AUSTIN, Texas, May 8, 2015 /PRNewswire/ -- Ross R. Moody,
President of National Western Life Insurance Company (Nasdaq:
NWLI), announced today first quarter 2015 consolidated net earnings
of $21.3 million, or $6.03 per diluted Class A common share, compared
with consolidated net earnings of $19.8
million, or $5.61 per diluted
Class A common share, for the first quarter of 2014. The Company's
book value per share increased to $436.35 as of March 31,
2015 from $428.01 at
December 31, 2014.
Total revenues for the quarter ended March 31, 2015, declined to $147.9 million from $158.0
million in the first quarter of 2014 principally due to
lower market value adjustments on purchased call options used to
hedge the interest crediting mechanism on the Company's
equity-index life and annuity products. Mr. Moody noted, "Generally
accepted accounting principles require that we value our open
option contracts at current market rates which create fluctuations
in our top line revenue figures. With over 90% of our first quarter
annuity sales and more than 80% of our life sales during the same
time frame coming from equity-index products, we have a substantial
portion of our business which we are hedging with purchased call
options. Consequently, marking the open option contracts to market
value each period is prone to swings. Our core insurance revenues,
namely net investment income and cost of insurance and
administrative fee income, showed solid growth in the first
quarter."
The Company reported earnings from operations, excluding net
realized gains and losses on investments, of $20.7 million for the quarter ended March 31, 2015, or $5.85 per diluted Class A common share, compared
to $18.8 million, or $5.33 per diluted Class A common share, in the
same period for 2014. Mr. Moody commented on the earnings results
saying, "Industry leaders readily acknowledge that the low interest
rate environment presents one of the most significant current
challenges for life insurers because of the potential for
compression on interest rate margins. Since National Western's
business is heavily weighted toward equity-index products, our
exposure to pressure on interest rate spread margins is mitigated
somewhat due to the interest crediting aspect of our products being
shifted to indexed returns which are hedged with call options. With
the challenge of managing portfolio investment yield levels
relative to interest crediting rates balanced with managing the
equity-index products, we are in a better position to manage to our
profit targets."
Founded in 1956, National Western Life is a stock life insurance
company offering a broad portfolio of individual universal life,
whole life and term insurance plans, annuity products, and
investment contracts meeting the financial needs of its customers
in 49 states as well as residents of various countries in Central
and South America, the
Caribbean, Eastern Europe, Asia, and the Pacific Rim. The Company has 265 employees and
approximately 20,760 contracted independent agents, brokers, and
consultants, and at March 31, 2015,
maintained total assets of $11.5
billion, stockholders' equity of $1.6
billion, and life insurance in force of $23.1 billion.
Caution Regarding Forward-Looking Statements:
This press release contains statements which are or may be viewed
as forward-looking within the meaning of The Private Securities
Litigation Reform Act of 2005. Forward-looking statements relate to
future operations, strategies, financial results or other
developments, and are subject to assumptions, risks, and
uncertainties. Factors that may cause actual results to differ
materially from those contemplated in these forward-looking
statements can be found in the Company's Form 10-K filed with the
Securities and Exchange Commission. Forward-looking statements
speak only as of the date the statement was made and the Company
undertakes no obligation to update such forward-looking statements.
There can be no assurance that other factors not currently
anticipated by the Company will not materially and adversely affect
our results of operations. Investors are cautioned not to place
undue reliance on any forward-looking statements made by us or on
our behalf.
Summary of
Consolidated Operating Results (Unaudited)
|
(In thousands
except per share data)
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
Revenues, excluding
investment and index option gains (losses)
|
155,198
|
|
|
155,942
|
|
|
|
|
|
|
|
Realized and
unrealized gains (losses) on index options
|
(8,287)
|
|
|
548
|
|
Realized gains on
investments
|
979
|
|
|
1,513
|
|
Total
revenues
|
147,890
|
|
|
158,003
|
|
|
|
|
|
Earnings:
|
|
|
|
Earnings from
operations
|
20,690
|
|
|
18,842
|
|
Net realized gains on
investments
|
636
|
|
|
984
|
|
Net
earnings
|
21,326
|
|
|
19,826
|
|
|
|
|
|
Net earnings
attributable to Class A shares
|
20,723
|
|
|
19,265
|
|
|
|
|
|
Basic Earnings
Per Class A Share:
|
|
|
|
Earnings from
operations
|
5.85
|
|
|
5.33
|
|
Net realized gains on
investments
|
0.18
|
|
|
0.28
|
|
Net
earnings
|
6.03
|
|
|
5.61
|
|
|
|
|
|
Basic Weighted
Average Class A Shares
|
3,436
|
|
|
3,435
|
|
|
|
|
|
Diluted
Earnings Per Class A Share:
|
|
|
|
Earnings from
operations
|
5.85
|
|
|
5.33
|
|
Net realized gains on
investments
|
0.18
|
|
|
0.28
|
|
Net
earnings
|
6.03
|
|
|
5.61
|
|
|
|
|
|
Diluted Weighted
Average Class A Shares
|
3,438
|
|
|
3,437
|
|
Investor Relations Contact:
Brian M. Pribyl - Senior Vice
President, Chief Financial Officer and Treasurer
(512) 836-1010
bpribyl@nationalwesternlife.com
www.nationalwesternlife.com
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SOURCE National Western Life Insurance Company