#6. NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORP.
1115 30th St. NW Washington, D.C. 20007 ASSETS: $3 billion PROFITS: $32 million EARNINGS PER SHARE: NA DIVIDEND: None STOCKHOLDERS' EQUITY: NA RETURN ON EQUITY: NA EXCHANGE: NA EMPLOYES: 125 TOP EXECUTIVE: Charles B. Gill, governor and chief executive officer. FOUNDED: 1969
DESCRIPTION: National Rural Utilities Cooperative Finance Corp. is a nonprofit cooperative that provides its 936 rural electric systems, which serve nearly 23 million customers, with financing to supplement federal loans from the Rural Electrification Administration.
DEVELOPMENTS: Assets of the cooperative increased 7 percent in the fiscal year ended May 31, 1985, and another 2 percent in the first nine months of the current fiscal year. Loans to member utilities stood at $2.78 billion at the end of the fiscal year, an increase of 4 percent over the prior year. However, the rate of borrowing has decreased slightly in the first nine months of the current year, with $3.1 million in loans to members through Feb. 28, compared with $3.2 million in the similar period last year. #7. GEICO CORP.
GEICO Plaza Washington, D.C. 20076 ASSETS: $2.4 billion PROFITS: $170.6 million EARNINGS PER SHARE: $9.25 DIVIDEND: $1 STOCKHOLDERS' EQUITY: $515.6 million RETURN ON EQUITY: 35.6 percent EXCHANGE: NYSE EMPLOYES: 5,492 TOP EXECUTIVE: William B. Snyder, chairman, president and chief executive officer. FOUNDED: 1936
DESCRIPTION: Geico's primary business is preferred-risk private automobile and homeowners insurance written by Government Employees Insurance Co. Its principal subsidiaries include Criterion Insurance Co. and Criterion Casualty Co. for standard and nonstandard-risk car insurance; Garden State Life Insurance Co., and Government Employees Financial Corp., which does consumer and business lending and marketing of time-share intervals.
DEVELOPMENTS: The property-casualty underwriter had a very poor year, with operating earnings off 17.6 percent, due to the rising cost of claim settlements and bad weather causing homeowners' losses. Too rapid growth of new voluntary auto policies in 1985 also had a negative impact on operating earnings. Substantial rate increases in automobile insurance that were put into effect last year will begin to show up in premium earnings this year.
However, investment income increased by 20.7 percent, enough to offset operational losses and boost profits by 30 percent. Per-share profits rose to $9.25 from $6.68 as the company continued to decrease the number of shares outstanding by buying back the stock it had issued over a decade ago to raise money when the company faced insolvency.
Former chairman and chief executive officer John J. Byrne, who presided over that comeback, left the company last year. Eugene Meyung was elected president of Government Employees Insurance Co. #8. USLICO CORP.
1701 Pennsylvania Ave. NW Washington, D.C. 20006 ASSETS: $1.6 billion PROFITS: $20.2 million EARNINGS PER SHARE: $2.19 DIVIDEND: 80 cents STOCKHOLDERS' EQUITY: $231.6 million RETURN ON EQUITY: 12.1 percent EXCHANGE: OTC EMPLOYES: 728 TOP EXECUTIVE: Leslie P. Schultz, chairman, president and chief executive officer. FOUNDED: 1984
DESCRIPTION: USLICO Corp. is a $1.6 billion holding company for five life insurance companies, including United Services Life Insurance Co., two financial services subsidiaries and International Bank, a holding company with diversified investments.
DEVELOPMENTS: USLICO underwent dramatic changes during 1985 when it took over International Bank of Washington (IB) at a cost of $206 million. IB, which was not a bank but an investment company, previously had owned 35.7 percent of USLICO's stock. After the merger, George Olmsted, the longtime head of International Bank, retired at the age of 85. Olmsted was left with 9.5 percent of USLICO stock, worth about $29 million.
USLICO began trimming the size of its merged operation by selling IB's light industrial companies and some of its real estate. USLICO sold Globe Industries of Chicago, which manufactures sound-control products for automobiles, for $23.5 million. USLICO also is selling its headquarters building at 1701 Pennsylvania Ave. NW to Atlantic Freeholds, a general partnership composed of Grosvenor International Ltd. and two British pension funds. The price was not immediately specified, but the building was reported to be worth more than $40 million.
