SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996 Commission file number 0-23484
STANDARD FUNDING CORP.
- --------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
New York 11-2523559
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
335 Crossways Park Drive, Woodbury, New York 11797
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip code)
(516) 364-0200
- --------------------------------------------------------------------------------
(Issuer'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 Exchange Act 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
----- -----
----------
Common Stock, $.001 par value, outstanding as of November 8, 1996: 2,760,000
shares
Transitional Small Business Disclosure Format: Yes No X
----- -----
<PAGE>
STANDARD FUNDING CORP.
- -------------------------------------------------------------------------------
Quarterly Report on Form 10-QSB
for the period ended September 30, 1996
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
PART I - FINANCIAL INFORMATION Page
- ------ --------------------- ----
Item 1 Financial Statements
BALANCE SHEETS AT SEPTEMBER 30, 1996 AND
DECEMBER 31, 1995 .................................... 3
STATEMENTS OF INCOME FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995 ...... 4
STATEMENTS OF INCOME FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995 ...... 5
STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995 ...... 6
NOTES TO FINANCIAL STATEMENTS ........................... 7
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations................... 9
PART II - OTHER INFORMATION
- ------- -----------------
Item 6 Exhibits and Reports on Form 8-K......................... 14
- -------------------------------------------------------------------------------
-2-
<PAGE>
PART I. FINANCIAL INFORMATION
- ------- ---------------------
Item 1. FINANCIAL STATEMENTS
STANDARD FUNDING CORP.
BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
------------- ------------
1996 1995
---- ----
<S> <C> <C>
ASSETS
Cash .............................................. $ 123,174 $ 939,869
------------ ------------
Installment loans receivable
under premium finance agreements ............... 32,324,284 24,170,397
Less: Unearned interest ........................... (831,000) (654,000)
Allowance for possible credit losses (Note 2) (246,000) (208,000)
------------ ------------
Installment loans receivable
under premium finance agreements - net ......... 31,247,284 23,308,397
Due from officers ................................. 150,498 141,693
Property and equipment - net ...................... 219,694 167,197
Other assets ...................................... 612,146 243,889
------------ ------------
Total .......................................... $ 32,352,796 $ 24,801,045
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Notes payable to financial institutions ........... $ 16,600,000 $ 10,300,000
Commercial paper issued ........................... 2,375,727 2,951,225
Amounts due to insurance companies ................ 1,112,640 220,220
Accrued expenses and other ........................ 513,725 195,246
Deferred income taxes payable ..................... 234,000 185,727
------------ ------------
Total, exclusive of subordinated debt .......... 20,836,092 13,852,418
Subordinated debt ................................. 4,913,000 4,765,000
------------ ------------
Total Liabilities .............................. 25,749,092 18,617,418
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, par value $.001 per share;
1,000,000 authorized, none issued .............. -- --
Common stock, par value $.001 per share;
4,000,000 authorized, 2,760,000 shares
issued and outstanding ......................... 2,760 2,760
Additional paid-in capital ........................ 3,991,501 3,991,501
Retained earnings ................................. 2,609,443 2,189,366
------------ ------------
Total Shareholders' Equity ..................... 6,603,704 6,183,627
------------ ------------
Total ....................................... $ 32,352,796 $ 24,801,045
============ ============
</TABLE>
See notes to financial statements.
-3-
<PAGE>
STANDARD FUNDING CORP.
STATEMENTS OF INCOME (UNAUDITED)
Nine Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
1996 1995
---- ----
NET INTEREST INCOME:
Finance charge income and other .............. $4,111,731 $3,492,549
Less: Interest and other expenses on
borrowings ................................... 1,344,137 1,054,324
---------- ----------
Net Interest Income ..................... 2,767,594 2,438,225
---------- ----------
OTHER EXPENSES:
Operating expenses ........................... 1,346,352 1,275,605
Selling expenses ............................. 424,733 347,620
Provisions for possible credit losses
(Note 2) .................................... 296,380 224,684
---------- ----------
Total ..................................... 2,067,465 1,847,909
---------- ----------
INCOME BEFORE PROVISION FOR
INCOME TAXES .................................. 700,129 590,316
PROVISION FOR INCOME TAXES ...................... 280,052 236,126
---------- ----------
NET INCOME ...................................... $ 420,077 $ 354,190
========== ==========
NET INCOME PER SHARE (Note 1) ................... $ .15 $ .13
---------- ----------
AVERAGE NUMBER OF
SHARES OUTSTANDING ............................ 2,760,000 2,760,000
========== ==========
See notes to financial statements.
