State Auto Financial Reports First Quarter 2009 Results
28 April 2009 - 8:00PM
Business Wire
State Auto Financial Corporation (NASDAQ: STFC) today reported a
first quarter 2009 net loss of $14.0 million, or $0.35 per diluted
share, versus net loss of $12.5 million, or $0.31 per diluted
share, for the first quarter of 2008. Net loss from operations* per
diluted share for the first quarter 2009 was $0.18, versus net loss
of $0.28 for the same 2008 period.
STFC�s GAAP combined ratio for the quarter was 112.0 versus
111.3 for the first quarter of 2008. Catastrophe losses accounted
for 15.3 points of the total 78.6 loss ratio points, or $43.8
million, during the first quarter this year, compared to 12.5
points of the total 76.8 loss ratio points, or $35.0 million, for
the same period in 2008. Net written premium for the quarter
increased 5.7% over the same period in 2008. STFC�s book value was
$19.21 per share as of March 31, 2009, a decrease of $0.02 per
share from STFC�s book value on December 31, 2008. Return on
stockholders� equity for the twelve months ended March 31, 2009 was
negative 4.0% compared to positive 8.7% for the twelve months ended
March 31, 2008.
�The unusual run of catastrophic storms continued for State Auto
into 2009, producing unprecedented first quarter losses. As
reported earlier, most of the damage was done by ice and wind
storms that hit in late January and early February,� said STFC
Chairman, President and CEO Bob Restrepo.
�STFC�s production for the quarter was strong. Overall net
written premium grew 5.7%, driven by standard private passenger
auto which grew 14.2%. Our new products and advanced technology
have strengthened our position with our independent agency partners
and allowed us to take advantage of increased consumer shopping.
Growth is also driven by our entry into and development of new
states via expansion and acquisition.
�We are pleased with the non-CAT underwriting results in our
core book. STFC�s loss ratios are on plan in this highly
competitive market. In particular our business insurance results
were profitable despite a significant large fire loss in the
Columbus area. We are taking actions to further mitigate the impact
of catastrophe losses, including the adoption of an aggregate
reinsurance treaty, pricing and deductible changes for wind and
hail coverage, and the development of agency management practices
that address geographic concentrations,� added Restrepo.
State Auto Financial Corporation, headquartered in Columbus,
Ohio, is a super regional property and casualty insurance holding
company. The company markets its personal and business insurance
products exclusively through independent insurance agencies in 33
states and is proud to be a Trusted Choice� company partner. STFC
stock is traded on the NASDAQ Global Select Market, which
represents the top third of all NASDAQ listed companies.
The insurance subsidiaries of State Auto Financial Corporation
are part of the State Auto Group. The State Auto Group�is rated A+
(Superior) by the A.M. Best Company and�consists of State
Automobile Mutual, State Auto Property & Casualty, State Auto
National, State Auto Ohio, State Auto Wisconsin, State Auto
Florida, Milbank, Farmers Casualty, Meridian Security, Meridian
Citizens Mutual, Beacon National, Beacon Lloyds, Patrons Mutual and
Litchfield Mutual Fire. Additional information on State Auto
Financial Corporation�can be found online at www.StateAuto.com.
*Net income (loss) from operations, a non-GAAP financial measure
which management believes is informative to Company management and
investors, differs from GAAP net income (loss) only by the
exclusion of realized capital gains and (losses), net of applicable
taxes, on investment activity for the periods being reported. For
STFC, this amounted to ($0.17) per diluted share for the first
quarter 2009 versus ($0.03) for the same 2008 period.
STFC has scheduled a conference call with interested investors
for Tuesday, April 28, 10:00 a.m. Eastern time to discuss the
company�s first quarter 2009 performance. Live and archived
broadcasts of the call can be accessed on www.StateAuto.com. A
replay of the call can be heard beginning at noon, April 28, by
calling 1- 888-566-0689. Supplemental schedules detailing the
company�s first quarter 2009 financial, sales and underwriting
results are made available on www.StateAuto.com prior to the
conference call.
This news release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are based on the current
assumptions, expectations and projections of State Auto Financial
Corporation�s (the �Company�) management about future events.
Although we believe these statements are based on reasonable
assumptions, the Company can give no assurance that they will prove
to be correct. Numerous factors, including those related to market
conditions and those detailed in the Company�s filings with the
Securities and Exchange Commission, may cause actual results of the
Company to differ materially from those anticipated in these
forward-looking statements. Many of the factors that will determine
the Company�s future results are beyond the control to predict.
These forward-looking statements are subject to these risks and
uncertainties and, therefore, actual results may differ materially.
The Company undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (unaudited) � � Three
Months Ended March 31 (In millions, except per share amounts)
2009 2008 � Net premiums written $ 287.1
� $ 325.2 � (B) � Earned premiums 286.0 279.2 Net investment income
18.3 22.4 Net realized loss on investments (11.3 ) (1.8 ) Other
income � 1.0 � � 1.2 � Total revenue � 294.0 � � 301.0 � � Loss
before federal income taxes (30.9 ) (15.0 ) � Federal income tax
benefit � (16.9 ) � (2.5 ) Net loss $ (14.0 ) $ (12.5 ) � Loss per
share: - basic $ (0.35 ) $ (0.31 ) - diluted $ (0.35 ) $ (0.31 ) �
Loss per share from operations (A): - basic $ (0.18 ) $ (0.28 ) -
diluted $ (0.18 ) $ (0.28 ) � Weighted average shares outstanding:
- basic 39.6 40.3 - diluted 39.6 40.3 � Book value per share $
19.21 $ 22.18 � Dividends paid per share $ 0.15 $ 0.15 � Total
shares outstanding 39.6 39.8 � GAAP ratios: Loss and LAE ratio 78.6
76.8 Expense ratio � 33.4 � � 34.5 � Combined ratio � 112.0 � �
111.3 � � Reconciliation of non-GAAP financial measure: (A) Net
loss from operations: Net loss $ (14.0 ) $ (12.5 ) Less net
realized losses on investments, less applicable federal income
taxes � (6.8 ) � (1.2 ) Net loss from operations $ (7.2 ) $ (11.3 )
�
(B)
�
Net premiums written for the three
months ended March 31, 2008, includes $53.6 million of unearned
premiums transferred to STFC in connection with the addition of The
Patrons Group, Beacon National and SAMMI to the State Auto Pool,
effective January 1, 2008.
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