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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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|X| Quarterly Report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1999
OR
|_| Transition report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
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Commission File Number 0-3722
ATLANTIC AMERICAN CORPORATION
Incorporated pursuant to the laws of the State of Georgia
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Internal Revenue Service-- Employer Identification No.
58-1027114
Address of Principal Executive Offices:
4370 Peachtree Road, N.E., Atlanta, Georgia 30319
(404) 266-5500
Indicate by check mark whether 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 |_|
The total number of shares of the registrant's Common Stock, $1 par value,
outstanding on May 6, 1999, was 19,106,238.
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ATLANTIC AMERICAN CORPORATION
INDEX
Part 1. Financial Information Page No.
Item 1. Financial Statements:
Consolidated Balance Sheets -
March 31, 1999 and December 31, 1998 2
Consolidated Statements of Operations -
Three months ended March 31, 1999 and 1998 3
Consolidated Statement of Shareholders' Equity -
Three months ended March 31, 1999 and 1998 4
Consolidated Statements of Cash Flows -
Three months ended March 31, 1999 and 1998 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of 7 - 9
Financial Condition and Results of Operations
Part II. Other Information
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Item 6. Exhibits and Report on Form 8-K 10
Signature 11
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands, except share and per share data)
March 31, December 31,
1999 1998
----------------------
Cash, including short-term investments of
$18,115 and $24,068 $29,767 $32,385
---------------------
Investments:
Bonds (Cost: $102,171 and $98,286) 102,287 99,341
Common and preferred stocks (cost: $30,924
and $33,116) 56,040 61,007
Other invested assets (cost: $4,982 and
$4,982) 4,857 4,822
Mortgage loans 3,827 3,851
Policy and student loans 3,666 4,268
Real estate 46 46
---------------------
Total investments 170,723 173,335
Receivables:
Reinsurance 25,110 22,772
Other (net of allowance for bad debts: $1,290
and $1,377) 31,304 18,912
Deferred acquisition costs 17,899 16,881
Other assets 4,234 4,225
Goodwill 4,242 4,339
---------------------
Total assets $283,279 $272,849
=====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Insurance reserves and policy funds:
Future policy benefits $39,030 $38,912
Unearned premiums 35,062 22,971
Losses and claims 87,562 86,768
Other policy liabilities 4,033 3,726
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Total policy liabilities 165,687 152,377
Accounts payable and accrued expenses 11,985 12,255
Debt payable 26,000 26,000
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Total liabilities 203,672 190,632
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Commitments and contingencies Shareholders' equity:
Preferred stock, $1 par, $4,000,000 shares authorized;
Series B preferred, 134,000 shares issued
and outstanding, $13,400 redemption value 134 134
Common stock, $1 par, 30,000,000 shares
authorized; 19,405,753 shares issued in 1999
and 1998 and 19,103,875 shares outstanding
in 1999 and 19,119,888 shares outstanding in
1998 19,406 19,406
Additional paid-in capital 50,104 50,406
Accumulated deficit (13,762) (15,213)
Accumulated other comprehensive income - 25,107 28,786
unrealized investment gains, net
Treasury stock, at cost, 301,878 shares in
1999 and 285,865 shares in 1998 (1,382) (1,302)
---------------------
Total shareholders' equity 79,607 82,217
=====================
Total liabilities and shareholders'
equity $283,279 $272,849
=====================
The accompanying notes are an integral part of these consolidated
financial statements.
-2-
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
(In thousands, except per share data)
1999 1998
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Revenue:
Insurance premiums $23,343 $22,958
Investment income 2,871 2,924
Realized investment gains, net 865 518
Other income 258 112
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Total revenue 27,337 26,512
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Benefits and expenses:
Insurance benefits and losses incurred 16,249 15,522
Commissions and underwriting expenses 6,964 7,278
Interest expense 465 568
Other 2,179 1,519
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Total benefits and expenses 25,857 24,887
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Income before income tax expense 1,480 1,625
Income tax expense 27 26
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Net income $ 1,453 $ 1,599
===================
Net income per common share (basic and diluted) $ .06 $ .06
===================
Weighted average common shares outstanding, basic 19,111 18,909
===================
Weighted average common shares outstanding, diluted 19,412 19,231
===================
The accompanying notes are an integral part of these consolidated
financial statements.
