Printer Friendly

CITIZENS CORPORATION ANNOUNCES THIRD QUARTER EARNINGS

 WORCESTER, Mass., Oct. 26 /PRNewswire/ -- Citizens Corporation (Citizens) (NYSE: CZC), which through its wholly-owned subsidiary, Citizens Insurance Company of America, is one of the leading underwriters of personal and commercial property and casualty insurance in Michigan, today reported net income for the third quarter of $26.9 million or $.72 pro forma per share compared to net income of $14.9 million or $.38 pro forma per share in 1992. This increase was primarily due to improved underwriting results in the workers' compensation line, as well as an increase in net realized gains resulting from a shift towards a higher level of tax-exempt investments. Net income for the first nine months of 1993 was $61.6 million or $1.62 pro forma per share compared to $57.1 million, or $1.50 pro forma per share for the first nine months of 1992. This increase was due primarily to net realized gains resulting from the shift towards a higher level of tax-exempt investments.
 All per share amounts are computed on a pro forma basis reflecting the reorganization and exchangeo?f common and preferred shares between Citizens, The Hanover Insurance Company, and Citizens Insurance which occurred in February of 1993, and the shares issued in conjunction with the initial public offering and the exercise of the underwriters "over- allotment" option in March and April of 1993, respectively, as if these transactions had occurred on January 1, 1992. Actual earnings per share are $1.69 for the first nine months of 1993 and $.72 for the third quarter, and are not comparable to 1992 actual earnings per share due to the changes in capital structure.


Third Quarter Results
 Citizens' net premiums written increased 9.5 percent to $206.4 million in the third quarter of 1993 from $188.5 million in the third quarter of 1992. Approximately $15.7 million or 87.7 percent of this increase resulted from a change in the terms of personal lines policies from a three month minimum term to a minimum term of six months for policies effective June 1, 1993.
 For the third quarter of 1993, net income from operations excluding net realized gains was $19.5 million, or $.51 pro forma per share compared to $12.9 million, or $.33 pro forma per share for 1992. This increase was primarily due to improved underwriting results in the workers' compensation line.
 Net investment income before taxes for Citizens was $18.2 million in 1993 and $19.7 million in 1992. Realized gains, net of tax, were $7.4 million in 1993 and $2.0 million in 1992. The decrease in net investment income before taxes and the increase in realized gains were attributable to the continued shift towards a higher level of tax-exempt investments in accordance with Citizens' current tax strategy, which is aimed at maximizing after-tax net investment income. Net investment income after taxes increased 4.3 percent, primarily as a result of the investment income earned on the proceeds of Citizens' March, 1993 initial public offering.
 Citizens' statutory combined ratio, including policyholders' dividends, was 96.9 percent in 1993, compared to 102.9 percent in 1992. This improvement in the statutory combined ratio reflects the improvement in the workers' compensation underwriting results.


Year-to-date Results
 Citizens' net premiums written increased 9.3 percnt to $576.4 million in 1993 from $527.3 million in 1992. Approximately $30.1 million or 61.3 percent of this increase resulted from a change in the terms of personal lines policies from a three month minimum term to a minimum term of six months for policies effective June 1, 1993. The remainder of the increase in net premiums written was due to price increases in commercial lines as well as continued growth in policies in force in certain personal and commercial lines products.
 Net income from operations, excluding net realized gains and the cumulative effect of changes in accounting principles, was $48.1 million, or $1.25 pro forma per share for the first nine months of 1993, compared to $53.3 million, or $1.39 pro forma per share for 1992. Unusually mild weather in Michigan during the first part of 1992 caused better than expected profits in that year. Results in 1993 reflect the return to more normal weather in Michigan.
 Net investment income before taxes for Citizens was $55.3 million in 1993 and $56.9 million in 1992. Realized gains, net of tax, were $18.5 million in 1993 and $3.8 million in 1992. The decrease in net investment income before taxes and the increase in realized gains were attributable to the continued shift towards a higher level of tax-exempt investments in accordance with Citizens' current tax strategy, which is aimed at maximizing after-tax net investment income. Net investment income after taxes increased 8.1 percent, primarily as a result of the investment income earned on the proceeds of the initial public offering.
 Citizens' statutory combined ratio, including policyholders' dividends, was 98.8 percent in 1993, compared to 95.7 percent in 1992.


A Review of the Balance Sheet
 Fixed maturity investments represented 95.3 percent of total invested assets of $1.3 billion at September 30, 1993. Of the total fixed maturity investments, 97.1 percent were rated investment grade or above. There are no investments in real estate or mortgages secured by real estate.
 Shareholders' equity increased $24.5 million in the third quarter of 1993 from $595.4 million ($16.50 per share) at June 30, 1993, to $619.9 million ($17.18 per share) at September 30, 1993.
 All interim information is unaudited, and all results are reported in accordance with generally accepted accounting principles (GAAP) with the exception of the combined ratio, which is reported on a statutory basis.
 Citizens is a member of Allmerica Financial, a diversified group of insurance and financial services companies based in Worcester, Mass.
 DOW JONES
 CITIZENS CORPORATION
 For the Periods Ended September 30, 1993 and 1992
 Quarter September 30: 1993 1992
 Net Income $26,859,000 $14,859,000
 Pro Forma Earnings Per Share (a) $ .72 $ .38
 Pro Forma Average No. Shares 36,075,100 36,075,100
 Nine months September 30: 1993 1992
 Net Income $61,601,000 $57,089,000
 Pro Forma Earnings Per Share (a) $1.62 $1.50
 Pro Forma Average No. Shares 36,075,100 36,075,100
 All figures are reported in accordance with generally accepted accounting principles (GAAP) after giving retroactive effect of the reorganization and exchange of common and preferred shares between Citizens Corporation, The Hanover Insurance Company, and Citizens Insurance which occurred in February of 1993 and reflecting the shares issued in conjunction with the initial public offering and underwriters' "Over-Allotment" option as if these transactions had occurred on January 1, 1992. All figures reflect actual earnings per share.


(a) Includes net realized gain (loss) on investments, net of federal income taxes at the statutory rate of 35 percent and 34 percent for 1993 and 1992, respectively, as follows:
 Y-T-D 3rd Qtr
 1993 1992 1993 1992
 Net realized gain(loss)
 on investments, net of
 applicable federal
 income taxes $ .51 $ .11 $ .21 $ .05
 Cumulative effect of changes
 in accounting principles, net
 of applicable federal income
 taxes $(.14) -- -- --
 -0- 10/26/93
 /CONTACT: (Investors) Edward J. Parry, III, vice president and treasurer, 508-855-4600; or Mark C. McGivney, investor relations, 508-855-4019; or (Media) Michael F. Buckley, director, public information, 508-855-3099/
 (CZC)


CO: Citizens Corporation ST: Massachusetts IN: INS SU: ERN

DD -- NE006 -- 6733 10/26/93 08:58 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 26, 1993
Words:1253
Previous Article:ALLMERICA PROPERTY & CASUALTY ANNOUNCES THIRD QUARTER EARNINGS
Next Article:PRUDENTIAL HOME MORTGAGE RECEIVES MOODY'S TOP COMMERCIAL PAPER RATING
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters