Loan servicing income 1,954,000 1,959,000 5,835,000 5,688,000
Gain on sale of mortgage loans 5,455,000 2,186,000 13,915,000 5,384,000
Interest income 1,072,000 661,000 3,038,000 1,824,000
Total revenues 9,439,000 5,522,000 25,846,000 15,124,000
EXPENSES:
Compensation and benefits 3,072,000 2,022,000 8,075,000 6,075,000
General and administrative expenses 2,144,000 1,637,000 6,778,000 4,393,000
Amortization of capitalized servicing rights 1,118,000 776,000 2,818,000 1,917,000
Interest expense 468,000 180,000 993,000 535,000
Total expenses 6,802,000 4,615,000 18,664,000 12,920,000
INCOME BEFORE INCOME TAXES 2,637,000 907,000 7,182,000 2,204,000
INCOME TAX EXPENSE 1,092,000 380,000 2,977,000 926,000
NET INCOME $1,545,000 $527,000 $4,205,000 $1,278,000
Basic and Diluted Earnings Per Share $0.29 $0.09 $0.76 $0.22
</TABLE>
[FN]
<F1>
See accompanying notes
</FN>
<PAGE>
<TABLE>
FIRST MORTGAGE CORPORATION
UNAUDITED STATEMENTS OF CASH FLOWS
<CAPTION>
Nine Months Ended
December 31,
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $4,205,000 $1,278,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for deferred income taxes 1,278,000 311,000
Provision for losses on foreclosure (217,000) (490,000)
Amortization of capitalized servicing rights 2,818,000 1,917,000
Depreciation and amortization of property and equipment 197,000 159,000
Changes in excess service fee 58,000 72,000
Originations and purchases of mortgage loans held for sale (696,031,000) (315,330,000)
Sales and principal repayments of mortgage loans
held for sale 688,881,000 305,736,000
Changes in other receivables and servicing advances 3,037,000 326,000
Change in prepaid expenses and other assets 245,000 167,000
Change in accounts payable and accrued liabilities 1,420,000 (2,000)
Change in prepaid income taxes (413,000) -
Net cash provided by (used in) operating activities 5,478,000 (5,856,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of mortgage servicing rights (23,000) (605,000)
Origination of mortgage servicing rights (6,731,000) (2,412,000)
Purchase of property and equipment (205,000) (224,000)
Change in due to affiliates - 134,000
Net cash used in investing activities (6,959,000) (3,107,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in notes payable, banks 1,374,000 11,461,000
Change in sight drafts payable 2,805,000 (613,000)
Change in note payable, officer - (1,500,000)
Repurchase of common stock (2,007,000) (80,000)
Net cash provided by financing activities 2,172,000 9,268,000
INCREASE IN CASH 691,000 305,000
CASH, BEGINNING OF PERIOD 8,182,000 5,903,000
CASH, END OF PERIOD $8,873,000 $6,208,000
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 714,000 $ 406,000
Income taxes 1,850,000 455,000
</TABLE>
[FN]
<F1>
See accompanying notes
</FN>
<PAGE>
FIRST MORTGAGE CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
December 31, 1998
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and in accordance with the instructions to Form 10-Q
and Regulation S-X. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) necessary for a fair
presentation of the results for the interim periods have been included. The
results of operations for the interim periods are not necessarily indicative
of the results to be expected for the full year. In addition, this document
should be read in conjunction with the financial statements and footnotes
included in the Company's annual report on Form 10-K for fiscal year ended
March 31, 1998.
The preparation of the financial statements of the Company requires
management to make estimates and assumptions that affect reported amounts.
These estimates are based on information available as of the date of the
financial statements. Therefore, actual results could differ from those
estimates.
2. CAPITALIZED SERVICING RIGHTS
Activities in capitalized servicing rights are summarized as follows:
<TABLE>
<CAPTION>
Capitalized
Servicing
Rights
<S> <C>
Balance at March 31, 1998 $7,490,000
Additions 6,754,000
Amortizations and write offs (2,876,000)
Balance at December 31, 1998 $11,368,000
</TABLE>
3. NOTES PAYABLE
At December 31, 1998, the Company had line of credit agreements with two
nonaffiliated banks, which provided for borrowings up to $70,000,000 and
$35,000,000 with annual interest payable monthly at 1.25% to 1.40% or the
bank's reference rate, depending on the level of borrowings and the
compensating balances maintained. At December 31, 1998, borrowings under
these lines of $41,801,000 were collateralized by mortgage loans held for
sale.
