<PAGE> 1
UNITED STATES
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1999
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 000-24057
Rushmore Financial Group, Inc.
---------------------------------------
(Exact name of registrant as specified in its charter)
Texas 75-2375969
-------- ---------------
(State of Incorporation) (I. R. S. Employer Identification No.)
13355 Noel Road, Suite 650, Dallas, Texas 75240
--------------------------------------------------------
972-450-6000
--------------------------------------------------------
(Issuer's telephone number, including area code)
Check whether the issuer filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by the court.
Yes No
------ ------
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 XXX No
------ ------
State the number of shares outstanding of each of the issuer's classes
of common equity as of March 31, 1999: 3,007,499 shares of common stock, $0.01
par value.
Transitional Small Business Disclosure Format;
Yes No XXX
------ ------
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
2
<PAGE> 3
RUSHMORE FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
------------ ------------
ASSETS
<S> <C> <C>
Investments:
Cash and cash equivalents $ 1,156,981 $ 613,814
Certificates of deposit 902,570 1,201,284
Amounts on deposit with reinsurer 4,486,525 32,785,657
Bonds available for sale; amortized cost $203,883 at December 31, 1998 -- 204,641
Equity securities available for sale 50,000 --
------------ ------------
Total investments 6,596,076 34,805,396
------------ ------------
Deferred policy acquisitions costs -- 1,989,174
Accounts receivable and due from reinsurers 435,556 1,328,659
Prepaid expenses and deposits 263,186 270,894
Equipment, net of accumulated depreciation 527,363 470,837
Deferred federal income taxes 9,652 91,674
Goodwill 28,144 246,326
Other assets 503 628
------------ ------------
Total assets $ 7,860,480 $ 39,203,588
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Future policy benefits $ 5,112 $ 87,393
Universal life contract liabilities 4,414,880 34,189,968
Present value of future profits -- 610,519
Claims payable -- 128,216
Notes payable 88,370 60,352
Due to reinsurers 50,559 1,127,099
Accrued expenses & other liabilities 391,707 383,291
------------ ------------
Total liabilities 4,950,628 36,586,838
------------ ------------
Shareholders' Equity:
Preferred stock-9% cumulative preferred stock, $10 par value, 2,000 shares
issued and outstanding at March 31, 1999 and
December 31, 1998 20,000 20,000
Preferred stock-Series A cumulative preferred stock, $10 par value;
13,687 shares issued and outstanding at March 31, 1999 and
December 31, 1998 136,870 136,870
Common stock-$0.01 par value, 10,000,000 shares authorized,
3,096,972 shares issued and 3,007,499 outstanding at March 31, 1999;
10,000,000 shares authorized and 3,066,597 issued and 2,977,124
shares outstanding at December 31, 1998 30,969 30,666
Common stock subscribed-8,000 shares at $0.01 at March 31, 1999;
10,000 shares at $0.01 at December 31,1998 80 100
Additional paid in capital 6,117,717 6,086,850
Treasury stock; 89,473 shares at cost (116,345) (116,345)
Retained earnings (deficit) (3,235,519) (3,453,470)
Accumulated other comprehensive income -- 758
Shareholder/subscription receivables:
Common stock subscriptions receivable (43,920) (43,920)
Shareholder loans -- (44,759)
------------ ------------
Total shareholders' equity 2,909,852 2,616,750
------------ ------------
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 7,860,480 $ 39,203,588
============ ============
</TABLE>
See accompanying notes to consolidated financial statements. 3
<PAGE> 4
RUSHMORE FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended March 31, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Revenue:
Revenue from Insurance Services:
Insurance policy income $ 128,313 $ 862,083
Net Investment income 92,991 523,917
Agency Management fee 40,238 704
Gain on sale of insurance block 1,016,268 --
Revenue from Investment Services:
Commissions and fees 680,263 499,824
Asset management 65,622 45,655
Other 11,320 15,996
----------- -----------
Total revenues 2,035,015 1,948,179
----------- -----------
Expenses:
Insurance Services Expenses:
Other insurance services expenses 133,630 314,438
Policyholder benefits 68,100 441,939
Amortization of deferred policy
acquisition costs 92,864 218,543
Amortization of present value of insurance in force -- 332,215
Investment services expenses:
Commission expense 603,393 459,458
Other investment services expenses 43,739 24,884
