Exhibit 99.1

LOGO   NEWS RELEASE

2108 East South Boulevard

   Montgomery, Alabama 36116    Telephone 334-288-3900

 

FINANCIAL CONTACT:

   MEDIA CONTACT:

Stephen G. Rutledge

   David Rickey

Senior Vice President, CFO

   Vice President – Public Relations

and Chief Investment Officer

   (334) 613-4034

(334)613-4500

  

ALFA CORPORATION REPORTS SECOND QUARTER 2007 RESULTS

Montgomery, Alabama (July 27, 2007) — Alfa Corporation (NASDAQ:ALFA) today announced financial results for the three and six months ended June 30, 2007. Operating income for the quarter was $34,828,816, or $0.43 per diluted share, compared with operating income of $24,428,642, or $0.30 per diluted share, for the second quarter of 2006, a per share increase of 41.9%. Net income, which includes net realized investment gains, was $35,281,464, or $0.43 per diluted share, for the second quarter of 2007, compared with $25,508,448, or $0.31 per diluted share in 2006, a per share increase of 37.6%. Premiums and policy charges for the second quarter of 2007 increased 5.1% to $179,556,628.

For the six months ended June 30, 2007, operating income was $48,342,975 compared with operating income of $44,483,721 for the first six months of 2006. On a per share basis, operating income increased 8.1% to $0.59 per diluted share for the six-month period in 2007 compared with $0.55 per diluted share for the same period in 2006. After net realized investment gains, net income was $49,610,284, or $0.61 per diluted share, for the first six months of 2007, compared with net income of $45,645,890, or $0.56 per diluted share, for the same period in 2006, a per share increase of 8.1%. Premiums and policy charges increased 5.2% to $357,563,010 for the first six months of 2007.

Alfa Corporation will host a conference call on Friday, July 27, at 10:30 a.m. Eastern time. Investors and other interested parties may access the teleconference by calling 800-218-8862 or via links located on Alfa’s web site: www.alfains.com. A 30-day Internet play of the call will also be available from Alfa’s web site.

Alfa Corporation is engaged in insurance and financial activities through its subsidiaries. The common stock of Alfa Corporation is traded on the NASDAQ Global Select Market under the symbol ALFA.

The associated investor supplement package for the second quarter ended June 30, 2007, may be found by clicking on the web cast link in the “About Alfa – Investor Relations” section of Alfa’s web site and is also available at: http://www.irinfo.com/alfa/ALFA2q07tvs.pdf.

Investors are cautioned that statements in this press release which relate to the future are, by their nature, uncertain and dependent upon numerous contingencies – including political, economic, regulatory, climatic, competitive, legal, and technological – any of which could cause actual results and events to differ materially from those indicated in such forward-looking statements. Additional information regarding these and other risk factors and uncertainties may be found in Alfa Corporation’s filings with the Securities and Exchange Commission.

 

-MORE-


ALFA Reports Second Quarter Results

Page 2

July 27, 2007

 

ALFA CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(UNAUDITED)

 

    

Six Months Ended

June 30,

   Statistics   

Three Months Ended

June 30,

    Statistics
     2007    2006    % Change    2007    2006    2007    2006    % Change     2007    2006

Revenues

                            

Premiums – Property and Casualty Insurance

   313,027,325    298,250,971    4.95          157,648,498    150,835,039    4.52       

Premiums – Life Insurance

   25,180,713    22,839,703    10.25          12,624,544    11,093,850    13.80       

Policy Charges – Life Insurance

   19,354,972    18,757,220    3.19          9,283,586    8,924,542    4.02       

Net Investment Income

   53,697,594    40,800,741    31.61          26,250,637    16,825,077    56.02       

Other Income

   15,521,702    13,404,208    15.80          6,907,017    6,034,463    14.46       
                                          

Total Revenues

   426,782,306    394,052,843    8.31          212,714,282    193,712,971    9.81       
                                          

Benefits, Losses and Expenses

                            

Benefits, Claims, Losses and Settlement Expenses

   242,848,655    228,131,475    6.45    56.90    57.90    108,832,443    109,311,786    (0.44 )   51.16    56.43

Dividends to Policyholders

   2,134,309    2,085,958    2.32    0.50    0.53    990,299    970,959    1.99     0.47    0.50

Amortization of Deferred Policy Acquisition Costs

   71,438,846    61,250,061    16.63    16.74    15.54    35,484,996    30,525,438    16.25     16.68    15.76

Other Operating Expenses

   44,251,236    41,765,883    5.95    10.37    10.60    19,665,544    19,728,392    (0.32 )   9.25    10.18
                                                  

Total Benefits, Losses and Expenses

   360,673,046    333,233,377    8.23    84.51    84.57    164,973,282    160,536,575    2.76     77.56    82.87
                                                  

Income Before Income Tax Expense

   66,109,260    60,819,466    8.70    15.49    15.43    47,741,000    33,176,396    43.90     22.44    17.13

Income Tax Expense

   17,766,285    16,335,745    8.76    26.87    26.86    12,912,184    8,747,754    47.61     27.05    26.37
                                          

