Omaha, Neb. – (March 9, 2009) Mutual of Omaha today reported 2008 consolidated net income of $47.0 million on total revenues of $4.07 billion, compared to net income of $217.0 million on total revenues of $4.24 billion in 2007.
Net realized investment losses of $133.7 million and $34.1 million in expenses related to Mutual of Omaha Bank’s acquisition of banks in Arizona, California and Nevada last summer contributed to the lower net income in 2008 compared to 2007. Mutual of Omaha Bank is a subsidiary of Mutual of Omaha, an Omaha-based insurance and financial services company.
“While the investment losses show the company is not immune to the economic and market forces that are impacting the nation, Mutual of Omaha’s financial foundation has never wavered,” said Mutual of Omaha Chairman and CEO Dan Neary. “Our disciplined investment strategy has enabled us to avoid the types of investments and financial transactions that have proven problematic for others in our industry.”
Neary noted that the $133.7 million in investment losses represents less than 1 percent of Mutual of Omaha’s approximately $17 billion in invested assets.
Mutual of Omaha reported consolidated pre-tax earnings of $225.7 million in 2008 compared with $314 million a year earlier and, despite the economic downturn in the latter half of the year, the company finished 2008 with total assets and retained earnings at record levels.
Consolidated total assets at Dec. 31, 2008, were $21.2 billion, up from $19.4 billion at year-end 2007. Retained earnings were $3.61 billion, up from $3.56 billion a year earlier. Statutory surplus was $2.1 billion, down from $2.2 billion at year-end 2007.
“Even in the midst of economic conditions that are shaking the financial industry,” Neary said, “Mutual of Omaha remains in a very strong financial position, thanks to the focused efforts of its workforce and a consistent strategy that emphasizes growth in core products, a strong extended product portfolio and new business ventures that complement the company’s strengths.”
Led by record-setting Medicare supplement sales, revenue generated by the company’s core products grew by $339.9 million, or 12.7 percent, in 2008. The company’s core products grew by $315 million in 2007.
“Given current economic conditions, these results are especially significant and illustrate that our products are valued by consumers,” Neary said. “Our strong earnings results show that our business strategy with an emphasis on our core products remains sound. And thanks to our financial discipline, we are better positioned than most of our competitors to weather the current economic storm.”
Mutual of Omaha also is well positioned for future growth in its banking operations as the result of the acquisition of banks in the Southwest.
Last July, Mutual of Omaha Bank opened 28 locations in Arizona, Nevada and California after taking over the deposits of the failed First National Bank of Nevada (also operating as First National Bank of Arizona), and its affiliate, First Heritage Bank of Newport Beach, Calif. Mutual of Omaha Bank assumed all the deposits of the banks, including those that exceeded the FDIC insurance limit, and no depositor lost money as a result.
Mutual of Omaha Bank now operates 44 locations in Nebraska, Colorado, Arizona, Nevada, California, Texas and Iowa with deposits totaling approximately $4 billion.
Mutual of Omaha provides insurance and financial services products for individuals, businesses and groups throughout the United States.
Note: Unless otherwise noted, all financial results discussed above are based on Generally Accepted Accounting Principles.
For more information about Mutual of Omaha, visit www.mutualofomaha.com.
