Alfa Corporation Reports Second Quarter 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/NM:ALFA) today announced financial results for the second quarter and six months ended June June: see month. 30, 2005. 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 second quarter was $27,332,929, or $0.34 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 $19,311,504, or $0.24 per diluted share for the second quarter of 2004, an increase of 41.5% on a per share basis. Net income, which includes net realized investment gains and losses, was $28,555,161, or $0.35 per diluted share for the second quarter of 2005, compared with $20,566,130, or $0.26 per diluted share for the second quarter of 2004, an increase of 38.8%. Premiums and policy charges for the second quarter of 2005 increased 12.7% to $156,892,571. For the six months ended June 30, 2005, operating income was $48,177,076 compared with operating income of $43,841,114 for the first half of 2004. On a per share basis, operating income increased 9.9% to $0.60 per diluted share for the six-month period in 2005 compared with $0.54 per diluted share for the similar period in 2004. Net income, which includes net realized investment gains, was $50,125,505, or $0.62 per diluted share for the first six months of 2005, compared with net income of $46,043,017, or $0.57 per diluted share for the same period in 2004, a per share increase of 8.8%. Premiums and policy charges increased 12.0% to $311,670,728 for the first half of 2005. 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, "Strong performance in both our property casualty and life operations produced another record quarter for Alfa Corporation. We are extremely proud of our results for the second quarter with income increasing over 50% in our combined insurance operations. New production by our exclusive agency force, combined with the addition of Alfa Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). Mutual and Alfa Vision Insurance, led to a 13% increase in our premium and policy charges. We are excited about our company's direction and look forward to the second half of 2005." 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 800-289-0730, or via links located on Alfa's 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 play of the call will also be available from Alfa's 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. The associated investor supplement package for the second quarter and six months ended June 30, 2005, may be found by clicking on the webcast link in the "Invest in Alfa" section of Alfa's website and is also available at: http://www.irinfo.com/alfa/2q05fsx.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 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
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Six Months Ended
June 30, Statistics
---------------------------------------------
2005 2004 %Change 2005 2004
---------------------------------------------
Revenues
Premiums - Property and
Casualty Insurance 273,343,821 242,389,710 12.77
Premiums - Life
Insurance 20,303,738 18,568,127 9.35
Policy Charges - Life
Insurance 18,023,169 17,442,480 3.33
Net Investment Income 45,882,057 44,454,131 3.21
Other Income 9,163,229 1,537,563 495.96
----------------------------------------------------------------------
Total Revenues 366,716,014 324,392,011 13.05
----------------------------------------------------------------------
Benefits and Expenses
Benefits & Settlement
Expenses 213,287,106 191,560,423 11.34 58.16 59.05
Dividends to
Policyholders 2,021,825 1,962,954 3.00 0.55 0.61
Amortization of Deferred
Policy Acquisition
Costs 53,529,672 46,274,103 15.68 14.60 14.26
Other Operating Expenses 32,094,924 24,345,953 31.83 8.75 7.51
----------------------------------------------------------------------
Total Expenses 300,933,527 264,143,433 13.93 82.06 81.43
----------------------------------------------------------------------
Income Before Provision
for Income Taxes 65,782,487 60,248,578 9.19 17.94 18.57
Provision For Income
Taxes 17,605,411 16,407,464 7.30 26.76 27.23
----------------------------------------------------------------------
Operating Income 48,177,076 43,841,114 9.89
Realized Investment
Gains, Net of Tax 1,948,429 2,201,903 (11.51)
----------------------------------------------------------------------
Net Income 50,125,505 46,043,017 8.87
======================================================================
Operating Income Per
Share - Basic 0.60 0.55 9.81
======================================================================
Operating Income Per
Share - Diluted 0.60 0.54 9.86
======================================================================
Net Income Per Share
- Basic 0.63 0.58 8.79
======================================================================
Net Income Per Share
- Diluted 0.62 0.57 8.84
======================================================================
Dividends Per Share 0.1875 0.1675 11.94
======================================================================
Average Shares
Outstanding - Basic 80,124,054 80,068,036 0.07
======================================================================
Average Shares
Outstanding - Diluted 80,609,351 80,590,799 0.02
======================================================================
Three Months Ended
June 30, Statistics
---------------------------------------------
2005 2004 %Change 2005 2004
---------------------------------------------
Revenues
Premiums - Property
and Casualty
Insurance 138,986,041 122,346,043 13.60
Premiums - Life
Insurance 9,212,787 8,421,189 9.40
Policy Charges -
Life Insurance 8,693,743 8,452,283 2.86
Net Investment
Income 22,906,901 22,552,970 1.57
Other Income 2,227,936 620,796 258.88
----------------------------------------------------------------------
Total Revenues 182,027,408 162,393,281 12.09
----------------------------------------------------------------------
Benefits and Expenses
Benefits & Settlement
Expenses 101,529,176 100,986,535 0.54 55.78 62.19
Dividends to
Policyholders 944,351 920,229 2.62 0.52 0.57
Amortization of
Deferred Policy
Acquisition Costs 27,693,546 23,368,804 18.51 15.21 14.39
Other Operating
Expenses 13,409,925 11,273,011 18.96 7.37 6.94
----------------------------------------------------------------------
Total Expenses 143,576,998 136,548,579 5.15 78.88 84.09
----------------------------------------------------------------------
Income Before
Provision for
Income Taxes 38,450,410 25,844,702 48.77 21.12 15.91
Provision For
Income Taxes 11,117,481 6,533,198 70.17 28.91 25.28
----------------------------------------------------------------------
Operating Income 27,332,929 19,311,504 41.54
Realized Investment
Gains, Net of Tax 1,222,232 1,254,626 (2.58)
----------------------------------------------------------------------
Net Income 28,555,161 20,566,130 38.85
======================================================================
Operating Income
Per Share - Basic 0.34 0.24 41.46
======================================================================
Operating Income
Per Share - Diluted 0.34 0.24 41.52
======================================================================
Net Income Per
Share - Basic 0.36 0.26 38.77
======================================================================
Net Income Per
Share - Diluted 0.35 0.26 38.83
======================================================================
Dividends Per Share 0.1000 0.0875 14.29
======================================================================
Average Shares
Outstanding - Basic 80,082,617 80,039,000 0.05
======================================================================
Average Shares
Outstanding - Diluted 80,538,612 80,531,351 0.01
======================================================================
Management believes that operating income and operating income per
share, non-GAAP financial measures, serve as meaningful tools for
assessing the profitability of the Company's ongoing operations.
