<PAGE> 1
UNITED STATES
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 March 31, 1997
COMMISSION FILE NUMBER 0-22280
PHILADELPHIA CONSOLIDATED HOLDING CORP.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-2202671
(State of Incorporation) (IRS Employer Identification No.)
ONE BALA PLAZA, SUITE 100
BALA CYNWYD, PENNSYLVANIA 19004
(610) 617-7900
(Address, including zip code and telephone number,
including area code, of registrant's 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 the number of shares outstanding of each of the issuer's classes of
common stock as of May 9, 1997.
Preferred Stock, $.01 par value, no shares outstanding
Common Stock, no par value, 6,089,560 shares outstanding
1
<PAGE> 2
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
INDEX
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
<TABLE>
<S> <C>
Part I - Financial Information
Consolidated Balance Sheets - March 31, 1997 and
December 31, 1996 3
Consolidated Statements of Operations - For the three
months ended March 31, 1997 and 1996 4
Consolidated Statements of Changes in Shareholders' Equity - For the
three months ended March 31, 1997 and year ended
December 31, 1996 5
Consolidated Statements of Cash Flows - For the three
months ended March 31, 1997 and 1996 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of Results of Operations and
Financial Condition 8-9
Part II - Other Information 10
Signatures 11
Exhibits 12
</TABLE>
2
<PAGE> 3
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
As of
--------------------------
March 31, December 31,
1997 1996
-------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
INVESTMENTS:
FIXED MATURITIES AVAILABLE FOR SALE AT MARKET
(AMORTIZED COST $148,394 AND $137,757)
(including $24,323 and $24,867 in Trust Accounts) $149,324 $141,236
EQUITY SECURITIES AT MARKET (COST $21,486 AND $19,648) 28,585 27,342
-------- --------
TOTAL INVESTMENTS ................................ 177,909 168,578
CASH AND CASH EQUIVALENTS (including $1,207 and $1,224
in Trust Accounts) ................................... 8,585 11,483
ACCRUED INVESTMENT INCOME .............................. 2,259 2,626
PREMIUMS RECEIVABLE .................................... 10,997 8,112
PREPAID REINSURANCE PREMIUMS AND REINSURANCE
RECEIVABLES .......................................... 15,211 18,078
DEFERRED ACQUISITION COSTS ............................. 9,862 9,033
PROPERTY AND EQUIPMENT ................................. 5,568 5,226
GOODWILL-LESS ACCUMULATED AMORTIZATION OF
$1,330 AND $1,313 .................................... 754 771
DEFERRED INCOME TAXES .................................. 279 --
OTHER ASSETS ........................................... 2,813 2,031
-------- --------
TOTAL ASSETS ..................................... $234,237 $225,938
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
POLICY LIABILITIES AND ACCRUALS:
UNPAID LOSS AND LOSS ADJUSTMENT EXPENSES ............. $102,071 $ 96,642
UNEARNED PREMIUMS .................................... 35,153 33,154
-------- --------
TOTAL POLICY LIABILITIES AND ACCRUALS ............ 137,224 129,796
PREMIUMS PAYABLE ....................................... 943 698
PAYABLE FOR INVESTMENT PURCHASES ....................... 2,013 --
OTHER LIABILITIES ...................................... 4,740 7,614
DEFERRED INCOME TAXES .................................. -- 1,240
INCOME TAXES PAYABLE ................................... 1,925 948
-------- --------
TOTAL LIABILITIES ................................ 146,845 140,296
-------- --------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
PREFERRED STOCK, $.01 PAR VALUE,
10,000,000 SHARES AUTHORIZED,
NONE ISSUED AND OUTSTANDING
COMMON STOCK, NO PAR VALUE,
50,000,000 SHARES AUTHORIZED, 6,082,810 AND
6,039,806 SHARES ISSUED AND OUTSTANDING .......... 41,903 41,167
NOTES RECEIVABLE FROM SHAREHOLDERS ................... (1,457) (924)
UNREALIZED INVESTMENT APPRECIATION (DEPRECIATION),
NET OF DEFERRED INCOME TAXES ..................... 5,299 7,374
RETAINED EARNINGS .................................... 41,647 38,025
-------- --------
TOTAL SHAREHOLDERS' EQUITY ....................... 87,392 85,642
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ....... $234,237 $225,938
