Alfa Corporation Reports 2007 Results.MONTGOMERY Montgomery, city, United States Montgomery, city (1990 pop. 187,106), state capital and seat of Montgomery co., E central Ala., near the head of navigation on the Alabama River just below the confluence of the Coosa and Tallapoosa rivers, and in the rich , Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. . -- Alfa Al´fa n. 1. A plant (Macrochloa tenacissima) of North Africa; also, its fiber, used in paper making. Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ALFA) today announced financial results for the year ended December December: see month. 31, 2007. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the year was $94,225,423, or $1.15 per 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. share, compared with operating income of $103,676,787, or $1.28 per diluted share for 2006, a decrease of 9.6% on a per share basis. Net income, which includes net realized investment gains, was $93,508,467, or $1.15 per diluted share for 2007, compared with $105,888,237, or $1.30 per diluted share in 2006, a per share decrease of 12.2%. Premiums and policy charges increased 4.0% to $714,838,275 for 2007. Operating income for the fourth quarter of 2007 was $20,905,197, or $0.26 per diluted share, compared with fourth quarter 2006 operating income of $32,321,887, or $0.40 per diluted share. After net realized investment gains, net income for the fourth quarter of 2007 was $18,778,831, or $0.23 per diluted share, compared with $33,004,673, or $0.41 per diluted share, in the prior-year period. Premiums and policy charges increased 2.1% to $177,888,996 for the final three months of 2007. Alfa's results for the fourth quarter were affected by expenses associated with the previously announced definitive merger agreement with Alfa Mutual Insurance Company and Alfa Mutual Fire Insurance Company (referred to collectively as the Alfa Mutual Group) pursuant to which the Alfa Mutual Group, which owns a majority of Alfa Corp.'s common stock, will acquire for $22.00 per share all of the outstanding shares of Alfa Corp.'s common stock that it does not currently own. This transaction will result in Alfa Corp. being delisted with NASDAQ and becoming a privately held corporation Noun 1. privately held corporation - a corporation owned by a few people; shares have no public market close corporation, closed corporation, private corporation owned jointly by the Alfa Mutual Group. Costs associated with this transaction added approximately $6 million of additional expense in the fourth quarter of 2007, resulting in an earnings decline of $0.07 per diluted share during the quarter. Also, during the fourth quarter of 2007, Alfa Corporation recorded a loss of approximately $1,700,000 or $0.02 per diluted share resulting from its 41% ownership in MidCountry Financial Corp.. In the quarter, reserves associated with MidCountry's loan portfolios were strengthened. In the fourth quarter of 2006, Alfa Corporation released $3,300,000 in reserves previously held for uncertain tax positions. This had a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact on fourth quarter 2006 earnings of $0.04 per diluted share. Full-year 2007 results were also affected when MidCountry Financial Corp. experienced a loss in its mortgage portfolio on loans originated by a company headquartered in Florida and primarily concentrated in Florida. This same entity defrauded MidCountry in the amount of $7,900,000 by misappropriating large principal payments on construction loans being serviced for MidCountry. The impact of this extraordinary loss on Alfa Corporation, resulting from its 41% ownership, was approximately $3,150,000 after-tax, or $0.03 per diluted share. Alfa Corporation is engaged in insurance and financial activities through its subsidiaries. The common stock of Alfa Corporation is traded on the Nasdaq Stock Market's National Market under the symbol ALFA. The associated investor supplement package for the fourth quarter ended December 31, 2007, may be found by clicking on the following link: http://www.irinfo.com/alfa/ALFA4q07mdt.pdf. Investors are cautioned that statements in this press release which relate to the future are, by their nature, uncertain and dependent upon numerous contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. - including political, economic, regulatory, climatic, competitive, legal, and technological - any of which could cause actual results and events to differ materially from those indicated in such 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. . Additional information regarding these and other risk factors and uncertainties may be found in Alfa Corporation's filings with the Securities and Exchange Commission. [TABLE OMITTED] [TABLE OMITTED] |
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