United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30,2002.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
..
Commission file number : 0-25679
FIRST AMERICAN CAPITAL CORPORATION
----------------------------------------------------
(Exact Name of small business issuer in its charter)
Kansas 48-1187574
----------------------------- ------------------------------------------
(State of incorporation) (I.R.S. Employer Identification Number)
1303 S.W. First American Place Topeka, Kansas 66604
-----------------------------------------------------------
(Address of principal executive offices)
Issuer's telephone number (785) 267-7077
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
Common Stock, $.10 Par Value - 5,273,985 shares as of August 1, 2002
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X ]
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FIRST AMERICAN CAPITAL CORPORATION
INDEX TO FORM 10-QSB
Part I. FINANCIAL INFORMATION Page Numbers
------- ---------------------- -------------
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets as of June 30, 2002
and December 31, 2001 3
Condensed Consolidated Statements of Operations for the
three months ended June 30, 2002 and 2001 and for
the six months ended June 30, 2002 and 2001 5
Condensed Consolidated Statements of Cash Flows for the
six months ended June 30, 2002 and 2001 6
Notes to Condensed Consolidated Financial Statements 8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
Part II.
Item 4. Submission of Matters to a Vote of Shareholders
Item 6. Exhibits and Reports on Form 8-K
Signatures
----------------
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FIRST AMERICAN CAPITAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
ASSETS 2002 2001
============ ============
(Unaudited)
Investments:
Securities available for sale, at fair value:
Fixed maturities (amortized cost, $9,015,364
in 2002 and $8,313,448 in 2001) $ 9,432,956 $ 8,605,901
Investments in real estate 274,564 274,564
Policy loans 47,432 33,178
Notes receivable (net of valuation allowance
of $3,010 in 2002 and $4,406 in 2001) 30,000 -
Short-term investments 1,639,996 2,286,095
------------ -------------
Total investments 11,424,948 11,199,738
Cash and cash equivalents 764,675 463,363
Investments in related parties 145,950 150,576
Accrued investment income 180,880 181,719
Accounts receivable 232,101 104,447
Accounts receivable from affiliate 131,080 124,881
Deferred policy acquisition costs (net of accumulated
amortization of $1,476,814 in 2002 and $1,259,744 in 2001) 2,474,676 1,928,820
Property and equipment (net of accumulated depreciation
of $195,872 in 2002 and $129,977 in 2001) 3,010,193 3,060,347
Other assets 60,838 26,072
------------ -------------
Total assets $18,425,341 $ 17,239,963
============ ============
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FIRST AMERICAN CAPITAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
June 30, December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 2002 2001
============ ============
(Unaudited)
Policy and contract liabilities:
Annuity contract liabilities $ 2,117,949 $ 1,424,118
Life policy reserves 1,954,189 1,522,794
Liability for policy claims 78 -
Policyholder premium deposits 169,854 166,182
Deposits on pending policy applications 161,539 172,616
Reinsurance premiums payable 39,221 32,142
------------ -------------
Total policy and contract liabilities 4,442,830 3,317,852
Commissions, salaries, wages and benefits payable 112,198 84,038
Other liabilities 47,591 28,395
Note payable 1,928,594 1,967,328
Accounts payable to affiliate 10,284 18,022
Federal income taxes payable:
Current - 613
Deferred 734,511 533,793
------------ -------------
Total liabilities 7,276,008 5,950,041
Shareholders' equity:
Common stock, $.10 par value, 8,000,000 shares authorized; 543,899 543,899
5,438,985 shares issued and 5,273,985 outstanding
in 2002 and 2001;
Additional paid in capital 12,328,617 12,328,617
Retained earnings - deficit (1,750,847) (1,529,613)
Accumulated other comprehensive income 271,922 191,277
Less: Treasury shares held at cost (165,000 shares in 2002
and 2001) (244,258) (244,258)
------------ -------------
Total shareholders' equity 11,149,333 11,289,922
------------ -------------
Total liabilities and shareholders' equity $18,425,341 $ 17,239,963
============ ============
See notes to condensed consolidated financial statements.
