FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[x] Quarterly Report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1996
or
[ ] Transition Report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the transition period from
____________________to____________________
Commission file number 0-13972
PENN TREATY AMERICAN CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-1664166
(State or other juris- (I.R.S. Employer Identi-
diction of incorporation fication No.)
of organization)
3440 Lehigh Street, Allentown, PA 18103
(Address, including zip code, of principal executive offices)
(610) 965-2222
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if change since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
The number of shares outstanding on the Registrant's common stock, par value
$.10 per share, as of May 9, 1996 was 6,990,084.
<PAGE>
PART I FINANCIAL INFORMATION
Item I. Financial Statements
The registrant's Unaudited Consolidated Balance Sheets, Statements of Operations
and Statements of Cash Flows and Notes thereto required under this item are
contained on pages 3 through 9 of this report, respectively.
<PAGE>
<TABLE>
<CAPTION>
PENN TREATY AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 DECEMBER 31, 1995
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Investments:
Bonds, available for sale at market,
(amortized cost $145,354,697 and
$136,600,775, respectively) ............... $ 146,747,870 $ 142,243,341
Equity securities at market value, (cost
$2,826,441 and $2,102,529, respectively) .. 3,515,637 2,605,612
Policy loans ................................ 79,567 79,404
------------- -------------
Total Investments ......................... 150,343,074 144,928,357
------------- -------------
Cash and cash equivalents ..................... 8,349,672 8,881,061
Property and equipment, at cost, less
accumulated depreciation of $1,939,365
and $1,854,065, respectively ................ 6,007,713 5,740,353
Unamortized policy acquisition costs .......... 67,303,615 63,133,759
Receivables from agents, less allowance for
uncollectable amounts of $231,226 ........... 1,354,377 1,275,481
Accrued investment income ..................... 2,333,406 2,436,435
Cost in excess of net assets acquired, less
accumulated amortization of $240,766 and
$231,826, respectively ...................... 1,188,634 1,197,574
Receivable from reinsurers .................... 8,042,085 7,730,828
Other assets .................................. 3,062,556 2,420,422
------------- -------------
Total Assets .............................. 247,985,132 237,744,270
============= =============
LIABILITIES
Policy reserves:
Accident and health ......................... 68,774,532 62,007,433
Life ........................................ 7,360,838 7,118,848
Unearned premium reserve ...................... 30,719 26,503
Policy and contract claims .................... 53,075,354 50,206,608
Accounts payable and other liabilities ........ 3,690,181 2,681,499
Mortgages and other debts ..................... 2,165,672 2,206,117
Federal income taxes payable .................. 175,000 183,249
Deferred income taxes ......................... 15,437,352 16,206,959
------------- -------------
Total Liabilities ......................... 150,709,648 140,637,216
------------- -------------
(Continued)
<PAGE>
<CAPTION>
PENN TREATY AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS -- Continued
MARCH 31, 1996 DECEMBER 31, 1995
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
Commitments and contingencies
SHAREHOLDERS' EQUITY
Preferred stock, par value $1.00; 5,000,000
shares authorized, none outstanding ......... -- --
Common stock, par value $.10; 10,000,000
shares authorized, 7,595,713 and
7,576,913 shares issued ..................... 759,571 757,691
Additional paid-in capital .................... 41,301,234 41,146,594
Net unrealized appreciation (depreciation)
of securities ............................... 1,374,364 4,055,788
Retained earnings ............................. 55,546,189 52,852,855
------------- -------------
98,981,358 98,812,928
Less 605,629 common shares held in treasury,
at cost ..................................... (1,705,874) (1,705,874)
------------- -------------
Total Shareholders' Equity ................ 97,275,484 97,107,054
------------- -------------
Total Liabilities and Shareholders' Equity $ 247,985,132 $ 237,744,270
============= =============
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PENN TREATY AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
----------------------------
1996 1995
------------ ------------
<S> <C> <C>
Revenue:
Accident and health premiums ................. $ 29,523,797 $ 22,561,821
Life premiums ................................ 946,097 846,371
------------ ------------
30,469,894 23,408,192
Net investment income ........................ 2,386,069 1,682,466
