Exhibit 11.1 Litchfield Financial Corporation Computation of Earnings per Share Year Ended December 31, ------------------------ 1996 1995 1994 ---- ---- ---- Primary Weighted average number of common shares outstanding ........ 5,441,636 4,315,469 4,116,685 Net effect of dilutive stock options--based on the treasury stock method using the average market price .......................... 232,628 207,514 163,321 ------- ------- ------- Total ............................ 5,674,264 4,522,983 4,280,006 ========= ========= ========= Income before extraordinary item ............................ $ 5,273,000 $ 3,449,000 $ 2,699,000 Extraordinary item (net of applicable tax benefit of $76,000) ......... -- -- (126,000) ----------- ----------- ------------ Net income ....................... $ 5,273,000 $ 3,449,000 $ 2,573,000 =========== =========== ============ Income before extraordinary item per common share ....... $.93 $ .76 $ .63 Extraordinary item (net of applicable tax benefit of $76,000) per common share .............. -- -- (.03) --- ---- ----- Net income per common share ...... $ .93 $ .76 $ .60 === ==== ===== Fully Diluted Weighted average number of common shares outstanding ....... 5,441,659 4,313,583 4,116,685 Net effect of dilutive stock options--based on the treasury stock method using the average market price ......... 294,808 229,426 163,321 ------- ------- ------- Total ............................ 5,736,467 4,543,009 4,280,006 ========= ========= ========= Income before extraordinary item . $ 5,273,000 $ 3,449,000 $ 2,699,000 Extraordinary item (net of applicable tax benefit of $ 76,000) -- -- (126,000) ----------- ----------- ----------- Net income ....................... $ 5,273,000 $ 3,449,000 $ 2,573,000 =========== =========== =========== Income before extraordinary item per common share .......... $ .92 $ .76 $ .63 Extraordinary item (net of applicable tax benefit of $76,000) per common share .............. -- -- (.03) ----------- ----------- ----------- Net income per common share ...... $ .92 $ .76 $ .60 =========== =========== ===========