SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.  20549
                       ----------------------------------------
                                      FORM 10-Q

          [Mark One]

          [X]  Quarterly  Report Pursuant  to Section  13 or  15(d) of  the
               Securities Exchange Act of 1934
                  For the quarterly period ended September 30, 1996.
                                          OR
          [ ]  Transition Report  Pursuant to  Section 13  or 15(d)  of the
               Securities Exchange Act of 1934
          For the transition period from                to            .

                             Commission File No.  0-19727

                       ---------------------------------------

                              CUMBERLAND HOLDINGS, INC.
                (Exact name of registrant as specified in its charter)

                    Florida                       59-3094503
          (State of incorporation) (I.R.S. Employer Identification Number)

              4311 West Waters Avenue, Suite 501, Tampa, Florida  33614
          (Address  of registrant's principal  executive offices, including
          zip code)
                       ---------------------------------------
          (Registrant's  telephone  number, including  area code):(813)885-
          2112

                                    Not applicable
          -----------------------------------------------------------------
          (Former name, former address, and  former fiscal year, if changed
          since last report)

          Indicate by check mark  whether the registrant (1) has  filed all
          reports  required  to be  filed  by Section  13  or 15(d)  of the
          Securities Exchange Act  of 1934 during  the preceding 12  months
          (or for such shorter  period that the registrant was  required to
          file  such  reports), and  (2) has  been  subject to  such filing
          requirements for the past 90 days.
                                         Yes [X]  No   [ ]

                         Applicable Only to Corporate Issuers

          The  number of shares of the Registrant's Common Stock, $.001 par
          value, outstanding as of September 30, 1996 was 3,739,307 shares.<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                                      FORM 10-Q

                                        INDEX


                                                                       Page
                                                                       ----

          PART I.   FINANCIAL INFORMATION

                    Item 1.   Condensed consolidated balance
                              sheets at December 31, 1995 and
                              September 30, 1996 (unaudited)  . . . . . 1-2

                              Condensed consolidated statements
                              of operation for the nine months
                              ended September 30, 1995 and
                              September 30, 1996  . . . . . . . . . . . . 3

                              Condensed consolidated statements
                              of operation for the three months
                              ended September 30, 1995 and
                              September 30, 1996  . . . . . . . . . . . . 4

                              Condensed consolidated statements
                              of cash flows for the nine months
                              ended September 30, 1995 and 1996
                              (unaudited) . . . . . . . . . . . . . . . 5-6

                              Notes to condensed consolidated
                              financial statements  . . . . . . . . .  7-15

                    Item 2.   Management's discussion and analysis
                              of financial condition and results
                              of operations . . . . . . . . . . . . . 16-19

          PART II.  OTHER INFORMATION

                    Item 1.   Legal proceedings . . . . . . . . . . . .  20

                    Item 2.   Changes in securities . . . . . . . . . .  20

                    Item 3.   Defaults upon senior securities . . . . .  20

                    Item 4.   Submission of matters to a vote
                              of security holders . . . . . . . . . . .  20

                    Item 5.   Other information . . . . . . . . . . . .  20

                    Item 6.   Exhibits and Reports of Form 8-K  . . . .  20

                              Signatures  . . . . . . . . . . . . . . .  21<PAGE>





                     SECURITIES AND EXCHANGE COMMISSION FORM 10-Q
                            PART I - FINANCIAL INFORMATION


          Item 1.   FINANCIAL STATEMENTS


                              CUMBERLAND HOLDINGS, INC.

                        CONDENSED CONSOLIDATED BALANCE SHEETS

                                            December 31,   September 30,
                                                1995           1996
                                            -------------  -------------
          ASSETS                                            (unaudited)
          ------
          Investments:                      
             Securities available-for-sale  
             at fair value:
               Fixed maturities . . . . . . $  3,452,553   $  3,046,700 
               Equity securities  . . . . .    1,160,500      1,066,405 
             Fixed maturity securities      
                held-to-maturity, at        
               amortized cost . . . . . . .    1,294,758      1,664,285 
             Residential mortgage loan on   
                real estate, at unpaid      
               principal  . . . . . . . . .       46,367         45,948 
             Short-term investments   . . .      348,993        323,993 
                                            -------------  -------------
               Total investments  . . . . .    6,303,171      6,147,331 
                                            -------------  -------------
                                            
             Cash and cash equivalents  . .    1,235,930        550,712 
             Accrued investment income  . .       87,231         65,910 
                                            
