<PAGE>
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Period Ended March 31, 2000
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 : 33-67312
FIRST ALLIANCE CORPORATION
(exact name of registrant as specified in its charter)
Kentucky 61-1242009
State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) number)
2285 Executive Drive, Suite 308
Lexington, Kentucky 40505
(Address of principal executive offices) (Zip Code)
(606) 299-7656
(Registrant's telephone number, including area code)
Check whether the issuer (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 [ ]
Applicable Only to Corporate Insurers
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practical date.
Common Stock, No Par Value - 5,676,510 shares as of April 30, 2000
Transitional Small Business Disclosure Format (Check one): Yes___ No X
<PAGE>
FIRST ALLIANCE CORPORATION
INDEX TO FORM 10-Q
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets at
March 31, 2000 and December 31, 1999 1
Condensed Consolidated Statements of Operations
for the three months ended March 31, 2000 and 1999 3
Condensed Consolidated Statements of Cash Flows for the
three months ended March 31, 2000 and 1999 4
Notes to Condensed Consolidated Financial Statements 6
Management's Discussion and Analysis or Plan of Operation 9
Part II.
Item 2. Changes in Securities
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
<TABLE>
FIRST ALLIANCE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31, December 31,
2000 1999
------------- -------------
<S> <C> <C>
Assets Unaudited
Investments:
Available-for-sale fixed maturities, at
fair value (amortized cost, $9,193,696 and
$8,897,097 in 2000 and 1999, respectively) $ 9,080,678 $ 8,774,608
Equity securities (cost of $4,134,025 and
$382,588 in 2000 and 1999, respectively) 4,095,375 407,881
Policy loans 46,866 32,194
Notes receivable (net of $149,698 valuation
allowance in 2000 and 1999) 85,113 103,164
Investments in partnership 150,000 150,000
Investment in limited liability company 300,000 -
Short-term investments - 200,000
------------- -------------
Total investments 13,758,032 9,667,847
Cash and cash equivalents 1,839,606 5,540,571
Investments in related parties 125,000 125,000
Reinsurance recoverable - 1,418
Receivables from related parties 60,097 14,203
Federal income tax recoverable 6,382 7,985
Accrued investment income 180,611 135,482
Deferred policy acquisition costs 3,029,428 2,743,111
Value of insurance acquired 60,289 61,311
Goodwill 158,975 155,256
Premiums due 88,450 81,690
Office furniture and equipment, less
accumulated depreciation of $100,989 and
$96,427 in 2000 and 1999, respectively 38,231 42,499
Other assets 114,060 117,815
------------- -------------
Total assets $ 19,459,161 $ 18,694,188
============= =============
See notes to condensed consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
FIRST ALLIANCE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
<CAPTION>
March 31, December 31,
2000 1999
------------- -------------
<S> <C> <C>
Liabilities and Shareholders' Equity (Unaudited)
Policy and contract liabilities:
Annuity contract liabilities $ 3,427,678 $ 3,004,186
Life policy reserves (net of reinsurance
ceded reserves of $231,171 and $203,776
in 2000 and 1999, respectively) 3,462,209 3,273,564
Policy and contract claims 12,254 42,099
Policyholder dividend deposits 42,640 43,188
Policyholder premium deposits 193,713 187,414
Deposits on pending policy applications 333,775 233,158
Unearned revenue 83,280 86,878
Reinsurance premiums payable 59,859 61,450
------------- -------------
Total policy and contract liabilities 7,615,408 6,931,937
Federal income taxes payable:
Deferred 669,376 602,667
Other taxes payable 8,664 8,207
Commissions, salaries, wages and benefits
payable 142,733 133,382
Accounts payable and accrued expenses 53,460 81,562
------------- -------------
Total liabilities 8,489,641 7,757,755
Shareholders' equity:
Common stock, no par value, 8,000,000 shares
authorized; 5,677,865 and 5,643,185 shares
issued and outstanding at March 31, 2000
and December 31, 1999 567,786 564,318
Additional paid in capital 12,564,125 12,466,943
Retained Earnings - deficit (2,049,091) (2,030,679)
Accumulated other comprehensive income (113,300) (64,149)
------------- -------------
Total shareholders' equity 10,969,520 10,936,433
------------- -------------
Total liabilities and shareholders' equity $ 19,459,161 $ 18,694,188
============= =============
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
FIRST ALLIANCE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Three months ended
March 31, March 31,
2000 1999
------------- -------------
<S> <C> <C>
(Unaudited) (Unaudited)
Revenues
Premium Income (net of reinsurance of
$234,873 in 2000 and $53,965 in 1999) $ 916,043 $ 793,064
Net Investment Income 191,803 152,681
Net realized investment losses (27,095) -
