[2] Enhance Financial Services Reports 14 Percent Increase in Third-Quarter 1999 Operating Earnings.NEW YORK--(BUSINESS WIRE)--Nov. 1, 1999-- Enhance Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. Group Inc. (NYSE NYSE See: New York Stock Exchange :EFS EFS Encrypted File System (Microsoft Windows 2000) EFS Event Free Survival (survival rates in clinical trials) EFS Evangeliska Fosterlandsstiftelsen (Sweden) ) today reported that operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before (1) increased 14 percent to $24.4 million in third-quarter 1999 from $21.4 million in third-quarter 1998. Operating earnings in the first nine months of 1999 also rose 14 percent to $69.6 million from $61.2 million in the first nine months of 1998. Operating earnings exclude the impact of capital gains and losses, foreign exchange gains and losses, and certain non-recurring items. Operating earnings per share rose 15 percent to $0.63 in third-quarter 1999 from $0.55 in third-quarter 1998. (Unless otherwise stated, all per share earnings results in this release are reported on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis.) Operating earnings per share for the first nine months of 1999 rose 14 percent to $1.78 from $1.56 in the 1998 period. Operating return on equity (ROE A fictitious surname used for an unknown or anonymous person or for a hypothetical person in an illustration. A lawsuit is generally named for the persons who are parties to it. ) excluding adjustments for FAS 115 was 14.2 percent in third-quarter 1999 compared to 14.2 percent in third-quarter 1998. Operating ROE excluding adjustments for FAS 115 was 13.9 percent in the first nine months of 1999 compared to 13.9 percent in the first nine months of 1998. Daniel Daniel, book of the Bible Daniel, book of the Bible. It combines "court" tales, perhaps originating from the 6th cent. B.C., and a series of apocalyptic visions arising from the time of the Maccabean emergency (167–164 B.C. Gross, President and Chief Executive Officer, said, "Operating earnings growth in the third quarter reflects continued strong performance at C-BASS C-BASS Credit-Based Asset Servicing and Securitization and the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact of our REMIC residuals Residuals (1) Part of stock returns not explained by the explanatory variable (the market index return). Residuals measure the impact of firm-specific events during a particular period. investment. At the same time, we are clearly dissatisfied dis·sat·is·fied adj. Feeling or exhibiting a lack of contentment or satisfaction. dis·sat  is·fied with
the decline in our overall pre-tax pre-tax adj → anterior al impuestopre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta earnings from last year. We are taking actions to enable us to resume our strong growth in pre-tax earnings in 2000, including a corporate-wide initiative to review and control expenses." Mr. Gross added, "We remain confident in our ability to achieve our longer-term goal of improving operating return on equity to 15 percent by the year 2001." Net income in third-quarter 1999 decreased to $22.4 million from $22.7 million in the year-ago quarter. Net income for the first nine months of 1999 increased to $64.0 million from $62.5 million in the same period in 1998. Earnings per share in third-quarter 1999 were $0.57 compared to $0.58 in third-quarter 1998, while earnings per share for the first nine months of 1999 were $1.64 compared to $1.59 in the first nine months of 1998. Net income in third-quarter and the first nine months of 1999 includes an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. non-recurring reserve of $2.1 million, or $0.06 per share, related to losses expected to be incurred in the future from the potential run-off run-off n (in contest, election) → desempate m (= extra race); carrera de desempate run-off n (in contest, election) → of Enhance Financial's subsidiary, Van-American Companies. Van-American Companies is the parent company of Van-American Insurance Company, a provider of financial responsibility bonds for coal mine operators and landfill operators. Due to intense pricing competition in Van-American's core business and a poor strategic fit with Enhance Financial's other operations, Enhance Financial decided in the fourth quarter of 1998 to exit the financial responsibility line of business and put up for sale its 96 percent interest in Van-American Companies. While efforts to sell Van-American are continuing, those efforts may prove unsuccessful, at which point the business would be placed in run-off. Book value per share at September September: see month. 30, 1999 increased to $18.16 from $17.50 at December December: see month. 