Alfa Corporation Reports First Quarter 2001 Results.Business Editors 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. .--(BUSINESS WIRE)--April 25, 2001 Alfa Al´fa n. 1. A plant (Macrochloa tenacissima) of North Africa; also, its fiber, used in paper making. Corporation (Nasdaq/NM:ALFA) today announced financial results for the three months ended March 31, 2001. 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 quarter was $13,912,372, or $0.35 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 $15,787,298, or $0.40 per diluted share for the first quarter of 2000, a decrease of 11.4% on a per share basis. First quarter 2001 results were reduced by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $4.8 million, after tax, or $0.12 per diluted share, due to previously reported storm losses. Net income, which includes net realized investment gains, was $14,333,676, or $0.36 per diluted share for the first quarter of 2001, compared with $16,350,175, or $0.41 per diluted share for the first quarter of 2000, a decrease of 11.8%. Premium revenue for the first quarter of 2001 increased 6.1% to $111,904,154. Alfa's Chairman, President and Chief Executive Officer, Jerry Jer·ry n. pl. Jer·ries Chiefly British Slang A German, especially a German soldier. [Alteration of German. A. Newby, said, "The amount of storm activity in the first three months made this a difficult quarter. We were pleased, however, that despite this level of storm activity, shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. increased more than $11.2 million for the quarter. In addition, our life insurance operations reported another solid quarter of growth with premiums up 8.0% and operating income up 19.3%." Alfa Corporation will host a conference call today at 10:30 a.m. Eastern time. Investors and other interested parties may access the teleconference by calling 800/289-0493, or via links located on our web site: www.alfains.com. A 30-day Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the replay of the call will also be available from our web site. 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. 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 reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. , 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
ALFA CORPORATION
Financial Highlights
(Unaudited)
Three Months Ended
March 31,
------------------------------
2001 2000 Change
------------- ------------- --------
Premiums and Policy
Charges $111,904,154 $105,486,896 6.08%
Net Investment Income 19,162,723 17,131,830 11.85%
Realized Investment Gains 1,046,285 865,964 20.82%
Other Income 818,744 802,116 2.07%
------------- ------------- -------
Total Revenues 132,931,906 124,286,806 6.96%
------------- ------------- -------
Total Expenses 112,704,579 101,224,103 11.34%
------------- ------------- -------
Income Before Provision
for Income Taxes 20,227,327 23,062,703 -12.29%
Provision for Income Taxes 5,634,870 6,712,528 -16.05%
Cumulative Effect of
Changes in Accounting
Principles (258,781) 0 NM
------------- ------------- -------
Net Income $14,333,676 $16,350,175 -12.33%
============= ============= =======
Net Income Per Share
Basic $0.37 $0.41 -11.73%
Diluted $0.36 $0.41 -11.82%
============= ============= =======
Operating Income (a) $13,912,372 $15,787,298 -11.88%
============= ============= =======
Operating Income Per Share
Basic $0.36 $0.40 -11.27%
Diluted $0.35 $0.40 -11.36%
============= ============= =======
Dividend Per Share $0.13 $0.12 8.33%
============= ============= =======
Average Number of Shares
Outstanding
Basic 39,153,707 39,438,331
Diluted 39,423,413 39,640,043
============= =============
(a) Operating income excludes investment gains, losses and related
taxes.