Other income 152,022 20,028
------------- -------------
Total revenue 1,232,773 965,773
Benefits and expenses
Increase in policy reserves 188,645 254,597
Death claims (net of reinsurance of $1,815
in 2000 and $162,0000 in 1999) 12,586 68,750
Policyholder surrender values 53,797 11,251
Interest credited on annuities and premium
deposit funds 68,630 40,147
Payment of dividend accumulations 959 -
Commissions 464,161 301,260
Policy acquisition costs deferred (407,157) (382,973)
Amortization of deferred policy acquisition
costs 120,840 158,225
Amortization of cost of insurance acquired 1,022 -
Salaries, wages and employee benefits 289,726 247,212
Agency expenses 181,833 57,242
Professional fees 56,108 43,486
Other expenses 119,546 166,481
------------- -------------
Total benefits and expenses 1,150,696 965,678
------------- -------------
Income from operations 82,077 95
------------- -------------
Federal income taxes 89,839 49,496
------------- -------------
Net income/(loss) $ (7,762) $ (49,401)
============= =============
Net income/(loss) per common share-basic
and diluted $ 0.00 $ (0.01)
============= =============
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
FIRST ALLIANCE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Three months ended
March 31, March 31,
2000 1999
------------- -------------
<S> <C> <C>
(Unaudited) (Unaudited)
Operating activities:
Net loss $ (7,762) $ (49,401)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Interest credited on annuities and premium
deposits 65,839 40,147
Provision for depreciation 4,562 4,142
Amortization of premium and accretion of
discount on fixed maturity investments 5,657 7,002
Amortization of insurance acquired 1,022 -
Realized investment loss 27,095 1
Provision for deferred federal income taxes 92,031 50,257
Increase in policy loans (14,672) -
Increase (decrease) in accrued investment income (45,129) 15,060
Increase in receivables from related parties (45,894) (6,485)
Decrease in reinsurance recoverable 1,418 -
Increase in federal income tax recoverable 1,603 -
Increase in deferred policy acquisition costs,
net (286,317) (224,749)
Decrease in unearned revenue (3,598) -
Increase in premiums due (6,760) (14,061)
Decrease (increase) in other assets 3,755 (31,752)
Increase in policy reserves 188,645 254,597
Increase in deposits on pending policy
applications 100,617 48,777
Increase (decrease) in claims payable (29,845) 68,750
Decrease in reinsurance premiums payable (1,591) (1,688)
Decrease in federal income taxes payable - (32,258)
Increase (decrease) in commissions,
salaries, wages and benefits 9,351 9,509
Increase (decrease) in accounts payable,
accrued expenses and other liabilities (27,645) 15,197
------------- -------------
Net cash provided by operating activities 32,382 153,045
Investing activities:
Purchase of available-for-sale fixed
maturities (2,188,995) -
Sale of available-for-sale fixed maturities 1,851,840 -
Maturity of available-for-sale fixed
maturities - 750,000
Purchase of common stock (4,722,572) -
Sale of common stock 958,938 -
Purchase price paid for Benefit Capital
Life Insurance Company in excess of cash
acquired (3,719) -
Purchase of limited liability company interest (300,000) -
Short term investments disposed 200,000 -
Decrease in notes receivable 18,051 60,752
Net (increase) decrease in furniture
and equipment (294) 5,963
------------- -------------
Net cash provided by investing activities (4,186,751) 816,715
Financing activities:
Deposits on annuity contracts, net 357,653 236,860
Policyholder premium deposits, net 6,299 17,042
Policyholder dividend deposits, net (548) -
Proceeds from sale of common stock 105,450 99,438
Cost of stock offering (1,050) -
Repurchase of common stock (14,400) -
------------- -------------
Net cash provided by financing activities 453,404 353,340
------------- -------------
Increase in cash and cash equivalents (3,700,965) 1,323,100
Cash and cash equivalents beginning of period 5,540,571 6,587,264
------------- -------------
Cash and cash equivalents at end of period $ 1,839,606 $ 7,910,364
============= =============
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
FIRST ALLIANCE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation of the results for the
interim periods have been included.
Certain financial information which is normally included in financial
statements prepared in accordance with generally accepted accounting
principles, but which is not required for interim reporting purposes,
has been omitted. The accompanying condensed consolidated financial
statements should be read in conjunction with the financial statements
and notes thereto included in the Company's Form 10-K for the fiscal
year ended December 31, 1999. Certain reclassifications have been
made in the prior period financial statements to conform with the
current year presentation.