The line of credit agreements are subject to renewal on September 1, 1999
and August 31, 2000, respectively. Both agreements contain certain
requirements, including but not limited to, the maintenance of minimum net
worth, debt to net worth ratio, current ratio, net income and servicing
portfolio, and restrict the Company's ability to pay dividends. The Company
believes its two lines of credit agreements will be renewed prior to their
expiration.
<PAGE>
4. EARNINGS PER SHARE
<TABLE>
The following table sets forth the computation of basic and diluted earnings
per share:
<CAPTION>
Three Months ended Nine Months ended
December 31 December 31
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Numerator:
Net income $1,545,000 $527,000 $4,205,000 $1,278,000
Denominator:
Shares used in computing basic earnings per share 5,357,529 5,849,450 5,557,524 5,855,883
Effect of stock options treated as equivalents
under the treasury stock method 729 - 9,378 -
Denominator for diluted earnings per share 5,358,258 5,849,450 5,566,902 5,855,883
Basic earnings per share $.29 $.09 $.76 $.22
Diluted earnings per share $.29 $.09 $.76 $.22
</TABLE>
5. NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities", ("SFAS 133"). It requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
SFAS 133 is required to be adopted by first quarter of fiscal year 2001.
The Company believes that the adoption of SFAS 133 will not have a material
impact on its financial statements.
In October 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 134, "Accounting for Mortgage-Backed
Securities Retained after the Securitization of Mortgage Loans Held for Sale
by a Mortgage Banking Enterprise", ("SFAS 134"). This Statement requires
that after the securitization of mortgage loans held for sale, an entity
engaged in mortgage banking activities classify the resulting mortgage-
backed securities and other retained interest based on its ability and
intent to sell or hold those instruments. The Company will adopt SFAS 134
in the fourth quarter of fiscal year 1999. The Company believes that the
adoption of SFAS 134 will not have a material impact on the financial
statements.
6. CONTINGENCIES
The Company is currently a defendant in certain litigation arising in the
ordinary course of business. It is management's opinion that the outcome of
these actions will not have a material effect on the financial position or
results of operations of the Company.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING STATEMENTS
Certain statements in this Form 10-Q are forward-looking statements, including
those that discuss strategies, goals, outlook, projected revenues, income,
return and other financial measures. These forward-looking statements are
subject to risk and uncertainties that may cause actual results to differ
materially from those contained in the statements, including the following
factors: (i) the direction of interest rates; (ii) the demand for mortgage
credits; (iii) the ability to obtain sufficient financial sources for liquidity
and working capital; (iv) changes in laws or regulations governing mortgage
banking operations; and (v) level of competition within the mortgage banking
industry. In addition, the words "believe," "expect," "anticipate," "intend,"
"will" and similar words identify forward-looking statements in this Form 10-Q.
RESULTS OF OPERATIONS:
Three months ended December 31, 1998 compared to three months ended December 31,
1997.
GENERAL
First Mortgage reported net income of $1.545 million or $0.29 per share for
the quarter ended December 31, 1998, compared to net income of $527,000 or
$0.09 per share for the comparable 1997 quarter. The increase of 193.2% in
net income was attributable to substantial larger gains on mortgage sales;
stronger loan origination revenues and increase in interest income. The
improvement in earnings was, however, offset partially by higher
compensation; general and administrative expenses and amortization of
capitalized servicing rights.
REVENUES
For the quarter ended December 31, 1998, the volume of new mortgage loans
closed increased by 128.3% to $262.52 million from $114.99 million in the
prior year quarter. The increase is a reflection of lower long-term
interest rates, which significantly increased the volume of refinancing
loans in the market place, and the robust recovery of the California real
estate market.
For the three months ended December 31, 1998, loan origination revenue
increased by approximately 33.8% to $958,000 from the December 1997
quarter, due primarily to a higher volume of retail loans, which carry
higher front-end origination fees.
