-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DpQ1JMNqF11sYM8hX84JNyw5rsr50pw9ZwnweidGNEzZ3LJ5TOI/sPUn9Tp3A3n7 p5TBgxZz40lUHZRiX/Po6Q== 0000892893-96-000013.txt : 19960625 0000892893-96-000013.hdr.sgml : 19960625 ACCESSION NUMBER: 0000892893-96-000013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960331 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960508 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST COLONY CORP CENTRAL INDEX KEY: 0000892893 STANDARD INDUSTRIAL CLASSIFICATION: 6311 IRS NUMBER: 541200334 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11482 FILM NUMBER: 96557650 BUSINESS ADDRESS: STREET 1: 901 E BYRD STREET STREET 2: RIVERFRONT PLZ - WEST TWR STE 13500 CITY: RICHMOND STATE: VA ZIP: 23219 BUSINESS PHONE: 8047750300 MAIL ADDRESS: STREET 1: RIVERFRONT PLAZA WEST TOWER SUITE 1350 STREET 2: 901 EAST BYRD STREET CITY: RICHMOND STATE: VA ZIP: 23219 FORMER COMPANY: FORMER CONFORMED NAME: FIRST COLONY HOLDING CORP DATE OF NAME CHANGE: 19600201 8-K 1 FIRST COLONY CORPORATION FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) May 8, 1996 FIRST COLONY CORPORATION (Exact name of registrant as specified in its charter) VIRGINIA 1-11482 54-1200334 (State or other (Commission (I.R.S. Employer jurisdiction of File Number) Identification No.) incorporation) RIVERFRONT PLAZA, WEST TOWER SUITE 1350 901 EAST BYRD STREET RICHMOND, VIRGINIA 23219 (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code (804) 775-0300 (Former name or former address, if changed since last report) Not applicable Item 5. Other Events Registrant has submitted a supplemental financial report concurrent with the press release of the current quarter's operating results for the period ended March 31, 1996. Item 7. Exhibits EX-99.1 First Colony Corporation - Press Release EX-99.2 First Colony Corporation - Financial Supplement EX-27.0 Financial Data Schedule Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FIRST COLONY CORPORATION (Registrant) Date: May 8, 1996 By: s/Ronald V. Dolan President Date: May 8, 1996 By: s/Peter W. Karras, CPA Secretary and Treasurer EX-99.1 2 FIRST COLONY CORPORATION - PRESS RELEASE FIRST COLONY CORPORATION Corporate Communications 700 Main Street P. O. Box 1280 Lynchburg, Virginia 24505 FOR IMMEDIATE RELEASE FIRST COLONY REPORTS RECORD 1ST QUARTER RESULTS LYNCHBURG, VA., May 7, 1996 - First Colony Corporation (NYSE:FCL) reported record operating earnings and record life insurance sales for the first quarter ended March 31, 1996. After-tax operating income was a record $0.64 per share or $32.4 million, up 25% from 1995's first quarter of $0.51 per share or $25.7 million. After-tax results for the quarter benefited from the growth of life and annuity business in force and relatively better life insurance and annuity mortality. Pre-tax operating income was $50.2 million for the quarter, up 27% from $39.6 million a year ago. Net income, including $6.5 million of realized investment gains and related amortization, was $38.9 million, or $0.77 per share for the quarter, up from $32.9 million, or $0.65 per share from a year ago. Realized investment gains in the first quarter of 1995 were $7.2 million. Annual premium life sales reached an all-time high of $35.8 million for the quarter up 6% over a year ago. By face amount, life insurance sales were $12.1 billion for the quarter, up 13%. Single premium immediate annuity (SPIAs) sales of $143.8 million for the quarter, were up 6%. This increase reflects growth in the settlement annuity market. Sales of accumulation products, which include single premium deferred annuities and single premium life, were $12.0 million for the quarter, down 82% from a year ago reflecting market conditions which were not as attractive for sales at acceptable profit and risk levels. Total