ALFA CORPORATION REPORTS FIRST QUARTER 2006 RESULTS
MONTGOMERY, Ala. -- Alfa Corporation announced April 25 financial results for the three months ended March 31, 2006.
Operating income for the quarter was $20,055,079, or $0.25 per diluted share, compared with operating income of $20,844,146, or $0.26 per diluted share for the first quarter of 2005, a decrease of 4.3 percent on a per share basis. Net income, which includes net realized investment gains, was $20,137,442, or $0.25 per diluted share, for the first quarter of 2006, compared with $21,570,344, or $0.27 per diluted share in 2005, a per share decrease of 7.2 percent. Premiums and policy charges for the first quarter of 2006 increased 10.3% to $168,994,463.
As previously announced, Alfa's results for the first quarter of 2006 were affected by losses from a series of thunderstorms that struck Alabama. These thunderstorms produced wind and hail, which caused damage to both automobiles and homes, generating claims of more than $15.2 million for the Alfa Group. The impact of these claims on Alfa Corporation's first quarter earnings, after reinsurance and taxes, was $0.08 per diluted share compared with storm losses of $0.09 per diluted share in the first quarter of 2005 from the same of type weather-related events.
In addition, Alfa Corporation adopted the requirements of FASB Statement No. 123R, Accounting For Stock-Based Payments, in the first quarter using a modified version of the prospective application. This Statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. Under the prospective method, share-based compensation of $1,190,000, or $0.01 per diluted share, was recognized in the first quarter of 2006. Prior to adoption, share-based compensation was recognized when options were exercised.
Alfa's Chairman, President and Chief Executive Officer, Jerry A. Newby, said, "We had solid performance in the first quarter despite challenges resulting from thunderstorms that occurred in January and March. These losses were somewhat offset by an outstanding core loss ratio of 55.6%. We continue to experience good top-line growth as a result of strong increases in premium from Alfa Vision Insurance together with steady growth in our core states. We believe these results have laid a good foundation for the remainder of 2006."
Alfa Corporation hosted a conference call on April 26. A 30-day Internet replay of the call will be available from Alfa's web site at www.alfains.com.
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.
The associated investor supplement package for the first quarter ended March 31, 2006, may be found by clicking on the web cast link in the "Invest in Alfa" section of Alfa's web site and is also available at: http://www.irinfo.com/alfa/1q06fss.pdf.
Click here for the 1st quarter news release including financial tables