PR Newswire | Mar 15, 2021 03:15PM EDT

Earnings

03/15 14:15 CDT

National Western Life Group, Inc. Announces 2020 Full Year and Fourth Quarter Earnings AUSTIN, Texas, March 15, 2021

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 $165,507172,808 658,917 689,740 investment and index option

gains

Realized and unrealized 49,619 60,081 14,754 123,207 gains on index options

Realized gains on 8,411 2,539 21,071 6,241 investments

Total revenues 223,537235,428 694,742 819,188



Benefits and expenses:

Life and other policy 37,331 35,578 131,337 137,342 benefits

Amortization of deferred acquisition costs and

value of business acquired 28,568 30,229 140,503 116,802

Universal life and annuity 86,625 94,830 206,250 295,330 contract interest

Other operating expenses 29,854 27,363 104,584 104,558

Total benefits and expenses 182,378188,000 582,674 654,032



Earnings before income 41,159 47,428 112,068 165,156 taxes

Income tax expense 6,024 9,695 19,756 33,540

Net earnings $35,135 37,733 92,312 131,616



Net earnings attributable $34,142 36,666 89,701 127,894 to Class A shares



Diluted Earnings Per Class $9.94 10.67 26.11 37.22 A Share



Diluted Weighted Average 3,436 3,436 3,436 3,436 Class A Shares



December 31,December 31,

2020 2019



Book value per share $698.50 582.07

Less: Per share impact of accumulated other 108.75 16.53 comprehensive income

Book value per share, excluding accumulated $589.75 565.54 other comprehensive income *

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) 836-1010bpribyl@nationalwesternlife.comwww.nwlgi.com

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SOURCE National Western Life Group, Inc.