10QSB

United States Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-QSB

(Mark One)

þ Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2007.

o Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                                          to                                         .

Commission file number:    0-25679

FIRST AMERICAN CAPITAL CORPORATION

(Exact Name of small business issuer in its charter)

Kansas	48-1187574
(State of incorporation)	(I.R.S. Employer Identification Number)

10950 Grandview Drive, Suite 600
Overland Park, Kansas 66210
(Address of principal executive offices)

Issuer’s telephone number    (913) 661-0123

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

Common Stock, $.01 Par Value — 3,085,817 shares as of April 19, 2007

Transitional Small Business Disclosure Format (check one): Yes o No þ

FIRST AMERICAN CAPITAL CORPORATION

INDEX TO FORM 10-QSB

	Page Numbers
PART I   FINANCIAL INFORMATION		3
Item 1.   Financial Statements		3
Condensed Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006		3
Condensed Consolidated Statements of Operations for the three months ended March 31, 2007 and 2006		5
Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2007 and 2006		6
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2007 and 2006		7
Notes to Condensed Consolidated Financial Statements		9
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations		11
Item 3.   Controls and Procedures		19
PART II   OTHER INFORMATION		20
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds		20
Item 4.   Submission of Matters to a Vote of Security Holders		20
Item 5.   Other Information		21
Item 6.   Exhibits		21
SIGNATURES		22
Exhibit 10.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

2

PART I

FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

FIRST AMERICAN CAPITAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	March 31,		December 31,
Assets	2007		2006
Investments:
Securities available-for-sale, at fair value:
Fixed maturities (amortized cost, $15,161,196 in 2007 and $12,532,067 in 2006)	$	14,950,184	$	12,298,780
Equity securities (cost of $258,400 in 2007 and $258,400 in 2006)		281,180		283,060
Investments in real estate		274,564		274,564
Policy loans		151,653		166,026
Mortgage loans on real estate		1,918,144		1,937,281
Other investments		3,467,506		3,067,369
Total investments		21,043,231		18,027,080
Cash and cash equivalents		3,339,516		3,542,928
Accrued investment income		234,789		233,858
Accounts receivable		326,934		281,894
Reinsurance receivables		150,854		112,145
Deferred policy acquisition costs (net of accumulated amortization of $4,613,795 in 2007 and $4,444,081 in 2006)		5,296,580		5,209,693
Property and equipment (net of accumulated depreciation of $978,075 in 2007 and $945,228 in 2006)		2,596,856		2,627,586
Other assets		745,666		1,221,559
Total assets	$	33,734,426	$	31,256,743

See notes to condensed consolidated financial statements.

3

FIRST AMERICAN CAPITAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)

	(Unaudited)
	March 31,			December 31,
Liabilities and Shareholders’ Equity	2007			2006
Policy and contract liabilities:
Future annuity benefits	$	15,378,042		$	13,658,174
Future policy benefits		6,438,680			6,109,055
Liability for policy claims		145,271			211,932
Policyholder premium deposits		93,801			104,038
Deposits on pending policy applications		127,161			27,788
Reinsurance premiums payable		49,514			54,732
Amounts held under reinsurance		1,071			18,321
Total policy and contract liabilities		22,233,540			20,184,040
Commissions, salaries, wages and benefits payable		70,897			49,661
Other liabilities		331,800			257,085
Deferred federal income taxes payable		512,459			508,380
Total liabilities		23,148,696			20,999,166
Shareholders’ equity:
Common stock, $.01 par value, 25,000,000 shares authorized; 3,214,487 issued and outstanding in 2007; and 2,666,667 issued and outstanding in 2006		32,145			26,667
Additional paid in capital		14,919,456			14,530,631
Accumulated deficit		(4,215,270	)		(4,132,804	)
Accumulated other comprehensive loss		(150,601	)		(166,917	)
Total shareholders’ equity		10,585,730			10,257,577
Total liabilities and shareholders’ equity	$	33,734,426		$	31,256,743

See notes to condensed consolidated financial statements.

4

FIRST AMERICAN CAPITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	(Unaudited)
	Three months ended
	March 31,			March 31,
	2007			2006
Revenues:
Gross premium income	$	1,219,175		$	1,263,966
Reinsurance premiums assumed		2,587			2,166
Reinsurance premiums ceded		(148,698	)		(162,353	)
Net premium income		1,073,064			1,103,779
Net investment income		322,631			265,966
Net realized investment loss		(46	)		(1,724	)
Rental income		59,596			59,058
Consulting fees and other income		255,207			250
Total revenue		1,710,452			1,427,329
Benefits and expenses:
Increase in policy reserves		329,626			249,977
Policyholder surrender values		86,706			71,365
Interest credited on annuities and premium deposits		172,744			126,304
Death claims		313,537			132,564
Commissions		253,414			250,321
Policy acquisition costs deferred		(250,746	)		(274,994	)
Amortization of deferred policy acquisition costs		163,859			155,916
Salaries, wages, and employee benefits		348,936			270,832
Miscellaneous taxes		29,641			27,128
Other operating costs and expenses		345,201			359,093
Total benefits and expenses		1,792,918			1,368,506
Income (Loss) before income tax expense		(82,466	)		58,823
Income tax expense (benefit)		—			—
Net Income (Loss)	$	(82,466	)	$	58,823
Net Income (Loss) per common share — basic and diluted	$	(0.03	)	$	0.04

See notes to condensed consolidated financial statements.

5

FIRST AMERICAN CAPITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	(Unaudited)
	Three months ended
	March 31,			March 31,
	2007			2006
Net income (loss)	$	(82,466	)	$	58,823
Unrealized gain (loss) on available-for-sale securities:
Unrealized holding gain (loss) during the period		20,349			(304,367	)
Less: Reclassification for gains (loss) included in net income		(46	)		(1,724	)
Tax benefit (expense)		(4,079	)		62,863
Other comprehensive income (loss)		16,316			(239,780	)
Comprehensive income (loss)	$	(66,150	)	$	(180,957	)

See notes to condensed consolidated financial statements.

6

FIRST AMERICAN CAPITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	(Unaudited)
	Three months ended
	March 31,			March 31,
	2007			2006
Operating activities:
Net income (loss)	$	(82,466	)	$	58,823
Adjustments to reconcile net loss to net cash provided by operating activities:
Interest credited on annuities and premium deposits		172,744			126,304
Net realized investment loss		46			1,724
Provision for depreciation		33,465			35,425
Amortization of premium and accretion of discount on fixed maturity and short-term investments		(47,366	)		(11,619	)
Acquisition costs capitalized		(250,746	)		(274,994	)
Amortization of deferred acquisition costs		163,859			155,916
(Increase) decrease in assets:
Accrued investment income		(931	)		22,873
Accounts receivable		(45,040	)		117,830
Reinsurance receivables		(38,709	)		25,559
Policy loans		14,373			(23,576	)
Other assets		475,893			11,679
Increase (decrease) in liabilities:
Future policy benefits		329,625			249,977
Liability for policy claims		(66,661	)		(17,301	)
Deposits on pending policy applications		99,373			38,744
Reinsurance premiums payable		(5,218	)		(43,521	)
Amounts held under reinsurance		(17,250	)		(81,259	)
Commissions, salaries, wages and benefits payable		21,236			(75,137	)
Other liabilities		74,714			58,974
Net cash provided by operating activities	$	830,941		$	376,421

See notes to condensed consolidated financial statements.

7

FIRST AMERICAN CAPITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

	(Unaudited)
	Three months ended
	March 31,			March 31,
	2007			2006
Investing activities:
Purchase of available-for-sale fixed maturities	$	(2,651,533	)	$	(565,852	)
Sale of available-for-sale fixed maturities		—			69,346
Maturity of available-for-sale fixed maturities		11,912			50,000
Additions to property and equipment		(2,734	)		(7,755	)
Purchase of other investments		(506,000	)		(130,800	)
Maturity of other investments		163,677			57,812
Payments received on mortgage loans		19,137			13,590
Net cash used in investing activities		(2,965,541	)		(513,659	)
Financing activities:
Payments on notes payable		—			(24,789	)
Deposits on annuity contracts		1,801,473			1,243,050
Surrenders on annuity contracts		(253,310	)		(158,912	)
Policyholder premium deposits		2,431			—
Withdrawals on policyholder premium deposits		(13,709	)		(12,988	)
Proceeds from redemption of warrant		394,303			—
Net cash provided by financing activities		1,931,188			1,046,361
Increase (decrease) in cash and cash equivalents		(203,412	)		909,123
Cash and cash equivalents, beginning of period		3,542,928			249,109
Cash and cash equivalents, end of period	$	3,339,516		$	1,158,232
Supplemental disclosure of cash activities:
Interest paid	$	—		$	36,446

See notes to condensed consolidated financial statements.

