South Dakota State Medical Holding Company, Incorporated
1323 South Minnesota Avenue
Sioux Falls, SD 57105
November 27,1996
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. 20549
Re: Amendment to
Quarterly Report on Form 10-Q for the
Quarter Ended June 30, 1996
Commission File No. 0-23430
Dear Commission Staff:
Attached for filing with the Commission via EDGAR, pursuant to the
Securities Exchange Act of 1934 and Rule 101(a)(1)(iii) of Reg.S-T, please
find a Quarterly Report on Form 10Q/A, which amends the previously filed
Report on Form 10-Q for the quarter ended June 30, 1996, by including the
Financial Data Schedule as Exhibit 27.
Very truly yours,
/s/Kirk J. Zimmer
Kirk J. Zimmer,
Principal Financial Officer
attachment
cc: Shelley Parratt,
SEC Assistant Director (w/one hard copy)
Bruce McPheeters (w/one hard copy)
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 June 30, 1996
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 0-23430
South Dakota State Medical Holding Company, Incorporated
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
South Dakota 46-0401087
--------------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
1323 South Minnesota Avenue, Sioux Falls, South Dakota 57105
------------------------------------------------------------
(Address of principal executive office)
(Zip Code)
(605) 334-4000
--------------
(Registrant's telephone number, including area code)
______________________________
(Former name, former address, and former fiscal year, if changed
since last report)
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 the latest practicable date.
<TABLE>
<S> <C>
Class Outstanding at July 30, 1996
----- ----------------------------
Class C Common Stock 1,505,760
</TABLE>
<PAGE> 2
SOUTH DAKOTA STATE MEDICAL HOLDING COMPANY, INCORPORATED
FORM 10-Q
INDEX
Part 1. Financial Information (unaudited)
Item 1. Financial Statements
Consolidated Balance Sheets at
June 30, 1996 and December 31, 1995
Consolidated Statements of Income for
the Three and Six Months Ended June 30,
1996 and 1995
Consolidated Statement of Stockholders'
Equity for the Six Months Ended
June 30, 1996
Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 1996
and 1995
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Part II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Default Upon Senior Securities
Item 4. Submission of Matters to a Vote
of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE> 3
<TABLE>
PART 1: FINANCIAL INFORMATION
Item 1. Financial Statements
<CAPTION>
SOUTH DAKOTA STATE MEDICAL HOLDING
COMPANY, INCORPORATED d/b/a DAKOTACARE
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
ASSETS 1996 1995
----------- ------------
<S> <C> <C>
Cash and cash equivalents $ 3,667,633 $ 3,586,196
Investments in debt securities 1,055,090 1,195,129
Certificates of deposit 875,000 604,900
Receivables 492,110 534,570
Prepaids and other assets 112,786 71,957
Deferred income taxes 503,000 462,000
----------- ------------
Total current assets $ 6,705,619 $ 6,454,752
----------- ------------
Investments in debt securities $ 3,592,550 $ 2,613,470
Investments in equity securities 281,400 292,700
Pledged certificates of deposit 500,000 500,000
Cash surrender value of life insurance 57,000 51,000
----------- ------------
Total long-term investments $ 4,430,950 $ 3,457,170
----------- ------------
Leasehold improvements and equipment, net $ 1,118,766 $ 1,173,891
----------- ------------
Deferred income taxes $ 314,000 $ 339,000
----------- ------------
$ 12,569,335 $ 11,424,813
============ ============
LIABILITIES
Reported and unreported medical
claims liabilities $ 2,594,000 $ 2,710,000
Unearned subscriber premiums and
administration fees 828,455 815,653
Accounts payable and accrued expenses 815,171 787,008
Dividends payable 90,346 --
Contingency reserve payable 1,046,000 973,000
----------- -----------
Total current liabilities $ 5,373,972 $ 5,285,661
Contingency reserve payable 1,499,506 981,669
----------- -----------
Total liabilities $ 6,873,478 $ 6,267,330
----------- -----------
Minority interest in subsidiary $ 294,366 $ 277,892
----------- -----------
STOCKHOLDERS' EQUITY
Class A preferred stock,
issued 992 and 976 shares $ 9,920 $ 9,760
Class B preferred stock, issued
1,300 and 1,000 shares 1,300 1,000
Class C common stock, issued 1,505,760 shares 15,058 15,058
Additional paid-in capital 3,749,342 3,749,342
Retained earnings 1,643,099 1,107,480
