Kingsway Financial Services Inc.

KINGSWAY FINANCIAL SERVICES INC.

CONSOLIDATED STATEMENT OF INCOME

For the periods ended September 30, 1996 and 1995

($ in Thousands, except for per share amounts)                    
                     
                     
        Quarter ended September 30:       9 months to September 30:    
        1996 1996 1995   1996 1996 1995
        Actual Forecast Actual   Actual Forecast Actual
          (Unaudited)       (Unaudited)  
                     
Gross premiums written       $41,881 $25,575 $14,172   $102,834 $69,725 $40,741
                     
Net premiums written       $38,016 $21,581 $12,107   $100,112 $58,782 $34,077
                     
Net earned premiums       $31,005 $17,658 $11,575   $74,037 $52,556 $33,306
Investment income       1,761 1,240 841   4,643 3,115 2,659
Premium finance income       517 551 620   1,247 1,384 1,024
        33,283 19,449 13,036   79,927 57,055 36,989
                     
Claims incurred       19,258 11,500 8,444   46,120 34,500 22,625
Commissions & premium taxes       6,711 3,031 2,096   14,062 9,022 5,700
General expenses       2,894 1,788 1,134   8,382 5,363 4,028
        28,863 16,319 11,674   68,564 48,885 32,353
                     
Income before income taxes       4,420 3,130 1,362   11,363 8,170 4,636
Income taxes       1,961 1,284 613   4,094 3,352 2,080
                     
Net income       $2,459 $1,846 $749   $7,269 $4,818 $2,556
                     
                     
Earnings per share:                    
  basic:     $0.24 $0.19 $0.13   $0.72 $0.50 $0.43
  fully -diluted:     $0.23 $0.19 $0.13   $0.68 $0.49 $0.43
                     
Claims ratio       62.1% 65.1% 73.0%   62.3% 65.6% 67.9%
Expense ratio       31.0% 27.3% 27.9%   30.3% 27.4% 29.2%
Combined ratio       93.1% 92.4% 100.9%   92.6% 93.0% 97.1%
                     
Underwriting profit (loss)       $2,142 $1,339 ($99)   $5,473 $3,671 $953
                     
Return on Equity (annualized)       20.3% 18.2% 15.9%   21.6% 16.5% 19.0%
                     
                     
KINGSWAY FINANCIAL SERVICES INC.                    
CONSOLIDATED BALANCE SHEET                    
As at September 30, 1996 and 1995                    
($ in Thousands)                    
                     
                     
                1996   1995
                  (Unaudited)  
ASSETS                    
                     
  Cash & Investments             $120,974   $42,730
  Financed premiums receivable             29,515   11,104
  Deferred policy acquisition costs             12,805   4,301
  Amounts due from reinsurers             25,722   6,601
  Accounts receivable             12,339   4,929
  Capital assets             5,863   2,089
  Other             1,198   864
                $208,416   $72,618
                     
                     
LIABILITIES AND SHAREHOLDERS' EQUITY                    
                     
LIABILITIES                    
                     
  Unpaid claims             $83,895   $26,694
  Unearned premiums             63,555   23,394
  Bank indebtedness             6,975   -
  Accounts payable & accrued liabilities             3,179   417
  Note payable to Intercargo             -   2,437
  Other             2,030   463
                159,634   53,405
                     
SHAREHOLDERS' EQUITY                    
                     
  Share capital             24,218   5,636
  Share warrant             2,507   -
  Retained earnings             22,057   13,577
                48,782   19,213
                     
                $208,416   $72,618
                     
                     
                     
                     
KINGSWAY FINANCIAL SERVICES INC.                    
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION                    
For the periods ended September 30, 1996 and 1995                    
($ in Thousands)                    
                     
                1996   1995
                     
                  (Unaudited)  
Operating activities:                    
  Net income             $7,269   $2,556
  Items not involving cash:                  
    Amortization           305   172
    Deferred income taxes           (307)   -
    Net realized gain on sale of investments           (51)   (227)
    Amortization of bond premiums & discounts           (886)   (1,416)
                6,330   1,085
                     
Net change in non-cash balances:               32,990   5,669
                39,320   6,754
                     
Financing activities                    
  Issuance of share capital, net             2,329   -
  Share warrant             2,507   -
  Note payable to Intercargo             -   (63)
  Bank indebtedness             5,495   -
                10,331   (63)
                     
Investing activities:                    
  Purchase of investments             (115,750)   (72,577)
  Proceeds from sales of investments             94,233   63,946
  Purchase of subsidiary             (5,209)   -
  Additions to capital assets             (3,799)   (666)
                (30,525)   (9,297)
                     
Increase (decrease) in cash during period               19,126   (2,606)
                     
Cash, beginning of period               1,363   3,567
                     
Cash, end of period               $20,489   $961

Last Updated on 7/27/97
By Dan Browne