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE> 4
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
1997 1996
---- ----
<S> <C> <C>
REVENUE:
GROSS EARNED PREMIUMS ............... $ 32,617 $ 25,438
CEDED EARNED PREMIUMS ............... (10,229) (9,621)
---------- ----------
NET EARNED PREMIUMS ................. 22,388 15,817
NET INVESTMENT INCOME ............... 2,211 1,846
NET REALIZED INVESTMENT GAIN (LOSS) . 28 (27)
OTHER INCOME ........................ 57 48
---------- ----------
TOTAL REVENUE ................... 24,684 17,684
---------- ----------
LOSSES AND EXPENSES:
LOSS AND LOSS ADJUSTMENT EXPENSES ... 13,385 9,979
NET REINSURANCE RECOVERIES .......... (904) (1,305)
---------- ----------
NET LOSS AND LOSS ADJUSTMENT EXPENSES 12,481 8,674
ACQUISITION COSTS AND OTHER
UNDERWRITING EXPENSES ............. 6,946 5,107
OTHER OPERATING EXPENSES ............ 523 400
---------- ----------
TOTAL LOSSES AND EXPENSES ....... 19,950 14,181
---------- ----------
INCOME BEFORE INCOME TAXES ............ 4,734 3,503
---------- ----------
INCOME TAX EXPENSE (BENEFIT):
CURRENT ............................. 1,562 839
DEFERRED ............................ (450) (51)
---------- ----------
TOTAL INCOME TAX EXPENSE ........ 1,112 788
---------- ----------
NET INCOME ..................... $ 3,622 $ 2,715
========== ==========
PER AVERAGE COMMON SHARE DATA:
NET INCOME .......................... $ 0.49 $ 0.39
========== ==========
WEIGHTED AVERAGE SHARES AND SHARE
EQUIVALENTS USED IN COMPUTATION OF NET
INCOME PER COMMON SHARE .............. 7,351,695 7,000,213
========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
4
<PAGE> 5
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
For the Three Months For the Year Ended
Ended March 31, December 31,
1997 1996
---- ----
(Unaudited)
<S> <C> <C>
COMMON SHARES:
BALANCE AT BEGINNING OF PERIOD ................. 6,039,806 5,813,851
ISSUANCE OF SHARES
PURSUANT TO EMPLOYEE STOCK PURCHASE PLAN .... 30,504 78,455
PURSUANT TO EMPLOYEE STOCK OPTION PLAN ...... 12,500 147,500
---------- ----------
BALANCE AT END OF PERIOD .................... 6,082,810 6,039,806
========== ==========
COMMON STOCK:
BALANCE AT BEGINNING OF PERIOD ................. $ 41,167 $ 39,057
ISSUANCE OF SHARES
PURSUANT TO EMPLOYEE STOCK PURCHASE PLAN ..... 599 1,131
EXERCISE OF EMPLOYEE STOCK OPTIONS ............. 137 979
---------- ----------
BALANCE AT END OF PERIOD .................... 41,903 41,167
---------- ----------
NOTES RECEIVABLE FROM SHAREHOLDERS:
BALANCE AT BEGINNING OF PERIOD ................. (924) --
NOTES RECEIVABLE ISSUED
PURSUANT TO EMPLOYEE STOCK PURCHASE PLAN .... (599) (1,131)
COLLECTION OF NOTES RECEIVABLE ................. 66 207
---------- ----------
BALANCE AT END OF PERIOD .................... (1,457) (924)
---------- ----------
UNREALIZED INVESTMENT APPRECIATION (DEPRECIATION),
NET OF DEFERRED INCOME TAXES:
BALANCE AT BEGINNING OF PERIOD ............... 7,374 4,608
CHANGE IN UNREALIZED INVESTMENT APPRECIATION
(DEPRECIATION), NET OF DEFERRED INCOME TAXES (2,075) 2,766
---------- ----------
BALANCE AT END OF PERIOD .................... 5,299 7,374
---------- ----------
RETAINED EARNINGS:
BALANCE AT BEGINNING OF PERIOD ................. 38,025 24,651
NET INCOME ..................................... 3,622 13,374
---------- ----------
BALANCE AT END OF PERIOD .................... 41,647 38,025
---------- ----------
TOTAL SHAREHOLDERS' EQUITY ..................... $ 87,392 $ 85,642
========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
5
<PAGE> 6
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended March 31
-----------------------------------
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME .................................... $ 3,622 $ 2,715
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
NET REALIZED INVESTMENT (GAIN) LOSS ......... (28) 27
DEPRECIATION AND AMORTIZATION EXPENSE ....... 336 222
DEFERRED INCOME TAX BENEFIT ................. (450) (51)
CHANGE IN PREMIUMS RECEIVABLE ............... (2,885) (215)
CHANGE IN OTHER RECEIVABLES ................. 3,234 (1,257)
CHANGE IN DEFERRED ACQUISITION COSTS ........ (829) (743)