As of December 31, 1998, the Company serviced $1.643 billion in loans
compared to $1.702 billion at December 31, 1997, a decrease of 3.5%
compared to the year-ago quarter. The run-off in the servicing portfolio
was due to heavy refinances induced by the current low interest rate
environment. Total loan servicing income, including late charges and other
miscellaneous fees, declined marginally by 0.3% to $1.94 million in the
December 1998 quarter, from $1.96 million of the prior year quarter.
<PAGE>
<TABLE>
The following table sets forth certain information pertaining to the
servicing portfolio of the Company for the period indicated.
<CAPTION>
Three Months Ended
December 31
1998 1997
(Dollars in thousands
except average loan
balance)
<S> <C> <C>
Beginning loan service portfolio $1,573,950 $1,613,942
Add: Loans originated 262,522 114,987
Less: Prepayment and amortization 278,259 117,418
Ending loan servicing porfolio 1,558,213 1,611,511
Sub-Servicing 84,836 90,196
Total servicing portfolio $1,643,049 $1,701,707
Average loan balance (end of period) $ 92,954 $ 95,963
</TABLE>
Due to a very favorable reduction in long-term mortgage interest rates
during the quarter, the gain on sale of mortgage loans was $5.46 million
for the three months ended December 31, 1998, an increase of 149.5% over
the 1997 period.
Interest income, which reflects the interest received on mortgage loans
held for sale, increased to $1.07 million for the three months ended
December 31, 1998 from $661,000 for the comparable prior year quarter.
This increase was due primarily to the larger mortgage inventory carried by
the Company during the December 1998 quarter, partially offset by lower
interest rate.
EXPENSES
The major components of the Company's total expenses are (i) compensations
and benefits, (ii) general and administrative expenses, (iii) amortization
of capitalized servicing rights, and (iv) interest expense. Total expenses
for the three months ended December 31, 1998 increased by 47.4% to $6.8
million from the three months ended December 31, 1997. Compensations and
benefits were $3.07 million for the December 1998 quarter, an increase of
51.9% over the year-ago quarter. General and administrative expense
increased by $507,000, or 31% over prior year. These higher expenses were
a direct result of expanding production operations in the quarter,
partially offset by cost reduction measures taken by the Company over the
past year.
Amortization of capitalized servicing rights increased by 44.1% over prior
year quarter due mainly to the larger investment in mortgage servicing
rights and higher volume of prepayments from refinances over the comparable
prior period.
Interest expense increased 160% to $468,000 for quarter ended December 31,
1998 from $180,000 for the same period in 1997. The increase was due to
the larger volume of loans originated during the quarter.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
Nine months ended December 31, 1998 compared to nine months ended December 31,
1997
GENERAL
In the nine months ended December 31, 1998, the Company reported net
income of $4.21 million or $0.76 per share, compared to net income of
$1.28 million or $0.22 per share for the same period of 1997. Total
revenue increased by 70.9% to $25.85 million from $15.12 million in the
comparable prior period. The increase in net income was due to higher
loan origination income and a larger gain on sale of mortgage loans for
the nine month period as compared to last year.
REVENUES
For the nine months ended December 31, 1998, loan origination revenue
increased 37.3% to $3.06 million from $2.23 million for the nine months
ended December 31, 1997. The higher loan origination revenue was
primarily due to the larger volume of new loans originated by the Company.
The volume of new mortgage loan originations increased 120.7% to $696.03
million from $315.33 million in the comparable period last year.
Loan servicing income, representing the loan servicing fees, late charges
and other fees earned by the Company for administering the loans in its
servicing portfolio, rose 2.6% to $5.84 million for the nine months ended
December 31, 1998 from $5.69 million for the same period in 1997. The
slight increase in servicing income is primarily due to the larger number
of FHA and VA loans currently serviced by the Company, which typically
carry a higher net service fees than conventional loans.