Operating Income

   48,342,975    44,483,721    8.68          34,828,816    24,428,642    42.57       

Realized Investment Gains, Net of Tax

   1,267,309    1,162,169    9.05          452,648    1,079,806    (58.08 )     
                                          

Net Income

   49,610,284    45,645,890    8.69          35,281,464    25,508,448    38.31       
                                          

Operating Income Per Share – Basic

   0.60    0.55    8.40          0.43    0.30    42.17       
                                          

Operating Income Per Share – Diluted

   0.59    0.55    8.12          0.43    0.30    41.87       
                                          

Net Income Per Share – Basic

   0.62    0.57    8.41          0.44    0.32    37.92       
                                          

Net Income Per Share – Diluted

   0.61    0.56    8.13          0.43    0.31    37.63       
                                          

Dividends Per Share

   0.2275    0.2100    8.33          0.1175    0.1100    6.82       
                                          

Average Shares Outstanding – Basic

   80,519,119    80,315,256    0.25          80,552,577    80,325,375    0.28       
                                          

Average Shares Outstanding – Diluted

   81,549,342    81,131,983    0.51          81,584,269    81,179,210    0.50       
                                          

Management believes that operating income and operating income per share, non-GAAP financial measures, serve as meaningful tools for assessing the profitability of the Company’s ongoing operations. Operating income is defined by the Company as net income excluding realized investment gains and losses, net of applicable taxes. Operating income per share represents operating income divided by the weighted average shares outstanding for the reporting period. Management uses operating income and operating income per share as measures of the Company’s ongoing profitability since they eliminate the effect of securities market volatility from earnings.

 

-MORE-


ALFA Reports Second Quarter Results

Page 3

July 27, 2007

 

ALFA CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

 

    

(Unaudited)

June 30,

2007

   

December 31,

2006 (1)

    % Change  

Assets

      

Investments:

      

Fixed Maturities Held for Investment, at amortized cost (fair value $42,341 in 2007 and $57,272 in 2006)

   $ 40,396     $ 55,052     -26.62 %

Fixed Maturities Available for Sale, at fair value (amortized cost $1,550,859,472 in 2007 and $1,436,188,473 in 2006)

     1,533,832,259       1,446,693,702     6.02 %

Equity Securities Available for Sale, at fair value (cost $123,531,903 in 2007 and $101,177,606 in 2006)

     136,581,024       111,427,207     22.57 %

Policy Loans

     66,528,419       64,949,875     2.43 %

Collateral Loans

     124,945,312       128,685,111     -2.91 %

Other Long-Term Investments

     90,948,079       86,823,771     4.75 %

Short-Term Investments

     118,129,067       167,683,154     -29.55 %
                      

Total Investments

     2,071,004,556       2,006,317,872     3.22 %

Cash

     27,517,959       37,218,109     -26.06 %

Other Long-Term Investments in Affiliates

     135,032,358       120,819,010     11.76 %

Accrued Investment Income

     18,598,823       17,026,711     9.23 %

Accounts Receivable

     94,977,128       84,100,246     12.93 %

Reinsurance Balances Receivable

     10,979,522       6,015,853     82.51 %

Deferred Policy Acquisition Costs

     233,947,743       224,516,950     4.20 %

Goodwill

     9,576,218       9,576,218     0.00 %

Other Intangible Assets (net of accumulated amortization of $1,708,500 in 2007 and $1,366,800 in 2006)

     7,399,500       7,741,200     -4.41 %

Other Assets

     18,641,748       20,906,925     -10.83 %
                      

Total Assets

   $ 2,627,675,555     $ 2,534,239,094     3.69 %
                      

Liabilities and Stockholders’ Equity

      

Policy Liabilities and Accruals - Property and Casualty Insurance

   $ 186,967,643     $ 172,664,652     8.28 %

Policy Liabilities and Accruals - Life Insurance Interest-Sensitive Products

     674,388,808       646,354,761     4.34 %

Policy Liabilities and Accruals - Life Insurance Other Products

     216,389,257       205,449,027     5.33 %

Unearned Premiums

     252,692,036       236,481,371     6.85 %

Dividends to Policyholders

     11,789,761       11,882,776     -0.78 %

Premium Deposit and Retirement Deposit Funds

     4,827,459       4,921,879     -1.92 %

Deferred Income Taxes

     12,824,306       25,547,554     -49.80 %

Other Liabilities

     91,645,993       75,222,398     21.83 %

Due to Affiliates

     17,560,447       24,355,859     -27.90 %

Commercial Paper

     212,633,458       206,923,215     2.76 %

Notes Payable

     70,000,000       70,000,000     0.00 %

Notes Payable to Affiliates

     26,847,576       27,516,459     -2.43 %
                      

Total Liabilities

     1,778,566,744       1,707,319,951     4.17 %
                      

Commitments and Contingencies

      

Stockholders’ Equity :

      

Preferred Stock, $1 par value

     —         —       0.00 %

Shares authorized: 1,000,000

      

Issued: None

      

Common Stock, $1 par value

     83,783,024       83,783,024     0.00 %

Shares authorized: 110,000,000

      

