American National Announces Fourth Quarter and Full Year 2019 Results
February 26 2020 - 3:13PM
American National Insurance Company (NASDAQ: ANAT) announced that
net income for the fourth quarter of 2019 increased to $171.1
million or $6.37 per diluted share, compared to a net loss of
$117.4 million or $4.37 per diluted share for the same period in
2018. The increase in net income for the fourth quarter of 2019 was
to a large extent attributable to an after-tax net gain on equity
securities of $111.0 million or $4.13 per diluted share due to
favorable equity market conditions during this period. In
comparison, unfavorable equity market returns during the fourth
quarter of 2018 produced an after-tax net loss of $203.6 million or
$7.57 per diluted share in that period. In addition, net income for
the fourth quarter of 2019 also included after-tax net realized
investment earnings of $5.5 million or $0.21 per diluted share
compared to $11.9 million or $0.44 per diluted share for the same
period in 2018.
Net income for the twelve months ended December 31, 2019 was
$620.4 million or $23.07 per diluted share, up from $159.0 million
or $5.91 per diluted share for the same period in 2018. Net income
for the twelve months ended December 31, 2019 included an after-tax
net gain on equity securities of $333.8 million or $12.41 per
diluted share compared to an after-tax net loss on equity
securities of $84.7 million or $3.15 per diluted share for the same
period in 2018. In addition, net income for the twelve months ended
December 31, 2019 also included after-tax net realized investment
earnings of $94.7 million or $3.52 per diluted share compared to
$28.8 million or $1.07 per diluted share for the same period in
2018. The increase in after-tax net realized investment earnings
was primarily due to the sale of real estate investments in joint
ventures.
After-tax adjusted net operating income for the fourth quarter
of 2019 was $54.6 million or $2.03 per diluted share compared to
$74.3 million or $2.76 per diluted share for the same period in
2018. Our annuity, property and casualty, and health segments each
generated more after-tax net operating income in the fourth quarter
of 2019 compared to 2018, however, net operating income from our
life segment in the fourth quarter of 2019 was negatively impacted
by increases in reserves for our participating business and was
lower than after-tax adjusted net operating income for this segment
in the fourth quarter of 2018.
After-tax adjusted net operating income for the twelve months
ended December 31, 2019 was $191.9 million or $7.14 per diluted
share compared to $214.9 million or $7.99 per diluted share for the
same period in 2018. In 2018 due to various tax planning
initiatives, including a significant contribution to our pension
plan, we achieved an effective tax rate of 0.8% and for 2019 our
effective tax rate was 20.5%. This was a large contributor to the
decline in after-tax adjusted net operating income in 2019 compared
to 2018. In addition, a significant increase in net operating
income from our property and casualty segment during 2019 was more
than offset by lower net operating income from our other segments,
primarily our life segment. Our life segment earnings decreased in
2019 as a result of the aforementioned increase in liabilities
related to our participating business. Net operating income from
our annuity segment was also lower in 2019 primarily as a result of
spread compression and higher than expected fixed annuity
surrenders that resulted in increased DAC amortization for the
year.
A reconciliation of adjusted net operating income, a non-GAAP
measure, to GAAP net income is included in the table below.