Unrealized loss on securities
available for sale (17,228) (3,049)
----------- -----------
$ 5,401,491 $ 4,879,591
----------- -----------
$ 12,569,335 $ 11,424,813
============ ============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
SOUTH DAKOTA STATE MEDICAL HOLDING
COMPANY, INCORPORATED d/b/a DAKOTACARE
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Premiums, net
of reins. ceded $ 6,867,146 6,677,863 $ 13,421,206 $ 13,463,417
Third party
administration fees 971,365 668,188 1,978,359 1,320,425
Net investment income 134,033 112,748 256,746 219,695
Other income 100,837 95,450 176,963 189,017
------------ ------------ ------------ ------------
Total revenues $ 8,073,381 $ 7,554,249 $ 15,833,274 $ 15,192,554
------------ ------------ ------------ ------------
Operating expenses:
Claims incurred, net
of reins. recoveries $ 5,208,316 $ 4,841,212 $ 10,385,615 $ 10,384,776
Personnel expense 912,362 790,622 1,809,577 1,496,668
Commissions 293,748 263,556 614,626 567,901
Professional fees exp. 290,355 225,168 590,191 457,230
Office expense 196,380 194,599 391,343 381,904
Advertising 154,558 122,216 318,336 337,200
Occupancy expense 155,287 112,630 305,822 229,523
State insurance taxes 84,274 83,511 164,781 166,628
Other general and
administrative expenses 94,427 88,001 163,256 156,181
---------- ----------- ----------- -----------
Total operating
expenses $ 7,389,707 $ 6,721,515 $ 14,743,547 $ 14,178,011
------------ ----------- ------------ ------------
Income before income
taxes and minority
interest $ 683,674 $ 832,734 $ 1,089,727 $ 1,014,543
Income taxes 236,000 295,000 372,000 350,000
----------- ---------- ------------ ------------
Income before minority
interest in earnings
(loss) of subsidiary $ 447,674 $ 537,734 $ 717,727 $ 664,543
Minority interest in
earnings (loss) of
subsidiary 7,375 (2,224) 16,474 (1,555)
----------- ----------- ----------- -------------
Net income $ 440,299 $ 539,958 $ 701,253 $ 666,098
=========== =========== =========== =============
Earnings per common share $ .29 $ .36 $ .47 $ .44
=========== =========== =========== =============
Weighted average number
of common shares
outstanding 1,505,760 1,505,760 1,505,760 1,505,760
=========== =========== =========== =============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
SOUTH DAKOTA STATE MEDICAL HOLDING
COMPANY, INCORPORATED d/b/a DAKOTACARE
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
Unrealized
Loss on
Securities
Capital Paid-In Retained Available
Stock Capital Earnings for Sale
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Balance,
December 31, 1995 $ 25,818 $ 3,749,342 $ 1,107,480 $ (3,049)
Issuance of Class A
preferred stock 320 -- -- --
Redemption of Class A
preferred stock (160) -- -- --
Issuance of Class B
preferred stock 300 -- -- --
Increase in unrealized loss
on securities available
for sale -- -- -- (14,179)
Dividends paid or accrued on
Class C common stock -- -- (165,634) --
Net income for the
six months -- -- 701,253 --
----------- ------------ ------------ ------------
Balance,
June 30, 1996 $ 26,278 $ 3,749,342 $ 1,643,099 $ (17,228)
=========== ============ ============ =============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
SOUTH DAKOTA STATE MEDICAL HOLDING
COMPANY, INCORPORATED d/b/a DAKOTACARE
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
1996 1995
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 701,253 $ 666,098
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 152,415 106,414
Minority interest in earnings (loss) of subsidiary 16,474 (1,555)
Amortization of discounts and premiums
on investments and certificates of
deposit, net (48,997) (48,039)
Change in deferred income taxes (16,000) (28,000)
Change in other assets and liabilities 517,433 557,282
------------ -----------
Net cash provided by operating activities $ 1,322,578 $ 1,252,200
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of certificates
of deposit $ 604,900 $ 700,000
Purchase of certificates of deposit (875,000) (1,000,000)
Purchase of debt securities (1,224,545) (480,275)
Proceeds from maturities of debt securities 434,501 208,535
Purchase of investment in equity securities (2,879) (2,794)
(Increase) in cash surrender value of
life insurance (6,000) (6,000)
Purchase of leasehold improvements
and equipment (97,290) (355,573)
------------ -----------
Net cash (used in) investing activities $ (1,166,313) $ (936,107)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of stock $ 620 $ 290