             Reinsurance recoverable  . . .    1,697,417      1,299,181 
                                            
             Accounts receivable:           
               Trade, less allowance for    
                doubtful accounts of        
               December 31, 1995 and        
             September 30, 1996   . . . . .      428,376        949,118 
               Affiliate  . . . . . . . . .      122,052        121,534 
             Deferred policy acquisition    
                costs   . . . . . . . . . .      435,272        599,309 
             Intangibles, net   . . . . . .    2,162,961      1,929,478 
             Other assets   . . . . . . . .      236,566        262,023 
                                            -------------  -------------
                                            $ 12,708,976   $ 11,924,596 
                                            =============  =============


                               See accompanying notes.<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                        CONDENSED CONSOLIDATED BALANCE SHEETS

                                            December 31,   September 30,
                                                1995           1996
                                            -------------  -------------
          LIABILITIES AND STOCKHOLDER'S                     (unaudited)
             EQUITY
          ---------------------------------
          Policy liabilities and accruals:  
             Loss and loss adjustments      
               expenses . . . . . . . . . . $  2,351,804   $  1,436,553 
             Unearned premiums  . . . . . .    1,182,305      1,607,548 
                                            
          Ceded reinsurance payable . . . .                     184,517 
          Accounts payable and other        
             liabilities  . . . . . . . . .    1,116,815      1,224,433 
          Short-term borrowings . . . . . .      406,607                
          Long-term debt:                   
             Affiliate, including accrued   
               interest . . . . . . . . . .    4,797,804      5,169,870 
             Nonaffiliate   . . . . . . . .    1,563,870      1,533,488 
                                            -------------  -------------
               Total liabilities  . . . . .   11,419,205     11,156,409 
                                            -------------  -------------
                                                                        
          Stockholders' equity:
             Preferred stock, $.001 par     
               value; 10,000,000 shares     
               authorized, no shares issued                             
             Common stock, $.001 par        
               value; 10,000,000 shares     
               authorized, 4,056,480 shares 
               issued . . . . . . . . . . .        4,040          4,056 
             Capital in excess of par       
               value  . . . . . . . . . . .    2,044,794      2,069,727 
             Net unrealized (depreciation)  
               appreciation of available-   
               for-sale securities  . . . .       63,045         76,357 
             Accumulated deficit  . . . . .     (681,193)    (1,147,395)
                                            -------------  -------------
                                               1,430,686      1,002,745 
             Less treasury stock, at cost,  
               224,263 and 317,173 shares   
               at December 31, 1995 and     
               September 30, 1996,              (140,915)      (234,558)
          respectively                      -------------  -------------
               Total stockholders' equity .    1,289,771        768,187 
                                            -------------  -------------
                                            $ 12,708,976   $ 11,924,596 
                                            =============  =============

                               See accompanying notes.<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                                                 Nine Months Ended
                                                   September 30,
                                            ---------------------------
                                                1995           1996
                                            -------------  -------------
                                             (unaudited)    (unaudited)
                                            -------------  -------------
          REVENUES:                         
             Reinsurance premiums assumed   $  4,047,088   $  2,179,218 
                                                            
             Direct premiums earned:                        
               Affiliates . . . . . . . . .                             
               Nonaffiliates  . . . . . . .      387,265        733,859 
                                            
               Less reinsurance ceded . . .     (408,935)      (203,254)
                                            -------------  -------------
                                            
               Net premium income . . . . .    4,025,418      2,709,823 
               Net investment income  . . .      389,703        304,757 
               Other income . . . . . . . .      985,241      1,627,910 
                                            -------------  -------------
                                            $  5,400,362   $  4,642,490 
                                            =============  =============
                                                            
          Benefits and expenses:            
             Benefits and claims  . . . . .    1,364,053      1,006,518 
             Amortization of deferred       
               policy acquisition costs . .    1,892,773      1,163,103 
             Operating expenses   . . . . .    1,930,785      2,476,285 
             Interest expense to            
               affiliates, net  . . . . . .      393,277        462,786 
                                            -------------  -------------
                                            $  5,580,888   $  5,108,692 
                                            =============  =============
          Income (loss) before income                    
             taxes  . . . . . . . . . . . .     (180,526)      (466,202)
          Income taxes  . . . . . . . . . .                             
                                            -------------  -------------
          Net income (loss) . . . . . . . . $   (180,526)  $   (466,202)
                                            =============  =============
          Weighted average number of shares 
             outstanding  . . . . . . . . .    3,830,619      3,776,172 
                                            =============  =============
          Net income (loss)per common . . . $       (.05)  $       (.12)
                                            =============  =============


          
                               See accompanying notes.<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                                                 Three Months Ended
                                                   September 30,
                                            ---------------------------
                                                1995           1996
                                            -------------  -------------
                                             (unaudited)    (unaudited)
                                            -------------  -------------
          REVENUES:                         
             Reinsurance premiums assumed   $  1,475,774   $    515,037 
                                            