Operating income is defined by the Company as net income excluding
realized investment gains and losses, net of applicable taxes.
Operating income per share represents operating income divided by the
weighted average shares outstanding for the reporting period.
Management uses operating income and operating income per share as
measures of the Company's ongoing profitability since they eliminate
the effect of securities market volatility from earnings.
ALFA CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30, Dec. 31,
2005 2004 %Change
--------------- --------------- ---------
Assets (Unaudited)
Investments:
Fixed Maturities Held for
Investment, at amortized
cost (fair value $108,327
in 2005 and $123,935 in 2004) $101,442 $114,708 -11.57%
Fixed Maturities Available
for Sale, at fair value
(amortized cost $1,356,809,245
in 2005 and $1,305,288,027
in 2004) 1,412,718,571 1,354,507,490 4.30%
Equity Securities Available
for Sale, at fair value
(cost $96,308,359 in 2005
and $83,445,562 in 2004) 106,500,417 99,701,250 6.82%
Policy Loans 59,866,125 58,476,569 2.38%
Collateral Loans 117,136,148 110,792,974 5.73%
Commercial Leases 3,348,057 4,155,791 -19.44%
Other Long-Term Investments 145,703,454 145,474,366 0.16%
Short-Term Investments 70,384,433 80,988,969 -13.09%
--------------- --------------- ---------
Total Investments 1,915,758,647 1,854,212,117 3.32%
Cash 17,490,372 20,052,493 -12.78%
Accrued Investment Income 16,518,692 16,726,050 -1.24%
Accounts Receivable 77,722,823 50,452,538 54.05%
Reinsurance Balances
Receivable 2,511,978 5,279,560 -52.42%
Deferred Policy Acquisition
Costs 194,431,695 183,258,224 6.10%
Assets Classified as Held
for Sale 77,752,016 77,450,278 0.39%
Goodwill 13,924,306 - 100.00%
Other Intangible Assets (net
of accumulated amortization
of $341,700 in 2005) 8,766,300 - 100.00%
Other Assets 19,315,389 15,266,244 26.52%
--------------- --------------- ---------
Total Assets $2,344,192,218 $2,222,697,504 5.47%
=============== =============== =========
Liabilities and Stockholders'
Equity
Policy Liabilities and
Accruals - Property and
Casualty Insurance $143,565,172 $154,107,730 -6.84%
Policy Liabilities and
Accruals - Life Insurance
Interest-Sensitive Products 587,295,857 555,733,736 5.68%
Policy Liabilities and
Accruals - Life Insurance
Other Products 187,181,916 180,410,535 3.75%
Unearned Premiums 219,502,309 185,856,467 18.10%
Dividends to Policyholders 11,224,057 11,262,132 -0.34%
Premium Deposit and
Retirement Deposit Funds 6,285,672 6,369,125 -1.31%
Deferred Income Taxes 44,247,356 43,100,038 2.66%
Liabilities Associated with
Assets Classified as Held
for Sale 683,876 340,876 100.62%
Other Liabilities 72,648,385 73,877,730 -1.66%
Due to Affiliates 20,896,586 29,995,986 -30.34%
Commercial Paper 223,909,322 204,303,206 9.60%
Notes Payable 70,000,000 70,000,000 0.00%
Notes Payable to Affiliates 24,873,787 15,887,635 56.56%
--------------- --------------- ---------
Total Liabilities 1,612,314,295 1,531,245,196 5.29%
--------------- --------------- ---------
Commitments and Contingencies
Stockholders' Equity:
Preferred Stock, $1 par value - - 0.00%
Shares authorized: 1,000,000
Issued: None
Common Stock, $1 par value 83,783,024 83,783,024 0.00%
Shares authorized: 110,000,000
Issued: 83,783,024
Outstanding: 80,028,804 in
2005 and 79,833,467
in 2004
Capital in Excess of
Par Value 15,164,546 10,961,782 38.34%
Accumulated Other
Comprehensive Income
(unrealized gains on
securities available for
sale, net of tax of $39,343,682
in 2005 and $39,450,553 in 2004;
unrealized (losses) on interest
rate swap contract, net of tax
of ($728,751) in 2005 and
($1,406,747) in 2004; unrealized
gains on other long-term
investments, net of tax of
$7,701 in 2005 and $16,565
in 2004) 38,622,632 38,060,371 1.48%
Retained Earnings 634,685,588 599,609,509 5.85%
Treasury Stock, at cost
(shares, 3,754,220 in 2005
and 3,949,557 in 2004) (40,377,867) (40,962,378) -1.43%
--------------- --------------- ---------
Total Stockholders'
Equity 731,877,923 691,452,308 5.85%
--------------- --------------- ---------
Total Liabilities and
Stockholders' Equity $2,344,192,218 $2,222,697,504 5.47%
=============== =============== =========
Book Value per share $9.15 $8.66
=============== ===============
Book Value per share
(excluding FAS 115) $8.81 $8.37
=============== ===============
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