HARLEYSVILLE GROUP REPORTS FIRST QUARTER EARNINGS
HARLEYSVILLE GROUP REPORTS FIRST QUARTER EARNINGS HARLEYSVILLE, Pa., April 29 /PRNewswire/ -- Harleysville Group Inc.
(NASDAQ: HGIC), a regional insurance holding company, today reported first quarter revenues and earnings.
Operating earnings per share were up 16 percent to $.52, compared with $.45 in the first quarter of 1991. Net income increased 79 percent to $9.6 million in the first quarter, compared with $5.4 million during the first quarter of 1991. On a per-share basis, first quarter net income rose 75 percent to $.77, compared with $.44 in the same period of 1991. Net income includes $.25 per share of aftertax realized capital gains in the latest quarter and a $.01 per share realized capital loss in the like quarter of 1991. All per-share amounts have been adjusted to reflect the 3-for-2 stock split effective Nov. 4, 1991. "The first quarter of 1992 was a strong quarter for Harleysville Group," commented Bradford W. Mitchell, chairman of the board, president and chief executive officer of Harleysville Group. "We are especially pleased with our results in light of the continuing soft commercial insurance environment and the downward pressure on investment income resulting from lower interest rate levels." The realized capital gains are the result of a restructuring of the company's bond portfolio in the first quarter. The proceeds from the sales were invested, in part, in tax-free bonds. Investment income for the first quarter was up 5 percent to $14.4 million, vs. $13.7 million in the first quarter of 1991. At the same time, aftertax investment income rose 7 percent to $10.8 million in 1992 from $10 million in the first quarter of 1991 reflecting the higher amount of tax-exempt investments. First quarter earned premiums were down 2 percent to $89.4 million, compared with $91.2 million during the same period one year earlier. The decrease in earned premiums reflects the removal of Pennsylvania and New Jersey personal auto insurance business from the intercompany pooling agreement, as well as the company's continuing strategy not to compete for market share in the present unfavorable price and rate environment. Total revenues increased 4 percent to $108.8 million, compared with $105 million during 1991's first quarter. Stockholders' equity rose 16 percent to $221.3 million ($17.63 per share) at March 31, 1992, compared with $191 million ($15.73 per share) at March 31, 1991. The trailing 12-month return on average stockholders' equity at March 31, 1992, was 12.5 percent based on operating earnings. Harleysville Group's statutory combined ratio for the first quarter of 1992 was 106.5 percent, compared with 107.4 percent in the first quarter of 1991. The improved combined ratio is due to the removal of Pennsylvania and New Jersey personal auto insurance from the intercompany pooling arrangement and an improvement in commercial lines underwriting experience. "On April 23, 1992, a secondary offering of 1,650,000 shares of our common stock was made at $18.75 per share," Mitchell said. "Since the shares are owned by Harleysville Mutual Insurance Company, the offering will reduce the company's ownership interest in Harleysville Group from approximately 70 percent to 56 percent. However, since the offered shares are owned by Harleysville Mutual, the sale will not dilute Harleysville Group's earnings." Harleysville Group Inc. is a regional holding company for six property and casualty insurers whose marketing territory encompasses the entire East Coast. The companies include: Atlantic Insurance Company of Savannah, Connecticut Union Insurance Company, Harleysville Insurance Company of New Jersey, Huron Insurance Company, New York Casualty Insurance Company and Worcester Insurance Company. Harleysville Group also manages the operations of Berkshire Mutual Insurance Group, the financial results of which are not consolidated into Harleysville Group. Harleysville Group's property/casualty subsidiaries are rated A-plus (Superior) by the A.M. Best Company. HARLEYSVILLE GROUP INC. AND SUBSIDIARIES (Unaudited; In thousands, except per-share data) Quarter ended March 31 1992 1991 Operating results: Premiums earned $89,411 $91,157 Investment income, net of investment expense 14,442 13,719 Net income 9,606 5,360 Per common share: Net income $.77 $.44 Cash dividend .12 .11 Financial condition at March 31, 1992 Dec. 31, 1991 Assets $862,550 $846,970 Stockholders' equity 221,263 211,275 Per common share $17.63 $16.98 Consolidated Statements of Income (Unaudited; In thousands, except per-share data) Quarter ended March 31 1992 1991 Revenues: Premiums earned $89,411 $91,157 Investment income, net of investment expenses 14,442 13,719 Realized investment gains (losses) 4,668 (169) Other income 256 274 Total revenues 108,777 104,981 Losses and expenses: Losses and loss settlement expenses 64,113 66,994 Amortization of deferred policy acquisition costs 23,916 24,321 Other underwriting expenses 7,300 6,437 Interest expense 341 134 Other expenses 522 619 Total expenses 96,192 98,505 Income before income taxes 12,585 6,476 Income taxes 2,979 1,116 Net income 9,606 5,360 Weighted average number of shares outstanding 12,483,758 12,082,289 Earnings per common share $.77 $.44 Cash dividend per common share .12 .11 The per-share data and the weighted average number of shares outstanding have been retroactively adjusted to reflect the 1991 3-for-2 stock split. Supplementary Financial Analysts' Data (Unaudited; in thousands, except per-share data) Quarter ended March 31 1992 1991 Pre-tax investment income $14,442 $13,719 Related federal income taxes 3,680 3,670 After-tax investment income 10,762 10,049 Net premiums written(A) 89,114 109,565 Fresh start benefit per share $.01 $.01 Earnings per common share: Operating income .52 .45 Net income .77 .44 (A) The 1991 net premiums written includes $19,565,799 from the Jan. 1, 1991, pooling change. /delval/ -0- 4/29/92 /CONTACT: Bruce J. Magee, vp-controller, 215-256-5011; Robert Simpson Jr., 215-256-5392; or Randy Buckwalter, 215-256-5288, all of Harleysville Group/ (HGIC) CO: Harleysville Group Inc. ST: Pennsylvania IN: INS SU: ERN
KA-MK -- PH002 -- 4154 04/29/92 07:57 EDT
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|Date:||Apr 29, 1992|
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