Annual Report (Form 10-K), fiscal year 1993

ITEM 1. Business
HOME BENEFICIAL CORPORATION
Home Beneficial Corporation ("the Corporation") was incorporated in Virginia on March 5, 1970, for the purpose of becoming a holding company for Home Beneficial Life Insurance Company ("the Life Company"), which originated in 1899. On December 31, 1970, pursuant to a Plan of Reorganization proposed by the Board of Directors and approved by the stockholders of the Life Company, the Corporation acquired all of the issued and outstanding capital stock of the Life Company by merger of the Life Company into a wholly-owned subsidiary of the Corporation, the name of which was immediately changed to Home Beneficial Life Insurance Company. At the present time, the Life Company, which is engaged in the life and accident and health insurance business, is the major subsidiary of the Corporation.
There was no material change in the nature of business done by the Corporation during 1993.
BUSINESS OF THE LIFE COMPANY
General
The Life Company sells group life insurance and substantially all of the forms of ordinary insurance, including universal life, whole life, term, and annuities, together with accidental death and disability riders. Prior to December 1, 1979, the Life Company also sold weekly premium industrial life insurance, and this line was replaced by a new ordinary line which provides the policyowners more flexibility in selecting the mode of payment which best suits their life style.
Prior to 1960, the Life Company, as primary insurer, had group life insurance in force only for the group insurance issued on the lives of its own employees. Since January 1, 1960, the Life Company has written or reinsured regular group insurance which, as of December 31, 1993, represented approximately 99% of the $5.5 billion group life insurance then in force. Group life insurance in force is subject to wide fluctuation due to varying increases and decreases in the number of employees and coverage per employee under the various group reinsurance programs in which the Life Company participates.
Life Insurance Underwriting
Underwriting policy for ordinary applications requires medical exami- nations above certain prescribed maximum amounts which are graduated according to the age of the applicant; the maximum non-medical limit for ages 0 to 30 is $100,000, with lesser amounts at higher ages. Medical examinations are generally required for all applicants over age 56. The Life Company accepts certain substandard risks for which it charges a higher premium.
Accident and Health Insurance
The Life Company currently writes individual accident policies with accidental death and dismemberment benefits. The accident policies accounted for approximately 32% of total accident and health premiums for 1993.
The individual accident coverage presently offered by the Life Company provides for lump-sum benefits for accidents occurring before age 70. The Life Company offers no major medical coverage other than to its own employees.
A significant proportion of the Life Company's group accident and health insurance is attributable to medical expense benefit coverage provided for its own employees and their dependents under the Life Company's Protection and Retirement Plan. In recent years, the Life Company has increased the cost to its employees for the dependents' medical expense benefit coverage provided by the Plan.
Assets and Investment Policy
The investment of the Life Company's funds and assets is determined by an Investment Committee. Generally, investments made must meet requirements established by the applicable investment statutes of the Commonwealth of Virginia governing the nature and quality of investments which may be made by life insurance companies.
The following table shows investments of the Life Company at December 31, 1993. Fixed maturities (bonds, notes and redeemable preferred stocks), mortgage loans on real estate, and short-term investments are stated at cost adjusted where appropriate for amortization of premium or discount; equity securities (nonredeemable preferred and common stocks) are stated at market and policy loans are stated at unpaid balances.
Asset Value Amount Percent (000's) of Total
The Life Company's mortgage portfolio consists of approximately 2600 conventional first mortgages on a wide range of residential, commercial and industrial properties located primarily in those mid-Atlantic states in which the Life Company conducts its insurance business. At December 31, 1993, the aggregate carrying value of mortgage loans was $316,371,747, broken down by category as follows:
Residential $171,972,307 Commercial 144,399,440
Commercial loans include loans on apartments, shopping centers, office buildings and warehouses. Generally, commercial loans range from $250,000 to $3,500,000 in principal amount. The Life Company also makes some mortgage loans to churches. Every property is inspected by a staff under-writer prior to the issuance of a loan commitment. On commercial loans of more than $250,000, the property is inspected every two years after the loan is closed as long as the balance exceeds $250,000. As of December 31, 1993, approximately 1% of the Life Company's mortgages, constituting less than 1% of the aggregate mortgage portfolio book value, consisted of government insured or guaranteed mortgages.
The Life Company's mortgage lending business is heavily concentrated in the states of Virginia and North Carolina. At December 31, 1993, approximately 73% of the Life Company's mortgages, constituting approxi- mately 73% of the total book value of the Life Company's mortgage port- folio, were on residential or commercial properties located in the State of Virginia. Additionally, at the same date approximately 17% of the Life Company's mortgages, constituting approximately 15% of the total book value of the Life Company's mortgage portfolio, were on properties in North Carolina. The relatively high percentage of mortgage loans made in these two states reflects the geographical concentration of the Life Company's insurance business activities in the same two states. Although the Life Company's mortgage loan portfolio is heavily concentrated in Virginia and North Carolina, the economies of those states have become increasingly diversified since World War II, and the Life Company does not believe its mortgage loan portfolio reflects undue risk from the large percentage of its loans originated in those two states.