8

FIRST AMERICAN CAPITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying condensed consolidated financial statements of First American Capital Corporation and its Subsidiaries (the “Company”) for the three month periods ended March 31, 2007 and 2006 are unaudited. However, in the opinion of the Company, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been reflected therein.

Certain financial information which is normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, but which is not required for interim reporting purposes, has been omitted. The accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Form 10-KSB for the fiscal year ended December 31, 2006. The results of operations for the period are not necessarily indicative of the results to be expected for the full year.

2. Net Income (Loss) Per Common Share

Basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted net income (loss) is calculated by including the weighted average effect of dilutive warrants outstanding during the periods. The weighted average number of shares issuable upon the exercise of outstanding warrants assumes that the applicable proceeds from such exercises are used to acquire treasury shares at the average price of common stock during the periods. Basic and diluted net income (loss) per share for the three months ended March 31, 2007 and 2006, were determined as follows (adjusted for the 1-for-3 reverse stock split approved by the Company’s shareholders on January 31, 2007 and effective as of April 13, 2007):

	Three months ended
	March 31,			March 31,
	2007			2006
Numerator:
Net income (loss)	$	(82,466	)	$	58,823
Denominator:
Average common shares outstanding		9,095,640			4,257,057
Effect of 1-for-3 reverse stock split		(6,063,760	)		(2,838,038	)
Shares used for diluted earnings per share		3,031,880			1,419,019
Earnings per share — basic and diluted	$	(0.03	)	$	0.04

On April 2, 2007, the Company concluded a modified “Dutch auction” tender offer for shares of its common stock. The Company accepted for purchase 379,248 (126,416 post 1-for-3 reverse stock split) shares of its common stock at a price of $1.60 ($4.80 post split) per share for an aggregate purchase price of approximately $607,000. In connection with the execution of the reverse stock split, the Company purchased an additional 2,253 shares of common stock in accordance with its commitment to purchase, for cash, any fractional shares that resulted from the reverse stock split. All shares purchased by the Company in connection with the tender offer and reverse stock split were considered outstanding for the calculation of earnings per share — basic and diluted for the three months ended March 31, 2007. As of April 19, 2007, the Company had 3,085,817 shares of common stock outstanding.

9

3. Federal Income Taxes

Current taxes are provided based on estimates of the projected effective annual tax rate. Deferred taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company has elected to file a consolidated federal income tax return with its subsidiaries, First Life America Corporation (“FLAC”) and Brooke Capital Advisors, Inc., (“BCA”) for 2007 and 2006. FLAC is taxed as a life insurance company under the provisions of the Internal Revenue Code and had to file a separate tax return for its initial five years of existence, which covers the period from November 1998 through December 31, 2002.

4. Reinsurance

Effective September 29, 2005, the Company and Wilton Reassurance Company (“Wilton Re”), of Wilton, CT, executed a binding letter of intent whereby both parties agreed that the Company would cede the simplified issue version of its Golden Eagle Whole Life (Final Expense) product to Wilton Re on a 50/50 quota share original term coinsurance basis. The letter of intent was executed on a retroactive basis to cover all applicable business issued by the Company subsequent to January 1, 2005. Wilton Re has agreed to provide various commission and expense allowances to the Company in exchange for the Company ceding 50% of the applicable premiums to Wilton Re as they are collected. As of June 24, 2006, Wilton Re terminated the reinsurance agreement, for new business issued after the termination date.

5. Other Regulatory Matters

The Company believes that it is currently in material compliance with all state, federal and foreign regulations to which the Company is subject and the Company is unaware of any pending or threatened investigation, action or proceeding by any state federal or foreign regulatory agency involving the Company that would have a material adverse effect on the Company’s operations.

FLAC is licensed to transact life and annuity business in the states of Kansas, Texas, Illinois, Oklahoma, North Dakota, Kentucky, Nebraska and Ohio. In the fourth quarter 2005, Ohio suspended FLAC’s license because its statutory capital and surplus fell below the minimum amount of $2,500,000 as of September 30, 2005. This shortfall was corrected as of December 31, 2005 and Ohio reinstated FLAC’s license in 2006. FLAC continues to operate under a Confidential Memorandum of Understanding which restricts its ability to write new business in Ohio; however, management believes this restriction will be removed in 2007 because of FLAC’s profitable operations in 2006 and its 46% increase in its capital and surplus at December 31, 2006 as compared to December 31, 2005.

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6. Financial Information Relating to Industry Segments

The operations of the Company and its subsidiaries have been classified into three operating segments as follows: life and annuity insurance operations (conducted by FLAC and by FACC pursuant to a shared Services Agreement); brokerage operations conducted by BCA and corporate operations. All sales of life insurance by FLAC are to unaffiliated customers. Financial information related to these three segments of the Company’s business is presented below as of the dates and for the periods indicated:

	(Unaudited)
	Three months ended
	March 31,			March 31,
	2007			2006
Revenues:
Life and annuity insurance operations	$	1,447,921		$	1,365,394
Brokerage operations		255,207			215
Corporate		7,324			61,720
Total	$	1,710,452		$	1,427,329
Income (loss) before income taxes:
Life and annuity insurance operations	$	7,391		$	244,467
Brokerage operations		79,125			(4,946	)
Corporate		(168,982	)		(180,698	)
Total	$	(82,466	)	$	58,823
Depreciation and amortization expense:
Life and annuity insurance operations	$	181,106		$	155,916
Brokerage operations		49			146
Corporate		16,169			35,279
Total	$	197,324		$	191,341

	March 31,		December 31,
	2007		2006
Assets:
Life and annuity insurance operations	$	30,528,120	$	28,570,332
Brokerage operations		1,438,105		1,198,212
Corporate		1,768,201		1,488,199
Total	$	33,734,426	$	31,256,743

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report on Form 10 QSB for the quarter and three-month period ended March 31, 2007 includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and is subject to the safe harbor created by that act. Among other things, these statements relate to our financial condition, results of operations and business. These forward-looking statements are generally identified by the words or phrases “would be,” “will allow,” “expect to,” “intend to,” “will continue,” “is anticipated,” “estimate,” “plan,” “may,” “believe,” “implement,” “build,” “project” or similar expressions and references to strategies or plans.

While the Company provides forward-looking statements to assist in the understanding of the Company’s anticipated future financial performance, the Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date that the Company makes them. Forward-looking statements are subject to significant risks and uncertainties, many of which are beyond the Company’s control. Although the Company believes that the assumptions underlying its forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Actual results may differ materially from those contained in or implied by these forward-looking statements for a variety of reasons. These risks and uncertainties are discussed in more detail in the Company’s annual report on Form 10-KSB for the fiscal year ended December 31, 2006, in its other filings with the Securities and Exchange Commission, and in this section of this report and include, but are not limited to: the uncertainty that plans relating to the Company’s acquisition of a federal savings bank will be successfully implemented, the uncertainty as to the effect of the potential transaction on the earnings and operations of the Company; the uncertainty that the Company will achieve short-term and long-term profitability and growth goals, uncertainties associated with market acceptance of and demand for the products and services of the Company or its subsidiaries, the impact of competitive products and pricing, the dependence on third-party suppliers and their pricing, the availability of capital and funding sources, the exposure to market risks, uncertainties associated with

11

the development of technology, changes in the law and in economic, political and regulatory environments, the impact of inflation and general economic conditions on the Company’s liquidity and capital resources, changes in management, the dependence on intellectual property rights, the effectiveness of internal controls, and risks and factors described from time to time in reports and registration statements filed by the Company with the Securities and Exchange Commission. When considering forward-looking statements, you should keep these factors in mind as well as the other cautionary statements in this report. You should not place undue reliance on any forward-looking statement. The Company is not obligated to update forward-looking statements.

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto.

Critical Accounting Policies and Estimates

The accounting policies below have been identified as critical to the understanding of the results of operations and financial position. The application of these critical accounting policies in preparing the financial statements requires management to use significant judgments and estimates concerning future results or other developments, including the likelihood, timing or amount of one or more future transactions. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, estimates, assumptions and judgments are evaluated based on historical experience and various other information believed to be reasonable under the circumstances.

Investments. The Company classifies all of its fixed maturity and equity investments as available-for-sale. Available-for-sale fixed maturities are carried at fair value with unrealized gains and losses, net of applicable taxes, reported in other comprehensive income. Equity securities are carried at fair value with unrealized gains and losses, net of applicable taxes, reported in other comprehensive income. Mortgage loans on real estate are carried at cost less principal payments. Other investments are carried at amortized cost. Discounts originating at the time of purchase, net of capitalized acquisition costs, are amortized using the level yield method on an individual basis over the remaining contractual term of the investment. Policy loans are carried at unpaid balances. Cash equivalents consist of highly liquid investments with maturities of three months or less at the date of purchase and are carried at cost, which approximates fair value. Realized gains and losses on sales of investments are recognized in operations on the specific identification basis. Interest earned on investments is included in net investment income.