USLICO sold its General Services Life Insurance Co. to Life Investors of Iowa for $17 million.
USLICO reported net earnings of $20.2 million ($2.19 a share) for 1985, compared with net income of $31.9 million ($3.41) for 1984. Net earnings fell, the company said, because of a $3.1 million dilution from the IB acquisition and an adjustment for a special $12.5 million income-tax credit in 1984.
USLICO said it would take steps to try to restore profitability to IB's property and casualty companies, which reported heavy losses in the last two years and required a $19 million infusion to strengthen reserves. USLICO officials began an "austerity" program to reduce overhead and said other corrective actions would be taken. #9. UNION LABOR LIFE INSURANCE CO.
111 Massachusetts Ave. NW Washington, D.C. 20001 ASSETS: $1.4 billion PROFITS: $29.4 million EARNINGS PER SHARE: NA DIVIDEND: None STOCKHOLDERS' EQUITY: NA RETURN ON EQUITY: NA EXCHANGE: NA EMPLOYES: 639 TOP EXECUTIVE: Daniel E. O'Sullivan, president and chief executive officer. FOUNDED: 1925
DESCRIPTION: Union Labor Life Insurance Co. was founded to serve the insurance needs of blue-collar workers. It is an independent, union-owned insurance company.
DEVELOPMENTS: Union Labor Life profits soared in the fiscal year ended Dec. 31, up nearly 150 percent over the previous year. The strong performance is attributed primarily to the company's recovery of business that previously had been passed on to other firms under reinsurance agreements.
The company's net income also was boosted by contracting with tenants to sublease office space in New York that had been vacated by Union Labor Life and unoccupied in 1984. In another real estate move that helped raise net income, the company has leased four floors of the eight-floor headquarters building it owns on Massachusetts Avenue.
The company recently announced formation of a new life insurance subsidiary to be called Union Standard of America Life (USA Life). New insurance services offered by the company include fiduciary liability insurance for pension-fund officers, retirement-plan trustees and similar corporate officers with fiscal responsibilities, and a "stop loss" policy that helps protect health and welfare plans that self-insure a portion of their total exposure to loss.
In January, Union Labor Life acquired New Systems Inc. of San Francisco, a claims-processing and independent administrative-services firm. #10. MONUMENTAL CORP.
1111 N. Charles St. Baltimore, Md. 21201 ASSETS: $1 billion PROFITS: $11.7 million EARNINGS PER SHARE: $1.78 DIVIDEND: $1.35 STOCKHOLDERS' EQUITY: $215.7 million RETURN ON EQUITY: 9.3 percent EXCHANGE: OTC EMPLOYES: 1,684 TOP EXECUTIVE: Leslie B. Disharoon, president and chairman of the board. FOUNDED: 1968
DESCRIPTION: Monumental Corp. is an insurance holding company whose eight subsidiaries market life and health insurance and annuity products to middle-income consumers. The company sells individual policies through home-service agents and brokers of payroll-deduction plans. It also markets supplemental insurance coverage by direct mail through financial institutions and sells credit insurance through banks and car dealerships.
DEVELOPMENTS: Monumental's rate of revenue growth slowed in the fiscal year ended Dec. 31 with a gain of 10 percent for the year. In the prior fiscal year, revenue was up 20 percent. However, profit performance improved significantly on a year-to-year comparison: up 23 percent in fiscal 1985, compared with a 40 percent drop in the year earlier.
Last November, Monumental sold Monumental Life Insurance Co. of New York to the Equitable Life Insurance Co. for $9 million. In January, it disposed of another subsidiary, United Republic Life Insurance Co. in Harrisburg, Pa., for $30 million. The Pennsylvania-based company uses a network of high-school teachers and coaches to "pyramid" sales. Increased competition among insurance companies using such networks prompted Monumental's management to reassess the technique as inconsistent with company strategies for future growth.
In March, Monumental issued $25 million in new debt instruments to retire inter-company obligations and short-term debt.