-4-
<PAGE>
STANDARD FUNDING CORP.
STATEMENTS OF INCOME (UNAUDITED)
Three Months Three Months
Ended Ended
September 30, September 30,
------------- -------------
1996 1995
---- ----
NET INTEREST INCOME:
Finance charge income and other ............... $1,396,758 $1,223,293
Less: Interest and other expenses on
borrowings .................................... 481,930 389,626
---------- ----------
Net Interest Income ..................... 914,828 833,667
---------- ----------
OTHER EXPENSES:
Operating expenses ............................ 432,104 437,671
Selling expenses .............................. 145,122 114,710
Provisions for possible credit losses
(Note 2) ...................................... 104,595 65,854
---------- ----------
Total ...................................... 681,821 618,235
---------- ----------
INCOME BEFORE PROVISION FOR
INCOME TAXES .................................. 233,007 215,432
PROVISION FOR INCOME TAXES ....................... 93,203 86,172
---------- ----------
NET INCOME ....................................... $ 139,804 $ 129,260
========== ==========
NET INCOME PER SHARE (Note 1) .................... $ .05 $ .05
---------- ----------
AVERAGE NUMBER OF
SHARES OUTSTANDING ............................. 2,760,000 2,760,000
========== ==========
See notes to financial statements.
-5-
<PAGE>
STANDARD FUNDING CORP.
STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .................................. $ 420,077 $ 354,190
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for possible credit losses ..... 296,380 224,684
Deferred income taxes .................... 48,273 42,306
Depreciation and amortization ............ 32,815 31,082
Changes in assets and liabilities:
Other assets .......................... 368,257 55,792
Accrued expenses and other and amounts
due to insurance companies ......... 1,210,899 640,471
------------ ------------
Net cash provided by operating
activities ......................... 2,376,701 1,348,525
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Installment loans receivable originated ..... (63,225,614) (50,171,011)
Collections of installment loans receivable . 54,245,028 43,968,501
Purchase of equipment ....................... (85,312) (100,548)
------------ ------------
Net cash used in investing activities .... (9,065,898) (6,303,058)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank notes - net .............. 6,300,000 3,200,000
Proceeds (Repayment) of commercial paper
issued - net ............................. (575,498) 1,619,814
Proceeds (Repayment) of subordinated debt ... 148,000 75,000
------------ ------------
Net cash provided by financing activities 5,872,502 4,894,814
------------ ------------
INCREASE (DECREASE) IN CASH .................... (816,695) (59,719)
CASH AT BEGINNING OF YEAR ...................... 939,869 183,559
------------ ------------
CASH AT END OF PERIOD .......................... $ 123,174 $ 123,840
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH
FLOWS INFORMATION:
Income taxes paid ........................... $ 363,753 $ 216,030
============ ============
Interest paid ............................... $ 1,224,467 $ 1,054,324
============ ============
-6-
<PAGE>
STANDARD FUNDING CORP.
NOTES TO FINANCIAL STATEMENTS
For the nine months ended September 30, 1996 and 1995 (unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Business - Standard Funding Corp. (the "Company") provides loans to finance
substantially all forms of property and casualty insurance premiums on
policies which are written through independent insurance agents and brokers.
The insurance policies are primarily held by commercial businesses.
Interim Financial Statements - The financial statements for the three month
and nine month periods ended September 30, 1996 and 1995 are unaudited. In
the opinion of management, the accompanying unaudited financial statements
contain all the adjustments necessary for a fair presentation of the
financial condition and results of operations for the three month and nine
month periods ended September 30, 1996 and 1995. The interim financial
results are not necessarily indicative of the results to be expected for a
full year.
Unearned Interest - Unearned interest on installment loans receivable under
premium finance agreements is recognized as income using a method which
approximates the results which would be obtained using the interest method.
Fees and Loan Processing Costs - Loan processing costs incurred are deferred
and amortized on the straight-line method over the term of the related
installment loans receivable under premium finance agreements. Cancellation
fees and late charges are recognized as income when received.
Allowance for Possible Credit Losses - The balance in the allowance for
possible credit losses is based on management's assessment of risk in the
installment loan portfolio. The Company writes off receivables upon
determination that no further collections are probable.
Property and Equipment - net - Property and equipment are stated at cost.
Depreciation is provided on the straight-line basis over such assets'
estimated useful service lives which range from three to five years.
Purchased computer software is amortized over longer periods. Leasehold
improvements are amortized over the shorter of their estimated useful lives
or the remaining term of the lease.
