National General Holdings Corp. (NGHC) has reported a 34.75 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $28.13 million, or $0.18 a share in the quarter, compared with $43.11 million, or $0.38 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $33.59 million, or $0.31 a share compared with $44.05 million or $0.43 a share, a year ago.
Revenue during the quarter surged 56.25 percent to $857.38 million from $548.74 million in the previous year period. During the quarter, the company has written premium worth $767.32 million on net basis, up 59.20 percent or $285.33 million.
Total expenses increase substantially
Operating income for the quarter was $34.30 million, compared with $48.69 million in the previous year period.
Net investment income was at $26.37 million for the quarter, up 63.37 percent or $10.23 million from year-ago period. Meanwhile, income from fees and commission for the quarter jumped 49.09 percent or $34.78 million to $105.64 million. The company has booked a loss on investments of $11.05 million in the quarter compared with a loss of $4.72 million for the previous year period.
Barry Karfunkel, National General's president and chief executive officer, stated: "Our third quarter results reflect strong top line momentum, both from organic opportunities that we are seeing in the market and the benefit of recently closed acquisitions. Since we last reported earnings, we have closed on our acquisitions of both Standard Mutual, which further expands our packaged home and auto offerings in Illinois and Indiana, and Direct General, which adds a direct marketing distribution channel to our core non-standard auto business and expands our presence in this product line in the Southeast. Our acquisition pipeline remains active, as we are at a point in the cycle where some competitors are having difficulty maintaining profitability and lack the technological capabilities to compete effectively in a challenging market. This dislocation is also benefiting us organically. As always, we will remain opportunistic in our deal selection process."
Liabilities outpace assets growth
Total assets increased 26.43 percent or $1,343.62 million to $6,427.95 million on Sep. 30, 2016. On the other hand, total liabilities were at $4,515.06 million as on Sep. 30, 2016, up 27.05 percent or $961.28 million from year-ago.
Return on assets stood at 0.60 percent in the quarter, down 0.36 from 0.96 percent in the last year period. At the same time, return on equity was at 1.04 percent in the quarter, down 1.51 from 2.55 percent in the last year period.
Investments increase substantially
Investments stood at $3,360.50 million as on Sep. 30, 2016, up 47.84 percent or $1,087.45 million from year-ago. Meanwhile, yield on investments went up 7 basis points to 0.78 percent in the quarter.
Meanwhile, reinsurance recoverables moved down 14.88 percent or $152.48 million over the year to $872.26 million on Sep. 30, 2016.
Total debt was at $675.51 million as on Sep. 30, 2016, up 68.25 percent or $274.02 million from year-ago. Shareholders equity stood at $1,912.89 million as on Sep. 30, 2016, up 24.98 percent or $382.34 million from year-ago. As a result, debt to equity ratio went up 9 basis points to 0.35 percent in the quarter from 0.26 percent in the last year period.
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