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CAPITAL HOLDING REPORTS SECOND QUARTER OPERATING EARNINGS OF $1.51 PER SHARE, UP 11.9 PERCENT

 CAPITAL HOLDING REPORTS SECOND QUARTER OPERATING EARNINGS
 OF $1.51 PER SHARE, UP 11.9 PERCENT
 LOUISVILLE, Ky., July 29 /PRNewswire/ -- Capital Holding Corporation (NYSE: CPH) today reported second quarter operating earnings, excluding realized investment gains and losses and related deferred acquisition cost amortization, of $77.4 million or $1.51 per share. This represents an 11.9 percent increase over the $1.35 per share, or $62.9 million, reported for last year's second quarter. Year-to-date operating earnings were $151.5 million, bringing the six months' per share results to $2.95, up 11.3 percent.
 Net income for the second quarter, including realized investment gains and losses, was $1.51 per share, up 8.6 percent compared to the same period last year. Net income for the first six months was $2.79 per share, up 7.3 percent from the first half of 1991. Six months' net income of $143.3 million included $7.9 million in net realized securities gains, offset by $15.6 million in mortgage loan writedowns and reserve additions.
 "Despite the nation's ongoing economic uncertainty, we again produced solid growth in earnings in the second quarter," said Irving W. Bailey II, Capital Holding's chairman, president and chief executive officer.
 Revenues for the second quarter, excluding realized investment gains and losses, were $712.2 million, up 8.4 percent over last year. Quarterly premium income was up sharply by 22.4 percent over the prior year, largely due to the Durham Corporation acquisition as well as increased life annuity sales. Net investment income for the quarter was $366.0 million, essentially even with last year.
 During the second quarter, A.M. Best Company reaffirmed the A+ (Superior) ratings of Capital Holding's three major life companies, Commonwealth Insurance, Peoples Security Insurance and National Home Life Insurance.
 The company reported higher earnings in each of its four operating units.
 Agency Group pretax earnings for the second quarter were $47.5 million, up 11.8 percent over the second quarter of 1991. Six months pretax earnings were $91.9 million, a 12.4 percent increase compared to the first six months of last year. The increase is primarily the result of the Durham acquisition, as well as strong sales in both agent-sold life insurance and marketing partnership business, and continued favorable persistency.
 The Direct Response Group (DRG) reported pretax earnings for the quarter of $20.0 million, up 18.8 percent from the same period last year. For the first six months, pretax earnings were $37.4 million, up 22.5 percent. Earnings strength was largely a result of improving loss ratios in the personal property and casualty insurance business, as well as lower overall expenses and favorable life claims experience. DRG continues to make progress in its customer retention efforts and is revamping its claims-administration process to enhance customer service.
 Pretax earnings for the Accumulation and Investment Group (AIG) in the second quarter were $30.2 million, up 8.0 percent, bringing six months' earnings to $60.4 million, up 8.9 percent from 1991. Solid margins have continued in this business as a result of the favorable interest rate environment. However, the company noted that margins may tighten going forward, as investments in floating-rate securities continue to reset downward in response to lower interest rates. Any slowing of AIG's earnings growth is expected to be offset by improved results in other businesses.
 Asset quality remains high and the mortgage loan portfolio continues to perform well. Commercial mortgage delinquencies, foreclosures and real estate owned as a percentage of the portfolio improved modestly in the quarter and remain at less than half the industry average.
 First Deposit Corporation's (FDC) pretax earnings were $23.5 million for the second quarter, bringing the six months' earnings to $45.5 million, up 30.4 percent over the same period a year earlier. Total credit card receivables, including securitized loans which FDC services, were up 10.8 percent over last year. Lower funding costs offset a modest increase in chargeoffs. Total portfolio chargeoffs, including securitized assets, increased modestly to 5.9 percent versus 5.8 percent in the first quarter. FDC securitized $375 million in receivables in June, bringing total securitized assets to more than $1.8 billion.
 Capital Holding is one of the nation's largest shareholder-owned life insurance organizations, with $19.6 billion in assets and $55.9 billion of life insurance coverage in force.
 The corporation offers a broad range of financial services and products through agents, direct-marketing media, investment professionals and retail locations. Its common stock is listed on the New York and Pacific Stock Exchanges under the ticker symbol CPH; its preferred stock is listed on the New York Stock Exchange under the symbol CPHF.
 Capital Holding financial highlights
 CAPITAL HOLDING CORPORATION
 THREE- AND SIX-MONTH FINANCIAL HIGHLIGHTS
 Three Months Ended
 June 30, Percent
 1992 1991 Increase
 Operations:
 Total revenues $715,756,000 $661,488,000 8.2
 Operating earnings,
 excluding realized
 investment gain and
 related amortization,
 net of tax 77,365,000 62,949,000 22.9
 Realized investment
 gain, net of tax
 and related
 amortization, net
 of tax 261,000 1,586,000
 Net income 77,626,000 64,535,000 20.3
 Per share:
 Operating earnings,
 excluding realized
 investment gain and
 related amortization,
 net of tax $1.51 $.35 11.9
 Realized investment
 gain, net of tax and
 related amortization,
 net of tax -- .04
 Net income 1.51 1.39 8.6
 Six Months Ended
 June 30, Percent
 1992 1991 Increase
 Operations:
 Total revenues $1,426,763,000 $ 1,293,547,000 10.3
 Operating earnings,
 excluding realized
 investment gain and
 loss and related
 amortization, net of tax 151,537,000 23,236,000 23.0
 Realized investment
 gain and loss,
 net of tax and related
 amortization, net of tax (8,240,000) (2,356,000)
 Net income 143,297,000 120,880,000 18.5
 Per share:
 Operating earnings,
 excluding realized
 investment gain and loss
 and related amortization,
 net of tax $ 2.95 65 11.3
 Realized investment
 gain and loss,
 net of tax
 and related amortization,
 net of tax (.16) (.05)
 Net income 2.79 2.60 7.3
 -0- 7/29/92 R
 /CONTACT: Jean Peters, Capital Holding Corporation, 502-560-2992/
 (CPH) CO: Capital Holding Corporation ST: Kentucky IN: INS SU: ERN


DF -- CH008R -- 4918 07/30/92 08:42 EDT
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Date:Jul 30, 1992
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