SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549




                                    FORM 10-Q

                QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE

                             SECURITIES ACT OF 1934


For the Quarterly Period Ended March 31, 2001
Commission File Number 0-4690



                        FINANCIAL INDUSTRIES CORPORATION
             (Exact Name of Registrant as specified in its charter)

         Texas                                 74-2126975
(State of Incorporation)   (I.R.S. Employer Identification Number)



6500 River Place Blvd., Building One
Austin, Texas                                                 78730
(Address of principal executive offices)       (Zip Code)

Registrant's telephone number, including area code (512) 404-5000




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

Number  of  common  shares  outstanding  ($.20  par  value)  at end  of  period:
5,054,661.
                                      - 1 -
<PAGE>

                           Forward-Looking Statements

Except for  historical  factual  information  set forth in this Form  10-Q,  the
statements, analyses, and other information contained in this report relating to
trends in the Company's  operations and financial  results,  the markets for the
Company's products,  the future development of the Company's  business,  and the
contingencies and uncertainties to which the Company may be subject,  as well as
other  statements  including  words  such as  "anticipate,"  "believe,"  "path,"
"estimate,"   "expect,"  "intend"  and  other  similar  expressions   constitute
forward-looking statements under the Private Securities Litigation Reform Act of
1995. Such statements are made based upon management's  current expectations and
beliefs concerning the financial results, economic conditions and are subject to
known and unknown risks,  uncertainties  and other factors  contemplated  by the
forward-looking  statements.  Such  factors  include,  among other  things:  (1)
general economic  conditions and other factors,  including  prevailing  interest
rate levels and stock market performance, which may affect the ability of FIC to
sell its products,  the market value of FIC's investments and the lapse rate and
profitability of policies;  (2) FIC's ability to achieve  anticipated  levels of
operational efficiencies and cost-saving  initiatives;  (3) customer response to
new products,  distribution channels and marketing  initiatives;  (4) mortality,
morbidity  and  other  factors  which  may  affect  the  profitability  of FIC's
insurance  products;  (5) changes in the Federal income tax laws and regulations
which may affect the  relative tax  advantages  of some of FIC's  products;  (6)
increasing  competition in the sale of insurance and  annuities;  (7) regulatory
changes or actions, including those relating to regulation of insurance products
and insurance companies; (8) ratings assigned to FIC's insurance subsidiaries by
independent rating  organizations such as A.M. Best Company,  which FIC believes
are  particularly  important  to the  sale of  annuity  and  other  accumulation
products; and (9) unanticipated litigation. There can be no assurance that other
factors not currently  anticipated  by management  will not also  materially and
adversely affect FIC.







                                      - 2 -
<PAGE>


                FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES


                                      INDEX

                                                                  Page No.



Part I - Financial Information

Item 1. Financial Statements
Consolidated Balance Sheets
         March 31, 2001 and December 31, 2000.......................... 4

Consolidated Statements of Income
         For the three month period ended
         March 31, 2001 and March 31, 2000............................. 6

Consolidated Statements of Cash Flows
         For the three month period ended
         March 31, 2001 and March 31, 2000............................. 8

Notes to Consolidated Financial Statements.............................10

Item 2. Management's Discussion and Analysis of
         Financial Conditions and Results of Operations................12

Item 3. Quantitative and Qualitative Disclosures
         About Market Risk ............................................21

Part II

Other  Information.....................................................22

Signature  Page........................................................25





                                      - 3 -
<PAGE>


                FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

<TABLE>
<S>                                                                           <C>                   <C>
                                                                           March 31,            December 31,
                                                                             2001                  2000
                                                                          (unaudited)

ASSETS

Investments other than investments in affiliate:

Fixed maturities available for sale at  market value
 (amortized cost of $74,946 and $78,249 at March 31,
 2001 and December 31, 2000, respectively)                        $        77,340          $       79,786
Equity securities at market (cost approximates $11
 at March 31, 2001 and December 31, 2000)                                       4                       4
Policy loans                                                                3,746                   3,699
Short-term investments                                                     14,862                  15,624

     Total investments                                                     95,952                  99,113

Cash and cash equivalents                                                   3,855                   2,733
Investment in affiliate                                                    79,559                  79,105
Accrued investment income                                                   1,348                   1,172
Agency advances and other receivables                                       9,854                   7,604
Reinsurance receivables                                                    18,136                  17,466
Due and deferred premiums                                                  12,863                  12,537
Property and equipment, net                                                 1,318                   1,318
Deferred policy acquisition costs                                          56,695                  56,161
Present value of future profits of acquired business                       18,602                  19,440
Other assets                                                                4,453                   4,117

     Total Assets                                                 $       302,635          $      300,766

</TABLE>

              The accompanying notes are an integral part of these
                        consolidated financial statements




                                      - 4 -
<PAGE>

                FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)


<TABLE>
<S>                                                                        <C>                   <C>
                                                                           March 31,              December 31,
                                                                             2001                    2000
                                                                         (unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Policy liabilities and contract holder deposit funds:

Future policy benefits                                             $         62,584          $       62,462
Contract holder deposit funds                                                43,055                  43,301
Unearned premiums                                                                -0-                     -0-
Other policy claims and benefits payable                                      3,303                   2,931
                                                                            108,942                 108,694

Subordinated notes payable to affiliate                                      33,812                  35,349
Deferred federal income taxes                                                24,473                  24,437
Other liabilities                                                             5,491                   3,734

Total Liabilities                                                           172,718                 172,214

Commitments and Contingencies

Shareholders' equity:

Common stock, $.20 par value, 10,000,000
 shares authorized; 5,845,300 shares issued, 5,054,661
 outstanding in 2001 and 2000                                                 1,169                   1,169
Additional paid-in capital                                                    7,225                   7,225
Accumulated other comprehensive income                                        3,320                   2,107
Retained earnings                                                           125,578                 125,426
                                                                            137,292                 135,927

Common treasury stock, at cost, 790,639 shares in 2001                       (7,375)                 (7,375)
 and 2000

Total Shareholders' Equity                                                  129,917                 128,552