(2) Subsidiary Operations
The Company's wholly owned subsidiaries', First Alliance Insurance
Company ("FAIC") and First Kentucky Capital Corporation ("FKCC"), are
included in the condensed consolidated financial information. Benefit
Capital Life Insurance Company ("BCLIC") is included from the date of
acquisition of December 30, 1999.
<TABLE>
(3) Comprehensive income
The components of comprehensive income along with the related tax
effects are presented for the quarters ended March 31, 2000 and 1999
as follows:
<CAPTION>
2000 1999
------------- -------------
<S> <C> <C>
Unrealized loss on available-for-sale
securities:
Unrealized holding losses during the period $ (74,473) $ (80,317)
Tax benefit 25,322 27,307
------------- -------------
Other comprehensive income (49,151) (53,010)
============= =============
Net loss $ (7,762) $ (49,401)
Other comprehensive income/(loss) net of
tax effect:
Unrealized investment loss (49,151) (53,010)
------------- -------------
Comprehensive loss $ (56,913) $ (102,411)
============= =============
Net income/(loss) per common share - basic
and dilute $ 0.00 $ (0.01)
============= =============
</TABLE>
(4) Investments
On February 17, 2000 the Company executed an agreement with Ken Belsky
to purchase a 10% interest in Ken Belsky & Associates, LLC, for
$300,000 cash . The Company also received an option to purchase up
to an additional 5% interest for an amount equal to $30,000 for each
1% of the additional interest purchased. The option expires February
17, 2001. Ken Belsky & Associates, LLC is a general insurance agency
specializing in the marketing of substandard life insurance policies.
<PAGE>
(4) Investments (continued)
On August 8, 1996, the Company purchased 725,000 shares of the common
stock of Mid-American Alliance Corporation ("MAAC") of Jefferson City,
Missouri, for $72,500. At March 31, 2000, MAAC had raised total
capital of $10,558,440 from the sale of shares through a $16,000,000
Missouri intrastate public stock offering. On December 31, 1997, MAAC
acquired Mid American Century Life Insurance Company ("MACLIC"), a
Missouri domiciled life insurance company. $3,667,000 of the proceeds
of the public offering were used during 1999 to further capitalize
MACLIC.
<TABLE>
(5) Segment Information
The operations of the Company and its subsidiaries have been classified
into three operating segments as follows: life and annuity insurance
operations, venture capital operations, and corporate operations.
Segment information as of March 31, 2000 and December 31, 1999 and for
the quarters ended March 31, 2000 and 1999 is as follows:
<CAPTION>
2000 1999
------------- -------------
<S> <C> <C>
Revenues:
Life and annuity insurance operations $ 1,156,675 $ 601,739
Venture capital operations - 726
Corporate operations 76,098 45,749
------------- -------------
Total $ 1,232,773 $ 648,214
============= =============
Income (loss) before income taxes:
Life and annuity insurance operations $ 255,429 $ 186,347
Venture capital operations - 710
Corporate operations (173,352) (138,928)
------------- -------------
Total $ 82,077 $ 48,129
============= =============
Assets:
Life and annuity insurance operations $ 16,756,580 $ 9,918,761
Venture capital operations 208,766 49,968
Corporate operations 2,493,815 3,743,122
------------- -------------
Total $ 19,459,161 $ 13,711,851
============= =============
Depreciation and amortization expense:
Life and annuity insurance operations $ 122,721 $ 80,930
Venture capital operations - -
Corporate operations 3,703 3,513
------------- -------------
Total $ 126,424 $ 84,443
============= =============
</TABLE>
(6) Earnings Per Share
Net income (loss) per common share for basic and diluted earnings per
share is based upon the weighted average number of common shares
outstanding during the year. The weighted average outstanding common
shares was 5,659,064 in 2000 and 5,667,690 in 1999.
<PAGE>
(7) Private Placement Offering
In February 1999 the Company commenced an offering of 200,000 shares of
class A common stock no par value for $2.50 per share. The securities
are exempted from registration in reliance on Rule 506 of Regulation D
of the Securities Act of 1933 and related exemptions at the state level.
Additionally, these securities are restricted from transfer for thirty
months from the date of purchase. The shares of common stock are being
offered directly to potential subscribers on a direct participation
basis by agents of the Company. At March 31, 2000, the Company had sold
192,655 shares raising total proceeds of $481,637 and incurring offering
cost, including commissions, of $55,608.