Issued: 83,783,024

      

Outstanding: 80,567,613 in 2007 and 80,459,113 in 2006

      

Capital in Excess of Par Value

     31,734,833       27,502,452     15.39 %

Accumulated Other Comprehensive Income (unrealized gains on securities available for sale, net of tax of $299,787 in 2007 and $14,019,988 in 2006; unrealized gains on interest rate swap contract, net of tax of $105,541 in 2006; unrealized gains (losses) on other long-term investments, net of tax of ($282,982) in 2007 and $75,006 in 2006)

     16,805       14,200,535     -99.88 %

Retained Earnings

     770,072,823       738,811,778     4.23 %

Treasury Stock, at cost (shares, 3,215,411 in 2007 and 3,323,911 in 2006)

     (36,498,674 )     (37,378,646 )   -2.35 %
                      

Total Stockholders’ Equity

     849,108,811       826,919,143     2.68 %
                      

Total Liabilities and Stockholders’ Equity

   $ 2,627,675,555     $ 2,534,239,094     3.69 %
                      

Book Value per share

   $ 10.54     $ 10.28    
                  

(1)

Derived from audited financial statements

 

-END-


LOGO

Alfa Corporation

Investor Supplement

Second Quarter 2007

This Investor Supplement is for informational purposes only. The consolidated financial statements and financial exhibits included herein are unaudited. These consolidated financial statements and exhibits should be read in conjunction with the consolidated financial statements and notes thereto included in Form 10-K.

Measures used in these financial statements and exhibits that are not based on generally accepted accounting principles (“non-GAAP”) are denoted with an asterisk (*) the first time they appear. These measures are defined on the page “Definitions of Non-GAAP, GAAP and Operating Measures” and are reconciled to the most directly comparable GAAP measure herein.


ALFA CORPORATION

PROPERTY/CASUALTY SEGMENT (UNAUDITED)

(in thousands, except ratios and per share data)

 

    

Six Months Ended

June 30,

    Ratios    

Three Months Ended

June 30,

    Ratios  
     2007     2006     % Change     2007     2006     2007     2006     % Change     2007     2006  

INCOME STATEMENT

                    

Revenues

                    

Automobile Premiums

   $ 194,768     $ 187,480     3.9         $ 97,779     $ 94,981     2.9      

Homeowner Premiums

     109,167       102,849     6.1           55,017       51,341     7.2      

Other Premiums

     9,092       7,922     14.8           4,852       4,513     7.5      
                                                    

Total Premiums - Property and Casualty Insurance

     313,027       298,251     5.0     100.0 %   100.0 %     157,648       150,835     4.5     100.0 %   100.0 %

Net Investment Income

     22,844       18,547     23.2           11,283       8,868     27.2      

Other Income

     8,287       6,833     21.3           3,443       3,419     0.7      
                                                    

Total Revenues

     344,158       323,631     6.3           172,374       163,122     5.7      

Benefits, Losses and Expenses

                    

Incurred Losses (Non-storm)

     171,795       159,882     7.5     54.9 %   53.6 %     82,008       77,871     5.3     52.0 %   51.6 %

Incurred Losses (Storm)

     13,917       13,805     0.8     4.4 %   4.6 %     2       3,893     (99.9 )   0.0 %   2.6 %

Loss Adjustment Expense

     16,283       14,548     11.9     5.2 %   4.9 %     8,353       7,504     11.3     5.3 %   5.0 %
                                                                    

Total Benefits, Claims, Losses and Settlement Expenses

     201,995       188,235     7.3     64.5 %   63.1 %     90,363       89,268     1.2     57.3 %   59.2 %

Amortization of Deferred Policy Acquisition Costs

     63,114       56,143     12.4     20.2 %   18.8 %     31,735       28,363     11.9     20.1 %   18.8 %

Other Operating Expenses

     27,364       26,730     2.4     8.7 %   9.0 %     12,332       12,963     (4.9 )   7.8 %   8.6 %
                                                                    

Total Operating Expenses

     90,478       82,873     9.2     28.9 %   27.8 %     44,067       41,326     6.6     27.9 %   27.4 %
                                                                    

Total Benefits, Losses and Expenses

     292,473       271,108     7.9     93.4 %   90.9 %     134,430       130,594     2.9     85.2 %   86.6 %
                                                                    

Income Before Income Tax Expense

     51,685       52,523     (1.6 )         37,944       32,528     16.7      

Income Tax Expense

     13,044       13,925     (6.3 )         9,713       8,791     10.5      
                                                    

Operating Income *

     38,641       38,598     0.1           28,231       23,737     18.9      

Realized Investment Gains (Losses), Net of Tax

     (2,888 )     (1,014 )   (184.8 )         (1,488 )     (325 )   (357.8 )    
                                                    