Total Liabilities and Shareholders' Equity                         $        302,635          $      300,766

</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                      - 5 -
<PAGE>

                FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                      (in thousands except per share data)
<TABLE>
<S>                                                                         <C>                       <C>

                                                                             Three Months Ended March 31,
                                                                             2000                      2001
                                                                                     (unaudited)

Revenues:

Premiums                                                              $       8,038            $      8,401
 Net investment income                                                        1,631                   1,740
 Earned insurance charges                                                       934                   1,147
                                                                             10,603                  11,288

Benefits and expenses:

 Policyholder benefits and expenses                                           2,591                   3,351
 Interest expense on contract holders
  deposit funds                                                                 570                     590
 Amortization of present value of future
  profits of acquired businesses                                                838                   1,016
 Amortization of deferred policy
  acquisition costs                                                           1,439                   1,349
 Operating expenses                                                           3,140                   2,947
 Interest expense                                                               427                     528
                                                                              9,005                   9,781
Income before federal income tax and
 equity in net earnings of affiliates                                         1,598                   1,507
Provision for federal income taxes                                              360                     259
Income before equity in net earnings
 of affiliates                                                                1,238                   1,248
Equity in net earnings of affiliate,
 net of tax                                                                     845                     966

Net Income                                                            $       2,083            $      2,214

</TABLE>
              The accompanying notes are an integral part of these
                            consolidated statements.


                                      - 6 -
<PAGE>

                FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                      (in thousands except per share data)
<TABLE>


<S>                                                                     <C>                 <C>
                                                                       Three Months Ended March 31,
                                                                          2001               2000

                                                                               (unaudited)
Net Income Per Share

Basic:

Average weighted shares outstanding                                     5,055               5,055
Basic earnings per share                                           $     0.41          $     0.44

Diluted:

Common stock and common stock equivalents                               5,183               5,167
Diluted earnings per share                                         $     0.40          $     0.43

</TABLE>






              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                      - 7 -
<PAGE>

                FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<S>                                                                   <C>                      <C>

                                                                      Three Months Ended March 31,
                                                                     2001                    2000
                                                                              (unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES

Net Income                                                   $        2,083          $         2,214
Adjustments to reconcile net income to net
 cash (used in) provided by operating activities:

Amortization of present value of future
 profits of acquired business                                           838                    1,016
Amortization of deferred policy
 acquisition costs                                                    1,439                    1,349
Equity in undistributed earnings of affiliate                        (1,361)                  (1,526)

Changes in assets and liabilities:

(Increase) decrease in accrued investment income                       (176)                      49
Increase in agent advances and
 other  receivables                                                  (2,920)                    (257)
(Increase) decrease in due premiums                                    (326)                     137
Increase in deferred policy acquisition costs                        (1,973)                  (1,971)
(Increase) decrease in other assets                                    (336)                     100
Increase (decrease) in policy liabilities and accruals                  248                     (220)
Increase (decrease) in other liabilities                              1,757                     (465)
(Decrease) increase in deferred federal income taxes                     36                      (47)
Other, net                                                             (661)                    (140)

Net cash (used in) provided by operating activities          $       (1,352)         $           239


</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                      - 8 -
<PAGE>

                FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued
                                 (in thousands)
<TABLE>
<S>                                                                <C>                   <C>
                                                                  Three Months Ended March 31,
                                                                  2001                   2000
                                                                          (unaudited)
CASH FLOWS FROM INVESTING ACTIVITIES

Fixed maturities purchased                                  $     (5,200)        $    (1,462)
Increase in policy loans                                             (47)                 (3)
Proceeds from calls and maturities of
 fixed maturities                                                  8,496                 232
Net increase (decrease) in short-term investments                    762               2,712
Net cash provided by investing activities                          4,011               1,479

CASH FLOW FROM FINANCING
 ACTIVITIES

Repayment of subordinated notes payable                           (1,537)             (1,537)
Net cash used in financing activities                             (1,537)             (1,537)
Net increase in cash                                               1,122                 181
Cash and cash equivalents, beginning of year                       2,733                 692

Cash and cash equivalents, end of period                    $      3,855         $       873



</TABLE>



              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                      - 9 -
<PAGE>

                FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The financial  statements  included herein have been presented to conform to the
requirements  of Form 10-Q.  This  presentation  includes year end balance sheet
data which was  derived  from  audited  financial  statements.  The notes to the
financial  statements do not  necessarily  include all  disclosures  required by
generally accepted accounting principles (GAAP). The reader should refer to Form
10-K for the year ended December 31, 2000  previously  filed with the Securities
and Exchange  Commission for financial  statements  prepared in accordance  with
GAAP.  Management  believes the  financial  statements  reflect all  adjustments
necessary to present a fair  statement of interim  results.  Certain  prior year
amounts have been reclassified to conform with current year presentation.


The  consolidated   financial  statements  include  the  accounts  of  Financial
Industries Corporation ("FIC") and its wholly-owned subsidiaries. The investment
of FIC in  InterContinental  Life  Corporation  ("ILCO") is presented  using the
equity method.  All significant  intercompany  items and transactions  have been
eliminated.

Other Comprehensive Income

The following is a  reconciliation  of accumulated  other  comprehensive  income
from December 31, 2000 to March 31, 2001 (in thousands):

<TABLE>
<S>                                                     <C>                        <C>                  <C>
                                                     Net unrealized                                    Total
                                                     gain on                      Net                  accumulated
                                                     investments                  appreciation         other
                                                     in fixed maturities          of equity            comprehensive
                                                     available for sale           securities           income

Balance at December 31, 2000                         $  2,107                 $      0                  $  2,107
Current Period Change                                   1,213                        0                     1,213
Balance at March 31, 2001                            $  3,320                 $      0                  $  3,320
</TABLE>








                                     - 10 -
<PAGE>

                FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dividends Declared

In March,  2001 FIC announced  that its board  approved the payment of an annual
cash dividend in the amount of $0.41 per share. The dividend has been accrued in
other  liabilities on the  consolidated  balance sheet and was paid on April 12,
2001, to shareholders of record as of the close of business on March 19, 2001.