-3-
ATLANTIC AMERICAN CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Preferred Common Additional Accumulated Net Unrealized Treasury
Stock Stock Paid-In Capital Deficit Investment Gains Stock Total
Balance, December 31,1998 $ 134 $ 19,406 $ 50,406 $ (15,213) $ 28,786 $ (1,302) $ 82,217
Comprehensive income:
Net income 1,453 1,453
Decrease in unrealized investment gains (3,679) (3,679)
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Total comprehensive income (2,226)
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Dividends accrued on preferred stock (302) (302)
Purchase of shares for treasury (113) (113)
Issuance of shares for employee benefit plans
and stock options (2) 33 31
------------ ------------ ------------ ------------ ------------- ------------ -----------
Balance, March 31, 1999 $ 134 $ 19,406 $ 50,104 $ (13,762) $ 25,107 $(1,382) $ 79,607
============ ============ ============ ============ ============= ============ ===========
Balance, December 31, 1997 $ 164 $ 18,921 $ 53,316 $(23,653) $ 29,498 $ (63) $ 78,183
Comprehensive income:
Net income 1,599 1,599
Increase in unrealized investment gains 1,834 1,834
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Total comprehensive income 3,433
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Cash dividends paid on preferred stock (79) (79)
Dividends accrued on preferred stock (302) (302)
Purchase of shares for treasury (58) (58)
Issuance of shares for employee benefit plans
and stock options 2 (2) 27 27
Issuance of shares for acquisition of
Self-Insurance Administrators, Inc. 15 51 66
------------ ------------ ------------ ------------ ------------- ------------ -----------
Balance, March 31, 1998 $ 164 $ 18,936 $ 52,988 $ (22,056) $ 31,332 $ (94) $ 81,270
============ ============ ============ ============ ============= ============ ===========
The accompanying notes are an integral part of these consolidated
financial statements.
-4-
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
----------------------
1999 1998
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(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,453 $ 1,599
Adjustments to reconcile net income to net cash
used by operating activities:
Amortization of deferred acquisition costs 2,960 2,055
Acquisition costs deferred (3,978) (2,745)
Realized investment gains (865) (518)
Increase in insurance reserves 13,310 11,129
Depreciation and amortization 346 228
Increase in receivables, net (14,729) (14,327)
(Decrease) Increase in other liabilities (574) 4,291
Other, net (121) (296)
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Net cash (used) provided by operating activties (2,198) 1,416
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from investments sold or matured 15,693 23,763
Investments purchased (15,871) (21,377)
Reduction in minority interest liability -
payable
Additions to property and equipment (160) (175)
Bulk reinsurance transactions, net 564
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Net cash used provided by investing (338) 2,775
activities
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CASH FLOWS FROM FINANCING ACTIVITIES:
Preferred stock dividends - (79)
Proceeds from exercise of stock options 31 -
Purchase of treasury shares (113) (59)
Repayments of debt - (1,000)
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Net cash used by financing activities (82) (1,138)
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Net (decrease) increase in cash and cash equivalents (2,618) 3,053
Cash and cash equivalents at beginning of period 32,385 51,044
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Cash and cash equivalents at end of period $29,767 $54,097
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SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 465 $ 568
===================
Cash paid for income taxes $ - $ -
===================
The accompanying notes are an integral part of these consolidated
financial statements.
-5-
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
Note 1. Basis of presentation.
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. All significant intercompany accounts and transactions have been
eliminated in consolidation. Operating results for the three month period ended
March 31, 1999, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1999. For further information, refer
to the financial statements and footnotes thereto included or incorporated by
reference in the Company's annual report on Form 10-K for the year ended
December 31, 1998.
