Symetra Financial Corporation (NYSE:SYA) today reported fourth quarter 2012 net income of $31.0 million, or $0.22 per diluted share, compared with $73.7 million, or $0.54 per diluted share, in fourth quarter 2011. Symetra’s equity investment portfolio generated $35.4 million less in returns than fourth quarter 2011, reflecting lower equity market growth. For full-year 2012, Symetra produced net income of $205.4 million, or $1.49 per diluted share, up from $195.8 million, or $1.42 per diluted share, in 2011.
Adjusted operating income was $32.9 million, or $0.24 per diluted share, in fourth quarter 2012, compared with $51.1 million, or $0.37 per diluted share, in the same period a year ago. For full-year 2012, Symetra generated adjusted operating income of $185.3 million, or $1.34 per diluted share, compared with $190.2 million, or $1.38 per diluted share, in 2011.
Symetra posted a 6.1% return on equity (ROE) for 2012, compared with 7.2% in 2011. Operating return on average equity (ROAE) 1 for 2012 was 8.5%, compared with 9.5% in 2011.
|Summary Financial Results||Three Months Ended||Twelve Months Ended|
|(In millions, except per share data)||December 31||December 31|
|Per Diluted Share of Common Stock||$||0.22||$||0.54||$||1.49||$||1.42|
|Adjusted Operating Income||$||32.9||$||51.1||$||185.3||$||190.2|
|Per Diluted Share of Common Stock||$||0.24||$||0.37||$||1.34||$||1.38|
|Return on Equity||6.1||%||7.2||%|
|Operating Return on Average Equity||8.5||%||9.5||%|
* Historical financial information has been restated to reflect retrospective adoption of a new accounting standard for deferred policy acquisition costs on Jan. 1, 2012.Fourth quarter 2012 results included the following pretax items of note, which decreased overall adjusted operating income by $2.2 million pretax, and $6.1 million after tax:
- Investment income of $10.8 million, related to investment prepayments (primarily bond make-whole payments in the Deferred Annuities segment), offset by related increased amortization of $2.5 million.
- Operating expense charges of $4.6 million, including expenses related to the exploration of an acquisition opportunity that did not come to fruition.
- Reserve increase and higher claims, resulting in a $3.8 million decline in Benefits earnings related to the limited benefit medical business.
- Reserve increases of $2.1 million, resulting in a charge against earnings of $1.1 million in Income Annuities, and a charge of $1.0 million in the Individual Life segment.
- A deferred tax asset adjustment, resulting in a $4.7 million increase in income tax expense.