AUSTIN,
Texas, May 15, 2023 /PRNewswire/ -- Ross R. Moody, Chairman of the Board, President,
and Chief Executive Officer of National Western Life Group, Inc.
(Nasdaq: NWLI), announced today first quarter 2023 consolidated net
earnings of $12.3 million, or
$3.48 per diluted share of Class A
Common Stock, compared with restated consolidated net earnings of
$97.6 million, or $27.59 per diluted share of Class A Common Stock,
for the quarter ended March 31, 2022.
The Company's book value per share as of March 31, 2023
increased to $634.27.
Publicly traded life insurance companies were required to adopt
a new accounting standard effective January
1, 2023, requiring retroactive restatement of previously
reported financial statement results. The transition date for the
adoption of the new accounting guidance, "Targeted Improvements to
the Accounting for Long-Duration Contracts" (LDTI), was
January 1, 2021.
LDTI requires a separate liability to be established for Market
Risk Benefits and to report changes in the liability balance
through net earnings. Market risk benefits include certain contract
features on the Company's annuity products that provide minimum
guarantees to policyholders, such as guaranteed minimum withdrawal
benefits. For the quarters ended March 31,
2023 and 2022, pretax earnings expense/(benefit) pertaining
to Market Risk Benefits was $37.0
million and $(61.0) million,
respectively. Commenting on the effect of this accounting
treatment, Mr. Moody noted, "The Market Risk Benefits reporting
requirement introduces a new degree of volatility to Company
earnings caused by this liability being reported on a fair value
basis. As fair value is predominantly dictated by interest rate
levels in effect at each reporting date, an increase in interest
rates creates a benefit as was the case for the first quarter of
2022, while a decrease in interest rate levels causes a charge
against earnings as was the situation in the first quarter of
2023."
The Company reported a 10% increase in total revenues in the
first quarter of 2023 over the prior year first quarter. Excluding
market value fluctuations associated with the Company's derivative
instruments, index options and funds withheld reinsurance, net
investment income increased from $90.0
million in the quarter ended March
31, 2022 to $91.5 million in
the first quarter of 2023. Mr. Moody stated, "Despite a slightly
lower investment asset base, we saw increased returns both in new
bond purchase yields and in our continued diversification into
alternative investment vehicles, without any slippage in credit
quality."
Improvements in policy benefit and other operating expenses
positively contributed to the first quarter 2023 results. "We had a
very good quarter in terms of mortality experience, and we achieved
expense savings in several areas compared to the first quarter of
2022," Mr. Moody indicated.
National Western Life Group, Inc. is the parent organization of
National Western Life Insurance Company, which is the parent
organization of Ozark National Life Insurance Company, both stock
life insurance companies in aggregate offering a broad portfolio of
individual universal life, whole life and term insurance plans, as
well as annuity products. At March 31, 2023, the Company
maintained consolidated total assets of $12.8 billion, consolidated stockholders' equity
of $2.3 billion, and combined life
insurance in force of $19.3
billion.
Caution Regarding Forward-Looking Statements:
This press release contains statements which are or may be viewed
as forward-looking within the meaning of The Private Securities
Litigation Reform Act of 2005. Forward-looking statements relate to
future operations, strategies, financial results or other
developments, and are subject to assumptions, risks, and
uncertainties. Factors that may cause actual results to differ
materially from those contemplated in these forward-looking
statements can be found in the Company's Form 10-K filed with the
Securities and Exchange Commission. Forward-looking statements
speak only as of the date the statement was made and the Company
undertakes no obligation to update such forward-looking statements.
There can be no assurance that other factors not currently
anticipated by the Company will not materially and adversely affect
our results of operations. Investors are cautioned not to place
undue reliance on any forward-looking statements made by us or on
our behalf.
Summary of
Consolidated Financial Results (Unaudited)
(In thousands except
per share data)
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
|
|
|
2023
|
|
2022
|
Revenues:
|
|
|
|
|
Revenues, excluding
investment and index option gains (losses)
|
$
|
149,614
|
|
172,657
|
Realized and unrealized
gains (losses) on index options
|
|
2,933
|
|
(38,198)
|
Realized gains on
investments
|
|
67
|
|
3,794
|
Total
revenues
|
|
152,614
|
|
138,253
|
|
|
|
|
|
Benefits and
expenses:
|
|
|
|
|
Life and other policy
benefits
|
|
24,190
|
|
33,512
|
Market risk benefit
expense
|
|
36,960
|
|
(61,006)
|
Amortization of
deferred transaction costs
|
|
21,274
|
|
23,436
|
Universal life and
annuity contract interest
|
|
30,212
|
|
(13,571)
|
Other operating
expenses
|
|
24,683
|
|
32,581
|
Total benefits and
expenses
|
|
137,319
|
|
14,952
|
|
|
|
|
|
Earnings before
income taxes
|
|
15,295
|
|
123,301
|
Income tax
expense
|
|
2,991
|
|
25,739
|
Net
earnings
|
$
|
12,304
|
|
97,562
|
|
|
|
|
|
Net earnings
attributable to Class A shares
|
$
|
11,956
|
|
91,388
|
|
|
|
|
|
Diluted Earnings Per
Class A Share
|
$
|
3.48
|
|
27.59
|
|
|
|
|
|
Diluted Weighted
Average Class A Shares
|
|
3,436
|
|
3,436
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
2023
|
|
2022
|
|
|
|
|
|
Book value per
share
|
|
634.27
|
|
602.56
|
Less: Per share impact
of accumulated other comprehensive income (loss)
|
|
(100.62)
|
|
(128.86)
|
Book value per share,
excluding accumulated other comprehensive income (loss)
*
|
|
734.89
|
|
731.42
|
|
|
*
|
Book value per share
excluding accumulated other comprehensive income (loss) is a
non-GAAP financial measure. Accumulated other
comprehensive income (loss) totaled $(375.2) million at
March 31, 2023 and $(478.2) million at December 31, 2022.
Since accumulated
other comprehensive income (loss) fluctuates from quarter to
quarter due to unrealized changes in the fair value of investments
caused
primarily by changes in market interest rates, National Western
Life Group, Inc. believes this financial measure provides
useful
supplemental information.
|
Investor Relations Contact:
Brian M. Pribyl - Senior Vice President, Chief
Financial Officer and Treasurer
(512) 836-1010
bpribyl@nwlic.com
www.nwlgi.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/national-western-life-group-inc-announces-2023-first-quarter-earnings-301824934.html
SOURCE National Western Life Group, Inc.