The following table sets forth certain information pertaining to the
servicing portfolio of the Company for the period indicated:
<TABLE>
<CAPTION>
Nine Months Ended December 31,
1998 1997
(Dollars in thousands
except average loan
balance)
<S> <C> <C>
Beginning loan service portfolio $1,570,143 $1,583,837
Add: Loans originated 696,031 315,330
Less: Prepayment and amortization 707,961 287,656
Ending loan servicing portfolio 1,558,213 1,611,511
Sub-Servicing 84,836 90,196
Total servicing portfolio $1,643,049 $1,701,707
Average loan balance (end of period) $92,954 $95,693
</TABLE>
The sale of mortgages for the nine months ended December 31, 1998 resulted
in a gain of $13.92 million compared to a gain of $5.38 million for the
1997 period. The gain is primarily attributable to the higher volume of
loan originations coupled with the favorable trend in long-term interest
rates in 1998.
<PAGE>
Interest income, which reflects the interest earned on mortgage loans held
for sale for the nine months ended December 31, 1998 was $3.04 million, an
increase of 66.6% over the comparable 1997 period. The increase was as a
result of the higher volume of loans originated in the 1998 period,
partially offset by lower interest rate.
EXPENSES
The major components of the Company's total expenses are (i) compensation
and benefits, (ii) general and administrative expenses, (iii) amortization
of capitalized servicing rights, and (iv) interest expenses. Total
expenses for the nine months ended December 31, 1998 increased by $5.74
million or 44.5% from the nine months ended December 31, 1997.
Compensation and benefits increased 32.9% to $8.08 million compared to
$6.08 million in the first nine months of fiscal year 1997. General and
administrative expenses increased by 54.3% to $6.78 million from the
comparable period in 1997. The increases in these expenses were a direct
result of expansion in loan originations and direct marketing effort in
fiscal year 1999.
Increase in amortization of capitalized servicing rights was mainly due to
larger investment in servicing rights and higher volume of loan
prepayments over prior period.
Interest expense increased 85.6% to $993,000 as compared to $535,000 in
the year earlier nine months, due primarily to the larger volume of loans
originated during the period.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal liquidity requirement is the funding of its new
mortgage loans and loan origination expenses. To meet these funding needs,
the Company relies on warehouse lines of credit with banks, its own
capital, and also cash flows from operations.
At December 31, 1998, maximum permitted borrowings under the warehouse line
of credit agreements with two nonaffiliated banks totaled $105 million and
the amount outstanding was $41.8 million. Borrowings under these
facilities are secured by mortgage loans. The agreements contain various
covenants, including minimum net worth, current ratio, net income,
servicing portfolio balances, debt to net worth ratio, and restrict the
Company's ability to pay dividends. The Company was in compliance with all
debt covenants at December 31, 1998. The Company believes that the
warehouse agreements will be renewed when the current terms expire.
In the first nine months in fiscal year 1999, the Company repurchased in
open market transactions 453,500 shares of its common stock at an aggregate
cost of $2,007,000.
The Company had stockholders' equity of $29.11 million at December 31,
1998. Management believes that its current financing arrangements are
adequate to meet its projected operational needs.
<PAGE>
DISCLOSURE ABOUT MARKET RISK
The Company's earnings can be impacted significantly by the movement of
interest rates, which is the primary component of the market risk to the
Company. The interest rate risk affects value of the capitalized mortgage
servicing rights, volume of loan production and total net interest income
earned on its mortgage inventory. The Company has been managing this risk
by striving to balance its loan origination and loan servicing segments,
which generally are counter cyclical in nature. The overall objective is
to offset changes in the values of the following items, such as the
committed pipeline, mortgage loan inventory, mortgage-backed securities
held for sale and mortgage servicing rights. The Company does not
speculate on the direction or movement of the interest rates.
Based on the information available and the interest environment as of
December 31, 1998, the Company believes that a 100 basis point change in
long-term interest rates over a twelve month period, up or down and all
else being constant, would increase or decrease the Company's gross income
by approximately $1.5 million dollars. These estimates are limited by the
fact that they are performed at a particular point in time and do not
incorporate many other factors and consequently, should not be used as
forecast.