Deferred Policy Acquisition Costs. Commissions and other costs of acquiring life insurance, which vary with, and are primarily related to, the production of new business have been deferred to the extent recoverable from future policy revenues and gross profits. The acquisition costs are being amortized over the premium paying period of the related policies using assumptions consistent with those used in computing policy reserves.

Future Policy Benefits. Traditional life insurance policy benefit liabilities are computed on a net level premium method using assumptions with respect to current yield, mortality, withdrawal rates, and other assumptions deemed appropriate by the Company.

Future Annuity Benefits. Annuity contract liabilities are computed using the retrospective deposit method and consist of policy account balances before deduction of surrender charges, which accrue to the benefit of policyholders. Premiums received on annuity contracts are recognized as an increase in a liability rather than premium income. Interest credited on annuity contracts is recognized as an expense.

Premiums. Premiums for traditional life insurance products are reported as revenue when due. Traditional insurance products include whole life and term life. Deposits relate to deferred annuity products. The cash flows from deposits are credited to policyholder account balances. Deposits are not recorded as revenue.

Income Taxes. Deferred income taxes are recorded on the differences between the tax bases of assets and liabilities and the amounts at which they are reported in the consolidated financial statements. Recorded amounts are adjusted to reflect changes in income tax rates and other tax law provisions as they become enacted.

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Reinsurance. Reinsurance is one of the tools that the Company uses to accomplish its business objectives. A variety of reinsurance vehicles are currently in use. Reinsurance supports a multitude of corporate objectives including managing statutory capital, reducing volatility and reducing surplus strain. At the customer level it increases the Company’s capacity, provides access to additional underwriting expertise, and generally makes it possible for the Company to offer products at competitive levels that the Company could not otherwise bring to market without reinsurance support.

Financial Condition

Significant changes in the condensed consolidated balance sheets from December 31, 2006 to March 31, 2007 are highlighted below.

Total assets increased from $31,256,743 at December 31, 2006 to $33,734,426 at March 31, 2007 primarily due to the investment of premiums received during the three months ended March 31, 2007 and cash received from the exercise of the warrant to Brooke Corporation (“Brooke”) on January 31, 2007 in the amount of $447,818.

The Company’s available-for-sale fixed maturity securities had aggregate fair values of $14,950,184 and $12,298,780 at March 31, 2007 and December 31, 2006, respectively. Other investments increased from $3,067,369 at December 31, 2006 to $3,467,506 at March 31, 2007 as a result of the purchase of two lottery cash flows in the amount of $506,000 These increases in fixed maturity securities and other investments were primarily due to the net cash provided by operating activities of $830,941 and net cash provided by financing activities of $1,931,188 during the three months ended March 31, 2007.

Accounts receivable increased 16% from $281,894 at December 31, 2006 to $326,934 at March 31, 2007. The increase is primarily due to an increase of $48,747 in federal and state income taxes recoverable on withholdings on lottery receivable investments. An allowance for uncollectible items is not deemed necessary with respect to these receivables.

Reinsurance receivables increased from $112,145 at December 31, 2006 to $150,854 at March 31, 2007. The increase during the year represents the balance due from Wilton Re in conjunction with the reinsurance of the Company’s Golden Eagle Whole Life (Final Expense) product. The change is due primarily to an increase in paid claims recoverable from Wilton Re in the amount of $39,808.

Deferred policy acquisition costs, net of amortization, increased slightly from $5,209,693 at December 31, 2006 to $5,296,580 at March 31, 2007 resulting from the capitalization of acquisition expenses related to the sales of life insurance. These acquisition expenses include commissions on first year business, medical exam and inspection report fees, and salaries of employees directly involved in the marketing, underwriting and policy issuance functions. Management of the Company reviews the recoverability of deferred acquisition costs on a quarterly basis based on current trends as to persistency, mortality and interest. These trends are compared to the assumptions used in the establishment of the original asset in order to assess the need for impairment. Based on the results of the aforementioned procedures performed by management, no impairments have been recorded against the balance of deferred acquisition costs.

Other assets included receivables from affiliates of $435,000 and $1,196,182 at March 31, 2007 and December 31, 2006, respectively.

Policy and contract liabilities increased to $22,233,540 at March 31, 2007 from $20,184,040 at December 31, 2006. A significant portion of this increase is attributable to future policy and annuity benefits related to sales of the Company’s various life insurance products. Reserves for future policy benefits established due to the sale of life insurance increased $329,625 or 5% from December 31, 2006 to March 31, 2007. These reserves are actuarially determined based on such factors as insured age, life expectancy, mortality and interest assumptions. Reserves for future annuity benefits increased $1,719,868 or 13% from December 31, 2006 to March 31, 2007. In 2006 and 2007, annuity contract liabilities increased due to the introduction of three new annuity products to the marketing force and continued considerations received on the Company’s FA2000 product. According to the design of the Company’s FA2000 product, first year premium payments are allocated 100% to life insurance and renewal payments are split 50% to life and 50% to annuity.

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Liabilities for policy claims decreased from $211,932 at December 31, 2006 to $145,271 at March 31, 2007. The decrease is due to the timing of notice on death claims and the payments of the related death claims.

Deposits on pending policy applications increased $99,373 from $27,788 at December 31, 2006 to $127,161 at March 31, 2007. Deposits on pending policy applications represent money submitted with policy applications that have not yet been approved. Any increases or decreases in this liability from period to period are attributable to the timing of the approval and delivery of any new business which has been submitted to the Company. The Company received three annuity applications in the amount of $125,223 in the last ten days of the quarter ended March 31, 2007 that were not issued by the end of the quarter.

Commissions, salaries, wages and benefits payable increased from $49,661 at December 31, 2005 to $70,897 at March 31, 2007. The increase is attributable to an increase in full-time employees at March 31, 2007 as compared to December 31, 2006.

Results of Operations

The Company reported a net loss of $82,466 for the three months ended March 31, 2007 and net income of $58,823 during the same time period in 2006. The primary reason for the decrease in income was a $180,973 increase in death claims from the three months ended March 31, 2006 as compared to the same period in 2007. The increase is attributable to the increase in the number of policies inforce and the continued maturation of the final expense policies, which are generally purchased by consumers in their senior years.

Significant components of revenues include life insurance premiums (net of reinsurance) and net investment income. The following table provides information concerning net premium income for the three months ended March 31, 2007 and 2006:

	Three months ended
	March 31,			March 31,
	2007			2006
First year
Life insurance premiums	$	120,733		$	236,965
Reinsurance premiums ceded		(16,018	)		(101,840	)
Net first year premium income		104,715			135,125
Renewal
Life insurance premiums		1,095,342			1,020,001
Reinsurance premiums ceded		(132,680	)		(60,513	)
Net renewal year premium income		962,662			959,488
Single premium		3,100			7,000
Reinsurance premiums assumed		2,587			2,166
Net premium income	$	1,073,064		$	1,103,779

Net first year premium income decreased from $135,125 for the three months ended March 31, 2006 to $104,715 for the same time period in 2007. Gross first year premium income decreased 49% or $116,232 for the three months ended March 31, 2007 as compared to the same period in 2006, primarily due to FLAC’s inability to write new business in the state of Ohio during those periods and capital restrictions that limited its ability to promote other new business. First year reinsurance premiums ceded decreased $85,822 for the three months ended March 31, 2007 as compared to the same time period in 2006. The decrease in reinsurance premiums is due to the termination of the reinsurance treaty with Wilton Re for the Company’s Final Expense product for policies issued after June 24, 2006.

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Net renewal year premium income increased marginally from the three months ended March 31, 2006 to the same time period in 2007. Gross renewal year premiums increased 7% or $75,341 for the three months ended March 31, 2007 as compared to the same time period in 2006. Renewal year reinsurance premium ceded increased $72,167 for the three months ended March 31, 2007 as compared to the same time period in 2006. The increase in reinsurance premium ceded is due to policies ceded to Wilton Re from January 1, 2005 to June 24, 2006 surpassing their first year policy anniversary. Renewal premiums reflect the premium collected in the current year for those policies that have surpassed their first policy anniversary. Renewal premiums will continue to increase unless premiums lost from surrenders, lapses, settlement options or application of the non-forfeiture options, exceed prior year’s first year premium.

Net investment income increased $56,665 or 21% for the three months ended March 31, 2007, compared to the same period for 2006. The increase is due to an increase in the size of the Company’s investment portfolio and improved average yields.

Consulting fees and other income were $254,957 higher for the three months ended March 31, 2007 as compared to March 31, 2006 as a result of the Company’s ability to begin brokering loans to managing general insurance agencies in the fourth quarter of 2006 pursuant to a brokerage agreement with a Brooke subsidiary.

Benefits and expenses totaled $1,792,918 and $1,368,506 for the three months ended March 31, 2007 and 2006, respectively. Included in total benefits and expenses were policy reserve increases of $329,626 and $249,977 for the three months ended March 31, 2007 and 2006, respectively. Life insurance reserves are actuarially determined based on such factors as insured age, life expectancy, mortality and interest assumptions. As more life insurance is written and existing policies reach additional durations, policy reserve requirements will continue to increase.