               Direct premiums earned . . .       92,878        297,229 
               Less reinsurance ceded . . .     (142,544)       (48,369)
                                            -------------  -------------
                                            
               Net premium income . . . . .    1,426,108        763,897 
               Net investment income  . . .      177,583         68,018 
               Other income . . . . . . . .      467,986        601,777 
                                            -------------  -------------
                                            $  2,071,677   $  1,433,692 
                                            =============  =============
                                                            
          Benefits and expenses:            
             Benefits and claims  . . . . .      641,197        252,595 
             Amortization of deferred       
               policy acquisition costs . .      653,006        311,239 
             Operating expenses   . . . . .      756,068        898,276 
             Interest expense to                                        
               affiliates, net  . . . . . .      174,821        157,748 
                                            -------------  -------------
                                            $  2,225,092   $  1,619,858 
                                            =============  =============
                                            
          Income before income taxes  . . .     (153,415)      (186,166)
          Income taxes  . . . . . . . . . .                             
                                            -------------  -------------
          Net income  . . . . . . . . . . . $   (153,415)  $   (186,166)
                                            =============  =============
          Net income per common share . . . $       (.04)  $       (.05)
                                            =============  =============
          Weighted average number of shares 
             outstanding  . . . . . . . . .    3,830,619      3,776,172 
                                            =============  =============





                               See accompanying notes.<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                 Nine Months Ended
                                                   September 30,
                                            ---------------------------
                                                1995           1996
                                            -------------  -------------
                                             (unaudited)    (unaudited)
                                            -------------  -------------
          Cash flows from operating         
             activities:                   
             Net income   . . . . . . . . . $   (180,526)  $   (466,202)
             Adjustments to reconcile net                   
             income to net cash provided
             (used) by operating
             activities:
               Amortization/accretion of    
                  investment premiums and   
                  discounts . . . . . . . .       (6,052)        (5,966)
               Amortization of deferred     
                  policy acquisition costs     1,892,773     (1,163,103)
               Depreciation and             
                  amortization  . . . . . .       52,750        284,854 
               Net realized (gain) loss on  
                  investments . . . . . . .      (82,044)       (25,933)
               Accrued interest on term     
                  note, net . . . . . . . .      336,799        395,986 
               (Increase) decrease in:                      
                  Reinsurance recoverable .       41,630        582,753 
                  Accrued investment income                      21,321 
                  Trade receivables . . . .    1,155,691       (508,742)
                  Deferred income taxes . .        8,710                
                  Deferred policy           
                    acquisition costs . . .   (1,739,694)       999,066 
               Other assets . . . . . . . .      (55,889)       (76,310)
               Increase/(decrease) in:                      
                  Policy liabilities and    
                    accruals  . . . . . . .   (2,589,509)      (490,008)
                  Ceded reinsurance payable                             
                  Other liabilities . . . .      295,181        107,618 
                                            -------------  -------------
                    Total adjustments . . .     (689,654)       121,536 
                                            -------------  -------------
                                            
          Net cash provided (used) in       
             operating activities   . . . .     (870,180)      (344,666)
                                            -------------  -------------




                               See accompanying notes.<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (continued)

                                                 Nine Months Ended
                                                   September 30,
                                            ---------------------------
                                                1995           1996
                                            -------------  -------------
                                             (unaudited)    (unaudited)
                                            -------------  -------------
          Investment activities:            
             Proceeds from sales and        
               maturities of investments  .    3,392,615      3,383,038 
             Purchases of investments   . .   (4,039,201)    (3,181,987)
             Net advances from KC   . . . .                             
             Payments for business          
               acquired, net  . . . . . . .     (498,797)       (12,000)
                                            -------------  -------------
          Net cash provided by (used)       
             investing activities   . . . .   (1,145,383)       189,051 
                                            
          Financing activities:             
             Insurance of common stock                           24,949 
             Purchases of treasury stock  .      (27,666)       (93,643)
             Payments on short-term         
               borrowings and long-term     
               debt . . . . . . . . . . . .     (106,635)       (54,302)
             Net proceeds from short-term   
               borrowings . . . . . . . . .      672,535       (406,607)
                                            -------------  -------------
          Net cash provided by financing    
             activities   . . . . . . . . .      538,234       (529,603)
                                            
          Net increase/decrease in cash and 
             cash equivalents   . . . . . .   (1,477,329)      (685,218)
          Cash and cash equivalents,        
             beginning of period  . . . . .    1,700,901      1,235,930 
                                            -------------  -------------
          Cash and cash equivalents, end of 
             period   . . . . . . . . . . . $    223,572   $    550,712 
                                            =============  =============
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            