(8) Commitments
On June 16, 1999, First Kentucky Capital Corporation executed a
commitment to purchase three units of the Prosperitas Investment Partners,
LP ("Prosperitas") for $450,000. Prosperitas is a venture capital fund
based in Louisville, Kentucky. An initial payment of $22,500, which
represents five percent of the total investment, was paid upon the
execution of the subscription agreement. On November 29, 1999 a
payment of $127,500 was made and the remaining amount of the commitment
is due in equal installments on the second and fourth anniversaries of
the initial capital contribution.
On April 7, 2000 the Company executed an agreement with Jackie Sharpe to
purchase a 1% interest in Ken Belsky & Associates, LLC, for $30,000 cash.
On April 10, 2000 the Company executed an agreement with Frances Fischer
to purchase a 1% interest in Ken Belsky & Associates, LLC, for $30,000
cash.
On May 2, 2000 the Comp any entered into an agreement with Ken Belsky
and Associates, LLC to pr ovide a credit facility of $60 0,000 at a 10%
rate of interest to Ken Belsky & Associates, LLC ("Borrower"). Advances
under the credit facility will be made as follows: (i) $300,000 as of the
closing date through March 31, 2001 and (ii) $300,000 as of the
satisfaction of the funding conditions through March 31, 2001, funding
conditions were met on March 10, 2000. Upon the Company's advance to
Borrower of the first $100,000, Borrower will issue a one percent (1%)
membership interest in Borrower to the Company and upon the Company's
advance to borrow of any amount in excess of $300,000, Borrower will
issue an additional one percent (1%) membership interest in Borrower to
the Company. Principal and interest under the credit facility shall be
due and payable as follows: monthly payments of interest only on the
outstanding balance of the loans through March 1, 2001 and then principal
and interest will be payable in thirty (30) equal monthly installments
beginning April 1, 2001.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company makes forward-looking statements from time to time and desires to
take advantage of the "safe harbor" which is afforded such statements under
the Private Securities Reform Act of 1995 when they are accompanied by
meaningful cautionary statements identifying important factors that could
cause actual results to differ materially from those in the forward-looking
statements.
The statements contained in the following "Management's Discussion and
Analysis or Plan of Operation", statements contained in future filings with
the Securities and Exchange Commission and publicly disseminated press
releases, and statements which may be made from time to time in the future by
management of the Company in presentations to shareholders, prospective
investors, and others interested in the business and financial affairs of the
Company, which are not historical facts, are forward-looking statements that
involve risks and uncertainties that could cause actual results to differ
materially from those set forth in the forward-looking statements. Any
projections of financial performances or statements concerning expectations
as to future developments should not be construed in any manner as a
guarantee that such results or developments will, in fact, occur. There can
be no assurance that any forward-looking statement will be realized or that
actual results will not be significantly different from that set forth in
such forward-looking statements. In addition to the risks and uncertainties
of ordinary business operations, the forward-looking statements of the
Company referred to above are also subject to risks and uncertainties.
The following discussion should be read in conjunction with the condensed
consolidated financial statements and the notes thereto.
Results of Operations
Revenues for the three months ended March 31 totaled $1,232,773 in 2000 and
$965,773 in 1999. The primary source of revenue for the Company is life
insurance premium income. Premium income for the first three months of 2000
increased $122,979 in comparison to 1999 results. This increase is due to
life insurance premium renewals and new sales. An annuity rider is also
included with most of the life insurance products; however, according to
Statement of Financial Accounting Standards ("SFAS") No. 97, "Accounting and
Reporting by Insurance Enterprises for Certain Long-Duration Contracts and
for Realized Gains and Losses from Sales of Investments", annuity premium
income is not recognized as revenue. Annuity premium receipts for the first
quarter of 2000 and 1999 totaled $417,448 and $259,499, respectively, and are
recognized as annuity contract liabilities. Pursuant to the terms of the
reinsurance agreement between FAIC and Business Men's Assurance Company,
there are no first year reinsurance premiums due. However, SFAS No. 113,
"Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration
Contracts", requires this unpaid premium to be recognized as an expense and
amortized over the term of the contracts reinsured. At March 31, 2000 and
1999 amortization of reinsurance premiums payable totaled $3,090 and $822,
respectively.
Net investment income totaled $191,803 for the quarter ended March 31, 2000
and $152,682 for the same period in 1999. Approximately half of the increase
in net investment income is attributable to the BCLIC acquisition and the
remainder is attributable to an increase in investments in fixed maturities
and higher yields on fixed maturities.
