UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FORM 10-Q
[x] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1997
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or
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
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Commission file number 33-20104
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MetLife Texas Holdings, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 13-3437648
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Madison Avenue, New York, New York 10010
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(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code (212)578-3437
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Not Applicable
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(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes x . No .
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APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the latest practicable date.
Common Stock, $1.00 Par Value 1,000
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Title of Class Outstanding at March 31, 1997
METLIFE TEXAS HOLDINGS, INC.
INDEX
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Part I. FINANCIAL INFORMATION Page No(s)
----------
Item 1. Financial Statements
Condensed Consolidated Statements of
Income for the quarters and years-to-date
ended March 31, 1997 and 1996 (Unaudited) 3
Condensed Consolidated Balance Sheets
as of March 31, 1997 (Unaudited) and
December 31, 1996 4
Condensed Consolidated Statements of
Cash Flows for the years-to-date ended
March 31, 1997 and 1996 (Unaudited) 5
Notes to Condensed Consolidated Financial
Statements (Unaudited) 6-8
Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations 9-13
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K
(including Exhibit Index) 14
Signatures 15
-2
METLIFE TEXAS HOLDINGS, INC.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
METLIFE TEXAS HOLDINGS INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Quarter and
Year-to-Date
Ended March 31,
1997 1996
------- -------
Revenues:
Insurance revenues
Traditional life insurance premiums........ $ 3,658 $ 3,382
Universal life and investment product
policy charges........................... 4,412 3,629
Investment income (less related expenses).... 8,410 8,431
Trading securities-unrealized (loss)......... - (710)
Realized gain on investments................. 63 502
Other income................................. 461 66
------- -------
17,004 15,300
------- -------
Benefits, Claims and Expenses:
Policyholder benefits and claims............. 5,105 3,668
Change in liability for future
policyholder benefits...................... 7,219 6,229
Operating expenses........................... 2,431 2,110
Commissions, taxes and fees.................. 958 873
Amortization of policy acquisition costs..... 948 873
Amortization of cost of insurance acquired... 479 547
------- -------
17,140 14,300
------- -------
(Loss)income before income taxes............. (136) 1,000
------- -------
Provision (benefit) for federal income taxes
Current.................................... 133 839
Deferred................................... (236) (537)
------- -------
(103) 302
------- -------
Net (loss) income $ (33) $ 698
======= =======
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
-3-
METLIFE TEXAS HOLDINGS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands) March 31, December 31,
1997 1996
-------- ------------
ASSETS (Unaudited)
Investments:
Fixed maturities available for sale.... $323,899 $321,578
Fixed maturities held to maturity...... 51,880 53,145
Equity securities...................... 2,924 2,854
Mortgage loans......................... 30,359 31,910
Cash and cash equivalents.............. 12,080 16,369
Policy loans........................... 30,856 30,230
Other.................................. 3,592 3,541
-------- --------
455,590 459,627
Deferred policy acquisition costs........... 52,634 48,348
Cost of insurance acquired.................. 41,484 39,033
Goodwill.................................... 4,104 4,154
Investment income due and accrued........... 5,868 6,412
Amounts due from reinsurers................. 7,262 7,423
Other....................................... 3,632 3,983
-------- --------
TOTAL ASSETS $570,574 $568,980
======== ========
LIABILITIES AND STOCKHOLDERS EQUITY
Liabilities:
Policy liabilities.......................... $413,974 $408,441
Deferred federal income tax................. 15,708 16,933
Contingent notes payable.................... 7,874 7,874
Notes payable to affiliates................. 12,500 12,500
General expenses............................ 11,055 8,668
Other....................................... 17,367 20,602
-------- --------
Total Liabilities........................... 478,478 475,018
-------- --------
Stockholders Equity:
Common stock, par value $1.00 (1,000 shares
authorized, issued and outstanding)....... 1 1
Additional paid-in capital.................. 60,200 60,200