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FIRST AMERICAN CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Six months ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
============ ============ ============ ============
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues:
Gross premium income $ 790,328 $ 584,951 $ 1,688,666 $1,178,128
Reinsurance premiums ceded (33,434) (27,148) (67,979) (51,943)
Net premium income 756,894 557,803 1,620,687 1,126,185
Net investment income 137,624 162,107 279,585 377,608
Net realized (loss) gain on disposal of assets (16,391) 2,727 (16,305) 5,807
Rental income 70,544 - 141,088 -
Other income (72) - 990 -
------------ ------------ ------------ ------------
Total revenue 948,599 722,637 2,026,045 1,509,600
Benefits and expenses:
Increase in policy reserves 242,261 122,492 431,394 251,531
Policyholder surrender values 10,128 12,053 37,649 19,683
Interest credited on annuities and
premium deposits 38,720 17,768 70,725 30,515
Death claims 1,074 (2,142) 1,074 36,000
Commissions 263,212 194,112 564,682 342,519
Policy acquisition costs deferred (363,662) (253,366) (762,926) (440,162)
Amortization of deferred policy acquisition costs 163,828 113,617 217,070 169,379
Salaries, wages, and employee benefits 334,322 234,076 685,975 426,502
Miscellaneous taxes 11,728 4,279 19,127 8,649
Administrative fees - related party 23,293 33,252 66,142 68,981
Other operating costs and expenses 399,009 351,323 758,882 551,983
------------ ------------ ------------ ------------
Total benefits and expenses 1,123,913 827,464 2,089,794 1,465,580
------------ ------------ ------------ ------------
(Loss) income before income tax expense (175,314) (104,827) (63,749) 44,020
------------ ------------ ------------ ------------
Income tax expense 47,329 39,758 157,485 96,638
------------ ------------ ------------ ------------
Net loss $ (222,643) $ (144,585) $ (221,234) $ (52,618)
============ ============ ============ ============
Net loss per common
share - basic and diluted $ (0.04) $ (0.03) $ (0.04) $ (0.01)
============ ============ ============ ============
See notes to condensed consolidated financial statements
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FIRST AMERICAN CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
June 30, June 30,
2002 2001
============ ============
(Unaudited) (Unaudited)
Net loss $ (221,234) $ (52,618)
Adjustments to reconcile net income to net cash
provided by operating activities:
Interest credited on annuities and premium deposits 70,725 32,581
Net realized investment loss 16,305 1,125
Provision for depreciation and amortization 65,895 23,229
Equity loss in investment in affiliate 14,431 -
Amortization of premium and accretion of discount on
fixed maturity and short-term investments 25,947 (12,114)
Interest credited to certificates of deposit balances (6,301) (36,181)
Realized net loss on disposal of assets - 1,034
Provision for deferred federal income taxes 157,295 95,340
Increase in prepaid administrative fees - related party - (58,814)
Decrease (increase) in accrued investment income 839 (12,547)
Increase in accounts receivable (127,654) (24,733)
Increase in accounts receivable from affiliate (6,199) -
Increase in deferred policy acquisition costs, net (545,856) (270,783)
Increase in policy loans (14,254) (23,403)
Increase in other assets (34,766) (22,675)
Increase in policy reserves 431,395 251,531
Increase (decrease) in liability for policy claims 78 (22,306)
(Decrease) increase in deposits on pending policy applications (11,077) 114,664
Increase in reinsurance premiums payable 7,079 10,782
Increase in commissions, salaries, wages and benefits payable 28,160 35,506
Decrease in accounts payable to affiliate (7,738) (15,410)
Increase in other liabilities 18,582 381,313
------------ ------------
Net cash (used in) provided by operating activities $ (138,348) $ 395,521
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June 30, June 30,
2002 2001
============ ============
(Unaudited) (Unaudited)
INVESTING ACTIVITIES:
Purchase of available-for-sale fixed maturities $ (2,236,577) $ (3,003,042)
Sale or maturity of available-for-sale fixed maturities 1,517,300 1,198,262
Additions to property and equipment, net (15,741) (1,804,615)
Purchase of investments in affiliates (9,807) -
Purchase of other investments - (284,564)
Changes in notes receivable, net (30,000) 7,258
Short-term investments (acquired) disposed, net 626,439 1,646,400
------------ ------------
Net cash used in investing activities (148,386) (2,240,301)
FINANCING ACTIVITIES:
Proceeds from note payable - 1,241,309
Payments on note payable (38,734) -
Deposits on annuity contracts, net 627,896 492,762
Purchase of treasury stock - 0
Policyholder premium deposits, net (1,116) 48,660
------------ ------------
Net cash provided by financing activities 588,046 1,782,731
------------ ------------
Increase (decrease) in cash and cash equivalents 301,312 (62,049)
Cash and cash equivalents, beginning of period 463,363 832,485
------------ ------------
Cash and cash equivalents, end of period $ 764,675 $ 770,436
============ ============
See notes to condensed consolidated financial statements.