Net realized capital gains ................... 51,221 13,123
Other income ................................. 85,750 61,274
------------ ------------
32,992,934 25,165,055
------------ ------------
Benefits and expenses:
Benefits to policyholders .................... 19,786,654 14,699,128
Commissions .................................. 10,186,871 7,399,866
Net policy acquisition costs deferred ........ (4,169,856) (2,425,042)
General and administrative ................... 3,305,716 2,717,166
Interest ..................................... 36,215 136,512
------------ ------------
29,145,600 22,527,630
------------ ------------
Income before federal income taxes ............. 3,847,334 2,637,425
Provision for federal income taxes ............. 1,154,000 795,000
------------ ------------
Net Income ................................. $ 2,693,334 $ 1,842,425
============ ============
Earnings per share ............................. 0.39 0.39
Weighted average number of shares outstanding .. 6,985,988 4,671,284
============ ============
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PENN TREATY AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
----------------------------
1996 1995
------------ ------------
<S> <C> <C>
Net cash flow from operating activities:
Net income ................................... $ 2,693,334 $ 1,842,425
Adjustments to reconcile net income to cash
provided by operations:
Amortization of intangible assets .......... 8,940 8,940
Policy acquisition costs, net .............. (4,169,856) (2,425,042)
Deferred income taxes ...................... 612,248 422,964
Depreciation expense ....................... 70,665 65,135
Net realized capital gains ................. (51,221) (13,123)
Increase (decrease) due to change in:
Receivables from agents .................... (78,896) (35,301)
Receivable from reinsurers ................. (311,257) (331,210)
Policy and contract claims ................. 2,868,746 2,647,744
Policy and unearned premium reserves ....... 7,013,305 3,954,983
Accounts payable and other liabilities ..... 1,008,682 814,688
Federal income taxes recoverable ........... 0 372,036
Federal income tax payable ................. (8,249) 0
Accrued investment income .................. 103,029 (159,868)
Other, net ................................. (642,134) (395,142)
------------ ------------
Cash provided by operations .............. 9,117,336 6,769,229
------------ ------------
Cash flow from (used in) investing activities:
Proceeds from sales of investments ........... 2,549,725 3,663,123
Maturities of investments .................... 2,140,771 454,696
Purchase of investments ...................... (14,117,271) (9,989,361)
Acquisition of property and equipment ........ (338,025) (109,414)
------------ ------------
Cash used in investing ................... (9,764,800) (5,980,956)
------------ ------------
Cash flow from (used in) financing activities:
Proceeds from excerise of options ............ 156,520 0
Repayments of mortgages and other debts ...... (40,445) (6,952)
------------ ------------
Cash provided by (used in) financing ..... 116,075 (6,952)
------------ ------------
Decreases in cash .............................. (531,389) 781,321
Cash balances:
Beginning of period .......................... 8,881,061 7,226,769
------------ ------------
End of period ................................ $ 8,349,672 $ 8,008,090
============ ============
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1996
(unaudited)
The Consolidated Financial Statements should be read in conjunction with this
note and with the Notes to Consolidated Financial Statements included in Penn
Treaty American Corporation's ("the Company's") Annual Report on Form 10-K for
the year ended December 31, 1995.
In the opinion of management, the summarized financial information reflects all
adjustments (consisting only of normal recurring adjustments) which are
necessary for a fair presentation of financial position and results of
operations for the interim periods. Certain prior period amounts have been
reclassified to conform with current period presentation.
1. Investments
Management has categorized all of its investment securities as
available for sale since they may be sold in response to changes in
interest rates, prepayments, and similar factors. Investments in this
classification are reported at the current market value with net
unrealized gains and losses, net of the applicable deferred income tax
effect, being added to or deducted from the Company's total
shareholders' equity on the balance sheet. As of March 31, 1996,
shareholders' equity was increased by $1,374,364 due to unrealized
gains of $2,082,369 in the investment portfolio. As of December 31,
1995 shareholders equity was increased by $4,055,788 due to unrealized
gains of $6,145,649 in the investment portfolio.
