1994 ANNUAL REPORT
HOME BENEFICIAL CORPORATION
FINANCIAL HIGHLIGHTS

1994 1993

Life insurance in force (In 000's) $ 10,223,828 $ 9,988,596
Total assets $1,288,826,060 $1,280,233,898
Net operating income before realized investment
gains (losses), net of
income taxes $ 36,238,568 $ 35,911,485
Realized investment (losses) gains, before income
taxes $ (42,592) $ 10,802,968
Net income $ 36,195,976 $ 42,614,453
Per Share
Net operating income before realized investment
gains (losses), net of
income taxes $ 2.04 $ 1.98
Realized investment (losses) gains, net
of income taxes $ 0 $ .37
Net income $ 2.04 $ 2.35
Dividends paid $ .795 $ .775
Book value $ 26.58 $ 26.38

CONTENTS

Financial Highlights................................................................. 1
The Business of Home Beneficial Corporation.......................................... 3
A Message to Our Stockholders........................................................ 4
Consolidated Financial Statements.................................................... 6
Notes to Consolidated Financial Statements........................................... 11
Report of Ernst & Young LLP, Independent Auditors.................................... 18
Management's Discussion and Analysis of
Financial Condition and Results of Operations..................................... 19
Quarterly Financial Information and Market and
Dividend Information.............................................................. 21
Record of Growth of Insurance and Selected Consolidated Financial Data............... 22
Directors and Officers............................................................... 23

THE BUSINESS OF HOME BENEFICIAL CORPORATION
Home Beneficial Corporation is a holding company domiciled in the state of
Virginia with one principal operating subsidiary, Home Beneficial Life Insurance
Company (the Life Company), which is engaged in the life and accident and health
insurance business. The Life Company sells group life insurance and
substantially all the forms of ordinary insurance, including universal life,
whole life, term, and annuities, together with accidental death and disability
riders. The Life Company's business is concentrated in six Mid-Atlantic states
and the District of Columbia and its policies are marketed through its own sales
force of approximately 1150 full time personnel.
ANNUAL MEETING
The Annual Meeting of the stockholders of Home Beneficial Corporation will be
held on Tuesday, April 4, 1995 at 10:00 a.m. at the Corporation's Home Office,
3901 West Broad Street, Richmond, Virginia 23230.

(logo) HOME BENEFICIAL CORPORATION

HOME OFFICE TRANSFER AGENT AND REGISTRAR
3901 West Broad Street First Union National Bank of North Carolina
P.O. Box 27572 Shareholders Services Group -- 1154
Richmond, Virginia 23261 230 S. Tryon Street -- 10th Floor
Charlotte, North Carolina 28288-1154

A MESSAGE
TO OUR STOCKHOLDERS
or the life insurance industry, 1994 was an especially trying year as
consumers and regulators shifted their attention away from the financial
solvency and soundness of companies to issues relating to market conduct.
Insurers continued working diligently trying to allocate resources between
maintaining a financially sound company with a solid public image while at the
same time contending with economic uncertainty, regulatory pressures, consumer
preferences and growing competition. The word "change" seems to be the best word
to describe our industry and one that will be with us for many more years.
F
Your Company entered the year with high expectations of improvement over the
previous year, concentrating our efforts on the final installation of our field
accounting system and increasing investment income, excluding realized
investment gains (losses), as the year progressed. Our efforts were directed to
these areas because if we are to grow, it will come from the technology
developed in our field accounting system along with increasing our investment
income. Sales practices and policyholder services have always separated the
leading companies in our industry from the rest. Without our new system, your
Company could not maintain a leadership position in those areas.
We are pleased to report that in October the final conversion was made to our
new system. The success we enjoyed did not happen by coincidence but, on the
contrary, was a reflection of the team work, planning and hard work done during
the year by a lot of people. We are grateful to our agency force and all of our
home office personnel who backed them up. The credit for the success we
highlight in this 1994 report goes to them.
The Corporation's net operating income was $36,238,568 or $2.04 per share
compared to
1993 results of $35,911,485 or $1.98 per share. On a per share basis, operating
income for 1994 improved by 3%. Net income of $36.2 million trailed 1993 results
of $42.6 mil-
lion due to realized investment gains in our securities portfolio during 1993.
Per share dividends paid to stockholders for the year totaled $.795 compared to
$.775 the previous year. The Corporation and its predecessor, Home Beneficial
Life Insurance Company, have paid dividends each year without interruption since
1906 with the amount increasing every year since 1963.
The Life Company celebrated its 95th anniversary in 1994 and for the first time
in its history, life insurance in force rose above the $10 billion mark, ending
the year at a record $10.2 billion. Total assets of $1.3 billion along with
total investments under management also reached an all time high. Net investment
income in the fourth quarter, excluding realized investment gains (losses),
moved ahead of 1993 fourth quarter, resulting in the first increase in quarterly
comparison during the year. We were very pleased to have attained our goal of a
quarterly increase during the 1994 year.
In January, 1994, the Corporation adopted Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities." This
Standard permits bonds to be valued in the balance sheet at amortized value or
market value or a combination of both. We chose to carry our entire bond
portfolio at market value in order to give us as much flexibility as possible in
managing this account. While this did not affect our income statement, it did
affect stockholders' equity. As interest rates go up bond prices go down and
vice versa. A major investment firm stated, and I quote, "While there were many
cross currents affecting the insurance group, sharply rising interest rates
represented the most important factor, as the bond markets suffered their worst
setback in over six decades." In over 60 years you might have thought the
Financial Accounting Standards Board could have chosen a better year for
the final adoption of this Standard. Your Company lost $.97 per share in book
value due to
4

BOARD OF DIRECTORS Standing, left to right: W. B. Wiltshire; J. M. Wiltshire,
Jr.; Dianne N. Collins; W. G. Hancock; H. D. Garnett; G. T. Richardson. Seated,
Left to Right: L. W. Richardson; R. W. Wiltshire; R. W. Wiltshire, Jr.; C. M.
Glenn, Jr.
the adoption of Standard 115. We are pleased to report that in spite of that
$.97 adjustment, book value per share for the Corporation increased to $26.58.
During 1994, two outside authorities in the insurance field recognized the
Corporation for its outstanding achievements. A. M. Best Company assigned Home
Beneficial Life Insurance Company to its highest category of Superior, which
category includes less than 15% of the 1566 life/health insurers evaluated. The
Company was assigned the rating of A+ Superior. Ward Financial Group, an
investment banking firm specializing in the insurance industry, completed its
in-depth analysis of the life/health industry in 1994. Based upon that analysis,
your Company was named to the 1994 Ward's 50 benchmark group for achieving
outstanding financial results in the areas of safety, consistency and
performance over the past five years. While Ward's did not rank the 50 companies
numerically, their universe included some 2000 life/health insurers.
In conclusion, as we look to the years ahead, many of the issues and challenges
we faced in
1994 will still exist. We have always depended on technology for productivity
improvements in the home office. That will not change; it will only happen more
quickly and involve our field personnel more directly. Your management is very
conscious of its responsibilities to you, our stockholders, and at the same
time, we realize that the Company's success will depend on quality sales
production and service through a well trained agency organization. Therefore, we
will continue investing for the future, in personnel, training and technology in
order to give our sales force the tools needed to maintain a leadership position
in the communities we serve.
R. W. Wiltshire
Chairman of the Board
R. W. Wiltshire, Jr.
President and
Chief Executive Officer
5

