State Auto Financial Corporation (NASDAQ: STFC) today reported fourth quarter 2011 net income of $100.6 million, or $2.49 per diluted share, versus $37.6 million, or $0.94 per diluted share, for the fourth quarter of 2010. Net income from operations* per diluted share for the fourth quarter 2011 was $2.30, versus $0.78 for the same 2010 period. STFC’s GAAP combined ratio for the fourth quarter 2011 was 94.0 versus 97.6 for the fourth quarter of 2010. Catastrophe losses during the fourth quarter of 2011, including prior accident period development, favorably impacted the 59.7 loss ratio by 0.5 points, or $1.8 million. For the same 2010 period, catastrophe losses accounted for 2.3 points of the total 62.6 loss ratio points, or $7.7 million. As previously reported, the State Auto Group implemented capital management actions at the end of 2011 to improve and better manage the capital position of STFC. First, the intercompany reinsurance pooling agreement was amended to reduce the overall participation percentage of the STFC insurance subsidiaries from 80% to 65% including pooling other comprehensive income related to employee benefit plans. Second, the State Auto Group entered into a three-year quota share reinsurance agreement with a syndicate of reinsurers covering its homeowners’ book of business. Third, retiree health care benefits for most active employees and certain retirees were terminated. STFC’s book value was $18.81 per share as of Dec. 31, 2011, an increase of $3.87 per share from STFC’s book value on Sept. 30, 2011, and a decrease of $2.42 per share from Dec. 31, 2010. Net income combined with other comprehensive income for the quarter significantly impacted the book value per share increase. Other comprehensive income benefited from improved investment valuations, termination of retiree health care benefits and pooling of other comprehensive income for employee benefit plans, offset by the annual remeasurement of employee benefit plan obligations at Dec. 31. Book value per share as of Dec. 31, 2011, is reduced by $2.26 for a deferred tax asset valuation allowance. Return on stockholders’ equity for the year ended Dec. 31, 2011, was negative 18.2% compared to 2.9% for same period in 2010.