Retained earnings........................... 32,120 32,153
Net unrealized investment (losses) gains on
fixed maturities available for sale and
equity securities......................... (225) 1,608
-------- --------
Total Stockholders Equity.................. 92,096 93,962
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $570,574 $568,980
======== ========
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
-4
METLIFE TEXAS HOLDINGS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
For the
Year-to-Date Ended
March 31,
1997 1996
------- -------
OPERATING ACTIVITIES
Net Loss....................................$ (33) $ 698
Adjustments to reconcile net income to cash
provided by operating activities:
Increase in liability for future
policy benefits and other policy
liabilities............................. 1,618 874
Amortization and depreciation.............. 1,624 1,603
Decrease in other assets................... 843 1,273
Deferred policy acquisition costs.......... (2,886) (2,447)
Decrease in other non-policy related
liabilities.............................. (1,084) (1,619)
Increase in trading securities............. 0 (2,183)
Interest credited to policyholder accounts. 4,888 4,742
------- -------
CASH PROVIDED BY OPERATING ACTIVITIES.......... 4,970 2,941
------- -------
INVESTING ACTIVITIES
Purchase of investments and loans made.......(17,716) (38,243)
Sale or maturities of investments and
receipts from repayment of loans........... 9,430 28,671
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CASH USED FOR INVESTING ACTIVITIES............ (8,286) (9,572)
------- -------
FINANCING ACTIVITIES
Net (withdrawals) receipts from universal
life policyholders (debited from)credited
to policyholder account balances............ (973) 697
Other......................................... 0 314
------- -------
CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES (973) 1,011
------- -------
DECREASE IN CASH AND CASH EQUIVALENTS.......... (4,289) (5,620)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD....................................... 16,369 20,930
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.....$12,080 $15,310
======= =======
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
-5
METLIFE TEXAS HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997 (Unaudited)
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the three months ended March 31, 1997 are not necessarily
indicative of the results that may be expected for the year ending December
31, 1997. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Registrants Annual Report
on Form 10-K for the fiscal year ended December 31, 1996.
NOTE 1 - CONTINGENT PAYMENT NOTES
MetLife Texas Holdings, Inc. (Holdings or Registrant) issued 9.41%
Contingent Payment Notes (Notes) in the face amount of $12,800,000 in
connection with its acquisition of Texas Life Insurance Company (TLIC) on
July 31, 1988. The principal amount of these Notes is due on December 31,
1997 (unless redeemed earlier at the option of Holdings) and interest is
payable semi-annually at the stated interest rate of 9.41%. The principal
and interest payments on the Notes are, however, subject to reduction. In
general, the reduction is equal to the difference between the contractual
terms of, and amounts of principal and interest payments actually received
by TLIC on, certain specified real estate mortgage notes receivable (Pool
Loans). The holders of the Notes received no interest for the three months
ended March 31, 1997 and 1996.
The carrying value of the Notes in the accompanying Condensed Consolidated
Balance Sheets was reduced by a valuation allowance for possible losses of
$4,703,000 at both March 31, 1997 and December 31, 1996. The carrying
value of the related Pool Loans was reduced by a valuation allowance of
$2,603,000 at March 31, 1997 and $2,451,000 at December 31, 1996.
See Note 9 to the consolidated financial statements included in the
Registrants Annual Report on Form 10-K for the fiscal year ended December
31, 1996 for a description of certain restrictions on Holdings contained in
the indenture pursuant to which the Notes were issued.
NOTE 2 - NOTES PAYABLE TO AFFILIATES
On June 30, 1989, TLIC issued a $7,000,000 note payable (called a surplus
debenture) to Metropolitan Life Insurance Company (Metropolitan), the
parent of Holdings. Such note has no specified maturity date and semi-
annual principal payments will not begin until TLICs statutory surplus, as
calculated under Texas insurance regulations, increases to $50,000,000.
-6
METLIFE TEXAS HOLDINGS, INC AND SUBSIDIARY
TLICs statutory surplus amounted to $28,683,000 at March 31, 1997.
Interest is payable semi-annually at any time TLICs statutory surplus is
in excess of $12,798,000. The note bears interest at a rate of 7.60% per
annum until June 30, 1999, at which time, it will be adjusted to a rate
equal to 0.75% over the then five year U.S. Treasury note rate. Interest
of $266,000 was paid on January 2, 1997 and January 2, 1996.