Policyholder surrender values expense increased $15,341 from the three months ended March 31, 2006 to the same time period in 2007. The increase is attributable to the increase in the number of policies inforce and the continued maturation of those policies.

Interest credited on annuities and premium deposits totaled $172,744 and $126,304 for the three months ended March 31, 2007 and 2006, respectively. The increase is primarily a result of the increase in annuity fund balances due to deposits of $1,801,473 less surrenders of $253,310 for three months ended March 31, 2007. Both interest credited on annuities and premium deposits have increased as a result of the increase in the number of policies inforce.

Commission expense totaled $253,414 and $250,321 for the three months ended March 31, 2007, and 2006, respectively. Commission expense is based on a percentage of premium and is determined in the product design. Additionally, higher percentage commissions are paid for first year business than renewal year. The slight increase in commission expense during the three months ended March 31, 2007 as compared to the same period in 2006 is partially due to an increase in annuity commission of $23,390 for the three months ended March 31, 2007 as compared to the same time period in 2006. The increase in commission expense is also related to the termination of the reinsurance treaty with Wilton Re on June 24, 2006 which reduced the commission allowance by $99,177 for the three months ended March 31, 2007 as compared to the same time period in 2006 and a decrease in first year commission of $160,275 for the three months ended March 31, 2007 as compared to the same time period in 2006.

Salaries, wages and employee benefits increased from $270,832 to $348,936 for the three months ended March 31, 2006 as compared to the same time period in 2007. The increase in 2007 is primarily attributable to an increase of six fulltime employees, five of whom joined the Company’s brokerage subsidiary.

Liquidity and Capital Resources

During the quarters ended March 31, 2007, and 2006, the Company maintained liquid assets sufficient to meet operating demands, while continuing to utilize excess liquidity to purchase various investments. Net cash provided by operating activities during the quarters ended March 31, 2007 and 2006 totaled $830,941 and $376,421, respectively.

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As of March 31, 2007, the Company and its subsidiaries had consolidated cash reserves and liquid investments of approximately $18,554,080, as compared with $15,576,573 as of March 31, 2006. Of these amounts, cash reserves and liquid investments at the Company’s life insurance company subsidiary, FLAC as of these dates were approximately $15,978,098 and $15,231,163, respectively. FLAC generally receives adequate cash flow from premium collections and investment income to meet the obligations of its insurance operations. Insurance policy liabilities are primarily long-term and generally are paid from future cash flows. Cash collected from deposits on annuity contracts and policyholder premium deposits are recorded as cash flows from financing activities.

As of March 31, 2007, cash reserves and liquid investments at the parent company level were approximately $1,709,762 as compared with $340,052 as of March 31, 2006. Cash reserves at the Company’s brokerage subsidiary, BCA, were $866,220 at March 31, 2007 and $5,358 at March 31, 2006. Cash balances at the parent company level as of March 31, 2007 increased from net proceeds of approximately $394,000 resulting from the exercise of a warrant by, Brooke during the first quarter of 2007. Existing cash balances at the parent company level of $1,709,762 at March 31, 2007 combined with the expected cash flows from its brokerage subsidiary, income tax sharing arrangements and administrative services reimbursements from FLAC are believed by management to be sufficient to fund the parent company’s normal operations and pay its corporate expenses, income taxes and dividends.

The Company may also receive additional capital contributions from Brooke during the next three years resulting from an agreement by Brooke to contribute up to an additional $6,000,000 to the Company’s capital if the Company’s brokerage subsidiary does not achieve $6,000,000 in pre tax income over an approximate three year period ending September 30, 2009, in accordance with an agreed upon schedule.

The nature of the Company’ brokerage subsidiary, BCA, operations is such that it is not expected to require any capital contributions in 2007 from the parent company. Instead, if BCA is successful in implementing its marketing plans, it will likely be a source of cash to the parent company.

On April 2, 2007, the Company concluded a modified “Dutch auction” tender offer for shares of its common stock. The Company accepted for purchase 379,248 shares of its common stock at a price of $1.60 per share for an aggregate purchase price of approximately $607,000, to be paid from cash reserves. Upon completion of the offer, the Company had 9,264,212 shares of common stock outstanding. As of the close of business on April 13, 2007, the Company effected a 1-for-3 reverse stock split. After effectiveness of the reverse stock split, the Company had 3,085,817 shares outstanding.

If the Company’s life insurance subsidiary, FLAC, is successful in implementing its marketing plans and its premiums increase significantly as a result, then FLAC may require additional capital contributions in 2007 from the parent company. In this event, capital contributions are not expected to exceed $1,000,000 and any such required contributions are expected to be funded from the parent company’s cash reserves.

In February 2007, the Company announced an agreement to acquire all of the outstanding common stock of Brooke Savings Bank in exchange for 6,047,904 shares of the Company’s stock (2,015,968 new shares, after the effect of the reverse stock split) with a value of approximately $10,100,000. Although the transaction, if consummated, will not affect the parent company’s cash balances, it will increase the Company’s total equity capital. If Brooke Savings Bank is acquired and it is successful in implementation of its business plans, then the bank may require additional capital contributions in 2007 from the parent company. In this event, capital contributions are not expected to exceed $10,000,000 and any such required contributions are expected to be funded from the sale by the parent company of common or preferred equity to public or private investors.

If another suitable bank, life insurance or brokerage acquisition opportunity arises, the Company may require additional capital to fund an acquisition. In this event, the required capital for an acquisition is expected to be funded from the sale by the parent company of common or preferred equity to public or private investors.

The Company plans to seek a listing of its common stock on either the American Stock Exchange or the NASDAQ Capital Market, once those shares are eligible for listing. Management believes that a stock exchange listing will improve the Company’s prospects for selling additional equity, acquiring a business by merger or issuing debt.

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Recently Issued Accounting Principals

On July 14, 2006, the Financial Accounting Standards Board (“FASB”) issued Financial Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes,” an Interpretation of Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes.” FIN 48 prescribes guidance to address inconsistencies among entities with the measurement and recognition in accounting for income tax positions for financial statement purposes. Specifically, FIN 48 addresses the timing of the recognition of income tax benefits. FIN 48 requires the financial statement recognition of an income tax benefit when the company determines that it is more-likely-than-not that the tax position will be ultimately sustained. FIN 48 is effective for fiscal years beginning after December 15, 2006, which, for the Company, is fiscal year 2007. The Company does not anticipate a material effect on its consolidated financial statements as a result of the issuance of FIN 48.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which provides enhanced guidance for using fair value measurements in financial reporting. While the standard does not expand the use of fair value in any new circumstance, it has applicability to several current accounting standards that require or permit entities to measure assets and liabilities at fair value. This standard defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Application of this standard is required for the Company beginning in 2008. Management is currently assessing what impact, if any, the application of this standard could have on the Company’s reported results of operations and financial position.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.” This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. This statement is effective for an entity’s first fiscal year that begins after November 15, 2007, which, for the Company, is fiscal year 2008. Management is currently assessing what impact, if any, the application of this standard could have on the Company’s reported results of operations and financial position.

Related Party Transactions

On March 2, 2005, the Company entered into a Stock Repurchase Agreement with Brooke under which the Company repurchased 450,500 shares of Company common stock from Brooke. Brooke had previously acquired the shares from a third party for a total purchase price of $772,255. The privately negotiated transaction involved approximately 9.7 % of Company common stock then outstanding. The shares were purchased at a price of $1.71 per share for a total purchase price of $770,355. The Company paid the purchase price using $200,000 of its working capital and financed the remaining amount with a loan from Brooke Credit at a fixed rate of 8% over a ten-year period. The repurchase agreement also granted Brooke warrants to purchase up to 150,000 shares of Company common stock at prices ranging from $1.71 to $5.00 per share. These warrants were cancelled as part of the 2006 Stock Purchase Agreement (as later defined).

The mortgage note on the commercial property and office building that the Company owned was financed by Vision Bank of Topeka, Kansas. Gary Yager, a former Director of the Company, is the President and CEO of Vision Bank. As of December 31, 2006 the mortgage note was paid in full. Management believes that the terms obtained from Vision Bank at the time of financing were no less favorable to the Company than those available from an independent lender.

The Boards of Directors of the Company and FLAC and the Kansas Insurance Department (“KID”) authorized the parent company to sell its office building and related real estate to FLAC. The proceeds were used in part to repay the notes to Vision Bank and Brooke described above. Closing of this transaction occurred May 1, 2006.

On October 5, 2006, Mr. Van Engelen was awarded a warrant to purchase up to 50,000 shares of Company common stock at an exercise price of $1.72 per share (16,666 shares at an exercise price of $5.16 per share after the 1-for-3 reverse stock split effective April 13, 2007). The warrant was awarded to Mr. Van Engelen in exchange for his services in successfully negotiating and closing the transactions contemplated by the 2006 Stock Purchase Agreement. Mr. Van Engelen entered into an employment agreement with the Company effective December 8, 2006 to serve as President and CEO of FLAC.

