<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities and Exchange Act of 1934
For Quarter Ended Commission File No.
September 30, 1994 0-8403
LAURENTIAN CAPITAL CORPORATION
Delaware 59-1611314
- - ------------------------- ------------------------
(State of Incorporation) (I.R.S. Employer
Identification Number)
640 Lee Road
Wayne, Pennsylvania 19087
- - ------------------------- -------------------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number,
including area code (610) 889-7400
-------------------------
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 and 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
------ ------
Number of shares outstanding of the Registrant's Common Stock as of November 14,
1994:
Common stock, $0.05 Par Value - 7,587,398
---------
Page 1 of 18
Exhibit Index Page 17
<PAGE> 2
LAURENTIAN CAPITAL CORPORATION
CONTENTS
Page(s)
Consolidated Balance Sheets as at September 30, 1994
(Unaudited) and December 31, 1993 3-4
Consolidated Statements of Operations (Unaudited) for the
Nine Months and Quarter Ended September 30, 1994 and 1993 5
Consolidated Statements of Cash Flows (Unaudited) for the
Nine Months Ended September 30, 1994 and 1993 6
Notes to Interim Consolidated Financial Statements
(Unaudited) 7-8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-13
Part II - Other Information 14-15
Signature 16
Exhibit Index 17
Exhibit 11 - Computation of Per Share Earnings 18
Exhibit 27 - Financial Data Schedule 19
<PAGE> 3
LAURENTIAN CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)
September 30, December 31,
1994 1993
-------------- ------------
(Unaudited)
ASSETS
Investments:
Fixed maturities held for investment, at
amortized cost (market, $253,801).............. $ 277,263 $ 0
Fixed maturities, at amortized cost
(market, 1993 - $468,497)...................... 0 458,668
Fixed maturities available for sale, at
market (amortized cost, $230,959).............. 221,648 0
Equity securities, at market (cost,
1994 - $13,139; 1993 - $28,481)................ 12,346 30,379
Mortgage loans on real estate................... 23,005 29,438
Investment real estate.......................... 4,521 4,643
Policy loans.................................... 50,784 51,677
Short-term investments.......................... 1,198 10,479
-------- --------
TOTAL INVESTMENTS............................ 590,765 585,284
Cash............................................. 6,936 8,722
Accounts, notes and premiums receivable.......... 4,461 5,011
Reinsurance receivables.......................... 89,359 38,982
Accrued investment income........................ 6,661 5,855
Deferred policy acquisition costs................ 72,938 71,745
Costs in excess of net assets of business
acquired........................................ 7,447 7,130
Property and equipment, net...................... 11,998 11,972
Other assets..................................... 3,555 1,780
Assets held in separate accounts................. 227,426 236,251
-------- --------
TOTAL ASSETS................................. $1,021,546 $972,732
========== ========
SEE NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
<PAGE> 4
LAURENTIAN CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)
September 30, December 31,
1994 1993
------------- ------------
(Unaudited)
LIABILITIES
Policy liabilities and accruals:
Future policy benefits...................... $ 477,087 $411,951
Unearned premiums........................... 1,713 1,804
Other policy claims and benefits payable.... 13,672 12,629
---------- --------
Total policy liabilities and accruals........ 492,472 426,384
Other policyholders' funds................... 125,946 122,409
Debt......................................... 45,000 54,822
Other liabilities............................ 16,766 15,257
Current income taxes......................... 92 145
Deferred income taxes........................ 9,956 11,827
Liabilities related to separate accounts..... 227,426 236,251
------- -------
TOTAL LIABILITIES........................ 917,658 867,095
---------- --------
Commitments and contingent liabilities
Redeemable preferred stock, Series A
Convertible, $.01 par value, at
redemption value
Shares authorized: 5 million
Shares issued: 57,767
Outstanding: 32,939 and 41,528 at
September 30, 1994 and December 31,
1993, respectively........................ 3,294 4,153
------- -------
STOCKHOLDERS' EQUITY
Common stock, $.05 par value
Shares authorized: 20 million
Shares issued: 8,111,496................... 406 406
Capital in excess of par value.............. 59,127 59,071
Net unrealized appreciation (depreciation)
of securities, net of tax.................. (6,668) 1,253
Treasury stock, at cost (shares
outstanding: 517,739 and 562,739 at
September 30, 1994 and December 31, 1993,
respectively)............................... (2,593) (2,818)
Retained earnings............................ 50,322 43,572
------- -------
TOTAL STOCKHOLDERS' EQUITY............... 100,594 101,484