An additional $5,500,000 note payable (also called a surplus debenture) was
issued by TLIC to MetLife Credit Corp., a wholly-owned subsidiary of
Metropolitan, on December 31, 1990. Such note has no specified maturity
date and annual principal payments will not begin until TLICs statutory
surplus, as calculated under Texas insurance regulations, increases to
$40,000,000. This note must be repaid in full before TLIC can make any
principal payments on the $7,000,000 note payable to Metropolitan discussed
above. Interest is payable monthly, at a variable interest rate which is
set by MetLife Credit Corp. on the first of each month, at any time TLICs
statutory surplus exceeds $10,000,000. $96,000 of interest was paid for
the first three months of 1997 and $99,000 was paid for the comparable
period of 1996.
NOTE 3 - REINSURANCE
Reinsurance receivables of $7,009,000 and $6,569,000 are recorded in
accordance with Statement of Financial Accounting Standards No. 113
Accounting and Reporting for Reinsurance of Short-Duration and Long-
Duration Contracts, and are included in amounts due from reinsurers in the
accompanying March 31, 1997 and December 31, 1996 Condensed Consolidated
Balance Sheets, respectively. For the three months ended March 31, 1997
and March 31, 1996, earned premiums ceded were $2,138,000 and $2,181,000,
respectively, and recoveries recognized under reinsurance contracts were
$1,986,000 and $1,583,000, respectively.
NOTE 4 - INVESTMENTS
As a result of the requirements of Statement of Accounting Standards No.
115 Accounting for Certain Investments in Debt and Equity Securities
(SFAS No. 115), stockholders equity at March 31, 1997 and December 31,
1996, as shown on the Condensed Consolidated Balance Sheets, were impacted
as follows: at March 31, 1997 stockholders equity was decreased
approximately $1,833,000 net of adjustments of $2,348,000 for deferred
acquisition costs, $2,930,000 for the cost of insurance acquired and
$989,000 for deferred federal income tax benefit; and at December 31, 1996
stockholders equity was increased approximately $1,608,000 net of
adjustments of $2,251,000 for deferred acquisition costs, $2,808,000 for
the cost of insurance acquired and $924,000 for deferred federal income
taxes.
-7
METLIFE TEXAS HOLDINGS, INC. AND SUBSIDIARY
NOTE 5 - MORTGAGE LOANS
As of January 1, 1995, Holdings adopted Statement of Accounting Standards
No. 114, Accounting by Creditors for Impairment of a Loan, as amended by
SFAS No. 118, Accounting by Creditors for the Impairment of a Loan -
Income Recognition and Disclosure, which addresses the accounting by
creditors for the impairment of certain loans. Total impaired loans and
the allowance for all known credit losses on mortgages were $2,951,000 and
$3,306,000, respectively, at March 31, 1997, and $2,951,000 and $2,992,000,
respectively, at March 31, 1996. Holdings primary policy is to utilize
the cash basis of accounting for the recognition of interest income on
impaired loans.
The average recorded investment in impaired loans during both of the three
month periods ended March 31, 1997 and 1996 was $2,951,000 and the related
interest income recognized during the periods was $43,000 for 1997 and
$48,000 for 1996 on both the accrual and cash bases of accounting.
Activity in the allowance for credit losses for the three months ended
March 31, 1997 and 1996 was as follows:
1997 1996
---------- ----------
Balance at end of prior year $3,306,000 $3,302,000
Provision for impaired loans - -
Write-downs - (310,000)
Recoveries - -
---------- ----------
Balance at March 31 $3,306,000 $2,992,000
========== ==========
-8
METLIFE TEXAS HOLDINGS, INC.
Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
RESULTS OF OPERATIONS
HISTORICAL RESULTS OF OPERATIONS
MetLife Texas Holdings, Inc. (Holdings) is a wholly-owned subsidiary of
Metropolitan Life Insurance Company (Metropolitan) and was formed for the
purpose of acquiring Texas Life Insurance Company (TLIC). Holdings
unconsolidated revenues are exclusively attributable to its interest
bearing investments. Therefore, the changes in the Condensed Consolidated
Statements of Income that are discussed below are primarily attributable to
TLIC.