HOME BENEFICIAL CORPORATION
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1994 AND 1993
ASSETS

1994 1993

INVESTMENTS -- Note 2
Securities available-for-sale at fair value
Fixed maturities (1994 amortized cost: $718,305,895) $ 691,976,855 $ --
Equities (cost: 1994, $9,728,145; 1993, $6,922,789)..................... 24,229,849 27,281,131
Fixed maturities, at amortized cost (1993 approximate
fair value: $737,966,196)............................................... -- 705,683,386
Mortgage loans on real estate.............................................. 338,458,261 316,371,747
Policy loans............................................................... 53,425,676 52,738,134
Short-term investments..................................................... 32,459,616 35,506,190
Other...................................................................... 6,167,002 6,360,115
Total investments....................................................... 1,146,717,259 1,143,940,703
CASH......................................................................... 1,726,812 6,039,294
ACCRUED INVESTMENT INCOME.................................................... 16,958,594 16,688,448
RECEIVABLES -- uncollected premiums.......................................... 5,232,370 5,065,577
DEFERRED POLICY ACQUISITION COSTS............................................ 96,246,153 96,368,346
PROPERTY AND EQUIPMENT, AT COST
(less accumulated depreciation: 1994, $6,598,531;
1993, $6,160,296).......................................................... 7,627,921 8,264,073
DEFERRED CHARGES AND OTHER ASSETS............................................ 14,316,951 3,867,457
$1,288,826,060 $1,280,233,898

See accompanying notes.
6

LIABILITIES AND STOCKHOLDERS' EQUITY

1994 1993

LIABILITIES
Policy liabilities and accruals -- Note 1
Future policy benefits.................................................. $ 660,081,842 $ 649,964,396
Unearned premiums....................................................... 25,658,167 25,934,028
Policy claims and benefits payable...................................... 11,004,362 10,160,984
Total policy liabilities and accruals................................. 696,744,371 686,059,408
Other policyholder funds................................................... 65,821,085 61,246,483
Income taxes -- Notes 2 and 5.............................................. 420,269 2,632,769
Other liabilities.......................................................... 59,070,401 57,032,846
Total liabilities..................................................... 822,056,126 806,971,506
COMMITMENTS AND CONTINGENT LIABILITIES -- Note 3
STOCKHOLDERS' EQUITY -- Notes 2, 6 and 7
Capital stock
Class A Common Stock, Voting, $.3125 par value, 12,800,000
shares authorized; 8,476,576 issued at December 31, 1994 and
December 31, 1993..................................................... 2,648,930 2,648,930
Class B Common Stock, Non-Voting, $.3125 par value,
19,200,000 shares authorized; 9,087,534 issued at December 31, 1994
and 9,462,482 issued at December 31, 1993............................. 2,839,854 2,957,025
Total capital stock................................................... 5,488,784 5,605,955
Unrealized (losses) gains on securities less deferred
income taxes............................................................ (6,652,336) 14,258,342
Retained earnings.......................................................... 467,933,486 453,398,095
Total stockholders' equity............................................ 466,769,934 473,262,392
$1,288,826,060 $1,280,233,898

HOME BENEFICIAL CORPORATION
CONSOLIDATED STATEMENT OF INCOME
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992

1994 1993 1992

REVENUES
Premiums...................................................... $116,071,422 $116,369,121 $117,946,267
Net investment income -- Note 2............................... 84,859,430 96,874,324 93,583,108
Total revenues........................................... 200,930,852 213,243,445 211,529,375
BENEFITS, CLAIMS AND EXPENSES
Benefits and claims........................................... 91,098,014 94,609,539 88,416,743
Underwriting, acquisition and insurance expenses:
Amortization of deferred policy acquisition
costs.................................................... 13,221,175 14,191,104 17,379,387
Commissions and related sales expenses..................... 11,277,898 10,758,965 7,646,474
General, administrative and other.......................... 29,737,789 29,769,384 29,358,401
Total benefits, claims and expenses...................... 145,334,876 149,328,992 142,801,005
INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE...................... 55,595,976 63,914,453 68,728,370
INCOME TAXES -- Note 5
Current....................................................... 18,475,000 24,650,000 21,825,000
Deferred...................................................... 925,000 (3,350,000) 425,000
Total income taxes....................................... 19,400,000 21,300,000 22,250,000
Income Before Cumulative Effect of Change in Accounting
Principle..................................................... 36,195,976 42,614,453 46,478,370
Cumulative Effect of Change in Accounting for Postretirement
Medical Benefits -- Note 4.................................... -- -- (29,444,884)
NET INCOME...................................................... $ 36,195,976 $ 42,614,453 $ 17,033,486

NET INCOME PER SHARE OF COMMON STOCK
(Average shares outstanding:
1994, 17,757,315; 1993, 18,126,135; and 1992,
18,600,224) -- Notes 4 and 6
Income Before Cumulative Effect of Change in Accounting
Principle.................................................. $2.04 $2.35 $2.50
Cumulative Effect of Change in Accounting for Postretirement
Medical Benefits........................................... -- -- (1.58)
Net Income...................................................... $2.04 $2.35 $ .92

See accompanying notes.
8

HOME BENEFICIAL CORPORATION
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

1994 1993 1992

Balance at beginning of year.................................... $453,398,095 $438,756,912 $436,513,105
Additions (deductions)
Net income.................................................... 36,195,976 42,614,453 17,033,486
Dividends declared to stockholders (per share:
1994, $.795; 1993, $.775; 1992, $.57) (14,102,572) (14,014,459) (10,596,241)
Purchase and retirement of Class A and Class B
Common Stock -- Note 6..................................... (7,558,013) (13,958,811) (4,193,438)
Balance at end of year.......................................... $467,933,486 $453,398,095 $438,756,912

See accompanying notes.
9

HOME BENEFICIAL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
Increase (decrease) in cash