New Accounting Pronouncements

In  June,  1998,  the  FASB  issued  FAS No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities",  which establishes accounting and reporting
standards for derivative  instruments,  including certain derivative instruments
embedded in other contracts,  (collectively  referred to as derivatives) and for
hedging  activities.  FAS No. 133, as amended by FAS No.  138,  "Accounting  for
Certain Derivative  Instruments and Certain Hedging Activities - An Amendment of
FASB  Statement No. 133", is applicable to financial  statements  for all fiscal
quarters of fiscal years  beginning after June 15, 2000 as amended by FAS No 137
"Accounting for Derivative  Instruments and Hedging Activities - Deferral of the
Effective  Date  of FAS No  133".  As the  Company  does  not  have  significant
investments in derivative financial instruments, the adoption of FAS 133 did not
have a material  impact on the  Company's  results of  operations,  liquidity or
financial position.


                                     - 11 -
<PAGE>


Item 2. Management's Discussion and Analysis of Financial Conditions and Results
of Operation

       Results of Operations - Three Months Ended March 31, 2001 and 2000

For  the  three-month  period  ended  March  31,  2001,   Financial   Industries
Corporation's  ("FIC") net income was  $2,083,000  (basic  earnings of $0.41 per
common  share,  or diluted  earnings  of $0.40 per common  share) as compared to
$2,214,000  (basic  earnings of $0.44 per common share,  or diluted  earnings of
$0.43 per common  share) in the first three  months of 2000.  Earnings per share
are stated in accordance with the requirements of FAS No. 128, which establishes
two  measures  of  earnings  per share:  basic  earnings  per share and  diluted
earnings  per share.  Basic  earnings  per share is computed by dividing  income
available to common shareholders by the weighted average number of common shares
outstanding during the period.  Diluted earnings per share reflect the potential
dilution that would occur if securities or other contracts to issue common stock
were converted or exercised.

FIC's  income from  operations - as  determined  before  federal  income tax and
equity in net earnings of its affiliate, InterContinental Life Corporation - for
the  three-month  period ended March 31, 2001,  was  $1,598,000  (on revenues of
$10,603,000),  as compared to $1,507,000  (on revenues of  $11,288,000),  in the
first three months of 2000.

The  operating  strategy  of the  Company's  management  emphasizes  several key
objectives:  expense  management;  marketing of  competitively  priced insurance
products  which are designed to generate an acceptable  level of  profitability;
maintenance of a high quality portfolio of investment grade securities;  and the
provision of quality customer service.

Revenues.

Premiums for the first three months of 2001, net of reinsurance ceded, were $8.0
million,  as compared to $8.4  million in the first three  months of 2000.  This
source of revenues is related to Family Life's  traditional  life insurance book
of business,  primarily Family Life's term life insurance business. The decrease
from March 31, 2000 to March 31,  2001 is  attributable  to the  decrease in the
traditional life insurance book of business from $5.76 billion at March 31, 2000
to $5.51 billion at March 31, 2001.

The net  investment  income for the first three months of 2001 was $1.63 million
as compared  to $1.74  million in the same  period of 2000.  The net  investment
income  decreased as compared to the same  quarter for 2000 because  there was a
decline in the average  interest rate earned on the investment  portfolio of the
Company.

                                     - 12 -

<PAGE>

Earned insurance  charges for the first three months of 2001 were $0.93 million,
as compared to $1.15 million in the same period of 2000.  This source of revenue
is related  to Family  Life's  universal  life  insurance  and  annuity  book of
business.  The decline in the level of earned insurance  charges is attributable
to a decrease in Family Life's  universal  life and annuity  business.  The face
amount of in force universal life policies was $908 million at March 31, 2000 as
compared to $897 million at March 31, 2001.

Benefits and Expenses.

Policyholder  benefits  and expenses  were $2.6 million in the first  quarter of
2001,  as  compared  to $3.4  million in the first  quarter of 2000.  The change
between the two periods is  attributable  to a decline in the amount of benefits
paid during the first quarter of 2001 of $0.87 million.

Interest  expense on contract  holders  deposit  funds was $0.57  million in the
first  quarter of 2001,  as compared to $0.59  million in the same period of the
year 2000.  This expense's  slight  decrease is related to the small decrease in
the level of contract holder deposit funds, which declined from $43.3 million at
December 31, 2000 to $43.1 million at March 31, 2001.

In the first three months of 2001, the  amortization  of present value of future
profits of acquired  business was $0.84  million as compared to $1.02 million in
the first three months of 2000.  These decreases in  amortization  were expected
and should continue to decrease as the underlying asset, present value of future
profits, decreases.

The amortization of deferred policy  acquisition  costs was $1.44 million in the
first three  months of 2001,  as  compared  to $1.35  million in the first three
months  of  2000.  The  increase  in   amortization   is   attributable  to  the
capitalization  of  expenses  incurred  in  connection  with the  writing of new
business.

The operating expenses for the first three months of 2001 were $3.14 million, as
compared to $2.95  million in the first three  months of 2000.  The increase was
due to a higher  level of  expenses  over the  current  period  versus the prior
period's expenses.

Interest  expense  for the first  three  months of 2001 was  $0.43  million,  as
compared to $0.53 million in the first three months of 2000. The decrease in the
amount of interest  expenses from the first quarter of 2000 to the first quarter
of 2001 is attributable to the scheduled  reduction in the amount of outstanding
indebtedness.


                                     - 13 -
<PAGE>


The  provision  for federal  income  taxes was $0.36  million in the first three
months of 2001 as compared to $0.26  million in the first three  months of 2000.
The increase is due to the increase in income from operations.

            Equity in Net Income of InterContinental Life Corporation

General

For the three-month period ended March 31, 2001, the Company's equity in the net
earnings of InterContinental  Life Corporation  ("ILCO"),  net of federal income
tax, was  $845,000,  as compared to $966,000 for the first three months of 2000.
The decrease is attributable to the lower level of ILCO's earnings.