<PAGE>
The amortized cost and estimated market value of investments available
for sale as of March 31, 1996 and December 31, 1995 are as follows:
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
-------------- -----------------
Amortized Estimated Amortized Estimated
Cost Market Value Cost Market Value
---- ------------ ---- ------------
<S> <C> <C> <C> <C>
U.S. Treasury securities
and obligations of
U.S. Government
corporations and
agencies $113,497,522 $113,983,203 $103,119,270 $107,160,841
Obligations of states
and political
sub-divisions 24,952,467 25,771,483 24,952,467 26,147,000
Debt securities issued by
foreign governments 424,055 450,059 449,055 480,500
Corporate securities 4,020,169 4,008,915 5,619,499 5,820,000
Other debt securities 2,460,484 2,534,210 2,460,484 2,635,000
Equities 2,826,441 3,515,637 2,102,529 2,605,612
Policy Loans 79,567 79,567 79,404 79,404
-------- -------- ------- -------
Total Investments $148,260,705 $150,343,074 $138,782,708 $144,928,357
============ ============ ============ ============
Net unrealized gain (loss) $2,082,369 $6,145,649
----------- ----------
$150,343,074 $144,928,357
============ ============
</TABLE>
<PAGE>
2. Reinsurance
The Company has assumed and ceded reinsurance on certain life and
accident and health contracts under various agreements. The tables
below highlight the amounts shown in the accompanying consolidated
statements of operations which are net of reinsurance activity:
<TABLE>
<CAPTION>
Assumed
Assumed
Three Months Ended Gross Ceded to from Other Net
March 31, 1995 Amount Other Companies Companies Amount
------------------ ------ --------------- --------- ------
<S> <C> <C> <C> <C>
Ordinary Life Insurance
In-Force $68,709,000 $18,862,000 - $49,847,000
Premiums:
Accident and Health $30,136,962 $736,315 $123,150 $29,523,797
Life 1,183,024 236,927 0 946,097
Benefits to Policyholders:
Accident and Health 13,064,577 418,440 57,880 12,704,017
Life 466,426 186,394 - 280,032
Increase (decrease) in Policy
Reserves:
Accident and Health 6,550,602 (34,918) (1,842) 6,583,678
Life 241,990 23,063 - 218,927
Commissions 10,485,378 316,980 18,473 10,186,871
<CAPTION>
Assumed
Three Months Ended Gross Ceded to from Other Net
March 31, 1995 Amount Other Companies Companies Amount
------------------ ------ --------------- --------- ------
<S> <C> <C> <C> <C>
Ordinary Life Insurance
In-Force 55,732,000 15,421,000 - 40,311,000
Premiums:
Accident and Health $22,992,556 $584,672 $153,937 $22,561,821
Life 1,307,661 461,290 0 846,371
Benefits to Policyholders:
Accident and Health 11,339,958 653,865 72,350 10,758,443
Life 253,694 82,391 0 171,303
Increase (decrease in
Policy Reserves:
Accident and Health 3,862,401 242,527 (1,267) 3,618,607
Life 1,128,151 977,376 0 150,775
Commissions 7,640,358 263,583 23,091 7,399,866
</TABLE>
<PAGE>
3. Merger Agreement
On March 15, 1996, the Company signed an agreement with Health
Insurance of Vermont, Inc. ("HIVT") providing that the Company will
acquire HIVT by means of a statutory merger with a subsidiary of the
Company. Completion of the merger is subject to approval of regulatory
authorities, and to certain other conditions. HIVT is licensed to
conduct business in 46 states, including New Jersey, West Virginia,
Kansas, Maine and Massachusetts. Upon completion of the merger the
Company would be licensed in all states with the exception of New York.
The Company currently has a license application pending in New York.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Three Months Ended March 31, 1996 and 1995:
Accident and Health Premiums. First year accident and health premiums earned by
the Company in the three month period ended March 31, 1996, including long-term
care and Medicare supplement, increased 44.9% to $10,013,934, compared to
$6,911,074 in the same period in 1995.