1994 1993 1992

Operating Activities
Net income.................................................... $ 36,195,976 $ 42,614,453 $ 17,033,486
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization.............................. 1,386,584 1,260,484 1,155,903
Amortization of discount and premium on
investments, net......................................... (933,633) (1,627,782) (2,387,396)
Increase in policy liabilities and accruals................ 10,684,963 13,876,769 10,403,969
Decrease in income tax liability........................... (900,000) (3,200,000) (17,110,000)
Policy acquisition costs deferred.......................... (13,098,982) (14,741,170) (21,814,363)
Amortization of deferred policy acquisition costs.......... 13,221,175 14,191,104 17,379,387
Cumulative effect of accounting change..................... -- -- 44,644,884
Realized investment losses (gains)......................... 42,592 (10,802,968) (2,857,454)
Other...................................................... 1,555,893 904,443 (3,371,660)
Net cash provided by operating activities................ 48,154,568 42,475,333 43,076,756
Investing Activities
Proceeds from sales, calls or maturities of investments
Securities available-for-sale.............................. 259,204,236 -- --
Fixed maturities, at amortized cost........................ -- 138,353,688 80,226,637
Mortgage loans on real estate.............................. 44,355,677 121,053,918 163,348,543
Policy loans............................................... 10,607,709 10,173,381 10,187,598
Short term investments, net................................ 3,046,574 54,896,290 --
Other...................................................... -- 3,600,772 2,801,011
Total proceeds........................................... 317,214,196 328,078,049 256,563,789
Costs of investments acquired
Securities available-for-sale.............................. 273,055,083 -- --
Fixed maturities, at amortized cost........................ -- 273,007,658 177,434,305
Mortgage loans on real estate.............................. 66,406,835 54,762,575 56,330,146
Short term investments, net................................ -- -- 38,739,935
Policy loans............................................... 11,295,251 10,837,781 11,502,287
Property and equipment and other........................... 1,720,923 7,354,663 1,597,951
Total costs.............................................. 352,478,092 345,962,677 285,604,624
Net cash used in investing activities................. (35,263,896) (17,884,628) (29,040,835)
Financing Activities
Dividends paid................................................ (14,102,572) (14,014,459) (14,152,261)
Purchase of Class A and Class B Common Stock.................. (7,675,184) (14,142,511) (4,252,500)
Other......................................................... 4,574,602 6,260,146 5,139,732
Net cash used in financing activities.................... (17,203,154) (21,896,824) (13,265,029)
Net (decrease) increase in cash................................. (4,312,482) 2,693,881 770,892
Cash at beginning of year....................................... 6,039,294 3,345,413 2,574,521
Cash at end of year............................................. $ 1,726,812 $ 6,039,294 $ 3,345,413

Supplemental disclosure of cash flow information
Income tax payments........................................... $20,300,000 $24,500,000 $24,160,000

See accompanying notes.
10

HOME BENEFICIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1993 and 1992
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation -- The consolidated financial statements include the accounts
of the Corporation, its principal subsidiary, Home Beneficial Life Insurance
Company (the Life Company), and its other subsidiaries. All significant
intercompany accounts and transactions are eliminated. The Corporation is
engaged predominantly in the life and accident and health insurance business.
Basis of Presentation -- The accompanying consolidated financial statements
have been prepared on the basis of generally accepted accounting principles
(GAAP), which reflect certain major adjustments to the Life Company's
financial statements as filed with insurance regulatory authorities
(statutory basis). See Note 7.
Investments -- The Corporation adopted Statement of Financial Accounting
Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and
Equity Securities" as of January 1, 1994. As a result of the implementation
of SFAS No. 115, the Corporation's entire fixed maturity (bonds and
redeemable preferred stocks) and equity (non-redeemable preferred and common
stocks) securities were classified as available-for-sale. Accordingly, these
securities are reported at estimated fair value at December 31, 1994 with
related unrealized gains and losses (net of deferred taxes) reported as a
separate component of stockholders' equity. Prior to adoption of SFAS No.
115, fixed maturities were carried at amortized cost and equities were
reported at estimated fair values. Mortgage loans on real estate are reported
at cost, adjusted where appropriate for amortization of premium or discount.
Short-term investments are reported at cost and policy loans are reported at
unpaid balances. Realized investment gains and losses are included as a
component of net investment income and unrealized investment gains and losses
applicable to fixed maturity and equity securities, less related deferred
income taxes, are included as a separate component of stockholders' equity.
The cost of investments sold is generally determined under the specific
identification method.
Fair Value Disclosures -- The following methods and assumptions were used by
the Corporation in estimating its fair value disclosure for financial
investments: The carrying amounts of cash and short-term investments reported
in the balance sheet approximate their fair values. Fair values for fixed
maturity securities (including redeemable preferred stocks) are based on
quoted market prices, where available. For fixed maturity securities not
actively traded, fair values are estimated using values obtained from
independent pricing services or, in the case of private placements, are
estimated by discounting expected future cash flows using a current market
rate applicable to the yield, credit quality, and maturity of the
investments. Fair values for available-for-sale fixed maturities are
recognized in the balance sheet in accordance with SFAS No. 115. The fair
values for equity securities are based on quoted market prices and are
recognized in the balance sheet. The fair values for mortgage loans and
policy loans are estimated using discounted cash flow analyses, using
interest rates currently being offered for similar loans to borrowers with
similar credit ratings. Loans with similar characteristics are aggregated for
purposes of the calculations. Fair values for the Corporation's liabilities
under investment-type insurance contracts (included with policy liabilities
and accruals in the balance sheet) approximate recorded values.
Revenues, Benefits, Claims, and Expenses
Traditional Life Insurance Products -- Traditional life insurance products
include those products with fixed and guaranteed premiums and benefits and
consist principally of whole life and limited-payment life insurance
policies. Premiums are recognized as revenues when due. Liabilities for
policy benefits and expenses for traditional life insurance policies are
computed using a net level premium method including assumptions as to
investment yields, mortality, withdrawals, and other assumptions which were
appropriate at the time the policies were issued based on the Company's
experience
11

