Current Report

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 6, 2013 (April 30, 2013)

 

 

STATE AUTO FINANCIAL CORPORATION

 

(Exact name of registrant as specified in its charter)

 

 

 

Ohio

     

000-19289

     

31-1324304

(State or other jurisdiction      (Commission      (IRS Employer
of incorporation)      File Number)      Identification No.)

 

518 East Broad Street, Columbus, Ohio

   

43215-3976

(Address of principal executive offices)    (Zip Code)

Registrant’s telephone number, including area code: (614) 464-5000

Not Applicable

 

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Section 2. Financial Information

 

Item 2.02. Results of Operations and Financial Condition.

On April 30, 2013, State Auto Financial Corporation (the “Company”) issued a press release disclosing the Company’s results of operations for the three-month period ended March 31, 2013 (the “Release”). The full text of the Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The Release included a non-GAAP financial measure, net income (loss) from operations per diluted share. Net income (loss) from operations differs from GAAP net income (loss) only by the exclusion of realized capital gains (losses), net of applicable taxes, on investment activity for the periods being reported. For the three-month periods ended March 31, 2013 and 2012, GAAP net income (loss) was $0.49 per diluted share and $(0.05) per diluted share, respectively, while net income (loss) from operations was $0.38 per diluted share and $(0.16) per diluted share for the same respective periods. For the three-month period ended March 31, 2013, realized capital gains, net of applicable taxes, increased the GAAP net income per diluted share by $0.11. For the three-month period ended March 31, 2012, realized capital gains, net of applicable taxes, decreased the GAAP net loss per diluted share by $0.11.

Management uses net income (loss) from operations because it believes this calculation better indicates the Company’s operating performance than GAAP net income (loss) in that net income (loss) from operations excludes the sometimes volatile realized capital gains/losses, net of applicable federal income taxes, that can produce inconsistent results.

The Release also included a non-GAAP financial measure as to the first quarter 2013 combined ratio. The first quarter 2013 GAAP combined ratio was 100.2. Excluding the impact of the homeowners quota share arrangement(1) and the previously disclosed runoff of business related to the termination of several programs written through the Company’s former RED unit, the first quarter 2013 combined ratio would have been 94.0. Managements believes this non-GAAP financial measure provides investors with meaningful information concerning the Company’s first quarter 2013 combined ratio.

 

 

(1) Homeowners quota share arrangement: On December 31, 2011, the State Auto Group entered into a quota share reinsurance agreement with a syndicate of unaffiliated reinsurers covering its homeowners book of business.

 

Section 7. Regulation FD

 

Item 7.01. Regulation FD Disclosure.

The Company’s management conducted a conference call on April 30, 2013, at approximately 11:00 a.m., ET, to review the Company’s financial results for the three-month period ended March 31, 2013, and to respond to questions from interested investors and financial analysts. A transcript of the conference call is furnished as Exhibit 99.2 to this Current Report on Form 8-K.

In addition to the Consolidated Statements of Income and reconciliation schedules included with the Release, the Company makes available on its website additional supplemental schedules containing financial information for the Company. These supplemental schedules include information on fixed maturities at March 31, 2013 and December 31, 2012, 2012 net investment income, 2012 premiums for the specialty insurance segment and 2012 statutory loss and ALAE ratios for the specialty insurance segment. This information is available at www.stateauto.com by clicking “News Releases” under the “Investors” tab.

 

Section 9. Financial Statements and Exhibits

 

Item 9.01. Financial Statements and Exhibits.

 

(c) Exhibits.

 

Exhibit No.

   

Description

99.1    Press release issued by State Auto Financial Corporation on April 30, 2013, regarding results of operations for the three-month period ended March 31, 2013.
99.2    Transcript of conference call held by management of State Auto Financial Corporation on April 30, 2013.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    STATE AUTO FINANCIAL CORPORATION
Date: May 6, 2013     By   /s/ Steven E. English
      Vice President and Chief Financial Officer

EXHIBIT INDEX

 

Exhibit No.

   

Description

99.1    Press release issued by State Auto Financial Corporation on April 30, 2013, regarding results of operations for the three-month period ended March 31, 2013.
99.2    Transcript of conference call held by management of State Auto Financial Corporation on April 30, 2013.