Although the economic downturn during 1990 and 1991 was characterized by troubled real estate loans in the portfolios of many financial institutions operating in the Life Company's market, the Life Company's mortgage loan portfolio has not reflected the widely-publicized experience of other financial institutions. The Life Company presently holds two real estate parcels acquired through foreclosure with a carrying value in the financial statements of $665,000. No mortgage loans were in foreclosure proceedings at December 31, 1993. Except as indicated below, there were no mortgage loans otherwise not performing in accordance with the contractual terms; there were no mortgage loans whose terms had been restructured; nor, is the Life Company aware of any potential problem loans.
At December 31, 1993, the aging schedule for delinquent mortgage loans in terms of past due days was as follows:
Past due days 30-60 60-90 Over 90 Total
130-60 days past due includes a substantial amount of loan payments that have been received by the Life Company's brokers after their December, 1993 cut-off reporting date to the Life Company. These amounts will be included in their next remittance report.
The Life Company believes the quality of its loan portfolio is attributable to its relatively stringent underwriting standards which have been in force for many years. At the present time, and for a number of years, the Life Company's lending policies have restricted mortgage loans to a maximum loan to value ratio of 75%, based on the lower of cost or appraisal, except for purchase money mortgages and insured or guaranteed mortgages. The Life Company's policy is to place mortgage loans on non-accrual status where any mortgage payment is 90 days or more past due.
During the period 1986-1993, the Life Company experienced only five foreclosures on real estate loans, one in each of the years 1986, 1989 and 1990, two in 1992 and none in 1993. The total of the unpaid principal balances of loans in these five foreclosures was $986,477. The Life Company disposed of three properties acquired in foreclosure proceedings prior to 1993 without loss. The respective market value of properties acquired in 1992 exceeds foreclosed balances, and the Life Company anticipates that they will be disposed of timely without loss. The Corporation does not provide a provision for loan losses in its financial statements. Based upon the de minimis loss experience of the mortgage loan portfolio over many years and the continuing satisfactory performance of its portfolio, the Corporation's management does not feel that a provision is required.
In 1993 the Life Company had net investment income from interest and dividends of $85.5 million constituting 42% of total Life Company revenues excluding realized investment gains. The Life Company's return on invested assets after investment expenses, but before federal taxes, was 7.77% for 1993 compared to 8.47% for 1992, both figures having been based on net investment income and investment balances determined in accordance with generally accepted accounting principles.
See Investment Operations, Note 2 of Notes to Consolidated Financial Statements, which is incorporated herein by reference from pages 12, 13, and 14 of the 1993 Annual Report to Stockholders, and Schedule I included in Part IV elsewhere herein, for additional information concerning the Corporation's consolidated investment portfolio.
Reserves
The Life Company, as a legal reserve company, is required by the various laws of the states in which it is licensed to transact business to carry as liabilities aggregate policy reserves which are considered adequate to meet its obligations on insurance policies in force. Such required reserves are considered statutory reserves because the methods and assumptions used in their calculation are explicitly prescribed by the laws of the various states. The liabilities shown herein for all policies issued in 1948 and subsequently are based on guidelines prescribed by the American Institute of Certified Public Accountants and have been calculated in accordance with generally accepted accounting principles. Such liabilities are calculated by the use of assumptions as to mortality rates, interest rates, withdrawal rates and expense rates in effect at the time the gross premiums were calculated. Liabilities on paid-up policies include a liability for future maintenance expenses which the Life Company expects to incur.
See Revenues, Benefits, Claims and Expenses, Note 1 of the Notes to Consolidated Financial Statements, which is incorporated herein by reference from page 11 of the 1993 Annual Report to Stockholders for additional information relating to the Life Company's reserves.
Reinsurance
The Life Company, as do many other companies engaged in selling insurance, reinsures with other companies portions of the individual life insurance policies it has underwritten. The primary purpose of reinsurance is to enable an insurance company to write a policy in an amount larger than the risk it is willing to assume for itself. A contingent liability exists on insurance ceded to the reinsurer since the Life Company would be liable in the event that the reinsurer is unable to meet obligations assumed by it under the reinsurance agreement.
The maximum amount of ordinary insurance presently retained by the Life Company without reinsurance is $150,000 plus an additional $75,000 coverage for accidental death. This maximum is scaled down according to the age and physical classification of the insured. The total amount of life insurance in force at December 31, 1993 reinsured by the Life Company with other companies aggregated $100 million representing 1% of the Life Company's life insurance in force on that date.
The Life Company acts as a reinsurer on an automatic basis to the extent of its participation in several group life insurance programs. Group life reinsurance does not have a material impact on the Life Company's profitability. The Life Company also assumes reinsurance on a facultative basis on a yearly renewable ordinary term plan from two other life companies.