General and administrative 711,784 290,333
----------- -----------
Total expenses 1,653,510 2,081,810
----------- -----------
Operating income (loss) 381,505 (133,631)
Interest expense 171 8,264
----------- -----------
Income (loss) before income taxes 381,334 (141,895)
Provision for income taxes 163,383 --
----------- -----------
Net income (loss) $ 217,951 $ (141,895)
=========== ===========
Net income (loss) applicable to common shareholders $ 214,422 $ (145,966)
=========== ===========
Basic:
Net income (loss) per share of common stock,
after dividends on preferred stock $ 0.07 $ (0.07)
=========== ===========
Weighted average common shares outstanding 3,004,659 2,147,863
=========== ===========
Diluted:
Net income (loss) per share of common stock,
after dividends on preferred stock $ 0.07 $ (0.07)
=========== ===========
Weighted average common shares outstanding 3,078,359 2,147,863
=========== ===========
See accompanying notes to consolidated financial statements
</TABLE>
4
<PAGE> 5
RUSHMORE FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 217,951 $ (141,895)
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities:
Gain on sale of insurance block (1,016,268) --
Realized (gains) and losses net (3,933) --
Depreciation and amortization 29,680 8,205
CHANGE IN ASSETS AND LIABILITIES, NET OF EFFECTS OF
SALE OF INSURANCE BLOCK:
(Increase) decrease in assets:
Accounts receivable and due from reinsurers (102,618) (150,323)
Prepaid expenses and deposits 7,708 2,944
Deferred policy acquisition costs 85,878 90,789
Amounts on deposit with reinsurer (112,914) 165,920
Net deferred federal income taxes (9,652) (44,579)
Other assets 1,755 --
Increase (decrease) in liabilities:
Accrued expenses and other liabilities 334,086 217,654
Due to reinsurers 114,483 --
Future policy benefits 499 207
Universal Life liabilities 22,261 (316,391)
Present value of future profits -- 332,215
Claims payable -- (207,133)
------------- -------------
Net cash flows provided (used) by operating activities (431,084) (42,387)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (86,206) (3,251)
Purchase of equity securities available for sale (50,000) 110
Decrease in certificates of deposit 298,714 --
Sales of bonds available for sale 207,816 --
Cash received on sale of insurance block 500,000 --
------------- -------------
Net cash flows provided (used) by investing activities 870,324 (3,141)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans to officers and affiliate 44,759 58,063
Proceeds from sale of Common Stock 34,679 12,848
Costs of stock offering -- (251,293)
Preferred Stock dividends paid (3,529) (4,071)
Payments on notes payable (7,242) --
Proceeds from notes payable 35,260 --
------------- -------------
Net cash flows provided (used) by financing activities 103,927 (184,453)
------------- -------------
Change in cash and cash equivalents 543,167 (229,981)
Cash and cash equivalents at beginning of period 613,814 1,222,820
------------- -------------
Cash and cash equivalents at end of period $ 1,156,981 $ 992,839
============= =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 822 $ 1,786
Cash paid for income taxes $ -- $ 86,558
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The financial statements included herein have been prepared by Rushmore
Financial Group, Inc. ("Company") without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures contained herein are adequate to make the information
presented not misleading. In the opinion of management, the information
furnished in the unaudited consolidated financial statements reflects all
adjustments which are ordinary in nature and necessary to present fairly the
Company's financial position, results of operations and changes in financial
position for such interim period. These interim financial statements should be
read in conjunction with the Company's financial statements and the notes
thereto as of December 31, 1998, included in the Company's annual report on
Form 10-KSB for the year ended December 31, 1998.
Rushmore Insurance Services, Incorporated ("Rushmore Agency") is an insurance
agency and an affiliate of the Company by means of service agreements. The
Company has entered into an administrative services agreement whereby net
revenues and expenses are charged via a management fee to the Company. Rushmore
Agency has been consolidated in the accompanying consolidated financial
statements. All financial information contained herein has been reclassified,
where applicable, to include these net revenue and expenses for the three
months ended March 31, 1998.
