##### Table of Contents



U.S. Securities and Exchange Commission
 Washington, D.C. 20549
 Form 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 Commission file number 000-24498
 DIAMOND HILL INVESTMENT GROUP, INC.
  Ohio
    
    65-0190407(State of incorporation)
    
    (I.R.S. Employer Identification No.)
 325 John H. McConnell Blvd, Suite 200, Columbus, Ohio 43215
 (Registrants telephone number, including area code)
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o No: þ




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##### 



PAGEPart I: FINANCIAL INFORMATION
    
    3Item 1. Consolidated Financial Statements
    
    3Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    22Item 4. Controls and Procedures
    
    22Part II: OTHER INFORMATION
    
    22Item 1. Legal Proceedings
    
    22Item 1A. Risk Factors
    
    22Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    22Item 3. Defaults Upon Senior Securities
    
    22Item 4. Submission of Matters to a Vote of Security Holders
    
    23Item 5. Other Information
    
    23Item 6. Exhibits
    
    24Signatures
    
    25EX-31.1EX-31.2EX-32.1
  2




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##### Table of Contents



PART I FINANCIAL INFORMATION
 
 ITEM 1: Financial Statements
 Diamond Hill Investment Group, Inc.
Consolidated Balance Sheets
 9/30/2008
    
    
    12/31/2007(Unaudited)ASSETSCash and cash equivalents
    
    $
    28,870,788
    
    
    $
    11,783,278Investment portfolio
    
    
    27,437,554
    
    
    
    34,036,163Accounts receivable
    
    
    7,626,282
    
    
    
    5,694,274Prepaid expenses
    
    
    1,506,256
    
    
    
    1,115,728Fixed assets, net of depreciation
    
    
    861,847
    
    
    
    654,500Deferred taxes
    
    
    1,937,680
    
    
    
    Total assets
    
    $
    68,240,407
    
    
    $
    53,283,943LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesAccounts payable and accrued expenses
    
    $
    1,199,075
    
    
    $
    979,467Accrued incentive compensation
    
    
    10,990,000
    
    
    
    12,450,000Current and deferred taxes
    
    
    473,082
    
    
    
    546,944Total liabilities
    
    
    12,662,157
    
    
    
    13,976,411Commitments and contingencies
    
    
    
    
    
    
    Shareholders EquityCommon stock, no par value7,000,000 shares authorized;2,465,927 issued and outstanding at September 30, 2008;2,243,653 issued and outstanding at December 31, 2007
    
    
    41,460,171
    
    
    
    27,719,024Preferred stock, undesignated, 1,000,000 shares
authorized and unissued
    
    
    
    
    
    
    Deferred compensation
    
    
    (6,515,897
    )
    
    
    (4,056,015
    )Retained earnings
    
    
    20,633,976
    
    
    
    15,644,523Total shareholders equity
    
    
    55,578,250
    
    
    
    39,307,532Total liabilities and shareholders equity
    
    $
    68,240,407
    
    
    $
    53,283,943
  3




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##### Table of Contents



Diamond Hill Investment Group, Inc.
Consolidated Statements of Income (unaudited)
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007REVENUES:Investment advisory
    
    $
    11,577,006
    
    
    $
    9,215,700
    
    
    $
    31,466,240
    
    
    $
    25,979,666Performance incentive
    
    
    
    
    
    
    1,520
    
    
    
    378,881
    
    
    
    5,817Mutual fund administration, net
    
    
    1,770,894
    
    
    
    1,484,121
    
    
    
    4,801,714
    
    
    
    4,439,441Total revenue
    
    
    13,347,900
    
    
    
    10,701,341
    
    
    
    36,646,835
    
    
    
    30,424,924OPERATING EXPENSES:Compensation and related costs
    
    
    7,125,709
    
    
    
    5,074,607
    
    
    
    19,582,071
    
    
    
    14,948,034General and administrative
    
    
    789,248
    
    
    
    973,758
    
    
    
    1,946,986
    
    
    
    2,141,463Sales and marketing
    
    
    169,981
    
    
    
    106,809
    
    
    
    440,911
    
    
    
    348,619Third party distribution
    
    
    381,211
    
    
    
    404,419
    
    
    
    1,173,037
    
    
    
    1,127,680Mutual fund administration
    
    
    659,758
    
    
    
    608,258
    
    
    
    1,700,639
    
    
    
