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National Western Life Group, Inc. Announces 2022 First Quarter Earnings

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National Western Life Group, Inc. (NWLI) reported a 42% decline in total revenues for Q1 2022, totaling $134.3 million, primarily due to unrealized investment losses. The company's net earnings fell to $36.2 million, or $10.23 per diluted share, from $62.1 million in Q1 2021. As of March 31, 2022, book value per share decreased to $632.00 from $698.48. Key factors included significant unrealized losses on investments, shifting from a gain of $476 million at year-end 2021 to a loss of $155.3 million in Q1 2022.

Positive
  • Improvement in claim experience, with COVID-19 related claims down nearly 60% year-over-year.
  • Consolidated total assets stood at $13.8 billion, supporting financial stability.
Negative
  • Total revenues fell 42% from Q1 2021, indicating a challenging environment.
  • Net earnings dropped from $62.1 million to $36.2 million, reflecting decreased profitability.
  • Unrealized losses on index options shifted from a gain of $28 million to a loss of $38.2 million.
  • The company's debt security investment portfolio reported unrealized losses of $155.3 million.

AUSTIN, Texas, May 10, 2022 /PRNewswire/ -- Ross R. Moody, Chairman of the Board, President, and Chief Executive Officer of National Western Life Group, Inc. (Nasdaq: NWLI), announced today first quarter 2022 consolidated net earnings of $36.2 million, or $10.23 per diluted Class A common share, compared with consolidated net earnings of $62.1 million, or $17.57 per diluted Class A common share, for the first quarter of 2021. The Company's book value per share as of March 31, 2022 was $632.00.

Total revenues declined 42% in the quarter ended March 31, 2022 from the level reported in the first quarter of 2021 due to a decline in investment income caused by unrealized investment losses. Net investment income in the first quarter of 2022, including unrealized investment gains and losses, was $69.7 million as compared to $166.1 million in the first quarter of 2021. Mr. Moody observed, "The combination of higher interest rates and lower equity market performance substantially effected the fair values used to report the Company's investments this quarter."

The Company reported that index options purchased to hedge the crediting rate mechanism in its equity-indexed life and annuity products swung from an unrealized gain of $28.0 million in the first quarter of 2021 to an unrealized loss of $38.2 million in the first quarter of 2022. In addition, the Company's debt security investment portfolio shifted from an unrealized gain position of $476.0 million at December 31, 2021 to an unrealized loss of $155.3 million at March 31, 2022. Mr. Moody indicated, "The decrease in the Company's book value per share during the quarter is entirely due to the unrealized losses recorded on debt securities. The Company's core book value, without unrealized gains and losses on debt securities, exhibited a healthy increase during the first quarter."

The Company reported that net earnings for the quarter ended March 31, 2022 included improvement in claim experience over the first quarter in the prior year. Mr. Moody noted, "Claims reported which indicated the cause of death as COVID-19 decreased nearly 60% in the first quarter this year from that of last year. There is industry speculation regarding the completeness of COVID-19 death claim reporting, but the trend is headed in the right direction."

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 March 31, 2022, the Company maintained consolidated total assets of $13.8 billion, consolidated stockholders' equity of $2.3 billion, and combined life insurance in force of $20.6 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



March 31,



2022


2021

Revenues:





Revenues, excluding investment and index option gains (losses)

$

168,703


200,938

Realized and unrealized gains (losses) on index options


(38,198)


28,024

Realized gains on investments


3,794


1,416

Total revenues


134,299


230,378






Benefits and expenses:





Life and other policy benefits


41,899


37,889

Amortization of deferred transaction costs


29,016


29,989

Universal life and annuity contract interest


(14,805)


52,845

Other operating expenses


32,582


31,335

Total benefits and expenses


88,692


152,058






Earnings before income taxes


45,607


78,320

Income tax expense


9,423


16,191

Net earnings

$

36,184


62,129






Net earnings attributable to Class A shares

$

35,161


60,372






Diluted Earnings Per Class A Share

$

10.23


17.57






Diluted Weighted Average Class A Shares


3,436


3,436








March 31,


December 31,



2022


2021






Book value per share


632.00


698.48

Less: Per share impact of accumulated other comprehensive income


(17.04)


59.39

Book value per share, excluding accumulated other comprehensive income *


649.04


639.09

 

*

Book value per share excluding accumulated other comprehensive income is a non-GAAP financial measure. Accumulated other comprehensive income (loss) totaled $(61.9) million at March 31, 2022 and $216.0 million at December 31, 2021. Since accumulated other comprehensive income (loss) 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

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/national-western-life-group-inc-announces-2022-first-quarter-earnings-301544114.html

SOURCE National Western Life Group, Inc.

FAQ

What were National Western Life Group's earnings for Q1 2022?

National Western Life Group reported net earnings of $36.2 million for Q1 2022.

How much did National Western Life Group's revenues decline in Q1 2022?

Total revenues declined by 42% in Q1 2022 compared to the previous year.

What was the book value per share for NWLI as of March 31, 2022?

The book value per share for NWLI was $632.00 as of March 31, 2022.

How did COVID-19 claims impact NWLI's net earnings in Q1 2022?

Claims related to COVID-19 decreased nearly 60% compared to the prior year, positively impacting net earnings.

What are the unrealized losses reported by National Western Life Group?

Unrealized losses on debt securities amounted to $155.3 million in Q1 2022.

National Western Life Group, Inc.

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Insurance - Life
Life Insurance
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United States of America
AUSTIN