modified as necessary to reflect anticipated trends and to include provisions
for possible unfavorable deviations. Investment yield assumptions are graded
and range from 9% to 3% and the weighted average assumed investment yield was
approximately 4 1/2% for 1994. Unearned premiums include certain deferred
profits on limited-payment policies which are being recognized in income over
the estimated lives of the policies.
Interest-Sensitive Insurance Products -- Premiums for interest-sensitive
policies are recorded in a policyholder account as a liability. Premium
revenue is recognized as amounts are assessed against the policyholder
account for mortality coverage and policy administration. Surrender benefits
reduce the account value. Policy benefits and claims that are charged to
expense include interest credited to policyholder accounts and benefit claims
incurred in excess of the account balances. Interest credit rates for
interest-sensitive insurance products range from 6 1/4% to 5 1/4%. A
liability equal to the current value of the policyholder accounts is included
in other policyholder funds in the balance sheet.
Deferred Policy Acquisition Costs -- The costs of acquiring new business,
principally commissions and certain policy underwriting and issue costs,
which generally vary with and are primarily related to the production of new
business have been deferred to the extent such costs are deemed recoverable
from future premiums. Costs deferred related to traditional life insurance
are being amortized over the premium paying period of the related policies
using assumptions consistent with those used in computing future policy
benefits. Costs deferred related to interest-sensitive policies are being
amortized over the lives of the policies, in relation to the present value of
estimated gross profits from mortality, investment and expense margins.
Income Taxes -- Income taxes have been provided using the liability method in
accordance with SFAS No. 109, "Accounting for Income Taxes". Under that
method, deferred tax assets and liabilities are determined based on the
difference between their financial reporting and their tax bases and are
measured using the enacted tax rates.
Accounting Change -- The Corporation adopted the provisions of Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities" as of January 1, 1994. SFAS No. 115 requires
that investments in all debt securities and equity securities with readily
determinable fair values be classified into one of three categories:
held-to-maturity, trading or available-for-sale. Debt securities that a
corporation does not have the positive intent or ability to hold to maturity
and all marketable equity securities are classified as available-for-sale or
trading and are carried at fair value. Unrealized gains and losses on
securities classified as available-for-sale are carried as a separate
component of stockholders' equity. Unrealized gains and losses on securities
classified as trading are reported in earnings. On adoption of SFAS No. 115,
the Corporation classified its entire fixed maturity and equity securities
portfolio as available-for-sale. The Corporation believes that it has the
ability to hold all fixed income investments until maturity; however,
securities may be sold to take advantage of investment opportunities
generated by changing interest rates, prepayments, or income tax
considerations, as part of the Corporation's asset/liability strategy, or for
other similar factors. In accordance with SFAS No. 115, prior-period
financial statements have not been restated to reflect the change in
accounting principle. The cumulative effect as of January 1, 1994 of adopting
SFAS No. 115 increased stockholders' equity by $21 million (net of deferred
income taxes) to reflect the net unrealized gains on securities previously
carried at amortized cost. Due to rising interest rates during 1994, a $17
million net unrealized loss (net of deferred income taxes) was charged
against stockholders' equity at December 31, 1994. There was no effect on net
income as a result of the adoption of SFAS No. 115.
2. INVESTMENT OPERATIONS
The following is a summary of available-for-sale securities at December 31,
1994:

GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
1994 COST GAINS LOSSES VALUE

US Treasury securities and obligations of US government
corporations and agencies $ 28,659,884 $ 1,543,642 $ 524,719 $ 29,678,807
Obligations of states and political
subdivisions 302,051,360 1,407,623 19,022,256 284,436,727
Debt securities issued by foreign
governments 26,343,642 46,220 1,072,524 25,317,338
Corporate securities 361,251,009 4,172,933 12,879,959 352,543,983
Total debt securities 718,305,895 7,170,418 33,499,458 691,976,855
Equity securities 9,728,145 14,546,906 45,202 24,229,849
Total $728,034,040 $21,717,324 $33,544,660 $716,206,704

The following is a summary of fixed maturities held as of December 31, 1993:

Gross Gross Estimated
Amortized Unrealized Unrealized Fair
1993 Cost Gains Losses Value

US Treasury securities and obligations of
US government corporations and
agencies $ 26,851,211 $ 5,339,258 $ 104,060 $ 32,086,409
Obligations of states and political
subdivisions 249,926,041 14,077,275 3,825,618 260,177,698
Debt securities issued by foreign
governments 24,818,059 1,592,771 100,454 26,310,376
Corporate securities 404,088,075 21,200,388 5,896,750 419,391,713
Total $705,683,386 $42,209,692 $9,926,882 $737,966,196

The amortized cost and estimated fair value of fixed maturities, by
contractual maturity, and equities available-for-sale at December 31, 1994,
are shown below. Expected maturities will differ from contractual maturities
because borrowers may have the right to call or prepay obligations with or
without call or prepayment penalties.

1994
ESTIMATED
AMORTIZED FAIR
COST VALUE

Due in one year or less $ 29,367,651 $ 29,610,610
Due after one year through five years 147,584,529 147,517,115
Due after five years through ten years 482,641,789 456,516,118
Due after ten years 44,769,672 43,049,128
704,363,641 676,692,971
US government mortgage backed securities 13,942,254 15,283,884
Equities 9,728,145 24,229,849
Total $728,034,040 $716,206,704

The carrying amounts and fair values of the Corporation's investments in
mortgage loans and policy loans were as follows at December 31, 1994 and
1993:

1994 1993
ESTIMATED Estimated
CARRYING FAIR Carrying Fair
AMOUNT VALUE Amount Value

Commercial Mortgages $169,981,656 $170,169,251 $144,399,440 $160,149,343
Residential Mortgages 168,476,605 156,615,617 171,972,307 187,226,892
$338,458,261 $326,784,868 $316,371,747 $347,376,235
Policy Loans $ 53,425,676 $ 48,546,135 $ 52,738,134 $ 53,515,890

Details of net investment income follow:

1994 1993 1992

Fixed maturities $54,057,136 $48,541,194 $44,811,324
Equity securities 1,037,639 975,218 1,098,826
Mortgage loans on real estate 28,277,362 33,667,861 42,680,116
Short-term investments 1,672,379 3,596,291 3,031,855
Realized investment (losses) gains (42,592) 10,802,968 2,857,454
Other 4,169,001 3,305,772 3,070,378
Total investment income 89,170,925 100,889,304 97,549,953
Investment expenses (4,311,495) (4,014,980) (3,966,845)
Net investment income $84,859,430 $96,874,324 $93,583,108

Realized investment gains (losses) and unrealized investment gains (losses)
representing the change in difference between fair value and cost
(principally amortized cost for fixed maturities) on fixed maturities, equity
securities and other investments for the three years ended December 31, 1994
are summarized below:

Investment Gains (Losses)
Change in
Realized Unrealized Net

1994
Fixed maturities available-for-sale $(5,894,439) $(49,386,850)(2) $(55,281,289)
Equity securities available-for-sale 5,865,050 (3,806,638)(1) 2,058,412
Other (13,203) -- (13,203)
$ (42,592) $(53,193,488) $(53,236,080)
(1)Net of $2,050,000, deferred income tax
benefit.
(2)Net of $9,225,000 deferred income tax
benefit on available-for-sale fixed
maturities at December 31, 1994.
1993
Fixed maturities $ 7,898,182 $ 2,048,149 $ 9,946,331
Equity securities 2,904,686 (1,636,487)(1) 1,268,199
Other 100 -- 100
$10,802,968 $ 411,662 $ 11,214,630
(1)Net of $725,000, deferred income tax
benefit.
1992
Fixed maturities $ 2,387,462 $ (4,070,822) $ (1,683,360)
Equity securities 469,877 1,323,466(1) 1,793,343
Other 115 -- 115
$ 2,857,454 $ (2,747,356) $ 110,098
(1)Net of $650,000 deferred income taxes.