revenues for the quarter of $411.7 million were up 9% from $376.6 million a year ago. The increase is due principally to higher premium revenues and investment income. FCC-2 At March 31, 1996, total assets, excluding the effect of FASB 115, increased to $10.6 billion, up 2% from $10.4 billion at year-end 1995 and up 11% from March 31, 1995. This increase is due principally to asset growth from new sales. Including the effect of FASB 115, assets of $10.7 billion, were level with year-end 1995, reflecting the effect of the mark-to-market requirements of FASB 115 in the rising interest rate environment of the first quarter. Shareholders' equity, excluding the effect of FASB 115, was $1.3 billion, or $24.71 per share, up 2% from $24.22 at year-end 1995 and up 11% from March 31, 1995. Including the effect of FASB 115, shareholders' equity was $1.4 billion, or $25.81 per share, down 9% from $28.44 per share at year-end 1995. Life insurance in force reached $185 billion, up 21% from a year earlier. Bruce C. Gottwald, Jr., chairman and chief executive officer of First Colony Corporation, said, "We are pleased with the first quarter's record operating earnings continuing last year's return to double digit growth, and the strong increase in life insurance and immediate annuity sales in today's competitive market." 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 FCC-3 FIRST COLONY CORPORATION Financial Highlights (000's except per share data) Three Months Ended March 31, 1996 1995 %Change Income: Pre-tax operating income (a) $ 50,159 $39,566 27% After-tax operating income 32,431 25,706 26 Net realized investment gains (losses) (b) 6,492 7,229 (10) Net income 38,923 32,935 18 Per Share: After-tax operating income (c) $0.64 $0.51 25% Net realized investment gains (losses) 0.13 0.14 (7) Net income (c) 0.77 0.65 18 Sales and Other Selected Data Life insurance sales by face amount $ 12,135,344 $10,716,834 13% Premium sales: Life insurance 35,788 33,714 6 Single premium immediate annuities 143,817 135,092 6 Accumulation products 11,959 66,045 (82) Other Data: 3/31/96 12/31/95 %Change Assets (including FASB 115) $10,717,983 $10,720,609 0% Assets (excluding FASB 115) 10,634,607 $10,400,166 2 Shareholders' equity per common share (including FASB 115) 25.81 28.44 (9) Shareholders' equity per common share (excluding FASB 115) 24.71 24.22 2 Life insurance in force (in billions) 185.2 176.9 5 Average shares outstanding 49,372 49,377 (a) Excludes pretax realized investment gains of $10.3 million for the quarter ended March 31, 1996, versus $11.5 million in 1995; and the effect of related amortization of $0.3 million for both periods. (b) After income taxes, net of the effect of related amortization. (c) Reflects dividends on preferred stock of $888, or $0.02 per share for the quarter ended March 31, 1996, versus $749, or $0.02 per share a year ago. EX-99.2 3 FIRST COLONY CORPORATION - FINANCIAL SUPPLEMENT FIRST QUARTER 1996 FINANCIAL SUPPLEMENT FIRST COLONY CORPORATION TABLE OF CONTENTS Quarterly Sales and Financial Summary 3&4 Per Share Analysis 5 Segment Summary 6 Operating Segment Data: Annual Life Insurance 7 SPIA 8 Accumulation Products 9 Segment Analysis 10 Balance Sheet 11 Income Statement 12 Shareholders Equity Statement 13 Cash Flow Statement 14 Investment Summary 15, 16, 17, & 18 Analyst Coverage 19 Common Stock Data 19 Ratings 19 Questions regarding this financial report should be referred to: April A. Keesee, CMA Assistant Vice President Director - Investor Relations Phone: (804) 948-5709 Fax: (804) 948-5749 Interim results are unaudited First Colony Corporation 3 Quarterly Sales and Financial Summary (In millions of dollars)