    1,816,813Total operating expenses
    
    
    9,125,907
    
    
    
    7,167,851
    
    
    
    24,843,644
    
    
    
    20,382,609NET OPERATING INCOME
    
    
    4,221,993
    
    
    
    3,533,490
    
    
    
    11,803,191
    
    
    
    10,042,315Investment return
    
    
    (2,319,263
    )
    
    
    534,594
    
    
    
    (4,025,376
    )
    
    
    733,720INCOME BEFORE TAXES
    
    
    1,902,730
    
    
    
    4,068,084
    
    
    
    7,777,815
    
    
    
    10,776,035Income tax provision
    
    
    (678,339
    )
    
    
    (1,419,791
    )
    
    
    (2,788,362
    )
    
    
    (3,719,733
    )NET INCOME
    
    $
    1,224,391
    
    
    $
    2,648,293
    
    
    $
    4,989,453
    
    
    $
    7,056,302Earnings per shareBasic
    
    $
    0.50
    
    
    $
    1.20
    
    
    $
    2.09
    
    
    $
    3.31Diluted
    
    $
    0.50
    
    
    $
    1.14
    
    
    $
    2.08
    
    
    $
    3.13Weighted average shares outstandingBasic
    
    
    2,430,772
    
    
    
    2,204,641
    
    
    
    2,383,621
    
    
    
    2,130,867Diluted
    
    
    2,444,340
    
    
    
    2,322,281
    
    
    
    2,396,999
    
    
    
    2,251,407
  4




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Diamond Hill Investment Group, Inc.
Consolidated Statements of Cash Flow (unaudited)
 Nine Months Ended September 30,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net Income
    
    $
    4,989,453
    
    
    $
    7,056,302Adjustments to reconcile net income to net cash provided by
(used in) operating activities:Depreciation on furniture and equipment
    
    
    131,610
    
    
    
    113,089Amortization of deferred compensation
    
    
    2,287,358
    
    
    
    940,204(Increase) in accounts receivable
    
    
    (1,932,008
    )
    
    
    (988,828
    )Change in deferred taxes
    
    
    (2,484,624
    )
    
    
    1,762,158Stock option expense
    
    
    2,233
    
    
    
    6,812Noncash director fee expense
    
    
    167,281
    
    
    
    Unrealized (gains)/losses on investments
    
    
    3,275,157
    
    
    
    (195,853
    )Other changes in assets and liabilities
    
    
    7,394,451
    
    
    
    (4,997,692
    )Net cash provided by operating activities
    
    
    13,830,911
    
    
    
    3,696,192CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (338,957
    )
    
    
    (267,623
    )Investment portfolio activity
    
    
    3,323,452
    
    
    
    (129,544
    )Net cash provided by (used in) investing activitie
    
    
    2,984,495
    
    
    
    (397,167
    )CASH FLOWS FROM FINANCING ACTIVITIES:Payment for repurchase of common shares
    
    
    (862,115
    )
    
    
    Payment of taxes withheld on option/warrant exercises
    
    
    (167,335
    )
    
    
    (8,020,273
    )Proceeds from common stock issuance
    
    
    1,301,554
    
    
    
    13,042,390Purchase of treasury stock
    
    
    
    
    
    
    (1,344,958
    )Sale of treasury stock
    
    
    
    
    
    
    1,440,694Net cash provided by financing activities
    
    
    272,104
    
    
    
    5,117,853CASH AND CASH EQUIVALENTSNet change during the period
    
    
    17,087,510
    
    
    
    8,416,878At beginning of period
    
    
    11,783,278
    
    
    
    9,836,989At end of period
    
    $
    28,870,788
    
    
    $
    18,253,867Cash paid during the period for:Interest
    
    
    
    
    
    
    Income taxes
    
    
    1,905,000
    
    
    
    520,560Noncash Transactions during the period for:Common Stock Issued as Incentive Compensation
    
    
    5,754,140
    
    
    
    5,478,718
  5




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##### Table of Contents



Diamond Hill Investment Group, Inc.
Notes to Consolidated Financial Statements (unaudited)
 Organization
     Significant Accounting Policies
  Principles of Consolidation
  Segment Information
  Cash and Cash Equivalents
  6




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##### Table of Contents



Significant Accounting Policies (Continued)
 Accounts Receivable
  Valuation of Investment Portfolio
   Limited Partnership Interests
  Furniture and Equipment
  Revenue Recognition  General
  7