As of December 31, 1993, life insurance assumed represented approxi- mately 55% of life insurance in force and 17% of life premium income.
Territory Served and Regulation
The Life Company writes insurance in six states and the District of Columbia. The following table sets forth the geographic distribution of premiums received (direct business only) during 1993 as well as the year in which the Life Company began writing insurance in each state:
(1) Gross cash premiums received, before premiums on reinsurance ceded or assumed.
The Life Company, in common with other insurance companies, is subject to regulation and supervision in each of the states in which it does business. Although the extent of such regulation varies from state to state, in general, the insurance laws of the respective states delegate broad administrative powers to supervisory agencies. These powers relate to the granting and revocation of licenses to transact business, the licensing of agents, the approval of the forms of policies used, reserve requirements, and the type and concentration of investments permitted. In addition, the supervisory agencies have power over the form and content of required financial statements and reports, including requirements regarding accounting practices to be employed in the presentation of such statements and reports. Certain of the required accounting practices vary from generally accepted accounting principles. See Notes 1 and 7 of the Notes to Consolidated Financial Statements, which Notes are incorporated herein by reference from pages 11, 12 and 17 of the 1993 Annual Report to Stockholders.
The Life Company is also required under these laws to file detailed annual reports with the supervisory agencies in each of the states in which it does business. Its business and accounts are also subject to examination by such agencies. Under the laws of Virginia and procedures established by the National Association of Insurance Commissioners, the Life Company is examined periodically by one or more of the state supervisory agencies and is required to have an annual independent audit performed by a qualified certified public accountant. Under Virginia law, the Life Company must be examined at least every five years. The most recently completed examination, covering the years 1989 through 1991, was conducted by insurance department representatives from the state of Virginia. Such regulation is primarily for the benefit of the policyholders of the Life Company rather than the stockholders.
Several jurisdictions in which the Life Company does business includ- ing its domiciliary state of Virginia, have enacted legislation providing for specific regulation of the relationship between licensed insurers and their holding companies and among affiliated members of a holding company group. These statutes vary in substance from state to state, but generally speaking, vest administrative control in the insurance regulatory authority. Among the provisions found in these statutes are provisions for the filing of registration statements by insurers which are members of a holding company group, provisions that the holding company will be subject to reporting requirements and to visitation by the insurance regulatory authorities, standards as to transactions between insurers and their holding companies or between members of a holding company group, and control over the payment of extraordinary dividends. See Stockholders' Equity and Restrictions, Note 7 of the Notes to Consolidated Financial Statements, which is incorporated herein by reference from page 17 of the 1993 Annual Report to Stockholders for additional information concerning transactions between the Life Company and its affiliates.
Competition
The life insurance business is intensely competitive and the Life Company competes with many other companies, both stock and mutual, in the states in which it is licensed. The American Council of Life Insurance in its "1993 Fact Book", estimates that of the 2,065 life companies doing business in the United States at the beginning of 1993, approximately 1,948 were stock companies.
According to figures reported in the July 1993 issue of Best's Review, Life/Health Edition, calculated on a statutory accounting basis, the Life Company ranks in the top 10% of all stock companies in the United States based on total admitted assets as of December 31, 1992.
Dependence Upon Single or a Few Customers
No material portion of the business of the Life Company is dependent upon a single customer or a very few customers. The group life insurance sold by the Life Company consists largely of reinsurance participations described under "Business of the Life Company -- Reinsurance" above.
Agency Force and Employees
The Life Company offers its insurance through its own agency force and at December 31, 1993, the agency force consisted of approximately 1,150 full-time personnel assigned to some 47 districts and 13 smaller offices located in principal cities and towns.
In addition to its agency force, at the end of 1993 there were some 270 supervisory, administrative, clerical and other personnel employed in the home office. The Life Company's employees are not represented by labor unions and the Life Company considers its relations with its agents and other personnel to be good.
Industry Segment and Other Information
The Corporation's only industry segment is the business of the Life Company, and its operations have contributed over 98% of the total consolidated revenues and income before income taxes for each of the past three years.
Foreign Business
Neither the Corporation nor any of its subsidiaries engage in material operations outside of the United States, or derives material business from customers outside the United States.
ITEM 2.



ITEM 2. Properties
The principal office of the Corporation is located at 3901 West Broad Street, Richmond, Virginia 23230, which also serves as the home office premises of the Life Company. The home office building, which contains approximately 110,000 square feet of office space, was originally completed in 1950 with a 30,000 square foot addition completed in 1990. The building is used solely for company purposes.
The Life Company presently leases space for 60 district and detached offices in Delaware, Maryland, the District of Columbia, West Virginia, Virginia, Tennessee and North Carolina. The termination dates on these leases range from 1994 to 2003; all of the longer term leases being for district office purposes. The maximum annual rent paid under any lease is $25,550. The annualized rent under all leases in effect on December 31, 1993 was approximately $795,000.