YEAR 2000 ISSUES
The Company's computing environment consists of one IBM AS/400 and other
personal computers connected to a Local Area Network. The IBM AS/400 is
the primary platform for the Loan Servicing Department processing. Other
departments, including loan processing, loan funding and accounting, are
serviced mainly by personal computers. Software for loan funding, loan
administration and accounting are maintained by outside service bureaus.
These service bureaus have been contacted by the Company and the Company
has received system upgrades and assurances from a majority of the software
vendors that year 2000 compliance can be achieved by June 30, 1999.
Additionally, the Company has enrolled in the Mortgage Bankers Association
Year 2000 Readiness Test, and many of the Company's software providers are
also participating. Other institutions involved in the project include
GNMA, FNMA and FHLMC. Through this extensive inter-industry testing
beginning in February 1999, the Company will try to ensure all the various
communication hardware and interface pieces will work together smoothly.
A majority of the software and applications currently used by the Company
are not in-house developed programs. The Company believes that it will
receive year 2000 upgrades from the software vendors, from whom the
programs were purchased, in a timely manner. The Company, however, cannot
be assured that these third party service providers will not have business
interruptions or other problems which could have an adverse impact on the
Company. Presently, the Company has a contractual agreement with IBM to
provide `hot site' backup for the loan servicing system, however, it does
not have a comprehensive contingency plan to handle the worst case
scenarios. The Company is in the process of developing such a plan that
will include identifying alternative processing platforms and systems for
all year 2000 compliant related problems.
The Company has made and will continue to make investments to identify and
modify any programs and systems that are not yet year 2000 compliant.
These costs are being expensed by the Company during the period in which
they are incurred. Based on preliminary information, the Company does not
anticipate that the expenses related to achieving year 2000 compliance will
have a material impact on the Company's results of operations.
<PAGE>
PROSPECTIVE TRENDS
During the first nine months of fiscal 1999 long-term mortgage interest
rates fell to the lowest levels in the last 25 years, contributing to a
120.7% increase in new loan originations over the year earlier period ended
December 31, 1997. Unless long-term interest rates unexpectedly increase,
the surge in activity should continue to help produce positive results for
the Company going forward.
Pricing of many traditional mortgage products, however, remains
uneconomical and the Company still faces intense competition from many
directions, particularly for the standard conforming conventional mortgage
loans so coveted by many of the major commercial banks. Our strategy is to
instead emphasize the origination of FHA and VA loans and other mortgage
products with greater profit potential for the Company.
As a continuing part of the Company's long-term plan, we are opening
additional retail offices wherever such opportunity presents itself.
During this fiscal year we have already opened new offices in West Los
Angeles, California and Las Vegas, Nevada.
We believe we are appropriately positioned to take advantage of the market
niches within which we can competitively operate, but we still face
formidable competition and, as always, our business is greatly influenced
by the level of interest rates. Refinance loans are now the biggest part
of our new loan originations, and should interest rates unexpectedly
increase, our results would be negatively impacted.
<PAGE>
PART II. OTHER INFORMATION.
Item 6. Exhibits and Reports of Form 8-K.
(a) No exhibits are filed with this report.
(b) The Company did not file any reports on Form 8-K during the quarter
ended December 31, 1998.
<PAGE>
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 MORTGAGE CORPORATION
Date: February 10, 1999 By S/Clement Ziroli
Clement Ziroli
Chairman of the
Board of Directors,
Chief Executive Officer
Date: February 10, 1999
By S/Pac W. Dong
Pac W. Dong
Executive Vice President,
Chief Financial Officer
[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] MAR-31-1999
[PERIOD-END] DEC-31-1998
[CASH] 8873
[SECURITIES] 0
[RECEIVABLES] 7746
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 0
[PP&E] 2921
[DEPRECIATION] 2249
[TOTAL-ASSETS] 89520
[CURRENT-LIABILITIES] 0
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 2956
[OTHER-SE] 26237
[TOTAL-LIABILITY-AND-EQUITY] 89520
[SALES] 0
[TOTAL-REVENUES] 25846
[CGS] 0
[TOTAL-COSTS] 18664
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] 7182
[INCOME-TAX] 2977
[INCOME-CONTINUING] 4205
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 4205
[EPS-PRIMARY] 0.76
[EPS-DILUTED] 0.76
</TABLE>
