FORM 10-Q

	SECURITIES AND EXCHANGE COMMISSION

	Washington, D.C.  20549

 

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

	OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002
	OR

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

	OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ................ to ................

 

Commission File Number 0-5486
 

                         PRESIDENTIAL LIFE CORPORATION                         

             (Exact name of registrant as specified in its charter)

           Delaware                                  13-2652144                

(State or other jurisdiction of           (I.R.S. Employer Identification No.)

 incorporation or organization)

69 Lydecker Street, Nyack, New York                            10960           

(Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code      845 - 358-2300         
 

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES   X       NO 
There were 29,334,668 shares of common stock, par value $.01 per share of the issuer's common stock outstanding as of the close of business on November 12, 2002.
**INDEX**
 

Part I - Financial Information						   Page No.
Item 1.  Consolidated Financial Statements

Consolidated Balance Sheets (Unaudited) September 30, 2002

and December 31, 2001........................................           3

Consolidated Statements of Income (Unaudited) - For

the Nine months Ended September 30, 2002 and 2001................       4

	Consolidated Statements of Income (Unaudited) - For

	the Three Months Ended September 30, 2002 and 2001..............	      5

Consolidated Statements of Shareholders'

Equity (Unaudited) - For the Nine months Ended

September 30, 2002 and 2001.......................................      6

Consolidated Statements of Cash Flows (Unaudited) - For

the Nine months Ended September 30, 2002 and 2001................       7

      Condensed Notes to (Unaudited) Consolidated Financial Statements..      8-11

Independent Accountants' Review Report............................      12

Item 2.  Management's Discussion and Analysis of

Financial Condition and Results of Operations...........          13-20

Item 4.  Controls and Procedures . . . . . . . . . . . . . . . . . .          21

Part II - Other Information.........................................          22

Item 1.  Legal Proceedings

Item 2.  Changes in Securities

Item 3.  Defaults Upon Senior Securities

Item 4.  Submission of Matters to a Vote of Security Holders

Item 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K

Signatures..........................................................          23

Form 10-Q Certification for Chief Executive Officer . . . . . . . .           24

Form 10-Q Certification for Treasurer and Principal Accounting Officer        25

 

 

 

 

 

 

 

 

	

 

 

 

2.

 

 

PRESIDENTIAL LIFE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)
 
September 30,

2002

(Unaudited) 
December 31,

2001

ASSETS:   
Investments:   
    Fixed maturities:   
     Available for sale at market (Cost of 
       $3,467,938 and $3,028,014, respectively)
$  3,457,011 
$ 2,967,684 
     Common stocks (Cost of $17,952 and   
       $19,237, respectively)
16,975  
25,909 
    Mortgage loans
12,181  
13,398 
    Real estate
415  
415 
    Policy loans
17,590  
16,985 
    Short-term investments
321,152  
308,311 
    Other invested assets
245,971  
240,053 
             Total Investments
4,071,295  
3,572,755      
Cash and cash equivalents
(2,512) 
(18,993)
Accrued investment income
50,141  
40,757 
Amounts due from security transactions
1,109  
784 
Deferred federal income taxes
41,819  
15,199 
Federal income tax recoverable
16,039  
26,924 
Deferred policy acquisition costs
120,602  
103,082 
Furniture and equipment, net
344  
458 
Amounts due from reinsurers
17,971  
19,575 
Other assets
5,731  
5,923 
Assets held in separate account
2,232  
3,053 
              TOTAL ASSETS
4,324,771  
3,769,517     
LIABILITIES AND SHAREHOLDERS' EQUITY:   
Liabilities:   
Policy Liabilities:
   Policyholders' account balances
2,770,502  
2,167,332 
   Future policy benefits:   
    Annuity
624,338  
583,483 
    Life and accident and Health
69,373  
69,006 
   Other policy liabilities
4,932  
4,348 
              Total Policy Liabilities
3,469,145  
2,824,169     
Dollar repurchase agreements
261,476  
260,556 
Notes payable
100,000  
100,000 
Short-term note payable
50,000  
50,000 
Deposits on policies to be issued
30,494  
69,019 
General expenses and taxes accrued
3,745  
9,255 
Other liabilities
19,340  
26,371 
Liabilities related to separate account
2,232  
3,053 
              Total Liabilities
3,936,432  
3,342,423     
Shareholders' Equity:   
   Capital stock ($.01 par value; authorized   
    100,000,000 shares; issued and outstanding,    
    29,334,668 shares in 2002 and 29,317,759   
    shares in 2001
293  
293 
    Accumulated other comprehensive loss
(11,618) 
(34,552)
   Retained earnings
399,664  
461,353 
               Total Shareholders' Equity
388,339  
427,094 
               TOTAL LIABILITIES AND SHAREHOLDERS'
                  EQUITY
$   4,324,771 
$ 3,769,517     
The accompanying notes are an integral part of these Unaudited Consolidated
Financial Statements.
 