Revenue and Credit Concentration - The Company receives substantially all of
its revenues from financing arrangements made within the New York, New Jersey
and Connecticut tri-state area. Accordingly, at September 30, 1996,
substantially all of the Company's installment loans outstanding were from
this geographic region.
-7-
<PAGE>
STANDARD FUNDING CORP.
NOTES TO FINANCE STATEMENTS - (Continued)
Income Taxes - Deferred taxes provide for the tax effect of timing
differences between financial and tax reporting primarily arising from the
recognition of unearned interest income for tax purposes and from the use of
accelerated depreciation methods.
Net Income Per Share - Net income per share is based on the average number of
shares outstanding.
Reclassifications - Certain amounts in prior periods have been reclassified
to conform with the current period's presentations.
2. INSTALLMENT LOANS RECEIVABLE UNDER PREMIUM FINANCE AGREEMENTS
Substantially all installment loans receivable under premium finance
agreements are completely repayable in less than one year. In the event of
default by a borrower, the Company is entitled to cancel the insurance policy
financed and receive a refund for the unused term of such policy from the
insurance carrier. The proceeds of such refunds are generally sufficient to
cover the unpaid balance of the loan.
A summary of activity in the allowance for possible credit losses is as
follows:
Nine Months
Ended Year Ended
September 30, December 31,
------------- ------------
1996 1995
---- ----
Balance, beginning of period ...... $ 208,000 $ 150,000
Provision.......................... 296,380 304,740
Charge-offs - net of recoveries of
$22,627 and $38,205, respectively.. (258,380) (246,740)
--------- ---------
Balance, end of period............. $ 246,000 $ 208,000
========= =========
-8-
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Comparison of Nine Months Ended September 30, 1996 to Nine Months Ended
September 30, 1995
Finance charge income increased by 17.7% to $4,111,731 in the first nine
months of 1996 from $3,492,549 in the first nine months of 1995 primarily
because of an increase in total installment loans financed during the respective
periods. Total installment loans originated increased 26.0% to $63,225,614 from
$50,171,011. The Company's average receivables for the period ended September
30, 1996 increased 26.8% to $30,422,887 from $23,987,154 for the period ended
September 30, 1995. Interest expense for the period ended September 30, 1996
increased 27.5% to $1,344,137 from $1,054,324 for the period ended September 30,
1995, an increase of $289,813, due to an increase in borrowings. Selling and
operating expenses increased during the period ended September 30, 1996 to
$1,771,085 from $1,623,225 in the period ended September 30, 1995. This increase
was primarily attributable to increases in salary rates and expenses. There was
a 13.5% increase in the "spread" to $2,767,594 for the period ended September
30, 1996 from $2,438,225 for the period ended September 30, 1995.
In comparing the periods, the number of contracts booked decreased to
19,034 from 20,506. The average size of each contract for the period ended
September 30, 1996 increased 35.8% to $3,322 from $2,447 in the period ended
September 30, 1995, an increase of $875, as the Company has concentrated on the
commercial aspect of the business. Management estimates that approximately 85%
of the Company's outstanding receivables are commercial accounts and
approximately 15% are personal accounts.
The provision for possible credit losses increased to $296,380 for the
period ended September 30, 1996 from $224,684 for the period ended September 30,
1995. This increase of $71,696 is due primarily to the increase in installment
loan receivables. The allowance for possible credit losses increased to $246,000
at September 30, 1996 from $193,000 at September 30, 1995.
Comparison of Three Months Ended September 30, 1996 to Three Months Ended
September 30, 1995
Finance charge income increased by 14.2% to $1,396,758 in the third quarter
of 1996 from $1,223,293 in the third quarter of 1995 primarily because of an
increase in total installment loans financed during the respective periods.
Total installment loans originated increased 22.4% to $19,997,827 from
$16,335,740. The Company's average receivables for the third quarter of 1996
increased 27.9% to $32,632,433 from $25,522,139 for the third quarter of 1995.
Interest expense for the third quarter of 1996 increased 23.7% to $481,930 from
$389,626 for the third quarter of 1995, an increase of $92,304, due to an
increase in borrowings. Selling and operating expenses increased during the
third quarter of 1996 to $577,226 from $552,381 in the third quarter of 1995.
This increase was primarily attributable to increases in salary rates and
expenses. There was a 9.7% increase in the "spread" to $914,828 for the third
quarter of 1996 from $833,667 for the third quarter of 1995.