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##### Table of Contents



Significant Accounting Policies (Continued)
 Revenue Recognition  Performance Incentive Revenue
  As Of September 30,2008
    
    
    2007AUM  Contractual Period Ends Quarterly
    
    $
    249,888,929
    
    
    $
    230,210,018AUM  Contractual Period Ends Annually
    
    
    299,504,260
    
    
    
    391,965,865Total AUM Subject to Performance Incentive
    
    $
    549,393,189
    
    
    $
    622,175,882
 For The Three Months Ending Sept 30,
    
    For The Nine Months Ending Sept 30,2008
    
    2007
    
    2008
    
    2007Performance Incentive Fees  Method 1
    
    $
    
    
    
    $
    1,520
    
    
    $
    378,881
    
    
    $
    5,817Performance Incentive Fees  Method 2
    
    $
    
    
    
    $
    44,282
    
    
    $
    378,881
    
    
    $
    48,579
  Revenue Recognition  Mutual Fund Administration
  8




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##### Table of Contents



Significant Accounting Policies (Continued)
 Revenue Recognition  Mutual Fund Administration (Continued)
 Three Months Ended Sept. 30,
    
    
    Nine Months Ended Sept. 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Mutual fund admin revenue, gross
    
    $
    2,647,960
    
    
    $
    2,035,329
    
    
    $
    7,161,024
    
    
    $
    6,195,872Mutual fund admin, fund related expense
    
    
    892,451
    
    
    
    607,548
    
    
    
    2,378,500
    
    
    
    1,846,107Mutual fund admin revenue, net of fund related expenses
    
    
    1,755,509
    
    
    
    1,427,781
    
    
    
    4,782,524
    
    
    
    4,349,765C-Share broker commission advance repayments
    
    
    502,519
    
    
    
    550,857
    
    
    
    1,333,370
    
    
    
    1,464,002C-Share broker commission amortization
    
    
    487,134
    
    
    
    494,517
    
    
    
    1,314,180
    
    
    
    1,374,326C-Share financing activity, net
    
    
    15,385
    
    
    
    56,340
    
    
    
    19,190
    
    
    
    89,676Mutual fund administration revenue, net
    
    $
    1,770,894
    
    
    $
    1,484,121
    
    
    $
    4,801,714
    
    
    $
    4,439,441
 Third Party Distribution Expense
  Income Taxes
   Earnings Per Share
  Reclassifications
  9




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##### Table of Contents



Investment Portfolio
  September 30,
    
    
    December 31,2008
    
    
    2007Diamond Hill Small Cap Fund
    
    $
    122,187
    
    
    $
    1,039,517Diamond Hill Small-Mid Cap Fund
    
    
    1,772,624
    
    
    
    1,016,243Diamond Hill Large Cap Fund
    
    
    305,737
    
    
    
    1,017,340Diamond Hill Select Fund
    
    
    1,404,783
    
    
    
    1,015,803Diamond Hill Long-Short Fund
    
    
    931,868
    
    
    
    1,027,615Diamond Hill Financial Long-Short Fund
    
    
    62,173
    
    
    
    1,025,356Diamond Hill Strategic Income Fund
    
    
    4,019,180
    
    
    
    3,765,566Diamond Hill
Financial Trends Fund, Inc.
    
    
    661,741
    
    
    
    Diamond Hill Investment Partners, L.P.
    
    
    8,965,432
    
    
    
    10,070,021Diamond Hill Investment Partners II, L.P.
    
    
    4,508,972
    
    
    
    5,058,702Other marketable equity securities
    
    
    4,682,857
    
    
    
    9,000,000Total Investment Portfolio
    
    $
    27,437,554
    
    
    $
    34,036,163
  September 30,
    
    December 31,2008
    
    2007Total partnership assets
    
    $
    304,344,214
    
    
    $
    360,372,685Total partnership liabilities
    
    
    52,787,420
    
    
    
    80,007,267Net partnership assets
    
    
    251,556,794
    
    
    
    280,365,418Net partnership income (loss)
    
    
    (34,344,422
    )
    
    
    6,581,829DHCMs portion of net assets
    
    
    13,474,404
    
    
    
    15,128,723DHCMs portion of net income (loss)
    
    
    (1,651,319
    )
    