 

 

 

 

 

 

 

3.

 

 

PRESIDENTIAL LIFE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share data)

 
 
   NINE MONTHS ENDED

    SEPTEMBER 30

    (UNAUDITED)
REVENUES:
2002 
2001
 Insurance Revenues:   
     Premiums
$   7,400  
   $   5,136
     Annuity considerations
52,920  
     69,617
     Universal life and investment type policy   
        fee income
812  
581 
  Net investment income
201,196  
161,664 
  Realized investment losses
(118,346) 
     (35,380)
  Other income
2,196  
       2,382    
           TOTAL REVENUES
146,178  
204,000     
BENEFITS AND EXPENSES:   
  Death and other life insurance benefits
9,768  
9,500 
  Annuity benefits
47,523  
42,812 
  Interest credited to policyholders' account   
        Balances
106,610  
78,323 
  Interest expense on notes payable
8,179  
6,314 
  Other interest and other charges
(4) 
437 
  Increase in liability for future policy benefits
41,443  
57,773 
  Commissions to agents, net
25,637  
21,204 
  General expenses and taxes
8,243  
11,189 
  Change in deferred policy acquisition costs
(25,439)
(17,725)    
           TOTAL BENEFIT AND EXPENSES 
221,960  
209,827     
Income before income taxes
(75,782) 
(5,827)    
Provision (benefit) for income taxes   
  Current
15,669  
5,456 
  Deferred
(38,335) 
    (7,204) 
(22,666) 
  (1,748)
NET LOSS
$   (53,116) 
$  (4,079)    
Earnings per common share
(1.81) 
(.14)    
Weighted average number of shares outstanding   
During the period
29,331,262 
29,313,944     
The accompanying notes are an integral part of these Unaudited Consolidated
Financial Statements.
	

 

 

 

 

 

 

 

 

 

 

 

 

 

4.

 

PRESIDENTIAL LIFE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share data)

 
 
  THREE MONTHS ENDED

    SEPTEMBER 30

    (UNAUDITED)
REVENUES:
2002 
2001
 Insurance Revenues:   
     Premiums
$  3,444   
$  2,129 
     Annuity considerations
20,822  
20,014 
     Universal life and investment type policy   
        fee income
536  
156 
  Net investment income
70,041  
54,762 
  Realized investment losses
(88,339) 
(35,506)
  Other income
654  
870     
           TOTAL REVENUES
7,158  
42,425     
BENEFITS AND EXPENSES:   
  Death and other life insurance benefits
3,860  
3,401 
  Annuity benefits
16,103  
14,567 
  Interest credited to policyholders' account   
        Balances
38,164  
27,810 
  Interest expense on notes payable
1,849  
1,586 
  Other interest and other charges
207  
114 
  Increase in liability for future policy benefits
17,608  
16,363 
  Commissions to agents, net
9,522  
7,072 
  General expenses and taxes
2,080  
4,111 
  Change in deferred policy acquisition costs
(12,019) 
(9,283)    
           TOTAL BENEFIT AND EXPENSES 
77,374  
65,741     
Income before income taxes
(70,216) 
(23,316)    
Benefit for income taxes   
  Current
10,659  
732 
  Deferred
(31,655) 
(7,606) 
(20,996) 
(6,874)    
NET LOSS
$   (49,220) 
$  (16,442)    
Earnings per common share
(1.68) 
(.56)    
Weighted average number of shares outstanding   
During the period
29,334,668  
29,319,813     
The accompanying notes are an integral part of these Unaudited Consolidated
Financial Statements.