SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
- -------------------------------------------------------------------------------
[X] Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 1997
or
[ ] Transition Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Transition Period from ------------to------------
- -------------------------------------------------------------------------------
Commission File Number 33-87570
I.R.S. Employer Identification Number 41-1793975
American Church Mortgage Company
Incorporated Under the Laws of the State of Minnesota
10237 Yellow Circle Drive
Minnetonka, MN 55343
Telephone: (612) 945-9455
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 requirements
for the past 90 days. Yes X No
The number of shares outstanding of the Registrant's stock as of May 1,
1997 was:
362,603 Shares of Common Stock Outstanding
1
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
INDEX Page
No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Balance Sheets March 31, 1997 and 1996..................3
Statements of Operations
Three Month Periods Ending March 31, 1997 and 1996... 4
Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996............5
Statement of Stockholders Equity........................6
Notes to Financial Statements ..........................7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ...................11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders...........13
Item 6. Exhibits and Reports on Form 8-K .............................13
Signatures'............................................13
2
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
UNAUDITED BALANCE SHEETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31, March 31,
1997 1996
<S> <C> <C>
Assets:
Current Assets
Cash and Cash Equivalents.................... $ 511,894 $ 136,000
Prepaid Expense.............................. - 0 - 695
Current Maturities of Loans Receivable...... 56,982 - 0 -
---------- -----------
Total current Assets: 568,876 136,695
Loans Receivable, net of current maturities.. 2,709,948 - 0 -
Bonds receivable............................. 121,647 - 0 -
Deferred Offering Costs...................... - 0 - 107,295
Deferred Tax Asset........................... 15,000 - 0 -
Organizational Expenses, (net of accumulated
amortization March 31, 1997, $859; March
31, 1996, $556)............................ 692 996
------------- ----------
Total Assets: $ 3,416,163 $ 244,986
========== =========
Liabilities and Shareholder's Equity:
Current Liabilities:
Accounts Payable............................. $ 1,699 $ 37,890
Deferred Income.............................. 19,016 - 0 -
Notes Payable................................ - 0 - 14,109
Dividends Payable............................ 81,377 - 0 -
--------- ---------
Total current liabilities: 102,092 51,999
Deferred Income.............................. 23,881 - 0 -
Shareholder's Equity
Common stock, par value $.01 per share;
authorized 30,000,000 shares; issued
and outstanding 362,574 as of March 31,
1997, 20,000 shares as of
March 31, 1996........................... 3,626 200
Additional Paid in Capital................... 3,334,239 199,800
Deficit accumulated during development stage. (29,894) (7,013)
Net Income .................................. (17,781) - 0 -
---------- -----------
Total Shareholders Equity: 3,290,190 192,987
--------- -------
$ 3,416,163 $ 244,986
========= =======
</TABLE>
Notes to Financial Statements are an integral part of this Statement.
3
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
UNAUDITED STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
1997 1996
<S> <C> <C>
Revenues
Interest Income Loans................... $ 61,244 $ - 0 -
Interest Income Other................... 7,170 1,270
Capital Gains Realized.................. 1,007 - 0 -
Origination Income...................... 3,033 - 0 -
Escrow Interest Income.................. - 0 - 22,402
-------- -------
Total Revenues: 72,454 23,672
Expenses
Professional fees....................... 1,230 1,310
Director fees........................... 800 - 0 -
Amortization............................ 76 76
Escrow Interest Expense................. - 0 - 22,249
Other................................... 1,752 1,205
-------- ---------
Total Expenses: 3,858 24,840
Provision for (Benefit from )
Income Taxes.............................. 5,000 - 0 -
-------- ----------
Net Income (loss)........................... $ 63,596 $ (1,168)
======== =======
Income (Loss) Per Common Share.............. $ .18 $ (.06)
Weighted Average Common Shares
Outstanding............................ 361,677 20,000
Dividends Declared.......................... $ 81,377 $ - 0 -
</TABLE>
Notes to Financial Statements are an integral part of this Statement.
