Vesta Unveils Q1 Report

Alabama-based Vesta Insurance Group Inc. reported net operating earnings from continuing operations of $14.3 million, or $0.40 per diluted share in the first quarter of 2004 compared to net operating earnings from continuing operations of $2.2 million, or $0.06 per diluted share for the corresponding period in 2003.

Net income from continuing operations was $14.9 million, or $0.42 per diluted share for the quarter ending March 31, 2004 compared to net income from continuing operations of $4.5 million, or $0.13 per diluted share in the first quarter of 2003. Net earned premiums for the quarter were $110.0 million compared to $117.5 million in the first quarter of 2003, which is reflective of Vesta’s increased use of reinsurance.

“Our operating results reflect our strong position in our targeted
markets,” said Norman Gayle, III, president and CEO, Vesta Insurance Group. “We are off to a terrific start in 2004.”

Vesta’s standard property/casualty segment, which includes the residential property and standard auto businesses, posted net income from continuing operations of $6.7 million in the first quarter of 2004.

The company’s non-standard auto underwriting business generated a GAAP combined ratio of 95.1 percent in the first quarter of 2004 compared to a 95.2 percent for the corresponding period in 2003. The non-standard agency operations produced an 18.2 percent pre-tax margin in the quarter.

Vesta incurred a $.9 million charge related to discontinued operations in the quarter, primarily related to the company’s efforts to pursue commutations and settlements of its outstanding assumed reinsurance and commercial insurance obligations.