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 June 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 August 7, 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 June 30, 1996
TABLE OF CONTENTS
- ---------------------------------------------------------------------------
Page
----
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements
BALANCE SHEETS AT JUNE 30, 1996 AND
DECEMBER 31, 1995 ..................................... 3
STATEMENTS OF INCOME FOR THE SIX MONTHS
ENDED JUNE 30, 1996 AND JUNE 30, 1995 ................. 4
STATEMENTS OF INCOME FOR THE THREE MONTHS
ENDED JUNE 30, 1996 AND JUNE 30, 1995 ................. 5
STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS
ENDED JUNE 30, 1996 AND JUNE 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
June 30, 1996 December 31, 1995
------------- -----------------
(unaudited)
ASSETS:
Cash .......................................... $ 192,095 $ 939,869
------------ ------------
Installment loans receivable
under premium finance agreements .......... 32,888,913 24,170,397
Less: Unearned interest ....................... (846,000) (654,000)
Allowance for possible credit losses
(Note 2) .............................. (251,000) (208,000)
------------ ------------
Installment loans receivable
under premium finance agreements - net .... 31,791,913 23,308,397
Due from officers ............................. 147,552 141,693
Property and equipment - net .................. 195,741 167,197
Other assets .................................. 471,179 243,889
------------ ------------
Total ..................................... $ 32,798,480 $ 24,801,045
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Notes payable to financial institutions ....... $ 16,900,000 $ 10,300,000
Commercial paper issued ....................... 2,382,054 2,951,225
Amounts due to insurance companies ............ 1,600,000 220,220
Accrued expenses and other .................... 293,910 195,246
Deferred income taxes payable ................. 288,616 185,727
------------ ------------
Total, exclusive of subordinated debt ..... 21,464,580 13,852,418
Subordinated debt ............................. 4,870,000 4,765,000
------------ ------------
Total Liabilities ......................... 26,334,580 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 ............................. 2,469,639 2,189,366
------------ ------------
Total Shareholders' Equity ................ 6,463,900 6,183,627
------------ ------------
Total ................................ $ 32,798,480 $ 24,801,045
============ ============
See notes to financial statements.
-3-
<PAGE>
STANDARD FUNDING CORP.
STATEMENTS OF INCOME (UNAUDITED)
Six Months Six Months
Ended Ended
June 30, 1996 June 30, 1995
------------- -------------
NET INTEREST INCOME:
Finance charge income and other ................ $2,714,973 $2,269,256
Less: Interest and other expenses on borrowings 862,207 664,698
---------- ----------
Net Interest Income ..................... 1,852,766 1,604,558
---------- ----------
OTHER EXPENSES:
Operating expenses ............................. 914,248 837,934
Selling expenses ............................... 279,611 232,910
Provisions for possible credit losses (Note 2) . 191,785 158,830
---------- ----------
Total ..................................... 1,385,644 1,229,674
---------- ----------
INCOME BEFORE PROVISION FOR
INCOME TAXES ..................................... 467,122 374,884
PROVISION FOR INCOME TAXES ......................... 186,849 149,954
---------- ----------
NET INCOME ......................................... $ 280,273 $ 224,930
========== ==========
NET INCOME PER SHARE (Note 1) ...................... $ .10 $ .08
---------- ----------
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
June 30, 1996 June 30, 1995
------------- -------------
NET INTEREST INCOME:
Finance charge income and other ................ $1,395,949 $1,172,073
Less: Interest and other expenses on borrowings 460,634 359,015
---------- ----------
Net Interest Income ...................... 935,315 813,058
---------- ----------
OTHER EXPENSES:
Operating expenses ............................. 459,130 418,721
Selling expenses ............................... 140,664 113,935
Provisions for possible credit losses (Note 2) . 99,790 89,866
---------- ----------
Total ..................................... 699,584 622,522
---------- ----------
INCOME BEFORE PROVISION FOR
INCOME TAXES .................................... 235,731 190,536
PROVISION FOR INCOME TAXES ......................... 94,292 76,215
---------- ----------
NET INCOME ......................................... $ 141,439 $ 114,321
========== ==========
NET INCOME PER SHARE (Note 1) ...................... $ .05 $ .04