YEAR-TO-DATE RESULTS
TLICs sales in annualized premiums were $2.0 million for the three months
ended March 31, 1997, up $210,000, or 11.4%, over the comparable period of
1996. During this period, universal life sales increased $57,000, or 5.5%,
sales of permanent traditional life products increased $270,000, or 47.3%,
and sales of term life products decreased $117,000, or 50.7%.
Consolidated year-to-date revenue increased $1,704,000, or 11.1%, over the
first three months of 1996 primarily related to (i) a $276,000, or 8.2%,
increase in traditional life premiums and a $783,000, or 21.6%, increase in
universal life premiums, both attributable to increased sales in recent
years; (ii) a $710,000 unrealized loss on the trading portfolio in the
first quarter of 1996; and (iii) a $395,000 increase in other income caused
by an increase in supplementary contracts in the first quarter of 1997
versus the comparable period of 1996. These increases were partially
offset by a $439,000 decrease in realized capital gains in the first
quarter of 1997, as compared to the same period of 1996, related to profits
realized in 1996 on the sale of bonds as part of TLICs aggressive
mortgage-backed securities program and Holdings sale of its long-term
Treasury Notes.
Benefits, claims and expenses increased $2,840,000, or 19.9%, for the first
three months of 1997 over the comparable period of 1996. This increase is
primarily attributable to (i) a $1,437,000, or 39.2%, increase in
policyholder benefits and claims related to a large number of death claims
in the first quarter of 1997 as opposed to the comparable period of 1996;
(ii) a $990,000, or 15.9%, increase in the change in liability for future
policyholder benefits related to the increase in life insurance in force
resulting from increased sales and the aging of the block of traditional
life business in force; and (iii) a $321,000, or 15.2%, increase in
operating expenses primarily associated with increased expenses directly
related to the increase in sales.
Federal income taxes decreased $405,000 for the first quarter of 1997
versus 1996. This resulted from a $706,000, or 84.1%, decrease in current
taxes and a $301,000 decrease in deferred taxes. Current income taxes
-9
METLIFE TEXAS HOLDINGS, INC.
decreased primarily as follows: (i) a $454,000 decrease due to a decrease
in statutory earnings; (ii) a $97,000 decrease due to decreased earnings
for Holdings; (iii) a $79,000 decrease due to the decrease in realized
capital gains and (iv) a $91,000 decrease related to the recapture of a tax
deduction previously taken on a mortgage loan allowance. Deferred taxes
decreased principally due to a $593,000 decrease related to the
differential between the tax and book bases of invested assets, partially
offset by a $179,000 increase related to the difference between the tax and
book basis of policyholder reserves and a $135,000 increase related to the
difference between the tax and book bases of non-policy related liabilities
and non-investment related assets.
As a result of the items discussed above, net income for the three months
ended March 31, 1997 decreased $731,000 from the comparable period of 1996.
LIQUIDITY AND CAPITAL RESOURCES
Holdings sole activities consist of the investment of its assets in
certain high grade, liquid investments permitted by the indenture pursuant
to which its Contingent Payment Notes (Notes) were issued (see Note 1 to
the accompanying financial statements), administration of its Notes and
ownership of the outstanding stock of its wholly-owned subsidiary, TLIC.
The Contingent Payment Notes come due December 1997. On March 31, 1997,
Holdings had $18.0 million of high grade, liquid investments which will be
available to make the required principal payments, if any, on the Notes in
December 1997. It is likely that Holdings will be required to make a
payment on the Notes at their maturity in December 1997; however, it is
impossible to predict, at this time, the amount of such payment, primarily
because the remaining pool loans need to be valued as part of the
determination of such payment.
For the three months ended March 31, 1997 Holdings had a loss of $87,000,
on a stand alone basis, versus income of $93,000 for the comparable period
of 1996. March 31, 1997 results are not necessarily indicative of the
results that may be expected for the year ended December 31, 1997. Under
the terms of the Indenture, Holdings paid no interest on the Notes in 1996
or the first quarter of 1997 because of accumulated losses on the
underlying pool loans. The operating losses do not present a cash flow
concern since Holdings does not expect to be required to make any interest
payments on the Notes in July 1997. Holdings funds, including earnings on
its investments, are sufficient to make any required payments on the Notes.