Additional Highlights Summary:
- Total life insurance in force increased by $7.8 billion to
$118.1 billion since December 31, 2018
- Book value per diluted share as of December 31, 2019 increased
to $222.74, compared to book value per share of $195.32 on December
31, 2018
American National Consolidated Financial
Highlights |
|
(Preliminary & Unaudited in millions, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended December 31, |
|
Years Ended December 31, |
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
Net income (loss) (GAAP basis) |
|
$ |
171.1 |
|
|
$ |
(117.4 |
) |
|
$ |
620.4 |
|
|
$ |
159.0 |
|
|
Adjustments to eliminate the
impact of: |
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) on equity securities |
|
$ |
92.6 |
|
|
$ |
(201.4 |
) |
|
$ |
296.6 |
|
|
$ |
(86.3 |
) |
|
Net gains (losses) on equity securities sold |
|
18.4 |
|
|
(2.2 |
) |
|
37.2 |
|
|
1.6 |
|
|
Net gains (losses) on equity securities |
|
$ |
111.0 |
|
|
$ |
(203.6 |
) |
|
$ |
333.8 |
|
|
$ |
(84.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net realized investment earnings |
|
$ |
5.5 |
|
|
$ |
11.9 |
|
|
$ |
94.7 |
|
|
$ |
28.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net operating
income(1) (non-GAAP basis)* |
|
$ |
54.6 |
|
|
$ |
74.3 |
|
|
$ |
191.9 |
|
|
$ |
214.9 |
|
|
|
|
|
|
|
|
|
|
|
|
Per diluted share |
|
|
|
|
|
|
|
|
|
Net income (loss) (GAAP
basis) |
|
$ |
6.37 |
|
|
$ |
(4.37 |
) |
|
$ |
23.07 |
|
|
$ |
5.91 |
|
|
Net gains (losses) on equity securities |
|
4.13 |
|
|
(7.57 |
) |
|
12.41 |
|
|
(3.15 |
) |
|
Net realized investment earnings |
|
0.21 |
|
|
0.44 |
|
|
3.52 |
|
|
1.07 |
|
|
Adjusted net operating
income(1) (non-GAAP basis)* |
|
$ |
2.03 |
|
|
$ |
2.76 |
|
|
$ |
7.14 |
|
|
$ |
7.99 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
diluted shares upon which computations are based |
|
26,890,369 |
|
|
26,893,823 |
|
|
26,891,243 |
|
|
26,916,643 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
|
|
|
|
December 31,2019 |
|
December 31,2018 |
|
|
|
Book value per diluted
share |
|
|
|
$ |
222.74 |
|
|
$ |
195.32 |
|
|
|
|
* This measure is non-GAAP because it is not based on accounting
principles generally accepted in the United States. This non-GAAP
measure is used by the Company to enhance comparability between
periods and to eliminate the impact of certain items listed in the
footnote below, which can fluctuate in a manner unrelated to core
operations due to factors such as market volatility, interest rate
changes and credit risk. In the opinion of the Company’s
management, inclusion of this non-GAAP measure is meaningful to
provide an understanding of the significant factors that comprise
the Company’s periodic results of operations and financial
condition.
(1) Adjusted net operating income excludes the after-tax
impact of net gains (losses), both realized and unrealized, on
equity securities and net realized investment earnings. Realized
investment earnings are comprised of realized investment gains
(losses) on assets excluding equity securities, as well as earnings
(losses) from our equity in unconsolidated affiliates and
non-controlling interests.
American National is a family of companies that has, on a
consolidated GAAP basis, $28.6 billion in assets, $22.6 billion in
liabilities and $6.0 billion in stockholders’ equity. American
National, founded in 1905 and headquartered in Galveston, Texas,
and its subsidiaries offer a broad portfolio of products and
services, which include life insurance, annuities, property and
casualty insurance, health insurance, credit insurance, and pension
products. The American National companies operate in all 50 states.
Major insurance subsidiaries include American National Life
Insurance Company of Texas, American National Life Insurance
Company of New York, American National Property and Casualty
Company, Garden State Life Insurance Company, Standard Life and
Accident Insurance Company, Farm Family Casualty Insurance Company
and United Farm Family Insurance Company.
American National Insurance Company, the parent company, has
been assigned an ‘A’ rating by A.M. Best Company and an ‘A’ rating
by Standard & Poor’s, both of which are nationally recognized
rating agencies, and is licensed to conduct the business of
insurance in all states except New York.
For more information, including company news and investor
relations information, visit the company’s web site at
www.AmericanNational.com.
Contact: Timothy A. Walsh (409) 766-6553
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