CHANGE IN OTHER ASSETS ...................... (782) (622)
CHANGE IN UNPAID LOSS AND LOSS ADJUSTMENT
EXPENSES .................................. 5,429 4,050
CHANGE IN UNEARNED PREMIUMS ................. 1,999 2,017
CHANGE IN PREMIUMS PAYABLE AND OTHER
LIABILITIES ............................... (2,629) (277)
CHANGE IN INCOME TAXES PAYABLE .............. 977 822
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES.. 7,994 6,688
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
PROCEEDS FROM SALES OF INVESTMENTS IN FIXED
MATURITY SECURITIES AVAILABLE FOR SALE ...... 1,208 --
PROCEEDS FROM MATURITY OF INVESTMENTS IN FIXED
MATURITY SECURITIES AVAILABLE FOR SALE ...... 660 5,921
PROCEEDS FROM SALES OF INVESTMENTS IN EQUITY
SECURITIES .................................. 2,224 746
COST OF FIXED MATURITY SECURITIES AVAILABLE FOR
SALE ACQUIRED ............................... (10,538) (14,141)
COST OF EQUITY SECURITIES ACQUIRED ............ (4,055) (1,533)
PURCHASE OF PROPERTY AND EQUIPMENT ............ (594) (674)
-------- --------
NET CASH USED BY INVESTING ACTIVITIES ..... (11,095) (9,681)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
EXERCISE OF EMPLOYEE STOCK OPTIONS ............ 137 --
COLLECTION OF NOTES RECEIVABLE ................ 66 --
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES.. 203 --
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS ........ (2,898) (2,993)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.. 11,483 5,680
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ....... $ 8,585 $ 2,687
======== ========
CASH PAID DURING THE PERIOD FOR:
INCOME TAXES .................................. $ 599 $ --
NON-CASH TRANSACTIONS:
ISSUANCE OF SHARES PURSUANT TO EMPLOYEE
STOCK PURCHASE PLAN ......................... $ 599 $ 357
NOTES RECEIVABLE ISSUED PURSUANT TO
EMPLOYEE STOCK PURCHASE PLAN ................ $ (599) $ (357)
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
6
<PAGE> 7
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The consolidated financial statements as of and for the three months
ended March 31, 1997 and 1996 are unaudited, but in the opinion of
management, have been prepared on the same basis as the annual audited
consolidated financial statements and reflect all adjustments,
consisting of normal recurring accruals, necessary for a fair
presentation of the information set forth therein. The results of
operations for the three months ended March 31, 1997 are not
necessarily indicative of the operating results to be expected for the
full year or any other period. Certain prior year amounts have been
reclassified for comparative purposes.
These financial statements should be read in conjunction with the
financial statements and notes as of and for the year ended December
31, 1996 included in the Company's Annual Report on Form 10-K.
2. Earnings Per Share
Earnings per common share has been calculated by dividing net income
for the period by the weighted average number of common shares and
common share equivalents outstanding during the period.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings
per Share", specifying the computation, presentation, and disclosure
requirements for earnings per share for entities with publicly held
common stock. Under SFAS No. 128, entities shall present basic and
diluted per-share amounts for income from continuing operations and for
net income on the face of the income statement. The objective of basic
earnings per share is to measure the performance of an entity over the
reporting period and the objective of diluted earnings per share should
be consistent with the basic earnings per share objective while giving
effect to all dilutive potential common shares that were outstanding
during the period. The provisions of this statement are effective for
financial statements for interim and annual periods ending after
December 15, 1997. The company plans to adopt the provisions of SFAS
No. 128 as of December 31, 1997 and restate all prior period earnings
per share data to conform with the provisions of this Statement. The
calculated amount of basic and diluted earnings per share for the three
months ended March 31, 1997 was $0.60 and $0.49, respectively.
