FIRST COLONY CORPORATION
Corporate Communications
700 Main Street
P. O. Box 1280
Lynchburg, Virginia 24505
FOR IMMEDIATE RELEASE
FIRST COLONY REPORTS RECORD 2ND QUARTER RESULTS
LYNCHBURG, VA., August 7, 1996 - First Colony Corporation (NYSE:FCL)
reported record operating earnings for the second quarter and six months ended
June 30, 1996.
After-tax operating income was a record $0.67 per share or $34.1 million,
up 22% from 1995's second quarter of $0.55 per share or $28.2 million. For
the six months, after-tax operating income was $1.31 per share or $66.5
million, up 24% from $1.06 per share or $53.9 million in 1995. After-tax
results for the quarter and six months benefitted from the growth of life and
annuity business in force and relatively better life insurance and annuity
mortality.
Pre-tax operating income was $52.7 million for the quarter, up 21% from
$43.5 million a year ago. For the six months, pre-tax operating income of
$102.9 million was up 24% from $83.1 million a year ago.
Net income, which includes realized investment gains, was $41.7 million,
or $0.82 per share for the quarter compared with $41.8 million, or $0.83 per
share in 1995. For the six months, net income was $80.6 million, or $1.59 per
share, up from $74.7 million, or $1.48 per share a year earlier.
Net income for the quarter benefitted from higher operating earnings, but
was slightly below 1995 due to lower realized investment gains. Net income
for the six months was above 1995 due to higher operating earnings offset by
lower realized investment gains. Net realized investment gains were $7.6
million and $14.1 million for the quarter and six months, compared with $13.6
million and $20.8 million a year earlier.
Annual premium life sales were $32.3 million for the quarter, level with
last year, and $68.1 million for the six months, up 3% from a year ago. By
face amount, life insurance sales were $10.7 billion for the quarter, up 1%,
and $22.8 billion for the six months, up 7%.
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Single premium immediate annuity (SPIA) sales were $155.8 million for the
quarter, down 12% and $299.6 million, down 4% for the six months, reflecting
lower sales of retirement annuities.
Sales of accumulation products, which include single premium deferred
annuities and single premium life, were $39.2 million for the quarter and
$51.2 million for the six months, down 69% and 73%, respectively, reflecting
market conditions which are not as attractive for sales at acceptable profit
and risk levels.
Total revenues for the quarter of $414.9 million were down 2% from $421.6
million a year ago reflecting lower life contingent SPIA premiums. For the
six months, total revenues of $826.6 million were up 4% from $798.2 million.
The increase for the six months was due principally to higher life premium
revenues and investment income offset in part by lower life contingent SPIA
premiums.
At June 30, 1996, total assets, excluding the effect of FASB 115,
increased to $10,820 million, up 4% from year-end 1995 and up 9% from June 30,
1995. This increase is due principally to asset growth from new sales.
Including the effect of FASB 115, assets of $10,841 million, were up 1% from
year-end 1995, reflecting the effect of the mark-to-market requirements of
FASB 115 in the rising interest rate environment of the first six months.
Shareholders' equity, excluding the effect of FASB 115, was $1,332
million, or $25.33 per share, up 5% from $24.22 at year-end 1995 and up 10%
from June 30, 1995. Including the effect of FASB 115, shareholders' equity
was $1,346 million, or $25.61 per share, down 10% from $28.44 per share at
year-end 1995.
Life insurance in force reached $192 billion, up 20% from June 30, 1995.
On August 5, General Electric Capital Corporation and First Colony
Corporation announced the signing of a definitive agreement for the sale of
First Colony to GE Capital. First Colony's principal subsidiaries, First
Colony Life Insurance Company and American Mayflower Life Insurance Company of
New York, will become subsidiaries of GE Capital Assurance, a GE Capital
company.
The cash purchase price will be $36.15 per share of First Colony Corporation
common stock for a total value to First Colony shareholders of approximately
$1.8 billion. Following regulatory approval, the transaction is expected to
close by year-end.
Bruce C. Gottwald, Jr., chairman and chief executive officer of First
Colony Corporation, said, "We are pleased with the second quarter's record
operating earnings and the definitive agreement with GE Capital to acquire
First Colony. This transaction successfully completes First Colony's
evaluation of strategic alternatives to maximize value to shareholders."
First Colony Corporation is a Richmond, Virginia-based holding company
which owns First Colony Life Insurance Company and its wholly owned
subsidiary, American Mayflower Life Insurance Company of New York.
For information contact:
Media Relations: Investor Relations:
Frank G. Land April A. Keesee
(804) 948-5293 (804) 948-5709
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FIRST COLONY CORPORATION
Financial Highlights
(000's except per share data)
Three Months Ended June 30, 1996 1995 %Change
Income:
Pre-tax operating income (a) $ 52,721 $43,557 21%
After-tax operating income 34,105 28,193 21
Net realized investment gains (b) 7,600 13,568 (44)
Net income 41,705 41,761 0
Per Share:
After-tax operating income (c) $0.67 $0.55 22%
Net realized investment gains 0.15 0.28 (46)
Net income (c) 0.82 0.83 (1)
Six Months Ended June 30, 1996 1995 %Change
Income:
Pre-tax operating income (a) $ 102,880 $ 83,123 24%
After-tax operating income 66,536 53,899 23
Net realized investment gains (b) 14,092 20,797 (32)
Net income 80,628 74,696 8
Per Share:
After-tax operating income (c) $1.31 $1.06 24%
Net realized investment gains 0.28 0.42 (33)
Net income (c) 1.59 1.48 7
(a) Excludes pretax realized investment gains of $11.0 million and $21.3
million for the quarter and six months ended June 30, 1996, respectively,
versus $20.9 million and $32.4 million in 1995; and the effect of
related amortization of ($0.8) million and ($0.5) million versus ($0.2)
million and $0.1 million in 1995.
(b) After income taxes, net of the effect of related amortization.
(c) Reflects dividends on preferred stock of $935 thousand, or $0.02 per
share,
and $1,823 thousand, or $0.04 per share for the quarter and six months
ended June 30, 1996, respectively, and versus $997 thousand or $0.02 per
share, and $1,746 thousand, or $0.04 per share in 1995.
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FIRST COLONY CORPORATION
Sales and Other Selected Data
(000's except per share data)
Three Months Ended June 30, 1996 1995 % Change
Life insurance sales by face amount $ 10,647,187 $10,498,672 1%
Premium sales:
Life insurance 32,260 32,377 0
Single premium immediate annuities 155,800 177,300 (12)
Accumulation products 39,283 125,867 (69)
Six Months Ended June 30, 1996 1995 % Change
Life insurance sales by face amount $ 22,782,531 $21,215,506 7%
Premium sales:
Life insurance 68,048 66,091 3
Single premium immediate annuities 299,617 312,392 (4)
Accumulation products 51,242 191,912 (73)
Other Data: 6/30/96 12/31/95 %Change
Assets (including FASB 115) $10,841,083 10,720,609 1%
Assets (excluding FASB 115) 10,819,642 $10,400,166 4
Shareholders' equity per common share
(including FASB 115) 25.61 28.44 (10)
Shareholders' equity per common share
(excluding FASB 115) 25.33 24.22 5
Life insurance in force (in billions) 191.6 176.9 8
Average shares outstanding 49,429 49,377