Amerin Reports First Quarter Earnings Up 38 Percent.CHICAGO--(BUSINESS WIRE)--April 22, 1998--Amerin Corp. (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 : AMRN) the parent of Amerin 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. , today reported net income of $12.0 million, or 45 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. on a dilutive basis, for the first quarter of 1998, compared with $8.7 million, or 33 cents per share, a year ago, increases of 38 and 36 percent, respectively. Excluding 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. and losses, the earnings per share were 44 cents versus 33 cents, an increase of 33 percent. Total revenues for the period were $33.1 million, up 33 percent from $25.0 million in the first quarter of 1997. Net premiums earned were $27.6 million, an increase of 35 percent from $20.5 million in the first quarter of 1997. Investment income was $5.1 million, up from $4.5 million in the first quarter of 1997. New insurance written was $2.9 billion, a 59 percent increase from $1.8 billion in the same quarter last year. As of March 31, 1998, Amerin's insurance in force was $21.8 billion, an increase of $1.4 billion from December December: see month. 31, 1997. Insurance in force grew at an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. rate of 27 percent during the first quarter of 1998, despite a decline in Amerin's persistency rate. Persistency, or the percentage of insurance remaining in force from one year prior, was 83.0 percent at March 31, 1998, compared with 87.2 percent at December 31, 1997 and 89.3 percent at March 31, 1997. The decrease in the persistency rate in the first quarter is due to the significant increase in the level of refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. activity. As of March 31, 1998, Amerin's percentage of insured loans in default was 1.51 percent, compared to 1.43 percent at December 31, 1997 and 1.31 percent at March 31, 1997. The increase in the delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. rate is consistent with the maturation maturation /mat·u·ra·tion/ (mach-u-ra´shun) 1. the process of becoming mature. 2. attainment of emotional and intellectual maturity. 3. of Amerin's books of business. The loss ratio increased to 33.8 percent from 32.4 percent in the first quarter of 1997 and decreased from 35.5 percent in the fourth quarter of 1997. The statutory expense ratio declined to 23.6 percent from a year ago's level of 25.2 percent. The statutory combined ratio decreased slightly to 57.4 percent from 57.6 percent in the first quarter of 1997. Commenting on the results, Amerin chairman and chief executive officer Gerald Gerald - ["Gerald: An Exceptional Lazy Functional Programming Language", A.C. Reeves et al, in Functional Programming, Glasgow 1989, K. Davis et al eds, Springer 1990]. L. Friedman Fried·man , Milton Born 1912. American economist. He won a 1976 Nobel Prize for his theories of monetary control and governmental nonintervention in the economy. Noun 1. said: "We continue to strengthen our leadership position with the top lenders in the country. Our business strategy of serving these lenders in a focused and deliberate Willful; purposeful; determined after thoughtful evaluation of all relevant factors; dispassionate. To act with a particular intent, which is derived from a careful consideration of factors that influence the choice to be made. fashion remains on target." "We were particularly pleased to report strong growth in both insurance in force and new insurance written in the first quarter, a period marked by high refinance activity. Our market share increased to a record 8.2 percent, up from 6.1 percent in the fourth quarter of 1997." Amerin provides private mortgage insurance to leading mortgage originators. The company's products are Borrower-Paid Mortgage Insurance and Lender-Paid Mortgage Insurance. Amerin's approach to sales and underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. reduces the cost of its insurance and offers operating efficiencies to mortgage lenders and their borrowers. Home buyers who make down payments of less than 20 percent of the value of the home are usually required by the mortgage lender LENDER, contracts. He from whom a thing is borrowed. 2. The contract of loan confers rights, and imposes duties on the lender. 