3. Income Taxes
The effective tax rate differs from the 34% marginal tax rate
principally as a result of interest exempt from tax, the dividend
received deduction and other differences in the recognition of revenues
and expenses for tax and financial reporting purposes.
7
<PAGE> 8
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
GENERAL
Although the Company's financial performance is dependent upon its own specific
business characteristics, certain risk factors can affect the profitability of
the Company. These include:
- Industry factors - Historically the financial performance of the
commercial property and casualty insurance industry has tended to
fluctuate in cyclical patterns of soft markets followed by hard
markets. In the current environment, insurance industry pricing in
general continues to be soft; however, the Company's strategy is to
focus on underwriting profits and accordingly the Company's marketing
organization is being directed into those niche businesses that exhibit
the greatest potential for underwriting profits.
- Competition - The Company competes in the commercial property and
casualty business with other domestic and international insurers having
greater financial and other resources than the Company.
- Regulation - The Company's insurance subsidiaries are subject to a
substantial degree of regulatory oversight, which generally is designed
to protect the interests of policyholders, as opposed to shareholders.
- Inflation - Commercial property and casualty insurance premiums are
established before the amount of losses and loss adjustment expenses,
or the extent to which inflation may effect such amounts is known.
- Investment Risk - Substantial future increases in interest rates could
result in a decline in the market value of the Company's investment
portfolio and resulting losses and/or reduction in shareholders'
equity.
RESULTS OF OPERATIONS (THREE MONTHS ENDED MARCH 31, 1997 VS MARCH 31, 1996)
Premiums: Gross written premiums grew $7.1 million (25.8%) to $34.6
million for the three months ended March 31, 1997 from $27.5 million for the
same period of 1996; gross earned premiums grew $7.2 million (28.3%) to $32.6
million for the three months ended March 31, 1997 from $25.4 million for the
same period of 1996; net written premiums increased $9.7 million (55.4%) to
$27.2 million for the three months ended March 31, 1997 from $17.5 million for
the same period of 1996; and net earned premiums grew $6.6 million (41.8%) to
$22.4 million in 1997 from $15.8 million in 1996. The overall growth in premiums
and the varying growth rates for gross written premiums, gross earned premiums,
net written premiums, and net earned premiums are attributable to a number of
factors:
- - Overall premium growth is primarily attributable to: continued
marketing efforts of commercial auto, commercial package, and specialty
lines products along with the continued development of the Company's
Preferred Agent Plan, wherein business relationships are formed with
brokers specializing in certain of the Company's business niches
thereby increasing the distribution of the Company's niche products.
- - Net written and net earned premiums grew at higher rates than gross
written and gross earned premiums primarily due to the renegotiation of
the Company's reinsurance program effective January 1, 1997 whereby
more favorable reinsurance rates were realized while substantially the
same retentions and coverages were maintained.
Net Investment Income: Net investment income approximated $2.2 million
for the three months ended March 31, 1997 and $1.8 million for the same period
of 1996. Total investments grew to $177.9 million at March 31, 1997 from $141.5
million at March 31, 1996, primarily due to cash flows provided from operating
activities.
Net Loss and Loss Adjustment Expenses: Net loss and loss adjustment
expenses increased $3.8 million (43.7%) to $12.5 million in the first quarter of
1997 from $8.7 million in the first quarter of 1996 and the loss ratio increased
nominally to 55.7% in 1997 from 54.8% in 1996. The increase in net loss and loss
adjustment expenses was due primarily to the 41.8% growth in net earned
premiums.
8
<PAGE> 9
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
(continued)
Acquisition Costs and Other Underwriting Expenses: Acquisition costs
and other underwriting expenses increased $1.8 million (35.3%) to $6.9 million
for the three months ended March 31, 1997 from $5.1 million for the same period
of 1996. This increase was due primarily to the 41.8% growth in net earned
premiums offset in part by changes in product and distribution mix.
Income Tax Expense: The Company's effective tax rate for the three
months ended March 31, 1997 and 1996 was 23.5% and 22.5%, respectively. The
effective rates differed from the 34% statutory rate principally due to
investments in tax-exempt securities.