Proceeds from the sales of available-for-sale securities during 1994 were
$214,588,898 and gross realized investment gains and gross realized
investment losses of $9,186,184 and $10,199,263 were realized on those sales,
respectively. There were no sales of fixed maturities in 1993 and 1992. All
proceeds were from calls and maturities.
As of December 31, 1994 approximately 49% of the mortgage loans on real
estate were on single family homes and 51% were on commercial properties such
as apartments, shopping centers, office buildings and warehouses.
Approximately 74% and 12%, respectively, of the mortgage loans are on
properties geographically dispersed throughout Virginia and North Carolina.
The Corporation manages the credit risk on its mortgage loan portfolio by,
among other items, generally restricting loan to collateral value ratios to a
maximum of 75% at the time the loan is made, limiting the total amount of
loans outstanding by individual borrower and monitoring the type of loans and
extent of geographic concentration within the region in which the Life
Company operates.
No investment in any person or affiliates of the Corporation exceeded ten
percent of stockholders' equity at December 31, 1994.
14

3. REINSURANCE
Future policy benefits and claims are stated after deducting benefits
applicable to life insurance reinsured by other companies. The contingent
liability for such deducted benefits was less than 1% of future policy
benefits at December 31, 1994. Premiums related to such reinsurance are
insignificant.
The Life Company participates in several group life insurance programs as a
reinsurer and also assumes reinsurance on a facultative (individual risk)
basis from two other life insurance companies. Life insurance assumed relates
principally to group life and represented approximately 17% of premium income
for both 1994 and 1993 and 18% for 1992. Claims incurred under these group
life insurance programs approximate the related premium income, and no
significant assets or liabilities are required in the balance sheet.
4. PENSION PLAN AND HEALTH AND LIFE INSURANCE BENEFITS
A noncontributory defined benefit pension plan covers substantially all
employees. The benefits are based on years of service and the employee's
compensation. The pension liabilities and reserves are included in future
policy benefits and held by the Life Company. No separate portfolio of
related plan assets is maintained. The following table sets forth the plan's
status as of the indicated actuarial valuation dates:

December 31
1994 1993

Actuarial present value of benefit obligations:
Vested $73,357,708 $70,236,026
Nonvested 911,298 871,087
Total accumulated benefit obligations $74,269,006 $71,107,113
Projected benefit obligation $79,301,614 $76,779,672
Unrecognized net transition asset $ 4,956,906 $ 5,665,037

The weighted-average discount rate used in determining the actuarial present
value of the above projected benefit obligations was 7% for both 1994 and
1993. The rate of increase used for future compensation was 4 1/2% for both
1994 and 1993. The unrecognized net gain or loss on the projected benefit
obligation was a gain of $3,357,825 at December 31, 1994 and a loss of
$3,105,631 at December 31, 1993.
The components of net pension expense for 1994, 1993 and 1992 are as follows:

1994 1993 1992

Service cost -- benefits earned $2,091,022 $2,051,748 $1,961,296
Interest cost on projected benefit obligation 5,056,685 5,044,206 4,989,612
Net amortization and deferral (708,131) (708,131) (708,331)
Net pension expense $6,439,576 $6,387,823 $6,242,577

In addition to the Corporation's defined benefit pension plan, the
Corporation has two postretirement plans -- a medical plan (consisting of
defined benefit medical coverage for pre-1993 retirees and defined
contribution medical coverage for post-1992 retirees who were active
employees on December 31, 1992) and a life insurance plan. The pre-1993
retiree medical benefits program covers all employees who had retired under
the Corporation's pension plan as of December 31, 1992. The post-1992 retiree
medical benefits program covers all employees who were full time active at
December 31, 1992 and who retire under the Corporation's pension plan after
December 31, 1992. Employees who joined the Corporation after December 31,
1992 are not eligible for participation in either program under the
postretirement medical benefits plan. The postretirement life insurance
benefits plan covers all employees who retire under the Corporation's pension
plan.
The pre-1993 retiree medical benefits program reimburses its participants for
actual covered costs subject to specified deductibles and coinsurance. The
pre-1993 retiree program is contributory and participant contribution
requirements
15

may be increased from time to time and benefits may be modified or terminated
by the Corporation. The post-1992 retiree medical benefits program is
noncontributory and reimburses its participants for the cost of health
insurance and other health care coverage premiums up to a maximum benefit
amount determined in accordance with the plan based on years of service as of
December 31, 1992. A participant's unused maximum benefit amount for
post-1992 retirees determined as of December 31, 1992, is increased for
interest only from January 1, 1993 until it is fully expended. The
Corporation is self insured with respect to benefits under both the medical
and life insurance benefit plans.
Effective January 1, 1992, the Corporation adopted SFAS No. 106, "Employers
Accounting for Postretirement Benefits Other Than Pensions." The cumulative
effect of this accounting change for years prior to 1992, which is shown
separately in the statement of income for 1992, was a charge of $29,444,884
(after related income taxes of $15,200,000). Excluding the cumulative effect,
this change decreased net income for 1992 by $850,000.
The following is an analysis of the Corporation's accumulated postretirement
benefit obligation for postretirement medical and life insurance benefit
plans as reflected in the consolidated balance sheet at December 31, 1994 and
1993:

1994 1993

Retirees $40,890,109 $40,127,381
Fully eligible active plan participants 10,549,421 9,588,889
Other active plan participants 5,367,253 5,526,141
Total $56,806,783 $55,242,411