                               See accompanying notes.<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          1.   Organizations and summary of significant accounting policies

               Organization - Cumberland Holdings,  Inc., ("CHI") a Florida
               corporation,  was  formed  on  November 18,  1991,  to  be a
               holding  company and  a wholly-owned  subsidiary of  Kimmins
               Corp. ("KC").  Effective October 1, 1992, KC contributed all
               of  the outstanding common stock of two of its other wholly-
               owned  subsidiaries,  Cumberland Casualty  &  Surety Company
               ("CCS") and  Surety Specialists, Inc.  ("SSI") to  CHI.   KC
               then distributed  to its stockholders CHI's  common stock on
               the basis of one share of common stock of CHI  for each five
               shares of KC  common stock  and Class B  common stock  owned
               (the Distribution).   CHI conducts its  business through six
               subsidiaries.   CCS,  a  Florida corporation  formed in  May
               1988,  provides  reinsurance  for  speciality  sureties  and
               performance and  payment bonds for contractors.   The surety
               services  provided  include  reinsurance and,  to  a  lesser
               extent, direct surety.  SSI, a Florida corporation formed in
               August  1988, is a general lines agency which operates as an
               independent  agent.    The  Surety  Group  (SG),  a  Georgia
               corporation, and  Associates Acquisition Corp.  d/b/a Surety
               Associates (SA),  a South Carolina corporation, purchased in
               February and  July  1995, respectively,  are  general  lines
               agencies which  operate as  independent agencies.   Official
               Notary Service  of Texas,  Inc., (ONS), a  Texas corporation
               formed in  February 1994,  provides registration  and sundry
               services to  notaries.  Qualex Consulting,  Inc. (Qualex), a
               Florida corporation formed in November 1994, provides claims
               and   contracting  consulting   services.     CHI   and  its
               subsidiaries are referred to herein as the "Company".

               Principles  of  consolidation -  The  consolidated financial
               statements include the accounts  of CHI and its wholly-owned
               subsidiaries.   All  material intercompany  transactions and
               balances have been eliminated in consolidation.

               Basis  of   Presentation   -  The   accompanying   unaudited
               consolidated  financial statements  have  been  prepared  in
               accordance  with  generally  accepted accounting  principles
               which, as  to the subsidiary insurance  company, differ from
               statutory  accounting practices  prescribed or  permitted by
               regulatory authorities.  The significant accounting policies
               followed by CHI and  subsidiaries that materially affect the
               financial statements are summarized in this note.<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          2.   Net income per share

               Net income per  share for  the three and  nine months  ended
               September 30, 1996 is based  on the weighted average  number
               of shares  outstanding, adjusted for the  dilative effect of
               stock options, and  is the  same on both  a primary  diluted
               basis.

          3.   Term note due affiliate

               In  1988, CCS issued a  surplus debenture to  KC in exchange
               for $3,000,000 which bore interest  at 10 percent per annum.
               Interest and  principal payments were due  quarterly only if
               and  when  CCS's   surplus,  as   defined  below,   exceeded
               $4,000,000 and are limited to an amount equal to one-half of
               the statutory  net income  before dividends and  federal and
               foreign income taxes of CCS during that year.

               In 1992,  the debenture due to  KC from CCS  was assigned to
               CHI.  CHI entered into a term note agreement with KC for the
               outstanding  amount  of  the debenture,  including  interest
               arrearage ($4,291,049) at September 30, 1992.  The term note
               is pari passi with the other debts of CHI, bears interest at
               10  percent and  is due  on October 1,  2002.   Interest and
               principal are  due quarterly with minimum  payments equal to
               one half of net earnings before  interest and federal income
               taxes.  Payments for the second five years are due quarterly
               and  are  payable  in  equal installments  to  amortize  the
               remaining  balance over the next 20 quarters.  Each of these
               payments will be credited first  to the accrued interest and
               then to principal.

               Interest arrearage on these  two term notes at December  31,
               1995  and September  30, 1996  is $1,797,804  and $2,169,870
               respectively,  which  is  due  when the  CCS  surplus  funds
               exceeds $4,000,000.

               The term note  was subordinate  in right of  payment to  all
               policyholders of CCS.  Surplus funds are defined as funds of
               CCS remaining after deduction of capital, insurance reserves
               and all  other liabilities,  in  accordance with  accounting
               practices prescribed or  permitted by the Florida  Insurance
               Department.<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

          4.   Notes payable to nonaffiliates

               In  connection  with  the  acquisition  of certain  agencies
               during  1995 (see  Note 10),  the Company  entered into  two
               notes payable with the agencies' previous owners.   One note
               is  due March  1,  2002 and  bears  interest at  8%  through
               February 28, 2001 and 10% thereafter.  Principal payments of
               $150,000  are due  annually beginning  March 1,  2000.   The
               other is due  September 30,  2010 and bears  interest at  8%
               through July 31, 1999 and 9% thereafter.  Principal payments
               of  $40,000  are  due  annually for  three  years  beginning
               January 5, 1996  and then principal  payments of $7,803  are
               due monthly beginning July 31, 1999.

