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Show The National Enterprise, August 11, 1976 Page twelve Surety Financial Increases Earnings SALT LAKE CITY, Utah financial Higher results were announced today six-mon- th for Surety Financial Corporation (OTC 2.875, 3.25) Salt Lake City insurance holding company. The firm reported operating earnings of $459,000 compared to $418,000 for the corresponding six-mon- th period of 1975. Operating earnings per share increased 14 to 26.9 cents from 23.5 cents. Net earnings, including recognized investment gains and losses, were 28.3 cents, up from 24.8 cents last year. President and chief exec- James Ellsworth, explained that the utive officer, L. increase was a result of favorable claim experience and an improved ability to keep policies in force. Unit expenses were lower, with total income increasing while general expenses remained relatively constant. Surety Life Insurance Company, the major subsidiary of the holding company, reported a 25 increase in the new ordinary life insurance premiufri sold. The insurance company's after-ta- x gain from operations (computed in accordance with statutory accounting practices) rose to $219,000 from $189,000 in the same period in 1975. . Inflamed Stockholder Berates Firms Action Continued From Page Eleven cash dividends,", one of the shareholders asked. Directing his anger at William H. Ellis, president and chief executive officer, he added, "The stockholders are unhappy. I think your salary is at least double what it should be until you produce dividends." He suggested Ellis cut his salary from $60,000 a year to $31,000 a year. Frustration Over Finances But, Ellis said that the shareholders couldnt expect dividends from the company until the Arm got "back on the track." The reason for both the optimism and frustration over dividends by the shareholders was the companys financial report for 1975. United American Life reported the largest statutory gain in its history, $350,593, compared with $166,142 in 1974. And, for the year, net income was $157,375, or 10 cents a share, on revenues of $7.64 million, compared with net income of $4,434, less than a penny a share, on revenues of $9.59 million the previous year. year, Ellis explained, the company didnt This of any lawsuits to contend with, and it was able to invest its money to better advantage. The company has been plagued with the same problems that clobbered many real estate investment trusts. A previous officer of the company had made a series of unauthorized loan commitments. When the borrowers called for the company to make the commitments good, it was unable to comply. And, the firm was hit with some $21.8 million in lawsuits. It has been able to settle all but one for $2.4 million. Ellis told the shareholders that the firm is planning the acquisition of American Western Life Insurance Co. of Salt Lake City. It already has purchased 49 percent of the shares from three principal shareholders, at $2 a share, and it has received approval from the Utah insurance commission for a tender offer for the remainder of the shares at the same price. have the settlement The acquisition would For further information please call James Barrett, Chairman. Area Code 208 356-4229. First Lombard Corporation Investment Bankers Salt Lake City Idaho Falls cost Lincoln American $1.4 million. A shareholder suggested the money could better be used as dividends. In response to a question by another shareholder, Ellis said that the firm increased its number of insurance salesmen and that resulted in a 57 percent increase in new premiums and an 85 percent gain in the face amount of policies written. He also said that income appeared to be about 50 percent higher than during the same period last year. Responding to another shareholder question, he said the company would comply with Colorado law and would have the right to have their shares appraised by the company and receive the appraisal value instead of accepting the offer by Lincoln American. |