AUSTIN, Texas, May 11, 2020 /PRNewswire/ -- Ross R. Moody,
Chairman of the Board, President, and Chief Executive Officer of
National Western Life Group, Inc. (Nasdaq: NWLI), announced today a
first quarter 2020 consolidated net loss of $2.1 million, or $0.58 per diluted Class A common share, compared
with consolidated net earnings of $40.2
million, or $11.37 per diluted
Class A common share, for the first quarter of 2019. The Company's
book value per share as of March 31,
2020 was $558.43.
Total revenues decreased in the first quarter of 2020 to
$52.5 million from $217.9 million in the first quarter of 2019
reflecting net investment losses incurred during the current
period. Net investment losses were the result of $138.1 million in unrealized losses for market
value changes on unexpired investment options which are purchased
to hedge the equity indexing obligation on the Company's fixed
indexed policies, a $6.0 million
decrease in the fair value of equity securities, and $3.4 million in credit losses driven by the
application of the new Current Expected Credit Losses accounting
standard. Commenting on the activity Mr. Moody indicated, "The
COVID-19 pandemic has introduced a great deal of financial
uncertainty and economic disruption which was evidenced by the
level of unrealized adjustments to investments we report at fair
market value. Somewhat hidden behind this data is positive news as
our life insurance sales increased 35% in the first quarter over
last year and annuity sales increased 23%."
Pretax earnings decreased $53.6
million in the quarter ended March
31, 2020 from the amount reported in the first quarter of
2019. This amount includes a shift of $53.9
million associated with liability accounting for fixed
indexed policy obligations. Mr. Moody commented on the charge
saying, "Embedded derivative accounting can produce dramatic swings
when equity markets are severely disrupted and volatility spikes.
Fortunately, we entered 2020 well-positioned in terms of liquidity,
with strong capital ratios and a solid balance sheet."
National Western Life Group, Inc. is the parent organization of
National Western Life Insurance Company, which is the parent
organization of Ozark National Life Insurance Company, both stock
life insurance companies in aggregate offering a broad portfolio of
individual universal life, whole life and term insurance plans, as
well as annuity products. At March 31,
2020, the Company maintained consolidated total assets of
$12.3 billion, consolidated
stockholders' equity of $2.0 billion,
and combined life insurance inforce of $22.9
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 Financial Results (Unaudited)
|
(In thousands
except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
2020
|
|
2019
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Revenues, excluding
investment and index option
|
$
|
155,632
|
|
|
171,277
|
|
|
|
|
|
gains
(losses)
|
|
|
|
|
|
|
|
|
Realized and
unrealized gains (losses) on index options
|
|
(106,629)
|
|
|
42,003
|
|
|
|
|
|
Realized gains
(losses) on investments
|
|
3,485
|
|
|
4,629
|
|
|
|
|
|
Total
revenues
|
|
52,488
|
|
|
217,909
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and
expenses:
|
|
|
|
|
|
|
|
|
Life and other policy
benefits
|
|
33,634
|
|
|
28,189
|
|
|
|
|
|
Amortization of
deferred acquisition costs and
|
|
|
|
|
|
|
|
|
value of business
acquired
|
|
30,037
|
|
|
32,164
|
|
|
|
|
|
Universal life and
annuity contract interest
|
|
(28,026)
|
|
|
80,916
|
|
|
|
|
|
Other operating
expenses
|
|
19,822
|
|
|
26,049
|
|
|
|
|
|
Total benefits and
expenses
|
|
55,467
|
|
|
167,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before income taxes
|
|
(2,979)
|
|
|
50,591
|
|
|
|
|
|
Income tax
expense
|
|
(917)
|
|
|
10,393
|
|
|
|
|
|
Net earnings
(loss)
|
$
|
(2,062)
|
|
|
40,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
attributable to Class A shares
|
$
|
(2,004)
|
|
|
39,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
(Loss) Per Class A Share
|
$
|
(0.58)
|
|
|
11.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Weighted
Average Class A Shares
|
|
3,436
|
|
|
3,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December
31,
|
|
|
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Book value per
share
|
|
|
|
|
$
|
558.43
|
|
|
585.32
|
|
Less: Per share
impact of accumulated other comprehensive income (loss)
|
|
(5.71)
|
|
|
16.53
|
|
Book value per share,
excluding accumulated other comprehensive income (loss)
*
|
$
|
564.14
|
|
|
568.79
|
|
|
|
*
|
Book value per share
excluding accumulated other comprehensive income (loss) is a
non-GAAP financial measure. Accumulated other comprehensive income
(loss) totaled $(20.8) million at March 31, 2020 and $60.1 million
at December 31, 2019. Since accumulated other comprehensive income
(loss) fluctuates from quarter to quarter due to unrealized changes
in the fair value of investments caused primarily by changes in
market interest rates, National Western Life Group, Inc. believes
this financial measure provides useful supplemental
information.
|
Investor Relations Contact:
Brian M. Pribyl - Senior Vice President, Chief
Financial Officer and Treasurer
(512) 836-1010
bpribyl@nationalwesternlife.com
www.nwlgi.com
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SOURCE National Western Life Group, Inc.