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY................................ $1,021,546 $972,732
========== ========
SEE NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
<PAGE> 5
LAURENTIAN CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Quarter Ended
September 30, September 30,
1994 1993 1994 1993
-------- -------- ------- -------
<S> <C> <C> <C> <C>
Revenues:
Premiums $ 63,455 $ 61,392 $ 22,802 $ 21,078
Net investment income 33,398 35,851 11,439 12,468
Realized investment gains 2,467 2,115 87 851
Other revenue 3,103 2,978 1,447 1,120
--------- --------- --------- ---------
Total revenues 102,423 102,336 35,775 35,517
--------- --------- --------- ---------
Benefits and expenses:
Benefits and settlement expenses 59,321 59,954 21,222 20,759
Amortization of deferred
policy acquisition costs 10,829 9,185 4,144 2,857
Insurance and other expenses 22,810 24,783 7,255 8,849
--------- --------- --------- ---------
Total benefits and expenses 92,960 93,922 32,621 32,465
--------- --------- --------- ---------
Income before income taxes and
cumulative effect of accounting change 9,463 8,414 3,154 3,052
Income tax expense:
Current 500 400 300 190
Deferred 1,960 2,166 457 765
--------- --------- --------- ---------
Income before cumulative effect of
accounting change 7,003 5,848 2,397 2,097
Cumulative effect of accounting change:
Adoption of SFAS 109 0 400 0 0
--------- --------- --------- ---------
NET INCOME $ 7,003 $ 6,248 $ 2,397 $ 2,097
========= ========= ========= =========
Income available to common shareholders:
Net income $ 7,003 $ 6,248 $ 2,397 $ 2,097
Less: accrued dividends on
preferred stock 178 207 51 69
--------- --------- --------- ---------
Net income attributable
to common shareholders $ 6,825 $ 6,041 $ 2,346 $ 2,028
========= ========= ========= =========
Earnings per share:
Income before cumulative effect of
accounting change $ 0.90 $ 0.75 $ 0.31 $ 0.27
Cumulative effect of accounting change:
Adoption of SFAS 109 0.00 0.05 0.00 0.00
--------- --------- --------- ---------
NET INCOME $ 0.90 $ 0.80 $ 0.31 $ 0.27
========= ========= ========= =========
Weighted average shares outstanding (in thousands) 7,578 7,549 7,594 7,549
========= ========= ========= =========
</TABLE>
SEE NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
<PAGE> 6
LAURENTIAN CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1994 1993
------ ------
<S> <C> <C>
Cash flow from operations:
Net income $ 7,003 $ 6,248
Adjustments to reconcile net income to net
cash provided by operating activities:
Cumulative effect of change in accounting principle 0 (400)
Increase in policy liabilities and accruals,
policyholders' funds and income taxes 18,209 12,959
Increase in accrued investment income and
accounts and notes receivable (53) (586)
Increase (decrease) in accrued expense and
other liabilities (785) 1,138
Amortization of deferred policy acquisition costs 10,829 9,185
Policy acquisition costs deferred (11,151) (7,646)
Depreciation expense 1,106 1,143
Amortization of goodwill 200 214
Realized gains on investments (2,467) (2,115)
Other reconciling adjustments, net (1,163) (1,643)
--------- ---------
Net cash provided by (used in) operating activities 21,728 18,497
--------- ---------
Cash flow from investing activities:
Sale of investments 15,727 8,786
Maturity or repayment of investments 72,962 167,294
Purchase of investments (109,975) (208,451)
Purchase of property and equipment (1,065) (984)
Net decrease in short-term investments 9,489 21,540
--------- ---------
Net cash provided by (used in) investing activities (12,862) (11,815)
--------- ---------
Cash flow from financing activities:
Proceeds from borrowing 45,000 392
Repayment of debt (54,822) 0
Sale of treasury shares 282 19
Dividends to preferred shareholders (253) (276)
Redemption of preferred stock (859) 0
Other financing activities, net 0 (3)
--------- ---------
Net cash provided by (used in) financing activities (10,652) 132
--------- ---------
Net increase (decrease) in cash (1,786) 6,814
Cash at beginning of period 8,722 20,292
--------- ---------
Cash at end of period $ 6,936 $ 27,106
========= =========
Supplemental disclosure of cash flow information:
Cash paid for interest expense $ 2,746 $ 3,667
Cash paid for federal income taxes 478 275
</TABLE>
SEE NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
<PAGE> 7
LAURENTIAN CAPITAL CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION:
- - -------------------------------
The Interim Consolidated Financial Statements should be read in conjunction with
the following notes and with the Notes to the Consolidated Financial Statements
included in the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993. In the opinion of management, the financial statements
contain all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the financial position as of September 30, 1994 and
the results of operations and statements of cash flows for the three month and
nine month periods ended September 30, 1994 and 1993.