31, 1998. Adjusted book value per share, which includes deferred premium revenue and the present value of future renewal premiums (after taxes and net of deferred acquisition costs), reached $22.80 at September 30, 1999, up from $22.12 at December 31, 1998. Insurance Businesses Net premiums written were $28.9 million in the third quarter of 1999, an increase of 5 percent from $27.6 million in third-quarter 1998. For the first nine months of 1999, net premiums written rose 5 percent to $93.4 million from $88.6 million in the first nine months of 1998. Premiums earned in third-quarter 1999 were $24.9 million compared to $29.1 million during the year-ago quarter, with premiums earned from refundings declining to $4.8 million from $5.3 million. For the first nine months of 1999, premiums earned were $75.3 million compared to $77.1 million during the year-ago period. Premiums earned from refundings were $9.8 million and $13.2 million, respectively, for the first nine month periods of 1999 and 1998. Net investment income (which excludes capital and foreign exchange gains or losses) increased 11 percent to $15.3 million in the third quarter of 1999, from $13.7 million in the year-ago quarter. Net investment income increased 7 percent to $42.8 million in the first nine months of 1999 from $40.0 million in the first nine months of 1998. Realized capital losses on the sale of investments in the 1999 third quarter were $0.1 million, compared to realized capital gains of $2.1 million in the 1998 quarter. Realized capital losses in the first nine months of 1999 were $4.5 million compared to capital gains of $2.1 million in first nine months of 1998. At September 30, 1999, Enhance Group's investment portfolio totaled $974.6 million, compared to $942.8 million at December 31, 1998. Asset-Based Businesses In third-quarter 1999, Singer Asset Finance Company, L.L.C., a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , contributed operating earnings of $0.03 per share, compared to $0.05 per share in third-quarter 1998. Singer Asset Finance contributed an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $0.05 per share in the first nine months of 1999 compared to an operating earnings contribution of $0.17 per share in the same 1998 period. C-BASS, Enhance Financial's 48 percent-owned joint venture with MGIC MGIC Mortgage Guaranty Insurance Company MGIC Montana Geographic Information Council Investment Corporation (NYSE:MTG MTG Meeting MTG Mortgage MTG Magic: The Gathering MTG Mounting MTG Mind the Gap (London underground announcement) MTG Methanol To Gasoline MTG Manual Tank Gauging MTG Master Timing Generator MTG Micro Turbine Generator ), contributed $0.10 per share to Enhance Financial's third-quarter 1999 operating earnings, compared to $0.04 per share in third-quarter 1998. C-BASS contributed $0.37 per share for the first nine months 1999 compared to $0.13 per share for the first nine months of 1998. Sherman Sherman, city (1990 pop. 31,601), seat of Grayson co., N Tex., near the Red River; inc. 1858. Originally on a stagecoach route, it is a highway and railroad junction. Manufactures include electronic equipment, processed foods, military equipment, and metal products. Financial Group LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , Enhance Financial's 45.5 percent-owned joint venture launched with MGIC in February February: see month. 1999, contributed a nominal Trifling, token, or slight; not real or substantial; in name only. Nominal capital, for example, refers to extremely small or negligible funds, the use of which in a particular business is incidental. NOMINAL. Relating to a name. operating loss in third-quarter 1999 and an operating loss of $0.03 per share for the first nine months of 1999. Enhance Financial's Latin Lat·in n. 1. a. The Indo-European language of the ancient Latins and Romans and the most important cultural language of western Europe until the end of the 17th century. b. American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of initiatives contributed nominal operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. in both third-quarter 1999 and the first nine months of 1999. Other Corporate Developments Separately, Enhance Financial announced today that Arthur Arthur, king of Britain: see Arthurian legend. Arthur king and hero of Scotland, Wales, and England. [Arthurian Legend: Parrinder, 28] See : Heroism Dubroff resigned as Executive Vice President and Chief Financial Officer and that Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a J. Dunn Dunn may refer to: Places
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of Enhance's Credit-Based Businesses, has been named Acting Chief Financial Officer. Enhance Financial Services Group Inc. is a leading provider of credit-based insurance and financial services. Enhance Financial's subsidiaries and affiliates provide financial guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. insurance and reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. and other credit-based products and services in a wide variety of domestic and international niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. . (1) Operating earnings is not a substitute for net income computed in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting but is an important measure used by management, equity analysts, and investors to measure the financial results of the Company. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : Certain statements contained in this release and in oral statements that Enhance Financial may make in connection with it are forward looking. Enhance Financial believes that the expectations expressed in these statements are based on reasonable assumptions within the bounds of its knowledge of its business and of the current economic environment. Actual results may differ materially from these expectations. For important factors that may cause actual results to differ from expectations and underlying assumptions, please see documents filed by Enhance Financial with the Securities and Exchange Commission.
