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2017 Annual Financial Highlights

  • LCBA’s risk-based capital ratio improved to 376% at December 31, 2017 from 324% at December 31, 2016. This increase is attributed to the growth in surplus experienced in 2017, as LCBA’s risk-based capital remained consistent with the prior year, dropping by just under one percent.
  • In the PreNeed market, management continues to work on improvements and made changes to the distribution and service model at the end of the year in order to spur future growth. Medicare Supplement premiums have shown consecutive years of significant growth, but remain a small percentage of overall net premiums.
  • The quality of LCBA’s investment portfolio remains high with an average rating of "A" and over 98% of bonds at investment grade. As anticipated, reinvestment rates remained low in 2017, leading to a slight reduction in book yield. Early in the year, LCBA took advantage of improved market conditions to sell all of its non-agency, mortgage-backed securities to further reduce risk in its portfolio.
  • Commission expense increased significantly in 2017 on the heels of strong sales growth of the new life product line, to $3.6 million from $1.6 million in 2016, or an increase of 122%. This follows a $950 thousand, 85% increase in 2016.
  • General Expenses decreased 1.7% in 2017 and ended the year under budget. Expenses were up 15% in 2016 due primarily to the costs associated with the new product line, which began development in the first quarter of the year. Additionally, in 2016, LCBA completed its five year Pennsylvania state insurance department examination in 2016, which cost the Association approximately $230,000 and resulted in a clean examination report.

​Statement of Financial Position

December 31, 2017 & 2016
 Assets 2017 2016
Bonds $181,846,213 179,117,935​​
Common & Preferred Stock - -
Real estate 1,566,430 1,578,081
Certificate loans 1,111,277 1,058,189
Cash & cash equivalents 942,942 849,844
Short term investments​ 1,337,296 530,782​
EDP equipment​ 23,166 22,100
Income due & accrued​ 2,437,130 2,216,443​
Total Assets​ $189,264,454 $185,373,374
​    ​ 
 Liabilities & Surplus​
Certificate reserves​ $173,954,293 $170,484,498
Deposit-type contracts​ 6,452,197 6,576,470​
Certificate​ claims 699,034 727,606
Provision for dividends​ 744,966 787,948
Advance premiums​ 461,471 484,041
Investment reserves​ 1,541,346 1,848,595
Accrued General Expenses​ 265,086 231,664
Other liabilities​ 789,694 691,728
Unassigned funds​ 4,356,367 3,540,824
Total Liabilities & Surplus $189,264,454 $185,373,374​

​Summary of Operations

Years ended December 31, 2017 & 2016​
Income​ 2017 2016
Life Insurance premiums $7,641,674 11,103,436
Annuity premiums​ 8,125,585 8,255,358
Accident and Health Premiums​ 143,833 60,625​
Net Investment income​ 8,388,906 8,438,045​
Other income​ 6,997,862 683,770​
Total Income​ $31,297,860 $28,541,234​
Member Benefits
Death benefits​ 5,269,590 5,375,078
Life & annuity benefits​ 13,150,064 13,732,366
Reserve changes​ 3,469,795 3,671,717​
Total Member Benefits​ $21,889,449 $22,779,161
Operating Expenses​
Commissions​ 3,583,986 1,616,128
General expenses​ 3,866,944 3,925,200​
Taxes 160,056 174,879
Other Expenses 71,293  -
Total Operating Expenses​ 7,682,279 5,716,207
Total Benefits & Expenses​ $29,571,728 $28,495,368​
Net Gain from Operations 1,726,132 45,866
Investment capital gain (loss)​ (66,518) (8,087)
Dividends Incurred​ (742,705) (787,622)​
Net Income​ $916,909 $(749,843)
Other Changes in Surplus​ (101,366) (855,975)
Net Changes in Surplus​ $815,543 $(1,605,818)