LIQUIDITY AND CAPITAL RESOURCES
For the three months ended March 31, 1997 the Company's investments
experienced unrealized investment depreciation of $2.1 million, net of the
related deferred tax benefit of $1.1 million. The change in unrealized
appreciation (depreciation), is primarily due to changes in market interest
rates and conditions during the period. At March 31, 1997, 100% of the Company's
fixed maturity securities consisted of U.S. Government securities or securities
rated "1" or "2" by the NAIC, 97.2% were rated "A-" or better (with no security
rated lower than "BBB-") by Standard & Poor's Corporation.
The Company produced net cash from operations of $8.0 million and $6.7
million, respectively, for the three months ended March 31, 1997 and 1996.
Management believes that the Company has adequate ability to pay all claims and
meet all other cash needs.
Risk-based capital is designed to measure the acceptable amount of
capital an insurer should have based on the inherent specific risks of each
insurer. Insurers failing to meet this benchmark capital level may be subject to
scrutiny by the insurer's domiciliary insurance department and ultimately
rehabilitation or liquidation. Based on the standards currently adopted, the
Company's insurance subsidiaries' capital and surplus is in excess of the
prescribed risk-based capital requirements.
9
<PAGE> 10
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other information.
None
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
<TABLE>
<CAPTION>
Exhibit No. Page No. Description
----------- -------- -----------
<S> <C> <C>
11.0 12 Computation of Earnings Per Share.
</TABLE>
b. The Company has not filed any reports on Form 8-K during the
quarter for which this report is filed.
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PHILADELPHIA CONSOLIDATED HOLDING CORP.
Registrant
Date May 9, 1997 /s/ James J. Maguire
---------------------------------------------
James J. Maguire
Chairman of the Board of Directors, President
and Chief Executive Officer
(Principal Executive Officer)
Date May 9, 1997 /s/ Craig P. Keller
---------------------------------------------
Craig P. Keller
Vice President, Secretary and
Chief Financial Officer (Principal Financial
and Accounting Officer)
11
<PAGE> 12
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Dollars and Share Data in Thousands, except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
As of and For the Three Months Ended March 31,
1997 1996
---- ----
<S> <C> <C>
Weighted Average Shares Outstanding 6,067 5,814
Weighted Average Stock Options Outstanding 1,780 1,877
Assumed Shares Repurchased (495) (691)
------ ------
Weighted Average Shares and Share
Equivalents Outstanding 7,352 7,000
====== ======
Net Income $3,622 $2,715
====== ======
Net Income per Share $ 0.49 $ 0.39
====== ======
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<DEBT-HELD-FOR-SALE> 149,324
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 28,585
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 177,909
<CASH> 8,585
<RECOVER-REINSURE> 1,180
<DEFERRED-ACQUISITION> 9,862
<TOTAL-ASSETS> 234,237
<POLICY-LOSSES> 102,071
<UNEARNED-PREMIUMS> 35,153
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
0
<COMMON> 41,903
<OTHER-SE> 45,489
<TOTAL-LIABILITY-AND-EQUITY> 234,237
22,388
<INVESTMENT-INCOME> 2,211
<INVESTMENT-GAINS> 28
<OTHER-INCOME> 57
<BENEFITS> 12,481
<UNDERWRITING-AMORTIZATION> 6,946
<UNDERWRITING-OTHER> 523
<INCOME-PRETAX> 4,734
<INCOME-TAX> 1,112
<INCOME-CONTINUING> 3,622
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,622
<EPS-PRIMARY> 0.49
<EPS-DILUTED> 0.49
<RESERVE-OPEN> 85,723<F1>
<PROVISION-CURRENT> 12,481
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 1,196
<PAYMENTS-PRIOR> 6,073
<RESERVE-CLOSE> 90,935<F1>
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>UNPAID LOSS AND LOSS ADJUSTMENT EXPENSES DIFFER FROM THE AMOUNTS REPORTED IN
THE CONSOLIDATED FINANCIAL STATEMENTS BECAUSE OF THE INCLUSION HEREIN OF
REINSURANCE RECEIVABLES OF $11,136 AND $10,919 AT MARCH 31, 1997 AND DECEMBER
31, 1996, RESPECTIVELY.
</FN>
</TABLE>