1. The lender has the right to revoke the loan at his mere pleasure; 9 Cowen, R. 687; 8 Johns. Rep. 432; 1 T. R. 480; 2 Campb. Rep. to qualify and pay for mortgage insurance on their mortgage loans. If the homeowner defaults on the loan, mortgage insurance pays the lender or the owner of the loan for its losses up to a specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. coverage amount. The following is a "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: The statements contained in this release that are not historical facts are 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. . Actual results may differ materially from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties, including but not limited to, the following risks: that interest rates may increase rather than remain stable or decrease; that housing demand may decrease for any number of reasons including changes in interest rates, adverse economic conditions, or other reasons; that Amerin's market share may decrease as a result of changes in underwriting criteria criteria (krītēr´ē  ),n. by Amerin or its competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. , or other reasons; and changes in the performance of the financial markets, in the demand for and market acceptance of Amerin products, and in general economic conditions. Investors are also directed to other risks discussed in documents filed by the Company with the Securities and Exchange Commission. -0-
Amerin Corporation and Subsidiaries
Consolidated Statement of Operations
Dollars in thousands, Three Months Ended
except per share amounts. March 31,
Revenues: 1998 1997
Net premiums written $27,162 $20,424
Decrease in unearned
premiums 447 67
Net premiums earned 27,609 20,491
Net investment income 5,088 4,483
Realized investment gains
(losses) 430 (22)
Total revenues 33,127 24,952
Expenses:
Losses incurred 9,334 6,630
Policy acquisition costs 3,939 2,539
Other operating expenses 3,175 3,616
Total losses and expenses 16,448 12,785
Income before taxes 16,679 12,167
Income taxes 4,729 3,498
Net income $11,950 $8,669
Average common and
common equivalent shares
outstanding 26,666.0 26,357.9
Net income per share (1)
Basic $ 0.46 $ 0.33
Diluted $ 0.45 $ 0.33
Operating ratios (2):
Insurance Subsidiaries-
Statutory Basis
Loss ratio 33.8% 32.4%
Expense ratio 23.6% 25.2%
Combined ratio 57.4% 57.6%
OTHER INFORMATION
Three Months Ended
March 31,
1998 1997
New insurance written ("NIW") $2,862 $1,796
Product mix as a % of NIW:
95% LTV 32.7% 38.5%
ARMs 1.8% 8.2%
95% LTV/30% coverage 31.5% 36.7%
90% LTV/25% coverage 44.8% 47.0%
Monthly premium 89.2% 91.2%
Refinances 37.9% 15.6%
(1) Calculated pursuant to Statement of Financial Accounting
Standards No. 128 "Earnings Per Share"
(2) Operating ratios are on the basis of statutory accounting
practices and reflect the combined results of Amerin's insurance
subsidiaries and do not include non-insurance company costs or
changes in level of deferred acquisition costs.
Amerin Corporation and Subsidiaries
Consolidated Balance Sheet
Dollars in thousands, March 31, December 31, March 31,
except per share amounts. 1998 1997 1997
Assets
Investments, at fair
value (1) $ 394,723 $ 377,720 $ 326,657
Cash and cash equivalents 7,467 4,456 1,831
Accrued investment income 5,380 5,872 4,458
Deferred policy
acquisition costs 8,998 7,776 5,534
Leasehold improvements,
furniture and equipment,
at cost, net of
accumulated depreciation 9,779 9,315 4,452
Goodwill, net of
accumulated amortization 2,096 2,133 2,245
Other assets 11,131 8,029 8,445
Total assets $ 439,574 $ 415,301 $ 353,622
Liabilities and Common
Stockholders' Equity
Liabilities:
Unearned premiums $ 22,999 $ 23,352 $ 20,468
Loss reserves 35,407 31,280 22,488
Due for securities purchased 7,034 -- --
Accrued expenses and other
liabilities 11,638 10,514 4,593
Total liabilities 77,078 65,146 47,549
Common Stockholders' Equity 362,496 350,155 306,073
Total liabilities and common
stockholders' equity $ 439,574 $ 415,301 $ 353,622
------
Book value per share $ 13.81 $ 13.39 $ 11.72
(1) Investments include
unrealized gains on
securities marked to market
pursuant to FAS 115: $ 11,249 $ 12,660 ($5,114)
Dollars in millions. OTHER STATISTICAL INFORMATION
Direct primary insurance
in force $ 21,786 $ 20,394 $ 16,206
Direct primary risk in force 5,480 5,149 4,039
Direct pool risk in force 14 7 --
Amerin Guaranty Corporation:
Risk-to-capital ratio 16.4 16.1 14.3
Primary insured loans 175,577 164,314 131,525
Annual persistency rate 83.0% 87.2% 89.3%
Primary loans in default 2,653 2,352 1,724
Default rate 1.51% 1.43% 1.31%
Reserve per delinquent loan 13,308 13,287 13,044
CONTACT: Amerin Corp., Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. David Vickers David Vickers is a fictional character from the daytime soap opera One Life To Live. He was played by Tuc Watkins from 1994 to 1996, and then again briefly in October 2001 and January 2002. , Chief Financial Officer, 312/540-4892 |
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