    
    562,469
  10




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##### Table of Contents



Capital Stock
 Common Shares
  Authorization of Preferred Shares
  Stock-Based Compensation
 Equity Incentive Plans
 2005 Employee and Director Equity Incentive Plan
  1993 Non-qualified and Incentive Stock Option Plan
  Equity Compensation Grants
  11




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##### Table of Contents



Stock-Based Compensation (Continued)
 401(k) Plan
  Stock Options and Warrants
   Options
    
    WarrantsWeighted Average
    
    
    
    
    
    Weighted AverageShares
    
    Exercise Price
    
    Shares
    
    Exercise PriceOustanding December 31, 2006
    
    
    283,102
    
    
    $
    14.60
    
    
    
    249,400
    
    
    $
    12.57Exercisable December 31, 2006
    
    
    243,102
    
    
    $
    16.26
    
    
    
    249,400
    
    
    $
    12.57Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expired / Forfeited
    
    
    
    
    
    
    
    
    
    
    2,000
    
    
    
    10.63Exercised
    
    
    178,602
    
    
    
    17.36
    
    
    
    222,000
    
    
    
    8.65Oustanding September 30, 2007
    
    
    104,500
    
    
    $
    9.87
    
    
    
    25,400
    
    
    $
    47.00Exercisable September 30, 2007
    
    
    84,500
    
    
    $
    11.14
    
    
    
    25,400
    
    
    $
    47.00Oustanding December 31, 2007
    
    
    92,500
    
    
    $
    10.40
    
    
    
    25,400
    
    
    $
    47.00Exercisable December 31, 2007
    
    
    72,500
    
    
    $
    12.03
    
    
    
    25,400
    
    
    $
    47.00Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expired / Forfeited
    
    
    
    
    
    
    
    
    
    
    12,000
    
    
    
    73.75Exercised
    
    
    85,500
    
    
    
    8.95
    
    
    
    3,000
    
    
    
    56.67Oustanding September 30, 2008
    
    
    7,000
    
    
    $
    28.10
    
    
    
    10,400
    
    
    $
    13.35Exercisable September 30, 2008
    
    
    7,000
    
    
    $
    28.10
    
    
    
    10,400
    
    
    $
    13.35
  12




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##### Table of Contents



Stock-Based Compensation (Continued)
 Stock Options and Warrants (Continued)
  Options
    
    
    WarrantsNumber
    
    
    Remaining
    
    
    
    
    
    
    Number
    
    
    RemainingOutstanding
    
    
    Life
    
    
    
    
    
    
    Outstanding
    
    
    Lifeand Exercisable
    
    
    In Years
    
    
    Exercise Price
    
    
    and Exercisable
    
    
    In Years
    
    
    Exercise Price7,000
    
    
    
    2.22
    
    
    $
    28.10
    
    
    
    400
    
    
    
    0.25
    
    
    $
    22.202,000
    
    
    
    0.62
    
    
    
    22.507,000
    
    
    
    2.22
    
    
    
    
    
    
    
    6,000
    
    
    
    1.41
    
    
    
    11.252,000
    
    
    
    1.61
    
    
    
    8.7510,400
    
    
    
    1.25
  Operating Leases
  2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    2013$
    63,000
    
    
    $
    259,000
    
    
    $
    267,000
    
    
    $
    249,000
    
    
    $
    254,000
    
    
    $
    130,000
  Income Taxes
  Tax Impact of Stock Option and Warrant Exercises
  13




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##### Table of Contents



Earnings Per Share
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Basic and Diluted net income
    
    $
    1,224,391
    
    
    $
    2,648,293
    
    
    $
    4,989,453
    
    
    $
    7,056,302Weighted average number of outstanding sharesBasic
    
    
    2,430,772
    
    
    
    2,204,641
    
    
    
    2,383,621
    
    
    
    2,130,867Diluted
    
    
    2,444,340
    
    
    
    2,322,281
    
    
    
    2,396,999
    
    
    
    2,251,407Earnings per shareBasic
    
    $
    0.50
    
    
    $
    1.20
    
    
    $
    2.09
    
    
    $
    3.31Diluted
    
    $
    0.50
    
    
    $
    1.14
    
    
    $
    2.08
    
    
    $
    3.13
  Commitments and Contingencies
  Subsequent Events
  14




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##### Table of Contents



ITEM 2: Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-looking Statements
  General
    15