ITEM 3.

ITEM 3. Legal Proceedings
As of the date of this report, neither the Corporation nor any of its subsidiaries was a party to any material pending legal proceedings.
ITEM 4.

ITEM 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Corporation's security holders during the fourth quarter of its fiscal year ended December 31, 1993.
PART II
ITEM 5.

ITEM 5. Market for the Registrant's Common Equity and Related Stockholder Matters
Incorporated herein by reference from the 1993 Annual Report to Stockholders, page 21.
ITEM 6.

ITEM 6. Selected Consolidated Financial Data
Incorporated herein by reference from the 1993 Annual Report to Stockholders, page 22.
ITEM 7.

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Incorporated herein by reference from the 1993 Annual Report to Stockholders, pages 4, 5, 19 and 20.
ITEM 8.


ITEM 8. Financial Statements and Supplementary Data
Consolidated financial statements of the Corporation at December 31, 1993 and 1992 and for each of the three years in the period ended December 31, 1993 and the auditor's report thereon and the Corporation's unaudited quarterly financial data for the two year period ended December 31, 1993 are incorporated herein by reference from the 1993 Annual Report to Stock-holders, pages 6 through 18 and 21.
ITEM 9.

ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures
None.
PART III
ITEM 10.



ITEM 10. Directors and Executive Officers of the Registrant
(a) and (b) The following table gives the name and age of each of the directors (all of whom, except C. M. Glenn, Jr., L. W. Richardson, and Dianne N. Collins are executive officers of the Corporation and the Life Company) and their positions and offices with the Corporation and the Life Company and the dates first elected to those positions with the Corporation.
Position and Offices with the Corporation and the Life Company and Date Elected to Name Age Corporation Officer Position
Dianne N. Collins 48 Director of the Life Company and the Corporation and Community Volunteer
H. D. Garnett 51 Vice President (since 1979), Controller (since 1974) and a director of the Corporation and the Life Company
C. M. Glenn, Jr. 77 Retired Vice President-Treasurer and a director of the Corporation and the Life Company
W. G. Hancock 43 Counsel (since 1984) and a director of the Corporation and the Life Company
G. T. Richardson 41 Vice President (since 1983) and a director of the Corporation and the Life Company
L. W. Richardson 74 Retired Vice President and a director of the Corporation and the Life Company
J. M. Wiltshire, Jr. 68 Vice President (since 1972), Counsel (since 1982), Secretary (since 1994) and a director of the Corporation and the Life Company
R. W. Wiltshire 72 Chairman of the Board (since 1983) and a director of the Corporation and the Life Company
R. W. Wiltshire, Jr. 48 President (since 1988), Chief Executive Officer (since 1992) and a director of the Corporation and the Life Company
W. B. Wiltshire 45 Vice President (since 1983) and a director of the Corporation and the Life Company
Mrs. Collins was first elected to the Board of Directors of the Corporation on February 15, 1994, Messrs. Garnett, Hancock, G. T. Richardson, and W. B. Wiltshire were first elected to the Board in 1983, and Messrs. R. W. Wiltshire, Jr. and J. M. Wiltshire, Jr. were first elected to the Board in 1976 and 1971, respectively, all to fill then existing vacancies on the Board. The remaining persons named in the foregoing table have served as directors of the Corporation since its organization in 1970.
All of the above persons serve one year terms as both executive officers and directors, or in the case of Messrs. Glenn and Richardson and Mrs. Collins, as directors only, which expire April 5, 1994. There are no executive officers of the Corporation who are not directors.
(c) Not applicable.
(d) C. M. Glenn, Jr. is the uncle of W. G. Hancock. L. W. Richardson is the father of G. T. Richardson and the first cousin of R. W. Wiltshire. R. W. Wiltshire is the father of R. W. Wiltshire, Jr. and W. B. Wiltshire and the first cousin of J. M. Wiltshire, Jr.
(e)(1) Except as set forth below, each of the persons named in (a) and (b) above has been principally employed by the Corporation and the Life Company in the present or a comparable position for more than the past five years. Dianne N. Collins has been a Trustee of the 1984 Voting Trust described in Item 12 below since January 4, 1994 and a volunteer in the Richmond, Virginia community for more than the past five years. C. M. Glenn, Jr. and L. W. Richardson retired at the end of 1986 and 1987, respectively, each having served in the office shown for more than five years immediately prior to his retirement. W. G. Hancock has been a partner of the law firm of Mays & Valentine, Richmond, Virginia since 1981 specializing in real estate and mortgage lending, insurance company regulation and general business matters. He was designated as Counsel to the Corporation and the Life Company effective June 13, 1984. J. M. Wiltshire, Jr. was elected to the additional office of Secretary of the Corporation and Life Company effective January 18, 1994. R. W. Wiltshire, Jr. was elected President of the Life Company and Corporation in 1988. Effective April 7, 1992, he was elected Chief Executive Officer of the Life Company and the Corporation to succeed R. W. Wiltshire who had served in that office for more than five years immediately prior thereto. Prior to his election as Chief Executive Officer, R. W. Wiltshire, Jr. was responsible for the general management of the operations of the Corporation and the Life Company. R. W. Wiltshire retired as an employee and salaried officer of the Corporation and the Life Company effective September 6, 1993.