FIC currently owns 3,591,534 shares of ILCO's common stock. In addition,  Family
Life  currently  owns  342,400  shares of ILCO common  stock.  As a result,  FIC
currently owns,  directly and indirectly  through Family Life,  3,933,934 shares
(approximately 48.1%) of ILCO's common stock.

FIC carries its  investment  in ILCO using the equity method of  accounting.  At
March 31, 2001, FIC's investment in affiliate was valued at $79.56 million.  The
book value of ILCO's common stock at March 31, 2001 was $20.55 per share,  which
is substantially  above the market value ($12.00) of ILCO's common stock on that
same  date.  The  applicable  accounting  standards  permit  FIC  to  carry  its
investment in ILCO on the equity method of accounting, without any adjustment to
reflect  the  difference  between  book value and market  value.  Under  certain
circumstances,  Accounting  Principles  Board  Opinion  18 ("APB  18") and Staff
Accounting  Bulletin  Topic 5.M ("SAB 5.M")  require an  adjustment  to earnings
where the value of an investment is deemed to have  decreased on an other than a
temporary basis.  Application of the "other than temporary" provisions of APB 18
and SAB 5.M to FIC's investment in ILCO would potentially  result in a charge to
earnings  in some  future  period.  The  amount  of such  charge  would be based
primarily upon the market price of ILCO's common stock, which ranged from $9.313
per share to $17.99 per share  during the period from January 1, 2001 to May 14,
2001.  Based on that range of market  prices,  the range of possible  impairment
charges which might result would be from $8.16 million to $39.76 million, net of
tax.

However,  management believes that an adjustment to earnings is neither required
nor  appropriate  under  the  provisions  of APB 18 and SAB  5.M.  In  addition,
management  notes that FIC and ILCO are  currently  parties to an Agreement  and
Plan of Merger whereby ILCO would become a  wholly-owned  subsidiary of FIC. FIC
believes  that it is  probable  that the merger will be  consummated.  After the
merger,  FIC will include ILCO in its  consolidated  financial  statements.  FIC
expects to recover the cost of its  investment in ILCO from the  realization  of
ILCO's net assets through consolidation.

As of March 31, 2001,  the market value of the fixed  maturities  available  for
sale  segment was $427.36  million as compared to an  amortized  cost of $418.02
million,  or  an  unrealized  gain  of  $9.34  million.  The  increase  reflects
unrealized  gains on such  investments  related  to changes  in  interest  rates
subsequent  to the purchase of such  investments.  Since FIC owns  approximately
48.1% of the  common  stock of ILCO,  such  unrealized  gains,  net of tax,  are
reflected in FIC's investment in affiliate and accumulated  other  comprehensive
income,  and had the effect of  increasing  the  reported  value of such  equity
interest by approximately  $1.9 million.  The net of tax effect of this increase
($1.8 million at March 31, 2001) is included in "Accumulated other comprehensive
income" on the Consolidated  Balance Sheets and has been recorded as an increase
in  shareholders'  equity.  As required under the provisions of FAS No. 130, the
determination of "Accumulated  other  comprehensive  income"  includes  separate
identification of the change in values which occurred during the current period.

As of December 31, 2000, the market value of the fixed maturities  available for
sale  segment  was $440.7  million as compared  to an  amortized  cost of $437.0
million, or an unrealized gain of $3.7 million.


                                     - 14 -
<PAGE>

Liquidity and Capital Resources of ILCO.

Liquidity  describes the ability of a company to generate  sufficient cash flows
to meet the cash requirements of business operations.  ILCO is a holding company
whose  principal  assets consist of the common stock of Investors Life Insurance
Company of North America  ("Investors-NA")  and its  subsidiary - Investors Life
Insurance Company of Indiana  ("Investors-IN").  Historically,  ILCO's principal
cash flow sources have been from  periodic  payment of principal and interest by
Investors-NA,  pursuant to the terms of the Surplus  Debentures.  In addition to
the need for cash flow to meet operating expenses, ILCO'S liquidity requirements
relate  principally  to the  liabilities  associated  with ILCO'S  various  life
insurance and annuity products.  ILCO'S product  liabilities include the payment
of benefits under life insurance and annuity products, as well as the payment of
policy surrenders, withdrawals and policy loans.

The Surplus Debentures were originally issued by Standard Life Insurance Company
and  their  terms  were  previously   approved  by  the  Mississippi   Insurance
Commissioner.  In  connection  with  the  1993  merger  of  Standard  Life  into
Investors-NA,  the  obligations  of  the  Surplus  Debentures  were  assumed  by
Investors-NA.  As of June 30, 2000,  the  outstanding  principal  balance of the
Surplus  Debentures was completely paid off. For periods  subsequent to June 30,
2000,  ILCO's  available  source of liquidity  is dividends  paid to it from its
subsidiaries.  Applicable state insurance laws generally restrict the ability of
insurance  companies to pay cash  dividends in excess of prescribed  limitations
without prior approval. The ability of Investors-NA to pay shareholder dividends
is and will  continue to be subject to  restrictions  set forth in the insurance
laws and  regulations  of  Washington,  its  domiciliary  state.  The Washington
insurance law limits how and when Investors-NA can pay shareholder  dividends by
including  the "greater  of" standard for payment of dividends to  shareholders,
and requiring  that prior  notification  of a proposed  dividend be given to the
Washington Insurance  Commissioner and that cash dividends may be paid only from
earned surplus.  Under the "greater of" standard,  an insurer may pay a dividend
in an amount equal to the greater of (i) 10% of the policyholder surplus or (ii)
the insurer's net gain from  operations  for the previous  year. As of March 31,
2001, Investors-NA had earned surplus of $60.7 million.

Investors-IN is domiciled in the State of Indiana.  Under the Indiana  insurance
code, a domestic insurer may make dividend  distributions  upon proper notice to
the  Department  of  Insurance,  as long as the  distribution  is  reasonable in
relation to adequate  levels of  policyholder  surplus and quality of  earnings.
Under Indiana law the dividend must be paid from earned  surplus.  Extraordinary
dividend  approval would be required where a dividend exceeds the greater of 10%
of  surplus  or the  net  gain  from  operations  for  the  prior  fiscal  year.
Investors-IN had earned surplus of $23.4 million at March 31, 2001.