-9-
<PAGE>
In comparing the periods, the number of contracts booked decreased to 5,594
from 6,322. The average size of each contract for the period ended September 30,
1996 increased 38.4% to $3,575 from $2,584 in the period ended September 30,
1995, an increase of $991, as the Company has concentrated on the commercial
aspect of the business. Management estimates that approximately 85% of the
Company's outstanding receivables are commercial accounts and approximately 15%
are personal accounts.
The provision for possible credit losses increased to $104,595 for the
third quarter of 1996 from $65,854 for the third quarter of 1995. This increase
of $38,741 is due primarily to the increase in installment loan receivables.
Liquidity and Capital Resources
The Company's operations are dependent upon the continued availability of
funds on satisfactory terms and rates. The Company uses such funds principally
to finance the origination of installment loans under premium finance
agreements. The Company obtains required funds from a variety of sources,
including internal generation of funds, unsecured borrowings under lines of
credit, direct issuance of commercial paper, placement of subordinated debt and
the sale of common equity.
As the Company increases the size of its business, it originates more
installment loans receivable than it collects, resulting in a larger outstanding
balance of installment loans receivable. For the nine month periods ended
September 30, 1996 and 1995, the Company originated installment loans receivable
of $63,225,614 and $50,171,011, respectively, compared to installment loans
collected for each period of $54,245,028 and $43,968,501, respectively. The
result was an increase in outstanding installment loan receivables to
$32,324,284 from $25,390,546 at September 30, 1996 and 1995, respectively.
The growth in the Company's loan portfolio has been the single largest
factor influencing the Company's cash flow from operations and its need for
financing. The determining factor influencing the growth in the loan portfolio
has been the extent to which the Company has been able to leverage its capital
into subordinated debt and then into short-term senior debt. For the nine month
periods ended September 30, 1996 and 1995, net cash provided by operating
activities was $2,376,701 and $1,348,525, respectively, which amounts were
comprised primarily of net earnings, loss provisions, depreciation and
amortization and other changes in assets and liabilities. For the nine month
periods ended September 30, 1996 and 1995, net cash provided by financing
activities was $5,872,502 and $4,894,814, respectively, comprised of proceeds
from bank notes and repayment of bank notes, proceeds from sales and repayments
of commercial paper and the net proceeds and repayments of subordinated debt.
-10-
<PAGE>
The following table sets forth the amounts of installment loans receivable
originated and the collections of installment loans receivable for the periods
indicated.
For the Nine Month Period
Ended September 30,
-------------------------
1996 1995
---- ----
Installment loans originated................. $63,225,614 $50,171,011
Installment loans collected.................. $54,245,028 $43,968,501
The Company has no present plans related to significant capital
expenditures. The Company is not aware of any pending legislation that would
have a material effect on its capital requirements or business prospects.
The Company is subject to minimum capital requirements imposed by certain
of the states in which it is licensed. The Commonwealth of Pennsylvania requires
an insurance premium finance company to have and maintain a minimum net worth of
$50,000. The State of New York requires that insurance premium finance companies
have and maintain equity capital equal to at least 10% of outstandings and, in
any event, not less than $1,500. In addition, the Company is prohibited from
declaring or paying any dividends on its capital stock (other than dividends
payable solely in shares of Common Stock) pursuant to one of the Company's
subordinated debt arrangements which matures on December 27, 2000.
The sources of funds (other than internal generation of funds and the sale
of common equity) which are presently available or being utilized by the Company
are described below. Management believes that the sources of funds presently
available to the Company are adequate for the conduct of its business at its
present level. To the extent that the Company in the future expands its business
and increases its total installment receivables outstanding beyond its present
levels of funding, the Company will need to obtain additional sources of funds
or expand existing sources of funds, which may not be available or, if
available, may not be on terms acceptable to the Company.
Lines of Credit
At September 30, 1996, the Company had unsecured short term lines of credit
aggregating $31,500,000 available through six commercial banks, under which
$16,600,000 was outstanding. Amounts outstanding under these lines bear interest
at variable rates over LIBOR. The Company pays fees to some of these banks in
connection with these lines. These lines expire on various dates through June
30, 1997, although there can be no assurance that these lines will not be
revoked, suspended or reduced at any time. No bank is contractually obligated to
renew any such line. During the nine month periods ended September 30, 1996 and
1995, the maximum aggregate amount outstanding under these lines at any time was
$17,300,000 and $11,200,000, respectively.