For the quarter ended March 31, 2000, expenses totaled $1,150,696 representing
an increase of $185,018 over the same period of 1999. Life policy reserve
expense decreased from $254,597 for the three months ended March 31,1999 to
$188,097 for the three months ended March 31, 2000. Expenses related to the
acquisition of life insurance are deferred and amortized over the premium
paying period of the related policy. These expenses, which include commissions
and administrative costs, totaled $407,157 for the quarter ended March 31,
2000 and $382,973 for the same period in 1999. Amortization of these costs
totaled $120,840 for the quarter ended March 31, 2000 and $158,225 for the
same period in 1999. Death claims incurred during the first quarter of 2000
totaled $12,586, net of reinsurance of $1,815 Death claims for the same
period in 1999 totaled $68,750, net of reinsurance of $162,000. Expenses
directly related to FAIC's agency totaled $181,833 for the first quarter of
2000 and $57,242 for the same period in 1999. These expenses include agent's
health insurance, agency meetings, recruiting, and other expenses directly
related to the sale of insurance and annuities.
<PAGE>
Salaries and benefit expenses totaled $289,726 for the first quarter of 2000
and $247,212 for the same period of 1999. The increase is due to the hiring
of additional employees and the adjustment of employee compensation. Income
tax expense, which is calculated based on the earnings of FAIC, totaled
$89,839 during the first quarter of 2000 and $49,496 for the same period of
1999.
Financial Position
Fixed maturities increased $296,599 based on amortized cost, during the first
three months of 2000. Equity securities increased $$3,751,437 on a cost
basis an increased $3,687,494 on market value basis, during the same period.
Gross unrealized appreciation on available-for-sale fixed maturities and
equity securities decreased approximately $74,473 during the three months
ended March 31, 2000.. Short term investments decreased $200,000 during the
three months ended March 31, 2000. Investment in Ken Belsky & Associates,
LLC increased $300,000 during the three months ended March 31, 2000. Cash
and cash equivalents decreased $3,700,965 during the three months ended
March 31, 2000
Cash Flow and Liquidity
The insurance operations generally provide adequate cash flow from premium
collections and investment income to meet their obligations. Insurance
policy liabilities are primarily long-term and generally are paid from future
cash flows. The Company's bonds and equity security investments are readily
marketable. Although there is no present need or intent to dispose of such
investments, the Company could liquidate portions of their investments if
such a need arose. The Company has commitments to (I) purchase investments
of $187,500 in 2000 and $127,500 in 2002 and (ii) fund a credit facility of
$600,000 in 2000.
<PAGE>
Part II. - Other information
Item 2. Changes in Securities
In February 1999 the Company commenced an offering of 200,000 shares
of class A common stock no par value for $2.50 per share. The
securities are exempted from registration in reliance on Rule 506 of
Regulation D of the Securities Act of 1933 and related exemptions at
the state level. Additionally, these securities are restricted from
transfer for thirty months from the date of purchase. The shares of
common stock are being offered directly to potential subscribers on a
direct participation basis by agents of the Company. At March 31,
2000, the Company had sold 192,655 shares raising total proceeds of
$481,637 and incurring offering cost, including commissions, of
$55,608.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 Financial data schedule
(b) The Company did not file any reports on Form 8-K during the three
months ended March 31, 2000
<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 Alliance Corporation
- --------------------------
(registrant)
/s/ Michael N. Fink Date May 12, 2000
- ----------------------------------------- --------------
Michael N. Fink, President
/s/ Thomas I. Evans Date May 12, 2000
- ----------------------------------------- --------------
Thomas I. Evans, Vice President/Secretary
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<DEBT-HELD-FOR-SALE> 9,080,678
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 4,095,375
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 13,758,032
<CASH> 1,839,606
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 3,029,428
<TOTAL-ASSETS> 19,459,161
<POLICY-LOSSES> 0
<UNEARNED-PREMIUMS> 83,280
<POLICY-OTHER> 12,254
<POLICY-HOLDER-FUNDS> 527,488
<NOTES-PAYABLE> 0
0
0
<COMMON> 567,786
<OTHER-SE> 10,401,734
<TOTAL-LIABILITY-AND-EQUITY> 19,459,161
916,043
<INVESTMENT-INCOME> 191,803
<INVESTMENT-GAINS> (27,095)
<OTHER-INCOME> 152,022
<BENEFITS> 2,342
<UNDERWRITING-AMORTIZATION> 120,840
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 82,077
<INCOME-TAX> 89,839
<INCOME-CONTINUING> (7,762)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,762)
<EPS-BASIC> .000
<EPS-DILUTED> .000
<RESERVE-OPEN> 3,273,564
<PROVISION-CURRENT> 188,645
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 3,462,209
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