On June 30, 1989, TLIC issued a $7 million note payable to Metropolitan
and, on December 31, 1990, it issued a $5.5 million note payable to MetLife
Credit Corp., a wholly-owned subsidiary of Metropolitan (see Note 2 to the
accompanying financial statements). While both of these notes are
considered a liability by the Registrant on a GAAP basis, they are surplus
for TLIC on a statutory basis. The $7 million note payable was issued to
provide additional statutory surplus to TLIC for expansion of premium
writings. Increases in first year premium volume reduce statutory surplus
since, for statutory purposes, acquisition costs are expensed rather than
deferred. The $5.5 million note payable is being used to provide a
voluntary statutory reserve for mortgage loans and foreclosed properties.
-10
METLIFE TEXAS HOLDINGS, INC.
The Registrant has no outstanding borrowings other than the Notes and
TLICs notes payable to Metropolitan and MetLife Credit Corp. and has no
need or plans to borrow funds in the foreseeable future other than
additional notes which may be issued to affiliates by TLIC to provide
additional statutory surplus. Borrowings by Holdings are prohibited by the
terms of the indenture pursuant to which the Notes were issued.
The Registrant is involved in the life insurance business solely through
its ownership of TLIC. The liabilities of TLIC are predominantly long-term
in nature and, therefore, in order to match these liabilities with assets,
TLIC has long-term fixed maturity investments such as bonds and mortgages.
Most of TLICs invested assets are investment grade securities to provide
ample protection for its policyholders. As of March 31, 1997, TLIC had
$5,069,000 of securities rated below investment grade by the National
Association of Insurance Commissioners, representing 0.9% of its total
assets. One of these investments, which was carried on the books at
$86,000, was in default as to interest at March 31, 1997.
TLIC has mortgage loans with a carrying value of $30,359,000 ($33,665,000
book value less $3,306,000 reserve for losses) at March 31, 1997. The
carrying value of these mortgage loans comprises 6.7% of total invested
assets. The reserve represents 9.8% of total mortgage loan book value.
Management believes that the reserve for losses is adequate.
Delinquent mortgage loans (those overdue more than 90 days) totaled
$2,951,000 at March 31 and are comprised of two performing cash flow
commercial loans and one nonperforming commercial loan. Expressed as a
percentage of mortgage loans, delinquencies were 8.8% at March 31, 1997 and
8.4% at December 31, 1996.
Included in the mortgage loan balance is $2,530,000 of loans on watch
(i.e., loans which are not delinquent over 90 days but are being monitored
more closely for possible problems in the future). Of the seven loans
included in this category, six loans totaling $2,312,000 are current and
one loan totaling $218,000 is 30 days overdue.
TLICs mortgage loan portfolio includes $15,960,000 of commercial loans,
$17,351,000 of agricultural loans, $54,000 of loans on apartments and
$300,000 of residential loans. 48.5% of these loans are in Texas and the
remaining 51.5% are spread over 13 states. The gross yield on all mortgage
loans was 8.0% for the three months ended March 31, 1997 and 8.1% for the
year ended December 31, 1996.
Since its acquisition by Holdings, TLIC has made eleven new commercial
mortgage loans, with a book value aggregating $5,038,000, fifteen purchase
money mortgages on foreclosed real estate aggregating $4,163,000 and 44
agricultural loans aggregating $20,203,000 through Metropolitans
Agricultural Investments Department, for a total of $29,404,000. Since the
acquisition, TLICs policy relating to new loans is not to loan more than
75% of appraised value based on earnings conditions at the time of the
loan. Additionally, these loans are issued to borrowers having strong
financial backgrounds. Collateral on loans generally includes personal
guarantees for the entire amount of the mortgage indebtedness as well as a
-11
METLIFE TEXAS HOLDINGS, INC.
lien on the mortgaged property. Loans generally mature within ten years,
with recent ten year loans containing a provision for adjustment in the
interest rate after three or five years.