-11-
<PAGE>
Commercial Paper
The Company directly issues its own commercial paper with maturities of up
to 270 days, which is unsecured and is unrated by commercial paper rating
agencies. Commercial paper outstanding at September 30, 1996 bore interest at
fixed annual rates ranging from 5.38% to 6.74%. During the nine month periods
ended September 30, 1996, the maximum outstanding commercial paper net of
prepaid discount at any month end was $2,649,355. Such commercial paper is
generally sold to officers of the Company and their affiliates and to
non-affiliated investors. The Company has obtained no commitments from any
purchaser of its commercial paper regarding additional or future purchases. It
is the Company's policy to maintain unused short-term bank lines of credit in an
amount in excess of the amount of commercial paper outstanding. The interest
rate on the Company's commercial paper has been and will continue to be
determined by reference to prevailing interest rates in the commercial paper
market. The Company does not anticipate any change in the level of financing
provided by affiliates of the Company or any changes in the costs of financing
provided by such affiliates. There can be no assurance, however, that such
levels of financing will be maintained in the future.
Senior Subordinated Debt
The Company has obtained unsecured senior subordinated debt in the amount
of $4,010,000 from outside investors. The notes bear interest at a fixed rate of
12.50% and 14% and are due from November 1, 2000 to March 31, 2001.
The notes due December 27, 2000 restrict the Company's ability, among other
things, to merge, pay dividends and permit its business to be heavily
concentrated with a single broker or agency. These notes contain various
covenants requiring the Company to meet certain financial ratios and other
restrictions on acquisitions and investments. The Company may, at its option,
prepay the loan in whole or in part. However, with respect to these notes, the
Company must reimburse the investors for any loss of margin on reemployment of
the funds so paid. The Company does not currently anticipate prepaying or
otherwise refinancing its existing senior subordinated debt prior to its
maturity.
In addition, the Company had obtained unsecured junior subordinated debt in
the amount of $903,000 from various investors. These notes bear interest at a
fixed rate of 11.25%, 12% and 14.25% and are due from February 16, 2001 to
September 30, 2001. The following table indicates amounts, rates and maturity
dates as of September 30, 1996.
-12-
<PAGE>
Rate Due Date Amount
---- -------- ------
14.25% 06/30/2001 $ 810,000
14.00% 11/01/2000 500,000
14.00% 12/27/2000 3,000,000
12.50% 03/31/2001 510,000
12.00% 02/16/2001 50,000
11.25% 09/30/2001 43,000
-----------
$ 4,913,000
===========
Subordinated debt is generally sold to officers of the Company and their
affiliates and to non-affiliated investors. The Company has obtained no
commitments from any holder of its subordinated debt regarding additional or
future purchases.
Other Potential Sources
In addition to the sources of funds described above, management believes
that the Company could obtain funds from the sale of finance receivables or
participations in finance receivables to banks. The Company has in the past
participated with banks on a pari passu basis in its installment paper. There
can be no assurance that such sales or participations could be effected in the
future on satisfactory terms, or at all.
The Company continually engages in discussions with both current and
prospective lenders regarding obtaining increases, in extensions of or additions
to, both its short-term lines of credit and its subordinated borrowings. The
Company is currently engaged in such discussions with several lenders, but can
give no assurance as to whether or when such discussions will be favorably
consummated.
-13-
<PAGE>
PART II. OTHER INFORMATION
- ------- -----------------
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
None.
(b) Reports on Form 8-K
None.
-14-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
STANDARD FUNDING CORP.
Date: November 8, 1996 /s/ Alan J. Karp
-------------------------------------
Alan J. Karp
President and Chief Executive Officer
Date: November 8, 1996 /s/ David E. Fisher
-------------------------------------
David E. Fisher
Treasurer and Chief Financial Officer
-15-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from 9/30/96 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 123,174
<SECURITIES> 0
<RECEIVABLES> 31,493,284
<ALLOWANCES> (246,000)
<INVENTORY> 0
<CURRENT-ASSETS> 32,133,102
<PP&E> 513,751
<DEPRECIATION> (294,057)
<TOTAL-ASSETS> 32,352,796
<CURRENT-LIABILITIES> 25,749,092
<BONDS> 0
0
0
<COMMON> 2,760
<OTHER-SE> 6,600,944
<TOTAL-LIABILITY-AND-EQUITY> 32,352,796
<SALES> 0
<TOTAL-REVENUES> 4,111,731
<CGS> 0
<TOTAL-COSTS> 1,771,085
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 296,380
<INTEREST-EXPENSE> 1,344,137
<INCOME-PRETAX> 700,129
<INCOME-TAX> 280,052
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 420,077
<EPS-PRIMARY> .15
<EPS-DILUTED> 0
</TABLE>