---------- ----------
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)
Six Months Six Months
Ended Ended
June 30, 1996 June 30, 1995
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ..................................... $ 280,273 $ 224,930
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for possible credit losses ....... 197,785 158,830
Deferred income taxes ...................... 66,216 42,272
Depreciation and amortization .............. 23,663 19,165
Changes in assets and liabilities:
Other assets ............................ 227,290 174,731
Accrued expenses and other and amounts
due to insurance companies ........... 1,478,444 95,336
------------ ------------
Net cash provided by operating activities 2,273,671 715,264
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Installment loans receivable originated ........ (43,227,788) (33,723,704)
Collections of installment loans receivable .... 34,114,720 27,387,308
Purchase of equipment .......................... (52,206) (69,420)
------------ ------------
Net cash used in investing activities ...... (9,165,274) (6,405,816)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank notes - net ................. 6,600,000 4,300,000
Proceeds (Repayment) of commercial paper
issued - net ................................ (561,171) 1,426,253
Proceeds (Repayment) of subordinated debt ...... 105,000 (100,000)
------------ ------------
Net cash provided by financing activities .. 6,143,829 5,626,253
------------ ------------
INCREASE (DECREASE) IN CASH ....................... (747,774) (64,299)
CASH AT BEGINNING OF YEAR ......................... 939,869 183,559
------------ ------------
CASH AT END OF PERIOD ............................. $ 192,095 $ 119,260
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH
FLOWS INFORMATION:
Income taxes paid .............................. $ 239,178 $ 110,000
============ ============
Interest paid .................................. $ 830,348 $ 707,906
============ ============
-6-
<PAGE>
STANDARD FUNDING CORP.
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 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 six month periods ended June 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 six month periods ended June 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 June
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:
Six Months
Ended Year Ended
June 30, December 31,
1996 1995
---------- ------------
Balance, beginning of period ........................ $ 208,000 $ 150,000
Provision ........................................... 191,785 304,740
Charge-offs - net of recoveries of $11,857 and
$38,205, respectively ............................... (148,785) (246,740)
-------- --------
Balance, end of period .............................. $ 251,000 $ 208,000
========= =========
-8-
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Comparison of Six Months Ended June 30, 1996 to Six Months Ended June
30, 1995
Finance charge income increased by 19.6% to $2,714,973 in the first
six months of 1996 from $2,269,256 in the first six months of 1995
primarily because of an increase in total installment loans financed during
the respective periods. Total installment loans originated increased 28.2%
to $43,227,788 from $33,723,704. The Company's average receivables for the
period ended June 30, 1996 increased 26.3% to $29,318,317 from $23,219,662
for the period ended June 30, 1995. Interest expense for the period ended
June 30, 1996 increased 29.7% to $862,207 from $664,698 for the period
ended June 30, 1995, an increase of $197,509, due to an increase in
borrowings. Selling and operating expenses increased during the period
ended June 30, 1996 to $1,193,859 from $1,070,844 in the period ended June
30, 1995. This increase was primarily attributable to increases in salary
rates and expenses. Due to the 19.6% increase in finance charge income,
compared to a 29.7% increase in interest expense, there was a 15.5%
increase in the "spread" to $1,852,766 for the period ended June 30, 1996
from $1,604,558 for the period ended June 30, 1995. In comparing the
periods, the number of contracts booked decreased from 14,184 to 13,440.
The average size of each contract for the period ended June 30, 1996
increased 35.3% to $3,216 from $2,377 in the period ended June 30, 1995, an
increase of $839, 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 $191,785 for the
period ended June 30, 1996 from $158,830 for the period ended June 30,
1995. This increase of $32,995 is due primarily to the increase in
installment loan receivables. The allowance for possible credit losses
increased to $251,000 at June 30, 1996 from $193,000 at June 30, 1995.