The consolidated financial statements include, after intercompany eliminations,
Laurentian Capital Corporation (individually or collectively with its
subsidiaries, the "Company"), and its wholly-owned subsidiaries Loyal American
Life Insurance Company ("Loyal"), Prairie States Life Insurance Company
("Prairie"), and Rushmore National Life Insurance Company ("Rushmore").
The results of operations for the nine month period ended September 30, 1994 are
not necessarily indicative of the results to be expected for the full year.
Certain prior year information has been reclassified to conform with the current
year's presentation.
NOTE 2 - CHANGE IN ACCOUNTING PRINCIPLE - ACCOUNTING FOR CERTAIN INVESTMENTS IN
DEBT AND EQUITY SECURITIES:
- - ---------------------------
Effective January 1, 1994, the Company adopted the provisions of Statement of
Financial Accounting Standards Number 115, "Accounting for Certain Investments
in Debt and Equity Securities" (SFAS 115). SFAS 115 requires that debt
securities are to be classified as either held to maturity (carried at amortized
cost), available for sale (carried at market value with unrealized gains or
losses reported in stockholders' equity), or trading (carried at market value
with unrealized gains or losses reported in net income).
The Company believes that it has the ability and intent to hold to maturity its
debt security investments that are classified as held to maturity. The Company
also recognizes that there may be circumstances where it may be appropriate to
sell a security prior to maturity in response to changes in a variety of
circumstances. In recognizing the need for the flexibility to respond to such
changes, the Company has designated a portion of its fixed maturity portfolio as
available for sale. The Company has not classified any of its fixed maturity
securities as trading.
<PAGE> 8
SFAS 115 does not permit a retroactive application to prior years' financial
statements. The effect of adopting SFAS 115 was to increase the carrying amount
of fixed maturity securities classified as available for sale by $6.5 million,
increase deferred income taxes payable by $2.2 million, and increase
stockholders' equity by $4.3 million (or $0.57 per share), as of January 1,
1994. Due to the general decline in the bond market experienced during 1994, the
effect of SFAS 115 was to decrease the carrying amount of fixed maturities
available for sale, deferred income taxes payable and stockholders' equity by
$9.3 million, $3.2 million and $6.1 million (or $0.81 per share), respectively,
at September 30, 1994.
NOTE 3 - INVESTMENTS:
- - ---------------------
Of the fixed maturity investments, $4.7 million at amortized cost, less
permanent impairments, were rated as below investment grade as of September 30,
1994. These investments had an associated market value of $4.4 million. As of
December 31, 1993, $8.8 million at amortized cost, less permanent impairments,
with an associated market value of $9.1 million were rated as below investment
grade. Most of these securities have been evaluated by the National Association
of Insurance Commissioners and found to be suitable for reporting at book value
for statutory reporting purposes. No material effect is expected from these
holdings on the Company's financial condition or the results of operations. The
Company's investment strategy is to hold fixed income instruments to maturity
and to recognize permanent impairments on those investments where reduction in
amounts to be received at maturity is likely.
<PAGE> 9
*******************************************************************************
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
----------------------------------------------------------------
Premium Income
- - --------------
The following table sets forth for the periods shown the amount of premium
income for the Company, and the percentage change from the corresponding
prior-year period:
Nine Months Ended Three Months Ended
September 30 September 30
------------------ ------------------
(Dollars in thousands)
1994 amount $63,455 $22,802
1993 amount 61,392 21,078
Percentage increase 3.4% 8.2%
For the nine months and quarter ended September 30, 1994, the net increase in
premium income, as compared to the corresponding period in 1993, was due to
increased life insurance sales at Prairie.