Note 2. Segment Information
The following summary sets forth information for each of the Company's
business segments by revenue and income (loss) before income tax provision
(benefit). The Company segments divides its operations by operating entity.
Corporate Adjustments
American Georgia Bankers and and
Southern Casualty Fidelity Other Eliminations Consolidated
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March 31, 1999:
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Revenue $10,110 $ 5,539 $11,426 $ 1,447 $(1,185) $27,337
Income (loss) before income
tax expense (benefit) 1,635 176 846 (1,177) 0 1,480
March 31, 1998:
- --------------
Revenue $10,498 $ 6,243 $ 9,628 $ 1,054 $ (911) $26,512
Income (loss) before income
tax expense (benefit) 1,524 288 698 (885) 0 1,625
Note 3. Reconciliation of Other Comprehensive Income
- -------
March 31,
1999 1998
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Gain on sale of securities included in net income $ 865 $ 518
======================
Other comprehensive income:
Net unrealized gain (loss) arising during year $(2,814) $ 2,352
Reclassification adjustment (865) (518)
----------------------
Net unrealized gain (loss) recognized in other
comprehensive income $(3,679) $ 1,834
======================
-6-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Management's discussion of financial condition and results of operations for
the three month periods ended March 31, 1999 and 1998 analyzes the results of
operations, consolidated financial condition, liquidity and capital resources of
Atlantic American Corporation (the "Company") and its consolidated subsidiaries:
Georgia Casualty & Surety Company ("Georgia Casualty"), American Southern
Insurance Company ("American Southern")Bankers Fidelity Life Insurance, American
Independent Life Insurance Company together known as "Bankers Fidelity" and
Self-Insurance Administrators, Inc. ("SIA, Inc.").
Atlantic American Corporation's net income for the first quarter of 1999 was
$1.5 million ($.06 per diluted share) compared to net income of $1.6 million
($.06 per diluted share) for the first quarter of 1998.
RESULTS OF OPERATIONS
Total revenue for the Company was up 3.1% for the first quarter of 1999,
increasing from $26.5 million in the first quarter of 1998 to $27.3 million.
This increase is attributable to a 1.7% increase in insurance premiums coupled
with an increase in realized gains of $347,000. Investment income for the
quarter was down 1.8%, slightly offsetting these increases.
The Company's two casualty operations saw declines in insurance premiums in
the first quarter of 1999. At American Southern insurance premiums were down
4.8% or $450,000 and at Georgia Casualty insurance premiums were down 14.0% or
$742,000. The decline in insurance premiums in both casualty companies is
attributable to declines in written premiums in 1998 the effects of which, due
to the timing of premium revenue recognition, are now being realized. Net
written premiums at both casualty companies were up in the first quarter over
first quarter 1998 by , 1.0% and 5.3% at Georgia Casualty and American Southern,
respectively.
Offsetting the decline in insurance premiums at the Company's casualty
operations, insurance premiums at Bankers Fidelity were up 19.2% or $1.6 million
for the quarter. This increase reflects the continued success of the refocused
marketing campaign that began in 1998 and Bankers Fidelity's continued
penetration into new geographic regions.
The small decline in investment income for the quarter of $53,000 is the
result of declining yields on both short-term investments and the yield on
recently acquired longer term securities. Realized investment gains for the
first quarter of $865,000 were up over 1998 first quarter realized investment
gains of $518,000. Management is continually evaluating the composition of the
Company's investment portfolio and will periodically divest highly appreciated
investments in an effort to improve the overall yield of the portfolio.
Insurance benefits and losses increased by 4.7% to $16.2 million, from $15.5
million in the first quarter of 1998. The increase is attributable to an
increase in benefits and losses at Bankers Fidelity of $1.6 million and
decreases in benefits and losses of $197,000 at American Southern and $631,000
at Georgia Casualty.