Redemption of stock (160) (190)
Payment of dividends on preferred stock (75,288) (84,699)
Minority investment in subsidiary -- 15,000
------------ -----------
Net cash (used in) financing activities $ (74,828) $ (69,599)
------------ -----------
Increase in cash and cash equivalents $ 81,437 $ 246,494
CASH AND CASH EQUIVALENTS
Beginning 3,586,196 3,290,253
------------ -----------
Ending $ 3,667,633 $ 3,536,747
============ ===========
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE> 7
SOUTH DAKOTA STATE MEDICAL HOLDING COMPANY, INCORPORATED
D/B/A DAKOTACARE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The consolidated financial statements of South Dakota State Medical Holding
Company, Incorporated, d/b/a DAKOTACARE, (the "Company") and its wholly-
owned subsidiaries, DAKOTACARE Administrative Services, Incorporated (DAS),
and DAKOTACARE Insurance Ltd. (DIL), and its 50.11% owned subsidiary,
Dakota Health Plans, Incorporated (DHP), contained in this report are
unaudited but reflect all adjustments, consisting only of normal recurring
adjustments, which, in the opinion of management, are necessary for a
fair presentation of the financial information for the periods presented
and are not necessarily indicative of the results to be expected for the
full year.
2. EARNINGS PER COMMON SHARE
On December 29, 1995, the Company reduced the par value of its Class C
common stock from $1 per share to $.01 per share and issued the 1,468,116
additional shares necessary to effect a 40-for-1 common stock split. The
earnings per common share for the six months ended June 30, 1995, have been
retroactively adjusted for this split as if it occurred on January 1, 1995.
Earnings per common share is calculated by dividing net income by the
weighted average number of Class C common shares outstanding during
each period.
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The South Dakota State Medical Holding Company, Incorporated, markets its
products under the tradename of DAKOTACARE. Its products include group
managed health care products such as HMO products and cafeteria plan
administration and workers compensation managed care services. Its
subsidiaries' (DAS and DHP) products are managed care and claims
administration services for self-insured employer groups. Its subsidiary,
DIL, was incorporated in January 1996, and was formed to accept reinsurance
risk on some of DAS's and DHP's self-funded customers. The Company and
subsidiaries DAS and DHP, market their products through a network of
independent insurance agents throughout South Dakota.
The Company contracts with over 98% of the physicians in the state of
South Dakota, 100% of the hospitals in the state of South Dakota, and many
other health care providers to provide medical services to its enrollees.
At July 1, 1996, the Company's HMO enrollment is approximately 22,000
enrollees, while its subsidiaries DAS and DHP have enrollment of
approximately 65,000 enrollees under their Administrative Services Only
(ASO) business.
COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1995
General
- -------
The Company's net income decreased $99,659 to $440,299 for the three months
ended June 30, 1996, as compared to $539,958 for the three months ended
June 30, 1995, representing a 18.46% decrease. This decrease was primarily
due to an increase in operating expenses of $668,192 which was offset by an
increase of $519,132 in total revenue and a $59,000 decrease in income taxes.
Revenues
- --------
Total revenues increased $519,132, or 6.87%, for the three months ended
June 30, 1996, as compared to the three months ended June 30, 1995. The
revenues from the net premiums generated by the health maintenance
organization increased by $189,283. This increase is attributable to an
average of 1.22% increase in the premiums earned per enrollee and a 1.60%
increase in the number of enrollees for the three months ended June 30,
1996, as compared to June 30, 1995. Revenues from the third party
administration (TPA) fees increased by $303,177 due to the increase in
enrollees in this TPA business through its subsidiaries DAS and DHP.
Operating Expenses
- ------------------
Total operating expenses increased $668,192, or 9.94%, for the three months
ended June 30, 1996, as compared to the three months ended June 30, 1995.
This was primarily due to an increase in personnel expense, professional
fees expense, and occupancy expenses.