Net Investment Income, Realized Investment Gains and Other Revenue
- - ------------------------------------------------------------------
The following table sets forth for the periods shown the amount of net
investment income, realized investment gains and other revenue and the
percentage change from the corresponding prior-year period:
Nine Months Ended Three Months Ended
September 30 September 30
------------------ ------------------
(Dollars in thousands)
1994 amount $ 38,968 $ 12,973
1993 amount 40,944 14,439
Percentage decrease (4.8)% (10.2)%
For the nine months and quarter ended September 30, 1994, the decreases in net
investment income, realized investment gains and other revenue in 1994, as
compared to 1993, were primarily due to decreases in net investment income of
$2.5 million and $1.0 million, respectively. The decrease for the nine months
ended September 30, 1994 was partially offset by an increase in gross realized
investment gains of $0.4 million, most of which resulted from the Company's sale
of its investment in North American National Corporation in the first quarter
for a gross realized gain of $1.7 million. The decline in net investment income
reflects the reduced portfolio yield as a result of significant prepayments
received during 1993 that were reinvested at lower interest rates. Partially
offsetting the decline in portfolio yield has been an increase in invested
assets.
<PAGE> 10
Benefits & Expenses
- - -------------------
The following table sets forth for the periods shown the benefits and expenses
incurred by the Company as a percentage of premium income:
Nine Months Ended Quarter Ended
September 30 September 30
--------------------- ----------------------
Benefits Expenses Benefits Expenses
-------- -------- -------- --------
1994 93.5% 53.0% 93.1% 50.0%
1993 97.7% 55.3% 98.5% 55.5%
For the nine months ended September 30, 1994, benefits decreased by $0.6 million
as compared to the prior year. The decrease was due primarily to lower levels of
life insurance benefits at Loyal, primarily in the first quarter. For the
quarter ended September 30, 1994, benefits increased by $0.5 million as compared
to the prior year while the percentage decreased due to a $1.7 million increase
in premium income.
Total expenses decreased $0.3 million for both the nine months and quarter ended
September 30, 1994. Interest expense for the nine months and quarter ended
September 30, was approximately $0.9 and $0.5 million lower than the
corresponding prior year periods, respectively, due to the refinancing of the
Company's debt. The Company continues to seek opportunities to reduce expenses
through various cost containment programs. Offsetting the decreases in benefits
and expenses was an increase in the amortization of deferred acquisition costs
asociated with the increase in single premium annuity and life insurance
products.
Income Taxes
- - ------------
The Company's effective tax rates for the periods ended September 30, 1994 and
1993 were 26% and 30.5%, respectively. The primary reason the effective tax
rates for the periods ended September 30, 1994 and 1993 are lower than the
enacted statutory tax rate of 34% is due to the utilization of previously
unrecognized tax benefits on the sales of certain real estate investments during
the 1994 and 1993 periods and on the sale of the investment in North American
National during the 1994 period.
Effective January 1, 1993, the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS 109). The cumulative
benefit of $400,000 of adopting this change as of January 1, 1993 has been
reflected in the statement of operations for the nine months ended September 30,
1993 included herein.
<PAGE> 11
Net Income
- - ----------
The following table sets forth for the periods shown net income and earnings per
share:
Nine Months Ended Three Months Ended
September 30 September 30
--------------------- ---------------------
(Dollars in thousands except per share amounts)
Earnings Earnings
Amount Per Share Amount Per Share
------ --------- ------ ---------
1994 amount $7,003 $ 0.90 $2,397 $ 0.31
1993 amount 6,248 0.80 2,097 0.27
Increase amount 755 0.10 300 0.04
The improvement in net income of approximately $0.8 million and $0.3 million for
the nine month and three month periods ended September 30, 1994, respectively,
over the corresponding periods in 1993, was due primarily to reductions in
expenses, offset by a decrease in net investment income. Included in net income
for the nine month period ended September 30, 1993 is a non-recurring income tax
benefit of $400,000 as a result of the Company's adoption of SFAS 109.
Liquidity and Capital Resources
- - -------------------------------
The life insurance industry is one that normally produces a positive cash flow
from operations and scheduled principal repayments from portfolios of fixed
maturity investments (bonds and redeemable preferred stocks) and mortgage loans.
This cash flow is used to fund an investment portfolio to finance future benefit
payments, which represent long-term obligations reserved using certain assumed
interest rates. Since future benefit payments are primarily long-term
obligations, the Company's investments are predominately long-term fixed rate
investments such as bonds and mortgage loans which should provide a sufficient
return to cover these obligations. The nature and quality of the various types
of investments made by a life insurance company must comply with the statutes
and regulations imposed by the states in which that company is licensed. These
statutes and regulations generally require that investments be in high grade
investments which provide protection for policyholders.
