StanCorp Financial Group, Inc. (“StanCorp” or the “Company”) (NYSE:SFG) today reported net income of $55.2 million, or $1.28 per diluted share for the third quarter of 2015, compared to net income of $69.8 million, or $1.62 per diluted share for the third quarter of 2014. After-tax net capital losses were $3.9 million for the third quarter of 2015, compared to after-tax net capital losses of $3.0 million for the third quarter of 2014.
Operating expenses for the third quarter of 2015 reflected expenses associated with business growth and an additional $3.0 million of after-tax expenses, or $0.07 per diluted share, related to the proposed merger with Meiji Yasuda Life Insurance Company (“Meiji Yasuda”) (see Agreement and Plan of Merger with Meiji Yasuda section below).
Net income excluding after-tax merger related expenses and after-tax net capital losses was $1.44 per diluted share for the third quarter of 2015, compared to $1.69 per diluted share for the third quarter of 2014 (see discussion of non-GAAP financial measures below). The decrease was primarily due to comparatively less favorable claims experience in Employee Benefits, higher operating expenses and higher commissions and bonuses in Employee Benefits, partially offset by higher premiums in Employee Benefits and more favorable claims experience in Individual Disability for the third quarter of 2015.
“Our businesses continued to report excellent results through the first three quarters of 2015, which included increased sales and premium growth combined with favorable claims experience in Insurance Services, and strong earnings in our Asset Management segment,” said Greg Ness, chairman, president and chief executive officer.
Year-to-Date
Net income was $176.0 million, or $4.11 per diluted share for the first nine months of 2015, compared to $158.7 million, or $3.63 per diluted share for the first nine months of 2014. After-tax net capital losses were $9.6 million for the first nine months of 2015, compared to $3.4 million for the first nine months of 2014.
Operating expenses for the first nine months of 2015 reflected expenses associated with business growth and an additional $5.2 million of after-tax expenses, or $0.12 per diluted share, related to the proposed merger with Meiji Yasuda.
Net income excluding after-tax merger related expenses and after-tax net capital losses was $4.45 per diluted share for the first nine months of 2015, compared to $3.71 per diluted share for the first nine months of 2014. The increase was primarily due to more favorable claims experience and higher premiums in Employee Benefits and Individual Disability, partially offset by higher operating expenses and higher commissions and bonuses for the first nine months of 2015.
Agreement and Plan of Merger with Meiji Yasuda
On July 23, 2015, the Company and Meiji Yasuda announced that they have entered into a definitive agreement under which Meiji Yasuda will acquire all outstanding shares of StanCorp for $115.00 per share in cash (the “Merger Agreement”). The joint press release can be found on the Company’s investor relations website at www.stancorpfinancial.com.
The Company expects the merger to close in the first quarter of 2016. Completion of the merger remains subject to various closing conditions, including, but not limited to, approval by the Company’s shareholders, regulatory approvals in Japan and the U.S., and other customary closing conditions. On September 16, 2015, the waiting period under the Hart-Scott-Rodino Antitrust improvements Act of 1976, as amended, terminated, pursuant to a grant of early termination. On September 21, 2015, the Company filed a Definitive Proxy Statement with the Securities and Exchange Commission and provided notice of the special meeting of shareholders to be held on Monday, November 9, 2015. At the meeting, shareholders will vote upon a proposal to approve the Merger Agreement and other related matters.
Business Segments
Insurance Services
Insurance Services reported income before income taxes of $77.4 million for the third quarter of 2015, compared to $93.6 million for the third quarter of 2014. The decrease was primarily due to comparatively less favorable claims experience in Employee Benefits, higher operating expenses and higher commissions and bonuses in Employee Benefits, partially offset by higher premiums in Employee Benefits and more favorable claims experience in Individual Disability. The higher operating expenses and higher commissions and bonuses reflected higher premiums and sales in Employee Benefits.
Employee Benefits
Employee Benefits reported income before income taxes of $60.0 million for the third quarter of 2015, compared to $81.1 million for the third quarter of 2014. The decrease was primarily due to less favorable claims experience and higher commissions and bonuses, partially offset by higher premiums.