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FIRST AMERICAN CAPITAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements of First American
Capital Corporation and its Subsidiaries ( the "Company") for the three month
and the six month periods ended June 30, 2002 and 2001 are unaudited. However,
in the opinion of the Company, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been reflected
therein.
Certain financial information which is normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America, but which is not required for interim reporting
purposes, has been omitted. The accompanying condensed consolidated financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's Form 10-KSB for the fiscal year ended December
31, 2001. Certain reclassifications have been made in the prior period financial
statements to conform with the current period presentation.
2. INVESTMENTS IN RELATED PARTIES
During 2001, the Company purchased a 50% interest in First Computer Services,
LLC ("FCS"). FCS owns the computer hardware and software that operates a
Company policy administration, underwriting, claim processing, and accounting
system. The company uses the equity method to account for this investment,
which is owned jointly by the Company and First Alliance Corporation. As of
June 30, 2002, the carrying value of the FCS investment was $104,150. This
amount represents total capital contributions of $125,000 reduced by the
Company's $20,850 share of the cumulative operating losses to date. Selected
financial data for FCS at June 30, 2002 and for the period ended June 30, 2002
is listed below.
Total Assets: $ 211,504
Total Liabilities: 3,204
Total Liabilities and Equity: 211,504
Loss from Operations: (28,862)
3. DEBT
On February 12, 2002, the Company obtained a $300,000 line of credit from Bank
of America. The line of credit expires on February 12, 2003 and interest is
accrued on the outstanding principal balance at Bank of America's Prime Rate.
The line of credit was obtained solely to secure the issuance of standby letters
of credit by the Company's subsidiary, First Life America Corporation ("FLAC").
The standby letters of credit are used to guarantee reserve credits taken by
FLAC's reinsurers in conjunction with reinsurance agreements. At June 30, 2002,
FLAC has a $10,000 letter of credit secured by the line of credit agreement.
FLAC has pledged bonds with a market value of $25,000 as collateral for the
letter of credit. As of June 30, 2002, the Company has not borrowed against
this line of credit and does not anticipate utilizing the line of credit.
4. NET EARNINGS PER COMMON SHARE
Net income per common share for basic and diluted earnings per share is based
upon the weighted average number of common shares outstanding during each
period. The weighted average common shares outstanding was 5,273,985 for the
three and six months ended June 30, 3002. For the three and six months ended
June 30, 2001, the weighted average common shares outstanding was 5,303,860.
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5. FEDERAL INCOME TAXES
Current taxes are provided based on estimates of the projected effective annual
tax rate. Deferred taxes reflect the net effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.
6. RELATED PARTY TRANSACTIONS
Effective December 31, 1998, the Company entered into a service agreement with
FLAC to provide personnel, facilities, and services to FLAC. The services to be
performed pursuant to the service agreement were underwriting, claim processing,
accounting, processing and servicing of policies, and other services necessary
to facilitate FLAC s business. The agreement was in effect until either party
provided ninety days written notice of termination. Under the agreement, FLAC
paid monthly fees based on life premiums delivered by FLAC. The percentages
were 25% of first year life premiums; 40% of second year life premiums; 30% of
third year life premiums, 20% of fourth year life premiums and 10% of life
premiums in years five and thereafter. FLAC retained general insurance expenses
related to its sales agency, such as agent training and licensing, agency
meeting expenses, and agent s health insurance.
Effective January 1, 2002, FLAC entered into a new service agreement with the
Company. Under the terms of the agreement, the Company provides personnel,
facilities, and services incident to the operations of FLAC. Services
performed pursuant to the agreement are underwriting, claim processing,
accounting, policy processing and other services necessary for FLAC to operate.