          5.   Short-term borrowings

               During  1995,  the  Company  entered in  to  a  margin  loan
               agreement with an investment  firm which enables the Company
               to borrow funds up to a percentage of the Company's invested
               funds.    At December  31,  1995  the  Company had  $406,607
               outstanding  under the agreement.   At December 31, 1995 the
               Company had preferred  and common stocks with  a fair market
               value  of $1,160,500  on account  with the  investment firm.
               The loan was liquidated August 31, 1996.

          6.   Intangibles

               Intangible   assets  are  stated  at  cost  and  principally
               represent    purchased    customer   accounts,    noncompete
               agreements, purchased contract agreements, and the excess of
               costs  over  the  fair  value  of  identifiable  net  assets
               acquired   (goodwill).      Purchased   customer   accounts,
               noncompete agreements, and purchased contract agreements are
               being amortized  on a  straight-line basis over  the related
               estimated lives and contract periods,  which range from 3 to
               15  years.   The  excess of  costs  over the  fair  value of
               identifiable  net assets  acquired is  being amortized  on a
               straight-line  basis  over  15  years.   Purchased  customer
               accounts  are  records  and  files  obtained  from  acquired
               businesses  that contain  information on  insurance policies
               and the related insured parties that is  essential to policy
               renewals.<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


               The carrying  value of goodwill and  other intangible assets
               will  be reviewed if circumstances  suggest that they may be
               impaired.   If  this  review indicates  that the  intangible
               assets will not be recoverable,  as determined based on  the
               undiscounted  cash flows  of  the entity  acquired over  the
               remaining amortization period,  the Company's carrying value
               of the goodwill  will be reduced by  the estimated shortfall
               of cash flows.

          7.   Loss and loss adjustment expenses

               The liability  for unpaid claims including  incurred but not
               reported losses is based on  the estimated ultimate cost  of
               settling the  claim (including the effects  of inflation and
               other societal  and economic factors), using past experience
               adjusted for current trends and any other factors that would
               modify past experience.  These estimates  are subject to the
               effects of trends in loss severity and frequency.   Although
               considerable  variability  is  inherent  in  such estimates,
               management  believes  that the  reserve  for  loss and  loss
               adjustment  expenses  are  adequate.     The  estimates  are
               continually reviewed and adjusted as necessary as experience
               develops or new information becomes known.  Such adjustments
               are  included in  current operations.   A liability  for all
               costs  expected  to  be  incurred  in  connection  with  the
               settlement of  unpaid claims  (claim adjustment  expense) is
               accrued  when the  related  liability for  unpaid claims  is
               accrued.  Claim adjustment expenses include costs associated
               directly  with specific  claims paid  or in  the  process of
               settlement,  such  as  legal  and adjusters'  fees.    Claim
               adjustment expenses also include  other costs that cannot be
               associated with  specific claims  but are related  to claims
               paid or in the process of settlement, such as internal costs
               of the claims function.

               The Company  does not discount  its reserves for  losses and
               loss adjustment  expenses.   The  Company  writes  primarily
               surety contracts which are of short duration.

               The  Company   does  not   consider  investment   income  in
               determining  if  a  premium  deficiency  relating  to  short
               duration contracts exists.

          8.   Unearned premiums

               Unearned premiums are calculated  using the monthly pro rata
               basis.<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


           9.  Reinsurance

               The Company  assumes and cedes reinsurance  and participates
               in  various pools.    The accompanying  financial statements
               reflect  premiums, benefits  and  settlement  expenses,  and
               deferred policy acquisition costs, net of reinsurance ceded.
               Amounts  recoverable  from  reinsurers  are estimated  in  a
               manner consistent  with the future policy  benefit and claim
               lability  associated with the  reinsured policies.  Accounts
               recoverable from reinsurers are presented as an asset in the
               accompanying consolidated financial statements.

               CCS also cedes  reinsurance from other  insurance companies.
               Reinsurance does not relieve an insurer of its liability  to
               the policyholder for the full amount of the policy, however,
               the reinsurer  is obligated to  the insurer for  the portion
               assumed by such  reinsurer.   Reinsured risks  give rise  to
               liability to CCS  as the insurer only in  the event that the
               reinsurer  is  unable  to  meet  its  obligation  under  the
               reinsurance agreement in force.