As a percentage of premium revenue, insurance benefits and losses incurred
for the first quarter of 1999 were up slightly to 69.6%, from 67.6% in the first
quarter of 1998. The ratio at American Southern increased from 63.7% in the
first quarter of 1998 to 64.7% in the first quarter of 1999. At Georgia Casualty
this ratio declined to 77.2% from 78.3% in the first quarter of 1998. Bankers
Fidelity saw an increase in this ratio from 65.2% in the first quarter of 1998
to 70.5% for the first quarter of 1999. The increase in this ratio at Bankers
Fidelity is attributable to an unusual volume of claims in the first three
months of 1999.
Commission and underwriting expenses decreased from $7.3 million in the first
quarter of 1998 to $7.0 million in the first quarter of 1999. The decrease is
attributable in part to the decrease in premiums at the two Company's casualty
operations. In addition, by revising its commission structure on its Medicare
product and holding other operating expenses stable Bankers Fidelity saw only a
2.6% increase in commission and underwriting expenses in spite of a 19.2%
increase in insurance premiums.
-7-
Interest expense for the quarter declined 18.1%, principally as a result of a
$1.6 million reduction in debt compared to the first quarter of 1998, compounded
by a reduction in the interest rate of the Company's credit facility to 7.25%.
The reduction in the rate is the result of a reduction of the prime rate of
interest during the latter part of 1998.
LIQUIDITY AND CAPITAL RESOURCES
The major cash needs of the Company are for the payment of claims and
expenses as they come due and maintaining adequate statutory capital and surplus
to satisfy state regulatory requirements and meet debt service requirements. The
Company's primary sources of cash are written premiums and investment income.
Cash payments consist of current claim payments to insureds and operating
expenses such as salaries, employee benefits, commissions, taxes, and
shareholder dividends, when earnings warrant such payment. By statute, the state
regulatory authorities establish minimum liquidity standards primarily to
protect policyholders.
The Company's insurance subsidiaries reported a combined statutory net income
of $1.4 million for the first quarter of 1999 compared to statutory net income
of $1.6 million for the first quarter of 1998. The reasons for the decline in
statutory earnings in the first quarter of 1999 are the same as those discussed
in "Results of Operations" above. Statutory results differ from the results of
operations under generally accepted accounting principles ("GAAP") for the
casualty companies due to the deferral of acquisition costs. Bankers Fidelity's
statutory results differ from GAAP primarily due to deferral of acquisition
costs, as well different reserving methods.
The Company is a party to a Credit Agreement with Wachovia Bank of
Georgia, N.A. At March 31, 1999, the Company had outstanding borrowings under
this agreement of approximately $26.0 million, of which $3.4 million is
scheduled to become due and over the next twelve months. The Company intends to
repay its obligations under the Credit Agreement using dividend payments
received from its subsidiaries and receipts from its tax sharing agreement with
its subsidiaries.
As previously announced, the Company has entered into an agreement to acquire
Association Casualty Insurance Company and its affiliate Association Risk
Management General Agency, Inc., for aggregate consideration of $8.5 million in
stock of the Company and $24.0 million in cash. The Company expects to finance
the cash portion through additional credit arrangements with bank lenders The
acquisition is scheduled to close in the third quarter, follwing receipt of
regulatory approvals.
The Company has one series of preferred stock outstanding, substantially of
all which is held by affiliates of the Company's chairman and principal
shareholders. The outstanding shares of Series B Preferred Stock ("Series B
Stock") have a stated value of $100 per share, accrue annual dividends at a rate
of $9.00 per share, in certain circumstances may be convertible into an
aggregate of approximately 3,358,000 shares of common stock and are redeemable
at the Company's option. The Series B Stock is not currently convertible. At
March 31, 1999, the Company had accrued, but unpaid dividends on the Series B
Stock totaling $2.7 million.