4
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
UNAUDITED STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Three For the Three
Months Ended Months Ended
March 31, March 31,
1997 1996
<S> <C> <C>
Cash Flows From Operating Activities
Net Income (Loss) $ 63,596 $ (1,168)
Adjustments to reconcile net income
(loss) to net cash
used in operating activities:
Deferred income taxes 5,000 - 0 -
Amortization (930) 75
Change in assets and liabilities:
Decrease in prepaid expenses - 0 - (695)
Decrease in deferred income (3,033) - 0 -
Increase (Decrease) in accounts payable (6,783) (11,603)
Net cash used in operating activities 57,850 (13,391)
Cash Flows From Investing Activities
Investment in mortgage loans (116,712) - 0 -
Collections of mortgage loans 10,606 - 0 -
Investment in bonds - 0 - - 0 -
---------- ---------
Net cash used for investing activities (106,106) - 0 -
Cash Flows From Financing Activities
Proceeds form issuance of note - 0 - 14,109
Proceeds from stock offering 27,830 - 0 -
Dividends Paid (80,424) - 0 -
--------- --------
Net cash from(used for)financing activities (52,594) 14,109
Net increase (decrease) in cash (100,850) 718
Cash
Beginning of period 612,744 135,282
---------- ----------
End of period $ 511,894 $ 136,000
========== ==========
Supplemental Schedule of Noncash
Financing Activities
Dividends declared but not paid $ 81,377 $ - 0 -
---------- --------
</TABLE>
Notes to Financial Statements are an integral part of this Statement.
5
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
UNAUDITED STATEMENT OF STOCKHOLDER'S EQUITY
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Additional
Common Stock Paid-In Accumulated
Shares Amount Capital Deficit
<S> <C> <C> <C> <C>
Balance, December 31, 1996 359,791 $ 3,598 $ 3,306,437 $ (29,894)
Issuance of 2,783 shares of
common stock, net of
offering costs 2,783 28 27,802
Net Income 63,596
Dividends declared (81,377)
Balance, March 31, 1997(unaudited) 362,574 $ 3,626 $ 3,334,239 $ (47,675)
</TABLE>
Notes to Financial Statements are an integral part of this Statement.
6
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
NOTES TO UNAUDITED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with the instructions for interim statements and, therefore, do not include all
information and disclosures necessary for a fair presentation of results of
operations, financial position, and changes in cash flow in conformity with
generally accepted accounting principles. However, in the opinion of management,
such statements reflect all adjustments (which include only normal recurring
adjustments) necessary for a fair presentation of the financial position,
results of operations, and cash flows for the period presented.
The unaudited consolidated financial statements of the Company should be read in
conjunction with its December 31, 1996, audited financial statements included in
the Company's Annual Report on Form 10-KSB, as filed with the Securities and
Exchange Commission for the year ended December 31, 1996.
Nature of Business
American Church Mortgage Company, a Minnesota corporation, was incorporated on
May 27, 1994. The Company, which was a development stage company until 1996, was
organized to engage in the business of making mortgage loans to churches an
other nonprofit religious organizations throughout the United States, on terms
that it establishes for individual organizations. The Company concluded its
public stock offering in November 1996 and commenced its principal business
activities early in 1996.
Accounting Estimates
Management uses estimates and assumptions in preparing these financial
statements in accordance with generally accepted accounting principals. Those
estimates and assumptions affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities, and the reported revenues
and expenses. Actual results could differ from those estimates.
Cash
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents. The Company maintains
some cash in bank deposit accounts which, at times, may exceed federally insured
limits. The Company has not experienced any losses in such accounts.
Marketable Securities
The Company accounts for its debt securities under Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." The Company classifies its marketable debt securities as
"held-to-maturity" because it has the intent and ability to hold the securities
to maturity. Securities classified as held-to-maturity are carried at amortized
cost.
Allowance for Loans Receivable
The Company follows a policy of providing an allowance for loans receivable.
However, at March 31, 1997, management believes the loans receivable to be
collectible in all material respects.
Deferred Income
Deferred income represents loan origination fees which are recognized over the
life of the loan as an adjustment to the yield on the loan.
7
<PAGE>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences in recognition of income from loan origination
fees for financial and income tax reporting. Deferred taxes are recognized for
operating losses that are available to offset future taxable income.
For fiscal 1996, the Company will elect to be taxed as a Real Estate Investment
Trust (REIT). Accordingly, the Company will not be subject to Federal income tax
to the extent of distributions to its shareholders if the Company meets all the
requirements under the REIT provisions of the Internal Revenue Code.
Income (Loss) Per Common Share
Income (loss) per common share is computed based upon the weighted average
number of common and dilutive common equivalent shares outstanding during the
period. Fully diluted and primary income (loss) per common share are the same
for the periods presented.
Newly Issued Accounting Standards
In February 1997, Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" was approved for issuance. The Company will adopt this Statement in
fiscal 1997. The effect of this Statement has not been determined, however, the
impact on the Company's financial position and results of operations is not
expected to be material.