          10.  Acquisitions

               Effective   February   28,   1995,  the   Company   acquired
               substantially  all of  the  assets of  The  Surety Group,  a
               Georgia insurance agency specializing in the sales of surety
               bond policies.  The purchase price of $850,000  is comprised
               of  $325,000 paid at  closing, the assumption  of $25,000 of
               capital lease obligations and a $500,000 note to the seller.
               The purchase agreement provides  that the purchase price may
               be  reduced,  but  not  increased,  based  on  the  agency's
               operating   results  during  the  three-year  period  ending
               February 28, 1998.   The  balance at September  30, 1996  is
               $423,488.

               Effective July  1, 1995  the Company acquired  substantially
               all  of  the assets  of  Surety  Associates,  Inc., a  South
               Carolina  insurance  agency  specializing in  the  sales  of
               surety  bond  and certain  types  of  property and  casualty
               insurance  policies.   The purchase  price of  $1,330,241 is
               comprised of $180,241 paid at closing, and a $1,150,000 note
               payable to the seller.  The balance at September 30, 1996 is
               $1,110,000.

               Both acquisitions have been accounted for using the purchase
               method.   The results of operations of the acquired entities
               have   been  included   in  the   accompanying  consolidated
               statements  of operations  since  their respective  purchase
               date.<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          11.  On  November 5,  1996 the  Company  converted its  term note
               payable  to  Kimmins Corp.    The  Company issued  1,723,290
               shares  to Kimmins Corp. in exchange for full payment of the
               note.   The stock  was issued  at the  fair market  value of
               $3.00 per  share.   The  following pro  forma balance  sheet
               represents the effect of the term note conversion.<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                    PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
                                      UNAUDITED

                                     As filed     Pro Forma    Pro Forma 
                                   September 30  Adjustments  September 30
                                        1996                      1996
                                   ------------- --------------------------

          ASSETS                                
          ------

          Investments:                          
            Securities available-               
            for-sale at fair value:

             Fixed maturities      $  3,046,700 $             $  3,046,700 

             Equity securities        1,066,405                  1,066,405 

            Fixed maturity                      
            securities held to                  
             maturity   . . . . . .   1,664,285                  1,664,285 
            Mortgage loan . . . . .      45,948                     45,948 

            Short term investments      323,993                    323,993 

                                                

            Cash and cash                       
             equivalents  . . . . .     550,712                    550,712 
            Reinsurance recoverable   1,299,181                  1,299,181 

                                                

            Deferred policy                     
             acquisition costs          599,309                    599,309 

            Intangibles, net  . . .   1,929,478                  1,929,478 
            Other assets  . . . . .   1,398,585                  1,398,585 
                                   ------------- --------------------------

                                   $ 11,924,596 $           0 $ 11,924,596 
                                   ============= ==========================<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                    PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
                                      UNAUDITED
                                     (continued)

                                     As filed      Pro Forma    Pro Forma 
                                   September 30   Adjustments  September 30
                                        1996                       1996
                                   -------------  -------------------------

          LIABILITIES                           
          -----------

          Policy liabilities and                
          accruals:
            Loss and loss                       
             adjustment expenses  .   1,436,553                  1,436,553 

            Unearned premiums . . .   1,607,548                  1,607,548 

            Ceded reinsurance                                  
             payable  . . . . . . .     184,517                    184,517 

          Accounts payable and                  
            other liabilities         1,224,433                  1,224,433 
          Long-term debt:                       

            Affiliate, including                
             accrued interest   . .    5,169,870   5,169,870(1)          0 

            Nonaffiliate  . . . . .   1,533,488                  1,533,488 
                                   -------------  -------------------------

            Total liabilities . . .$ 11,156,409 $  5,169,870   $ 5,986,539 
                                   =============  =========================
          (1) Elimination of term note payable to Kimmins Corp.<PAGE>





                              CUMBERLAND HOLDINGS, INC.