<PAGE> 9
Net claims expense increased by $367,104, or 7.58%. Average claims per
enrollee increased by 5.89% for the three months ended June 30, 1996, as
compared to the three months ended June 30, 1995, while the number of
enrollees increased by 1.60%. Personnel expense increased by $121,740,
or 15.40%, for the three months ended June 30, 1996, as compared to
June 30, 1995, due to the increase in personnel for DAS and DHP.
Professional fees expense increased $65,187, or 28.95%, for the three
months ended June 30, 1996, as compared to June 30,1995. This was
primarily due to increased consulting work being performed and an increase
in utilization review by outside companies with increased enrollment.
Occupancy expense increased $42,657, or 37.87%, due to increase in
depreciation on equipment purchased in the past couple of years due
to growth in TPA clients.
Income Taxes
- ------------
Income tax expense represents 34.52% and 35.43% of income before income
taxes and minority interest for the three months ended June 30, 1996 and
1995, respectively. As a result of existing levels of pretax earnings
and the availability of recoverable income taxes paid in recent years, no
valuation allowance is required for recorded deferred tax assets.
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1995
General
- -------
The Company's net income increased $35,155 to $701,253 for the six months
ended June 30, 1996, as compared to $666,098 for the six months ended
June 30, 1995, representing a 5.28% increase. This increase was primarily
due to an increase in total revenue of $640,720, which was offset by an
increase in total operating expenses of $565,536.
Revenues
- --------
Total revenues increased $640,720, or 4.22%, for the six months ended
June 30, 1996, as compared to the six months ended June 30, 1995. The
revenues from the net premiums generated by the health maintenance
organization decreased by $42,211. This decrease is attributable to a
1.38% decrease in the number of enrollees which was offset by a 1.09%
increase in the premiums earned per enrollee for the six months
ended June 30, 1996, as compared to the six months ended June 30, 1995.
Revenues from the third party administrative (TPA) fees increased by
$657,934 due to the increase in enrollees in this TPA business through
DAS and DHP.
Operating Expenses
- ------------------
Total operating expenses increased $565,536, or 3.99%, for the six months
ended June 30, 1996, as compared to the six months ended June 30, 1995.
This was primarily due to an increase in personnel expense, professional
fees expense, and occupancy expense.
<PAGE> 10
Net claims expense remained fairly constant. Average claims per enrollee
increased by 1.41% for the six months ended June 30, 1996, as compared to
June 30, 1995, while the number of enrollees decreased by 1.38%. Personnel
expense increased by $312,909, or 20.91%, for the six months ended June 30,
1996, as compared to June 30, 1995, primarily due to the increase in
personnel for DAS and DHP. Professional fees expense increased $132,961, or
29.08%, for the six months ended June 30, 1996, as compared to June 30, 1995.
This was primarily due to increased consulting work being performed and an
increase in utilization review by outside companies with increased enrollment.
Occupancy expense increased $76,299, or 33.24%, due to increase in
depreciation on equipment purchased in the past couple of years due to growth
in TPA clients.
Income Taxes
- ------------
Income tax expense represents 34.14% and 34.50% of income before income taxes
and minority interest for the six months ended June 30, 1996 and 1995,
respectively. As a result of existing levels of pretax earnings and the
availability of recoverable income taxes paid in recent years, no valuation
allowance is required for recorded deferred tax assets.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of cash have been premium revenue, collection
of premiums in advance of the claims cost associated with them, and an
agreement with participating physicians in which a percentage of fees for
services is withheld for cash flows of the Company. The Company in the past
has had borrowings from banks and affiliated companies, but currently does
not need to borrow for liquidity purposes.
Net cash provided by operating activities increased by $70,378 to $1,322,578
for the six months ended June 30, 1996, as compared to June 30, 1995. The
cash flows from operations have been used primarily to purchase investments,
certificates of deposits, and leasehold improvements and equipment and to
pay dividends for both periods.
The Company is not contractually obligated to pay out the contingency
reserve withheld but has historically elected to pay out a majority of the
amounts withheld. On June 5, 1996, the Board of Directors approved payment
of dividends on the Class C common stock of $.06 per share for shareholders
of record as of June 5, 1996, payable on August 15, 1996. Future dividend
payment is dependent on the operations and liquidity of the Company. The
Company believes that cash flow generated by operations, withholding of
contingency reserve payables, cash on hand, and short-term investment
balances will be sufficient to fund operations, pay out the projected
contingency reserve payable, and pay dividends on the Class C common stock.