(e)(2) Not applicable.
(f) Not applicable.
(g) Not applicable.
(h) The Corporation's directors and executive officers are required to file reports with the Securities and Exchange Commission (the "Commission") concerning their initial ownership of shares of the Corporation's Class A and Class B Common Stock and any subsequent changes in that ownership, and the Corporation traditionally has assisted its directors and executive officers in the filing of these reports. In making these reports, the Corporation has relied on written representation of its directors and executive officers and copies of the reports that they have filed with the Commission. The Corporation believes that these filing requirements were satisfied in 1993 with the following exception. Three family trusts of which W. G. Hancock is one of the trustees inadvertently filed their initial reports of ownership eight days late. These family trust holdings, however, were included in individual reports which were timely filed by Mr. Hancock in his individual capacity.
ITEM 11.

ITEM 11. Executive Compensation
(a) and (b) Summary Compensation Table
The following Summary Compensation Table sets forth certain information concerning cash compensation paid to or contributed for the benefit of the six individuals named below for services rendered to the Corporation and its subsidiaries as executive officers during each of the three years in the period ended December 31, 1993.
SUMMARY COMPENSATION TABLE
5% Class A Stockholders (Other Than Directors and Trustees)
(1) Beneficial ownership has been determined in accordance with Rule 13d- 3 under the Securities Exchange Act of 1934. (2) Where an asterisk is shown, the percentage is less than 1%. (3) 5,401,024 shares of Class A Common Stock constituting 63.7% of the 8,476,576 shares outstanding are held by R. W. Wiltshire, L. W. Richardson, R. W. Wiltshire, Jr., G. T. Richardson and Dianne N. Collins, as Trustees under the 1984 Voting Trust. (4) All of the voting trust certificates for Class A shares and the Class B shares are held of record by Dixie Company and may be acquired by Mrs. Collins pursuant to her power to revoke an inter vivos trust. Such voting trust certificates are also included in the table for Dixie Company. (5) Some portion or all of the Class A shares shown for each of the indicated directors or stockholders are subject to the 1984 Voting Trust, and their beneficial ownership as to those shares is evidenced by voting trust certificates that have been issued to them thereunder. The number of Class A shares deposited in the 1984 Voting Trust by each of them is as follows: Dianne N. Collins - 13,536; C. M. Glenn, Jr. - 150,164; G. T. Richardson - 22,510; L. W. Richardson - 250,708; R. W. Wiltshire - 539,016; R. W. Wiltshire, Jr. - 1,876; W. B. Wiltshire - 1,728; Dixie Company - 2,423,800; Estate of Mary Morton Parsons - 1,174,427; and George L. Richardson - 404,600. (6) All of the Class B shares shown for Mr. Garnett are owned jointly with his wife. (7) Includes 165,520 shares of Class A (of which 90,000 shares are evidenced by voting trust certificates of the 1984 Voting Trust) and 23,280 shares of Class B Common Stock held in trust by Crestar Bank as trustee for the benefit of Mr. Glenn during his lifetime, with remainder to his issue. (8) Includes 80,822 shares of Class A and, in the case of Mr. Glenn, 3,644 shares of Class B Common Stock, held by Mr. Glenn and his sister, Doris G. Hancock and another sister, as trustees under the will of Hazel C. Glenn for the benefit of his daughter. (9) Includes an aggregate of 6,216 shares of Class A (of which 2,696 shares are evidenced by voting trust certificates of the 1984 Voting Trust) and 14,094 shares of Class B Common Stock held by directors as trustees or custodians for the benefit of children (that are not described in other footnotes to this table), or by their wives, and with respect to which beneficial ownership is or will be disclaimed by individual directors in ownership reports filed with the Securities and Exchange Commission. (10) The ownership shown for Mr. Hancock excludes 188,800 shares of Class A Common Stock held in trust by Crestar Bank for the benefit of his mother, Doris G. Hancock, with remainder to Mrs. Hancock's issue, in which Mr. Hancock has a vested one-third beneficial interest subject to partial divestment upon any further children of Mrs. Hancock. (11) Includes 2,400 shares of Class A Common Stock held by Mr. Hancock and his brother and sister as trustees under inter vivos trusts created by their mother for the benefit of her six grandchildren, three of whom are children of Mr. Hancock. (12) Includes 25,538 shares of Class A Common Stock evidenced by voting trust certificates of the 1984 Voting Trust and 36,912 shares of Class B Common Stock held by Mr. Richardson, as trustee with sole voting and shared investment power, for the benefit of a member of his immediate family. (13) 55,500 shares of Class A Common Stock, voting trust certificates for 94,976 shares of Class A Common Stock