Employee Benefits premiums increased 7.1% to $486.2 million for the third quarter of 2015 from $453.9 million for the third quarter of 2014. The increase was primarily due to higher sales in the first nine months of 2015 and favorable retention of existing customers.
Employee Benefits annualized new sales were $67.6 million for the third quarter of 2015, compared to $52.8 million for the third quarter of 2014. The increase in sales for the third quarter of 2015 reflected an increase in proposal activity.
The benefit ratio for Employee Benefits, measured as benefits to policyholders and interest credited as a percentage of premiums, was 75.2% for the third quarter of 2015, compared to a historically low benefit ratio of 70.9% for the third quarter of 2014. The benefit ratio can fluctuate widely from quarter to quarter and tends to be more stable when measured on an annual basis. The benefit ratio for Employee Benefits was 76.7% for the first nine months of 2015, compared to 78.0% for the first nine months of 2014.
The Company’s discount rate used for newly established long term disability claim reserves was 4.00% for the third quarters of 2015 and 2014.
The Company’s new money investment rate was 4.49% for the third quarter of 2015, compared to 4.41% for the third quarter of 2014. The 12-month reserve interest margin between the Company’s new money investment rate and the average reserve discount rate was 49 basis points for the third quarter of 2015, compared to 56 basis points for the third quarter of 2014.
Individual Disability
Individual Disability reported income before income taxes of $17.4 million for the third quarter of 2015, compared to $12.5 million for the third quarter of 2014. The increase was primarily due to more favorable claims experience.
Individual Disability premiums were $51.5 million for the third quarter of 2015, compared to $50.3 million for the third quarter of 2014. The increase was primarily due to higher annualized new sales for the first nine months of 2015 and favorable retention of existing customers.
The benefit ratio for Individual Disability was 59.0% for the third quarter of 2015, compared to 67.8% for the third quarter of 2014. The benefit ratio can fluctuate widely on a quarterly basis and tends to be more stable when measured on an annual basis.
Asset Management
Asset Management reported income before income taxes of $19.0 million for the third quarter of 2015, compared to $20.8 million for the third quarter of 2014. The decrease was primarily due to reserve increases for the third quarter of 2015 reflecting an adjustment of $5.2 million related to changes in mortality and interest rate assumptions in individual annuities, partially offset by an increase in commercial mortgage loan prepayment fee revenues and bond call premiums. Commercial mortgage loan prepayment fee revenues and bond call premiums added $5.2 million of income before income taxes for the third quarter of 2015 compared to $2.7 million for the third quarter of 2014.
Assets under administration, which include assets related to retirement plans, individual fixed annuities and commercial mortgage loans managed for third-party investors, decreased 2.1% to $25.42 billion at September 30, 2015 from $25.97 billion at September 30, 2014, primarily reflecting the sale of the Company’s private client wealth management business, which included assets under administration of approximately $850 million.
Commercial mortgage loan originations increased $78.9 million to $382.4 million for the third quarter of 2015 from $303.5 million for the third quarter of 2014 due to increased activity in the commercial real estate market for loans that met the Company’s underwriting standards.
Other
The Other category includes the return on capital not allocated to the product segments, holding company expenses, operations of certain unallocated subsidiaries, interest on debt, unallocated expenses, net capital gains and losses primarily related to the disposition or impairment of the Company’s invested assets and adjustments made in consolidation.
The Other category reported a loss before income taxes of $15.4 million for the third quarter of 2015, compared to a loss before income taxes of $11.5 million for the third quarter of 2014. Net capital losses were $6.2 million for the third quarter of 2015, compared to net capital losses of $4.7 million for the third quarter of 2014. The loss before income taxes excluding net capital losses was $9.2 million for the third quarter of 2015, compared to $6.8 million for the third quarter of 2014. The increase in the loss before income taxes excluding net capital losses, was primarily due to an increase in operating expenses related to the proposed merger with Meiji Yasuda.