First year long-term care premiums earned by the Company in the three
month period ended March 31, 1996 increased 43.0% to $9,792,244, compared to
$6,847,645 in the same period in 1995. This increase was primarily attributable
to increased sales of home health care policies, which increased to $4,648,039
for the three month period ended March 31, 1996 from $1,759,499 for the same
period in 1995. Premiums from sales of nursing home care policies also increased
from $5,088,146 in the three month period ended March 31, 1995 to $5,144,205 in
the same period in 1996. These results reflect increasing market demand for the
Company's home health care policies relative to its nursing home policies and
the Company's marketing focus on its Independent Living policy first introduced
in the fourth quarter of 1994. First year Medicare supplement premiums earned by
the Company in the three month period ended March 31, 1996 increased to $221,690
from $63,429 in the same period in 1995. Total new business for this product
remains low due to the Company's continued de-emphasis of its Medicare
supplement products because of lower profit margins associated with this line of
business.
Renewal accident and health premiums earned by the Company in the three
month period ended March 31, 1996 including long-term care and Medicare
supplement, increased 24.7% to $19,509,862, compared to $15,650,747 in the same
period in 1995.
Renewal long-term care premiums earned by the Company in the three
month period ended March 31, 1996 increased 26.6% to $18,788,224, compared to
$14,841,115 in the same period in 1995. This increase reflects renewals of a
larger base of in-force policies as well as the effect of rate increases the
Company received in various states. The Company believes that this increase also
reflects an increase in persistency. Renewal Medicare supplement premiums earned
by the Company in the three month period ended March 31, 1996 decreased 10.9% to
$721,638, compared to $809,632 in the same period in 1995, consistent with the
Company's de-emphasis in marketing this product discussed above.
Life Premiums. First year life premiums earned by the Company in the three
month period ended March 31, 1996 decreased 6.4% to $387,036, compared to
$413,568 in the same period in 1995. The Company's life business has remained
stable as the Company is focusing its marketing efforts on its new Independent
Living policy and its other long-term care products.
Renewal life premiums earned by the Company in the three month period
ended March 31, 1996 increased to $559,061, compared to $432,803 in the same
period in 1995. This increase was primarily the result of renewals of first-year
policies written in 1995.
<PAGE>
Net Investment Income. Net investment income earned by the Company for the
three month period ended March 31, 1996 increased 41.8% to $2,386,069, from
$1,682,466 for the same period in 1995. This increase was primarily the result
of growth in the Company's investment assets due to continued premium growth and
additional funds of $22,500,000 from the Company's public offering in July 1995
which were offset by a decrease in the average yield on the Company's
investments to 6.5% for the three month period ended March 31, 1996 from 7.0%
for the same period in 1995.
Benefits to Policyholders. Accident and health benefits to policyholders in the
three month period ended March 31, 1996 increased 34.2% to $19,287,695 compared
to $14,377,050 in the same period in 1995. The Company's accident and health
loss ratio (the ratio of benefits to policyholders to total accident and health
premiums) was 65.3% in the three month period ended March 31, 1996, compared to
63.7% in the same period in 1995. This increase in loss ratio was due, in part,
to the increase in premium of the Company's Independent Living policy which is
reserved for at a higher rate, and also to improved persistency.
Life benefits to policyholders in the three month period ended March
31, 1996 increased to $498,959, compared to $322,078 for the same period in
1995. The life loss ratio (the ratio of claims experience and increases in
policy reserves to total life premiums) was 52.7% in the three month period
ended March 31, 1996, compared to 38.1% for the same period in 1995. This
increase relates to the maturing of the life products that the Company first
introduced in August 1993.
Net Policy Acquisition Costs Deferred. The net deferred policy acquisition
costs in the three month period ended March 31, 1996 increased 71.9% to
$4,169,856 compared to $2,425,042 in the same period in 1995, consistent with
the growth of the Company's business. This deferral is net of amortization,
which decreases or increases as the Company's actual persistency is better or
worse than the persistency assumed for reserving purposes. The deferral of
policy acquisition costs has remained consistent with the growth of premiums and
the growth in amortization of policy acquisition costs has been modified by
improved persistency.