The Form 10-Qs of ILCO for the  three-month  periods  ended  March 31,  2001 and
March 31, 2000, set forth the business  operations and financial results of ILCO
and its life insurance  subsidiaries.  Such 10-Q reports of ILCO,  including the
discussion by ILCO's management under the caption  "Management's  Discussion and
Analysis of Financial  Conditions  and Results of Operations"  are  incorporated
herein by reference.

                                     - 15 -
<PAGE>


                         Liquidity and Capital Resources

FIC is a holding company whose  principal  assets consist of the common stock of
Family Life and its equity  ownership in ILCO.  FIC's primary sources of capital
consist of cash flow from operations of its  subsidiaries  and the proceeds from
bank and institutional borrowings.

The cash  requirements  of FIC and its  subsidiaries  consist  primarily  of its
service of the  indebtedness  created in connection with its ownership of Family
Life. As of March 31, 2001, the  outstanding  balance of such  indebtedness  was
$33.8 million on the Subordinated Notes granted by Investors-NA.

The  principal  source of  liquidity  for  FIC's  subsidiaries  consists  of the
periodic  payment of principal and interest by Family Life pursuant to the terms
of a Surplus  Debenture.  The terms of the  Surplus  Debenture  were  previously
approved by the Washington Insurance  Commissioner.  Under the provisions of the
Surplus Debenture and current law, no prior approval of the Washington Insurance
Department  is required  for Family Life to pay  interest  or  principal  on the
Surplus  Debenture;  provided that,  after giving effect to such  payments,  the
statutory  surplus  of Family  Life is in excess of 6% of assets  (the  "surplus
floor").  However,  Family  Life has  voluntarily  agreed  with  the  Washington
Insurance Commissioner that it will provide at least five days advance notice of
payments which it will make under the surplus  debenture.  As of March 31, 2001,
the statutory  capital and surplus of Family Life was $26.1  million,  an amount
substantially  in  excess  of the  surplus  floor.  As of March  31,  2001,  the
principal balance of the Surplus Debenture was $3.9 million.  The funds required
by Family Life to meet its obligations  under the terms of the Surplus Debenture
are generated  primarily from premium  payments from  policyholders,  investment
income and the proceeds from the sale and redemption of portfolio investments.

Washington's insurance code includes the "greater of" standard for dividends but
has requirements that prior  notification of a proposed dividend be given to the
Washington Insurance  Commissioner and that cash dividends may be paid only from
earned surplus. Family Life does not presently have earned surplus as defined by
the regulations adopted by the Washington Insurance Commissioner and, therefore,
is not permitted to pay cash dividends.  However, since the new law applies only
to dividend payments,  the ability of Family Life to make principal and interest
payments  under the Surplus  Debenture  is not  affected.  The Company  does not
anticipate  that,  for  the  foreseeable  future,  Family  Life  will  have  any
difficulty in making payments to Family Life  Corporation in amounts  sufficient
to enable Family Life Corporation to service indebtedness, either by payments of
principal  and  interest  by Family  Life on the  Surplus  Debenture  or partial
redemptions by Family Life of its redeemable preferred stock.


The  sources  of  funds  for  Family  Life  consist  of  premium  payments  from
policyholders,  investment  income and the proceeds from the sale and redemption
of portfolio  investments.  These funds are applied primarily to provide for the
payment of claims under  insurance  and annuity  policies,  operating  expenses,
taxes,  investments in portfolio securities,  shareholder dividends and payments
under the provisions of the Surplus Debenture.

                                     - 16 -

<PAGE>

FIC's net cash flow (used in)  provided  by  operating  activities  was  $(1.35)
million in the first three months of 2001,  as compared to $0.24  million in the
first three months of 2000. Net cash flow used in financing activities was $1.54
million in the first three months of 2001,  as compared to $1.54  million in the
first three  months of 2000.  The  decrease in cash flow  provided by  operating
activities  for the quarter  ended March 31, 2001 was affected by an increase in
agency  advances  and  other  receivables  as  well  as  an  increase  in  other
liabilities related to the dividend payable to FIC shareholders.

Net cash flow provided by investing  activities  was $4.01 million for the three
months ended March 31, 2001, as compared to $1.48 million for the same period in
2000.  The  increase  in cash  flow  from  investing  activities  was  primarily
attributable  to cash  received from the  redemption or maturity of  investments
which cash was used in operations and financing activities.

The guaranty  commitments of FIC under the loans incurred in connection with the
acquisition  of Family Life (after  taking into account the  repayments  and new
loans which occurred in July, 1993) relate to: (i) the $22.5 million note issued
by Family Life Corporation to Investors Life Insurance  Company of North America
and (ii) the $34.5 million loaned by Investors-NA to two subsidiaries of FIC.

Management  believes that its cash, cash  equivalents and short term investments
are  sufficient  to meet the needs of its business and to satisfy debt  service.

There are no trends, commitments or capital asset requirements that are expected
to have an adverse effect on the liquidity of FIC.

Investments.

As of March 31, 2001, the Company's investment assets totaled $95.95 million, as
compared to $99.11  million as of December 31, 2000.  The decrease was primarily
attributable  to cash  received from the  redemption or maturity of  investments
which cash was used in operations and financing activities.

As of March 31, 2001,  the market value of the fixed  maturities  available  for
sale segment was $77.34 as compared to an amortized  value of $74.95  million or
an unrealized gain of $2.39 million.  The increase reflects  unrealized gains on
such investments related to changes in interest rates subsequent to the purchase
of such  investments.  The net of tax effect of this increase  ($1.55 million at
March 31, 2001) has been  recorded as an increase in  shareholders'  equity.  As
required under the provisions of FAS No. 130, the  determination of "Accumulated
other  comprehensive  income" includes separate  identification of the change in
values which occurred during the current period.

                                      -17-
<PAGE>

The level of short-term  investments  at March 31, 2001 was $14.86  million,  as
compared to $15.62 as of December  31, 2000.  The slight  decrease is within the
expected levels of short-term investments.