subject to the 1984 Voting Trust and 86,964 shares of Class B Common Stock are held by the Estate of Essie Lee Wiltshire for the life of R. W. Wiltshire with a vested remainder interest in the children of R. W. Wiltshire. R. W. Wiltshire is the sole executor of the Estate of Essie Lee Wiltshire. During the life of R. W. Wiltshire the income from the foregoing shares is paid to the children of R. W. Wiltshire. In addition, R. W. Wiltshire has a life estate in voting trust certificates evidencing 403,264 shares of Class A Common Stock subject to the 1984 Voting Trust and 47,260 shares of Class B Common Stock, with remainder to the children of R. W. Wiltshire. R. W. Wiltshire, Jr. and W. B. Wiltshire have vested one-fourth beneficial interests in all the foregoing shares, subject to partial divestment upon any further children of R. W. Wiltshire. The ownership shown includes such shares for R. W. Wiltshire and excludes all such shares for R. W. Wiltshire, Jr. and W. B. Wiltshire. Both R. W. Wiltshire, Jr. and W. B. Wiltshire also have the same vested one-fourth remainder interests subject to partial divestment in another 140,836 shares of Class B Common Stock in which various children and grandchildren of R. W. Wiltshire residing in other households have an interest for his life. The ownership shown for R. W. Wiltshire, R. W. Wiltshire, Jr. and W. B. Wiltshire does not reflect any of such shares, except in the case of R. W. Wiltshire, Jr. for 26,445 shares held by him as custodian for his minor children and another 8,764 shares held for his own benefit and in the case of W. B. Wiltshire for 17,630 shares held by him as custodian for his minor children and another 8,764 shares held for his own benefit. (14) Dixie Company is the nominee of Jefferson National Bank which holds 137,536 Class A shares and voting trust certificates for another 2,423,800 Class A shares in a number of fiduciary accounts that it administers (including voting trust certificates for 13,536 Class A shares previously reported in the table for Mrs. Collins). (15) Includes 188,800 shares of Class A Common Stock held in trust by Crestar Bank as trustee for the benefit of Mrs. Hancock during her lifetime with remainder to her issue. Also includes 18,205 Class A shares held by Mrs. Hancock's husband. (16) Clinton Webb and NationsBank of Virginia, N.A. are the co-executors of the Estate of Mary Morton Parsons.
As of March 11, 1994, executive officers and directors of the Corporation as a group beneficially owned 1,418,499 shares or 16.7% of the Class A (including beneficial ownership evidenced by voting trust certificates of, but exclusive of shares held by the Trustees under, the 1984 Voting Trust) and 441,337 shares or 4.7% of the Class B Common Stock of the Corporation, respectively.
(c) The Corporation has no knowledge of any contractual arrangement which may at a subsequent date result in a change of control of the Corporation, except that the 1984 Voting Trust is scheduled to expire on May 11, 1997. Upon its expiration, the shares of Class A Common Stock of the Corporation now held by the Trustees under the 1984 Voting Trust will be held by per-sons presently holding voting trust certificates representing those shares.
ITEM 13. Certain Relationships and Related Transactions
(a) On May 10, 1993, the Corporation repurchased 365,838 shares of its Class B Common Stock from the Estate of Mary Morton Parsons at a price of $9,008,761 or $24.625 per share. At the time of the repurchase, the Estate of Mary Morton Parsons was the beneficial owner of more than 5% of the Corporation's outstanding Class A Common Stock.
In the case of the above purchase, the price paid by the Corporation was below the then applicable bid price for the Corporation's Class B Common Stock in the over-the-counter market. Prior to the purchase, the Board of Directors determined that reacquisition of the shares was in the best interest of the Corporation and its stockholders when compared with alternative investments available to the Corporation. Immediately upon their reacquisition, all of the shares became authorized but unissued shares under Virginia law.
(b) W. G. Hancock is a partner in the law firm of Mays & Valentine which provided legal services as general counsel to the Corporation and its subsidiaries and affiliates during 1993, and is expected to serve in the same capacity in 1994. The amount of legal fees paid to that firm by the Corporation and its subsidiaries and affiliates for 1993 did not exceed 5% of the firm's gross revenues for its last full fiscal year.
(c) Not applicable.
(d) Not applicable.
Part IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. and 2. Financial Statements and Financial Statement Schedules
The financial statements and financial statement schedules listed in the accompanying Index to Financial Statements and Financial Statement Schedules on page 27 are filed as part of this annual report.
3. Exhibits
The exhibits listed in the accompanying Index to Exhibits are filed as part of this annual report.