As of March 31, 1997, TLIC had $982,000 of foreclosed real estate. This
consists of one acreage loan with residential development.
Due to the relatively small amount of TLICs below investment grade and
non-performing investments, they have not had, and are not expected to
have, a material effect on TLICs financial condition or results of
operations.
TLIC maintains liquidity through its selection of investments. Over 80
percent of its securities at March 31, 1997 were readily marketable
securities, primarily publicly traded bonds and stocks. TLIC must maintain
adequate liquidity to provide funds needed to make current payments to
policyholders. Significant changes in market interest rates could affect
TLICs liquidity. TLIC has utilized an asset/liability matching process to
help determine the investment rate it can credit to its policyholders.
TLICs universal life insurance products are credited an interest rate
based upon earnings from allocated assets less an interest rate margin.
Managements philosophy has been to maintain a credited interest rate based
on the returns on its allocated investments rather than to credit current
market rates to its previously issued policies. Significant increases in
its competitors credited rates could cause TLIC either to reduce its
margin or to credit a rate that may be noncompetitive, which may result in
surrenders of policies. However, TLIC has high surrender charges on most
of its universal life products during the first ten policy years (and
during the ten years following any increases in the policy face amount)
that would discourage surrenders or result in low surrender values. A
reduction in market interest rates could reduce the reinvestment rate of
its fixed investments and result in a lower than expected yield. However,
in this environment, TLIC could reduce the rates credited to the products
underlying these investments and maintain its interest rate margin without
risking significant amounts of surrenders of policies. Thus, changes
(other than sudden significant changes) in the interest rate environment
and the resulting changes in the interest rates credited to policyholders
would not significantly affect withdrawal experience because of the
significance of surrender charges to policyholders.
However, a sudden significant increase in current market rates could have a
material adverse impact on TLICs liquidity because policyholders might
convert to products of competitors to which higher rates are credited.
Conversely, sudden declines in interest rates could materially increase
TLICs liquidity if the issuers of TLICs fixed rate long-term investments
exercise their bond call options or refinance at lower rates the mortgages
that are owned by TLIC. Although they can significantly affect TLICs
liquidity, the impact of sudden increases or decreases in the interest rate
environment would be tempered by the fact that 38.6% of TLICs insurance in
force is traditional life insurance, which is not as susceptible to changes
in the interest rate environment (29.7% of TLICs insurance in force is
term insurance, which has no cash surrender value and is not impacted by
changes in the interest rate).
-12
METLIFE TEXAS HOLDINGS, INC.
In addition to the large amount of readily marketable securities referred
to above, it is also TLICs policy to maintain at least $3,000,000 of cash
and short-term investments less any commitments for investment purchases
within the next month. At March 31, 1997, TLIC had approximately $272,000
of cash and $6,167,000 of short-term investments and investment commitments
of $3,000,000 for April 1997.
-13
METLIFE TEXAS HOLDINGS, INC.
PART II - OTHER INFORMATION
Item 1. Legal proceedings
Neither Holdings nor its subsidiary are involved in any material pending or
threatened legal proceedings.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Index
4.1 Form of Indenture, dated as of July 27, 1988, between
Registrant and Bankers Trust Company, as Trustee, is herein
incorporated by reference to Exhibit 4.1 to Registrants
Form S-1 filed with the Securities and Exchange Commission
(File No. 33-20104), which became effective on May 13, 1988.
28.1 Registrants Form 10-K for the fiscal year ended December
31, 1996, filed with the Securities and Exchange Commission
on March 31, 1997, is herein incorporated by reference.
(b) Reports on Form 8-K - No report on Form 8-K was filed during the
quarter ended March 31, 1997.
-14-
METLIFE TEXAS HOLDINGS, INC.
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 thereunto duly authorized.
METLIFE TEXAS HOLDINGS, INC.
(Registrant)
Date: May 12, 1997 By Myron O. Schlanger
-----------------------------
Myron O. Schlanger
Vice-President and Controller
(Chief Financial Officer)
-15-
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
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8,070
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</TABLE>
