American Financial Group, Inc. (NYSE/NASDAQ: AFG) today reported net earnings attributable to shareholders of $99 million ($1.01 per share) for the 2012 second quarter, compared to $48 million ($0.46 per share) reported for the 2011 second quarter. Net earnings for the first six months of 2012 were $212 million ($2.15 per share) compared to $136 million ($1.29 per share) for the same period a year ago. The 2012 second quarter and six month results include $9 million and $37 million, respectively, in net realized gains compared to $12 million and $9 million in the comparable prior year periods. Book value per share, excluding appropriated retained earnings and unrealized gains on fixed maturities, increased by $2.11 to $40.74 per share during the first six months of 2012.
Core net operating earnings were $90 million ($0.91 per share) for the 2012 second quarter, compared to $74 million ($0.72 per share) reported in the 2011 second quarter. Higher profits in our Annuity and Supplemental Insurance (“A&S”) Group and improved underwriting results in our Specialty Property and Casualty Insurance (“P&C”) operations were offset somewhat by lower P&C investment income. Core net operating earnings for the first six months of 2012 were $175 million ($1.77 per share) compared to $165 million ($1.57 per share) for the same period a year ago. Six month annualized core operating return on equity was 9%.
Effective January 1, 2012, AFG retrospectively adopted new guidance issued by the Financial Accounting Standards Board related to the accounting for costs associated with acquiring or renewing insurance contracts. Accordingly, results for 2011 have been adjusted to reflect the impact of the adoption, which resulted in a reduction in AFG’s December 31, 2011 shareholders’ equity of approximately $134 million (3%).
During the second quarter of 2012, AFG repurchased approximately 2.5 million shares of common stock at an average price per share of $38.55. Repurchases during the first six months of 2012 totaled 4.0 million shares at an average price per share of $38.31.