1996 1995 % Change From 1st Qtr 1Q95 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Year Life insurance sales volume: $12,135.3 13% $10,716.8 $10,498.7 $9,884.7 $10,380.0 $41,480.2 Premium sales: Annual Life insurance 35.8 6% 33.7 32.4 31.4 31.3 128.8 SPIA 143.8 6% 135.1 177.3 168.6 186.6 667.6 Accumulation products 12.0 -82% 66.0 125.9 28.5 11.2 231.6 Selected Income Statement Data Premium Revenue - Life insurance 92.1 17% 79.0 85.0 85.9 94.2 344.1 - SPIA 85.4 6% 80.7 106.1 100.2 115.5 402.5 Total premium revenue 177.5 11% 159.7 191.1 186.1 209.7 746.6 Net investment income 196.2 9% 179.5 184.0 191.5 192.0 747.0 Mortality, surrender and administrative charges 27.7 7% 25.9 25.6 26.9 27.5 105.9 Total revenues excluding realized gains 401.4 10% 365.1 400.7 404.5 429.2 1,599.5 Debt service costs 3.1 3% 3.0 3.0 3.1 3.0 12.1 Benefits, claims and expenses 348.1 8% 322.5 354.2 354.0 378.2 1,408.9 Guaranty fund provision 0.0 - 0.0 0.0 0.0 4.0 4.0 Pretax operating income (a) 50.2 27% 39.6 43.5 47.4 48.0(b) 178.5(b) Income tax on operations 17.8 28% 13.9 15.3 16.6 15.5 61.3 Tax effect on guaranty fund provision 0.0 - 0.0 0.0 0.0 1.4 1.4 After-tax operating income 32.4 26% 25.7 28.2 30.8 31.1(b) 115.8(b) Realized gains on investments 10.3 -10% 11.5 20.9 4.6 21.9 58.9 Amortization effect related to realized gains -0.3 0% -0.3 0.2 0.7 -0.3 0.3 Income tax on realized gains 3.5 -13% 4.0 7.5 1.8 7.7 21.0 Net realized gains 6.5 -10% 7.2 13.6 3.5 13.9 38.2 Net income 38.9 18% 32.9 41.8 34.3 45.0 154.0 Preferred dividends 0.9 29% 0.7 1.0 0.7 1.0 3.4 Net income available to common shareholders 38.0 18% 32.2 40.8 33.6 44.0 150.6 Total income taxes incurred 21.3 17.9 22.8 18.4 23.2 82.3 Effective tax rate - Operations 35.3% 35.0% 35.3% 34.9% 35.2% 35.1% Total revenues including realized gains 411.7 9% 376.6 421.6 409.1 451.1 1,658.4 (a) Excludes net realized investment gains (losses) and the effect of related amortization. (b) Excluding $4.0 pretax ($2.6 after-tax), or $0.05 per share guaranty fund provision.
First Colony Corporation 4 Quarterly Sales and Financial Summary (In millions of dollars except per share data)
Actual 1996 Actual 1995 % Change from 1st Qtr. 1Q95 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Year Earnings per share ( based on 49.4 million shares): Operating income $0.64 25% $0.51 $0.55 $0.61 $0.61(a) $2.28(a) Net realized gains and losses $0.13 -7% $0.14 $0.28 $0.07 $0.28 $0.77 Net income available to common shareholders $0.77 18% $0.65 $0.83 $0.68 $0.84 $3.00 (a) Excludes $0.05 per share guaranty fund provision.
% Change % Change From 12/95 From 3/95
Selected Balance Sheet and In-Force Data: Amounts including FASB 115 Total investments $9,305 -1% 12% $8,322 $8,848 $9,033 $9,386 $9,386 Total assets 10,718 0% 12% 9,529 10,085 10,318 10,721 10,721 Shareholders' equity 1,354 -9% 19% 1,139 1,299 1,340 1,484 1,484 Book value per common share $25.81 -9% 20% $21.47 $24.69 $25.50 $28.44 $28.44 Amounts excluding FASB 115 Total investments $9,206 2% 10% $8,379 $8,694 $8,860 $9,017 $9,017 Total assets 10,635 2% 11% 9,584 9,956 10,171 10,400 10,400 Shareholders' equity 1,300 2% 11% 1,175 1,215 1,245 1,276 1,276 Book value per common share $24.71 2% 11% $22.19 $23.00 $23.57 $24.22 $24.22 Long-term debt 175 0% 0% 175 175 175 175 175 Pfd. Stock 80 0% 0% 80 80 80 80 80 Life insurance in force 185,160 5% 21% 152,758 160,243 166,881 176,919 176,919
5 PER SHARE ANALYSIS
% Change from 1Q96 1Q95 1Q95 2Q95 3Q95 4Q95 1995 Operating Income $0.64 25% $0.51 $0.55 $0.61 $0.61(a) $2.28(a) Net Realized Investment Gains/Losses 0.13 -7% 0.14 0.28 0.07 0.28 0.77 Net Income 0.77 18% 0.65 0.83 0.68 0.84 3.00 Book Value per Common Share: Including FASB 115 25.81 20% 21.47 24.69 25.50 28.44 28.44 Excluding FASB 115 24.71 11% 22.19 23.00 23.57 24.22 24.22 Shares used in computations (000) 49,372 49,354 49,361 49,414 49,388 49,377 (a) Excludes $0.05 per share guaranty fund provision.