Cash and Investments
At September 30, 2015, the Company’s total cash and investments consisted of 56.2% fixed maturity securities, 39.2% commercial mortgage loans, 2.3% cash and cash equivalents, and 2.3% real estate and other invested assets. The overall weighted-average credit rating of the fixed maturity securities portfolio was A- (Standard & Poor’s) at September 30, 2015.
At September 30, 2015, commercial mortgage loans in the Company’s investment portfolio totaled $5.55 billion on approximately 6,500 commercial mortgage loans. The average loan balance retained by the Company in the portfolio was approximately $0.8 million at September 30, 2015. Commercial mortgage loans more than 60 days delinquent were 0.06% and 0.19% of the portfolio balance at September 30, 2015 and 2014, respectively.
Book Value
The Company’s book value per share increased 1.0% to $53.66 at September 30, 2015 from $53.11 at September 30, 2014. Accumulated other comprehensive income (“AOCI”) decreased $152.0 million to $36.7 million at September 30, 2015 from $188.7 million at September 30, 2014, primarily due to a decrease in net unrealized gains in the Company’s fixed maturity securities portfolio as a result of an increase in market interest rates and adjustments recorded for the Company’s retirement plans in the fourth quarter of 2014. The Company’s book value per share excluding AOCI increased 8.5% to $52.79 at September 30, 2015 from $48.66 at September 30, 2014 (see discussion of non-GAAP financial measures below).
Capital Management
Share Repurchases
The Company did not repurchase shares in the third quarter of 2015 and does not anticipate further share repurchases pending completion of the merger with Meiji Yasuda.
Shareholder Dividend
As permitted by the Merger Agreement, on October 21, 2015 the Company announced that the Board of Directors declared an annual cash dividend of $1.40 per share, payable November 30, 2015 to shareholders of record at the close of business on November 10, 2015. The annual cash dividend of $1.40 per share represents a 7.7% increase over the dividend of $1.30 per share paid in 2014.
Available Capital
The Company’s available capital was approximately $640 million at September 30, 2015, compared to $590 million at June 30, 2015. The $50 million increase was primarily due to income from the Company’s statutory insurance subsidiaries, partially offset by allocations for expected annual shareholder dividends and interest for the third quarter of 2015. Available capital includes capital at its statutory insurance subsidiaries in excess of the Company’s target risk-based capital (“RBC”) ratio of 300% and cash and capital at the holding company and non-insurance subsidiaries. The RBC ratio was approximately 440% at September 30, 2015.
Non-GAAP Financial Measures
Financial measures that exclude after-tax merger related expenses, after-tax net capital gains and losses and AOCI are non-GAAP (“Generally Accepted Accounting Principles in the United States”) measures. To provide investors with a broader understanding of earnings, the Company provides net income per diluted share excluding after-tax merger related expenses and after-tax net capital gains and losses, along with the GAAP measure of net income per diluted share, because merger related expenses and capital gains and losses are not likely to occur in a stable pattern.
Net income return on average equity excluding after-tax merger related expenses and after-tax net capital gains and losses from net income and AOCI from equity is furnished along with the GAAP measure of net income return on average equity because management believes providing both measures gives investors a broader understanding of net income return on average equity. Measuring net income return on average equity without AOCI excludes the effect of market value fluctuations of the Company’s fixed maturity securities associated with changes in interest rates and other market data. Management believes that measuring net income return on average equity without AOCI is important to investors because the turnover of the Company’s portfolio of fixed maturity securities may not be such that unrealized gains and losses reflected in AOCI are ultimately realized. Furthermore, management believes exclusion of AOCI provides investors with a better measure of return.
A reconciliation of non-GAAP financial measures to the comparable GAAP measures is provided in the table below, under “Unaudited Statistical and Operating Data at or for the Periods Indicated.”
About StanCorp Financial Group, Inc.
StanCorp Financial Group, Inc., through its subsidiaries marketed as The Standard — Standard Insurance Company, The Standard Life Insurance Company of New York, Standard Retirement Services, StanCorp Mortgage Investors, StanCorp Investment Advisers, StanCorp Real Estate and StanCorp Equities — is a leading provider of financial products and services. StanCorp’s subsidiaries offer group and individual disability insurance, group life and accidental death and dismemberment insurance, group dental and group vision insurance, absence management services, retirement plans products and services, individual annuities, and the origination and servicing of fixed-rate commercial mortgage loans. For more information about StanCorp Financial Group, Inc., visit its investor relations website at www.stancorpfinancial.com.