                    PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
                                      UNAUDITED
                                     (continued)

                                     As filed     Pro Forma    Pro Forma 
                                   September 30  Adjustments  September 30
                                        1996                      1996
                                   ------------- --------------------------

          STOCKHOLDERS' EQUITY                  
          --------------------

          Common stock, $.001 par               
            value; 10,000,000                   
            shares authorized,                  
            4,056,480 shares issued             
            September 30, 1996;                 
            5,779,770 shares issued             
            on pro forma  . . . . .       4,056       1,724(2)       5,780 
          Capital in excess of par              
          value . . . . . . . . . .   2,069,727   5,168,146(2)   7,237,873 

          Net unrealized                        
          appreciation of                       
          available-for-sale                    
          securities  . . . . . . .      76,357                     76,357 

          Accumulated deficit . . .  (1,147,395)                (1,147,395)
                                   ------------- --------------------------

                                      1,002,745   5,169,870      6,172,615 
          Less treasury stock at                
            cost, 317,173 shares at             
            September 30, 1996  . .    (234,558)                  (234,558)
                                   ------------- --------------------------

          Total Stockholders'                   
            equity  . . . . . . . .     768,187   5,169,870      5,938,057 

                                   $ 11,924,596 $         0   $ 11,924,596 
                                   ============= ==========================

                                                
                                                



          (2) Issue of 1,723,290 shares of stock at $3.00 per share.<PAGE>





          Item 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                           LIQUIDITY AND CAPITAL RESOURCES


             The  capacity of a surety company  to underwrite insurance and
          reinsurance  is  based  on   maintaining  liquidity  and  capital
          resources  sufficient to pay  claims and expenses  as they become
          due.  Based on standards established by the National  Association
          of Insurance Commissioners (NAIC)  and promulgated by the Florida
          State  Board  of Insurance,  CCS could  write  premiums up  to an
          amount equal to six times the statutory surplus, or approximately
          $30,000,000 at  September  30,  1996.   The  primary  sources  of
          liquidity  for  the  Company  are  funds  generated  from  surety
          premiums,  investment   income,  and  proceeds   from  sales  and
          maturities of portfolio investments.   The principal expenditures
          are  payment of  losses and  loss adjustment  expenses, insurance
          operating expenses, and commissions.

             At  September 30,  1996, the  Company's  $11,924,596 of  total
          assets   calculated  based   on  generally   accepted  accounting
          principles were  distributed primarily as follows:   56.2 percent
          in  cash and investments 20.4 percent in receivables, 5.0 percent
          in deferred policy acquisition costs, 16.2 percent in intangibles
          and 2.2 percent in other assets.

             The Company maintains a liquid  operating position and follows
          investment  guidelines  that  are  intended  to  provide  for  an
          acceptable  return  on  investment  while  maintaining sufficient
          liquidity to meet its obligations.

             Net cash  (used) in  operating activities  was $(344,666)  and
          $(870,180) for the nine months ended September 30, 1996 and 1995,
          respectively.   The cash used  in both periods  was primarily the
          results  of  an  increase  in  trade  accounts receivable  and  a
          decrease in policy liabilities and accruals.

             Net  cash  provided  by (used  in)  investing  activities  was
          $(189,051) and  $(1,145,383) for the nine  months ended September
          30, 1996 and 1995, respectively.   The cash used in both  periods
          primarily related to the net increase in investment purchases and
          during 1995 for the purchase of one of the two insurance agencies
          purchased during 1995.

             The Company  believes  that  its  available  investments,  its
          short  term  borrowing  availability   and  its  cash  flow  from
          operations  in the future will  be sufficient to  meet its normal
          operating needs in the near term.<PAGE>





          Item 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                 RESULTS OF OPERATION

             COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995


             During  the nine months ended  September 30, 1996, net premium
          income totaled  $1,315,595 representing a decrease  of 33 percent
          from that of the same period in 1995 ($4,025,418).   The decrease
          is due to the decrease in the amount of premiums assumed  through
          a  pooling  agreement $1,662,189  which is  offset by  a $346,594
          increase in direct premiums.

             During  the  nine   months  ended  September  30,   1996,  net
          investment income of  $304,758 decreased by 22  percent from that
          of  the same  period  in 1995  ($389,704).   The  fluctuation  of
          investment  income   is attributed  to a  decrease in  short term
          investment  earnings of  approximately  $46,500;  a  decrease  in
          realized capital gains of  $56,100 which is offset by  a decrease
          of approximately $17,600 in investment expenses.

             During 1996,  other income,  which is  comprised primarily  of
          commissions  earned by the insurance agencies, increased $642,669
          representing  a 65%  change  to $1,627,910  (1996) from  $985,241
          (1995).  The increase is a result of agencies purchased in 1995.

             During the nine  months ended September 30, 1996, benefits and
          claims expenses  ($1,006,518) decreased $357,535  as compared  to
          the same period  in 1995 ($1,364,053).  The ratio  of benefit and
          claim expenses to net  premium income increased to 37  percent in
          1996 from  34 percent when  compared to the same  period in 1995,
          but  the decrease in benefit  expenses is primarily attributed to
          the reinsurance pools.

