Amerin Reports Second Quarter Results And A 66% Increase In New Insurance Written.CHICAGO--(BUSINESS WIRE)--July 23, 1996--Amerin 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 : 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. Corporation, today reported record earnings of $6.7 million for the second quarter, an increase of 169 percent over 1995's second quarter of $2.5 million. Net earnings per common share were $0.25 for the quarter, compared with $0.10 in the second quarter of 1995. 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 , 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 on investments, were $6.9 million, or $0.26 per share, for the quarter, compared with $2.2 million, or $0.07 per common share, a year ago. For the first half of 1996, the company earned $12.4 million, or $0.47 per share, an improvement of 204 percent over the first six months of 1995 when it earned $4.1 million, or $0.12 per share. On a 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 basis, net income for the second quarter 1995 was $4.4 million, or $0.17 per common share. On this basis, there was a 52 percent increase in net income and a 47 percent increase in earnings per share on a second quarter to second quarter comparison. The comparision for the half showed an improvement of 56 percent over 1995 pro forma net earnings of $7.9 million, or $0.30 per share. The pro forma looks at the company as if its November November: see month. 1995 IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. had taken place prior to January January: see month. 1, 1995 and reflects, among other adjustments, the inclusion of investment income on the proceeds of that offering for the entire period (see notes to supplementary pro forma information). "The second quarter was strong for the entire MI industry and especially for Amerin," said Amerin CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. 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. . "Our new insurance written grew by 66 percent, the highest level among the public mortgage insurers, and put us ahead of our new business goals for the first half. "Our insurance in force, which we believe to be the critical benchmark A performance test of hardware and/or software. There are various programs that very accurately test the raw power of a single machine, the interaction in a single client/server system (one server/multiple clients) and the transactions per second in a transaction processing system. of future profitability, passed the $11 billion mark in the second quarter. These strong results were achieved in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite a modest decline in market share for the quarter. This was primarily due to a shift to ARM origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real in the Spring, which benefitted MIs with stronger thrift thrift: see leadwort. relationships. Finally, our statutory combined loss/expense ratio for the quarter was 58.3 percent, one of the lowest in the industry." Total revenues for the second quarter were $18.6 million, up 148 percent, over 1995's second quarter of $7.5 million. For the quarter, net premiums earned were $14.8 million, up 166 percent, and investment income was $4.1 million, an improvement of 144 percent over the prior year's quarter. For the first half, total revenues were $34.8 million, compared with $13.1 million in the first half of 1995. Net premiums earned were $26.9 million for the half versus $9.5 million in the previous year. New insurance written in the second quarter was $2.1 billion, compared with $1.3 billion in the second quarter of 1995. For the half, new insurance written was $4.0 billion, up from $2.2 billion in the first six months of 1995. Net premiums written were $16.1 million in the quarter, a 145 percent rise over $6.6 million in the second quarter of 1995. For the half, net premiums written increased by 172 percent to $29.4 million. As of June June: see month. 30, 1996, Amerin's insurance in force was $11.6 billion, up $3.4 billion from year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 1995 and $6.7 billion higher than a year ago, when it was $4.9 billion. Persistency, or the percentage of insurance remaining in force from one year prior, was 85.1 percent at June 30, down from 93.0 percent at year-end and 96.4 percent at June 30, 1995. Amerin's statutory combined ratio was 61.1 percent for the half, down from 70.9 percent for the full year 1995 and from 89.1 percent in the first half of last year. Amerin's loss ratio was 31.1 percent in the half, compared with 28.2 percent for the full year 1995 and 23.7 percent in the comparable 1995 period. At the same time, the company's expense ratio declined to 30.0 percent in the half, down from 42.8 percent for the full year 1995 and 65.4 percent in the first half of 1995. The carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of Amerin's investment portfolio was $286.6 million at June 30, as compared with $297.0 million at December December: see month. 31, 1995, and $107.9 million, a year ago, before the company's IPO. Amerin provides private mortgage insurance to leading mortgage originators. The company's products are discount Borrower-Paid Mortgage Insurance and Lender-Paid Mortgage Insurance. Amerin's approach to sales, 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. and claims processing 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. 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,
except per share amounts.
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Revenues: Net premiums written $16,129 $ 6,578 $29,436 $10,841 Increase in unearned premiums (1,374) (1,040) (2,559) (1,323) Net premiums earned 14,755 5,538 26,877 9,518 Net investment income 4,082 1,670 8,123 3,256 Realized investment gains (losses) (266) 288 (221) 373 Total revenues 18,571 7,496 34,779 13,147 Expenses: Losses incurred 4,350 1,657 8,366 2,253 Policy acquisition costs 2,157 1,713 4,111 3,565 Underwriting and other expenses 2,742 1,635 5,100 3,256 Total losses and expenses 9,249 5,005 17,577 9,074 Income before taxes 9,322 2,491 17,202 4,073 Income taxes 2,611 ---- 4,817 ---- Net income 6,711 2,491 12,385 4,073 Pay-in-kind dividends on preferred stock ---- 1,418 ---- 2,774 Net income applicable to common shareholders $6,711 $1,073 $12,385 $1,299 Average common and common equivalent shares outstanding 26,344.6 10,545.2 26,345.0 10,545.4 Net income per share $0.25 $0.10 $0.47 $0.12 Operating ratios (1): Loss ratio 29.48% 29.92% 31.13% 23.67% Expense ratio 28.81% 55.44% 29.96% 65.40% Combined ratio 58.29% 85.36% 61.09% 89.07% -0- Supplementary pro forma information (2):
For the six
months ended For the quarter ended
June 30, June 30, March 31,
1995 1995 1995
Net income applicable to common shareholders $7,942 $4,426 $3,516 Average common and common equivalent shares outstanding 26,321.6 26,321.6 26,321.6 Net income per share $0.30 $0.17 $0.13 Dollars in millions. OTHER INFORMATION
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
New insurance written
("NIW") $2,104 $1,265 $3,986 $2,215
Product mix as a % of NIW:
95% LTV 39.3% 44.2% 38.3% 44.5%
ARMs 7.2% 18.7% 5.7% 24.5%
95% LTV/30% coverage 38.3% 40.1% 37.1% 33.0%
90% LTV/25% coverage 46.4% 42.4% 46.5% 34.6%
Monthly premium 86.7% 81.9% 85.4% 80.3%
Refinances 16.9% 8.0% 21.7% 7.7%
Net premiums written
(dollars in thousands)(3):
New business $3,244 $2,327 $6,592 $4,211
Renewals 12,885 4,251 22,844 6,630
(1) Operating ratios presented are on the basis of statutory
accounting practices and reflect the combined results of
Amerin's insurance subsidiaries and do not include holding
company costs.
(2) Provided for illustrative purposes only. Pro forma amounts
are not indicative of the results of operations that would
have occurred or of future operating results. Pro forma
amounts reflect adjustments to give effect to Amerin's initial
public offering as if it had occurred prior to January 1, 1995.
These adjustments consist of:
(i) increase of investment income, net of applicable taxes at
35%, by $1,773,275 in each of the quarters ended March 31 and
June 30, 1995;
(ii) retirement of Amerin's preferred stock at a redemption
value of $46 million;
(iii) elimination of fees paid by Amerin to certain of its
stockholders in respect of their standby commitments to
provide additional equity capital to Amerin under specified
conditions, which standby commitments terminated upon
consummation of the offering. Such fees, net of taxes at 35%,
amounted to $160,274 and $162,055 for the quarters ended
March 31 and June 30, 1995, respectively.
(3) For the monthly premium product, the first month's premium is
recorded as New business and all subsequent premiums are
recorded as Renewals.
-0-
Amerin Corporation and Subsidiaries
Consolidated Balance Sheet
Dollars in thousands,
except per share amounts.
June 30, December 31, June 30,
1996 1995 1995
Assets
Investments at fair value (1) $286,591 $296,982 $107,862 Cash and cash equivalents 1,500 1,054 586 Accrued investment income 4,281 2,376 1,563 Deferred policy acquisition costs 4,670 4,419 3,399 Leasehold improvements, furniture and equipment, at cost, net of accumulated depreciation 4,002 4,199 1,088 Goodwill, net of accumulated amortization 2,356 2,431 2,505 Other assets 6,690 4,867 3,108 Total assets $310,090 $316,328 $120,111 Liabilities, Redeemable Preferred Stock, and Common Stockholders' Equity Liabilities: Unearned premiums $15,269 $12,710 $7,646 Loss reserves 11,879 7,092 2,321 Due for securities purchased ---- 15,724 ---- Accrued expenses and other liabilities 3,119 6,665 1,568 Total liabilities 30,267 42,191 11,535 Redeemable Preferred Stock ---- ---- 43,529 Common Stockholders' Equity 279,823 274,137 65,047 Total liabilities, redeemable preferred stock, and common stockholders' equity $310,090 $316,328 $120,111 Book value per share $10.75 $10.55 $6.26
(1) Investments include unrealized
gains (losses) on securities
marked to market pursuant to
FAS 115: ($6,199) $4,967 $1,044
Dollars in millions. OTHER STATISTICAL INFORMATION Direct primary insurance in force $11,619 $8,262 $4,921 Direct primary risk in force 2,853 1,989 1,126 Amerin Guaranty Corporation: Risk-to-capital ratio 10.8 8.2 11.4 Insured loans 95,090 68,112 41,165 Persistency 85.1% 93.0% 96.4% Loans in default 878 606 224 Default rate 0.92% 0.89% 0.54% CONTACT: Bill Campbell Campbell, city, United States Campbell, city (1990 pop. 36,048), Santa Clara co., W Calif., in the fertile Santa Clara valley; founded 1885, inc. 1952. for Amerin Corporation (312) 540-0078 |
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