2. Sale of Insurance Block
On January 22, 1999 the Company executed a termination and recapture agreement
with Conseco Life Insurance Company ("CLIC") effective January 1, 1999. Under
the terms of the agreement all reinsurance is terminated and all risks formerly
assumed by CLIC were recaptured. On March 9, 1999 CLIC paid $500,000 to the
Company as consideration and in settlement of the amounts due CLIC from the
Company and the amounts due the Company from CLIC. The following table
summarizes the categories of net asset changes relating to this sale:
<TABLE>
<CAPTION>
Assets Increase Decrease
- ------------------------------------ --------------- --------------
<S> <C> <C>
Cash $ 500,000 $ --
Amounts on Deposit With Reinsurers -- 28,412,046
Accounts Receivable -- 995,721
Deferred Federal Income Tax -- 91,674
Deferred Policy Acquisition Costs -- 1,903,296
Goodwill -- 216,552
</TABLE>
<TABLE>
<CAPTION>
Liabilities Decrease Increase
- ------------------------------------ --------------- --------------
<S> <C> <C>
Future Policy Benefits $ 82,780 $ --
Universal Life Policy Liabilities 29,797,349 --
Present Value of Future Profits 610,519 --
Claims Payable 128,216 --
Due to Reinsurers 1,191,023 --
Accrued Expenses & Other Liabilities 116,039 --
</TABLE>
<TABLE>
<CAPTION>
Net Income Decrease Increase
- ------------------------------------ --------------- --------------
<S> <C> <C>
Gain on Sale of Insurance Block $ -- $ 1,016,268
Provision for Federal Income Tax 209,631 --
</TABLE>
6
<PAGE> 7
3. Industry Segment Information
The following summarizes the Company's industry segment data of identifiable
assets as of March 31, 1999:
<TABLE>
<CAPTION>
1999
----------
<S> <C>
Insurance Agency $ 388,750
Insurance Company 5,839,908
Investment Services 348,941
Other 1,282,881
----------
Total $7,860,480
==========
</TABLE>
The corresponding information regarding income segments is contained in the
following management discussion and analysis of financial condition and results
of operations.
4. Deferred Policy Acquisition Costs
Costs which vary with and which are directly related to the acquisition of new
business have been deferred to the extent that such costs are deemed
recoverable through future revenues. These costs primarily include commissions
and allowances. For universal life, such costs are amortized generally in
proportion to the present value (principally using the assumed crediting rate)
of expected gross profits. This amortization is adjusted retrospectively when
the insurance subsidiary revises its estimates of current or future gross
profits to be realized from a group of policies. For traditional products, such
costs are amortized with interest over the premium-paying period in proportion
to the ratio of anticipated annual premium revenue to the anticipated total
premium revenue.
Based on management's review of expected future gross profits, all unamortized
deferred policy acquisition costs at March 31 were written off, resulting in
additional amortization of $68,498. The Company continues to monitor the
recoverability, and any change in the recoverability will be recorded when
identified. Management does not anticipate that this will have a material
effect on financial results.
5. Comprehensive Income (Loss)
Comprehensive income (loss) for the periods ending March 31, 1999 and 1998
consists of:
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
--------- ---------
<S> <C> <C>
Net Income (Loss) $ 217,951 $(141,895)
Other comprehensive income (loss), net of tax
Unrealized gains (losses) on securities, net
of reclassification adjustment (758) 148
--------- ---------
Comprehensive income (loss) $ 217,193 $(141,747)
========= =========
</TABLE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Three Months Ended March 31, 1999 and 1998
7
<PAGE> 8
Revenues
The following table sets forth the components of the Company's revenues for the
periods indicated:
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
---------- ----------
<S> <C> <C>
Insurance Agency $ 141,601 $ 26,267
Insurance Company 1,136,209 1,360,437
Investment Services 745,885 545,479
Other 11,320 15,996
---------- ----------
Total $2,035,015 $1,948,179
========== ==========
</TABLE>
Total revenues increased 4% from $1,948,179 for the first quarter of 1998 to
$2,035,015 during the first quarter of 1999. The increase in investment
services revenue was generally attributable to an increase of $102,018 in
variable annuity commission income, plus an increase of $57,952 in investment
brokerage revenue. The increase in insurance agency revenue was the result of
an increase of $75,919 in life and health insurance commission income, plus
earnings of $37,546 in Health Association management fees.
As a result of the insurance block sale, insurance company revenue decreased
from $1,360,437 in 1998 to $1,136,209 (including $1,016,268 in gain on the sale
to CLIC). Insurance premium income decreased $809,570 to $26,950; and net
investment income decreased $430,926 to $92,991 as a result of the sale
discussed above.
Expenses
The following table sets forth the components of the Company's expenses for the
periods indicated:
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
---------- ----------
<S> <C> <C>
Insurance Agency $ 257,346 $ 31,382
Insurance Company 175,846 1,301,671
Investment Services 837,269 630,607
Other 383,049 118,150
---------- ----------
Total $1,653,510 $2,081,810
========== ==========
</TABLE>
Insurance agency expenses increased from $31,382 in 1998 to $257,346 in 1999.