ALFA CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended
March 31,
-------------------------
2001 2000
----------- -----------
Revenues
Premiums - Property and Casualty Insurance $96,905,178 $91,596,671
Premiums and Policy Charges -
Life Insurance 14,998,976 13,890,225
Net Investment Income 19,162,723 17,131,830
Realized Investment Gains (Losses) 1,046,285 865,964
Other Income 818,744 802,116
----------- -----------
Total Revenues 132,931,906 124,286,806
----------- -----------
Benefits and Expenses
Benefits & Settlement Expenses 79,826,991 74,124,217
Dividends to Policyholders 1,000,740 972,234
Amortization of Deferred Policy
Acquisition Costs 18,242,217 15,252,711
Other Operating Expenses 13,634,631 10,874,941
----------- -----------
Total Expenses 112,704,579 101,224,103
----------- -----------
Income Before Provision for Income Taxes 20,227,327 23,062,703
Provision for Income Taxes 5,634,870 6,712,528
Cumulative Effect of Changes in
Accounting Principles (258,781) 0
----------- -----------
Net Income $14,333,676 $16,350,175
=========== ===========
Net Income Per Share - Basic $0.37 $0.41
Net Income Per Share - Diluted $0.36 $0.41
=========== ===========
Operating Income $13,912,372 $15,787,298
Operating Income Per Share - Basic $0.36 $0.40
Operating Income Per Share - Diluted $0.35 $0.40
=========== ===========
Average Shares Outstanding - Basic 39,153,707 39,438,331
Average Shares Outstanding - Diluted 39,423,413 39,640,043
=========== ===========
ALFA CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, Dec. 31,
2001 2000
-------------- --------------
Assets
Investments:
Fixed Maturities Held for Investment,
at amortized cost (fair value $752,862
in 2001 and $792,959 in 2000) $710,498 $754,450
Fixed Maturities Available for Sale,
at fair value (amortized cost
$962,617,756 in 2001 and $937,730,993
in 2000) 990,731,158 946,179,812
Equity Securities, at fair value (cost
$58,073,917 in 2001 and $53,687,943
in 2000) 108,056,847 114,594,848
Mortgage Loans on Real Estate 199,865 214,394
Investment Real Estate (net of
accumulated depreciation of
$1,355,426 in 2001 and
$1,299,407 in 2000) 2,051,623 2,045,171
Policy Loans 47,486,687 46,335,399
Collateral Loans 70,565,109 70,022,985
Other Long-term Investments 130,808,465 118,945,159
Short-term Investments 45,422,811 55,933,710
-------------- --------------
Total Investments 1,396,033,063 1,355,025,928
Cash 4,550,044 4,475,672
Accrued Investment Income 15,536,389 14,020,985
Accounts Receivable 10,526,431 13,885,864
Reinsurance Balances Receivable 2,511,478 2,935,521
Due from Affiliates 7,802,556 5,753,191
Deferred Policy Acquisition Costs 143,798,492 144,572,014
Other Assets 5,247,010 5,633,934
-------------- --------------
Total Assets $1,586,005,463 $1,546,303,109
============== ==============
Liabilities
Policy Liabilities and Accruals -
Property and Casualty Insurance $143,920,918 $145,077,064
Policy Liabilities and Accruals -
Life Insurance 530,197,951 507,455,793
Unearned Premiums Including Advanced
Premiums 130,595,600 121,688,810
Dividends to Policyholders 10,059,994 10,033,028
Premium Deposit and Retirement Deposit
Funds 5,178,003 5,364,453
Deferred Income Taxes 44,328,542 42,513,055
Other Liabilities 71,670,700 82,021,332
Due to Affiliates 15,685,594 15,408,988
Commercial Paper 127,121,069 117,642,561
Notes Payable 103,427 103,806
Notes Payable to Affiliates 22,360,208 25,432,979
-------------- --------------
Total Liabilities 1,101,222,006 1,072,741,869
-------------- --------------
Commitments and Contingencies
Stockholders' Equity
Preferred Stock, $1 par value
Shares authorized: 1,000,000
Issued: None
Common Stock, $1 par value
Shares authorized: 110,000,000
Issued: 41,891,512
Outstanding: 2001 - 39,132,478;
2000 - 39,148,527 41,891,512 41,891,512