The agreement is effective until either party provides ninety days written
notice of termination. FLAC pays fees equal to the Company's cost of providing
such services, including an appropriate allocation of the Company's overhead
expenses, in accordance with accounting principles generally accepted in the
United States of America. FLAC still bears all direct selling costs which
include agent recruiting, training and licensing; agent commissions; any
benefits or awards directly for or to agents or management including the cost of
any life or health insurance; and any taxes (federal, state or county) directly
related to the business of FLAC. Additionally, FLAC is responsible for any
reinsurance premiums; legal expenses related to settlement of claims; state
examination fees; directors fees and directors liability insurance; interest on
indebtedness; costs related to mergers or acquisitions and costs related to
fulfilling obligations of the life insurance and annuity contracts written by
the agents of FLAC.
Pursuant to the terms of the above agreements, FLAC had incurred expenses of
$626,754 and $346,514 for the six months ended June 30, 2002 and 2001,
respectively. For the three months ended June 30, 2002 and 2001, FLAC incurred
expenses of $329,908 and $165,459, respectively.
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7. COMPREHENSIVE INCOME
The components of comprehensive income along with the related tax effects for
the three months and the six months ended June 30, 2002 and 2001 are as follows:
Three months ended Six months ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
============ ============ ============ ============
Unrealized gain on available-for-sale securities:
Unrealized holding gain (loss) during the period $ 239,402 $ 22,578 $ 124,070 $ (3,354)
Tax expense (83,791) (7,902) (43,426) (1,012)
------------ ------------ ------------ ------------
Other comprehensive income (loss) $ 155,611 $ 14,676 $ 80,644 $ (4,366)
============ ============ ============ ============
Net loss $ (222,643) $ (144,585) $ (221,234) $ (52,618)
Other comprehensive income (loss) net of
tax effect:
Unrealized investment gain (loss) 155,611 14,676 80,644 (4,366)
------------ ------------ ------------ ------------
Comprehensive loss $ (67,032) $ (129,909) $ (140,590) $ (56,984)
============ ============ ============ ============
Net loss per common share-basic and diluted $ (0.01) $ (0.02) $ (0.03) $ (0.01)
============ ============ ============ ============
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8. SEGMENT INFORMATION
The operations of the Company and its subsidiaries have been classified into two
operating segments as follows: life and annuity insurance operations and
corporate operations. Segment information as of June 30, 2002 and December 31,
2001 and for the three months and the six months ended June 30, 2002 and 2001 is
as follows:
Three months ended Six months ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
============ ============ ============ ============
Revenues
Life and annuity insurance operations $ 840,390 $ 614,891 $ 1,794,409 $ 1,283,448
Corporate operations 108,209 107,746 231,636 226,152
------------ ------------ ------------ ------------
Total $ 948,599 $ 722,637 $ 2,026,045 $ 1,509,600
============ ============ ============ ============
Income (loss) before income taxes:
Life and annuity insurance operations $ (69,932) $ 72,654 $ 206,911 $ 259,731
Corporate operations (105,382) (177,481) (270,660) (215,711)
------------ ------------ ------------ ------------
Total $ (175,314) $ (104,827) $ (63,749) $ 44,020
============ ============ ============ ============
Depreciation and amortization expense:
Life and annuity insurance operations $ 163,828 $ 113,617 $ 217,070 $ 169,379
Corporate operations 33,097 19,252 65,895 23,229
------------ ------------ ------------ ------------
Total $ 196,925 $ 132,869 $ 282,965 $ 192,608
============ ============ ============ ============
Segment asset information as of June 30, 2002 and December 31, 2001:
2002 2001
============ ============
Assets:
Life and annuity insurance operations $10,246,328 $ 8,795,709
Corporate operations 8,179,013 8,444,254
------------ ------------
Total $18,425,341 $17,239,963
============ ============
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company makes forward-looking statements from time to time and desires to
take advantage of the "safe harbor" which is afforded such statements under the
Private Securities Litigation Reform Act of 1995 when they are accompanied by
meaningful cautionary statements identifying important factors that could cause
actual results to differ materially from those in the forward-looking
statements.
The statements contained in this report, which are not historical facts, are
forward-looking statements that involve risks and uncertainties that could cause
actual results to differ materially from those set forth in the forward-looking
statements. Any projections of financial performances or statements concerning
expectations as to future developments should not be construed in any manner as
a guarantee that such results or developments will, in fact, occur. There can
be no assurance that any forward-looking statement will be realized or that
actual results will not be significantly different from that set forth in such
forward-looking statement. In addition to the risks and uncertainties of
ordinary business operations, the forward-looking statements of the Company
referred to above are also subject to risks and uncertainties.