2. MORTGAGE AND BONDS RECEIVABLE
At March 31, 1997, the Company had first mortgage loans receivable totaling
$2,766,930. The loans bear interest ranging from 9.25% to 11.25%. The maturity
schedule for those loans as of March 31, 1997 is as follows:
<TABLE>
<CAPTION>
<S> <C>
1997 $ 56,982
1998 61,987
1999 69,091
2000 77,009
2001 85,836
Thereafter 2,416,025
---------
Total $2,766,930
</TABLE>
The Company also has three bonds receivable, which are carried at cost plus
amortized interest income. The bonds pay quarterly interest ranging from 8.5% to
9.55%. The combined principal of $150,000 is due at various maturity dates
between May 15, 2001 and June 1, 2010.
3. NOTE PAYABLE
The Company has an unsecured note payable due to an affiliate in the amount of
$14,109 at March 31, 1996. Interest is charged at 8%and payment in full was
made on April 22, 1996.
4. STOCK OPTION PLAN
The Company has adopted a Stock Option Plan granting each member of the Board of
Directors and the president of the Advisor (Note 5) an option to purchase 3,000
shares of common stock annually upon their re-election. The purchase price of
the stock will be the fair market value at the grant date. On November 15, 1994,
the Company granted options to purchase an aggregate of 21,000 shares of common
stock at $10 per share. These options became exercisable November 15, 1995 and
expire November 15, 1999. No options have been exercised as of March 31, 1997.
8
<PAGE>
4. STOCK OPTION PLAN - Continued
The Company has chosen to account for stock based compensation in accordance
with APB Opinion 25. Management believes that the disclosure requirements of
Statement of Financial Accounting Standards No. 123 are not material to its
financial statements.
5. TRANSACTIONS WITH AFFILIATES
The Company has an Advisory Agreement with Church Loan Advisors, Inc. (Advisor).
The Advisor is responsible for the day-to-day operations of the Company and
provides administrative services and personnel.
Upon non-renewal or termination of the Advisory Agreement, the Company is
required to pay the Advisor a termination fee equal to two percent of the value
of the average invested assets of the Company as of the date of termination,
subject to limitations set forth in the Advisory Agreement.
The Company pays the Advisor an annual base management fee of 1.25 percent of
average invested assets (generally defined as the average of the aggregate book
value of the assets invested in securities and equity interests in and loans
secured by real estate), which is payable on a monthly basis. The Advisor will
also receive one-half of the origination fees paid by a mortgage loan borrower,
in connection with a mortgage loan made or renewed by the Company. The Company
paid no advisory or origination fees from January 1 through March 31, 1997.
The Advisor and the Company are related through common ownership and common
management. See Note 7.
6. INCOME TAXES
The income tax expense (benefit) consists of the following components:
<TABLE>
<CAPTION>
March 31
1997 1996
<S> <C> <C>
Current $ - $ -
Deferred 5,000 -
------ -----
Total tax expense (benefit) $ 5,000 $ -
====== =====
</TABLE>
The following reconciles the income tax benefit with the expected provision
obtained by applying statutory rates to pretax income:
<TABLE>
<CAPTION>
March 31,
1997 1996
<S> <C> <C>
Expected tax expense (benefit) $ 22,300 $ (300)
(Increase) decrease in valuation allowance 300
Benefit of REIT distributions (17,300)
-------- ----
Totals $ 5,000 $ -
======== ====
</TABLE>
The components of deferred income taxes are as follows:
<TABLE>
<CAPTION>
March 31,
1997 1996
<S> <C> <C>
Deferred tax assets:
Temporary differences (loan
origination fees) $ 15,000
Net operating loss carryforward $ 1,600
Valuation allowance - (1,600)
-------- -----
Net deferred tax asset $ 15,000 $ -
======== =====
</TABLE>
The Company increased its valuation allowance against deferred tax assets by
$300 at March 31, 1996.
9
<PAGE>
7. PUBLIC OFFERING OF THE COMPANY'S COMMON STOCK
The Company filed a Registration Statement with the Securities and Exchange
Commission for a public offering of its common stock in 1995. The Company
offered to sell 2,000,000 shares of its common stock at a price of $10 per
share. The offering was underwritten by an affiliate of the Advisor on a "best
efforts" basis, but required a minimum sale of at least 200,000 shares of common
stock. This minimum amount of shares was sold as of April 15, 1996, whereupon
the Company commenced its principal operating activities. The Company's public
offering of its shares was continued through November 8, 1996.
8. FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company's financial instruments, none of which
are held for trading purposes, are as follows at December 31, 1996 and 1995:
<TABLE>
<CAPTION>
March 31,
1997 1996
---------------------------- ---------------- ---------
Carrying Fair Carrying Fair
Amount Value Amount Value
<S> <C> <C> <C> <C>
Cash and equivalents $ 511,894 $ 511,894 $ 136,000 $136,000
Loans receivable 2,766,930 2,766,930
Bonds receivable 121,647 121,647
</TABLE>
The carrying value of cash and equivalents approximates fair value. The fair
value of the loans receivable and the bonds receivable are estimated by
discounting future cash flows using current discount rates that reflect the
risks associated with similar types of loans.
9. SUBSEQUENT EVENT
The Company is planning for a secondary public offering of its common stock
during the second quarter of 1997. The Company is registering with the
Securities and Exchange Commission 1,500,000 shares of common stock to be
offered to the public at $10.00 per share.
10
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Plan of Operation
The Company was founded in May 1994, began a "best efforts" offering of its
common stock on July 11, 1995, and commenced active business operations on April
15, 1996 after completion of the "Minimum Amount" in its public offering
(described below). Consequently, for the years ended December 31, 1994 and 1995,
the Company had no operating revenues, and expenses were limited to
organizational and offering-related costs.
On July 11, 1995, the Securities and Exchange Commission declared effective
the Company's offering of 2,000,000 common shares at a price of $10.00 per
share. The Company achieved the Minimum Offering of at least 200,000 shares
($2,000,000) sold to not less than 100 individuals (the "Minimum Offering") on
April 15, 1996. Until the Minimum Offering was achieved, the Company could not
commence its active business of making mortgage loans to churches. Consequently,
business operations from Inception (May 27, 1994) to completion of the Minimum
Offering (April 15, 1996) were limited to daily business organizational efforts,
activities relating to the offering, reviewing potential candidates for church
mortgage loans to be made by the Company once the Minimum Offering was achieved,
and conducting informational meetings with brokers and broker-dealers identified
to the Company by the Managing Underwriter. As of such date the Company had sold
335,481 shares to approximately 281 individuals, not including 20,000 shares
($200,000) previously purchased by the Company's initial shareholder -- DRM
Holdings, Inc.
Between the date upon which the Company began active business operations
(April 15, 1996) and the date hereof, the Company has made loans to seven
churches in the aggregate amount of $2,802,000, with the average size being
$400,000. The Company has also purchased in the secondary market three church
mortgage bonds at a discount, including two First Mortgage Church Bonds in the
face amount of $50,000 and one Second Mortgage Church Bond in the face amount of
$100,000. Funding of additional first mortgage loans is expected to continue on
an on-going basis as the Company's investable assets become available through
(i) the sale of additional shares; (ii) prepayment and repayment at maturity of
existing loans; (iv) borrowed funds; and (v) dividends reinvested under the
Company's Dividend Reinvestment Plan. The Company's initial public offering
ended November 8, 1996.
Results of Operations
The Company commenced active business operations on or about April 15, 1996.
As of March 31, 1997, the Company had funded seven first mortgage loans to
churches for an aggregate amount of $2,685,288 and purchased $50,000 principal
amount of First Mortgage Church Bonds for a purchase price of $46,412 (which
includes $407 in accrued interest), and for $72,805 Second Mortgage Church Bonds
in the face amount of $100,000. The loans made by the Company range in interest
rate charged to the borrowers from 9.25% for annually adjustable, 20 year
amortized loans, to 11.25% for 15 year fixed interest rate loans. As of March
31, 1997, the average, principal- adjusted interest rate on the Company's
portfolio of loans was 10.86%. The Company's portfolio of bonds has an average
current yield of 11.68% .
Net operating income for the Company's fiscal quarter ended March 31, 1997
was $68,596 ($.19 per share) on total revenues of $72,454. Revenues included
segments of income from interest paid by borrowers, capital gains and
origination income, all of which constitute the Company's "core" income segments
under its business plan. Operations expenses likewise are believed to be
reasonably reflective of the Company's expected on-going expenses which, for the
most part, consist mostly of the advisory fee. The Advisory absorbs all
operating expenses of the Company with the exception of professional fees,
director fees and costs related to capital-raising activities. If should be
noted, however, that the Advisor waived $8,641 in fees otherwise payable to it
during the three month period ended March 31, 1997. Comparison of the three
month period ended March 31, 1997 with 1996 is not illustrative in that the
Company had not commenced active business operations for the period ended March
31, 1996.
The Company's Board of Directors declared dividends of $.1927 for each share
held of record on June 30, 1996, $.23125 for each share held of record September
30, 1996, and $.240625 for each share held of record on December 31, 1996.