Net Income

   $ 35,753     $ 37,584     (4.9 )       $ 26,743     $ 23,412     14.2      
                                                    

Operating Income Per Share - Diluted *

   $ 0.47     $ 0.48     (0.4 )       $ 0.35     $ 0.29     18.3      

Net Income Per Share - Diluted

   $ 0.44     $ 0.46     (5.4 )       $ 0.33     $ 0.29     13.7      
                                                    

Operating Return on Equity*

     17.1 %     17.9 %                
                                

Return on Equity*

     16.1 %     17.2 %                
                                

Other Key Information

                    

Earned Premium by Market

                    

Alabama

   $ 224,410     $ 219,058     2.4     71.7 %   73.5 %   $ 112,722     $ 109,643     2.8     71.5 %   72.7 %

Georgia

     15,977       15,861     0.7     5.1 %   5.3 %     8,064       7,956     1.4     5.1 %   5.3 %

Mississippi

     22,089       20,005     10.4     7.1 %   6.7 %     11,472       10,156     13.0     7.3 %   6.7 %

Alliance/VA Mutual

     11,823       10,705     10.4     3.8 %   3.6 %     6,157       5,376     14.5     3.9 %   3.6 %

Nonstandard

     38,728       32,622     18.7     12.4 %   10.9 %     19,233       17,704     8.6     12.2 %   11.7 %
                                                                    

Total Earned Premium

   $ 313,027     $ 298,251     5.0     100.0 %   100.0 %   $ 157,648     $ 150,835     4.5     100.0 %   100.0 %
                                                                    

Incurred Losses by Market (Non-storm)

                    

Alabama

   $ 118,157     $ 116,179     1.7     52.7 %   53.0 %   $ 55,156     $ 56,193     (1.8 )   48.9 %   51.3 %

Georgia

     9,660       9,770     (1.1 )   60.5 %   61.6 %     4,398       4,652     (5.5 )   54.5 %   58.5 %

Mississippi

     12,209       8,876     37.6     55.3 %   44.4 %     6,161       4,141     48.8     53.7 %   40.8 %

Alliance/VA Mutual

     4,312       4,438     (2.8 )   36.5 %   41.5 %     2,792       1,944     43.6     45.3 %   36.2 %

Nonstandard

     27,457       20,619     33.2     70.9 %   63.2 %     13,501       10,941     23.4     70.2 %   61.8 %
                                                                    

Total Incurred Losses

   $ 171,795     $ 159,882     7.5     54.9 %   53.6 %   $ 82,008     $ 77,871     5.3     52.0 %   51.6 %
                                                                    

Lapse Ratio: Preferred and Standard Classes *

     3.24 %     3.35 %           3.09 %     3.27 %      

Net Written Premium by LOB

                    

Automobile

   $ 197,927     $ 202,594     (2.3 )       $ 92,527     $ 94,005     (1.6 )    

Homeowner

     114,242       107,526     6.2           60,420       56,671     6.6      

Other

     10,192       9,279     9.8           5,301       4,744     11.7      
                                                    

Total Net Written Premium

   $ 322,361     $ 319,399     0.9         $ 158,248     $ 155,420     1.8      
                                                    

Net Written Premium by Market

                    

Alabama

   $ 230,115     $ 224,914     2.3         $ 116,041     $ 113,199     2.5      

Georgia

     16,219       16,218     0.0           8,012       8,000     0.2      

Mississippi

     23,462       22,499     4.3           13,016       11,923     9.2      

Alliance/VA Mutual

     12,202       9,389     30.0           5,938       4,964     19.6      

Nonstandard

     40,363       46,379     (13.0 )         15,241       17,334     (12.1 )    
                                                    

Total Net Written Premium

   $ 322,361     $ 319,399     0.9         $ 158,248     $ 155,420     1.8      
                                                    

Data may differ from actual due to rounding.

Market information reflects presentation change for Nonstandard.


ALFA CORPORATION

LIFE SEGMENT (UNAUDITED)

(in thousands, except ratios and per share data)

 

    

Six Months Ended

June 30,

    Ratios    

Three Months Ended

June 30,

    Ratios  
     2007     2006     % Change     2007     2006     2007     2006     % Change     2007     2006  

INCOME STATEMENT

                    

Revenues

                    

Traditional Life Insurance Premiums

   $ 24,799     $ 22,349     11.0         $ 12,632     $ 11,094     13.9      

Universal Life Policy Charges

     11,147       10,795     3.3           5,574       5,403     3.2      

Universal Life Policy Charges - COLI

     2,522       2,478     1.8           849       779     9.0      

Interest-sensitive Life Policy Charges

     5,684       5,484     3.6           2,859       2,742     4.3      

Annuity Policy Charges

     2       —       100.0           1       —       100.0      

Group Life Insurance Premiums

     528       491     7.5           (8 )     —       (100.0 )    
                                                    

Total Premiums and Policy Charges - Life Insurance

     44,682       41,597     7.4     100.0 %   100.0 %     21,907       20,018     9.4     100.0 %   100.0 %

Net Investment Income

     29,735       27,306     8.9           15,097       13,716     10.1      

Other Income

     —         —       0.0       —         —         —       0.0      
                                                    

Total Revenues

     74,417       68,903     8.0           37,004       33,734     9.7      

Benefits, Claims, Losses and Settlement Expenses

     41,007       40,248     1.9     91.8 %   96.8 %     18,417       20,267     (9.1 )   84.1 %   101.2 %