The Company provides certain administrative and other services to each of its
insurance subsidiaries. The amounts charged to and paid by the subsidiaries in
the first quarter of 1999 remained approximately the same as in the first
quarter of 1998. In addition, the Company has a formal tax-sharing agreement
between the Company and its insurance subsidiaries. It is anticipated that this
agreement will provide the Company with additional funds from profitable
subsidiaries due to the subsidiaries' use of the Company's tax loss
carryforwards, which totaled approximately $41.0 million at March 31, 1999.
At March 31, 1999, the Company had a net cumulative deferred tax asset of
zero. The net cumulative deferred tax asset consisted of $19.6 million of
deferred tax assets, offset by $12.1 million of deferred tax liabilities, and a
$7.5 million valuation allowance. Due to the uncertain nature of their ultimate
realization, based upon past performance and expiration dates, the Company has
established a full valuation allowance against these carryforward benefits and
recognizes the benefits only as reassessment demonstrates they are realizable.
The Company's ability to generate taxable income from operations is dependent
upon various factors, many of which are beyond management's control.
Accordingly, there can be no assurance that the Company will generate future
taxable income based on historical performance. Therefore, the realization of
the deferred tax assets will be assessed periodically based on the Company's
current and anticipated results of operations
Approximately 93.8% of the investment assets of the insurance subsidiaries
are in marketable securities that can be converted into cash, if required;
however, use of such assets by the Company is limited by state insurance
regulations. Dividend payments to the Company by its insurance subsidiaries are
limited to the accumulated statutory earnings of the individual insurance
subsidiaries, subject to annual limitations. At March 31, 1999, Georgia Casualty
had $12.6 million of accumulated statutory earnings, American Southern had $20.2
million of accumulated statutory earnings, and Bankers Fidelity had $16.3
million of accumulated statutory earnings.
-8-
Net cash used by operating activities was $2.2 million in 1999 compared to
net cash provided by operating activities of $1.4 million in the first quarter
of 1998. Cash and short-term investments decreased from $32.4 million at
December 31, 1998, to $29.8 million at March 31, 1999. Total investments
(excluding short-term investments), decreased from $173.3 million to $170.7
million due principally to declines in the values of the Company's equity
securities.
The Company believes that the dividends, fees, and tax-sharing payments it
receives from its subsidiaries and, if needed, borrowings from banks and
affiliates of the Company will enable the Company to meet its liquidity
requirements for the foreseeable future. Management is not aware of any current
recommendations by regulatory authorities which, if implemented, would have a
material adverse effect on the Company's liquidity, capital resources or
operations.
YEAR 2000
Many existing computer systems and equipment with embedded computer chips
currently in use were developed using two digits rather than four digits to
specify the year. As a result, many systems will recognize a date code of "00"
as the calendar year 1900 rather than 2000 which could cause systems to fail or
cause erroneous results in date sensitive systems.
The Company's operating systems, most of which depend on date sensitive
data, are integral to its business. The Company has developed a program to
assess the state of readiness of the Company's internal systems, both computer
systems and those with embedded micro-processors, and those of its vendors and
customers, the remediation measures necessary for those systems to be Year 2000
compliant, the costs to undertake such measures and to develop appropriate
contingency plans.
The Company's program to assess its internal systems (which include both
hardware and software) is continuing. The Company has identified four critical
operating systems that require the highest level and priority of testing to
ensure that performance is not adversely affected by the Year 2000 issue. At the
end of 1998, the Company had completed all scheduled modifications to its
systems to appropriately address the Year 2000. Initial testing of these systems
has been completed and the Company is currently running on these modified
systems. Additional testing will continue through the first half of 1999. To
date, the Company has been able to remediate its systems through upgrades,
rather than system replacement. The failure of any of those systems as a result
of the Year 2000 issue would inhibit the Company's ability to conduct its
business and process claims, and would likely have a material adverse effect on
the Company's results of operations. The Company is also continuing to test less
critical information systems and systems with embedded micro-processors for
compliance, and expects that phase to be completed by the end of the second
quarter of 1999. As that testing process continues, the Company is developing
contingency plans to enable the Company to fulfill the functions performed by
those systems in the event of failure. The development of contingency plans is
ongoing; however, the Company expects to have in place contingency plans for its
critical operating systems, as well as for less critical systems and vendor
alternatives, by the beginning of the fourth quarter of 1999.