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On October 5, 2006, Thomas Fogt, a then director of the Company, was awarded a warrant to purchase up to 100,000 shares of Company common stock at an exercise price of $1.72 per share (33,333 shares at an exercise price of $5.16 per share after the 1-for-3 reverse stock split). Mr. Fogt was awarded the warrant in exchange for his services in successfully negotiating and closing the transactions proposed by the 2006 Stock Purchase Agreement.

The Company entered into a Stock Purchase and Sale Agreement dated October 6, 2006 (the “2006 Stock Purchase Agreement”) with Brooke that provided for a series of transactions that resulted in the acquisition by Brooke of a majority of FACC’s outstanding common stock. As more fully discussed in “Description of Business — Recent Developments” and “Market for Common Equity and Related Stockholder Matters — Sales of Unregistered Securities” sections of the Company’s Form 10-KSB for the fiscal year ended December 31, 2006, Brooke had or has a direct and/or indirect material interest in the 2006 Stock Purchase Agreement. Brooke also has an indirect interest in the Company’s proposed acquisition of Brooke Savings Bank. As a result of his relationship with Brooke, Robert Orr, a Company director and the Company’s Chairman of the Board, President and Chief Executive Officer, has an indirect material interest in these transactions.

With respect to the Company’s proposed acquisition of Brooke Savings Bank from Brooke Brokerage Corporation (“BBC”), the Company agreed to exchange 6,047,904 shares of its common stock (2,015,968 shares after the effects of the reverse stock split) with a value of approximately $10.1 million, for all of the stock of Brooke Savings Bank. The agreed upon purchase price of approximately $10.1 million equals the price paid by BBC to acquire Brooke Savings Bank on January 8, 2007. For the purpose of the proposed transaction, the shares of Company common stock have been valued at $1.67 per share. This valuation equals the approximate price per share paid by Brooke for its 55% ownership interest in the Company in the change of control transactions that occurred in December 2006 and January 2007. Based on the number of Company shares of common stock currently outstanding, and taking into account the results of the tender offer for shares of the Company’s common stock concluded on April 2, 2007, the proposed transaction would result in an increase in Brooke’s combined direct and indirect ownership of the Company from 55% to approximately 74%. The proposed transaction, after adjustments, would also reduce Brooke’s indirect ownership of Brooke Savings Bank from 100% to approximately 74%.

BAC entered into a services agreement with Brooke on March 21, 2007 that, in addition to other benefits to BAC, provided for the transfer of certain additional loan brokerage activities that were not a part of the original transfer of loan brokerage activities provided for in the 2006 Stock Purchase Agreement between the Company and Brooke.

This services agreement provides for monthly fees totaling $145,000, beginning in April 2007 and continuing until December 2007.

The Company’s cash balances are sometimes commingled with the balances of Brooke and its other subsidiaries for cash management purposes.

The Company has employed Robert Orr, as CEO of the Company and William Morton, as CFO of the Company. These individuals are also employed by Brooke or its other subsidiaries.

Impact of Inflation and General Economic Conditions

The Company’s liquidity and capital resources are subject to inflation and general market conditions. The Company is primarily invested in fixed maturity securities. A majority of these assets are debt securities and are considered fixed income investments. In addition, the Company has investments in mortgage loans. Both of these investments are exposed to three primary sources of investment risk: credit, interest rate and liquidity. In addition, the Company’s investments are subject, in varying degrees, to market risk that can affect their return and their fair market value.

Interest rate risk arises from the price sensitivity of investments to changes in interest rates. Coupon and/or dividend income represent the greatest portion of an investment’s total return for most fixed income instruments in stable interest rate environments. The changes in the fair market values of such investments are inversely related to changes in market interest rates. As interest rates fall, the coupon and dividend streams of existing fixed rate investments become more valuable and the market values rise. As interest rates rise, the opposite effect occurs.

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The Company’s mortgage loan investments are also particularly sensitive to interest rate changes. As long-term rates fall, borrowers become more likely to refinance their mortgages causing a prepayment of outstanding mortgage principal that requires reinvestment at lower rates. As interest rates rise, policyholders may become more likely to surrender policies or to borrow against cash values, often to meet sudden needs in an inflationary environment or to invest in higher yielding opportunities elsewhere. This risk of disintermediation may force the Company to liquidate part of its portfolio at a time when the fair market values of fixed income investments are falling.

A majority of the Company’s investments are exposed to varying degrees of credit risk. Credit risk is the risk that the value of the investment may decline due to the deterioration of the financial strength of the issuer and that the timely or ultimate payment of principal or interest may occur. The Company mitigates credit risk by diversifying the investment portfolio across a broad range of issuers, investment sectors and security types and by timing the amount of investments in any particular entity.

ITEM 3. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures. The Company maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and the information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. The Company’s Chief Executive Officer and Chief Financial Officer conducted an evaluation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon the evaluation of those controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in alerting management on a timely basis, of material information required to be disclosed in the Company’s reports as set forth in this section.

In connection with its review of the financial statements filed with the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2005, the Company’s independent public accounting firm advised management that it had noted certain matters that it considered to be a “material weakness”. A material weakness is a significant deficiency, or a combination of significant deficiencies, in the Company’s internal financial procedures or controls, that results in more than a remote likelihood that a material misstatement of the Company’s financial statements will not be prevented or detected. The auditors noted that due to the resignation of the Chief Financial Officer of the Company effective March 31, 2006, the Company did not then have adequate review procedures in place to ensure the development of timely, complete and accurate financial statements and related footnotes.

Since March 31, 2006, the Company has taken significant steps to remediate this material weakness, including enhancing the knowledge and skills of the existing staff, hiring outside consultants and independent contractors to assist the staff in handling financial statement matters, and engaging as a full-time consultant an individual who had previously served as the Company’s controller and who during that tenure was primarily responsible for preparing both the Company’s statutory and GAAP financial statements. On March 1, 2007, the Board of Directors elected Mr. Morton as the new Chief Financial Officer replacing John Van Engelen, the President and Chief Executive Officer of FLAC, who served in an interim capacity as the Chief Financial Officer of the Company from January 31, 2007 to March 1, 2007.

With these remediation steps remaining in place and the addition of the functional financial support to be provided by Brooke pursuant to the Brooke Servicing Agreement referred to above, management believes that the material weakness will continue to be remediated and that the Company’s internal control over financial reporting as of the date of this report is effective at a reasonable assurance level and has been for a period of time prior hereto. In connection with its review of the financial statements filed with the Company’s Annual Report on Form 10-KSB, for the year ended December 31, 2006, the Company’s independent public accounting firm has advised management that it has not identified any matters that it considered to represent material weaknesses.

Internal Control Over Financial Reporting. Except for our remediation efforts that are related to the material weakness previously identified and discussed above, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to affect, our internal control over financial reporting for the quarter ended March 31, 2007. We have undertaken remediation efforts, as discussed above. These staffing additions and training efforts are in response to the material weaknesses identified.

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PART II

OTHER INFORMATION

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Subsequent to the end of the Company’s fiscal quarter ended March 31, 2007, the Company concluded a modified “Dutch auction” tender offer for shares of its common stock on April 2, 2007. The Company accepted for purchase 379,248 shares of its $0.01 par value common stock at a price of $1.60 per share for an aggregate purchase price of approximately $607,000. Upon completion of the offer, the Company had 9,264,212 shares of common stock outstanding. As noted previously, effective as of the close of business on April 13, 2007, the Company completed a 1-for-3 reverse stock split. Upon completion of the reverse stock split, the Company had 3,085,817 shares of common stock outstanding (after the purchase of fractional shares representing the equivalent of 2,253 shares).

The following table provides information about the repurchases made by the Company as a result of the tender offer.

Period	(a) Total number of shares purchased	(b) Average price paid per share	(c) Total number of shares purchased as part of publicly announced plans or programs	(d) Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
March 2 — April 2, 2007	379,248 (126,416 post split)	$1.60 ($4.80 post split)	379,248 (126,416 post split)	0

The following table provides information about the repurchases made by the Company as a result of its commitment to purchase for cash any fractional shares that resulted from the reverse stock split.

Date	(a) Total number of shares purchased	(b) Average price paid per share	(c) Total number of shares purchased as part of publicly announced plans or programs	(d) Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
April 13, 2007	2,253	$5.16	2,253	0

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At a special meeting of shareholders held on January 31, 2007, a majority of the shareholders approved (a) amendments to the Company’s Articles of incorporation to (i) increase the number of shares of common stock that the Company is authorized to issue from 8,000,000 shares to 25,000,000 shares, (ii) increase the number of shares of preferred stock that the Company is authorized to issue from 550,000 shares to 1,550,000 shares, and (iii) reduce the par value of each share of common stock from $.10 to $.01, and (b) a reverse stock split of the Company’s common stock and the cash out of fractional shares at the equivalent of $1.72 per whole share.