Enhance Financial Services Group Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(In thousands except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
1999 1998 1999 1998
-------- -------- -------- --------
Revenues
1q99
Gross premiums written $ 34,416 $ 28,365 $ 99,092 $ 89,440
64,676
======== ======== ======== ========
Net premiums written $ 28,928 $ 27,619 $ 93,358 $ 88,582
64,430
======== ======== ======== ========
================
Premiums earned $ 24,897 $ 29,088 $ 75,294 $ 77,130
50,397
Net investment income 15,274 13,752 42,762 39,991
27,488
Realized losses (140) 2,083 (4,480) 2,060
(4,340)
Assignment sales 12,215 12,718 28,521 35,189
16,306
Other income (1,271) 1,534 4,940 4,535
6,211
-------- -------- -------- --------
Total revenues 50,975 59,175 147,037 158,905
96,062
-------- -------- -------- --------
---------------- ---------------
Expenses
Losses and LAE 3,837 4,647 9,223 8,514
5,386
Policy acquisition costs 8,915 10,158 27,022 26,826
18,107
Profit commissions 155 97 711 901
556
Other operating expenses
- insurance 3,912 3,334 12,114 10,011
8,202
- non-insurance 14,914 11,150 41,332 29,839
26,418
-------- -------- -------- --------
Total expenses 31,733 29,386 90,402 76,091
58,669
-------- -------- -------- --------
---------------- ---------------
Income from operations 19,242 29,789 56,635 82,814
37,393
Equity in net income
of affiliates 4,460 3,167 17,026 9,565
12,566
Foreign currency losses (27) (6) (33) (15)
(6)
Interest expense (3,070) (2,190) (7,998) (6,252)
(4,928)
-------- -------- -------- --------
Income before taxes 20,605 30,760 65,630 86,112
45,025
Income tax expense (1,991) 8,033 1,386 23,633
3,377
-------- --------- -------- --------
Net income $ 22,596 $ 22,727 $ 64,244 $ 62,479
41,648
======== ======== ======== ========
================ ===============
Basic earnings per share $ 0.59 $ 0.61 $ 1.69 $ 1.67
1.10
======== ======== ======== ========
Diluted earnings per share $ 0.58 $ 0.58 $ 1.64 $ 1.59
1.07
======== ======== ======== ========
Basic weighted average
shares outstanding 38,031 37,422 37,981 37,484
37955.386
======== ======== ======== ========
Diluted weighted average
shares outstanding 39,027 39,110 39,074 39,255
39095.585
======== ======== ======== ========
Enhance Financial Services Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
September 30, 1999 and December 31, 1998
(In thousands except per share amounts)
September 30, December 31,
------------ ------------
1999 1998
---- ----
(unaudited)
Assets
Investments:
Fixed maturities, held to
maturity, at amortized cost
(market value $187,875 and $205,792) $ 182,897 $ 196,768
Fixed maturities, available
for sale, at market
(amortized cost $755,427 and $657,644) 744,659 694,374
Short-term 46,224 50,794
Common stock 839 839
------------ ------------
Total investments 974,619 942,775
Cash and cash equivalents 2,756 5,542
Investment in affiliates 114,630 96,867
Deferred acquisition costs 118,788 103,794
Prepaid reinsurance premiums 9,600 7,000
Other assets 214,470 180,439
------------ ------------
Total assets $ 1,434,863 $ 1,336,417
============ ============
Liabilities
Losses and LAE $ 46,345 $ 42,233
Deferred premium revenue 335,878 315,215
Total debt payable 180,950 129,290
Other liabilities 180,622 187,033
------------ ------------
Total liabilities 743,795 673,771
------------ ------------
Shareholders' equity
Common stock 3,999 3,981
Additional paid-in capital 251,934 249,851
Retained earnings 475,417 418,214
Accumulated other comprehensive income (7,696) 23,186
Treasury stock (32,586) (32,586)
------------ ------------
Total shareholders' equity 691,068 662,646
------------ ------------
Total liabilities and shareholders' equity $ 1,434,863 $ 1,336,417
============ ============
Book value per share $ 18.16 $ 17.50
============ ============
Total shares outstanding 38,046 37,863
============ ============
Enhance Financial Services Group Inc. and Subsidiaries
Product Line Information
(Dollars in thousands)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
1999 1998 1999 1998
-------- -------- -------- --------
Net Premiums Written:
Monoline Municipal
Reinsurance $ 7,187 $ 11,571 $ 30,025 $ 40,612
Monoline Non-Municipal
Reinsurance 4,975 4,513 18,906 15,286
Other Insurance Lines 16,766 11,535 44,427 32,684
-------- -------- -------- --------
Total $ 28,928 $ 27,619 $ 93,358 $ 88,582
======== ======== ======== ========
Premiums Earned:
Monoline Municipal
Reinsurance $ 9,323 $ 9,503 $ 25,672 $ 32,774
Monoline Non-Municipal
Reinsurance 6,773 8,985 19,583 17,243
Other Insurance Lines 8,801 10,600 30,039 27,113
-------- -------- -------- --------
Total $ 24,897 $ 29,088 $ 75,294 $ 77,130
======== ======== ======== ========
Enhance Financial Services Group Inc.
Selected Statutory Data (1)
September 30, 1999 and December 31, 1998
(Dollars in thousands)
September 30, December 31,
------------ ------------
1999 1998
------------ ------------
(unaudited)
Balance Sheet
Contingency reserve $ 226,922 $ 207,876
Policyholders surplus 323,020 324,269
------------ ------------
Qualified statutory capital 549,942 532,145
Unearned premium reserve 405,387 381,593
Losses and loss adjustment expense reserve 34,989 30,800
------------ ------------
Policyholders' reserves $ 990,318 $ 944,538
============ ============
Net insurance in force $ 81,888,204 $ 75,595,143
Leverage ratio (2) 147:1 142:1
(1) Represents the combined statutory financial position of Enhance
Re and Asset Guaranty.
(2) Leverage ratio is net insurance in force divided by qualified
statutory capital.
Conference Call Notice: Enhance Financial Services Group will
host a conference call to discuss the information contained in this
press release. The conference call will take place at 8:30 a.m.
Eastern time, Tuesday, November 2, 1999. If you would like to
participate in the conference call, please call 1-888-569-5033 and ask
for the Enhance Conference Call. A replay of our conference call will
be available on November 2 and November 3 by calling 1-888-203-1112
and entering pin number 805576(pound).
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion