UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
Commission File Number 0-22404
ALLIED Life Financial Corporation
(Exact name of registrant as specified in its charter)
Iowa
(State or other jurisdiction of incorporation or organization)
42-1406716
(I.R.S. Employer Identification No.)
701 Fifth Avenue, Des Moines, Iowa
(Address of principal executive offices)
50391-2003
(Zip Code)
515-280-4211
(Registrant's telephone number, including area code)
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 [ ]
Indicate the number of outstanding shares of each of the issuer's classes of
common stock, as of May 1, 1997:
4,514,214 shares of Common Stock.
This document contains 19 pages.
<PAGE>
PART I
Item 1. Financial Statements
ALLIED Life Financial Corporation and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
<S> <C> <C>
March 31, December 31,
1997 1996
Assets
Investments
Fixed maturities
Held to maturity at amortized cost
(fair value $200,925,764 in 1997
and $205,347,823 in 1996) $198,622,393 $199,208,835
Available for sale, at fair value
(amortized cost $502,841,568 in 1997
and $492,686,241 in 1996) 498,675,105 500,289,070
Equity securities at fair value 7,875,268 6,406,552
Mortgage loans on real estate 1,325,257 1,456,688
Policy loans 10,639,808 10,306,724
Other invested assets 3,569,635 3,751,415
Short-term investments, at cost 1,468,250 919,687
Total investments 722,175,716 722,338,971
Accrued investment income 11,173,472 9,738,060
Accounts receivable 899,881 607,737
Reinsurance ceded receivables 5,671,185 5,786,434
Deferred policy acquisition costs 99,994,216 92,417,588
Other assets 5,914,975 4,710,933
Total assets $845,829,445 $835,599,723
See accompanying Notes to Interim Consolidated Financial Statements.
</TABLE>
1
<PAGE>
ALLIED Life Financial Corporation Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
<S> <C> <C>
March 31, December 31,
1997 1996
Liabilities
Policy liabilities
Policyholder account balances
Annuity contracts $474,727,449 $467,504,991
Universal life contracts 186,738,606 182,726,695
Other 7,900,855 8,846,156
Future policy benefits 34,391,261 33,473,558
Policy and contract claims 4,389,022 3,735,623
Other policyholder funds 2,073,593 1,575,995
710,220,786 697,863,018
Checks drawn in excess of bank balances 2,051,123 3,163,318
Current income taxes payable 189,439 940,576
Deferred income taxes 7,396,256 8,008,946
Indebtedness to affiliates 1,556,670 2,188,068
Note payable (note 2) 25,000,000 20,470,000
Other liabilities 1,993,151 3,024,175
Total liabilities 748,407,425 735,658,101
Stockholders' equity
Preferred stock, no par value, issuable in series,
authorized 7,500,000 shares
6.75% Series, authorized 2,440,000 shares, issued and
outstanding of 2,179,865 in 1997 and 2,143,691 in 1996 23,651,535 23,259,047
ESOP Series, authorized 300,000 shares, issued
and outstanding 108,014 in 1997 and 93,982 in 1996 1,581,853 1,327,186
Common stock, no par value, $1 stated value,
authorized 25,000,000 shares, issued and outstanding
4,514,081 in 1997 and 4,497,238 in 1996 4,514,081 4,497,238
Additional paid-in capital 46,816,438 46,596,171
Retained earnings 23,188,182 21,751,088
Unrealized (depreciation) appreciation of investments, net (2,330,069) 2,510,892
Total stockholders' equity 97,422,020 99,941,622
Total liabilities and stockholders' equity $845,829,445 $835,599,723
See accompanying Notes to Interim Consolidated Financial Statements.
</TABLE>
2
<PAGE>
ALLIED Life Financial Corporation and Subsidiaries
Consolidated Statements of Income
<TABLE>
<CAPTION>
<S> <C> <C>
Three Months Ended
March 31,
1997 1996
Revenues
Insurance revenues
Policyholder assessments on universal life contracts $ 5,383,438 $ 5,167,300
Surrender charges 619,094 628,460
Life insurance premiums 3,246,170 2,832,887
Other insurance income 1,223,698 805,428
Reinsurance premiums ceded (2,297,819) (2,063,720)
Total insurance revenues 8,174,581 7,370,355
Investment income 12,683,127 11,749,917
Realized investment losses (392,755) (84,184)
Other income 323,141 287,986
20,788,094 19,324,074
Benefits and Expenses
Policyholder benefits
Interest credited to policyholder account balances
Annuity contracts 6,420,843 5,800,453
Universal life contracts 2,456,203 2,375,262
Other 126,131 84,197
Death benefits 2,806,526 2,639,075
Other policyholder benefits 1,204,799 1,357,260
Reinsurance recoveries (288,072) (1,135,655)
Total policyholder benefits 12,726,430 11,120,592
Amortization of deferred policy acquisition costs 2,155,931 1,732,594
Commissions 872,492 669,331
Affiliated operating expenses 143,416 323,156
Other insurance operating expenses 1,699,078 1,434,021
17,597,347 15,279,694
Income before income taxes 3,190,747 4,044,380
Income Taxes
Current 753,814 1,069,061
Deferred 310,131 278,019
1,063,945 1,347,080
Net Income $ 2,126,802 $ 2,697,300
Net income applicable to common stock $ 1,707,305 $ 2,306,015
Earnings per Common Share $ 0.38 $ 0.50
Weighted average number of common shares outstanding 4,501,597 4,633,202
See accompanying Notes to Interim Consolidated Financial Statements.
</TABLE>
3
<PAGE>
ALLIED Life Financial Corporation and Subsidiaries
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
<S> <C> <C>
Three Months Ended
March 31,
1997 1996
Cash flow from operating activities
Net income $ 2,126,802 $ 2,697,300
Adjustments to reconcile net income to net cash provided by
operating activities
Policyholder assessments on universal life contracts (5,383,438) (5,167,300)
Surrender charges (619,094) (628,460)
Interest credited to policyholder account balances 9,003,177 8,259,912
Realized investment losses 392,755 84,184
Change in
Accrued investment income (1,435,412) (1,482,512)
Reinsurance ceded receivables 115,249 1,964,516
Deferred policy acquisition costs (1,942,100) (2,201,719)
Liabilities for future policy benefits 917,703 773,656
Policy and contract claims and other policyholder funds 1,150,997 43,541
Income taxes
Current (751,137) 1,068,944
Deferred 739,329 278,019
Other, net (3,017,736) (673,378)
Net cash provided by operating activities 1,297,095 5,016,703
Cash Flows from Investing Activities
Purchase of fixed maturities held to maturity (5,393,891) (6,500,000)
Maturities, calls, and principal reductions of fixed maturities
held to maturity 3,312,178 15,534,368
Purchase of fixed maturities available for sale (39,755,141) (50,627,478)
Proceeds from sale of fixed maturities available for sale 28,222,959 30,617,977
Maturities, calls, and principal reductions of fixed maturities
available for sale 3,610,417 2,489,422
Purchase of equity securities (2,452,512) (505,922)
Proceeds from sale of common stock 1,022,687 ---
Proceeds from repayment of mortgage loans 131,542 78,365
Change in policy loans, net (333,084) (523,637)
Net cash used in investing activities (11,634,845) (9,436,905)
Cash Flows from Financing Activities
Change in checks drawn in excess of bank balances (1,112,196) (786,375)
Deposits to policyholder account balances 25,031,575 20,238,719
Withdrawals from policyholder account balances (17,622,707) (11,572,961)
Change in note payable, net 4,530,000 (3,280,000)
Change in note payable from affiliate, net (134,915) ---
Proceeds from issuance of stock, net 491,768 291,494
Dividends paid to stockholders (297,212) (231,723)
Net cash provided by financing activities 10,886,313 4,659,154
Net Increase in Cash and Short-term Investments 548,563 238,952
Cash and short-term investments at beginning of year 919,687 721,612
Cash and short-term investments at end of quarter $ 1,468,250 $ 960,564
See accompanying Notes to Interim Consolidated Financial Statements.
</TABLE>
4
<PAGE>
ALLIED Life Financial Corporation and Subsidiaries
Notes to Interim Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
The accompanying consolidated financial statements include the accounts of
ALLIED Life Financial Corporation (the Company) and its subsidiaries on a
consolidated basis.
At March 31, 1997, ALLIED Mutual Insurance Company (ALLIED Mutual), an
affiliated property-casualty insurance company, controlled 54% of the voting
stock of the Company and the ALLIED Life Financial Corporation Employee Stock
Ownership Trust owned 2%. The remainder was owned by public stockholders.
The accompanying interim consolidated financial statements should be read in
conjunction with the following notes and with the Notes to Consolidated
Financial Statements included in the ALLIED Life Financial Corporation's Annual
Report on 10K for the year ended December 31, 1996. The interim consolidated
financial statements have been prepared in conformity with generally accepted
accounting principles (GAAP) and include all adjustments which are in the
opinion of management necessary for a fair presentation of the results for the
interim periods. In the opinion of management, all such adjustments are of a
normal and recurring nature. All significant intercompany balances and
transactions have been eliminated.
(2) Transactions with Affiliates
The Company and its affiliates pool their excess cash pursuant to the
Intercompany Cash Concentration Fund Agreement. The fund, administered by AID
Finance Services, Inc. (an affiliate of the Company), also issues short-term
loans (30 days or less) to affiliated companies in accordance with the current
intercompany borrowing policy. At March 31, 1997, the Company had an investment
balance in the intercompany fund of $1,265,733. Pursuant to the Agreement, AID
Finance Services, Inc. receives a management fee of 5 basis points which the
fund participants pay in the form of an additional 0.05% in the interest rate
for borrowings and a 0.05% reduction in the interest rate on invested funds.
The Company has a note payable with ALLIED Mutual. Interest is paid quarterly at
an annual rate of 7% and final payment shall be on August 15, 1999. At March 31,
1997 the outstanding balance of the note payable was $1,482,433.
(3) Note Payable to Nonaffiliates
ALLIED Life Insurance Company, a wholly owned subsidiary, has a line of credit
agreement with the Federal Home Loan Bank (FHLB) to make available borrowings of
$25,000,000. Interest is payable at either an adjustable interest rate with the
interest rate set and charged daily on the outstanding advance amount or at a
fixed rate with the interest rate set at issuance. As of March 31, 1997,
borrowings on this line of credit agreement were $25,000,000 at an interest rate
of 5.66% per annum. All borrowings with the FHLB are secured by securities with
a carrying value of $29,398,567.
(4) New Accounting Standard
In February 1997, the Financial Accounting Statndards Board (FASB) Issued
Statement of Financial Accounting Standards (SFAS) 128, "Earnings Per Share".
SFAS 128 supersedes Opinion 15, "Earnings Per Share" and specifies the
computation, presentation, and disclosure requirements for earnings per share
(EPS).
5
<PAGE>
ALLIED Life Financial Corporation and Subsidiaries
Notes to Interim Consolidated Financial Statements (continued)
It replaces the presentation of primary EPS and fully diluted EPS with basic EPS
and diluted EPS. Basic EPS includes weighted common shares outstanding and
excludes all dilutive securities. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stocks were
exercised or converted into common stock. Diluted EPS is computed similarly to
fully diluted EPS under APB 15. Statement 128 is effective for financial
statements for both interim and annual periods ending after December 15, 1997.
Management has determined that the implementation will not have a material
effect on its financial condition, results of operations, or liquidity.
(5) Subsequent Event
Effective May 13, 1997, the Board of Directors approved a stock repurchase
program to acquire up to 150,000 shares of the Company common stock on the open
market pursuant to rule 10b-18 under the Securities Exchange Act of 1934.
Completion of this program, expected within 24 months, is dependent upon market
conditions. The repurchase program may be terminated at any time at the
Company's discretion. The Company has no present intention to cause its shares
to be delisted or deregistered as a result of this repurchase program.
6
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Overview
The following analysis of the consolidated results of operations and financial
condition of the Company should be read in conjunction with the interim
consolidated financial statements and related footnotes included elsewhere
herein, and with the Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
ALLIED Life Financial Corporation is an insurance holding company formed by
ALLIED Mutual Insurance Company (ALLIED Mutual) in 1993. The financial
statements include the accounts of ALLIED Life Insurance Company (ALLIED Life),
ALLIED Life Brokerage Agency, Inc. (ALBA), and ALLIED Group Merchant Banking
Corporation (AGMB). ALLIED Life accounts for substantially all of the Company's
operations and sells primarily universal life insurance, term life insurance,
and annuity products.
The following table reflects ALLIED Life's production information and pretax
operating results excluding realized investment losses and related amortization
of deferred policy acquisition costs for the periods indicated.
Life Insurance Operations
<TABLE>
<CAPTION>
<S> <C> <C>
Three Months Ended
March 31,
1997 1996
(Dollars in thousands)
Production information
Life insurance
Life insurance face amount in force
Directly produced by agents
Universal Life $4,419,829 $4,228,392
Term life 4,287,625 3,555,948
Whole life 49,198 49,688
8,756,652 7,834,028
Other 383,770 382,440
$9,140,422 $8,216,468
Face amount of new life insurance sold
Directly produced by agents
Universal Life $ 157,639 $ 98,326
Term life 272,187 293,833
Whole life 1,756 977
431,582 393,136
Other 1,774 4,347
$ 433,356 $ 397,483
Life insurance termination rate
Universal life 6.8% 7.0%
Term life 17.6% 17.8%
Annuities
Account balance $ 474,727 $ 420,067
First-year annuity premiums $ 14,024 $ 9,268
</TABLE>
7
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Life Insurance Operations (Continued)
<TABLE>
<CAPTION>
<S> <C> <C>
Three Months Ended
March 31,
1997 1996
(Dollars in thousands)
Profitability
Investment income $12,672 $11,739
Interest credited on
Annuities 6,421 5,801
Universal Life 2,456 2,375
Other 126 84
9,003 8,260
Total interest expense
Investment spread 3,669 3,479
Fee income
Universal life charges 5,838 5,685
Annuity surrender charges 165 111
Total fee income 6,003 5,796
Other insurance income 2,172 1,575
Adjusted insurance revenues 11,844 10,850
Other expenses
Amortization of deferred policy acquisition costs (1) 2,436 1,762
Renewal commissions 688 568
Other operating expenses 1,591 1,505
Administrative fees 121 92
Total acquisition and operating expenses 4,836 3,927
Death benefits, net 2,326 1,503
Other policyholder benefits 1,398 1,358
Total other expenses 8,560 6,788
Income before income taxes and realized investment
losses from insurance operations $ 3,284 $ 4,062
<FN>
(1)Amounts exclude excess amortization of deferred policy acquisition costs
resulting from net realized investment losses.
</FN>
</TABLE>
RESULTS OF OPERATIONS
Consolidated revenues for the three months ended March 31, 1997 were $20.8
million, a 7.6% increase over the $19.3 million reported for the first quarter
of 1996. The increase was primarily attributable to higher insurance revenues,
which rose 10.9% to $8.2 million from $7.4 million. This can be attributed to
higher term life insurance premiums. Higher investment income, which grew 7.9%
to $12.7 million from $11.7 million, also contributed to the increase in
revenues.
Operating income decreased 19.4% to $3.3 million through March 31, 1997 from
$4.1 million through March 31, 1996. Net income totaled $2.1 million, down 21.2%
from $2.7 million through March 31, 1996. Operating earnings per common share
dropped to $0.40 through March 31, 1997 from $0.51 through March 31, 1996; net
income per common share was $0.38 compared with $0.50 for the same periods. The
decreases can be attributed to higher death benefits and amortization of
deferred policy acquisition costs.
8
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Life Insurance Operations
Total life insurance in force grew 11.2% to $9.1 billion at March 31, 1997 from
$8.2 billion at March 31, 1996. The increase was due to policy retention and
insurance sales.
The face amount of new life insurance sold directly by agents through March 31,
1997 increased 9.8% to $431.6 million from $393.1 million through March 31,
1996. The primary factor was a 60.3% increase in the face amount of new
universal life insurance sold to $157.6 million from $98.3 million. Universal
life policyholder account balances were up 8.4%, and related fee income
increased 2.7% to $5.8 million from $5.7 million.
The face amount of new term life insurance sold directly by agents decreased
7.4% to $272.2 million through March 31, 1997 from $293.8 million through March
31, 1996. Sales of ALLIED Life's ten- and twenty-year term products have
remained consistent.
First-year annuity premiums increased 51.3% to $14 million through March 31,
1997 from $9.3 million through March 31, 1996. The total annuity account balance
increased 13% to $474.7 million at March 31, 1997 from $420.1 million at March
31, 1996.
Adjusted insurance revenues increased 9.2% to $11.8 million for the first three
months of 1997 from $10.8 million for the first three months of 1996. The
increase was primarily attributable to higher term life insurance premiums.
The growth in life insurance in force and policyholder account balances
permitted invested assets at cost to increase 11.1% to $725.2 million at March
31, 1997 from $652.8 million at March 31, 1996. Investment income increased by
7.9%. ALLIED Life's return on invested assets through March 31, 1997 decreased
to 7.27% from 7.46% through March 31, 1996. The decrease was due to the fact
that ALLIED Life was reinvesting maturing investments at lower interest rates.
Investment spread through the first quarter of 1997 and 1996 grew to $3.7
million from $3.5 million. Annual average interest-credited rates on universal
life contracts decreased to 5.3% from 5.6% and on annuities decreased to 5.5%
from 5.6%. The ratio of investment spread to investment income for the quarter
was 29%. The 1996 total for the year was 28.2%. This increase, despite the
volatile interest rate environment, is evidence of ALLIED Life's ability to
adjust interest credited to policyholder accounts to reflect trends in
investment earnings.
Amortization of deferred policy acquisition costs through the first quarter of
1997 and 1996 increased 38.2% to $2.4 million from $1.8 million. Other insurance
operating expenses increased 7.2% to $1.7 million from $1.6 million. Death
benefits net of reinsurance through the first quarter of 1997 and 1996 increased
54.7% to $2.3 million from $1.5 million. Net death benefits per share were $0.25
compared to $0.17 per share in the first quarter of 1996. Other policyholder
benefits remained stable at $1.4 million.
9
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
ALLIED Life's operating income before taxes through March 31, 1997 and 1996 was
down 19.1% to $3.3 million from $4.1 million. The decrease occurred because of
higher death benefits and amortization of deferred policy acquisition costs.
LIQUIDITY AND CAPITAL RESOURCES
Consolidated
Life insurance companies generally produce a positive cash flow from operations.
Its adequacy is measured by the companies' liquidity. There should be sufficient
cash to meet benefit obligations to policyholders and normal operating expenses
as they are incurred and sufficient excess to help meet future policy benefit
payments and to write new business. ALLIED Life's liquidity position continued
to be favorable for the first quarter 1997. Cash inflows were at levels
sufficient to provide the grounds necessary to meet its obligations.
The Company's cash inflows consist primarily of deposits to policyholder account
balances, income from sales, maturities and calls of investments, and repayments
of investment principal. The Company's cash outflows primarily are related to
policyholder account withdrawals, investment purchases, policy acquisition
costs, policyholder benefits, and current operating expenses. These outflows
typically are met from normal annual premium and net investment cash inflows.
In the first quarter of 1997, the Company operations provided cash inflows of
$1.3 million and financing activities provided cash inflows of $10.9 million. In
the first quarter of 1996 it was $5 million and $4.7 million, respectively.
These inflows were used primarily to increase the Company's fixed maturity
investment portfolio.
Matching the investment portfolio maturities to the cash flow demands of the
insurance coverages being provided is an important consideration. The Company
continually monitors benefit and claims statistics to project future cash
requirements. As part of this monitoring process, the Company performs cash-flow
testing of its assets and liabilities under various scenarios to evaluate the
adequacy of reserves. In developing its investment strategy, the Company
establishes a level of cash and securities that when combined with expected net
cash inflows from operations, maturities of fixed-maturity investments,
principal payments on mortgage-backed securities, and its insurance products is
believed to be adequate to meet anticipated short-term and long-term benefit and
expense payment obligations.
A source of cash flows for the holding company is dividend payments from ALLIED
Life. During the first quarter of 1997, the Company paid cash dividends on
common stock of $270,000. ALLIED Life paid to the Company dividends of $437,500
to fund the Company's dividend requirements and its note payment on the
indebtedness to affiliates.
The Company has a line of credit agreement that provides additional liquidity.
The agreement makes $25 million available through March 13, 1998. Interest is
payable at a current rate upon issuance. From time to time, the Company has also
borrowed funds from its affiliates on an arms-length basis. At March 31, 1997,
the Company had outstanding borrowings of $25 million under the line of credit
agreements and borrowings of $1.5 million from affiliates.
Management anticipates that funds to meet the Company's short-term and long-term
capital expenditures, cash dividends, and operating cash needs will come from
existing capital and internally generated funds and believes the total is
adequate to meet expected cash obligations.
10
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
As of March 31, 1997, the Company had no material commitments for capital
expenditures. As additional capital needs arise, the Company will consider
taking an additional debt or issuing equity. Specific methods for meeting such
needs will depend upon financial market conditions at the time.
11
<PAGE>
PART II
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 10.12 - Federal Home Loan Bank Open Line of Credit
Application and Terms Agreement dated March 5, 1997 with ALLIED
Life Insurance Company.
Exhibit 11 - Statement re Computation of Per Share Earnings.
Exhibit 27 - Financial Data Schedule
(b) There were no reports filed on Form 8-K during the first quarter
of 1997.