(b) Reports on Form 8-K
None
HOME BENEFICIAL CORPORATION and Financial Statement Schedules (Item 14(a)) Annual Form Report to 10-K Stockholders
Consolidated Financial Statements:
Report of Ernst & Young, Independent Auditors 18 Consolidated Balance Sheet at December 31, 1993 and 1992 6-7 Consolidated Statement of Income for each of the three years in the period ended December 31, 1993 8 Consolidated Statement of Retained Earnings for each of the three years in the period ended December 31, 1993 9 Consolidated Statement of Cash Flows for each of the three years in the period ended December 31, 1993 10 Notes to Consolidated Financial Statements 11-17 Supplementary information-- Quarterly financial information (unaudited) 21
Financial Statement Schedules:
I - Summary of investments - other than investments in related parties at December 31, 1993 (Consolidated) 29
III - Condensed Financial Information of Registrant (Parent Company):
Balance Sheet at December 31, 1993 and 1992 30 Statement of Income for each of the three years in the period ended December 31, 1993 31 Statement of Cash Flows for each of the three years in the period ended December 31, 1993 32
VI - Reinsurance for each of the three years in the period ended December 31, 1993 (Consolidated) 33
All other schedules are omitted since the required information is not present, or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the financial statements and notes thereto.
The consolidated financial statements and supplementary information listed in the above index, which are included in the Annual Report to Stockholders for Home Beneficial Corporation for the year ended December 31, 1993, are incorporated herein by reference.
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report(Form 10-K) of Home Beneficial Corporation of our report dated February 10, 1994, included in the 1993 Annual Report to Stockholders of Home Beneficial Corporation.
Our audits also included the financial statement schedules of Home Beneficial Corporation listed in Item 14(a). These schedules are the responsibility of the Corporation's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.
ERNST & YOUNG
Richmond, Virginia February 10, 1994
Schedule I HOME BENEFICIAL CORPORATION
(CONSOLIDATED)
SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES
At December 31, 1993
Schedule III
HOME BENEFICIAL CORPORATION
(PARENT COMPANY)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEET December 31, 1993 and 1992
(*) See Notes 6 and 7 to Consolidated Financial Statements
Schedule III
HOME BENEFICIAL CORPORATION
(PARENT COMPANY)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENT OF INCOME Years Ended December 31, 1993, 1992 and 1991
Schedule III
HOME BENEFICIAL CORPORATION
(PARENT COMPANY)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENT OF CASH FLOWS Years Ended December 31, 1993, 1992 and 1991 Increase (Decrease) in Cash and Cash Equivalents (*)
(*) Short-term investments, which consist of investments with maturities of 30 days or less, are considered cash equivalents.
Schedule VI HOME BENEFICIAL CORPORATION (CONSOLIDATED) REINSURANCE Years Ended December 31, 1993, 1992 and 1991
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the Registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.
HOME BENEFICIAL CORPORATION Registrant
By: /s/ H. D. Garnett H.D. Garnett, Vice President and Controller, March 22, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
/s/ R. W. Wiltshire R.W. Wiltshire, Chairman of the Board & Director, March 22, 1994
/s/ C. M. Glenn, Jr. C.M. Glenn, Jr., Retired Vice President, Treasurer & Director, March 22, 1994
/s/ L. W. Richardson L.W. Richardson, Retired Vice President & Director, March 22, 1994
/s/ R. W. Wiltshire, Jr. R.W. Wiltshire, Jr., President, Chief Executive Officer & Director, March 22,
/s/ J. M. Wiltshire, Jr. J.M. Wiltshire, Jr., Vice President, Counsel, Secretary & Director, March 22,
/s/ W. B. Wiltshire W.B. Wiltshire, Vice President & Director, March 22, 1994
/s/ H. D. Garnett H.D. Garnett, Vice President, Controller & Director, March 22, 1994
/s/ G. T. Richardson G.T. Richardson, Vice President & Director, March 22, 1994
/s/ W. G. Hancock W.G. Hancock, Counsel & Director, March 22, 1994
/s/ Dianne N. Collins Dianne N. Collins, Director, March 22, 1994
HOME BENEFICIAL CORPORATION Index to Exhibits (Items 14(c))


ITEM 13. Certain Relationships and Related Transactions
(a) On May 10, 1993, the Corporation repurchased 365,838 shares of its Class B Common Stock from the Estate of Mary Morton Parsons at a price of $9,008,761 or $24.625 per share. At the time of the repurchase, the Estate of Mary Morton Parsons was the beneficial owner of more than 5% of the Corporation's outstanding Class A Common Stock.
In the case of the above purchase, the price paid by the Corporation was below the then applicable bid price for the Corporation's Class B Common Stock in the over-the-counter market. Prior to the purchase, the Board of Directors determined that reacquisition of the shares was in the best interest of the Corporation and its stockholders when compared with alternative investments available to the Corporation. Immediately upon their reacquisition, all of the shares became authorized but unissued shares under Virginia law.
