State Auto Financial Corporation Reported Third Quarter Earnings
26 October 2000
State Auto Financial Corporation Reported Third Quarter Earnings
COLUMBUS, Ohio--Oct. 26, 2000--State Auto Financial Corporation reported third quarter net earnings of $8,006,000. Third quarter reported earnings per share were $0.21 ($0.20 diluted) compared with $0.22 ($0.21 diluted) for the third quarter 1999. Net operating earnings per share for the third quarter ending September 30, 2000 were $0.18 ($0.17 diluted) compared with $0.21 ($0.20 diluted) for the same period last year.For the first nine months of 2000, net reported earnings were $34,183,000 or $0.89 ($0.87 diluted) compared with $29,781,000 or $0.72 ($0.71 diluted) for the same 1999 period. Net operating earnings per share for the nine months ended September 30, 2000 were $0.81 ($0.79 diluted) compared with $0.68 ($0.67 diluted) for the same period last year. Third quarter revenue was $116,328,000, up 5.3% from $110,460,000. Revenue for the first nine months of 2000 was $346,742,000, up 4.3% from $332,577,000.
A combination of a relatively small number of severe commercial losses and property damage due to Midwest storms resulted in a quarterly GAAP combined ratio of 105.6 compared with 99.7 for the same 1999 period. "While we were disappointed with the third quarter results, we do not believe the nature of these claims indicates a deterioration in our core underwriting operations," said STFC Chairman Robert L. Bailey. "We continue to remain committed to the same sound underwriting and pricing strategies that have produced our historical long-term profitable results.
"Despite the third quarter, through nine months, we believe we remain on track to produce our sixth consecutive year of underwriting profit."
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, October 26, 2000, 10AM, to discuss STFC's 2000 third 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 800-365-0145. The replay will be available through November 9, 2000.
Except for historical information, all other information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. The most significant of these uncertainties are described in State Auto Financial's Form 10-K and Form 10-Q reports and exhibits to those reports, and include (but are not limited to) legislative changes at both the state and federal level, state and federal regulatory rule making promulgation's, class action litigation involving the insurance industry and judicial decisions affecting claims, policy coverages and the general costs of doing business, the impact of competition on products and pricing, inflation in the costs of the products and services insurance pays for, product development, geographic spread of risk, weather and weather-related events, and other types of catastrophic events. State Auto Financial undertakes no obligation to update or revise any forward-looking statements.
STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Figures in thousands, except per-share amounts)
(unaudited)
Quarter Ended Nine Months Ended
September 30 September 30
2000 1999 2000 1999
---- ---- ---- ----
Net premiums written $104,411 $ 99,050 $308,743(a) $302,009(a)
-------- -------- -------- --------
Earned premiums 99,604 98,229 297,892 295,558
Net investment
income 9,743 8,566 28,741 25,374
Management services
income 4,390 2,182 13,188 6,558
Net realized gains
(losses) on
investments 1,841 734 4,640 2,660
Other income 750 749 2,281 2,427
-------- -------- -------- --------
Total revenue 116,328 110,460 346,742 332,577
-------- -------- -------- --------
Income before
federal income
taxes 9,131 10,666 44,227 39,094
Federal income taxes 1,125 2,134 10,044 9,313
-------- -------- -------- --------
Net income $ 8,006 $ 8,532 $ 34,183 $ 29,781
-------- -------- -------- --------
-------- -------- -------- --------
Net earnings
per share:
- basic $ 0.21 $ 0.22 $ 0.89 $ 0.72
- diluted $ 0.20 $ 0.21 $ 0.87 $ 0.71
Net earnings
per share from
operations(b):
- basic $ 0.18 $ 0.21 $ 0.81 $ 0.68
- diluted $ 0.17 $ 0.20 $ 0.79 $ 0.67
Weighted average
shares outstanding:
- basic 38,460 40,342 38,406 41,340
- diluted 39,244 41,098 39,035 42,113
Book value per share $ 9.32 $ 8.11
Dividends paid
per share $ 0.030 $ 0.028 $ 0.085 $ 0.078
Total shares
outstanding 38,451 39,793
GAAP ratios:
Loss ratio 76.8 70.2 69.5 68.8
Expense ratio 28.8 29.5 29.7 28.8
-------- -------- -------- --------
Combined ratio 105.6 99.7 99.2 97.6
-------- -------- -------- --------
-------- -------- -------- --------
(a) Net premiums written for the nine months ended September 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.