<PAGE> 12
As of September 30, 1994, the Company's total fixed maturity investment
portfolio had an amortized cost of $508.2 million with a market value of $475.4
million, $32.8 million below amortized cost. A portion of this amount has been
charged against stockholders' equity as of September 30, 1994 in accordance with
SFAS 115, as described in Note 2 to the Interim Consolidated Financial
Statements presented herein. This differential between amortized cost and market
is significantly influenced by changes in interest rates subsequent to purchase
of the investment. The Company had $23.0 million in mortgage loans at September
30, 1994, which could reflect a small premium or discount if those loans had
quoted market prices. Since these assets are invested for terms generally
corresponding to anticipated future benefit payments and carry interest rates in
excess of assumed reserve interest rates, they produce predictable cash flows
and when combined with future premium income should be sufficient to fund the
Company's future benefit payments in the ordinary course of business without any
need for liquidation prior to maturity.
The Company holds a substantial position in mortgage-backed securities ("MBS").
These are instruments collateralized by pools of residential or commercial
mortgages, which return interest and principal payments to the investor monthly.
The Company's MBS holdings are primarily issued by either U.S. government
agencies (i.e., GNMA, FNMA and FHLMC) or major U.S. financial institutions. MBS
are subject to prepayment risk, especially in periods when interest rates are
falling, which can adversely affect their yield and maturity. With the
significant decline experienced in interest rates throughout 1993, the Company
experienced significant prepayment activity. The Company has experienced a
decline in the portfolio yield as a result of reinvesting these proceeds into
similar investments at lower interest rates. The level of prepayment activity
abated significantly during the first nine months of 1994, and the Company
expects prepayment activity to diminish further throughout the remainder of
1994.
Policy loans at September 30, 1994 were $50.8 million. These loans have
associated rates in the 3.5% to 8% range, at least equal to the assumed interest
rates used for future policy benefits; accordingly, policy loans should not
result in negative cash flow.
In addition to the cash flow necessary to fund benefit payments, the Company
requires cash flows for operating and administrative expenses. The level of
expenses normally fluctuates in proportion to the amount of premium produced;
however, the Company's cash disbursements in the holding company have from time
to time exceeded its cash receipts, principally due to its former acquisitions
program. In accordance with the mandatory redemption provision of its preferred
stock, the Company redeemed 8,529 shares of such stock during the third quarter
of 1994. The stock was redeemed at $100 per share, for a total cash outlay of
$852,900.
On April 25, 1989, an agreement was signed which provided the Company with a
five year Revolving Underwriting Facility ("RUF") for a total commitment of $55
million. Pursuant to the terms of the RUF, the Company paid interest at a
variable rate, with a maximum rate equal to 0.30% above the London Interbank
Offered Rate ("LIBOR"). On March 6, 1991, the Company entered into an interest
rate swap agreement that had the effect of fixing the LIBOR component of the RUF
at 7.94% until its maturity on April 25, 1994.
<PAGE> 13
On April 25, 1994, the Company entered into a five year revolving credit
facility in the amount of $45 million to refinance part of the RUF. The new
credit facility, together with the payment of $10 million by the Company,
satisfied the repayment of the RUF. Pursuant to the terms of the new credit
facility, the Company will pay interest at a variable rate equal to 1.125% above
the LIBOR.
The Company's subsidiaries are currently producing earnings and net cash flow
sufficient to cover debt service at the parent. However, under the insurance
laws of the states in which the Company's insurance subsidiaries are domiciled,
certain restrictions are imposed on cash dividends from the subsidiaries to the
parent. The insurance laws and regulations generally limit the amount of
dividends to the greater of net statutory gain from operations or 10% of
statutory surplus, and dividends in excess of these amounts can be paid only
with the prior approval of the insurance regulators.
<PAGE> 14
Part II - OTHER INFORMATION
-----------------
Item 1 Legal Proceedings
-----------------
Not applicable
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
---------------------------------------------------
Not applicable
Item 5 Other Information
-----------------
Not applicable
Item 6 Exhibits and Reports on Form 8-K
--------------------------------
(a)
(2) Plan of acquisition, reorganization, arrangement,
liquidation or succession.
Not applicable
(4) Instruments defining the rights of security holders,
including indentures.
Not applicable
(10) Material Contracts.
Not applicable
(11) Statement re: computation of per share earnings.