The assets held by Family Life must comply with applicable  state insurance laws
and  regulations.  In  selecting  investments  for the  portfolios  of its  life
insurance  subsidiaries,  the Company's  emphasis is to obtain  targeted  profit
margins,  while  minimizing  the  exposure  to  changing  interest  rates.  This
objective  is  implemented  by  selecting   primarily   short-  to  medium-term,
investment grade fixed income securities.  In making such portfolio  selections,
the  Company  generally  does not  select  new  investments  which are  commonly
referred to as "high yield" or "non-investment grade".

The fixed maturities  portfolio of Family Life, as of March 31, 2001,  consisted
solely of fixed  maturities  investments  which, in the annual  statement of the
company,  as filed with state insurance  departments,  were designated under the
National Association of Insurance  Commissioners ("NAIC") rating system as a "1"
(highest quality).

The   investments  of  Family  Life  and  ILCO's   insurance   subsidiaries   in
mortgage-backed securities included collateralized mortgage obligations ("CMOs")
of $19 million and $173 million,  respectively, and mortgage-backed pass-through
securities  of $8 million and $39.4  million,  respectively,  at March 31, 2001.
Mortgage-backed  pass-through  securities,  sequential  CMO's and support bonds,
which comprised  approximately 54.4% of the book value of FIC's  mortgage-backed
securities and 56.2% of the book value of ILCO's  mortgage-backed  securities at
March 31, 2001,  are sensitive to prepayment and extension  risks.  ILCO and FIC
have reduced the risk of prepayment  associated with mortgage- backed securities
by investing in planned  amortization class ("PAC"),  target  amortization class
("TAC")  instruments  and scheduled  bonds.  These  investments  are designed to
amortize in a  predictable  manner by  shifting  the risk of  prepayment  of the
underlying  collateral to other investors in other tranches ("support  classes")
of the CMO. At March 31,  2001,  PAC and TAC  instruments  and  scheduled  bonds
represented  approximately  45.6%  of the book  value  of FIC's  mortgage-backed
securities and approximately  43.8% of the book value of ILCO's  mortgage-backed
securities.  Sequential and support classes  represented  approximately 24.8% of
the book value of FIC's  mortgage-backed  securities and approximately  37.7% of
the book  value of  ILCO's  mortgage-backed  securities  at March 31,  2001.  In
addition,  FIC and ILCO  limit the risk of  prepayment  of CMOs by not  paying a
premium for any CMOs. ILCO and FIC do not invest in  mortgage-backed  securities
with increased  prepayment  risk, such as  interest-only  stripped  pass-through
securities  and inverse  floater  bonds.  Neither FIC nor ILCO had any z-accrual
bonds as of March 31, 2001.  The  prepayment  risk that certain  mortgage-backed
securities are subject to is prevalent in periods of declining  interest  rates,
when  mortgages  may be  repaid  more  rapidly  than  scheduled  as  individuals
refinance higher rate mortgages to take advantage of the lower current rates. As
a result, holders of mortgage-backed securities may receive large prepayments on
their  investments  which cannot be reinvested at an interest rate comparable to
the  rate  on the  prepaying  mortgages.  For  the  year  2001,  the  investment
objectives of FIC and ILCO include the making of selected investments in CMOs.

Management  believes that the absence of "high-yield" or "non-investment  grade"
investments  (as  defined  above)  in  the  portfolios  of  its  life  insurance
subsidiary  enhances the ability of the Company to service its debt,  to provide
security  to its  policyholders  and to credit  relatively  consistent  rates of
return to its policyholders.

                                     - 18 -

<PAGE>

                             Accounting Developments

In  June,  1998,  the  FASB  issued  FAS No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities",  which establishes accounting and reporting
standards for derivative  instruments,  including certain derivative instruments
embedded in other contracts,  (collectively  referred to as derivatives) and for
hedging  activities.  FAS No. 133, as amended by FAS No.  138,  "Accounting  for
Certain Derivative  Instruments and Certain Hedging Activities - An Amendment of
FASB  Statement No. 133", is applicable to financial  statements  for all fiscal
quarters of fiscal years  beginning after June 15, 2000 as amended by FAS No 137
"Accounting for Derivative  Instruments and Hedging Activities - Deferral of the
Effective  Date  of FAS No  133".  As the  Company  does  not  have  significant
investments in derivative financial instruments, the adoption of FAS 133 did not
have a material  impact on the  Company's  results of  operations,  liquidity or
financial position.


                               Other Developments

Agreement and Plan of Merger.

On January 17,  2001,  FIC  entered  into an  Agreement  and Plan of Merger (the
"Agreement")  with ILCO and ILCO  Acquisition  Company ("ILCO  Acquisition"),  a
Texas corporation and wholly-owned  subsidiary of FIC. In general, the Agreement
provides that,  following the approval of the Agreement by the  shareholders  of
ILCO and the  approval  of the  issuance  of  shares  of FIC  common  stock  and
amendment to FIC's articles of  incorporation by the shareholders of FIC and the
satisfaction  or  waiver  of the  other  conditions  to  the  merger:  (1)  ILCO
Acquisition  will merge with and into ILCO; and (2) ILCO  Acquisition will cease
to  exist  and  ILCO  will  continue  as  the  surviving  corporation  and  as a
wholly-owned subsidiary of FIC following the merger.