The weighted-average annual assumed rate of increase in the per capita cost
of covered benefits (i.e., health care cost trend rate) at January 1, 1994
for the medical plan is 15% for participants under age 65, and 10.4% for
participants over age 65. The trend rate for both groups is assumed to
decrease gradually to 5 1/2% over approximately 17 years and remain at that
level thereafter. The health care cost trend rate assumption has a
significant effect on the amounts reported. For example, increasing the
assumed health care cost trend rate by one percentage point in each year
would increase the accumulated postretirement benefit obligation as of
December 31, 1994 by $2,599,183, and the net periodic postretirement benefit
cost for 1994 by $200,000.
The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7% for both 1994 and 1993.
Postretirement benefits expense was $3.5 million and $4 million for 1994 and
1993, respectively. This expense primarily represents interest expense on the
accumulated postretirement benefit obligation.
5. FEDERAL INCOME TAXES
Under the tax law in effect prior to 1984, $78,000,000 has been accumulated
in a "Policyholders' Surplus Account" which has not been subject to taxation.
Amounts, if any, distributed to stockholders from the account or exceeding
prescribed balance limitations will become taxable at the then current
federal income tax rates. Under the present circumstances, the Corporation
does not anticipate such account becoming taxable and no provision has been
made for the related deferred income taxes of $27,300,000.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant
components of the Corporation's deferred tax liabilities and assets as of
December 31, 1994 and 1993 are as follows:

1994 1993

Deferred tax assets:
Postretirement benefit obligation $17,272,194 $16,836,828
Policy liabilities 16,214,063 16,623,005
Unrealized investment losses on available-for-sale
securities 4,168,788 --
Other -- net 2,015,859 3,650,852
39,670,904 37,110,685
Deferred tax liabilities:
Deferred policy acquisition expenses 26,659,281 27,578,411
Discount on fixed maturities 2,706,629 2,401,946
Unrealized investment gain on equity securities -- 7,110,810
Other -- net 1,242,494 1,307,018
30,608,404 38,398,185
Net deferred tax asset (liability) $ 9,062,500 $(1,287,500)

The Corporation is required to establish a valuation allowance for any
portion of the deferred tax asset that management believes will not be
realized. In the opinion of management, it is more likely than not that the
Corporation will realize the benefit of the net deferred tax asset, and
therefore, no such valuation allowance has been established.
The provision for income taxes differs from amounts computed by applying the
statutory tax rate to income before income taxes, and these differences arise
from the following:

1994 1993 1992
PERCENT OF Percent of Percent of
PRE-TAX Pre-Tax Pre-Tax
AMOUNT INCOME Amount Income Amount Income

Tax computed at the
prevailing statutory rate $19,450,000 35.0% $22,400,000 35.0% $23,350,000 34.0%
Deduct tax effect of:
Special Life Company
deductions (500,000) (.9) (775,000) (1.2) (685,000) (1.0)
Other 450,000 .8 (325,000) (.5) (415,000) (.6)
(50,000) (.1) (1,100,000) (1.7) (1,100,000) (1.6)
Provision for income taxes $19,400,000 34.9% $21,300,000 33.3% $22,250,000 32.4%

6. CAPITAL STOCK
The Corporation purchased 374,948 shares of its Class B Common Stock in 1994
at a cost of $7,675,184. The cost was allocated to reduce Class B Common
Stock par value and retained earnings by $117,171 and $7,558,013,
respectively.
During 1993 the Corporation purchased 587,838 shares of its Class B Common
Stock at a cost of $14,142,511. The cost was allocated to reduce Class B
Common Stock par value and retained earnings by $183,700 and $13,958,811,
respectively.
In 1992 the Corporation purchased 189,000 shares of its Class B Common Stock
at a cost of $4,252,500. The cost was allocated to reduce Class B Common
Stock par value and retained earnings by $59,062 and $4,193,438,
respectively.
7. STOCKHOLDERS' EQUITY AND RESTRICTIONS
Consolidated stockholders' equity at December 31, 1994 includes $139,500,000
representing GAAP adjustments and minimum statutory capital and surplus
requirements of the Life Company that cannot be transferred in the form of
dividends, loans or advances to the Corporation.
In addition, the Corporation and the Life Company are subject to the
provisions of the Insurance Holding Company Act of the State of Virginia,
which governs transactions between the Corporation and the Life Company. The
Act, among other things, (1) requires that transactions among affiliates be
fair and reasonable, and (2) assures maintenance of reasonable statutory
capital and surplus in relation to the insurer's outstanding liabilities and
its other financial needs. Also the Act requires the prior approval of the
State Corporation Commission for transactions among affiliates that exceed
three percent of the insurer's admitted assets or twenty-five percent of the
insurer's statutory capital and surplus, whichever is the lesser, and, at
December 31, 1994 the maximum amount available under this provision without
prior approval approximated $37,000,000. The payment of dividends in any one
year by the Life Company without approval by the State Corporation Commission
is limited to the lesser of (1) ten percent of the insurer's prior year end
statutory capital and surplus, or (2) prior year statutory net gain from
operations before realized capital gains or losses.
On a statutory basis, the net gain from operations of the Life Company was
$27,048,483, $28,769,694 and $26,349,212 for the years ended 1994, 1993 and
1992, respectively; and stockholder's equity (capital and surplus) as of
December 31, 1994, 1993 and 1992 was $328,342,208, $325,866,987 and
$327,212,773, respectively.
17

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Home Beneficial Corporation
We have audited the accompanying consolidated balance sheet of Home Beneficial
Corporation as of December 31, 1994 and 1993, and the related consolidated
statements of income, retained earnings, and cash flows for each of the three
years in the period ended December 31, 1994. These financial statements are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Home Beneficial
Corporation at December 31, 1994 and 1993, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting principles.
As discussed in Notes 1 and 4 to the consolidated financial statements, the
Corporation changed its method of accounting for investments in debt and equity
securities and postretirement benefits other than pensions in 1994 and 1992,
respectively.
(Ernst & Young LLP sig)
Richmond, Virginia
February 10, 1995
18