6 SEGMENT SUMMARY
% Change from 1Q96 1Q95 1Q95 2Q95 3Q95 4Q95 1995 Revenues (millions) Excluding Realized Investment Gains and Losses: Annual Life Insurance $ 143.0 13% 126.5 129.9 135.1 143.3 534.8 SPIA 201.5 9% 185.2 214.7 212.7 229.6 842.2 Accumulation Products 56.9 7% 53.4 56.1 56.7 56.3 222.5 TOTAL $ 401.4 10% 365.1 400.7 404.5 429.2 1,599.5 Operating Earnings (millions) Excluding Realized Investment Gains and Losses: Annual Life Insurance $ 23.9 25% 19.1 22.7 25.9 22.7(a) 90.4(a) SPIA 14.1 28% 11.0 10.3 11.0 12.6(a) 44.9(a) Accumulation Products 12.2 28% 9.5 10.5 10.5 12.7(a) 43.2(a) TOTAL $ 50.2 27% 39.6 43.5 47.4 48.0(a) 178.5(a) Assets (including FASB 115) Annual Life Insurance $ 2,224.9 18% 1,887.6 1,963.6 2,018.5 2,129.3 2,129.3 SPIA 5,806.3 14% 5,071.7 5,368.2 5,538.5 5,822.8 5,822.8 Accumulation Products 2,686.8 5% 2,569.3 2,753.2 2,760.6 2,768.5 2,768.5 $ 10,718.0 12% 9,528.6 10,085.0 10,317.6 10,720.6 10,720.6 Assets (excluding FASB 115) Annual Life Insurance $ 2,227.5 17% 1,899.4 1,956.0 2,007.7 2,107.4 2,107.4 SPIA 5,761.4 13% 5,112.9 5,305.9 5,460.7 5,631.8 5,631.8 Accumulation Products 2,645.7 3% 2,571.3 2,694.5 2,702.2 2,661.0 2,661.0 $ 10,634.6 11% 9,583.6 9,956.4 10,170.6 10,400.2 10,400.2 (a) Excluding $4.0 pretax ($2.6 after-tax), or $0.05 per share guaranty fund provision.
7 OPERATING SEGMENT DATA ANNUAL LIFE INSURANCE Dollars in millions
% Change from 1Q96 1Q95 1Q95 2Q95 3Q95 4Q95 1995 Ordinary Life Insurance Sales: Volume $ 12,126.0 14% 10,679.0 10,401.5 9,844.8 10,367.7 41,293.0 Premium $ 35.8 6% 33.7 32.4 31.4 31.3 128.8 # Policies 43,889 10% 40,010 41,307 38,595 39,623 159,535 Life Insurance in Force by Face Amount $ 185,160 21% 152,758 160,243 166,881 176,919 176,919 Revenues: Operating $ 143.0 13% 126.5 129.9 135.1 143.3 534.8 Realized Investment Gains and Losses (net) $ 0.2 -96% 5.7 9.4 1.3 0.6 17.0 Income Before Income Taxes: Operating $ 23.9 25% 19.1 22.7 25.9 22.7(a) 90.4(a) Realized Investment Gains and Losses (net) $ 0.2 -96% 5.7 9.4 1.3 0.6 17.0 DAC Amortization $ 0.0 0% 0.0 0.3 (0.2) 0.0 0.1 Assets (including FASB 115) $ 2,224.9 18% 1,887.6 1,963.6 2,018.5 2,129.3 2,129.3 (excluding FASB 115) $ 2,227.5 17% 1,899.4 1,956.0 2,007.7 2,107.4 2,107.4 (a) Excluding $1.1 pretax ($0.7 after-tax), or $0.01 per share guaranty fund provision.