(b) W. G. Hancock is a partner in the law firm of Mays & Valentine which provided legal services as general counsel to the Corporation and its subsidiaries and affiliates during 1993, and is expected to serve in the same capacity in 1994. The amount of legal fees paid to that firm by the Corporation and its subsidiaries and affiliates for 1993 did not exceed 5% of the firm's gross revenues for its last full fiscal year.
(c) Not applicable.
(d) Not applicable.
Part IV
ITEM 14.

ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. and 2. Financial Statements and Financial Statement Schedules
The financial statements and financial statement schedules listed in the accompanying Index to Financial Statements and Financial Statement Schedules on page 27 are filed as part of this annual report.
3. Exhibits
The exhibits listed in the accompanying Index to Exhibits are filed as part of this annual report.
(b) Reports on Form 8-K
None
HOME BENEFICIAL CORPORATION and Financial Statement Schedules (Item 14(a)) Annual Form Report to 10-K Stockholders
Consolidated Financial Statements:
Report of Ernst & Young, Independent Auditors 18 Consolidated Balance Sheet at December 31, 1993 and 1992 6-7 Consolidated Statement of Income for each of the three years in the period ended December 31, 1993 8 Consolidated Statement of Retained Earnings for each of the three years in the period ended December 31, 1993 9 Consolidated Statement of Cash Flows for each of the three years in the period ended December 31, 1993 10 Notes to Consolidated Financial Statements 11-17 Supplementary information-- Quarterly financial information (unaudited) 21
Financial Statement Schedules:
I - Summary of investments - other than investments in related parties at December 31, 1993 (Consolidated) 29
III - Condensed Financial Information of Registrant (Parent Company):
Balance Sheet at December 31, 1993 and 1992 30 Statement of Income for each of the three years in the period ended December 31, 1993 31 Statement of Cash Flows for each of the three years in the period ended December 31, 1993 32
VI - Reinsurance for each of the three years in the period ended December 31, 1993 (Consolidated) 33
All other schedules are omitted since the required information is not present, or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the financial statements and notes thereto.
The consolidated financial statements and supplementary information listed in the above index, which are included in the Annual Report to Stockholders for Home Beneficial Corporation for the year ended December 31, 1993, are incorporated herein by reference.
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report(Form 10-K) of Home Beneficial Corporation of our report dated February 10, 1994, included in the 1993 Annual Report to Stockholders of Home Beneficial Corporation.
Our audits also included the financial statement schedules of Home Beneficial Corporation listed in Item 14(a). These schedules are the responsibility of the Corporation's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.
ERNST & YOUNG
Richmond, Virginia February 10, 1994
Schedule I HOME BENEFICIAL CORPORATION
(CONSOLIDATED)
SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES
At December 31, 1993
Schedule III
HOME BENEFICIAL CORPORATION
(PARENT COMPANY)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEET December 31, 1993 and 1992
(*) See Notes 6 and 7 to Consolidated Financial Statements
Schedule III
HOME BENEFICIAL CORPORATION
(PARENT COMPANY)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENT OF INCOME Years Ended December 31, 1993, 1992 and 1991
Schedule III
HOME BENEFICIAL CORPORATION
(PARENT COMPANY)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENT OF CASH FLOWS Years Ended December 31, 1993, 1992 and 1991 Increase (Decrease) in Cash and Cash Equivalents (*)
(*) Short-term investments, which consist of investments with maturities of 30 days or less, are considered cash equivalents.
Schedule VI HOME BENEFICIAL CORPORATION (CONSOLIDATED) REINSURANCE Years Ended December 31, 1993, 1992 and 1991
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the Registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.
HOME BENEFICIAL CORPORATION Registrant
By: /s/ H. D. Garnett H.D. Garnett, Vice President and Controller, March 22, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
/s/ R. W. Wiltshire R.W. Wiltshire, Chairman of the Board & Director, March 22, 1994
/s/ C. M. Glenn, Jr. C.M. Glenn, Jr., Retired Vice President, Treasurer & Director, March 22, 1994
/s/ L. W. Richardson L.W. Richardson, Retired Vice President & Director, March 22, 1994
/s/ R. W. Wiltshire, Jr. R.W. Wiltshire, Jr., President, Chief Executive Officer & Director, March 22,
/s/ J. M. Wiltshire, Jr. J.M. Wiltshire, Jr., Vice President, Counsel, Secretary & Director, March 22,
/s/ W. B. Wiltshire W.B. Wiltshire, Vice President & Director, March 22, 1994
/s/ H. D. Garnett H.D. Garnett, Vice President, Controller & Director, March 22, 1994
/s/ G. T. Richardson G.T. Richardson, Vice President & Director, March 22, 1994
/s/ W. G. Hancock W.G. Hancock, Counsel & Director, March 22, 1994
/s/ Dianne N. Collins Dianne N. Collins, Director, March 22, 1994
HOME BENEFICIAL CORPORATION Index to Exhibits (Items 14(c))