CHICAGO, Dec. 21, 2017 /PRNewswire/ -- Old Republic
International Corporation (NYSE: ORI) today announced notable
transactions and events affecting its financial statements for the
fourth quarter and year ending on December
31, 2017.
Revenue-wise Old Republic will report net realized investment
gains of approximately $150 million
in this year's final quarter. The fourth quarter gains, which are
substantially higher than gains realized in comparable periods in
recent years, stem from managed sales of investment portfolio
securities whose values had risen to higher than expected levels
over the course of 2017's strong securities market. In last year's
fourth quarter, net realized gains amounted to $14.7 million. For the year as a whole net
realized gains were $72.8 million in
2016, and for all of 2017 they will total approximately
$210 million. The net-of-tax proceeds
from gross securities sales of approximately $465 million in this year's final quarter have
been re-invested in common stocks expected to return moderately
higher dividend income than the securities that were sold.
Expense-wise the Company will record additional pre-tax income
statement charges of approximately $45
million in the final quarter of this year. Of this amount
$35 million is composed of: (a)
estimates of annual awards under the Company's Key Employee
Performance Recognition Plan (KEPRP), and (b) estimates of
additional awards resulting from satisfaction in 2017 of pre-set,
five-year underwriting/service income performance objectives by
ORI's Title and several General Insurance operating units. The
balance ($10 million) of the
$45 million charge stems from a
periodic review and resulting update of previously established
estimates of future interest rates, mortality, and persistency
applicable to largely inactive life insurance products.
In another development in December, the North Carolina
Department of Insurance issued a final order terminating its
supervision of ORI's mortgage guaranty insurance subsidiaries
chartered in that state. This favorable regulatory action, when
coupled with the subsidiaries' good name and trustworthiness in
meeting their obligations in good and bad times alike, augurs well
for Old Republic's ability to advance on strategic alternatives for
this business.
At its most recent December meeting the Board of Directors
reviewed these and other developments in Old Republic's
consolidated business. The Directors also evaluated the overall
level and liquidity of the Company's capitalization in support of
the sustainable, long-term growth of the enterprise. The Board
concluded that capital resources are sufficient to the task and
that a portion of them can now be returned to all shareholders in
the form of a special, one-time cash dividend. Based on these
considerations the Board of Directors has today declared a special
cash dividend of $1.00 per common
share. This dividend will be paid on January
31, 2018 to all common shareholders of record on
January 10, 2018.
About Old Republic
Chicago-based Old Republic
International Corporation is one of the nation's 50 largest
publicly held insurance organizations. Its most recent financial
statements reflect consolidated assets of approximately
$19.74 billion and common
shareholders' equity of $4.73
billion, or $18.09 per share.
Its current stock market valuation is approximately $5.36 billion based on a recent closing price of
$20.80 per share.
The Company is organized as an insurance holding company whose
subsidiaries actively market, underwrite, and provide risk
management services for a wide variety of coverages mostly in the
general and title insurance fields. A long-term interest in
mortgage guaranty and consumer credit indemnity coverages has
devolved to a run-off operating mode in recent years.
The nature of Old Republic's business requires that it be
managed for the long run. For the 25 years ended in 2016, the
Company's total market return, with dividends reinvested, has grown
at a compounded annual rate of 10.0 percent per share. For the same
period, the total market return, with dividends reinvested, for the
S&P 500 Index has grown at a 9.2 percent annual compound rate.
During those years, Old Republic's shareholders' equity account,
inclusive of cash dividends, has risen at an average annual rate of
9.5 percent per share, and the regular cash dividend has grown at a
9.0 percent annual compound rate. According to the most recent
edition of Mergent's Dividend Achievers, Old Republic is one of
just 96 qualifying companies, out of thousands considered, that
have posted at least 25 consecutive years of annual dividend
growth.
For Old Republic's latest news releases and
other corporate documents:
Please visit us at
www.oldrepublic.com
Alternatively, please write or call:
Investor Relations
Old Republic International Corporation
307 North Michigan Avenue • Chicago, IL 60601
312-346-8100
Further
Information Contacts:
|
AT OLD
REPUBLIC:
|
|
|
|
AT FINANCIAL
RELATIONS BOARD:
|
A. C. Zucaro:
Chairman & CEO
|
|
|
|
Analysts/Investors:
Marilynn Meek
|
(312)
346-8100
|
|
|
|
(212)
827-3773
|
View original
content:http://www.prnewswire.com/news-releases/old-republic-reports-on-notable-financial-matters-and-events-for-the-final-quarter-of-2017-company-declares-special-one-time-cash-dividend-of-100-per-share-300574668.html
SOURCE Old Republic International Corporation