8 OPERATING SEGMENT DATA SINGLE PREMIUM IMMEDIATE ANNUITIES Dollars in millions
% Change from 1Q96 1Q95 1Q95 2Q95 3Q95 4Q95 1995 Premium Sales: $ 143.8 6% 135.1 177.3 168.6 186.6 667.6 # Contracts Sold: 1,356 -19% 1,674 1,824 1,708 1,813 7,019 Revenues: Operating $ 201.5 9% 185.2 214.7 212.7 229.6 842.2 Realized Investment Gains and Losses (net) $ 12.5 184% 4.4 9.9 5.2 19.4 38.9 Income Before Income Taxes: Operating $ 14.1 28% 11.0 10.3 11.0 12.6(a) 44.9(a) Realized Investment Gains and Losses (net) $ 12.5 184% 4.4 9.9 5.2 19.4 38.9 DAC Amortization $ 0.0 0% 0.0 0.0 0.0 0.0 0.0 Assets (including FASB 115) $ 5,806.3 14% 5,071.7 5,368.2 5,538.5 5,822.8 5,822.8 (excluding FASB 115) $ 5,761.4 13% 5,112.9 5,305.9 5,460.7 5,631.8 5,631.8 (a) Excluding $2.3 pretax ($1.5 after-tax), or $0.03 per share guaranty fund provision.
9 OPERATING SEGMENT DATA ACCUMULATION PRODUCTS* Dollars in millions.
% Change from 1Q96 1Q95 1Q95 2Q95 3Q95 4Q95 1995 Premium Sales: $ 12.0 -82% 66.0 125.9 28.5 11.2 231.6 # Contracts Sold: 296 -79% 1,442 1,794 1,005 245 4,486 Revenues: Operating $ 56.9 7% 53.4 56.1 56.7 56.3 222.5 Realized Investment Gains and Losses (net) $ (2.4) -271% 1.4 1.6 (1.9) 1.9 3.0 Income Before Income Taxes: Operating $ 12.2 28% 9.5 10.5 10.5 12.7(a) 43.2(a) Realized Investment Gains and Losses (net) $ (2.4) -271% 1.4 1.6 (1.9) 1.9 3.0 DAC Amortization $ (0.3) 0% (0.3) (0.1) 0.9 (0.3) 0.2 Assets (including FASB 115) $ 2,686.8 5% 2,569.3 2,753.2 2,760.6 2,768.5 2,768.5 (excluding FASB 115) $ 2,645.7 3% 2,571.3 2,694.5 2,702.2 2,661.0 2,661.0 * Accumulation Products include Single Premium Deferred Annuities and Single Premium Whole Life Insurance. (a) Excluding $0.6 pretax ($0.4 after-tax), or $0.01 per share guaranty fund provision.
