Kingsway Financial Services Inc.

Kingsway Financial Services Inc.

Consolidated Statement of Income

For the three months ended March 31, 1996 and 1995

              ($ in Thousands, except for per share amounts)          
                         
                         
                  Quarter ended:      
                    31/3/96   31/3/95
                  Forecast   Actual Actual
                  (unaudited)   (unaudited) (unaudited)
                         
Gross premiums written                 $20,425   $21,856 $10,569
                         
Net premiums written                 $17,194   $26,336 $8,501
                         
Net earned premiums                 $16,878   $15,655 $10,614
Investment income                 833   1,280 712
Premium finance income                 370   328 200
                  18,081   17,263 11,526
                         
Claims incurred                 11,300   10,128 7,284
Commissions & premium taxes                 2,898   2,518 1,723
General expenses                 1,788   2,063 1,519
                  15,986   14,709 10,526
                         
Income before income taxes                 2,095   2,554 1,000
Income taxes                 860   962 451
                         
Net income                 $1,235   $1,592 $549
                         
Earnings per share:                        
  basic:               $0.00   $0.00 $0.00
  fully -diluted:               $0.00   $0.00 $0.00
                         
Claims ratio                 67.0%   64.7% 68.6%
Expense ratio                 27.8%   29.3% 30.5%
Combined ratio                 94.7%   94.0% 99.2%
                         
                         
              Kingsway Financial Services Inc.          
              Consolidated Balance Sheets          
              As at March 31, 1996 and 1995          
              ($ in Thousands)          
                         
                  1996     1995
                      (unaudited)  
ASSETS                        
                         
  Cash & Investments               $82,586     $37,359
  Financed premiums receivable               22,562     8,992
  Deferred policy acquisition costs (note)               9,077     3,741
  Amounts due from reinsurers               33,478     5,238
  Accounts receivable               10,791     4,760
  Capital assets               2,338     1,513
  Deferred income taxes               1,438     363
  Other               388     275
                  $162,658     $62,241
                         
                         
LIABILITIES AND SHAREHOLDERS' EQUITY                        
                         
LIABILITIES                        
                         
  Unpaid claims (note)               $64,695     $20,084
  Unearned premiums (note)               46,966     20,359
  Accounts payable & accrued liabilities               1,939     382
  Amounts due to reinsurers               3,891     1,140
  Note payable to Intercargo               -     2,438
  Deferred service charges               630     632
                  118,121     45,035
                         
SHAREHOLDER'S EQUITY                        
                         
  Share capital               24,222     5,636
  Share warrant               3,935     -
  Retained earnings               16,380     11,570
                  44,537     17,206
                         
                  $162,658     $62,241
                         
    Note:                    
      Comparative amounts were previously shown net of amounts ceded to reinsurers.                  
                         
              Kingsway Financial Services Inc.          
              Consolidated Statement of Changes in Financial Position          
              For the three months ended March 31, 1996 and 1995          
              ($ in Thousands)          
                         
                  1996     1995
                         
                      (unaudited)  
Operating activities:                        
  Net income               $1,592     $549
  Items not involving cash:                      
    Amortization             72     56
    Deferred income taxes             (747)     -
    Net realized gain on sale of investments             (70)     (24)
    Amortization of bond premiums & discounts             (335)     (686)
                  512     (105)
                         
Net change in non-cash balances:                 2,930     1,715
                  3,442     1,610
                         
Financing activities                        
  Issuance of share capital, net               2,333     -
  Share warrant               3,935     -
  Bank indebtedness               (1,480)     -
  Note payable to Intercargo               -     (62)
                  4,788     (62)
                         
Investing activities:                        
  Purchase of investments               (57,978)     (12,920)
  Proceeds from sales of investments               54,129     9,536
  Purchase of subsidiary               (5,209)     -
  Additions to capital assets               (53)     -
                  (9,111)     (3,384)
                         
Increase (decrease) in cash during period                 (881)     (1,836)
                         
Cash, beginning of period                 1,363     3,567
                         
Cash, end of period                 $482     $1,731

Last Updated on 7/27/97
By Dan Browne