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.
ALLIED Life Financial Corporation
(Registrant)
Date: May 14, 1997 By: /s/ Wendell P. Crosser
-----------------------
Wendell P. Crosser, Vice President and Treasurer
(Principal Financial Officer and Principal
Accounting Officer)
12
OPEN LINE OF CREDIT APPLICATION AND TERMS AGREEMENT
APPLICATION
ALLIED Life Insurance Company- ("Member") hereby applies to the Federal Home
Loan Bank of Des Moines ("Bank") for an Open Line of Credit commitment beginning
on the date of approval and ending one year from the date of approval, ("Ending
Date") in the amount of 25, 000, 000
TERMS
1. Member, through its authorized representative may request filnds by telephone
advice up to the approved Open Line of Credit limit. Funds will be available
upon advice.
2. The interest rate on advances funded under the Open Line of Credit will be
set and charged daily on the outstanding advance amount. The interest amount
will be deducted daily by the Bank from the member's demand account.
3. Advances funded under the Open Line of Credit will be available aier the
approval date and will mature on the Ending Date.
4. Member represents and warrants that the Open Line of Credit amount requested
does not exceed 15% of assets.
5. The Bank shall have no obligation to make any advance under the Open Line of
Credit unless the Bank is satisfied as to Member's continued creditworthiness
and compliance with the terms of the Agreement for Advances, Pledge and
Security Agreement ("AAPSA"). If adverse facts develop which make the member
ineligible for Bank advances, the member must provide the Bank with immediate
written notification of its ineligibility and the Bank may cancel this
commitment.
6. The fee for this Open Line of Credit commitment equals .05% times the amount
of the comrnitment. This fee will be charged to the member's demand account
on the date this application is approved by the Bank.
13
<PAGE>
7. This Application and Terms Agreement, if approved by the Bank will constitute
the Agreement between Member and Bank as to the Open Line of Credit and will
be wholly incorporated into and become a part of the AAPSA.
By signing this agreement, member hereby accepts the terms hereof.
ALLIED Life Insurance Company Date March 5,1997
Member
By:/s/ Wendell P. Crosser By:/s/ Tim J. Callahan
Wendell P. Crosser Tim J. Callahan
Typed Name of Signer Typed Name of Signer
Vice President & Treasurer Investment Accounting Supervisor
Title Title
FOR FELB USE
Date Approved: 03-13-97 FEDERAL HOME LOAN BANK OF DES MOINES
Expiration Date 03-13-98 By: /s/ Jerry R. Ferguson
Amount Approved: $25,000,000 By:/s/ David J. Waldrin
Commitment Number 970313A
Cornmitment Fee $12, 500
14
<PAGE>
CERTIFICATION
I, Sally J. Malloy, Assistant Secretary of ALLIED Life Insurance Company, 701
Fifth Avenue, Des Moines, Iowa certify the attached to be at true and correct
copy of the resolution currently in effect adopted by the Executive Committee of
the Board of Directors on May 1, 1996.
/s/ Sally Malloy
Assistant Secretary
15
<PAGE>
ALLIED LIFE INSURANCE COMPANY
FEDERAL HOME LOAN BANK
Open Lines of Credit
RESOLVED, that any of the following persons:
Samuel J. Wells, President
Wendell P. Crosser, Vice President & Treasurer
John S. Duffy, Vice President - Administration
Timothy J. Callahan, Investment Accounting Supervisor
Michael Rieks
Karen K. Gillispie
are hereby authorized to borrow up to $25,000,000 from the account at the
Federal Home Loan Bank of Des Moines on behalf of the Corporation.
16
Exhibit 11
ALLIED Life Financial Corporation and Subsidiaries
Computation of Per Share Earnings
For the three months ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
<S> <C> <C>
1997 1996
Primary
Net income $2,126,802 $2,697,300
Preferred stock dividends (419,497) (391,285)
Adjusted net income 1,707,305 2,306,015
Earnings per share $ 0.38 $ 0.50
Total 4,501,597 4,633,202
Fully Diluted
Net income $2,126,802 $2,697,300
Preferred stock dividends (419,497) (391,285)
Adjusted net income $1,707,305 $2,306,015
Earnings per share $ 0.38 $ 0.50
Total 4,501,597 4,633,202
<FN>
The common stock equivalents are not entered into earnings per share
computations because they would not have a dilutive effect.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
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0
25,234
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1,678
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</TABLE>