While the Company is taking every precaution to address the Year 2000
issue, some uncertainty remains. The Company can not control the activities of
its third party vendors, and the Company may have failed to identify and
remediate all of its systems and other such uncertainties. As a result,
management cannot determine whether or not Year 2000 related problems that could
arise will have a material impact on the Company's financial condition or
results of operations.
As part of this process, the Company is continuing its process of
surveying its vendors and service providers and customers in order to identify
areas in which Year 2000-related problems with external systems could cause
disruptions, delays or failures that could impact the Company. As the results of
these external surveys are assessed, the Company expects to develop appropriate
contingency plans. While unlikely, it is possible that a major service provider,
such as a utility company, may be unable to provide the Company with its needed
service for a period of time. If such an event were to happen, the Company might
not be able to provide services until the utilities are returned.
During the first quarter of 1999, the Company spent less than $50,000 to
modify existing systems and applications to address the Year 2000 issue. The
Company estimates that less than $100,000 will be incurred in the remainder
1999. The Company does not anticipate that the costs of bringing its systems
into compliance would have a material adverse effect on the results of
operations or financial condition of the Company.
FORWARD-LOOKING STATEMENTS
This report contains and references certain information that constitutes
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Those statements, to the extent they are not
historical facts, should be considered forward-looking and subject to various
risks and uncertainties. Such forward-looking statements are made based upon
management's assessments of various risks and uncertainties, as well as
assumptions made in accordance with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. The Company's actual results could
differ materially from the results anticipated in these forward-looking
statements as a result of such risks and uncertainties, including those
identified in the Company's Annual Report on Form 10-K for the fiscal year
ending December 31, 1997 and the other filings made by the Company from time to
time with the Securities and Exchange Commission.
-9-
PART II. OTHER INFORMATION
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
Item 6. Exhibits and Report on Form 8-K.
- -----------------------------------------
(a) The following exhibits are filed herewith:
Exhibit 11. Computation of net income per common share.
Exhibit 27. Financial data schedule.
(b) No reports on Form 8-K were filed with the Securities and Exchange
Commission during the first quarter of 1999.
-10-
SIGNATURE
---------
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.
ATLANTIC AMERICAN CORPORATION
-----------------------------
(Registrant)
Date: May 14, 1999 By: /s/
------------ -------------------------------------------
Edward L. Rand, Jr.
Vice President and Treasurer
(Principal Financial and Accounting Officer)
-11-
EXHIBIT 11
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
COMPUTATIONS OF NET INCOME PER COMMON SHARE
SUPPORTING SCHEDULE
Three Months Ended
March 31,
---------------------
(In thousands, except per share data) 1999 1998
---------------------
Basic Earnings Per Common Share:
Net income $ 1,453 $ 1,599
Less preferred dividends to affiliates (301) (380)
---------------------
Net income available to common shareholders $ 1,152 $ 1,219
=====================
Weighted average common shares ouststanding 19,111 18,909
=====================
Net income per common share $ .06 $ .06
=====================
Diluted Earnings Per Common Share:
Net income available to common shareholders $ 1,152 $ 1,219
=====================
Weighted average common shares outstanding 19,111 18,909
Effect of dilutive stock options 301 322
---------------------
Weighted average common shares outstanding
adjusted for dilutive stock options 19,412 19,231
=====================
Net income per common share $ .06 $ .06
=====================
-12-
7 1000 3-MOS DEC-31-1999 MAR-31-1999 0 102287 102287 56040 3827 46 170723 29767 25110 17899 283279 126592 35062 4033 0 26000 0 134 19406 60067 283279 23343 2871 865 258 16249 6964 0 1480 27 1453 0 0 0 1453 0.06 0.06 0 0 0 0 0 0 0