Upon the consummation of the merger:  (1) each share of ILCO common stock issued
and  outstanding  immediately  prior to the  merger,  other than  shares of ILCO
common  stock  held as  treasury  shares by ILCO (but  excluding  shares of ILCO
common  stock  held by any of ILCO's  subsidiaries,  whether  or not  treated as
treasury  shares  of ILCO  on a  consolidated  basis  under  generally  accepted
accounting  principles)  or shares of ILCO  common  stock  held by FIC,  will be
converted into the right to receive 1.1 shares of FIC common stock.  However, in
the event of any change in FIC common  stock  and/or ILCO common  stock prior to
the   merger,   such   as  a   stock   split,   stock   dividend,   subdivision,
reclassification, recapitalization, combination, exchange of shares or the like,
the number and class of shares of FIC common stock to be issued and delivered in
the merger in exchange for each  outstanding  share of ILCO common stock will be
adjusted so as to maintain the relative  proportionate  interests of the holders
of ILCO common stock and FIC common stock;  (2) each share of ILCO common stock,
series A  preferred  stock and series B  preferred  stock of ILCO,  in each case
which is held as treasury shares by ILCO prior to the merger  (excluding  shares
of ILCO common stock held by any of ILCO's subsidiaries,  whether or not treated
as treasury  shares of ILCO on a  consolidated  basis under  generally  accepted
accounting principles), and each share of ILCO common stock which is held by FIC
(excluding  any shares of ILCO common stock owned by any of FIC's  subsidiaries)
prior to the merger,  will be cancelled  and  retired;  (3) each share of common
stock of ILCO Acquisition issued and outstanding immediately prior to the merger
will be  converted  into one share of common  stock of ILCO and such shares will
represent all of the issued and outstanding  capital stock of ILCO following the
merger; and (4) shares of FIC common stock outstanding  immediately prior to the
merger  (including  shares of FIC common stock held by any  subsidiary of FIC or
ILCO)  will  remain  outstanding  and  will  be  unaffected  by the  merger.  No
fractional  shares of FIC common stock will be issued in the merger. A holder of
ILCO common stock who would otherwise be entitled to receive  fractional  shares
of FIC  common  stock  as a  result  of the  merger  will  receive,  in  lieu of
fractional  shares,  cash in an amount  equal to the average  closing  price per
share of FIC  common  stock for the 30  trading  days  immediately  prior to the
merger  multiplied  by the  fraction  to which the  holder  would  otherwise  be
entitled.  FIC will make  available to First Union  National  Bank,  as exchange
agent,  from  time to time  sufficient  cash  amounts  to  satisfy  payment  for
fractional  shares  and First  Union  will  distribute  such  proceeds,  without
interest, to the holders of the fractional interests.

                                     - 19 -
<PAGE>

The consummation of the merger remains subject to regulatory  approval,  as well
as to the various conditions precedent set forth in the Agreement, including the
approval  of certain  matters  by the  shareholders  of FIC and ILCO.  A Special
Meeting of the  shareholders  of each of FIC and ILCO is  scheduled  for May 18,
2001. For a more detailed description of the Agreement, see the complete copy of
the Agreement,  attached as an annex to the S-4 filed by FIC with the Securities
and Exchange  Commission  on February 1, 2001,  as amended by the S-4/A filed on
March 13, 2001 and the S-4/A filed on April 3, 2001.


NASDAQ Listing

On January 24,  2001,  FIC  submitted  an  application  to have its common stock
traded on the NASDAQ  National  Market  under the symbol FNIN.  Previously,  the
common stock of FIC was traded on the NASDAQ Small-Cap  Market.  The application
was  approved  and the  common  stock of FIC  commenced  trading  on the  NASDAQ
National Market on April 9, 2001.


Unsolicited Verbal Inquiries Concerning Possible Purchase of Post-Merger Company

On  March  8,  2001,  FIC  announced  that it has  received  unsolicited  verbal
indications of interest from a few companies that may be interested in acquiring
FIC after  completion  of the merger with ILCO.  The press release did not state
any price ranges or other material terms. In conjunction  with such  indications
of interest,  FIC has retained Philo Smith Capital  Corporation as its financial
advisor to  explore  the  possibility  of a  post-merger  sale of FIC with these
companies and to further  solicit  indications of interest from other  companies
that may have similar  interests.  As indicated on the Form 424B3 filed with the
Securities  and  Exchange  Commission  on May 9,  2001,  FIC  has  received  one
indication of interest  that it intends to pursue  through  further  discussions
with the third party  submitting such indication of interest.  However,  FIC has
still not determined whether it will sell the company,  and no price or material
terms on which it would agree to sell the company  have been  determined  by the
board of directors of FIC or agreed upon with any third party.


                                     - 20 -
<PAGE>


Dividends Declared

In March,  2001 FIC announced  that its board  approved the payment of an annual
cash dividend in the amount of $0.41 per share. The dividend has been accrued in
other  liabilities on the  consolidated  balance sheet and was paid on April 12,
2001, to shareholders of record as of the close of business on March 19, 2001.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

General.

FIC's principal  assets are financial  instruments,  which are subject to market
risks.  Market risk is the risk of loss arising  from adverse  changes in market
rates, principally interest rates on fixed rate investments. For a discussion of
the  Company's  investment  portfolio and the  management  of that  portfolio to
reflect the nature of the  underlying  insurance  obligations  of the  Company's
insurance  subsidiaries,  please  refer to the  information  set forth in Item 2
"Management's  Discussion  and Analysis of Financial  Conditions  and Results of
Operation - Investments" of this report.

The  following is a discussion of the Company's  primary  market risk  sensitive
instruments.  It should be noted that this  discussion has been developed  using
estimates  and  assumptions.  Actual  results may differ  materially  from those
described below.  Further,  the following  discussion does not take into account
actions which could be taken by management in response to the assumed changes in
market rates. In addition, the discussion does not take into account other types
of risks which may be involved in the business  operations of the Company,  such
as the reinsurance recoveries on reinsurance treaties with third party insurers.

The primary market risk to the Company's  investment  portfolio is interest rate
risk.  Since the Company owns  approximately  48.1% of the common stock of ILCO,
the interest  rate risk of ILCO's fixed  income  portfolio  has an effect on the
value of FIC's  'investment in  affiliate'.  The Company does not use derivative
financial instruments.

                                     - 21 -
<PAGE>

Interest Rate Risk.

(a)       FIC's Fixed Income Investments

          Assuming an immediate  increase of 100 basis points in interest rates,
          the  net  hypothetical  loss  in  fair  market  value  related  to the
          financial  instruments  segment  of the  Company's  balance  sheet  is
          estimated  to be $2.6  million at March 31,  2001 and $3.4  million at
          December  31,  2000.  For  purposes  of the  foregoing  estimate,  the
          following  categories of the Company's fixed income  investments  were
          taken into account:  (i) fixed maturities,  including fixed maturities
          available for sale and (ii) short-term  investments.  The market value
          of such assets was $92.2  million at March 31, 2001 and $95.4  million
          at December 31, 2000.