Conference Call
In light of the Merger Agreement with Meiji Yasuda, the Company will not hold an investor and analyst conference call to review the third quarter 2015 results.
Forward-Looking Information
Some of the statements contained in this earnings release, including estimates, projections, expected operating results, statements related to business plans, strategies, objectives and the assumptions upon which those statements are based, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act. Forward-looking statements also include, without limitation, any statement that includes words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “seeks,” “will be,” “will continue,” “will likely result” and similar expressions that are predictive in nature or that depend on or refer to future events or conditions. The Company’s forward-looking statements are not guarantees of future performance and involve uncertainties that are difficult to predict. They involve risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. The risks and uncertainties are detailed in reports filed by StanCorp with the Securities and Exchange Commission, including Forms 10-Q and 10-K.
As a provider of financial products and services, the Company’s actual results of operations may vary significantly in response to economic trends, interest rates, investment performance, claims experience, operating expenses and pricing. Given these uncertainties or circumstances, investors are cautioned not to place undue reliance on forward-looking statements as a predictor of future results. The Company assumes no obligation to publicly update or revise any forward-looking statements including annual guidance, whether as a result of new information, future events or otherwise.
The following factors could cause the Company’s results to differ materially from management expectations suggested by forward-looking statements:
- Failure to timely complete the merger with Meiji Yasuda could adversely impact the Company’s stock price, business, financial condition and results of operations.
- The pendency of the merger and operating restrictions contained in the Merger Agreement could adversely affect the Company’s business and operations.
- Shareholder litigation against the Company, our directors and/or Meiji Yasuda could delay or prevent the merger and cause the Company to incur significant costs and expenses.
- Growth of sales, premiums, annuity deposits, cash flows, assets under administration including performance of equity investments in the separate account, gross profits and profitability.
- Availability of capital required to support business growth and the effective use of capital, including the ability to achieve financing through debt or equity.
- Changes in liquidity needs and the liquidity of assets in its investment portfolios, including the ability to pledge collateral as required.
- Performance of business acquired through reinsurance or acquisition.
- Changes in financial strength and credit ratings.
- Changes in the regulatory environment at the state or federal level.
- Changes in accounting standards, practices or policies.
- Findings in litigation or other legal proceedings.
- Intent and ability to hold investments consistent with its investment strategy.
- Receipt of dividends from, or contributions to, its subsidiaries.
- Adequacy of the diversification of risk by product offerings and customer industry, geography and size, including concentration of risk, especially inherent in group life products.
- Adequacy of asset-liability management.
- Events of terrorism, natural disasters or other catastrophic events, including losses from a disease pandemic.
- Benefit ratios, including changes in claims incidence, severity and recovery.
- Levels of customer persistency.
- Adequacy of reserves established for future policy benefits.
- The effect of changes in interest rates on reserves, policyholder funds, investment income, bond call premiums and commercial mortgage loan prepayment fees.
- Levels of employment and wage growth and the impact of rising benefit costs on employer budgets for employee benefits.
- Competition from other insurers and financial services companies, including the ability to competitively price its products.
- Ability of reinsurers to meet their obligations.
- Availability, adequacy and pricing of reinsurance and catastrophe reinsurance coverage and potential charges incurred.
- Achievement of anticipated levels of operating expenses.
- Adequacy of diversification of risk within its fixed maturity securities portfolio by industries, issuers and maturities.
- Adequacy of diversification of risk within its commercial mortgage loan portfolio by borrower, property type and geographic region.
- Credit quality of the holdings in its investment portfolios.
- The condition of the economy and expectations for interest rate changes.
- The effect of changing levels of bond call premiums, commercial mortgage loan prepayment fees and commercial mortgage loan participation levels on cash flows.
- Experience in delinquency rates or loss experience in its commercial mortgage loan portfolio.