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Corporation is primarily engaged in the life insurance business which
historically has provided a positive cash flow. By statute, the Life Company is
required to invest in quality securities which provide ample protection for its
policyholders. Policy liabilities of the Life Company are predominately
long-term in nature and are supported primarily by long-term fixed maturity
investments and mortgage loans on real estate.
In May 1993 the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," effective for fiscal years beginning
after December 15, 1993. Under the new rules, debt securities that a corporation
has both the positive intent and ability to hold-to-maturity are carried at
amortized cost. Debt securities that a corporation does not have the positive
intent or ability to hold-to-maturity and all marketable equity securities are
classified as available-for-sale or trading are carried at fair value.
Unrealized gains and losses on securities classified as available-for-sale are
carried as a separate component of stockholders' equity. Unrealized gains and
losses on securities classified as trading are reported in earnings. The
Corporation adopted the provisions of SFAS No. 115 as of January 1, 1994. As a
result of adopting SFAS No. 115, the Corporation placed its entire fixed
maturity and equity securities portfolio in the available-for-sale
classification. The Corporation believes it has the ability to hold all fixed
income investments until maturity; however, securities may be sold to take
advantage of investment opportunities generated by changing interest rates,
prepayments or income tax considerations, as a part of the Corporation's
asset/liability strategy, or for similar factors. In accordance with SFAS No.
115, prior period financial statements have not been restated to reflect the
change in accounting principle. The cumulative effect as of January 1, 1994 of
adopting SFAS No. 115 increased stockholders' equity by $21 million (net of
deferred income taxes) to reflect the net unrealized gains on securities
previously carried at amortized cost. Due to rising interest rates during 1994,
a $17 million net unrealized loss (net of deferred income taxes) was charged
against stockholders' equity at December 31, 1994. There was no effect on net
income as a result of the adoption of SFAS No. 115.
Assets totaled $1.3 billion at December 31, 1994 with investment assets
totalling $1.2 billion or 89% of total assets. Both, total assets and invested
assets, increased over 1993; however, the growth in assets in 1994 was affected
by the reduction in carrying value of debt securities in accordance with the
required adoption of SFAS 115 and the use of $7.7 million of internally
generated funds to acquire 374,948 shares of the Corporation's common stock
during 1994. At December 31, 1994 there were no principal and interest payments
past due on fixed maturities and over 99% of the mortgage loans on real estate
were current for both principal and interest. There are no mortgage loans whose
terms have been restructured.
Cash and invested assets for 1994 exceeded total liabilities by 40%. The Life
Company continually matches the investment portfolio to the cash flow demands of
the types of insurance being written and maintains adequate cash and short-term
investments to meet cash requirements for policy loans and voluntary policy
terminations, as well as investment commitments. Policy loans increased less
than $1 million for 1994 and accounted for less than 5% of total cash and
invested assets.
As disclosed in the Notes to Consolidated Financial Statements as of December
31, 1994, $140 million of consolidated stockholders' equity represents net
assets of the Life Company that cannot be transferred in the form of dividends,
loans or advances to the Corporation. However, this poses no liquidity concerns
to the Corporation as it has sufficient cash flow to meet its operational
requirements.
In May 1993, the FASB issued SFAS No. 114, "Accounting for Creditors for
Impairment of a Loan." SFAS No. 114 requires that impaired loans be valued at
the present value of expected future cash flows discounted at the loan's
effective interest rate or, as a practical expedient, at the loan's observable
market price, or the fair market value of the collateral if the loan is
collateral dependent. The Corporation will be required to comply with SFAS No.
114 beginning in 1995. Management does not anticipate this Standard to have any
significant effect.
Effective December 31, 1993, the National Association of Insurance Commissioners
adopted Risk-Based Capital (RBC) requirements for life/health insurance
companies to evaluate the adequacy of statutory capital and surplus in relation
to investment and insurance risks such as asset quality, mortality and
morbidity, asset and liability matching, and other business
19

factors. The RBC formula will be used by states as an early warning tool to
identify companies that potentially are inadequately capitalized for the purpose
of initiating regulatory action. The Life Company's statutory adjusted capital
is 30 times the authorized control level RBC requirement.
RESULTS OF OPERATIONS
Premiums decreased less than 1% for 1994 compared to a decrease of 1.3% for 1993
and an increase of 14% for 1992. The decline in premium income for both 1994 and
1993 is due primarily to reduced individual sales. The majority of the premium
increase in 1992 resulted from increased participation in a group reinsurance
contract. Net investment income, excluding realized investment gains and losses,
decreased 1.4% compared to decreases of 5.1% and 3.3% for 1993 and 1992,
respectively. Investment income has been affected by the downward trend
experienced in portfolio interest rates during 1993 and 1992. In addition, the
Corporation has used $34 million of internally generated funds to repurchase
over 1.5 million shares of its common stock since March 1991. Realized
investment gains amounted to $10.8 million and $2.9 million, respectively, for
1993 and 1992. These gains resulted principally from calls and maturities of
fixed maturities. Realized investment gains and losses for 1994 were
insignificant. Benefits and claims decreased 4% compared to increases of 7% and
16%, respectively, for 1993 and 1992. Individual mortality costs contributed to
the changes for 1994 and 1993. The increase for 1992 resulted from increased
participation in a group reinsurance contract.
See "A Message to Our Stockholders" for further discussion and analysis of
financial condition and results of operations.
20

QUARTERLY FINANCIAL INFORMATION

First Second Third Fourth
Quarter Quarter Quarter Quarter

1994
Premium income $ 28,812,257 $ 28,360,063 $ 29,045,487 $ 29,853,615
Net investment income 21,044,266 21,165,271 21,098,994 21,550,899
Income before income
taxes 13,508,882 14,388,247 13,135,979 14,562,868
Net income 9,308,882 8,638,247 8,985,979 9,262,868
Net income per share .52 .48 .51 .53
1993
Premium income $ 29,125,783 $ 28,642,455 $ 28,960,706 $ 29,640,177
Net investment income 24,884,917 25,505,119 23,852,186 22,632,102
Income before income
taxes 17,029,491 17,673,931 14,416,080 14,794,951
Net income 11,379,491 11,923,931 9,341,080 9,969,951
Net income per share .61 .66 .52 .56

MARKET AND DIVIDEND INFORMATION
The Corporation's Class B Non-Voting Common Stock is traded in the
over-the-counter (OTC) market and is quoted on the National Association of
Securities Dealers Automated Quotations (NASDAQ) under the Symbol HBENB. The
Corporation's Class A Voting Stock is not publicly traded, but is entitled to
the same cash dividend as Class B Non-Voting Common Stock. The approximate
number of record holders of the Corporation's common stock at December 31, 1994
was 2,000.
The following table gives the high and low prices of the Corporation's Class B
Non-Voting Common Stock and the cash dividends paid per share for each quarter
in the past two years.