          The  fixed  income   investments  of  the  Company   include   certain
          mortgage-backed  securities.  The market value of such  securities was
          $27.9  million at March 31,  2001 and $28.1  million at  December  31,
          2000.  Assuming an immediate  increase of 100 basis points in interest
          rates, the net  hypothetical  loss in the fair market value related to
          such  mortgage-backed  securities  is  estimated to be $0.9 million at
          March 31, 2001 and $1.5 million at December 31, 2000.


(b)       FIC's Investment in Affiliate

          The value of FIC's  investment  in affiliate is affected by the amount
          of  unrealized  gains  and  losses,  net of  tax,  in  the  investment
          portfolio of its affiliate,  ILCO.  Assuming an immediate  increase of
          100 basis  points in  interest  rates,  the net  hypothetical  loss in
          value, net of tax, related to the Company's investment in affiliate is
          estimated  to be $5.6  million at March 31,  2001 and $6.2  million at
          December 31, 2000.

The  hypothetical  effect of the interest rate risk on fair values was estimated
by applying a commonly  used model.  The model  projects  the impact of interest
rate changes on a range of factors, including duration and potential prepayment.

Part II. Other Information

Item 1.  Legal Proceedings

The Company and its subsidiaries are defendants in certain legal actions related
to the normal business  operations of the Company.  Management believes that the
resolution  of such  legal  actions  will not have a  material  impact  upon the
financial statements.


                                     - 22 -
<PAGE>

Universal Life Litigation:

ILCO and  Investors-NA  are  defendants in a lawsuit which was filed in October,
1996, in Travis County, Texas. CIGNA Corporation,  an unrelated Company, is also
a named  defendant in the lawsuit.  The named  plaintiffs in the suit (a husband
and wife), allege that the universal life insurance policies sold to them by INA
Life Insurance  Company (a company which was merged into  Investors-NA  in 1992)
utilized unfair sales  practices.  The named  plaintiffs seek reformation of the
life  insurance  contracts  and an  unspecified  amount  of  damages.  The named
plaintiffs  also seek a class action as to similarly  situated  individuals.  In
April, 2001, the named plaintiffs filed an amended  complaint,  so as to include
various post-sale  allegations,  including  allegations related to the manner in
which  increases  in the cost of  insurance  were  applied,  the  allocation  of
portfolio  yields to the  universal  life  policies  and  changes  in the spread
between the earned rate and the  credited  rate.  The Company  filed a motion to
strike  the  amended  Complaint,  which  motion  was  denied  by the  Court.  No
certification  of a class has been  granted as of the date  hereof.  The Company
believes that the suit is without  merit and intends to  vigorously  defend this
matter.

Litigation Relating to the FIC/ ILCO Merger:

On the day that FIC and ILCO each publicly  announced the formation of a special
committee to evaluate a potential  merger,  two class action lawsuits were filed
against  ILCO,  FIC and the officers and directors of ILCO.  The actions  allege
that a cash  consideration  in the proposed merger is unfair to the shareholders
of ILCO,  that it would prevent the ILCO  shareholders  from  realizing the true
value of ILCO,  and that FIC and the named  officers and  directors had material
conflicts of interest in approving the transaction.

In their initial pleadings,  the plaintiffs sought certification of the cases as
class actions and the named plaintiffs as class representatives, and among other
relief, requested that the merger be enjoined (or, if consummated, rescinded and
set  aside)  and that the  defendants  account  to the class  members  for their
damages.

Recently,  the  plaintiffs  initiated  discovery in this matter.  The defendants
believe that the lawsuits are without merit and intend to vigorously contest the
lawsuits.  Management  is unable  to  determine  the  impact,  if any,  that the
lawsuits may have on the results of operations of the Company.

Other Litigation:

Additionally,  FIC and its  subsidiaries  are regularly  involved in litigation,
both as a  defendant  and as  plaintiff.  The  litigation  naming the  insurance
subsidiaries  as defendant  ordinarily  involves our activities as a provider of
insurance  protection products.  We do not believe that such litigation,  either
individually  or in the  aggregate,  will have a material  adverse effect on the
Company's business, financial condition or results of operations.

                                     - 23 -
<PAGE>

Item 2.  Changes in Securities

                  None

Item 3.  Defaults Upon Senior Securities

                  None

Item 4.  Submission of Matters to a Vote of Security Holders

                  None

Item 5.  Other Information

                  None

Item 6.  Exhibits and Reports on Form 8-K

         (a)        Exhibits

                    Form 10-K  Annual  Report of  Registrant  for the year ended
                    December 31, 2000  heretofore  filed by Registrant  with the
                    Securities   and  Exchange   Commission,   which  is  hereby
                    incorporated by reference.

         (b)        Reports on Form 8-K

                    On January 22, 2001, the  Registrant  filed a report on Form
                    8-K.  The  report  pertained  to  the  announcement  by  the
                    Registrant  that it had entered into a definitive  agreement
                    whereby  it  would  acquire  the  remaining   common  shares
                    (approximately  52%) of  InterContinental  Life  Corporation
                    ("ILCO")  which it does not  currently  own.  The  terms and
                    provisions of the  transaction are set forth in an Agreement
                    and Plan of Merger dated as of January 17,  2001,  among the
                    Registrant, ILCO and ILCO Acquisition Company. A copy of the
                    Agreement  and Plan of Merger is  attached  to the Report of
                    Form 8-K.

                                     - 24 -
<PAGE>

         FINANCIAL INDUSTRIES CORPORATION AND SUBSIDIARIES SUBSIDIARIES



                                    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.



FINANCIAL INDUSTRIES CORPORATION

 /s/ James M. Grace
James M. Grace, Treasurer



Date:   May 15, 2001





















                                     - 25 -
<PAGE>