Expenses to acquire sales leads rose to $51,132 in 1999 from zero in 1998, and
agent commissions rose to $50,328 in 1999 from $146 in 1998. Payroll and
employee benefit costs incurred to support additional sales volume rose to
$84,600 in 1999 from $3,988 in 1998, and postage/printing costs rose to $25,081
in 1999 from $1,140 in 1998.
Insurance company expenses decreased from $1,301,671 in 1998 to $175,846 in
1999 due primarily to the sale of reinsurance business to CLIC.
Investment services expenses increased 33% from $630,607 in 1998 to $837,269 in
1999. Commissions paid as a percentage of commission revenue decreased slightly
from 85.0% in 1998 to 84.1% in 1999. Non-commission expenses rose from $171,149
in 1998 to $233,870 in 1999; generally as a result of increases of $38,654 in
payroll and benefits expense, and $12,388 in quotation service costs.
Other expenses increased 224% from $118,150 in 1998 to $383,049 in 1999 due
primarily to increases in legal, professional, and personnel costs. Investor
Relations fees increased from zero in 1998 to $10,865 in 1999. Legal and
accounting fees increased to $29,020 in 1999 from $1,738 in 1998. The
compensation and benefits increase of $123,357 was due mainly to additional
personnel. As a result of acquiring additional computer equipment and office
equipment, and of expanding office space, depreciation expense increased from
$9,522 in 1998 to $28,871 in 1999.
8
<PAGE> 9
Operating income (loss)
The following table sets forth the components of the Company's net income for
the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
----------- -----------
<S> <C> <C>
Insurance Agency $ (115,745) $ (8,028)
Insurance Company 796,980 58,766
Investment Services (91,384) (85,128)
Other (371,900) (107,505)
----------- -----------
Total $ 217,951 $ (141,895)
=========== ===========
</TABLE>
The Company had net income of $217,951 for the first quarter of 1999; as
opposed to a net loss of $141,895 for the same period in 1998. The net income
applicable to common shareholders for the first quarter of 1999 was $214,422,
or $0.07 per share (basic and diluted). For 1998, the net loss applicable to
common shareholders of $145,966 was ($0.07) per share (basic and diluted). The
increase in net income is attributable to the pre-tax gain of $1,016,268 on the
disposition of the block of reinsurance policies, offset by increased
expenditures in general & administrative expenses of $421,451 and increase in
the provision for income taxes of $163,383. The provision for income taxes was
primarily the result of the sale of the insurance block by Rushmore Life
Insurance Company. Although the Company has significant net operating loss
deductions available, it is unable to consolidate Rushmore Life Insurance
Company for tax purposes. The increase in provision for income taxes includes
the result of an increase in additions to the deferred tax asset valuation
allowance of $244,826.
Year 2000
The Year 2000 will have a broad impact on the business environment in which the
Company operates. This is due to the possibility that many computerized systems
across all industries will be unable to process information containing dates
beginning in the Year 2000. The Company established an enterprise-wide program
in the first quarter of 1998 to prepare its computer systems, applications, and
transactional bridges between internal systems and external agents for the Year
2000. The Company is utilizing both internal and external resources to
identify, correct and test the systems for Year 2000 compliance. The majority
of its inventory, research, and modifications were completed by December 31,
1998. Further validations through testing and follow-up procedures will be
conducted throughout calendar year 1999. The Company expects that all
mission-critical systems will be Year 2000 compliant prior to June 30, 1999.
Because third party failures could have a material impact on the Company's
ability to conduct business, questionnaires have been sent to all of the
Company's vendors including the clearing firms and primary insurers to certify
that plans are being developed to address the Year 2000 issue. The
questionnaires that have been returned to date are being assessed by the
Company, and are being categorized based upon readiness for the Year 2000
issues. They are also being prioritized in order of significance to the
business of the Company. To the extent that business-critical vendors do not
provide the Company with satisfactory evidence to the readiness to handle Year
2000 issues, contingency plans will be developed. The Company intends to make
every reasonable effort to assess the Year 2000 readiness of the critical
business partners and to create actions plans to address the identified risks.
In addition to safeguarding against internal and external possible
malfunctions, the Company is developing a contingency plan to operate
independent of systems that could be affected by the Year 2000 problem. The
plan, which includes backup telephone systems and manual routing of
transactions such as security trades, will be in place by June 30, 1999.
Testing and remediation of all of the Company's systems and applications is
expected to cost approximately $25,000 from inception in calendar year 1998
through completion in calendar year 1999. All estimated costs have been
budgeted and are expected to be funded by cash flows from operations.
The Company does not believe the costs related to the Year 2000 compliance
project will be material to its financial position or results of operations.