High Low Dividend

1993
First Quarter $26 1/2 $24 $ .19
Second Quarter 25 23 1/2 .195
Third Quarter 26 1/4 23 .195
Fourth Quarter 24 21 1/2 .195
1994
First Quarter $23 $20 $ .195
Second Quarter 21 1/2 20 .20
Third Quarter 22 20 1/4 .20
Fourth Quarter 21 1/2 19 1/2 .20

RECORD OF GROWTH OF INSURANCE

FIVE YEARS ENDED DECEMBER 31 1994 1993 1992 1991 1990

ollars
in
sands)
Insurance in force at end of period
Direct Sales
Permanent................................. $3,487,732 $3,475,846 $3,493,455 $3,443,609 $3,355,675
Term...................................... 1,061,649 1,046,115 1,048,076 775,688 726,634
Total................................... 4,549,381 4,521,961 4,541,531 4,219,297 4,082,309
Group........................................ 5,674,447 5,466,635 5,249,927 2,328,608 2,546,885
Total................................... 10,223,828 $9,988,596 $9,791,458 $6,547,905 $6,629,194
New insurance written
Direct Sales
Permanent................................. $ 598,301 $ 600,158 $ 642,629 $ 659,425 $ 605,617
Term...................................... 192,227 196,247 359,406 191,217 142,733
Total................................... 790,528 796,405 1,002,035 850,642 748,350
Group........................................ 225,565 258,174 3,215,242 1,015 31,937
Total..................................... $1,016,093 $1,054,579 $4,217,277 $ 851,657 $ 780,287
Premium income
Life and annuity............................. 106,957 $ 107,091 $ 107,650 $ 93,720 $ 93,043
Accident and health.......................... 9,114 9,278 10,296 9,773 9,184
Total................................. $ 116,071 $ 116,369 $ 117,946 $ 103,493 $ 102,227

SELECTED CONSOLIDATED FINANCIAL DATA

FIVE YEARS ENDED DECEMBER 31 1994 1993 1992 1991

Premium income........................... $ 116,071,422 $ 116,369,121 $ 117,946,267 $ 103,492,622
Net investment income(1)................. 84,859,430 96,874,324 93,583,108 93,913,440
Net income before accounting change...... 36,195,976 42,614,453 46,478,370 47,361,885
Accounting change(2)..................... -- -- (29,444,884) --
Net income(1)............................ 36,195,976 42,614,453 17,033,486 47,361,885
Net income per share(1)(2)
Before accounting change............... 2.04 2.35 2.50 2.51
Accounting change...................... -- -- (1.58) --
Net................................. 2.04 2.35 .92 2.51
Dividends paid per share................. .795 .775 .76 .69
Investments(3)........................... 1,146,717,259 1,143,940,703 1,116,410,112 1,080,540,431
Total assets............................. 1,288,826,060 1,280,233,898 1,248,432,740 1,205,296,739
Total liabilities........................ 822,056,126 806,971,506 787,991,344 748,363,554
Stockholders' equity..................... 466,769,934 473,262,392 460,441,396 456,933,185
Book value per share..................... 26.58 26.38 24.85 24.41

FIVE YEARS ENDED DECEMBER 31 1990

Premium income........................... $ 102,226,755
Net investment income(1)................. 136,837,263
Net income before accounting change...... 66,618,365
Accounting change(2)..................... --
Net income(1)............................ 66,618,365
Net income per share(1)(2)
Before accounting change............... 3.29
Accounting change...................... --
Net................................. 3.29
Dividends paid per share................. .645
Investments(3)........................... 1,045,050,282
Total assets............................. 1,159,842,734
Total liabilities........................ 729,716,372
Stockholders' equity..................... 430,126,362
Book value per share..................... 22.52

(1) Net investment income for 1990 includes realized investment gains of
$43,853,598 which resulted primarily from the sale of the Corporation's
interest in a major regional shopping center. Net income for 1990 includes
$28,453,598 ($1.40 per share) of net realized investment gains. Realized
investment gains and losses for 1991 and 1994 were insignificant. Realized
gains were $10,802,968 and $2,857,454 in 1993 and 1992, respectively. The
Corporation adopted Statement of Financial Accounting Standards No. 96,
"Accounting for Income Taxes" in 1990. Adoption of this standard resulted in
an increase in previously provided deferred income taxes of $8,000,000 ($.39
per share) which was included in income tax expense for the year ended
December 31, 1990.
(2) The Corporation adopted Statement of Financial Accounting Standards (SFAS)
No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions" in 1992. Adoption of this Standard was recognized as an accounting
change. See Note 4 of Notes to Consolidated Financial Statements.
(3) The Corporation adopted Statement of Financial Standards No. 115 "Accounting
for Certain Investments in Debt and Equity Securities" as of January 1,
1994. Adoption of SFAS No. 115 resulted in a $26.3 million decrease in the
carrying value of debt securities at December 31, 1994. In accordance with
SFAS No. 115, prior period financial statement balances were not restated.
See Note 1 of Notes to Consolidated Financial Statements.
22

R. W. WILTSHIRE
Chairman of the Board

C. M. GLENN, JR.
Retired Vice President and Treasurer

L. W. RICHARDSON
Retired Vice President

R. W. WILTSHIRE, JR.
President and
Chief Executive Officer

J. M. WILTSHIRE, JR.
Vice President, Secretary and Counsel

W. B. WILTSHIRE, CLU
Vice President

H. D. GARNETT, CPA
Vice President and Controller

G. T. RICHARDSON
Vice President

W. G. HANCOCK
Counsel
Partner, Mays & Valentine

DIANNE N. COLLINS
Community Volunteer

Officers of Home Beneficial Corporation and/or
Home Beneficial Life Insurance Company

R. W. WILTSHIRE
Chairman of the Board

*R. W. WILTSHIRE, JR.
President and
Chief Executive Officer

H. S. BOURNE
Vice President

*J. M. WILTSHIRE, JR.
Vice President, Secretary and
Counsel[ciix]

*W. B. WILTSHIRE, CLU
Vice President[ciix]

*H. D. GARNETT, CPA
Vice President and Controller[ciix]

*G. T. RICHARDSON
Vice President

W. T. MACE
Vice President

C. P. PARRISH, FLMI
Vice President

E. L. JOHNSON, III, FSA
Vice President andChief Actuary

*B. P. BOYD
Vice President andAsst. Secretary
A. O. BENNETT, FLMI
Vice President

K. H. BOGGS, Jr.
Vice President

*D. M. WESTERHOUSE, JR., CPA
Treasurer

*W. F. COLLINS, FLMI
Auditor

H. H. NASH, FSA
Actuary

W. C. HANCOCK, M.D.
Medical Director

R. L. STILES
Asst. Vice President

R. I. KEMPTON
Asst. Vice President

R. G. GILLISPIE, FLMI
Asst. Vice President

A. N. FASTIGE
Asst. Vice President

W. A. SIMMONS
Asst. Vice President

R. L. STEVENS
Asst. Vice President

J. P. WINN
Asst. Vice President

C. L. MARSH, CFA, CPA, FLMI
Asst. Vice President

R. R. POSA, FSA
Asst. Actuary

H. C. HUTCHERSON
Asst. Actuary

G. T. NUCKOLLS, JR.
Asst. Secretary

H. J. SMITH
Asst. Secretary

J.S. Stewart, FLMI
Asst. Secretary

C. J. Jackson
Asst. Secretary

*W. G. HANCOCK
Counsel

*Officers of both the Corporation and the Life Company. Others are
officers of the Life Company.

MAYS & VALENTINE, General Counsel