Capital In Excess of Par Value 24,564,489 24,076,380
Accumulated Other Comprehensive Income 47,719,995 45,444,149
Retained Earnings 408,138,795 398,705,679
Treasury Stock: at cost (2001 -
2,759,034 shares; 2000 - 2,742,985 shares) (37,531,334) (36,556,480)
-------------- --------------
Total Stockholders' Equity 484,783,457 473,561,240
-------------- --------------
Total Liabilities and Stockholders'
Equity $1,586,005,463 $1,546,303,109
============== ==============
Book value per share $12.39 $12.10
============== ==============
Book value per share (excluding FAS 115) $12.26 $11.97
============== ==============
ALFA CORPORATION
OPERATING INCOME BY SEGMENT
(UNAUDITED)
Three Months Ended
March 31,
---------------------------------
%
2001 2000 CHANGE
------------ ------------ ------
(in thousands, except share
and per share data)
Operating income
Property and casualty insurance $9,110 $11,929 -24%
Agency 3 17 -82%
Life insurance 5,353 4,487 19%
------------ ------------ -----
Total insurance operations 14,466 16,433 -12%
Noninsurance operations 812 581 40%
Corporate expenses (1,365) (1,227) -11%
------------ ------------ -----
Total $13,913 $15,787 -12%
============ ============ =====
Operating income per share
- Basic $0.36 $0.40 -12%
============ ============ =====
Operating income per share
- Diluted $0.35 $0.40 -11%
============ ============ =====
Weighted average shares
outstanding - Basic 39,153,707 39,438,331 -1%
============ ============ =====
Weighted average shares
outstanding - Diluted 39,423,413 39,640,043 -1%
============ ============ =====
ALFA CORPORATION
QUARTERLY FINANCIAL SUPPLEMENT
MARCH 31, 2001
YTD YTD
3/31/2001 3/31/2000 %
------------ ------------ -----
Property Casualty Insurance
Total Written Premium (Alfa Group):
Automobile $96,824,177 $95,130,806 1.8%
Homeowner 29,433,068 28,125,550 4.6%
Other 23,792,981 23,433,425 1.5%
------------ ------------ -----
$150,050,226 $146,689,781 2.3%
============ ============ =====
Earned Premium:
Personal $92,768,274 $87,607,380 5.9%
Commercial 3,405,852 3,324,536 2.4%
Pools, associations and fees 1,072,872 992,599 8.1%
Reinsurance ceded (341,820) (327,844) 4.3%
------------ ------------ -----
Total $96,905,178 $91,596,671 5.8%
============ ============ =====
Operating Ratios Details
Losses 63,392,141 57,492,219 10.3%
Loss Adjustment Expense 3,601,524 4,515,955 -20.2%
Expenses 25,070,681 20,145,666 24.4%
Combined Expenses 92,064,346 82,153,840 12.1%
Underwriting Margin 4,840,832 9,442,831 -48.7%
Operating Ratios
Loss Ratio 65.4% 62.8%
Loss Adjustment Expense 3.7% 4.9%
Expense Ratio 25.9% 22.0%
Combined Ratio 95.0% 89.7%
Underwriting Margin 5.0% 10.3%
Lapse Ratio 3.92% 3.82%
Storm losses included in
Losses above 7,410,000 2,500,000 196.4%
Storm losses included in
Loss Ratio above 7.6% 2.7%
YTD YTD
3/31/2001 3/31/2000 %
------------ ------------ -----
Life Insurance
Issued New Business Premium $3,595,315 $3,094,617 16.2%
============ ============ =====
Total Premium and Policy Charges $14,998,976 $13,890,228 8.0%
============ ============ =====
Persistency Ratio 92.7% 92.8%
============ ============
Mortality:
Death Claims $4,251,865 $4,264,997 -0.3%
Actual to Expected 98% 110%
Consumer Finance
3/31/2001 3/31/2000 %
------------ ------------ -----
Loan Portfolio $64,738,178 $56,133,509 15.3%
============ ============ =====
LIFE INSURANCE OPERATIONS
DETAIL OF PREMIUMS AND POLICY CHARGES
(UNAUDITED)
Three Months Ended March 31,
---------------------------------
%
2001 2000 CHANGE
------------ ------------ ------
(in thousands)
Premiums and Policy Charges
Universal life policy charges $3,946 $3,593 10%
Universal life policy charges - COLI 1,257 1,184 6%
Interest sensitive life policy charges 2,507 2,502 0%
Traditional life insurance premiums 7,090 6,409 11%
Group life insurance premiums 199 202 -1%