Dividends to Policyholders

     2,134       2,086     2.3     4.8 %   5.0 %     990       971     2.0     4.5 %   4.9 %

Amortization of Deferred Policy Acquisition Costs

     8,325       5,894     41.2     18.6 %   14.2 %     3,750       2,950     27.1     17.1 %   14.7 %

Other Operating Expenses

     8,491       6,778     25.3     19.0 %   16.3 %     4,074       2,763     47.4     18.6 %   13.8 %
                                                                    

Total Benefits, Losses and Expenses

     59,957       55,006     9.0     134.2 %   132.3 %     27,231       26,951     1.0     124.3 %   134.6 %
                                                                    

Income Before Income Tax Expense

     14,460       13,897     4.1           9,773       6,783     44.1      

Income Tax Expense

     4,638       4,308     7.7           3,156       2,074     52.2      
                                                    

Operating Income

     9,822       9,589     2.4           6,617       4,709     40.5      

Realized Investment Gains, Net of Tax

     4,189       2,204     90.1           1,974       1,433     37.8      
                                                    

Net Income

   $ 14,011     $ 11,793     18.8         $ 8,591     $ 6,142     39.9      
                                                    

Operating Income Per Share - Diluted

   $ 0.12     $ 0.12     1.9         $ 0.08     $ 0.06     39.8      

Net Income Per Share - Diluted

   $ 0.17     $ 0.15     18.2         $ 0.11     $ 0.08     39.2      
                                                    

Operating Return on Equity

     7.4 %     7.4 %                
                                

Return on Equity

     9.7 %     9.1 %                
                                

Other Key Information (all information presented on a STAT-basis)

                    

Annualized New Business Premium by LOB

                    

Traditional Life

   $ 6,157     $ 7,188     (14.3 )       $ 2,591     $ 2,956     (12.3 )    

Universal Life

     1,964       1,913     2.7           837       807     3.7      

Interest-sensitive Life

     1,154       1,050     9.9           524       453     15.7      
                                                    

Total Issued New Business Premium by LOB

   $ 9,275     $ 10,151     (8.6 )       $ 3,952     $ 4,216     (6.3 )    
                                                    

Annualized New Business Premium by Region

                    

Alabama

   $ 7,910     $ 8,790     (10.0 )       $ 3,305     $ 3,595     (8.1 )    

Georgia

     638       720     (11.4 )         277       314     (11.8 )    

Mississippi

     727       641     13.4           370       307     20.5      
                                                    

Total Issued New Business Premium by Region

   $ 9,275     $ 10,151     (8.6 )       $ 3,952     $ 4,216     (6.3 )    
                                                    

Actual vs. Expected Mortality Ratio *

     81 %     101 %           61 %     106 %      

Persistency Ratio *

     90.5 %     91.2 %                
                                

Data may differ from actual due to rounding


ALFA CORPORATION

NONINSURANCE SEGMENT (UNAUDITED)

(in thousands, except ratios and per share data)

 

    

Six Months Ended

June 30,

   

Three Months Ended

June 30,

 
     2007     2006     % Change     2007     2006     % Change  

INCOME STATEMENT

            

Revenues

            

Equity Interest in MidCountry Financial (net of expense)

   $ 441     $ 803     (45.1 )   $ (24 )   $ 288     (108.3 )

Loan Income (net of expense)

     3,094       (3,318 )   193.2       1,099       (4,473 )   124.6  

Other Net Investment Income

     733       4     18,225.0       393       (157 )   350.3  
                                        

Total Net Investment Income

     4,268       (2,511 )   270.0       1,468       (4,342 )   133.8  

Fee/Commission Income - Agency Operations

     18,160       18,728     (3.0 )     8,146       7,917     2.9  

Other Income

     559       662     (15.6 )     286       318     (10.1 )
                                            

Total Other Income

     18,719       19,390     (3.5 )     8,432       8,235     2.4  
                                            

Total Revenues

     22,987       16,879     36.2       9,900       3,893     154.3  

Benefits, Losses and Expenses

            

Claims and Settlement Expenses - Agency Operations

     2,127       1,624     31.0       1,030       891     15.6  

Other Operating Expenses - Loan/Lease Operations

     2,176       2,344     (7.2 )     1,014       1,070     (5.2 )

Other Operating Expenses - Agency Operations

     13,724       15,226     (9.9 )     6,072       6,182     (1.8 )

Other Operating Expenses - Other Operations

     (123 )     366     (133.6 )     (430 )     20     (2,250.0 )
                                            

Total Benefits, Losses and Expenses

     17,904       19,560     (8.5 )     7,686       8,163     (5.8 )
                                            

Income Before Income Tax Expense

     5,083       (2,681 )   289.6       2,214       (4,270 )   151.9  

Income Tax Expense

     1,876       (875 )   314.4       810       (1,464 )   155.3  
                                            

Operating Income (Loss)

     3,207       (1,806 )   277.6       1,404       (2,806 )   150.0  

Realized Investment Gains (Losses), Net of Tax

     (33 )     (27 )   (22.2 )     (33 )     (27 )   (22.2 )
                                            

Net Income (Loss)

   $ 3,174     $ (1,833 )   273.2     $ 1,371     $ (2,833 )   148.4  
                                            

Operating Income (Loss) Per Share - Diluted

   $ 0.04     $ (0.02 )   276.7     $ 0.02     $ (0.03 )   149.8  

Net Income (Loss) Per Share - Diluted

   $ 0.04     $ (0.02 )   272.3     $ 0.02     $ (0.03 )   148.2  
                                            

Operating Return on Equity

     6.4 %     0.4 %        
                        

Return on Equity

     6.3 %     0.3 %        
                        
Other Key Information                                     
     6/30/07     6/30/06     % Change                    

Alfa Financial Corporation:

            

Loan Portfolio

   $ 124,614     $ 129,674     (3.9 )      

Loan Portfolio Yield *

     8.06 %     7.66 %        

Loan Gross Charge-offs

   $ (533 )   $ 506          

Loan Net Charge-offs

   $ (593 )   $ 5,958          

Loan Delinquency Ratio *

     2.03 %     1.36 %        

MidCountry Financial Corporation:

            

Carrying Value (41% and 42% ownership at 6/30/07 and 6/30/06, respectively)

   $ 84,779     $ 54,320     56.1        

Equity in Net Earnings

   $ 441     $ 803     (45.1 )      

Return on Carried Value *

     1.0 %     3.0 %        

Data may differ from actual due to rounding.


ALFA CORPORATION

CORPORATE SEGMENT AND ELIMINATIONS (UNAUDITED)

(in thousands, except ratios and per share data)

 

    

Six Months Ended

June 30,

   

Three Months Ended

June 30,

 
     2007     2006     % Change     2007     2006     % Change  

INCOME STATEMENT

            

Revenues

            

Premiums - Life Insurance

   $ (146 )   $ —       (100.0 )   $ —       $ —       0.0  

Investment Loss

     (381 )     (474 )   19.6       (191 )     (273 )   30.0  

Interest Expense

     (2,768 )     (2,068 )   (33.8 )     (1,406 )     (1,144 )   (22.9 )
                                            

Total Net Investment Loss

     (3,149 )     (2,542 )   (23.9 )     (1,597 )     (1,417 )   (12.7 )

Other Income

     (11,485 )     (12,819 )   10.4       (4,968 )     (5,620 )   11.6  
                                            

Total Revenues

     (14,780 )     (15,361 )   3.8       (6,565 )     (7,037 )   6.7  

Benefits, Losses and Expenses

            

Claims and Settlement Expenses

     (2,280 )     (1,974 )   (15.5 )     (978 )     (1,115 )   12.3  

Amortization of Deferred Policy Acquisition Costs

     —         (787 )   100.0       —         (787 )   100.0  

Other Operating Expenses

     (7,380 )     (9,677 )   23.7       (3,397 )     (3,269 )   (3.9 )
                                            

Total Benefits, Claims, Losses and Settlement Expenses

     (9,660 )     (12,438 )   22.3       (4,375 )     (5,171 )   15.4  
                                            

Loss Before Income Tax Expense (Benefit)

     (5,120 )     (2,923 )   (75.2 )     (2,190 )     (1,866 )   (17.4 )

Income Tax Expense (Benefit)

     (1,792 )     (1,022 )   (75.3 )     (767 )     (653 )   (17.5 )
                                            

Operating Income (Loss)

     (3,328 )     (1,901 )   (75.1 )     (1,423 )     (1,213 )   (17.3 )

Realized Investment Gains (Losses), Net of Tax

     —         —       0.0       —         —       0.0  
                                            

Net Income (Loss)

   $ (3,328 )   $ (1,901 )   (75.1 )   $ (1,423 )   $ (1,213 )   (17.3 )
                                            

Operating Income (Loss) Per Share - Diluted

   $ (0.04 )   $ (0.02 )   (74.2 )   $ (0.02 )   $ (0.01 )   (16.7 )

Net Income (Loss) Per Share - Diluted

   $ (0.04 )   $ (0.02 )   (74.2 )   $ (0.02 )   $ (0.01 )   (16.7 )
                                            

Data may differ from actual due to rounding.


ALFA CORPORATION

INVESTMENT PORTFOLIO

(in thousands, except ratios and per share data)

 

       

Six Months Ended

June 30,

               

Three Months Ended

June 30,

             
        2007     2006     % Change                 2007     2006     % Change              

Alfa Corporation Consolidated Investment Portfolio - Other Key Information

 

                 
                          Yields                       Yields  

Net Investment Income and Pre-tax Yield:

          2007     2006           2007     2006  

Fixed Income Securities

    $ 43,012     $ 38,952     10.4     5.8 %   5.6 1   $ 21,736     $ 19,495     11.5     5.8 %   5.6 1

Equity Securities

      1,960       2,277     (13.9 )   3.2 %   4.2 %     972       1,313     (26.0 )   3.1 %   4.8 %

