National Western Life Group, Inc. Announces 2020 Full Year and Fourth Quarter Earnings

AUSTIN, Texas, March 15, 2021 /PRNewswire/ -- Ross R. Moody, Chairman of the Board, President, and Chief Executive Officer of National Western Life Group, Inc. (Nasdaq: NWLI), announced today 2020 consolidated net earnings of $92.3 million, or $26.11 per diluted Class A common share, compared with consolidated net earnings of $131.6 million, or $37.22 per diluted Class A common share, for 2019. The Company's book value per share increased to $698.50 as of December 31, 2020 from $582.07 as of December 31, 2019. For the quarter ended December 31, 2020, the Company reported consolidated net earnings of $35.1 million, or $9.94 per diluted Class A common share, compared with $37.7 million, or $10.67 per diluted Class A common share, in the fourth quarter of 2019.

The Company reported total revenues for the year, excluding realized and unrealized gains on index options and investments, of $658.9 million in 2020 compared to $689.7 million in 2019. Mr. Moody noted that the decline was due to lower net investment income as a consequence of the substantial decrease in interest rates during 2020 caused by the COVID-19 pandemic. Net investment income for the year ended December 31, 2020 was $402.4 million compared to $432.3 million a year earlier.

Addressing the impact of lower yielding investments, Mr. Moody highlighted the execution of a reinsurance transaction the Company completed at the end of 2020. "In the past year, the life insurance industry has experienced a heightened level of merger and acquisition activity as well as consummations of reinsurance deals, particularly involving life insurers such as National Western with large legacy blocks of in force business with fixed interest rate guarantees. These types of products have come under pressure as traditional investment yields continue an unprecedented decline. As previously reported, we successfully completed a reinsurance agreement at December 31, 2020 that transferred financial responsibility for approximately $1.7 billion of these fixed interest rate policy obligations, which relieved us of the associated interest rate spread compression and allows us to redeploy our capital resources."

Mr. Moody indicated that the pandemic crisis presented challenges but did not prevent the Company from achieving successful operating results. "In terms of COVID-19 mortality experience, we were fortunate that National Western and Ozark National in the aggregate incurred only $7.9 million in net death claims, which was balanced out by favorable mortality experienced with the remainder of our business. From a new business standpoint, we had a very successful sales year as our annuity sales were up 38% and our life insurance sales increased over 6%."

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 December 31, 2020, the Company maintained consolidated total assets of $14.6 billion, consolidated stockholders' equity of $2.5 billion, and combined life insurance in force of $22.0 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


Twelve Months Ended



December 31,


December 31,



2020


2019


2020


2019

Revenues:









Revenues, excluding investment and index option

$

165,507



172,808



658,917



689,740


gains









Realized and unrealized gains on index options


49,619



60,081



14,754



123,207


Realized gains on investments


8,411



2,539



21,071



6,241


Total revenues


223,537



235,428



694,742



819,188











Benefits and expenses:









Life and other policy benefits


37,331



35,578



131,337



137,342


Amortization of deferred acquisition costs and









value of business acquired


28,568



30,229



140,503



116,802


Universal life and annuity contract interest


86,625



94,830



206,250



295,330


Other operating expenses


29,854



27,363



104,584



104,558


Total benefits and expenses


182,378



188,000



582,674



654,032











Earnings before income taxes


41,159



47,428



112,068



165,156


Income tax expense


6,024



9,695



19,756



33,540


Net earnings

$

35,135



37,733



92,312



131,616











Net earnings attributable to Class A shares

$

34,142



36,666



89,701



127,894











Diluted Earnings Per Class A Share

$

9.94



10.67



26.11



37.22











Diluted Weighted Average Class A Shares


3,436



3,436



3,436



3,436

















December 31,


December 31,







2020


2019










Book value per share





$

698.50



582.07


Less: Per share impact of accumulated other comprehensive income


108.75



16.53


Book value per share, excluding accumulated other comprehensive income *

$

589.75



565.54


 

*

Book value per share excluding accumulated other comprehensive income is a non-GAAP financial measure. Accumulated other comprehensive income totaled $395.4 million at December 31, 2020 and $60.1 million at December 31, 2019. Since accumulated other comprehensive income 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@nationalwesternlife.com
www.nwlgi.com

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SOURCE National Western Life Group, Inc.