Comparison of Three Months Ended June 30, 1996 to Three Months Ended
June 30, 1995
Finance charge income increased by 19.1% to $1,395,949 in the second
quarter of 1996 from $1,172,073 in the second quarter of 1995 primarily
because of an increase in total installment loans financed during the
respective periods. Total installment loans originated increased 33.5% to
$22,364,382 from $16,750,158. The Company's average receivables for the
second quarter of 1996 increased 28.1% to $32,031,884 from $25,000,984 for
the second quarter of 1995. Interest expense for the second quarter of 1996
increased 28.3% to $460,634 from $359,015 for the second quarter of 1995,
an increase of $101,619, due to an increase in borrowings. Selling and
operating expenses increased during the second quarter of 1996 to $599,794
from $532,656 in the second quarter of 1995. This increase was primarily
attributable to increases in salary rates and expenses. Due to the 19.1%
increase in finance charge income, compared to a 28.3% increase in interest
expense, there was a 15.0% increase in the "spread" to $935,315 for the
second quarter of 1996 from $813,058 for the second quarter of 1995.
-9-
<PAGE>
In comparing the periods, the number of contracts booked decreased
from 7,004 to 6,454. The average size of each contract for the period ended
June 30, 1996 increased 44.9% to $3,465 from $2,391 in the period ended
June 30, 1995, an increase of $1,074, 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 $99,790 for the
second quarter of 1996 from $89,866 for the second quarter of 1995. This
increase of $9,924 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 six month
periods ended June 30, 1996 and 1995, the Company originated installment
loans receivable of $43,227,788 and $33,723,704, respectively, compared to
installment loans collected for each period of $34,114,720 and $27,387,308,
respectively. The result was an increase in outstanding installment loan
receivables to $32,888,913 from $25,354,394 at June 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 six month periods ended June 30, 1996 and 1995, net cash
provided by operating activities was $2,273,671 and $715,264, respectively,
which amounts were comprised primarily of net earnings, loss provisions,
depreciation and amortization and other changes in assets and liabilities.
For the six month periods ended June 30, 1996 and 1995, net cash provided
by financing activities was $6,143,829 and $5,626,253, 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 Six Month Period
Ended June 30,
------------------------
1996 1995
---- ----
Installment loans originated ................ $ 43,227,788 $ 33,723,704
Installment loans collected ................. $ 34,114,720 $ 27,387,308
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 June 30, 1996, the Company had unsecured short term lines of credit
aggregating $29,000,000 available through seven commercial banks, under
which $16,900,000 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 six
month periods ended June 30, 1996 and 1995, the maximum aggregate amount
outstanding under these lines at any time was $16,900,000 and $11,100,000,
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 June 30, 1996 bore
interest at fixed annual rates ranging from 5.94% to 6.70%. During the six
month periods ended June 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 $860,000 from various investors. These notes bear
interest at a fixed rate of 12% and 14.25% and are due from February 16,
2001 to June 30,2001. The following table indicates amounts, rates and
maturity dates as of June 30, 1996.
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
-----------
$ 4,870,000
===========
-12-
<PAGE>
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: August 7, 1996 /s/ Alan J. Karp
-------------------------------------
J. Karp
President and Chief Executive Officer
Date: August 7, 1996 /s/ David E. Fisher
-------------------------------------
David E. Fisher
Treasurer and Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from 6/30/96
10-QSB and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 0
<CASH> 192,095
<SECURITIES> 0
<RECEIVABLES> 32,042,913
<ALLOWANCES> (251,000)
<INVENTORY> 0
<CURRENT-ASSETS> 32,602,739
<PP&E> 480,646
<DEPRECIATION> (284,905)
<TOTAL-ASSETS> 32,798,480
<CURRENT-LIABILITIES> 26,334,580
<BONDS> 0
0
0
<COMMON> 2,760
<OTHER-SE> 6,461,140
<TOTAL-LIABILITY-AND-EQUITY> 32,798,480
<SALES> 0
<TOTAL-REVENUES> 2,714,973
<CGS> 0
<TOTAL-COSTS> 1,193,859
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 191,785
<INTEREST-EXPENSE> 862,207
<INCOME-PRETAX> 467,122
<INCOME-TAX> 186,849
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 280,273
<EPS-PRIMARY> .10
<EPS-DILUTED> 0
</TABLE>