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CAPITAL HOLDING REPORTS FIRST QUARTER OPERATING EARNINGS OF $.81 PER SHARE, UP 12.5 PERCENT

 LOUISVILLE, Ky., April 28 /PRNewswire/ -- Capital Holding Corporation (NYSE: CPH) today reported first quarter operating earnings, excluding realized investment gains and losses and related deferred acquisition cost amortization, of $.81 per share, or $83.9 million. This represents a 12.5 percent increase over the $.72, or $74.2 million, reported for last year's first quarter. All per share amounts have been adjusted to reflect a two-for-one stock split in the form of a dividend, effective April 30, 1993.
 Net income for the first quarter, including net realized investment gains and losses and related amortizations, was $.64 per share, even with the same period last year. Three months' net income was $65.8 million, essentially even with net income of $65.7 million in the first quarter of 1992. For the first quarter 1993, net income included $9.3 million in net realized securities losses and $9.9 million in mortgage loan writedowns and reserve additions.
 "The year is off to a fine start. We have acquired businesses in our Direct Response and Banking groups that will add positively to growth in 1993 and beyond, and we continue to align our operations to focus on serving individual and family customers very well," said Irving W. Bailey II, Capital Holding's chairman, president and chief executive officer.
 Revenues for the first quarter, excluding realized investment gains and losses, were $736.1 million, up 1.9 percent over last year. Premium income was down 2.4 percent, reflecting the sale last year of the credit business of Durham Corporation and the reinsurance of its group business. Net investment income for the quarter was $362.7 million, down 1.7 percent compared to $369.1 million a year ago, primarily reflecting lower yields on floating-rate assets.
 During the first quarter, Moody's Investors Service raised Capital Holding's senior debt rating to A2 from A3. The company's commercial paper rating was also raised to Prime-1 from Prime-2 and its preferred stock to a2 from a3. Moody's also assigned an A2 rating for insurance financial strength to Capital Holding's National Home Life Assurance Company.
 For the first quarter, the company reported higher earnings in each of its four operating units.
 Agency Group pretax earnings for the first quarter were $46.1 million, up 3.8 percent over the first quarter of 1992. The increase reflects the growing premium base of this business. Life and health premiums were up 4.2 percent. Policy termination rates in core business lines, excluding marketing partnerships, were essentially even with the first quarter of 1992.
 The Direct Response Group (DRG) reported pretax earnings for the quarter of $23.0 million, up 32.4 percent from the same period last year. Increased earnings largely reflect the Academy Group acquisition, completed in January 1993. Life and health premiums, including Academy, were up 19.4 percent over the first quarter last year. Property and casualty earnings were up 71.0 percent in the quarter, as a result of improving basic auto experience. Property and casualty premiums increased 2.0 percent.
 Pretax earnings for the Banking Group were $27.1 million for the first quarter, up 23.5 percent over the same period a year earlier. Fee income increased due to new products and features, including credit protection and application fees from a secured credit card. The Banking Group's efforts to lower its cost of funds and prudent expense management also contributed to results.
 Total loans under management increased by 5.5 percent from las year's first quarter and reflect the inclusion of $39.5 million in receivables from two California operations, primarily in the business of financing automobile insurance premiums. Both operations were acquired last year. Annualized chargeoffs for the quarter were 5.7 percent, even with full-year 1992. Delinquent loan balances were 2.8 percent, slightly higher than the 1992 full year rate of 2.6 percent, primarily due to seasonality.
 The Accumulation and Investment Group pretax earnings in the first quarter were $32.9 million, up 9.1 percent from the first three months of 1992. Profit margins on spread deposits for the quarter of 117 basis points were up slightly from an average of 115 basis points for the full year. Deposits increased substantially during the quarter, with institutional spread deposits up by $371.3 million, retail spread deposits up by $138.8 million, and variable annuity sales of $103.2 million. Also, fee-based Trust GIC balances increased by nearly $1.2 billion during the first quarter.
 Capital Holding Corporation is one of the nation's largest shareholder-owned insurance organizations, with $21.8 billion in assets and $42.7 billion of individual 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.
 TO FOLLOW: Capital Holding financial highlights
 CAPITAL HOLDING CORPORATION
 THREE-MONTH FINANCIAL HIGHLIGHTS
 Percent
 Three Months Ended March 31, 1993 1992 Increase
 Operations:
 Total revenues $ 716,964,000 $ 711,007,000 .8
 Operating earnings 83,901,000 74,172,000 13.1
 Realized investment loss,
 net of related
 amortization,
 net of tax (18,065,000) (8,501,000)
 Net income 65,836,000 65,671,000 .3
 Per common and common
 equivalent share(A):
 Operating earnings .81 .72 12.5
 Realized investment loss,
 net of related amortization,
 net of tax (.17) (.08)
 Net income .64 .64 --
 (A) Per common and common equivalent share amounts have been retroactively adjusted for a two-for-one stock split in the form of a dividend, effective April 30, 1993.
 -0- 4/28/93
 /CONTACT: Bonnie Otto, 502-560-3019, or Michael Bateman, 502-560-2723, both of Capital Holding Corporation/
 (CPH)


CO: Capital Holding Corporation ST: Kentucky IN: INS SU: ERN

CM -- CH018 -- 2306 04/28/93 17:28 EDT
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Date:Apr 28, 1993
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