During the Company's public offering, dividends were computed and paid to each
Shareholder based on the number of days during a quarter that the Shareholder
owned his or her shares. Based on the 75 days of operation for the quarter
ending July 30, 1996 and the subsequent quarters ended September 30, 1996 and
December 31, 1996 , the dividends paid represented a 9.25%, 9.25% and 9.625%
annualized yield to Shareholders respectively.
11
<PAGE>
Total assets of the Company increased from $244,986 as of March 31, 1996 to
$3,416,163 as of March 31, 1997, primarily as a result of the sale and issuance
of the Company's common stock pursuant to its initial public offering, the
proceeds of which were deployed into mortgage loans, church bonds purchased in
the secondary market, and cash and cash equivalent money market obligations.
Shareholders' Equity rose from $192,987 to $3,290,190 for the same reason.
Company liabilities at the end of the first quarter ending March 31, 1997 are
primarily comprised of a "Deferred Income" item, reflecting the practice of the
Company of recognizing its origination income -- fees charged to borrowers at
the commencement of its loans -- over the life of each loan and dividends
declared as of March 31, 1997 but not yet paid.
Liquidity and Capital Resources
On March 31, 1996 the Company had no assets other than the $200,000 cash
paid by its promoter, DRM Holdings, for the 20,000 shares owned by it ($10.00
per share) and had incurred no material obligations, other than accumulated and
unpaid expenses pertaining to its initial public offering. The initial $200,000
capital contribution by the promoter was partially used to pay legal and
accounting costs relating to the organization of the Company, Independent
Director's fees and certain professional and other fees and costs associated
with the Company's initial public offering. On or about April 15, 1996, the
Company recorded additional paid-in capital of $2,019,205 in connection with the
sale of the Company's common stock in its initial public offering and began
active business operations. As of March 31, 1997, the Company had recorded a
total of $3,334,239 in additional paid in capital, which includes the initial
$200,000 investment by the promoter DRM Holdings.
On March 31, 1997 the Company had liquid assets consisting mainly of cash
and cash equivalents of approximately $512,000, substantially all of which is
available to be loaned by the Company; loans receivable (including current
portion) in the amount of $2,767,000; and church bonds receivable in the amount
of $121,647. The Company believes that it is not necessary for the Company to
maintain large amount of cash or cash equivalents for reserve or other purposes,
since most operational costs are included within the advisory fee paid to the
Advisor. Therefore, the intent of the Company is to deploy materially all of the
Company's assets into loans in order to maximize returns to the Company and
yields to its shareholders.
The Company's revenue is derived principally from interest income, and
secondarily, origination fees and renewal fees generated by mortgage loans made
by it. The Company also earns income through interest on funds that are invested
pending their use in funding mortgage loans or distributions of dividends to its
Shareholders, and on income generated on church bonds it may purchase and own.
The Company generates revenue through (i) Permitted Temporary Investments of the
net proceeds from the sale of Shares, and (ii) implementation of its business
plan of making mortgage loans to churches and other non-profit religious
organizations. The principal expenses of the Company will be Advisory Fees,
legal and accounting fees, communications costs with its Shareholders, and the
expenses of its stock transfer agent, registrar and dividend reinvestment agent.
The Company's future capital needs are expected to be met by (i) additional
sale of its shares to the public (ii) prepayment, repayment at maturity and
renewal of mortgage loans made by the Company, and (iii) borrowed funds. The
Company believes that the "rolling" effect of mortgage loans maturing, together
with dividends reinvested under the Company's Dividend Reinvestment Plan, will
provide a supplemental source of capital to fund business operations. Although
the Company may borrow funds in an amount not to exceed 50% of its Average
Invested Assets in order to increase its lending capacity, it has no present
intention of doing so, nor has it secured a source for such borrowing.
12
<PAGE>
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the quarter
ended March 31, 1997.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits filed with Form 10-QSB
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused the report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: May 15, 1997
AMERICAN CHURCH MORTGAGE COMPANY
By: /s/ V. James Davis
V. James Davis
Chief Executive Officer, Treasurer
(and Chief Financial Officer)
By: /s/ David G. Reinhart
David G. Reinhart
Vice President and Secretary
13
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 511,894
<SECURITIES> 121,647
<RECEIVABLES> 2,766,930
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 568,876
<PP&E> 0
<DEPRECIATION> 692
<TOTAL-ASSETS> 3,416,163
<CURRENT-LIABILITIES> 102,092
<BONDS> 0
0
0
<COMMON> 3,626
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,416,163
<SALES> 0
<TOTAL-REVENUES> 72,454
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,858
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 68,596
<INCOME-TAX> 63,596
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,596
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