Collateral Loans

      5,085       4,933     3.1           2,559       2,590     (1.2 )    

Commercial Leases

      74       94     (21.3 )         52       46     13.0      

Other Investment Income

      13,916       10,627     30.9           6,632       4,782     38.7      

Interest Expense

      (7,905 )     (7,268 )   (8.8 )         (3,987 )     (3,846 )   (3.7 )    

Investment Expenses

      (2,446 )     (8,815 )   72.3           (1,712 )     (7,554 )   77.3      
                                                     

Total Net Investment Income

    $ 53,696     $ 40,800     31.6         $ 26,252     $ 16,826     56.0      
                                                     

Investment Portfolio Composition:

      6/30/07       12/31/06                  

Fixed Income Securities, by Rating: 2

                     

NAIC Rated

  Moody’s Rated                    

1

  Aaa/Aa/A   $ 1,451,009     $ 1,353,897     7.2                

2

  Baa     75,853       83,338     (9.0 )              

3

  Ba     2,030       2,060     (1.5 )              

4

  B     1,980       4,454     (55.5 )              

5

  Caa     —         —       0.0                

6

  In or near default     —         —       0.0                

Not Rated

      3,000       3,000     0.0                
                                     

Total Fixed Income Securities

      1,533,872       1,446,749     6.0                

Equity Securities

      136,581       111,427     22.6                

Collateral Loans

      124,945       128,685     (2.9 )              

Other Invested Assets

      275,606       319,457     (13.7 )              
                                     

Total Investments

      2,071,004       2,006,318     3.2                

Investment In Affiliates

      135,032       120,819     11.8                
                                     
                     

Total

    $ 2,206,036     $ 2,127,137     3.7                
                                     

1

Yield on Fixed Income Securities is calculated as annualized income divided by the average of the beginning and end of period amortized investment balances for the same 12-month period, which exclude unrealized investment gains and losses.

2

Investment Portfolio Composition values for Fixed Income Securities are based on fair value for available for sale securities and amortized value for held for investment securities.

Data may differ from actual due to rounding.


ALFA CORPORATION

QUARTERLY FINANCIAL SUPPLEMENT

June 30, 2007

(Unaudited)

 

Additional Information                         
     03:1Q    03:2Q    03:3Q    03:4Q    2003

Pretax P&C Net Investment Income

   6,910,185    7,653,547    7,423,546    6,516,131    28,503,409

Pretax P&C Operating Income

   20,276,043    16,813,874    16,415,815    16,120,258    69,625,990

P&C Statutory Invested Assets

   619,015,221    626,103,044    640,677,141    643,775,395   

P&C Statutory Surplus

   300,514,053    308,384,829    314,946,117    323,362,342   

P&C Loss & LAE Reserves (1)

   144,689,722    145,691,012    147,585,697    139,589,753   

Pretax Life Net Investment Income

   11,534,769    10,948,305    10,843,170    11,408,366    44,734,610

Pretax Life Operating Income

   5,630,299    6,071,633    5,514,256    9,528,981    26,745,169

Life Statutory Invested Assets

   771,143,631    809,472,299    808,833,684    823,345,514   

Life Statutory Surplus

   127,075,494    130,374,293    133,237,013    144,834,065   
     04:1Q    04:2Q    04:3Q    04:4Q    2004

Pretax P&C Net Investment Income

   7,422,200    7,529,905    8,148,041    11,646,118    34,746,264

Pretax P&C Operating Income

   26,792,114    19,926,490    21,346,862    22,743,798    90,809,264

P&C Statutory Invested Assets (2)

   663,386,315    668,080,084    722,795,981    716,630,234   

P&C Statutory Surplus

   335,394,591    343,130,340    340,815,304    369,838,232   

P&C Loss & LAE Reserves (1)

   144,839,184    144,417,593    151,118,973    150,856,684   

Pretax Life Net Investment Income

   11,464,207    12,070,627    13,044,596    12,549,202    49,128,632

Pretax Life Operating Income

   6,101,031    4,881,196    5,704,300    8,778,931    25,465,458

Life Statutory Invested Assets

   850,439,601    865,246,778    876,301,256    890,441,591   

Life Statutory Surplus

   147,078,186    149,627,085    151,079,986    161,992,039   
     05:1Q    05:2Q    05:3Q    05:4Q    2005

Pretax P&C Net Investment Income

   9,310,764    8,926,932    11,232,799    10,729,178    40,199,673

Pretax P&C Operating Income

   19,002,266    33,255,773    29,255,953    24,178,448    105,692,440

P&C Statutory Invested Assets (2)

   705,855,331    715,563,873    720,574,977    733,114,630   

P&C Statutory Surplus

   372,285,887    385,401,304    398,052,284    407,475,146   

P&C Loss & LAE Reserves (1)