             During  the  nine   months  ended  September  30,   1996,  the
          amortization of  deferred policy  acquisition costs  decreased to
          $1,163,103 from $1,892,773  for the same period  in the preceding
          year.  The ratio  of amortization of deferred  policy acquisition
          costs to net premium income for  1996 of 43% decreased from  that
          of 1995  of 47%.  The  decrease is attributed to  the decrease in
          premiums assumed through a pooling agreement.

             During the  nine months  ended September  30, 1996,  operating
          expenses increased  by 28% to $2,476,285 from  $1,930,785 for the
          nine months ended September  30, 1995.  This  increase is due  to
          additional expenses associated with the operation of the agencies
          acquired during 1995 and the 1996  direct marketing operations of
          the insurance company.<PAGE>





          Item 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                 RESULTS OF OPERATION

             COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

             Net  interest  expense  increased to  $462,786  in  1996  from
          $393,277 in  1995.  The increase  during 1996 is due  to interest
          payments on  the loans in connection with  the agencies purchased
          in  1995.  Interest expense for affiliated loans are $372,066 and
          $338,221  during  1996 and  1995,  respectively.   1996  interest
          expense attributed to  agencies purchased in  1995 is $90,720  as
          compared to $55,056 during 1995.

             The Cumberland  Group's effective  tax rate  was 38.5  percent
          the nine  months ended September 30, 1995  and (-0-) for the nine
          months  ended September 30, 1996 due to the net operating loss in
          1996.   The tax  benefit generated for  the 1996 period  has been
          offset in its entirety by a valuation allowance.<PAGE>





          Item 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                 RESULTS OF OPERATION

             COMPARISON OF THREE MONTHS ENDED September 30, 1996 AND 1995

             During the three months ended September  30, 1996, net premium
          income  totaled $763,897  representing a  decrease of  46 percent
          from that of the same period in  1995 ($1,426,108).  The decrease
          is  due primarily  to  the decrease  in  the amount  of  premiums
          assumed through the pooling agreements  of approximately $866,562
          and  is  offset by  an increase  of  $204,351 in  direct premiums
          earned.

             During  the  three  months  ended   September  30,  1996,  net
          investment income of $68,018 decreased by 62 percent from that in
          1995 ($177,583).  The  decrease is due primarily to  net realized
          losses of $25,496 during  1996 as compared to net  realized gains
          of $74,675 during the same period in 1995.

             During  the  three  months ended  September  30,  1996,  other
          income of $601,777 increased by 28 percent from $467,986 in 1995,
          and  is  attributed to  commission  income  earned  from the  two
          agencies purchased during 1995.

             During the  three months  ended September  30, 1996,  benefits
          and claims  expenses decreased to $252,595 from  $641,197 for the
          three  months ended  September 30,  1995.   This decrease  is due
          primarily to  a decrease in  benefits and claims  associated with
          the reinsure pooling agreements.

             During  the  three  months  ended   September  30,  1996,  the
          amortization  of  deferred  policy  acquisition  costs  decreased
          $341,767 due primarily to a decrease in assumed premiums.

             During the  three months ended  September 30,  1996, operating
          expenses  increased $142,208  when compared  to the  three months
          ended September  1995.  The  increase is primarily  attributed to
          operating associated with the  direct marketing operations of the
          insurance company.

             Net  interest expense is consistent with  the rates charged on
          the  long-term  affiliates notes  payable  and  on notes  payable
          related to agencies purchased during 1995.

             Due  to  the  Company's  net   operating  loss  position,  the
          effective  tax rate was zero for the three months ended September
          30, 1996 and 1995.<PAGE>






                             PART II - OTHER INFORMATION


          Item 1.   Legal proceedings

                    None

          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

          Item 6.   Exhibits and reports on Form 8-K

                    (a)  The following  document is filed as  an exhibit to
                         this Quarterly Report on Form 10-Q.

                         27 - Financial Data Schedule (for SEC use only)

                    (b)  No  reports  on Form  8-K  were  filed during  the
                         quarter for which this report is filed.<PAGE>





                                      SIGNATURES

            Pursuant to the requirements  of the Securities Exchange Act of
          1934, the Registrant has duly caused  this report to be signed on
          its behalf by the undersigned thereunto duly authorized.

                                              CUMBERLAND HOLDINGS, INC.


           Date:  November 13, 1996        By:  /s/  Joseph M. Williams
                  ------------------------      -------------------------
                                                Joseph M. Williams
                                                President and
                                                Chief Executive Officer
                                                (Principle Executive
                                                   Officer)


           Date:  November 13, 1996        By:  /s/ Carol S. Black
                  ------------------------      -------------------------
                                                Carol S. Black
                                                Controller and
                                                Chief Financial Officer
                                                (Principle Accounting and
                                                   Financial Officer)<PAGE>