As of the close of business on April 13, 2007, the Company effected a 1-for-3 reverse stock split of its outstanding $0.01 par value common stock, in accordance with the terms approved by shareholders in their meeting on January 31, 2007.

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ITEM 5. OTHER INFORMATION

Conclusion of Tender Offer

As discussed under Item 2 of this quarterly report on Form 10-QSB, the Company concluded a modified “Dutch auction” tender offer for shares of its common stock on April 2, 2007. More detailed information about the tender offer is available in the Company’s current report on Form 8-K filed on April 9, 2007.

ITEM 6. EXHIBITS

a) Index to Exhibits

Exhibit No.	Description
3.1	Articles of Incorporation of First American Capital Corporation (Incorporated by reference from Exhibit 2.1 to the Registrant’s amended Form 10-SB filed August 13, 1999)
3.2	Bylaws of First American Capital Corporation, as amended (Incorporated by reference from Exhibit 3.2 to the Registrant’s Form 8-K filed April 11, 2005)
4	Certificate of Designations, Preferences and Relative, Participating, Optional and Other Special Rights of Preferred Stock and Qualifications, Limitations, and Restrictions Thereof of 6% Non-Cumulative, Convertible and Callable Preferred Stock (Incorporated by reference from Exhibit 3 to the Registrant’s amended Form 10-SB filed August 13, 1999)
10.1	Servicing Agreement between Brooke Corporation and Brooke Capital Advisors, Inc. dated March 21, 2007 (*)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)
32.1	Certification of Chief Executive Officer pursuant to Section 18 U.S.C. Section 1350 (*)
32.2	Certification of Chief Financial Officer pursuant to Section 18 U.S.C. Section 1350 (*)
	(*) Filed herewith

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SIGNATURES

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

FIRST AMERICAN CAPITAL CORPORATION

Date: April 25, 2007	By:	/s/ ROBERT D. ORR
		Robert D. Orr
		President & Chief Executive Officer
Date: April 25, 2007	By:	/s/ WILLIAM R. MORTON, JR.
		William R. Morton, Jr.
		Chief Financial Officer and Treasurer

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EXHIBIT INDEX

Exhibit No.	Description
3.1	Articles of Incorporation of First American Capital Corporation (Incorporated by reference from Exhibit 2.1 to the Registrant’s amended Form 10-SB filed August 13, 1999)
3.2	Bylaws of First American Capital Corporation, as amended (Incorporated by reference from Exhibit 3.2 to the Registrant’s Form 8-K filed April 11, 2005)
4	Certificate of Designations, Preferences and Relative, Participating, Optional and Other Special Rights of Preferred Stock and Qualifications, Limitations, and Restrictions Thereof of 6% Non-Cumulative, Convertible and Callable Preferred Stock (Incorporated by reference from Exhibit 3 to the Registrant’s amended Form 10-SB filed August 13, 1999)
10.1	Servicing Agreement between Brooke Corporation and Brooke Capital Advisors, Inc. dated March 21, 2007 (*)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)
32.1	Certification of Chief Executive Officer pursuant to Section 18 U.S.C. Section 1350 (*)
32.2	Certification of Chief Financial Officer pursuant to Section 18 U.S.C. Section 1350 (*)
	(*) Filed herewith

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EX-10.1

Exhibit 10.1

SERVICING AGREEMENT
BETWEEN
BROOKE CORPORATION
AND
BROOKE CAPITAL ADVISORS, INC.

This Servicing Agreement (this “Agreement”) is made and entered into as of March 21, 2007, by and between Brooke Capital Advisors, Inc., a Kansas corporation (“BCA”), and Brooke Corporation, a Kansas corporation (“BROOKE”).

WHEREAS, BCA desires to engage BROOKE to provide the Services (as defined below) to BCA according to the terms and subject to the conditions set forth herein.

NOW THEREFORE, in consideration of the premises and the agreements, covenants and representations herein contained, the parties hereto agree as follows:

1. The Services.

a. BROOKE shall provide to BCA on and after the Effective Date and through the Termination Date the services described in Exhibit A, Schedule of Services, attached hereto (which services are hereinafter referred to as the “Services”). BROOKE shall have no obligation to perform any services or have any obligations pursuant to this Agreement, except as specifically set forth on Exhibit A, or otherwise specifically set forth in this Agreement. BROOKE shall perform the Services in accordance with all laws and its customary standards, policies and procedures in performing similar obligations with respect to similarly situated third parties. BROOKE shall not be required to expand its facilities, incur capital expenses, maintain the employment of any specific personnel or employ additional personnel in order to provide the Services to BCA. In providing the Services, BROOKE, as it deems necessary or appropriate in its reasonable discretion, may use its personnel and/or employ the services of third parties for the efficient performance of any of the Services. BROOKE shall notify BCA of any event involving a disruption in the performance of the Services or any possible breach of security potentially affecting information of BCA or its customers or the facilities of BCA.

b. BROOKE shall, with regards to loan brokerage activities prior to January 1, 2007, cause its indirect wholly-owned subsidiary, CJD & Associates, L.L.C. (“CJD”) to assign to BCA all rights and obligations relating to any and all consulting and collateral preservation agreements for managing general agency loan brokerage services CJD provided to third parties prior to December 8, 2006 and all rights and obligations relating to any and all funeral home collateral preservation and consulting agreements executed with third parties prior to January 1, 2007.

c. BROOKE shall with regards to loan brokerage activities subsequent to January 1, 2007, cause CJD to: (a) discontinue its Funeral Loan Brokerage Business (defined below), (b) provide BCA information regarding it’s business methods, processes and know-how theretofore utilized by CJD in connection with CJD’s Funeral Loan Brokerage Business, (c) CJD shall refer to BCA any Funeral Loan Brokerage Business leads or inquiries, (d) CJD shall make its funeral industry contact listing available to BCA, (e) CJD shall not refer to any of its affiliates (other than BCA) any other Funeral Loan Brokerage business leads or inquiries or consult with such affiliates on Funeral Loan Brokerage Business opportunities. However, after any cessation by BCA of BCA’s Funeral Loan Brokerage Business for a period of 30 consecutive calendar days after the date here of for any reason, then, if BCA fails to resume the Funeral Loan Brokerage Business within 10 calendar days after delivery of written notice from CJD to BCA, nothing herein shall thereafter (a) preclude CJD from engaging in any Funeral Loan Brokerage Business, (b) preclude CJD from referring any Funeral Loan Brokerage Business to any individual, entity or business other than BCA, or (c) require CJD to perform any obligations pursuant to this paragraph. Funeral Loan Brokerage Business is defined by the parties to include (a) consulting with funeral home

owners regarding (i) acquisitions of funeral homes, (ii) financing of such acquisitions or other activities or needs of funeral homes, and (iii) other borrower’s assistance services; (b) referring such funeral home owners to BCC for the purpose of obtaining commercial loans from BCC for such acquisitions, activities or needs (such loans, the “Funeral Home Loans”) and (c) providing collateral preservation services to BCC with respect to Funeral Home Loans (such businesses, collectively, the “Funeral Home Loan Brokerage Business”), for which a fee is paid from the borrower to BCA that may be funded by BCC’s loan to the borrower and/or compensation from BCC for collateral preservation services;

d. BROOKE grants to the BCA a non-exclusive, non-transferable, and royalty-free license to use the name “Brooke” and such trademarks and service marks as are registered by BROOKE with the United State Patent and Trademark Office or claimed by BROOKE and pending registration with such Trademark Office (collectively, such name and marks to be referred to as the “Licensed Marks”) solely in connection with the BCA’s operation of its business. BCA shall make no other use of the Licensed Marks. BCA acknowledges the good will and business value created from CJD’s advertising and promotion of the Brooke trade name, and agrees that the rights granted to BCA by and obtained by BCA as a result of or in connection with this Agreement are license rights only, and nothing contained in this Agreement constitutes or shall be construed to be an assignment of any or all of BROOKE’s rights in any of the Licensed Marks. BROOKE retains the right to specify, from time to time, the format in which BCA shall use and display each Licensed Mark, and BCA shall only use or display the Licensed Mark in a format approved by BROOKE. BCA shall not at any time, whether during or after the term of this Agreement, do or cause to be done any act or thing challenging, contesting, impairing, invalidating, or tending to impair or invalidate any of BROOKE’s rights in any of the Licensed Marks or any registrations derived from such rights. BCA shall not assign, sublicense, transfer, or otherwise convey BCA’s rights or obligations with respect to the Licensed Marks without BROOKE’s prior written consent. BCA shall promptly notify BROOKE of any and all infringements, imitations, simulations or other illegal use or misuse of any of the Licensed Marks which come to BCA’s attention. As the sole owner of the Licensed Marks, BROOKE shall determine whether to take any action to prevent the infringement, imitation, simulation or other illegal use or misuse of the Licensed Marks. BCA shall render BROOKE all reasonable assistance in connection with any matter pertaining to the protection, enforcement or infringement of the Licensed Marks used by BCA, whether in the courts, administrative or quasi-judicial agencies, or otherwise.

e. BCA shall, in a timely manner, take all actions as may be reasonably necessary or desirable to enable or assist BROOKE in the provision of the Services, including, but not limited to, providing necessary information and specific written authorizations, consents and signatures, and Brooke shall be relieved of its obligations hereunder to the extent that BCA’s failure to take any such action renders performance by Brooke of such obligations unlawful or impracticable.

