American States Financial Corporation reports earnings.INDIANAPOLIS--(BUSINESS WIRE)--July 24, 1996--American States Financial Corporation (NYSE NYSE See: New York Stock Exchange :ASX ASX See: Australian Stock Exchange ) today announced that its second-quarter income from operations was $26.5 million, or 49 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared to $13.1 million, or 26 cents per share in the second quarter of 1995. The earnings report is the first issued by the insurer, which became a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. in late May. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma 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 per share for the quarter were 39 cents, compared to 14 cents in the corresponding quarter of 1995. (All pro forma results are stated as they would have been reported if the initial public offering and related transactions had occurred at the beginning of the respective periods.) Operating earnings per share for the first six months of 1996 were $1.15, compared to $1.23 for the same period in 1995. On a pro forma basis, 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. would have been 87 cents per share, compared to 88 cents in 1995. American States' net income for the quarter -- which includes net realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. -- was $29.8 million, up from $16.8 million in the second quarter of 1995. Net income per share was 55 cents, compared to 34 cents in 1995. Year-to-date net income was $76.7 million, down from $82.3 million a year earlier, with net income per share of $1.48, compared to $1.65 in 1995. "Frequent wind and hail storms in April and May across the Midwest dampened our earnings in what otherwise would have been a satisfactory quarter," said F. Cedric McCurley, chairman and chief executive officer. "While second quarter wind- and hailstorms typically produce a higher level of natural peril losses, both 1995 and 1996 activity exceeded historical norms," McCurley said. Property and casualty insurance operations The combined ratio for the quarter was 109.1, compared to 114.3 for 1995, while the year-to-date combined ratio was 108.7, up slightly from 108.4 at the same point in 1995. Second-quarter natural peril losses of $56.6 million (which includes $51 million in April and May that were previously reported), were less than the $61.7 million of a year ago but still overshadowed improvements in the underlying loss ratio and in loss adjustment expense. Natural peril losses contributed 13.9 points to the loss ratio -- a full point less than in 1995. The loss adjustment expense ratio returned to a more normal 11.6 percent from 14.2 percent for the second quarter of 1995. Realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of field offices and implementation of internal cost controls, announced in the fourth quarter of 1995, continued to produce expense savings in line with expectations. Reduction in fixed expenses during the second quarter was about $3 million, bringing the year-to-date savings to nearly $5 million, before taxes. Net written premium for the second quarter was $419.2 million, slipping $14.4 million or 3.3 percent from $433.6 million in the corresponding period in 1995. Three primary factors continue to put downward pressure on premium writings. The most pervasive is intensifying in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: commercial lines competition with the impact most evident in workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. and larger accounts. In addition, premium volume from state-mandated workers' compensation pools continues to decline. Finally, American States continues its planned reduction of exposure in Florida and California. American States does not expect significant losses to develop from the season's first hurricane. McCurley said, "Preliminary reports indicate that our involvement in Hurricane Bertha ber·tha n. A wide deep collar, often of lace, that covers the shoulders of a dress. [French berthe, after Bertha (died 783), Carolingian queen as the wife of Pepin the Short.] will be inconsequential in·con·se·quen·tial adj. 1. Lacking importance. 2. Not following from premises or evidence; illogical. n. A triviality. ," he said. Life insurance operations. Life insurance operating income for the quarter was $3.2 million, down $0.5 million from the same quarter in 1995. The decline was caused by higher mortality. Mortality is expected to fluctuate somewhat from quarter to quarter. American States Financial Corporation is a holding company that, through its subsidiaries, markets property, casualty and life insurance coverages. A leading writer of commercial coverage for small- to medium-sized businesses, American States also markets preferred personal insurance coverages. -0-
American States Financial Corporation
Digest of Earnings
Second Quarter, Ended June 30
1996 1995
Revenue $498,000,000 $505,000,000 Net Income $29,800,000 $16,800,000 Share Earnings: Net Income $0.55 $0.34 Weighted Average Number of Shares 53,644,692 50,000,000
Six Months, Ended June 30
1996 1995
Revenue $1,011,400,000 $1,037,400,000 Net Income $76,700,000 $82,300,000 Share Earnings: Net Income $1.48 $1.65 Weighted Average Number of Shares 51,832,414 50,000,000 CONTACT: American States Financial Corporation, Indianapolis Investors: Mark Chappell Mark Chappell is a British sitcom writer and screenwriter. His credits include My Life in Film (for BBC Three), Tony Blair, Rock Star (for Channel 4 Television/V Good Films) Perfect Day, The Millennium , 317/262-6930 Media: John Cook, 317/262-6790 |
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