See Exhibit 11 - attached
(15) Letter re: unaudited interim financial information
Not applicable
(18) Letter re: change in accounting principles.
Not applicable
(19) Report furnished to security holders.
Not applicable
(22) Published report re: matters submitted to vote of
security holders.
Not applicable
(23) Consents of experts and counsel.
Not applicable
(24) Power of attorney.
Not applicable
(27) Financial data schedule See Exhibit 27 - attached
<PAGE> 15
Part II - OTHER INFORMATION (continued)
-----------------
Item 6 Exhibits and Reports on Form 8-K (continued)
--------------------------------
(a) (continued)
(99) Additional exhibits.
Not applicable
(b) During the period covered by this Form 10-Q Quarterly Report, the
Company filed no reports on Form 8-K.
<PAGE> 16
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
LAURENTIAN CAPITAL CORPORATION
------------------------------
Registrant
Date: November 14, 1994 /s/ Bernhard M. Koch
---------------------- --------------------
Bernhard M. Koch
Senior Vice President, Treasurer,
Chief Financial Officer and Secretary
<PAGE> 17
EXHIBIT INDEX
Page
Number
------
Exhibit 11 Statement regarding computation of
per share earnings 18
Exhibit 27 Financial data schedule 19
<PAGE> 18
LAURENTIAN CAPITAL CORPORATION
Exhibit 11 - Computation of Per Share Earnings
---------------------------------
<TABLE>
<CAPTION>
Nine Months Ended Quarter Ended
September 30, September 30,
----------------------- ----------------------
1994 1993 1994 1993
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Shares outstanding 7,548,757 7,544,665 7,593,757 7,548,757
Number of days 96 6 92 92
Shares outstanding 7,593,757 7,548,757
Number of days 177 267
---------- ---------- ---------- ----------
Weighted Average
Shares Outstanding 7,577,933 7,548,667 7,593,757 7,548,757
========== ========== ========== ==========
Net income from operations $7,002,593 $5,847,914 $2,396,852 $2,097,286
Net income from cumulative effect
of change in method of accounting
for income taxes 0 400,000 0 0
---------- ---------- ---------- ----------
Total Net Income 7,002,593 6,247,914 2,396,852 2,097,286
Less:
Accrued Dividends
on Preferred Stock 177,539 207,009 50,621 69,003
---------- ---------- ---------- ----------
Adjusted Net Income $6,825,054 $6,040,905 $2,346,231 $2,028,283
========== ========== ========== ==========
Earnings Per Common Share:
Net income from operations $ 0.90 $ 0.75 $ 0.31 $ 0.27
Cumulative effect of change in
method of accounting for income
taxes 0.00 0.05 0.00 0.00
---------- ---------- ---------- ----------
Per Share Amount $ 0.90 $ 0.80 $ 0.31 $ 0.27
========== ========== ========== ==========
</TABLE>
The Company's Series A Redeemable Preferred Stock are considered to be common
stock equivalents. These shares were not included in the earnings per share
computation because their effect was anti-dilutive. Options granted to purchase
the Company's common stock are also considered common stock equivalents. These
options were not included in the computation of earnings per share because their
maximum possible dilution was not material.
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C>
<MULTIPLIER> 1,000
<CURRENCY> US
<PERIOD-TYPE> QTR-3
<EXCHANGE-RATE> 1
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<DEBT-HELD-FOR-SALE> 221,648
<DEBT-CARRYING-VALUE> 277,263
<DEBT-MARKET-VALUE> 253,801
<EQUITIES> 12,346
<MORTGAGE> 23,005
<REAL-ESTATE> 4,521
<TOTAL-INVEST> 590,765
<CASH> 6,936
<RECOVER-REINSURE> 89,359
<DEFERRED-ACQUISITION> 72,938
<TOTAL-ASSETS> 1,021,546
<POLICY-LOSSES> 477,087
<UNEARNED-PREMIUMS> 1,713
<POLICY-OTHER> 13,672
<POLICY-HOLDER-FUNDS> 125,946
<NOTES-PAYABLE> 45,000
<COMMON> 406
3,294
0
<OTHER-SE> 100,188
<TOTAL-LIABILITY-AND-EQUITY> 1,021,546
63,455
<INVESTMENT-INCOME> 33,398
<INVESTMENT-GAINS> 2,467
<OTHER-INCOME> 3,013
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<INCOME-TAX> 2,460
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<EPS-PRIMARY> 0.90
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</TABLE>