10 SEGMENT ANALYSIS Reserves (billions) At March 31, 1995 At March 31, 1996 Total Reserves $7.7 Total Reserves $8.6
% of % of Segment Reserves Total Segment Reserves Total Life $1.1 14.3% Life $1.3 15.1% Accumulation Products $2.4 31.2% Accumulation Products $2.5 29.1% Immediate Annuities $4.2 54.5% Immediate Annuities $4.8 55.8%
Operating Earnings At March 31, 1995 At March 31, 1996 % of % of Segment Total Segment Total Life 48.2% Life 47.6% Accumulation Products 24.0% Accumulation Products 24.3% Immediate Annuities 27.8% Immediate Annuities 28.1% 11 FIRST COLONY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands) (1996 Unaudited) March 31 December 31 1996 1995 Investments: Fixed maturities held to maturity, at amortized cost: Bonds (Fair value: 1996, $4,345,009; 1995, $4,660,947) $ 4,069,067 $ 4,070,476 Fixed maturities available for sale, at fair value: Bonds (Amortized cost: 1996, $4,468,066; 1995, $4,242,361) 4,564,479 4,602,319 Preferred stock, redeemable (Amortized cost: 1996, $74,540; 1995, $77,465) 85,717 96,479 Equity securities, at market value Preferred stock, nonredeemable (cost: 1996, $253,130; 1995, $274,328) 284,893 321,118 Common stock (cost: 1996, $28,766; 1995, $28,476) 35,568 32,935 Other invested assets 265,187 262,651 Total investments 9,304,911 9,385,978 Cash and cash equivalents 22,447 46,125 Accrued investment income 171,207 161,689 Deferred policy acquisition costs 938,381 874,586 Reinsurance receivable 125,375 115,344 Other assets and goodwill 155,662 136,887 Total assets $10,717,983 $10,720,609 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Policy liabilities and policyholder funds 8,795,303 8,639,242 Other liabilities 154,937 93,881 Long-term debt 174,847 174,843 Deferred income taxes 238,438 328,238 Total liabilities 9,363,525 9,236,204 Shareholders' equity: Preferred stock 80,000 80,000 Common stock 312,913 312,888 Net unrealized appreciation of fixed maturities 54,195 208,288 Net unrealized appreciation of equity securities 26,400 34,644 Retained earnings unappropriated 880,950 848,585 Total shareholders' equity 1,354,458 1,484,405 Total liabilities and shareholders' equity $10,717,983 $10,720,609 12 FIRST COLONY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands Except Per Share Amounts) (Unaudited) Three months ended March 31 1996 1995 Revenues: Life insurance premiums $ 92,106 $ 79,010 Life contingent annuity premiums 85,360 80,722 Total premiums 177,466 159,732 Net investment income 196,231 179,467 Mortality, surrender & administrative charges 27,725 25,865 Realized gains on investments 10,301 11,468 Total revenues 411,723 376,532 Benefits: Life and annuity benefits paid 133,488 117,353 Increase in reserves 174,658 170,164 Total benefits 308,146 287,517 Expenses: Commissions 7,977 8,749 General and administrative and other expenses 17,440 15,789 Amortization of intangible assets 14,892 10,695 Debt service cost 3,069 3,025 Total expenses 43,378 38,258 Total benefits and expenses 351,524 325,775 Income before income taxes 60,199 50,757 Income taxes 21,276 17,822 Net income 38,923 32,935 Dividends on preferred stock 888 749 Earnings available for common shareholders $ 38,035 $ 32,186 Net income per share of common stock $ 0.77 $ 0.65 Cash dividends paid per share of common stock $ 0.115 $ 0.100 Shares used to compute net income per share of common stock 49,372 49,354 13 FIRST COLONY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In Thousands) (Unaudited) Three Months Ended March 31 1996 1995 Shares Amounts Shares Amounts Preferred Stock, no par value (authorized 15,000 