General and Administrative Expenses. General and administrative expenses in the
three month period ended March 31, 1996 increased 21.7% to $3,305,716, compared
to $2,717,166 in the same period in 1995. This increase was due to the increase
in the growth of the Company's business. The ratio of general and administrative
expenses to total revenues decreased to 10.0% in the three month period ended
March 31, 1996 compared to 10.8% in the same period during 1995.
First Year Commissions. First year commissions on accident and health business
in the three month period ended March 31, 1996 increased 46.9% to $6,756,482,
compared to $4,599,040 in the same period in 1995, corresponding to the increase
in first year accident and health premiums. The ratio of first year accident and
health commissions to first year accident and health premiums was 67.5% in the
three month period ended March 31, 1996, compared to 66.6% in the same period in
1995.
First year commissions on life business in the three month period ended
March 31, 1996 decreased 4.4% to $310,272, compared to $324,441 in the same
period in 1995, corresponding to the decrease in first year life premiums. The
ratio of first year life commissions to first year life premiums was 80.2% in
the three month period ended March 31, 1996 compared to 78.5% in the same period
in 1995, reflecting a commission structure which varies with the premium payment
terms of policies.
Renewal Commissions. Renewal commissions on accident and health business in the
three month period ended March 31, 1996 increased 25.3% to $3,060,449, compared
to $2,443,023 in the same period in 1995, consistent with the increase in
renewal premiums discussed above. The ratio of renewal accident and health
commissions to renewal accident and health premiums was 15.6% in the three month
period ended March 31, 1996 compared to 15.4% in the same period in 1995. This
ratio fluctuates in relation to the age of the policies in force and the rates
of commissions paid to the agents.
<PAGE>
Provision for Federal Income Taxes. The provision for federal income taxes
recorded by the Company in the three month period ended March 31, 1996 increased
45.2% to $1,154,000, compared to $795,000 in the same period in 1995. The
effective tax rate remained at 30% in the three month period ended March 31,
1996 as in the same period in 1995. The Company's effective tax rate was below
the normal federal corporate rate as a result of deductions allowed for small
life insurance companies as well as the Company's tax-exempt investment income.
Liquidity and Capital Resources. The Company's consolidated liquidity
requirements have historically been created and met from the operations of the
Insurers. The Company's primary sources of cash are premiums and investment
income. The primary uses of cash are policy acquisition costs (principally
commissions), payments to policyholders, investment purchases and general and
administrative expenses.
The Company invests in securities and other investments authorized by applicable
state laws and regulations and follows an investment policy designed to maximize
yield to the extent consistent with liquidity requirements and preservation of
assets. At December 31, 1995, the average maturity of the Company's bond
portfolio was 6.4 years and its market value exceeded cost by 4.1% or
approximately $5,643,000. At March 31, 1996, the average maturity of the
Company's bond portfolio was 6.3 years and its market value exceeded cost by
1.0% or approximately $1,393,000.
On December 28, 1994, the Company entered into an agreement with CoreStates
Bank, N.A., whereby a loan was extended to the Company in an amount of
$4,000,000. The proceeds of the loan were contributed to the surplus of PTLIC in
the form of cash to strengthen its overall capital position. The Company repaid
this loan as required by the loan agreement, with a portion of the proceeds of
the Company's recent public offering of 2,300,000 shares of common stock. The
public offering was consummated on July 6, 1995 and the Company realized net
proceeds of $26,165,000, including the proceeds from the exercise of the
underwriters' over-allotment option.
Management has categorized all of its investment securities as available for
sale since they may be sold in response to changes in interest rates,
prepayments, and similar factors. Investments in this classification are
reported at the current market value with net unrealized gains and losses, net
of the applicable deferred income tax effect, being added to or deducted from
the Company's total shareholders' equity on the balance sheet. As of March 31,
1996, shareholders' equity was increased by $1,374,364 due to unrealized gains
of $2,082,369 in the investment portfolio. As of December 31, 1995 shareholders
equity was increased by $4,055,788 due to unrealized gains of $6,145,649 in the
investment portfolio.
