<PAGE>
MFN FINANCIAL CORPORATION
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income by the weighted
average number of shares of the Company's common stock outstanding during the
period. Diluted earnings per share is computed based upon the weighted average
number of shares of common stock outstanding and the dilutive common share
equivalents outstanding during the period. Common stock equivalents include
options granted under the Company's stock option plan, options granted pursuant
to an employment agreement with the Company's Chief Executive Officer and
warrants outstanding convertible into shares of common stock of the Company
using the treasury stock method.
<TABLE>
<CAPTION>
Reorganized Company
--------------------------------------------------
Three Three Nine Three
Months Months Months Months
Ended Ended Ended Ended
(Dollars in thousands, Sept. 30, Sept. 30, Sept. 30, June 30,
except per share data) 2000 1999 2000 1999
----------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
BASIC
Net Income $ 4,318 $ 13,128 $ 17,077 $ 16,627
Average common shares outstanding 10,000,003 10,000,000 10,000,002 10,000,000
Earnings before extraordinary credit $ 0.38 $ 1.16 $ 1.66 $ 1.51
Extraordinary gain from early
retirement of debt 0.05 0.15 0.05 0.15
----------- ----------- ----------- -----------
Earnings per common share $ 0.43 $ 1.31 $ 1.71 $ 1.66
=========== =========== =========== ===========
DILUTED
Net Income $ 4,318 $ 13,128 $ 17,077 $ 16,627
Average common shares outstanding and
share equivalents outstanding 10,002,908 10,054,269 10,003,192 10,087,248
Earnings before extraordinary credit $ 0.38 $ 1.16 $ 1.66 $ 1.50
Extraordinary gain from early
retirement of debt 0.05 0.15 0.05 0.15
----------- ----------- ----------- -----------
Earnings per common share $ 0.43 $ 1.31 $ 1.71 $ 1.65
=========== =========== =========== ===========
</TABLE>
Due to the Company's emergence from the Voluntary Case and the implementation of
Fresh Start Reporting, the presentation of earnings per share for the
Predecessor Company is not meaningful.