2. Term. The term of this Agreement shall begin on the effective date of April 1, 2007 (the Effective Date) and terminate on December 31, 2007 (the Termination Date), subject to the terms and provisions of Section 6 below.

3. Contract Sum.

a. Fees. In consideration of the grant of the license set forth in Section (c) and performance of the other Services set forth above in Sections 1(a), (b) and (c) by BROOKE, BCA shall pay to BROOKE the fees set forth in the Schedule of Fees attached hereto as Exhibit B (the “Contract Sum”) at the times and in accordance with Exhibit B. The Contract Sum shall be the sole compensation due BROOKE in connection with its performance of the Services.

b. Expenses. Unless otherwise agreed in writing, BROOKE shall be entitled to reimbursement from BCA for out-of-pocket expenses incurred in the performance of the Services unless BROOKE is specifically responsible for such amounts as set forth on the Schedule of Brooke-Paid Expenses attached hereto as Exhibit C. BROOKE shall provide to BCA an invoice setting forth any expenses to which it is entitled to reimbursement under this Subsection 3b and payment of the invoice amount due shall be due on or before the 20th calendar day after the date of the invoice.

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c. Third Party Fees and Expenses. Unless otherwise agreed in writing, BCA shall be responsible for fees incurred in connection with retaining any additional independent contractors, subcontractors, outside counsel, external accountant or auditors, internal audit consultants, tax consultants and tax preparers, or other third parties in connection with performing the Services. Such reasonable fees and expenses of such persons shall be paid directly by BCA or, at BROOKE’s option, paid by BROOKE and reimbursed by BCA after invoice in accordance with the reimbursement of expense provisions contained in Subsection 3b of this Agreement.

4. Events of Default by BROOKE. The following shall constitute “BROOKE Events of Default” hereunder by BROOKE:

a. failure on the part of BROOKE duly to observe or perform in any material respect any of the covenants or agreements on the part of BROOKE set forth in this Agreement which continues unremedied for a period of ten (10) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to BROOKE by BCA (unless such failure is the result of BCA’s failure to observe or perform any of its obligations hereunder, in which case BROOKE’s failure shall not constitute an event of default); or

b. a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or appointing a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against BROOKE and such decree or order shall have remained in force undischarged or unstayed for a period of sixty (60) days; or

c. BROOKE shall consent to the appointment of a trustee, conservator or receiver or liquidator in any bankruptcy, insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to BROOKE or of or relating to all or substantially all of the property of BROOKE; or

d. BROOKE shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable bankruptcy, insolvency or reorganization statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations or take any action in furtherance of the foregoing.

5. Events of Default by BCA. The following shall constitute “BCA Events of Default” hereunder by BCA:

a. any failure by BCA to make any payment required to be made by BCA to BROOKE in accordance with Section 3 of this Agreement; or

b. any failure on the part of BCA duly to observe or perform in any material respect any other of the covenants or agreements on the part of BCA set forth in this Agreement or any governing document by and between BCA and BROOKE for the transactions being serviced which continues unremedied for a period of ten (10) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to BCA by BROOKE; or

c. a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or appointing a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against BCA and such decree or order shall have remained in force undischarged or unstayed for a period of sixty (60) days; or

d. BCA shall consent to the appointment of a trustee, conservator or receiver or liquidator in any bankruptcy, insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to BCA or of or relating to all or substantially all of the property of BCA; or

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e. BCA shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable bankruptcy, insolvency or reorganization statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations or take any action in furtherance of the foregoing.

6. Remedies.

a. Remedies of BCA. If a BROOKE Event of Default shall occur, BCA (i) may terminate this Agreement by giving not less than ten (10) days prior written notice to BROOKE, and (ii) shall be entitled to any and all other rights and remedies under law or in equity.

b. Remedies of BROOKE. If a BCA Event of Default shall occur, BROOKE (i) may terminate this Agreement and any further obligations hereunder by giving not less than ten (10) days prior written notice to BCA, and (ii) shall be entitled to any and all other rights and remedies under law or in equity.

c. Payment of Fees Upon Termination. Whether this Agreement is terminated through Section 2 or Section 6, BROOKE shall be entitled to be paid any and all fees and reimbursements which remain accrued and unpaid through the final date of the rendering of the Services. In addition, within five (5) business days after any termination, BROOKE will return any of BCA’s materials used in performing the Services at BCA’s expense. The terms and provisions of this Section 6(c) shall survive any termination of this Agreement.

d. Limitation of Damages. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES. Additionally, BCA acknowledges that BROOKE is merely providing a service for a fee under this Agreement. Accordingly, BROOKE shall not be liable to BCA under this Agreement under any circumstances for any amounts in excess of any fees paid to BROOKE hereunder. BROOKE MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER WITH RESPECT TO THE SERVICES AND BCA SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. The terms and provisions of this Section 6(d) shall survive any termination of this Agreement.

e. Indemnification by BCA. BCA hereby agrees to indemnify and hold BROOKE and its affiliates, officers, directors, agents and employees (collectively, the “BROOKE Indemnitees”) harmless from and against any and all liabilities, losses, damages, expenses, fines and penalties of any kind, including reasonable attorneys’ fees and disbursements, incurred by the Brooke Indemnities as a result of any claim made against any of the Brooke Indemnitees by any third party arising out of provision of the Services (except to the extent, and only to the extent, of BROOKE’s liability to BCA provided in Subsection 6(d) above).

7. Notices. No notice or other communication (other than invoices from BROOKE to BCA pursuant to Subsection 3b of this Agreement) shall be deemed given unless sent in any of the manners, and to the persons, specified in this Section. All notices and other communications hereunder shall be in writing and shall be deemed given (a) upon receipt if delivered personally (unless subject to clause (b)) or if mailed by registered or certified mail, (b) at noon on the date after dispatch if sent by overnight courier or (c) upon the completion of transmission (which is confirmed by telephone or by a statement generated by the transmitting machine) if transmitted by telecopy or other means of facsimile which provides immediate or near immediate transmission to compatible equipment in the possession of the recipient, in any case to the parties at the following addresses or telecopy numbers (or at such other address or telecopy number for a party as will be specified by like notice):

If to BCA:	Brooke Capital Advisors, Inc.
	10950 Grandview Drive, Suite 500
	Overland Park, KS 66210
	Attn: President
	FAX: (913) 469-1177

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If to BROOKE:	Brooke Corporation
	10950 Grandview Drive, Suite 600
	Overland Park, Kansas 66210
	Attn: President
	Fax: (913) 339-6328

Invoices issued by BROOKE pursuant to Subsection 3b of this Agreement shall be delivered by hand delivery, regular mail, overnight courier, facsimile transmission or email transmission.

8. Independent Contractor. In its performance and completion of the Services and any of its other duties and obligations under this Agreement, BROOKE shall at all times be deemed to be an independent contractor and nothing in this Agreement shall at any time be construed so as to create the relationship of employer and employee, principal and agent, partnership or joint venture as between BROOKE and BCA. BROOKE shall have the entire charge, control and supervision of its performance of the Services and any of its other duties and obligations under this Agreement, subject to the terms and provisions of this Agreement and Exhibit A hereto. Both parties acknowledge that they shall have no authority to bind the other party to any contractual or other obligation whatsoever. The performance of the Services by BROOKE or any of its affiliates shall not in any manner impair the absolute control of the business operations of BCA by the board of directors of BCA.

9. Non-Exclusivity. Nothing contained in this Agreement shall be construed to provide either party with exclusive rights. Without limitation, this Agreement shall not be construed to preclude BCA from contracting with persons or entities other than BROOKE and its affiliates to perform any of the services that constitute the Services.