The Company's continued growth is dependent upon its ability to (i) continue
marketing efforts to expand its historical markets, (ii) continue to expand its
network of agents and effectively market its products in states where the
Insurers are currently licensed and (iii) fund such marketing and expansion
while at the same time maintaining minimum statutory levels of capital and
surplus required to support such growth. Management believes that the funds
necessary to accomplish the foregoing, including funds required to maintain
adequate levels of statutory surplus in the Insurers, can be met for at least
the next 24 months by funds generated from the Company's recent public offering
and from operations.
<PAGE>
PTLIC's capital position was improved by the contribution of $14,000,000 of the
net proceeds of the recent public offering to the capital and surplus of the
Insurers during the third quarter of 1995. The Insurers are, on a combined
basis, currently licensed in all states except Kansas, Maine, Massachusetts, New
Jersey, New York and West Virginia. The Company believes that the Insurers'
capital and surplus presently meets or exceeds the requirements in all
jurisdictions in which they each are licensed.
The long-term care insurance industry is a subject of pending legislation in
Congress which, in its present form, provides for a number of modifications of
existing law, including the tax deductibility of long-term care insurance
premiums and the implementation of minimum consumer protection standards to be
included in all long-term care insurance policies. There can be no assurance
that such legislation will be enacted or, if enacted, that the current proposals
will be included.
The Company regularly evaluates potential acquisition opportunities and often
makes preliminary inquiries to determine whether potential acquisition
candidates might be interested in being acquired by the Company. The Company
periodically enters into negotiations with respect to such potential acquisition
opportunities. On March 15, 1996, the Company signed an agreement with Health
Insurance of Vermont, Inc. ("HIVT") providing that the Company will acquire HIVT
by means of a statutory merger with a subsidiary of the Company. Completion of
the merger is subject to approval of regulatory authorities, and to certain
other conditions. HIVT is licensed to conduct business in 46 states, including
New Jersey, West Virginia, Kansas, Maine and Massachusetts. Upon completion of
the merger the Company would be licensed in all states with the exception of New
York. The Company currently has a license application pending in New York.
In the event the Company (i) fails to maintain minimum loss ratios calculated in
accordance with statutory guidelines, (ii) fails to meet other requirements
mandated and enforced by regulatory authorities, (iii) has adverse claim
experience in the future, (iv) is unable to obtain additional financing to
support future growth, or (v) the economy continues to effect the buying power
of senior citizens, the Company's results of operations, liquidity and capital
resources could be adversely affected.
<PAGE>
PART II OTHER INFORMATION
Item 1. Legal Proceedings
The Insurers are parties to various lawsuits generally arising in the normal
course of their insurance business. The Company does not believe that the
eventual outcome of any of the suits to which the Insurers are currently a party
will have a material effect on the financial condition or result of operations
of the Company.
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: Exhibit 11
(b) Reports on Form 8-K: The Company filed one report on Form 8-K during
the quarter ending March 31, 1996, pursuant to Item 5 of that form. No
financial statements were filed as part of that report.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PENN TREATY AMERICAN CORPORATION
Registrant
Date May 9, 1996 /s/Irving Levit
------------------- -----------------------------------------
Irving Levit
President
Date May 9, 1996 /s/Michael F. Grill
------------------- -----------------------------------------
Michael F. Grill
Treasurer
EXHIBIT 11
PENN TREATY AMERICAN CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(unaudited)
<TABLE>
<CAPTION>
Three months
ended March 31,
---------------
1996 (1) 1995 (1)
-------- --------
<S> <C> <C>
Shares outstanding 6,971,284 4,671,284
beginning of period
Weighted average shares of
exercised stock options 14,704 --
Weighted average primary
shares outstanding 6,985,988 4,671,284
Net income for primary
earnings per share 2,693,334 1,842,425
Net income per common
primary share $0.39 $0.39
</TABLE>
(1) Shares outstanding at the beginning of the period are net of Treasury
Shares held at January 1, 1995 and 1994 of 605,629.
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
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