- Adequacy of commercial mortgage loan loss allowance.
- Concentration of commercial mortgage loan assets collateralized in certain states such as California.
- Environmental liability exposure resulting from commercial mortgage loan and real estate investments.
| STANCORP FINANCIAL GROUP, INC. | |||||||||||||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||||
| (Dollars in millions—except per share data) | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
| Revenues: | |||||||||||||||||||||
| Premiums: | |||||||||||||||||||||
| Insurance Services | $ | 537.7 | $ | 504.2 | $ | 1,605.9 | $ | 1,527.9 | |||||||||||||
| Asset Management | 0.8 | 3.1 | 7.3 | 8.7 | |||||||||||||||||
| Total premiums | 538.5 | 507.3 | 1,613.2 | 1,536.6 | |||||||||||||||||
| Administrative fees: | |||||||||||||||||||||
| Insurance Services | 4.3 | 3.8 | 12.5 | 12.3 | |||||||||||||||||
| Asset Management | 33.3 | 33.9 | 100.8 | 99.2 | |||||||||||||||||
| Other | (5.1 | ) | (4.9 | ) | (15.0 | ) | (14.5 | ) | |||||||||||||
| Total administrative fees | 32.5 | 32.8 | 98.3 | 97.0 | |||||||||||||||||
| Net investment income: | |||||||||||||||||||||
| Insurance Services | 77.9 | 78.0 | 234.9 | 236.0 | |||||||||||||||||
| Asset Management | 69.8 | 69.4 | 216.0 | 211.1 | |||||||||||||||||
| Other | 6.0 | 5.2 | 15.4 | 14.2 | |||||||||||||||||
| Total net investment income | 153.7 | 152.6 | 466.3 | 461.3 | |||||||||||||||||
| Net capital losses: | |||||||||||||||||||||
Total other-than-temporary impairment losses on fixed maturity securities—available-for-sale | (2.9 | ) | (0.3 | ) | (4.5 | ) | (0.4 | ) | |||||||||||||
| All other net capital losses | (3.3 | ) | (4.4 | ) | (10.8 | ) | (4.9 | ) | |||||||||||||
| Total net capital losses | (6.2 | ) | (4.7 | ) | (15.3 | ) | (5.3 | ) | |||||||||||||
| Total revenues | 718.5 | 688.0 | 2,162.5 | 2,089.6 | |||||||||||||||||
| Benefits and expenses: | |||||||||||||||||||||
| Benefits to policyholders | 404.3 | 360.8 | 1,207.7 | 1,188.1 | |||||||||||||||||
| Interest credited | 35.4 | 38.7 | 117.4 | 122.8 | |||||||||||||||||
| Operating expenses | 127.0 | 119.9 | 377.1 | 348.3 | |||||||||||||||||
| Commissions and bonuses | 56.9 | 53.2 | 171.0 | 154.7 | |||||||||||||||||
| Premium taxes | 9.8 | 7.5 | 28.5 | 24.7 | |||||||||||||||||
| Interest expense | 7.8 | 7.8 | 23.3 | 24.1 | |||||||||||||||||
Net increase in deferred acquisition costs, value of business acquired and other intangible assets | (3.7 | ) | (2.8 | ) | (10.3 | ) | (2.0 | ) | |||||||||||||
| Total benefits and expenses | 637.5 | 585.1 | 1,914.7 | 1,860.7 | |||||||||||||||||
| Income (loss) before income taxes: | |||||||||||||||||||||
| Insurance Services | 77.4 | 93.6 | 227.0 | 197.4 | |||||||||||||||||
| Asset Management | 19.0 | 20.8 | 62.9 | 59.2 | |||||||||||||||||
| Other | (15.4 | ) | (11.5 | ) | (42.1 | ) | (27.7 | ) | |||||||||||||
| Total income before income taxes | 81.0 | 102.9 | 247.8 | 228.9 | |||||||||||||||||
| Income taxes | 25.8 | 33.1 | 71.8 | 70.2 | |||||||||||||||||
| Net income | $ | 55.2 | $ | 69.8 | $ | 176.0 | $ | 158.7 | |||||||||||||
| Net income per common share: | |||||||||||||||||||||
| Basic | $ | 1.30 | $ | 1.63 | $ | 4.17 | $ | 3.66 | |||||||||||||