------------ ------------ -----
Total $14,999 $13,890 8.0%
============ ============ =====
Net operating income $5,353 $4,487 19.3%
============ ============ =====
ALFA CORPORATION
QUARTERLY FINANCIAL SUPPLEMENT
MARCH 31, 2001
Additional Information
97:1Q 97:2Q 97:3Q 97:4Q 1997
----- ----- ----- ----- ----
Pretax P&C
Net
Investment
Income 5,682,014 5,703,759 6,044,107 6,505,424 23,935,304
Pretax P&C
Operating
Income 10,697,686 12,421,810 12,880,424 15,801,647 51,801,567
P&C Statutory
Invested
Assets 365,366,006 381,366,186 399,327,051 417,302,647
P&C Statutory
Surplus 140,670,107 151,145,835 163,344,267 171,727,914
P&C Loss &
LAE Reserves 119,821,684 122,940,806 125,834,902 131,125,833
Pretax Life
Net
Investment
Income 7,662,466 7,721,839 7,991,929 8,269,884 31,646,118
Pretax Life
Operating
Income 4,465,213 5,273,763 6,197,266 4,813,669 20,749,911
Life
Statutory
Invested
Assets 448,553,556 459,704,479 478,395,608 486,503,308
Life
Statutory
Surplus 112,914,992 120,000,260 124,318,047 126,716,550
98:1Q 98:2Q 98:3Q 98:4Q 1998
----- ----- ----- ----- ----
Pretax P&C
Net
Investment
Income 6,329,446 6,378,020 6,715,680 6,569,189 25,992,335
Pretax P&C
Operating
Income 15,869,826 11,137,116 16,169,591 16,708,058 59,884,591
P&C Statutory
Invested
Assets 426,632,174 431,531,850 436,236,657 451,935,637
P&C Statutory
Surplus 183,634,182 186,352,334 184,660,043 195,111,399
P&C Loss &
LAE Reserves 132,615,106 135,317,984 134,733,976 137,270,739
Pretax Life
Net
Investment
Income 8,561,483 8,611,867 8,985,793 8,731,039 34,890,182
Pretax Life
Operating
Income 4,863,130 4,953,803 6,179,274 5,992,038 21,988,245
Life
Statutory
Invested
Assets 520,955,177 526,531,459 523,768,446 530,956,250
Life
Statutory
Surplus 134,601,387 131,989,742 124,296,339 129,364,457
99:1Q 99:2Q 99:3Q 99:4Q 1999
----- ----- ----- ----- ----
Pretax P&C
Net
Investment
Income 6,509,443 6,720,977 6,876,742 7,493,687 27,600,849
Pretax P&C
Operating
Income 12,968,993 18,857,852 20,972,940 18,023,013 70,822,798
P&C Statutory
Invested
Assets 468,028,157 472,703,321 485,684,233 496,186,413
P&C Statutory
Surplus 198,827,244 210,000,182 217,324,686 226,875,025
P&C Loss &
LAE Reserves 135,694,714 139,967,772 137,336,505 138,719,696
Pretax Life
Net
Investment
Income 9,095,915 9,054,577 9,527,813 10,194,794 37,873,099
Pretax Life
Operating
Income 3,323,065 5,555,911 5,623,902 697,140 15,200,018
Life
Statutory
Invested
Assets 572,798,834 581,310,650 585,757,286 601,748,116
Life
Statutory
Surplus 126,998,415 129,813,861 130,555,063 127,713,370
00:1Q 00:2Q 00:3Q 00:4Q 2000
----- ----- ----- ----- ----
Pretax P&C
Net
Investment
Income 6,984,179 7,015,616 8,186,984 7,458,597 29,645,376
Pretax P&C
Operating
Income 16,496,967 18,753,010 14,432,955 18,311,177 67,994,109
P&C Statutory
Invested
Assets 515,366,140 529,642,152 528,864,568 532,042,868
P&C Statutory
Surplus 236,106,285 238,195,627 241,134,160 238,786,017
P&C Loss &
LAE Reserves 141,536,342 142,153,534 145,991,505 143,395,965
Pretax Life
Net
Investment
Income 9,955,766 10,269,499 10,647,234 11,085,284 41,957,783
Pretax Life
Operating
Income 6,185,518 6,926,338 6,600,461 5,129,081 24,841,398
Life
Statutory
Invested
Assets 629,328,272 639,415,909 653,775,207 666,541,786
Life
Statutory
Surplus 129,743,661 136,907,855 142,391,855 140,486,868
01:1Q 01:2Q 01:3Q 01:4Q YTD 2001
----- ----- ----- ----- --------
Pretax P&C
Net
Investment
Income 6,927,259 6,927,259
Pretax P&C
Operating
Income 9,110,111 9,110,111
P&C Statutory
Invested
Assets 529,832,002
P&C Statutory
Surplus 247,200,509
P&C Loss &
LAE Reserves 142,315,663
Pretax Life
Net
Investment
Income 11,269,815 11,269,815
Pretax Life
Operating
Income 7,525,273 7,525,273
Life
Statutory
Invested
Assets 684,373,729
Life
Statutory
Surplus 138,802,337
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