shares issued and outstanding 3,200) Beginning and ending balance 3,200 $ 80,000 3,200 $ 80,000 Common Stock, no par value (authorized 150,000 shares issued and outstanding 49,303 in 1996 and 49,301 in 1995) Beginning balance 49,302 $ 312,888 49,301 $ 312,879 Exercise of stock options 1 25 Ending balance 49,303 312,913 49,301 312,879 Net unrealized appreciation (depreciation) of fixed maturities: Beginning balance 208,288 (114,937) Net change in unrealized gains (losses) net of (i) deferred taxes (benefit) of ($82,973) in 1996 and $42,631 in 1995; (ii) deferred policy acquisition costs of ($32,800) in 1996 and $24,200 in 1995. (154,093) 79,173 Ending balance, net of (i) deferred taxes (benefit) of $29,182 in 1996 and ($19,258) in 1995; (ii) deferred policy acquisition costs of $16,000 in 1996 and ($2,800) in 1995. 54,195 (35,764) Net unrealized appreciation of equity securities: Beginning balance 34,644 16,293 Net change in unrealized gains (losses) net of deferred taxes (benefit) of $(4,439) in 1996 and $10,025 in 1995. (8,244) 18,618 Ending balance, net of deferred taxes of $12,166 in 1996 and $16,749 in 1995. 26,400 34,911 Retained earnings: Beginning balance 848,585 720,307 Net income 38,923 32,935 Cash dividends to shareholders: Preferred stock (888) (749) Common stock (5,670) (4,930) Ending balance 880,950 747,563 Total shareholders' equity $1,354,458 $1,139,589 14 FIRST COLONY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) (Unaudited) Three Months Ended March 31 1996 1995 Cash and cash equivalents at beginning of period $ 46,125 $ 54,817 Cash flows from operating activities: Net income 38,923 32,935 Adjustments to reconcile net income to cash provided from operating activities: Increase in policy liabilities and accruals 103,015 114,624 Depreciation, depletion and amortization 16,304 12,029 Federal income taxes 12,065 27,026 Accrual of discounts on fixed maturities (23,861) (23,377) Deferred policy acquisition costs (45,370) (47,389) Realized (gains)/losses on investments (10,301) (11,468) Other (22,083) (19,060) Net cash provided from operating activities 68,692 85,320 Cash flows used in investing activities Fixed maturities available-for-sale: Purchases (321,903) (277,850) Sales 23,294 157,614 Maturities, calls and redemptions 77,506 25,460 Fixed maturities held-to-maturity: Purchases (28,879) (172,452) Maturities, calls and redemptions 53,472 22,644 Purchase of other investments (1,753) (18,301) Sale or maturity of other investments 28,648 24,188 Other (2,605) (15,544) Net cash used by investing activities (172,220) (254,241) Cash flows from financing activities: Investment contracts 23,303 111,800 Universal life contracts 25,099 32,098 Dividend to shareholders (946) (5,720) Other 32,394 Net cash provided from financing activities 79,850 138,178 Decrease in cash and cash equivalents (23,678) (30,743) Cash and cash equivalents at end of period $ 22,447 $ 24,074 15 INVESTMENT SUMMARY Bond and Note Portfolio Quality Ratings by Par Value At March 31, 1996 At December 31, 1995 Quality % of Quality % of Rating Portfolio Rating Portfolio Aaa 25% Aaa 26% Aa 8% Aa 7% A 36% A 37% Baa 29% Baa 28% below Baa 2% below Baa 2% Bond Portfolio Composition by Par Value At March 31, 1996 At December 31, 1995 % of % of Type Portfolio Type Portfolio Public Bonds 57% Public Bonds 56% Private Placements 27% Private Placements 27% CMO's 16% CMO's 17% 16 INVESTMENT SUMMARY Book Value of Securities Called/Prepaid ($ millions) Bonds CMO's Period Book Value Period Book Value 1Q94 $ 107 1Q94 $ 185 2Q94 $ 64 2Q94 $ 58 3Q94 $ 25 3Q94 $ 23 