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Liberty Financial Reports Third Quarter Financial ResultsNine-month net operating income of $2.68 per share, up 15.5% over last yearBOSTON, October 28, 1997 - Liberty Financial Companies, Inc. (NYSE: L) today reported its financial results for the third quarter of 1997.For the quarter ended September 30, 1997, net operating income was a record $28.6 million or $0.91 per share, compared to $24.2 million or $0.81 per share for the same period in 1996. For the first nine months of the year, net operating income was $83.1 million or $2.68 per share, compared to $69.1 million, or $2.32 per share for the same period in 1996. Net operating income excludes net realized investment gains or losses. Assets under management totaled a record $51.9 billion, up from $46.9 billion at the end of the third quarter of 1996. Book value on September 30, 1997 was $39.87 per share, compared to $34.83 at the end of the same period a year ago. "Liberty Financial continued to make solid progress during the third quarter," said Kenneth R. Leibler, President and Chief Executive Officer. "Both our annuity and asset management businesses contributed to our record results. During the first two quarters, our annuity business accounted for most of our earnings increase, while third quarter results were led by gains in our asset management business. Both of these major business segments continued to build for the future by launching new products and significantly expanding our sales and distribution capabilities." Sales in the third quarter improved over the levels of the first two quarters and totaled $2.2 billion. Annuity sales were $297 million, and asset management sales were $1.9 billion. "Throughout 1997 we have launched a series of new initiatives to increase our sales and distribution capabilities," continued Mr. Leibler. "In recent months we have begun to see some encouraging results from that effort. With sales of $1.6 billion so far this year, our wealth management and institutional businesses have enjoyed an outstanding year. Third quarter sales of the Colonial funds were up 25% over this time last year." Net income for the third quarter was $32.9 million or $1.05 per share, compared to $24.7 million or $0.82 per share for the same period one year ago. Net income for the first nine months of 1997 was $97.9 million, or $3.17 per share, compared with $71.6 million and $2.40 per share for the same period a year ago. Net income includes net realized investment gains or losses.
Quarterly Highlights "We entered into the offering with the strategic goals of improving liquidity, broadening our shareholder base, and increasing analyst coverage," commented Mr. Leibler. "I am pleased to report we achieved each of these important goals. Our stock's trading volume has increased substantially. We have added 65 new institutional shareholders, expanded our list of international holders and added a significant number of new retail investors to our shareholder base. We are also pleased that six major brokerage firms have published new or updated research reports on our company in the past three months."
Annuity Business Overview Keyport's book of business consists primarily of single premium fixed and indexed annuities and a $2.0 billion closed block of single premium whole life policies. On September 30, 1997, Keyport's fixed and indexed annuity policyholder balances totaled $10.1 billion, compared to $9.6 billion on September 30, 1996. Keyport is rated A+ (Superior) by A.M. Best and AA- (Excellent) by Standard & Poor's. Keyport Life has continued to maintain a high-quality investment portfolio, with average credit quality of A+ and an effective duration of approximately 2.8 years, one of the shortest durations in the annuity industry. More than 92 percent of the portfolio's investments are investment grade. Substantially all of Keyport's net operating income is generated from investment spread, which is the excess of the investment earnings of Keyport's investment portfolio over interest credited to policyholders. For the third quarter of 1997, Keyport's average portfolio yield was 6.82 percent, and the average interest credited to policyholders was 5.02 percent, producing an investment spread percentage of 1.80. For the same period in 1996, Keyport's investment spread percentage was 1.85. Annuity sales in the quarter ended September 30, 1997 totaled $297 million, compared to $363 million in the same period a year ago. Keyport had $252 million in sales of fixed and indexed annuities, while variable annuity sales totaled $45 million. "The sales environment for fixed annuities has been difficult for much of this year. Low interest rates and a booming stock market have focused investor attention on other products such as mutual funds and variable annuities. We believe that stronger annuity companies, such as Keyport, have the opportunity to improve their market share during periods such as this by expanding their distribution capabilities. Keyport is doubling its number of wholesalers and has recently launched new sales campaigns with several major brokerage firms," said Mr. Leibler.
Asset Management Overview Mutual fund assets under management totaled $27.3 billion at the end of the third quarter, compared to $25.3 billion at the same point a year ago. Equity fund assets accounted for 51 percent of mutual fund assets at September 30, up from 46 percent a year ago. "Our asset management businesses showed good growth in the third quarter with our mutual fund, wealth management and institutional businesses all showing increases in assets, resulting in higher asset management profits. We were especially pleased to see sales of our mutual funds increase from the prior quarter. While market volatility in the Far East dampened sales of our Newport funds, sales of Colonial and Stein Roe funds have improved, " said Mr. Leibler. Liberty Financial continued to expand its mutual fund distribution. A new series of Stein Roe managed funds, the Stein Roe Advisor funds, has been created and Colonial's distribution arm will help market them through brokers, banks and financial planners.
Company Overview
### For more information, please contact William Rice at (617)371-2357 or Email wrice@lib.com[Return to Liberty Financial Corporate News Releases] Copyright © 1997, Liberty Financial Companies, Inc. 600 Atlantic Avenue, Boston, Massachusetts, USA. 617-722-6000 |