However, the cost of the project and the date on which the Company plans to
complete the Year 2000 modifications are based on management's best estimates.
These estimates were derived
9
<PAGE> 10
utilizing numerous assumptions of future events including the continued
availability of certain resources, third party modification plans and other
factors. Unanticipated failures by clearing firms and primary insurers, as well
as the failure by the Company to execute its own remediation efforts could have
a material adverse effect on the cost of the project and its completion date.
As a result, there can be no assurance that these forward-looking estimates
will be achieved and the actual cost and vendor compliance could differ
materially from those plans, resulting in material financial risks.
10
<PAGE> 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Neither Rushmore Financial Group, Inc. nor its subsidiaries is a party to any
pending legal proceedings which management believes would have a material
effect upon the operations or financial condition of Rushmore Financial Group,
Inc.
Item 2. Defaults Upon Senior Securities - None
Item 3. Submission of Matters to a Vote of Security Holders
The Company held its annual meeting of shareholders on May 7, 1999.
PROPOSAL 1 - ELECTION OF DIRECTORS
The following table provides information as of May 1, 1999, with respect to
each of the Company's directors continuing in office and nominees for director.
<TABLE>
<CAPTION>
NAME AGE SERVED AS DIRECTOR SINCE
- ----------------------------------------------- ------ ------------------------
<S> <C> <C>
DIRECTOR NOMINEES
CLASS OF NOMINEES FOR TERMS EXPIRING IN 2002
D. M. (Rusty) Moore, Jr 49 1990
Timothy J. Gardiner 44 1997
James M. Fehleison 39 1998
DIRECTORS CONTINUING IN OFFICE
CLASS OF DIRECTORS WITH TERMS EXPIRING IN 2000
James W. Clark 47 1991
Mark S. Adler 44 1997
Gayle C. Tinsley 68 1998
CLASS OF DIRECTORS WITH TERMS EXPIRING IN 2001
Frederick E. (Fritz) Mowery 43 1996
William C. Keane 68 1998
Charles M. Duke, Jr 62 1998
</TABLE>
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF AUDITORS
The holders of Common Stock were also asked to ratify the Board of Directors
appointment of KPMG LLP as the Company's independent auditors for the year
ending December 31, 1999.
The following table summarizes the votes cast regarding these proposals.
<TABLE>
<CAPTION>
Delivered Exception
Proposal For Against Abstain Not Voted & No Vote
- --------- --------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C>
1
Moore 2,536,774 0 31,152 0 438,948
Gardiner 2,536,774 0 31,152 0 438,948
Fehleison 2,536,774 0 31,152 0 438,948
2 2,536,143 2,230 29,553 0 438,948
</TABLE>
11
<PAGE> 12
Item 4. Exhibits and Reports on Form 8K
(a) Exhibits. Exhibit 11 - Earnings per share
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8k. - None
SIGNATURE
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 hereunto duly authorized.
Rushmore Financial Group, Inc.
Dated: May 12, 1999 By /s/ Robert W. Hendren
-----------------------
By Robert W. Hendren
12
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
11 Earnings per share
27 Financial Data Schedule
</TABLE>
<PAGE> 1
Exhibit 11 - Earnings per share
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
Net income (loss) $ 217,951 $ (141,895)
Less dividends on preferred stock (3,529) (4,071)
------------- -------------
Net income (loss) applicable to common shareholders $ 214,422 $ (145,966)
============= =============
Weighted average common shares outstanding 3,004,659 2,147,863
Dilutive Potential Common Shares-Options 73,700 0
Net income (loss) per common share
Basic $ 0.07 $ (0.07)
Diluted $ 0.07 $ (0.07)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-31-1999
<PERIOD-END> MAR-31-1999
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 50,000
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 6,596,076
<CASH> 1,156,981
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 7,860,480
<POLICY-LOSSES> 4,378,573
<UNEARNED-PREMIUMS> 41,419
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 88,370
0
156,870
<COMMON> 30,969
<OTHER-SE> 2,722,013
<TOTAL-LIABILITY-AND-EQUITY> 7,860,480
128,313
<INVESTMENT-INCOME> 92,991
<INVESTMENT-GAINS> (3,933)
<OTHER-INCOME> 1,817,644
<BENEFITS> 68,100
<UNDERWRITING-AMORTIZATION> 92,864
<UNDERWRITING-OTHER> 133,630
<INCOME-PRETAX> 381,334
<INCOME-TAX> 163,383
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 217,951
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
<RESERVE-OPEN> (91,674)
<PROVISION-CURRENT> 163,383
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> (9,652)
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