4Q94 $ 12 4Q94 $ 24 1Q95 $ 19 1Q95 $ 10 2Q95 $ 35 2Q95 $ 22 3Q95 $ 30 3Q95 $ 23 4Q95 $ 99 4Q95 $ 27 1Q96 $ 61 1Q96 $ 50 Bonds Currently Callable in 1996 Book Value: - $812 million - Total - $464 million - With Coupons in Excess of 8.00% - $234 million - With Coupons in Excess of 9.00% Portfolio at March 31, 1996 ($ millions) Carrying % of Value Total Bonds $8,633.5 92.5 Preferred Stock 370.6 4.0 Common Stock 35.6 0.4 Mortgage Loans 0.2 0.0 Real Estate 7.5 0.1 Policy Loans 212.6 2.3 Other 34.0 0.4 Cash and Short Term 33.3 0.3 $9,327.3 100.0 17 INVESTMENT SUMMARY QUARTERLY PRE-TAX REALIZED GAINS/LOSSES Gains/Losses Period (in millions) 1Q94 $ 24.3 2Q94 $ 1.7 3Q94 $ (3.1) 4Q94 $(35.0) 1Q95 $ 11.5 2Q95 $ 20.9 3Q95 $ 4.6 4Q95 $ 21.9 1Q96 $ 10.3 PORTFOLIO YIELD (excluding FASB 115) Period Yield 88 11.3% 89 11.2% 90 10.7% 91 10.4% 92 10.3% 93 9.8% 94 8.9% 95 8.9% 1Q96 8.8% 18 INVESTMENT SUMMARY Bond Portfolio Par Value by Coupon 3/31/96 (000,000) Total CMO/Mtg Cum Public Private Bonds Backed Total % % > 11% $ 35 $ 296 $ 331 $ 1 $ 332 3.4 % 3.4 % 10% 88 280 368 22 390 4.0 % 7.4 % 9% 478 760 1,238 212 1,450 15.0 % 22.4 % 8% 1,265 424 1,689 439 2,128 22.1 % 44.5 % 7% 2,055 358 2,413 616 3,029 31.4 % 75.9 % < 6% 607 240 847 300 1,147 11.9 % 87.8 % 0% 951 215 1,166 10 1,176 12.2 % 100.0 % $ 5,479 $ 2,573 $ 8,052 $ 1,600 $ 9,652 100.0 % Bond Portfolio Par Value by Coupon 12/31/95 Total CMO/Mtg Cum Public Private Bonds Backed Total % % > 11% $ 35 $ 292 $ 327 $ 1 $ 328 3.5 % 3.5 % 10% 88 291 379 33 412 4.4 % 7.9 % 9% 493 765 1,258 215 1,473 15.6 % 23.5 % 8% 1,276 424 1,700 467 2,167 23.0 % 46.5 % 7% 1,917 339 2,256 607 2,863 30.3 % 76.8 % < 6% 548 203 751 280 1,031 10.9 % 87.7 % 0% 953 214 1,167 0 1,167 12.3 % 100.0 % $ 5,310 $ 2,528 $ 7,838 $ 1,603 $ 9,441 100.0 % CMO Portfolio by Underlying Collateral Rate 3/31/96 Book Par < 7.5% $ 258.9 $ 280.0 7.5 - 8.5 468.9 490.1 8.5 - 9.5 453.4 469.9 > 9.5% 307.5 320.0 $ 1,488.7 $ 1,560.0 CMO Portfolio by Underlying Collateral Rate 12/31/95 Book Par < 7.5% $ 246.3 $ 266.4 7.5 - 8.5 457.2 478.0 8.5 - 9.5 467.6 484.6 > 9.5% 334.7 348.2 $ 1,505.8 $ 1,577.2 19 ANALYST COVERAGE A. G. Edwards Jeffrey Hopson Conning & Company Paul Goulekas CS First Boston Vanessa Wilson Davenport & Company David West Fox-Pitt, Kelton Ronald McIntosh Lehman Brothers Edward Spehar Merrill Lynch Margaret Alexandre Morgan Stanley Michael Blumstein Oppenheimer & Company Eric Berg Robinson-Humphrey Thomas Rosencrants Sanford Bernstein Sallie Krawcheck Schroder Wertheim Andrew Kligerman Scott & Stringfellow Neal Kaplan COMMON STOCK DATA 1Q96 1Q95 2Q95 3Q95 4Q95 High 26 1/4 23 24 7/8 27 3/4 28 7/8 Low 23 5/8 20 3/4 21 23 5/8 24 Closing 23 7/8 22 5/8 24 27 1/8 25 3/8 Avg. Daily Volume 74,935 64,862 100,379 56,349 72,498 Dividends per share .115 .10 .10 .10 .10 Shares Outstanding (millions) 49.4 49.3 49.4 49.4 49.4 FINANCIAL STRENGTH RATINGS A. M. Best A++ Duff & Phelps AA+ Moody's Aa3 S&P AA+ EX-27 4 FIRST COLONY CORPORATION - FINANCIAL DATA SCHEDULE
7 This schedule contains summary financial information extracted from the Condensed Consolidated Balance Sheets and the Consolidated Statements of Income and is qualified in its entirety by reference to such financial statements. 1000 3-MOS DEC-31-1996 MAR-31-1996 4,650,196 4,069,067 4,345,009 320,461 248 4,329 9,304,911 22,447 125,375 938,381 10,717,983 8,612,340 234 65,741 116,988 207,216 0 80,000 312,913 961,545 10,717,983 177,466 196,231 10,301 27,725 308,146 14,376 29,002 60,199 21,276 38,923 0 0 0 38,923 0.77 0.77 0 0 0 0 0 0 0
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