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##### Table of Contents



Assets Under Management
  Assets Under Management by ProductAs of September 30,(in millions)
    
    2008
    
    2007
    
    % ChangeMutual funds
    
    $
    3,864
    
    
    $
    2,889
    
    
    
    34
    %Separate accounts
    
    
    1,315
    
    
    
    1,000
    
    
    
    32
    %Private investment funds
    
    
    369
    
    
    
    491
    
    
    
    -25
    %Total
    
    $
    5,548
    
    
    $
    4,380
    
    
    
    27
    %
 Assets Under Management by ObjectiveAs of September 30,(in millions)
    
    2008
    
    2007
    
    % ChangeSmall and Small-Mid Cap
    
    $
    582
    
    
    $
    660
    
    
    
    -12
    %Large Cap and Select
    
    
    1,422
    
    
    
    1,028
    
    
    
    38
    %Long-Short
    
    
    3,363
    
    
    
    2,394
    
    
    
    40
    %Strategic and fixed income
    
    
    181
    
    
    
    298
    
    
    
    -39
    %Total
    
    $
    5,548
    
    
    $
    4,380
    
    
    
    27
    %
 Change in Assets Under ManagementFor the Nine Months Ended September 30,(in millions)
    
    2008
    
    2007AUM at beginning of the period
    
    $
    4,403
    
    
    $
    3,708Net cash inflows (outflows)mutual funds
    
    
    1,482
    
    
    
    347separate accounts
    
    
    545
    
    
    
    51private investment funds
    
    
    (73
    )
    
    
    1741,954
    
    
    
    572Net market appreciation (depreciation) and income
    
    
    (809
    )
    
    
    100Increase during the period
    
    
    1,145
    
    
    
    672AUM at end of the period
    
    $
    5,548
    
    
    $
    4,380
 Consolidated Results of Operations
  Three Months Ended September 30,
    
    Nine Months Ended September 30,2008
    
    2007
    
    % Change
    
    2008
    
    2007
    
    % ChangeNet income (in thousands)
    
    $
    1,224
    
    
    $
    2,648
    
    
    
    -54
    %
    
    $
    4,989
    
    
    $
    7,056
    
    
    
    -29
    %Net income per shareBasic
    
    $
    0.50
    
    
    $
    1.20
    
    
    
    -58
    %
    
    $
    2.09
    
    
    $
    3.31
    
    
    
    -37
    %Diluted
    
    $
    0.50
    
    
    $
    1.14
    
    
    
    -56
    %
    
    $
    2.08
    
    
    $
    3.13
    
    
    
    -34
    %Weighted average shares
outstanding (in thousands)Basic
    
    
    2,431
    
    
    
    2,205
    
    
    
    
    
    
    
    2,384
    
    
    
    2,131Diluted
    
    
    2,444
    
    
    
    2,322
    
    
    
    
    
    
    
    2,397
    
    
    
    2,251
 16




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##### Table of Contents



Three Months Ended September 30, 2008 compared with Three Months Ended September 30, 2007
  Revenue
 Three Months EndedSeptember 30,(in Thousands)
    
    2008
    
    2007
    
    % ChangeInvestment advisory
    
    $
    11,577
    
    
    $
    9,216
    
    
    
    26
    %Performance incentive
    
    
    
    
    
    
    1
    
    
    
    n.m.Mutual fund administration, net
    
    
    1,771
    
    
    
    1,484
    
    
    
    19
    %Total
    
    $
    13,348
    
    
    $
    10,701
    
    
    
    25
    %
  Investment Advisory Fees.
 Performance Incentive Fees.
 Mutual Fund Administration Fees.
 17




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##### Table of Contents



Expenses
 Three Months EndedSeptember 30,(in Thousands)
    
    2008
    
    2007
    
    % ChangeCompensation and related costs
    
    $
    7,126
    
    
    $
    5,075
    
    
    
    40
    %General and administrative
    
    
    789
    
    
    
    974
    
    
    
    -19
    %Sales and marketing
    
    
    170
    
    
    
    107
    
    
    
    59
    %Third party distribution
    
    
    381
    
    
    
    404
    
    
    
    -6
    %Mutual fund administration
    
    
    660
    
    
    
    608
    
    
    
    9
    %Total
    
    $
    9,126
    
    
    $
    7,168
    
    
    
