Newspaper article THE JOURNAL RECORD

American First Reports $6.5 Million Loss

Newspaper article THE JOURNAL RECORD

American First Reports $6.5 Million Loss

Article excerpt

A net loss of $6.5 million, or $1.20 per share, was reported Friday for the second quarter for 1987 by American First Corp. of Oklahoma City.

American First reported net income of $214,831, or 4 cents per share, in the second quarter of 1986. The net loss for the second quarter included at $5.5 million write-down to assets and investments and a $986,609 loss from operations.

Revenues for the quarter totaled $16 million, down 46.1 percent from $29.69 million. Revenues for the second quarter of 1986 included First Affiliated Securities Inc., which has been sold.

For the first six months of 1987, American First reported a net loss of $8.1 million, or $1.49 per share, compared to net income of $422,020, or 8 cents per share, in the first six months of 1986. Revenues for the first six months totaled $42.8 million, down 18.2 percent from $52.36 million.

The $5.5 million write-down included:

- A $2.9 million adjustment to deferred assets net of tax benefit.

The list of these write-downs included many of the items which were partially written down in 1986, according to the company, but whose value has further deteriorated in 1987. In many cases, American First reported, these assets have been written down to to zero for future carrying purposes.

- A $2.59 million total charge to earnings for deferred acquisition costs net of tax benefit. This is in the calculations of deferred acquisition costs for insurance policies, according to American First.

A more conservative calculation of these costs on a going forward basis and an adjustment is currently necessary to insure that future earnings will not be unduly penalized by the abnormally high increase in death and disability benefits incurred by the life insurance subsidiaries during the first six months of this year, according to American First.

To assist the company in its analysis, the company used a study prepared by its outside actuarial firm. …

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