State Auto Financial Corporation Reports Strong Second Quarter Earnings
28 July 2000
State Auto Financial Corporation Reports Strong Second Quarter Earnings
COLUMBUS, Ohio - State Auto Financial Corporation reported second quarter net earnings of $12,494,000, a 20.5% increase over the same 1999 period.Second quarter reported earnings per share were $0.33 ($0.32 diluted), compared with $0.25 ($0.25 diluted) for the second quarter 1999. Net operating earnings for the second quarter ending June 30, 2000 were also $0.33 ($0.32 diluted) compared with $0.23 ($0.23 diluted) for the same period last year.
For the first six months of 2000, net reported earnings were $26,177,000 or $0.68 per share ($0.67 diluted), compared with $21,249,000 or $0.50 ($0.50 diluted) for the same 1999 period. Second quarter total revenue was $113,953,000, up 2.5% from $111,186,000. Total revenue for the first half was $230,414,000, compared with $222,117,000 for the first half of 1999, a 3.7% increase.
STFC's second quarter GAAP combined loss and expense ratio was 95.5, versus 96.9 for the second quarter 1999. While storm losses severely impacted many insurers' results for the second quarter, State Auto's catastrophe storm losses totaled $4.4 million, down from $4.8 million for the second quarter 1999. STFC Chairman Robert Bailey noted that "not many companies in this business can match our underwriting results over the last several years. Despite the challenges of weather and the competition's willingness to sacrifice profit for sales, we've now achieved a combined ratio of 100.0 or better 14 out of the last 15 quarters. Going forward we remain committed to the strategies that have produced these exceptional results."
State Auto Financial Corporation is a regional property and casualty insurance holding company engaged primarily in writing personal and commercial automobile, homeowners, commercial multi-peril, workers' compensation and fire insurance. The company currently markets its products through more than 13,100 agents associated with approximately 2,200 agencies in 26 states. Products are marketed primarily in the Midwest and Eastern United States, excluding New York, New Jersey and the New England states.
STFC has scheduled a conference call with industry analysts for Thursday, July 27, 2000, 10 AM, to discuss the company's 2000 second quarter performance. A live Webcast of the conference call can be heard on StreetFusion (STREETFUSION.com). StreetFusion can be accessed directly or from links found on both STFC.com and STAUTO.com. A replay of the call can also be heard beginning at noon today by dialing 800-284-5340. The replay will be available through August 10, 2000.
STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Figures in thousands, except per-share amounts)
(unaudited)
Quarter Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999
---- ---- ---- ----
Net premiums written $102,406 $100,582 $204,332(a) $202,959(a)
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Earned premiums 99,477 98,853 198,288 197,329
Net investment income 9,624 8,357 18,998 16,808
Management services income 4,394 2,192 8,798 4,376
Net realized gains
(losses) on investments -340 872 2,799 1,926
Other income 798 912 1,531 1,678
--------- --------- --------- ---------
Total revenue 113,953 111,186 230,414 222,117
--------- --------- --------- ---------
Income before federal
income taxes 16,512 13,767 35,096 28,428
Federal income taxes 4,018 3,398 8,919 7,179
--------- --------- --------- ---------
Net income $ 12,494 $ 10,369 $ 26,177 $ 21,249
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Net earnings per share:
- basic $0.33 $0.25 $0.68 $0.50
- diluted $0.32 $0.25 $0.67 $0.50
Net earnings per share
from operations (b):
- basic $0.33 $0.23 $0.63 $0.47
- diluted $0.32 $0.23 $0.62 $0.47
Weighted average shares
outstanding:
- basic 38,405 41,642 38,378 41,847
- diluted 39,044 42,410 38,948 42,628
Book value per share $9.04 $8.22
Dividends paid per share $0.028 $0.025 $0.055 $0.050
Total shares outstanding 38,471 40,880
GAAP ratios:
Loss ratio 66.5 68.8 65.8 68.1
Expense ratio 29.0 28.1 30.1 28.4
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Combined ratio 95.5 96.9 95.9 96.5
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(a) Net premiums written for the six months ended June 30, 2000 and
1999 includes $7,289,000 and $5,816,000 of unearned premiums
transferred in connection with the 1/1/00 and 1/1/99 pooling changes,
respectively.
(b) Excludes net realized gains on investments, less applicable
federal income taxes.