The following discussion should be read in conjunction with the consolidated
financial statements and notes thereto.
Financial Condition
Significant changes in the consolidated balance sheets from December 31, 2001 to
June 30, 2002 are highlighted below.
Total assets increased from $17,239,963 at December 31, 2001 to $18,425,341 at
June 30, 2002. The Company's available-for-sale fixed maturities had a fair
value of $9,432,956 and 8,605,901 at June 30, 2002 and December 31, 2001,
respectively. The increase of $827,055 is due to the sale or maturation of
short-term investments which were reinvested into available for sale securities.
This investment portfolio is reported at market value with unrealized gains and
losses, net of applicable deferred taxes, reflected as a separate component in
Shareholders' Equity.
Notes receivable increased to $30,000 at June 30, 2002 from $0 at December 31,
2001. This increase is due to the issuance of a note to an employee of the
Company.
Short-term investments decreased from $2,286,095 at December 31, 2001 to
$1,639,996 at June 30, 2002. Several of the short-term investments held by the
Company were either sold or matured during the six months ended June 30, 2002,
and the proceeds were converted to available-for-sale securities. This resulted
in a $646,099 or 28% decrease in short-term investments.
Cash and cash equivalents increased from $463,363 at December 31, 2001 to
$764,675 at June 30, 2002. The increase of $301,312 in cash is primarily a
result of $627,896 received on deposit for annuity contracts. These deposits are
offset by $138,348 used in operating and $148,386 used in investing activities.
Refer to the statement of cash flows for more sources and uses of cash.
Accounts receivable increased 122% from $104,447 at December 31, 2001 to
$232,101 at June 30, 2002. The increase is due primarily to a $85,245 increase
in amounts due from agents and a $37,487 increase in due premiums. These
amounts are expected to be fully recoverable.
-12-
Deferred policy acquisition costs, net of amortization, increased 28% from
$1,928,820 at December 31, 2001 to $2,474,676 at June 30, 2002 resulting from
the capitalization of acquisition expenses related to the increasing sales of
life insurance. These acquisition expenses include commissions and other fees
incurred in the first policy year.
Other assets increased 133% from $26,072 at December 31, 2001 to $60,838 at June
30, 2002. The increase is due to an increase in escrow deposits and prepaid
expenses.
Liabilities increased to $7,276,008 at June 30, 2002 from $5,950,041 at December
31, 2001. A significant portion of this increase is due to life insurance
related policy liabilities. Policy reserves established due to the sale of life
insurance increased $431,395 or 28% from 2001 to 2002. These reserves are
actuarially determined based on such factors as insured age, life expectancy,
mortality and interest assumptions. Liabilities for policy claims are recorded
based on reported death.
There was a 49% increase in the amount of $693,831 for annuity contract
liabilities from December 31, 2001 to June 30, 2002. According to the design of
FLAC's primary life insurance product, first year premiums payments are
allocated 100% to life insurance and renewal payments are split 50% to life and
50% to annuity. In the first six months of 2002, annuity contract liabilities
increased as additional policies reached the second policy year.
Federal income taxes payable have increased 37% from $534,406 at December 31,
2001 to $734,511 at June 30, 2002. Federal income taxes payable are due to
deferred taxes established based on timing differences between income recognized
for financial statements and taxable income for the Internal Revenue Service.
These deferred taxes are based on the operations of FLAC and on unrealized gains
of fixed maturities.
Results of Operations
Revenues for the six months ended June 30, 2002 totaled $2,026,045 as compared
to $1,509,600 for the same period of 2001. The increase is primarily due to a
44% increase in net premium income of $494,502 resulting from the growth in the
policyholder base. A decrease in net investment income of $98,023 was primarily
a result of significantly lower investment yields. Rental income increased
$141,088 due to the Company having no rental income during the same period of
2001.
Revenues for the three months ended June 30, 2002 totaled $948,599 as compared
to $722,637 for the same period of 2001. The increase is primarily due to a 36%
increase in net premium income of $199,091 resulting from the growth in the
policyholder base. A decrease in net investment income of $24,483 was primarily
a result of significantly lower investment yields. Rental income increased
$70,544 due to the Company having no rental income during the same period of
2001.
Benefits and expenses for the six months ended June 30, 2002 totaled $2,089,794
as compared to $1,465,580 for the same period of 2001. The total increase in
benefits and expenses are $624,214 or 43%. Other operating costs accounted for
$206,899 of the total increase due to increases in depreciation, interest
expense, building expenses, travel, medical exam fees, and data processing. As
a result of the growth in the policyholder base, the increase in policy reserves
was $179,863 greater than the same period in 2001. Salaries and wages increased
$259,473 as a result of an increase in the number of employees. Commissions
increased $222,163 due to the increase in premium income and increased sales of
the final expense product. FLAC began marketing the final expense product
during the fourth quarter of 2001. Commission rates paid on first year premiums
received on the final expense product are typically higher than those paid on
the other products being marketed by FLAC.
-13-
Benefits and expenses for the three months ended June 30, 2002 totaled
$1,123,913 as compared to $827,464 for the same period of 2001. The total
increase in benefits and expenses are $296,449 or 36%. Other operating costs
accounted for $47,686 of the total increase due to increases in depreciation,
interest expense, building expenses, travel, medical exam fees, and data
processing. As a result of the growth in the policyholder base, the increase in
policy reserves was $119,769 greater than the same period in 2001. Salaries and
wages increased $100,246 as a result of an increase in the number of employees.
Commissions increased $69,100 due to the increase in premium income and
increased sales of the final expense product. FLAC began marketing the final
expense product during the fourth quarter of 2001. Commission rates paid on
first year premiums received on the final expense product are typically higher
than those paid on the other products being marketed by FLAC.
Liquidity and Capital Resources
During the quarters ended June 30, 2002 and 2001, the Company maintained liquid
assets sufficient to meet operating demands, while continuing to utilize excess
liquidity for fixed maturity investments. Net cash (used in) provided by
operating activities during the periods ended June 30, 2002 and 2001 totaled
($138,348) and $395,521, respectively.
FLAC's insurance operations generally receive adequate cash flows from premium
collections and investment income to meet their obligations. Insurance policy
liabilities are primarily long-term and generally are paid from future cash
flows. Cash collected from deposits on annuity contracts and policyholder
premium deposits are recorded as cash flows from financing activities. A
significant portion of the Company's invested assets are readily marketable and
highly liquid.
-14-
Part II.
Item 4. Submission of Matters to a Vote of Shareholders
(a) The annual meeting of the stockholders was held June 3, 2002 at 8:00
a.m.
The purpose of the meeting was to elect directors and the approval of
independent auditors for 2002.
(b) Individuals elected for a term of one year and the number of votes cast
was as follows:
Michael N. Fink Number of votes cast for 2,364,487 ; Withheld 9,850
Rick D. Meyer Number of votes cast for 2,364,737 ; Withheld 9,600
Phillip M. Donnelly Number of votes cast for 2,356,887 ; Withheld 17,450
Danny N. Biggs Number of votes cast for 2,364,337 ; Withheld 10,000
Paul E. Burke Number of votes cast for 2,367,087 ; Withheld 7,250
Ed. C. Carter Number of votes cast for 2,367,337 ; Withheld 7,000
Kenneth L. Frahm Number of votes cast for 2,365,887 ; Withheld 8,450
John W. Hadl Number of votes cast for 2,305,577 ; Withheld 68,760
Steve J. Irsik, Jr. Number of votes cast for 2,364,937 ; Withheld 9,400
John G. Montgomery Number of votes cast for 2,367,087 ; Withheld 7,250
Harland E. Priddle Number of votes cast for 2,364,887 ; Withheld 9,450
Gary E. Yager Number of votes cast for 2,367,337 ; Withheld 7,000
Approval of the appointment of Kerber, Eck, & Braeckel, LLP as independent
auditors for 2002.
In Favor 2,359,287
Against 4,650
Abstain 10,400
Item 6. Exhibits and Reports on Form 8-K
The Company did not file any reports on Form 8-K during the six months
ended June 30, 2002.
-15-
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
FIRST AMERICAN CAPITAL CORPORATION
8/13/02 By: /s/ Rickie D. Meyer
------------- ------------------------------------
Date: Rickie D. Meyer, President/Director
8/13/02 By: /s/ Phillip M. Donnelly
------------- ------------------------------------
Date: Phillip M. Donnelly, Secretary/Treasurer
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