   145,569,327    141,926,723    149,282,527    157,988,560   

Pretax Life Net Investment Income

   12,226,938    13,061,800    12,661,842    13,012,004    50,962,584

Pretax Life Operating Income

   7,722,260    7,001,604    6,004,445    9,749,301    30,477,610

Life Statutory Invested Assets

   923,042,022    932,889,527    957,943,993    957,658,384   

Life Statutory Surplus

   163,786,697    167,102,347    171,890,971    177,189,239   
     06:1Q    06:2Q    06:3Q    06:4Q    2006

Pretax P&C Net Investment Income

   9,678,917    8,867,842    10,230,689    10,639,827    39,417,275

Pretax P&C Operating Income

   19,996,255    32,528,491    27,338,061    29,125,239    108,988,046

P&C Statutory Invested Assets (2)

   781,525,886    792,053,522    789,965,735    815,633,254   

P&C Statutory Surplus

   410,789,564    430,367,018    424,266,223    450,690,007   

P&C Loss & LAE Reserves (1)

   163,390,031    161,008,518    164,960,736    170,675,884   

Pretax Life Net Investment Income

   13,590,101    13,716,250    14,296,140    14,924,804    56,527,295

Pretax Life Operating Income

   7,113,633    6,783,319    8,585,952    11,599,737    34,082,641

Life Statutory Invested Assets

   1,002,957,159    999,648,875    1,017,945,275    1,031,591,536   

Life Statutory Surplus

   182,409,009    179,808,669    184,518,325    202,198,338   
     07:1Q    07:2Q    07:3Q    07:4Q    2007

Pretax P&C Net Investment Income

   11,561,426    11,282,501          22,843,927

Pretax P&C Operating Income

   13,742,157    37,943,043          51,685,200

P&C Statutory Invested Assets (2)

   858,199,394    868,459,544         

P&C Statutory Surplus

   458,720,955    468,199,817         

P&C Loss & LAE Reserves (1)

   186,168,206    184,182,945         

Pretax Life Net Investment Income

   14,638,077    15,097,218          29,735,295

Pretax Life Operating Income

   4,685,844    9,774,858          14,460,702

Life Statutory Invested Assets

   1,066,821,010    1,078,632,782         

Life Statutory Surplus

   206,159,735    215,767,284         

(1) P&C Loss & LAE Reserves for fourth quarter 2003, fourth quarter 2004 and periods beginning in 2005 include salvage and subrogation receivables.
(2) P&C Statutory Invested Assets for fourth quarter 2004 and periods beginning in 2005 reflect a reclassification of premium installment plan receivables into Accounts Receivable.


Definitions of Non-GAAP, GAAP and Operating Measures

Management believes that disclosure of the following non-GAAP financial measures provides investors with meaningful tools to assess the Company’s ongoing operations. Our methods of calculating these measures may differ from those used by other companies, thereby limiting comparability.

Operating Income is defined as net income excluding realized investment gains and losses, net of applicable taxes. Management uses operating income as a measure of the Company’s ongoing profitability since it eliminates the effect of securities market volatility from earnings.

Operating Income per Share is defined as operating income divided by the weighted average shares outstanding for the reporting period. Management uses operating income per share as a measure of the Company’s ongoing profitability since it eliminates the effect of securities market volatility from earnings.

Operating Return on Equity (Current Period) is defined as operating income for the trailing 12-month period divided by the simple average of the beginning and ending stockholders’ equity of the same 12-month period.

Operating Return on Equity (Prior Period) is defined as operating income for the prior year divided by the simple average of the beginning and ending stockholders’ equity of the same 12-month period.

Return on Equity (Current Period) is defined as net income for the trailing 12-month period divided by the simple average of the beginning and ending stockholders’ equity of the same 12-month period.

Return on Equity (Prior Period) is defined as net income for the prior year divided by the simple average of the beginning and ending stockholders’ equity of the same 12-month period.

Management uses the following GAAP ratios to measure the Company’s ongoing operations. They are calculated as follows:

Loss Ratio is defined as incurred losses divided by earned premiums.

Loss Adjustment Expense Ratio is defined as loss adjustment expenses divided by earned premiums.

Operating Expense Ratio is defined as total operating expenses divided by earned premiums.

Combined Ratio is defined as the sum of the loss ratio, the loss adjustment expense ratio and the expense ratio or the sum of incurred losses, loss adjustment expenses and total operating expenses divided by earned premiums.

Management uses the following operating statistics to measure components of the Company’s ongoing operations. They are calculated as follows:

Lapse Ratio is defined as the number of policies lapsing as a percentage of billings produced during a stated time period.

Actual vs. Expected Mortality Ratio is defined as benefit payments divided by the actuarially estimated benefit payments for the stated time period.

Persistency Ratio is defined as the annualized premium of policies in force at the end of the period as a percentage of the annualized premium paid at the end of the period.

Loan Portfolio Yield is defined as annualized interest income divided by the loan portfolio balance.

Loan Delinquency Ratio is defined as the amount of loans 30 or more days past due divided by the loan portfolio balance.

Return on Carried Value is defined as equity in net earnings divided by the simple average of beginning and end of period carrying value.

Certain amounts in prior periods have been reclassified to conform to the presentation adopted in the current period. Such reclassifications did not impact earnings.


The following information was filed by Alfa Corp on Friday, July 27, 2007 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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