10. Confidentiality. Each party (the “Receiving Party”) agrees and acknowledges that, except to the extent permitted herein, all information and data supplied by the other party (the “Disclosing Party”) regarding its matters, systems, procedures, assets, customers or operations shall be held in strict confidence at all times and the Receiving Party will not disclose or otherwise divulge any of such information to any party without the prior written consent of the Disclosing Party, provided, however, that the Receiving Party shall be authorized to disclose such information (i) to any of its directors, members, officers, employees, representatives, accountants, auditors, attorneys and agents and to any of its affiliates, and parents and any of their respective directors, members, officers, employees, representatives, accountants, auditors, attorneys and agents to the extent any of them have a need to know such information to perform services hereunder and only for such purpose and agree in writing to keep such information confidential (collectively referred to herein as “Receiving Party’s Representatives”); (ii) to any government agency with jurisdiction over the Receiving Party or the Receiving Party’s Representatives or the transaction contemplated herein; (iii) as may be required by law or regulation, judicial or administrative order, ruling or judgment or legal obligation to disclose (which may include, by way of example and not by way of limitation, any discovery or disclosure demands or requirements issued or arising in any judicial or administrative investigation or proceeding); (iv) if it is advised in writing by its counsel that its failure to do so would be unlawful, or (v) if failure to do so would expose the Receiving Party to loss, liability, claim or damage for which it has not been adequately indemnified to its satisfaction. The terms and provisions of this Section 10 shall survive any termination of this Agreement.

11. Governing Law. This Agreement and the respective rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of Kansas, without regard to its conflicts of laws provisions.

12. Successors and Assigns. This Agreement and the terms, covenants, provisions and conditions hereof shall be binding upon, and shall inure to the benefit of, the respective heirs, successors and assigns of the parties hereto; provided, however, that neither party shall assign this Agreement, or otherwise dispose of all or any portion of its rights, interests or obligations hereunder, to any person or entity without the prior written consent of the other party. There shall be no third party beneficiaries to this Agreement. This Agreement is not intended to confer on any person other than the parties hereto and their successors and permitted assigns any rights, obligations, remedies or liabilities.

13. Severability. If any provision of this Agreement is held to be invalid or unenforceable, then, to the extent that such invalidity or unenforceability shall not deprive either party of any material benefit intended to be provided by this Agreement, the remaining provisions of this Agreement shall remain in full force and effect and shall be binding upon the parties hereto.

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14. Entire Agreement; Modification. This Agreement and the exhibits and schedules attached hereto embody the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous agreements and understandings, oral or written, relating to said subject matter. Any exhibits to this Agreement are hereby incorporated into this Agreement in their entirety by this reference. This Agreement and the exhibits hereto may be amended, modified and/or supplemented only by the written and executed agreement of BROOKE and BCA.

15. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and all of which shall together constitute one and the same agreement.

16. Headings. The headings of the Sections contained in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any provision hereof.

17. Waiver. All remedies available to either party for one or more breaches by the other party are and shall be deemed cumulative and may be exercised separately or concurrently without waiver of any other remedies. No party hereto shall be deemed to have waived any right, power or privilege under this Agreement unless such waiver shall have been expressed in a written instrument signed by the waiving party. The failure of any party hereto to enforce any provision of this Agreement shall in no way be construed as a waiver of such provision or a right of such party to thereafter enforce such provision or any other provision of this Agreement.

18. Construction. Unless the context of this Agreement otherwise clearly requires, (i) references in this Agreement to the plural include the singular, the singular the plural, the masculine the feminine, the feminine the masculine and the part the whole and (ii) the word “or” will not be construed as exclusive and the word “include,” “including” or similar terms shall be construed as if followed by the phrase “without being limited to.”

19. Mediation. Any issue, claim, dispute or controversy that may arise out of or in connection with, or relating to this Agreement (including exhibits and addenda) and/or the relationship of the parties, and which the parties are not able to resolve themselves by negotiation, shall be submitted to mediation in a manner agreed to by the parties. The parties agree to use mediation to attempt to resolve such issue, claim or dispute prior to filing any arbitration action, lawsuits, complaints, charges or claims. The parties will select an independent mediator agreeable to both parties. The mediator will communicate with the parties to arrange and convene the mediation process that will be most efficient, convenient and effective for both parties. The costs of the mediation and fees of the mediator will be borne equally by the parties. The parties will cooperate with the mediator in coming to a reasonable agreement on the mediation arrangements which will include the time and place for conducting the mediation, who will attend or participate in the mediation and what information and written material will be exchanged before the mediation. The mediation will be conducted in Kansas.

20. Arbitration. Any issue, claim, dispute or controversy that may arise out of, in connection with or relating to this Agreement (including exhibits and addenda) and/or the relationship of the parties, and which the parties are not able to resolve through mediation, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in a court having jurisdiction thereof. The parties agree to use arbitration to resolve any such issue, claim, dispute or controversy prior to and in lieu of filing any lawsuits, complaints, charges or claims. The costs of the arbitration and fees of the arbitrator(s) will be borne equally by the parties.

(signature page follows)

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.

BROOKE CAPITAL ADVISORS, INC.
/s/ MICHAEL S. HESS
By:	Michael S. Hess
Title:	President and Chief Executive Officer
BROOKE CORPORATION (“BROOKE”)
/s/ ANITA LARSON
By:	Anita Larson
Title:	President and Chief Operating Officer

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EXHIBIT A

SCHEDULE OF SERVICES

BROOKE shall perform the following services:

Legal Services

• Assist with dispute resolution and litigation relating to general corporate matters

• Assist in the development and maintenance of BCA policies

• Assist with problem resolution

• Negotiate, draft, review, revise, interpret, enforce and terminate contracts

• Coordinate responses to consumer and regulatory complaints and investigations

• Intellectual property assistance

• Seek and maintain service marks and trademark registrations

• Seek and maintain patents

Accounting, Tax and Auditing Services

• Work with BCA’s operations personnel to get information required for accounting purposes

• Coordinate BCA’s internal audit activities

• Facilitate and collaborate work of consultants and others hired to assist with BCA internal audit process

• Coordinate audit activities with external auditors

• Facilitate and collaborate work for external auditors

• Coordinate budget preparation

• Coordinate preparation of income tax returns, property tax returns and other tax reports and returns by external tax professionals

• Track fixed assets

• Assist with the establishment or enhancement of processes, controls, procedures and methods pertaining to financial reporting

Risk Management Services

• Provide or assist in procuring insurance

• Provide information about insurance policies

Corporate Marketing Services

• Develop, coordinate, track and release press releases

• Develop, design and coordinate corporate identity, BCA message and public relations

• Coordinate trademark protection, trade name protection and logo usage

Permanent and Confidential Document Management

• Process referenced documents in accordance with established Original Documents Memorandum

• Provide secure facilities for storage of referenced documents

• Establish procedures for filing and physical security of referenced documents

• Establish procedures for electronically storing and electronic security of referenced documents

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Transaction Services

• Prepare documents and negotiate acquisitions, sales and other contracts

• Maintain agreements library and forms

• Assist in the tracking and review of original transaction documents

• Provide advice on loan brokerage activity issues

• Provide consultation with respect to “Hot Spots”

• Research state laws as Company expands

• Handle financing transactions including securitizations, warehouse lines

• Provide legal counsel to Company on transaction related matters

• Coordinate loan brokerage registration and exemption filings

• Assist with problem resolution (including post transaction, loan brokerage activities and other issues)

• Review loan brokerage recruitment advertising for compliance

• Provide counsel on loan brokerage compliance

• Conduct loan brokerage compliance training

• Assist with dispute resolution and manage litigation relating to loan brokerage, sellers, lending,

Facilities Services

• Provide office space

• Track fixed assets for the company

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EXHIBIT B

SCHEDULE OF FEES

BCA shall pay the following fees to BROOKE:

A fee of $145,000.00 monthly payable in equal monthly installments, with each payment for a calendar month due on or before the last day of such calendar month. If the Servicing Agreement becomes effective on a day other than the first day of a calendar month, or if the Servicing Agreement terminates on a day other than the last day of a calendar month, the fee for such month shall be prorated based on the number of days in the month during which the Agreement is effective. Monthly payments shall be due and payable by BCA in accordance with this Schedule of Fees without invoice or advance notice of payment obligation from BROOKE.

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EX-31.1

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) Certifications

I, Robert D. Orr, certify, that:

1. I have reviewed this quarterly report on Form 10-QSB of First American Capital Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this quarterly report;

4. The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d. Disclosed in this quarterly report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Date: April 25, 2007	/s/ Robert D. Orr
	Robert D. Orr,
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Rule 13a-14(a)/15d-14(a) Certifications

I, William R. Morton, Jr., certify, that:

1. I have reviewed this quarterly report on Form 10-QSB of First American Capital Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this quarterly report;

4. The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d. Disclosed in this quarterly report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Date: April 25, 2007	/s/ William R. Morton, Jr.
	William R. Morton, Jr.
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-QKSB of First American Capital Corporation (the “Company”) for the period ended March 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert D. Orr, President and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: April 25, 2007	/s/ Robert D. Orr
	Robert D. Orr,
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-QSB of First American Capital Corporation (the “Company”) for the period ended March 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William R. Morton, Jr., Chief Financial Officer, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: April 25, 2007	/s/ William R. Morton, Jr.
	William R. Morton, Jr.
	Chairman & Secretary of the Board of Directors