    27
    %
 Compensation and Related Costs.
 General and Administrative.
 Sales and Marketing.
 Third Party Distribution.
 Mutual Fund Administration.
 Nine Months Ended September 30, 2008 compared with Nine Months Ended September 30, 2007
  18




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##### Table of Contents



Revenue
 Nine Months EndedSeptember 30,(in Thousands)
    
    2008
    
    2007
    
    % ChangeInvestment advisory
    
    $
    31,466
    
    
    $
    25,980
    
    
    
    21
    %Performance incentive
    
    
    379
    
    
    
    6
    
    
    
    n.m.Mutual fund administration, net
    
    
    4,802
    
    
    
    4,439
    
    
    
    8
    %Total
    
    $
    36,647
    
    
    $
    30,425
    
    
    
    20
    %
  Investment Advisory Fees.
 Performance Incentive Fees.
 Mutual Fund Administration Fees.
 19




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##### Table of Contents



Expenses
 Nine Months EndedSeptember 30,(in Thousands)
    
    2008
    
    2007
    
    % ChangeCompensation and related costs
    
    $
    19,582
    
    
    $
    14,948
    
    
    
    31
    %General and administrative
    
    
    1,947
    
    
    
    2,141
    
    
    
    -9
    %Sales and marketing
    
    
    441
    
    
    
    349
    
    
    
    26
    %Third party distribution
    
    
    1,173
    
    
    
    1,128
    
    
    
    4
    %Mutual fund administration
    
    
    1,701
    
    
    
    1,817
    
    
    
    -6
    %Total
    
    $
    24,844
    
    
    $
    20,383
    
    
    
    22
    %
 Compensation and Related Costs.
 General and Administrative.
 Sales and Marketing.
 Third Party Distribution.
 Mutual Fund Administration.
 Beacon Hill Fund Services
  Liquidity and Capital Resources
  20




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##### Table of Contents



Off-Balance Sheet Arrangements
  Critical Accounting Policies and Estimates
  21




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##### Table of Contents



ITEM 3: Quantitative and Qualitative Disclosures About Market Risk
  
 ITEM 4: Controls and Procedures
  
 PART II: OTHER INFORMATION
 
 ITEM 1: Legal Proceedings 
 
 ITEM 1A: Risk Factors
  
 ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds
  Total Number
    
    Maximum Numberof Shares Purchased
    
    of Shares That Mayas part of a Publicly
    
    Yet Be PurchasedTotal Number
    
    Average Price
    
    Announced Plans
    
    Under the Plans orPeriod
    
    of Shares Purchased
    
    Paid Per Share
    
    or Programs
    
    Programs (1)July 1, 2008 through
July 31, 2008
    
    
    9,577
    
    
    
    77.81
    
    
    
    16,105
    
    
    
    333,895August 1, 2008 through
August 31, 2008
    
    
    
    
    
    
    
    
    
    
    16,105
    
    
    
    333,895September 1, 2008 through
September 30, 2008
    
    
    
    
    
    
    
    
    
    
    16,105
    
    
    
    333,895
 
 (1) -
    
    The Companys current share repurchase program was announced on August 9, 2007. The board of
directors authorized management to repurchase up to 350,000 shares of its common stock in the open
market and in private transactions in accordance with applicable securities laws. The Companys
stock repurchase program is not subject to an expiration date. 
 ITEM 3: Defaults Upon Senior Securities
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##### Table of Contents



ITEM 4: Submission of Matters to a Vote of Security Holders
 
 ITEM 5: Other Information
 23




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##### Table of Contents



ITEM 6: Exhibits
 3.1
    
    Amended and Restated Articles of Incorporation of the Company. (Incorporated by
reference from Form 8-K Current Report for the event on May 2, 2002 filed with the SEC
on May 7, 2002; File No. 000-24498.)3.2
    
    Code of Regulations of the Company. (Incorporated by reference from Form 8-K Current
Report for the event on May 2, 2002 filed with the SEC on May 7, 2002; File No.
000-24498.)31.1
    
    Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).31.2
    
    Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).32.1
    
    Section 1350 Certifications.
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##### Table of Contents



SIGNATURES
   Date
    
    Title
    
    SignatureNovember 7, 2008
    
    President, Chief Executive Officer, and
a Director
    
    /s/ R. H. Dillon

R. H. DillonNovember 7, 2008
    
    Chief Financial Officer, Treasurer, and
Secretary
    
    /s/ James F. Laird

James F. Laird
 25