| Diluted | 1.28 | 1.62 | 4.11 | 3.63 | |||||||||||||||||
| Weighted-average common shares outstanding: | |||||||||||||||||||||
| Basic | 42,322,478 | 42,777,337 | 42,234,656 | 43,324,269 | |||||||||||||||||
| Diluted | 43,050,050 | 43,184,170 | 42,867,985 | 43,736,832 | |||||||||||||||||
| STANCORP FINANCIAL GROUP, INC. | |||||||||
| UNAUDITED CONSOLIDATED BALANCE SHEETS | |||||||||
| (Dollars in millions) | |||||||||
| September 30, | December 31, | ||||||||
| 2015 | 2014 | ||||||||
ASSETS | |||||||||
| Investments: | |||||||||
| Fixed maturity securities—available-for-sale (amortized cost of $7,699.6 and $7,390.0) | $ | 7,953.2 | $ | 7,773.7 | |||||
| Commercial mortgage loans, net | 5,547.3 | 5,321.1 | |||||||
| Real estate, net | 25.4 | 37.0 | |||||||
| Other invested assets | 306.6 | 301.6 | |||||||
Total investments | 13,832.5 | 13,433.4 | |||||||
| Cash and cash equivalents | 330.3 | 251.1 | |||||||
| Premiums and other receivables | 141.9 | 118.4 | |||||||
| Accrued investment income | 110.4 | 108.0 | |||||||
| Amounts recoverable from reinsurers | 995.0 | 994.2 | |||||||
| Deferred acquisition costs, value of business acquired and other intangible assets, net | 387.7 | 381.0 | |||||||
| Goodwill | 36.0 | 36.0 | |||||||
| Property and equipment, net | 85.2 | 79.3 | |||||||
| Other assets | 166.0 | 129.4 | |||||||
| Separate account assets | 6,797.2 | 7,179.8 | |||||||
| Total assets | $ | 22,882.2 | $ | 22,710.6 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||
| Liabilities: | |||||||||
| Future policy benefits and claims | $ | 5,820.4 | $ | 5,832.3 | |||||
| Other policyholder funds | 6,905.5 | 6,537.8 | |||||||
| Deferred tax liabilities, net | 16.7 | 60.0 | |||||||
| Short-term debt | 1.2 | 1.1 | |||||||
| Long-term debt | 504.8 | 503.9 | |||||||
| Other liabilities | 564.4 | 440.1 | |||||||
| Separate account liabilities | 6,797.2 | 7,179.8 | |||||||
| Total liabilities | 20,610.2 | 20,555.0 | |||||||
| Commitments and contingencies | |||||||||
| Shareholders’ equity: | |||||||||
| Preferred stock, 100,000,000 shares authorized; none issued | --- | --- | |||||||
Common stock, no par, 300,000,000 shares authorized; 42,342,304 and 42,077,825 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | 23.3 | 5.3 | |||||||
| Accumulated other comprehensive income | 36.7 | 114.3 | |||||||
| Retained earnings | 2,212.0 | 2,036.0 | |||||||
| Total shareholders' equity | 2,272.0 | 2,155.6 | |||||||
| Total liabilities and shareholders’ equity | $ | 22,882.2 | $ | 22,710.6 | |||||
| STANCORP FINANCIAL GROUP, INC. | ||||||||||||||||||||||||
| UNAUDITED STATISTICAL AND OPERATING DATA | ||||||||||||||||||||||||
| AT OR FOR THE PERIODS INDICATED | ||||||||||||||||||||||||
| (Dollars in millions—except per share data) | ||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
| Benefit ratio: | ||||||||||||||||||||||||
| % of total revenues: | ||||||||||||||||||||||||
| Employee Benefits (including interest credited) | 65.9 | % | 61.6 | % | 67.2 | % | 67.7 | % | ||||||||||||||||
| Individual Disability | 46.8 | 53.8 | 38.6 | 52.8 | ||||||||||||||||||||
| % of total premiums: | ||||||||||||||||||||||||
| Employee Benefits (including interest credited) | 75.2 | % | 70.9 | % | 76.7 | % | 78.0 | % | ||||||||||||||||
