ALFA CORPORATION REPORTS SECOND QUARTER RESULTS
MONTGOMERY, Ala.-- Alfa Corporation (Nasdaq/NM:ALFA) today announced financial results for the second quarter and six months ended June 30, 2003. Operating income for the second quarter was $17,132,576, or $0.21 per diluted share, compared with operating income of $15,334,180, or $0.19 per diluted share for the second quarter of 2002, an increase of 10.9% on a per share basis.
Management believes that operating income and operating income per share, non-GAAP financial measures, serve as meaningful tools for assessing the profitability of the Company's ongoing operations. Operating income is defined by the Company as net income excluding realized investment gains and losses, net of applicable taxes.
Operating income per share represents operating income divided by the weighted average shares outstanding for the reporting period. Management uses operating income and operating income per share as measures of the Company's ongoing profitability since they eliminate the effect of securities market volatility from earnings. Second quarter 2003 results were reduced by approximately $5.1 million, after tax, or $0.06 per diluted share, due to previously reported storm losses.
Net income, which includes net realized investment gains, was $19,187,821, or $0.24 per diluted share for the second quarter of 2003, compared with net income of $15,531,340, or $0.20 per diluted share for the same period in 2002, a per share increase of 22.6%. Premiums and policy charges for the second quarter of 2003 increased 6.8% to $129,845,410.
For the six months ended June 30, 2003, operating income was $37,029,545 compared with operating income of $33,213,279 for the first half of 2002. On a per share basis, operating income increased 10.6% to $0.46 per diluted share for the six-month period in 2003 compared with $0.42 per diluted share for the similar period in 2002.
Net income, which includes net realized investment gains, was $37,917,449, or $0.47 per diluted share for the first six months of 2003, compared with net income of $33,999,486, or $0.43 per diluted share for the same period in 2002, a per share increase of 10.6%. Premiums and policy charges for the first half of 2003 increased 7.4% to $259,032,749.
Alfa's Chairman, President and Chief Executive Officer, Jerry A. Newby, said, "Alfa Corporation had a solid performance despite an increase in the frequency of storm losses in the second quarter. Our core business continues to perform very well. We are also encouraged by the growth in our book value, increasing to over $600 million for the first time in our company's history. This represents a 7.5% growth rate for the first half of 2003. Our goal is to build on these results as a foundation for another successful year."
Alfa Corporation will host a conference call today at 10:30 a.m. Eastern time. Investors and other interested parties may access the teleconference by calling 800-289-0730, or via links located on Alfa's web site: www.alfains.com. A 30-day Internet play of the call will also be available from Alfa's web site.
Alfa Corporation is engaged in insurance and financial activities through its subsidiaries. The common stock of Alfa Corporation is traded on the Nasdaq Stock Market's National Market under the symbol ALFA.
Investors are cautioned that statements in this press release which relate to the future are, by their nature, uncertain and dependent upon numerous contingencies - including political, economic, regulatory, climatic, competitive, legal, and technological - any of which could cause actual results and events to differ materially from those indicated in such forward-looking statements. Additional information regarding these and other risk factors and uncertainties may be found in Alfa Corporation's filings with the Securities and Exchange Commission.
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