<PAGE> 11
OUTLOOK, TRENDS, EVENTS, OR UNCERTAINTIES
The Company identifies the following important factors which could cause the
Company's actual financial and enrollment results to differ materially from
any such results which might be projected, forecast, estimated, or budgeted
by the Company in forward-looking statements or valuation analysis: the
intensification of price competition; the entry of new competitors; the
introduction of new products by new and existing competitors; adverse state
and federal legislation and regulation; increases in medical costs, including
increases in utilization and costs of medical services and the effects of
actions by competitors or groups of providers; termination of providers
contracts or renegotiation at less cost-effective rates or terms of payment;
price increases in pharmaceuticals; failure to obtain new customers, retain
existing customers, or reductions in force by existing customers; adverse
publicity and news coverage; the selection by employers and individuals of
higher copayment/deductible/coinsurance plans with relatively lower premiums;
the migration of employers from insured to self-funded coverage resulting in
reduced margins to the Company; higher general and administrative expenses
occasioned by the need for additional advertising, professional services,
administrative, or management information systems expenditures; changes in
interest rates causing a reduction of net investment income; and increases
by regulatory authorities of minimum capital, reserve, and other financial
viability requirements.
<PAGE> 12
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
- --------------------------
None
Item 2. Changes in Securities
- ------------------------------
None
Item 3. Default Upon Senior Securities
- ---------------------------------------
None
<TABLE>
<CAPTION>
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
(a) The 1996 Annual Meeting of Shareholders of the Company was held on
June 6, 1996.
(b,c)The 1996 Annual Meeting was held to elect three directors of the
Company for a three year term, by the Class A and B shareholders. The
following persons were elected as directors of the Company at the 1996
Annual Meeting, with the respective votes indicated:
Name of Nominee For Against Withheld
--------------- --- ------- --------
<S> <C> <C> <C>
Guy E. Tam, M.D. 1,308 0 12
Patrick Beckman 1,307 0 13
Jeff Rodman 1,312 0 8
</TABLE>
There were no abstentions and no broker non-votes on this matter.
The following directors continue to serve as directors after the Annual
Meeting:
Robert Ferrell, M.D.
Gerald Tracy, M.D.
Ben Henderson, D.O.
Douglas Holum, M.D.
K. Gene Koob, M.D.
James Jackson, M.D.
Frank Messner, M.D.
There were no voting issues for the Class C shareholders.
<PAGE> 13
Item 5. Other Information
- ---------------------------
None
Item 6. Exhibits and Reports on Form 8-K
- ------------------------------------------
(a) Exhibit 27 is attached.
(b) No reports on Form 8-K have been filed during the quarter for which this
report is filed.
<PAGE> 14
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.
South Dakota State Medical Holding Company, Incorporated
--------------------------------------------------------
(Registrant)
Date: November 27, 1996 By: /s/ Robert D. Johnson
---------------------------
Robert D. Johnson
Chief Executive Officer
(Duly Authorized Officer)
Date: November 27, 1996 By: /s/ Kirk J. Zimmer
----------------------------
Kirk J. Zimmer
Senior Vice President
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 6,022,640
<DEBT-MARKET-VALUE> 0
<EQUITIES> 281,400
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 6,304,040
<CASH> 3,667,633
<RECOVER-REINSURE> 492,110
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 12,569,335
<POLICY-LOSSES> 2,594,000
<UNEARNED-PREMIUMS> 828,455
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
11,220
<COMMON> 15,058
<OTHER-SE> 5,375,213
<TOTAL-LIABILITY-AND-EQUITY> 12,569,335
13,421,206
<INVESTMENT-INCOME> 256,746
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 2,155,322
<BENEFITS> 10,385,615
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 614,626
<INCOME-PRETAX> 1,089,727
<INCOME-TAX> 372,000
<INCOME-CONTINUING> 701,253
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 701,253
<EPS-PRIMARY> .47
<EPS-DILUTED> .47
<RESERVE-OPEN> 2,710,000
<PROVISION-CURRENT> 10,385,615
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 7,716,615
<PAYMENTS-PRIOR> 2,785,000
<RESERVE-CLOSE> 2,594,000
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