| Individual Disability | 59.0 | 67.8 | 49.1 | 67.1 | ||||||||||||||||||||
| Reconciliation of non-GAAP financial measures: | ||||||||||||||||||||||||
| Net income | $ | 55.2 | $ | 69.8 | $ | 176.0 | $ | 158.7 | ||||||||||||||||
| After-tax merger related expenses* | (3.0 | ) | --- | (5.2 | ) | --- | ||||||||||||||||||
| After-tax net capital losses | (3.9 | ) | (3.0 | ) | (9.6 | ) | (3.4 | ) | ||||||||||||||||
Net income excluding after-tax merger related expenses* and after-tax net capital losses | $ | 62.1 | $ | 72.8 | $ | 190.8 | $ | 162.1 | ||||||||||||||||
| Net capital losses | $ | (6.2 | ) | $ | (4.7 | ) | $ | (15.3 | ) | $ | (5.3 | ) | ||||||||||||
| Tax benefit on net capital losses | (2.3 | ) | (1.7 | ) | (5.7 | ) | (1.9 | ) | ||||||||||||||||
| After-tax net capital losses | $ | (3.9 | ) | $ | (3.0 | ) | $ | (9.6 | ) | $ | (3.4 | ) | ||||||||||||
| Net income per diluted common share: | ||||||||||||||||||||||||
| Net income | $ | 1.28 | $ | 1.62 | $ | 4.11 | $ | 3.63 | ||||||||||||||||
| After-tax merger related expenses* | (0.07 | ) | --- | (0.12 | ) | --- | ||||||||||||||||||
| After-tax net capital losses | (0.09 | ) | (0.07 | ) | (0.22 | ) | (0.08 | ) | ||||||||||||||||
Net income excluding after-tax merger related expenses* and after-tax net capital losses | $ | 1.44 | $ | 1.69 | $ | 4.45 | $ | 3.71 | ||||||||||||||||
| Shareholders' equity | $ | 2,272.0 | $ | 2,255.7 | ||||||||||||||||||||
| Accumulated other comprehensive income | 36.7 | 188.7 | ||||||||||||||||||||||
Shareholders' equity excluding accumulated other comprehensive income | $ | 2,235.3 | $ | 2,067.0 | ||||||||||||||||||||
| Net income return on average equity | 10.6 | % | 9.6 | % | ||||||||||||||||||||
Net income return on average equity (excluding accumulated other comprehensive income) | 11.0 | 10.3 | ||||||||||||||||||||||
Net income return on average equity (excluding after-tax merger related expenses*, after-tax net capital losses and accumulated other comprehensive income) | 11.9 | 10.5 | ||||||||||||||||||||||
| Statutory data - insurance subsidiaries:** | ||||||||||||||||||||||||
Net gain from operations before federal income taxes and realized capital gains (losses) | $ | 85.0 | $ | 108.9 | $ | 224.4 | $ | 207.8 | ||||||||||||||||
Net gain from operations after federal income taxes and before realized capital gains (losses) | 69.1 | 80.9 | 189.6 | 162.2 | ||||||||||||||||||||
| September 30, | December 31, | |||||||||||||||||||||||
| 2015 | 2014 | |||||||||||||||||||||||
| Capital and surplus | $ | 1,234.1 | $ | 1,228.4 | ||||||||||||||||||||
| Asset valuation reserve | 105.2 | 106.2 | ||||||||||||||||||||||
| * Represents costs incurred in 2015 related to the proposed merger with Meiji Yasuda. | ||||||||||||||||||||||||
| ** Statutory data represents Standard Insurance Company and The Standard Life Insurance Company of New York. | ||||||||||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151022006542/en/
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Vice President, Investor
Relations and Capital Markets
jeff.hallin@standard.com
or
General
Media
Bob Speltz, 971-321-3162
Senior Director, Public Affairs
bob.speltz@standard.com
