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Presidential Life Corporation Announces Third Quarter 2012 Results

Stocks in this article: PLFE

Interest credited and benefits paid and accrued to policyholders were $45.5 million and $43.8 million in the third quarters of 2012 and 2011, respectively, a period-over-period increase of $1.7 million or 3.9%, and were $135.0 million and $131.8 million for the nine months ended September 30, 2012 and 2011, respectively, a period-over-period increase of $3.2 million or 2.4%. The increases are principally due to the increase in liabilities for immediate annuities with life contingencies in 2012 compared to 2011 related to the increase in sales of this product in 2012.

Commissions to agents, net were $1.3 million and $0.7 million in the third quarters of 2012 and 2011, respectively, a period-over-period increase of $0.6 million or 85.7%, and were $3.7 million and $3.1 million for the nine months ended September 30, 2012 and 2011, respectively, a period-over-period increase of $0.6 million or 19.4%. Commission expense increased slightly in the third quarter 2012 relative to 2011 due to higher annuity sales compared to the previous year. The net expense from changes in the deferred policy acquisition costs was $1.1 million and $1.3 million in the third quarters of 2012 and 2011, respectively, a period-over-period decrease of $0.2 million or 15.4%, and was $2.3 million and $4.5 million for the nine months ended September 30, 2012 and 2011, respectively, a period-over-period decrease of $2.2 million or 48.9%, principally related to lower amortization of DAC on annuity sales due to lower realized gains. Deferred acquisition costs were reduced by $0.5 million for the first nine months of 2012 relative to 2011 primarily due to a reduction in deferred costs resulting from the prospective adoption of a new accounting principle in 2012 that reduced the scope of deferrable costs to those directly linked to successful sales efforts.

General expenses and taxes were $6.6 million and $4.5 million in the third quarters of 2012 and 2011, respectively, a period-over-period increase of $2.1 million or 46.7%, and were $20.1 million and $17.6 million for the nine months ended September 30, 2012 and 2011, respectively, a period-over-period increase of $2.5 million or 14.2%. The third quarter increase was primarily due to higher transaction costs incurred in connection with the sale of the Company and increased consulting fees associated with systems implementation projects.

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