2014 Financial Results
2014 was an excellent year for FTFC. Our combined assets grew 19.6% from $183,173,159 to $219,001,168 an increase of $35,828,009. Similar to 2013, the growth in assets was primarily attributed to the organic growth of our life companies.
In the spring of 2011, Gregg Zahn, FTFC’s, Founder, Chairman, President and CEO travelled across the state of Oklahoma conducting a series of shareholder update meetings. At those meetings, he presented a projection of asset growth through a power-point presentation to our shareholders.
The company can enthusiastically report that FTFC’s asset growth has exceeded each of those projections to date.
Consolidated Revenues and Net Income after Federal Income Tax:
Consolidated 2014 revenues reached an all-time high for the Company. Consolidated revenue increased 10.7% from $16,148,233 in 2013 to $17,878,183 in 2014 an increase of $1,729,950. Net Income more than doubled in 2014. Net Income increased 116.5% from $889,323 in 2013 to $1,925,511 in 2014, an increase of $1,036,188. This represented net income of $0.25 per share as opposed to $0.11 per share in 2013. Net income in 2014 was FTFC’s highest earnings year to date excluding the 2011 net income which included a net gain of $6,915,479 from the acquisition of FBLIC. The company’s primary sources of revenue are life insurance premiums, investment income, and realized gains on investments.
Net Investment Income and Realized Investment Gains:
Net investment income and net realized investment gains have grown steadily over the past several years from $2,600,634 in 2010 to $9,700,552 in 2014. Net investment income and net realized gains increased 18.9% from $8,159,457 in 2013 to $9,700,552 in 2014, an increase of $1,541,095.
Net investment income and net realized investment gains have increased due to several factors: the exponential increase in invested assets over the past several years, management’s decision (due to low bond yields) to diversify its investment portfolio into first position mortgage loans, lottery receivables, and investment real estate.
In 2014, our investment portfolio consisted of 50.5% government and corporate bonds, 9.9% in lottery receivables, 17.6% in mortgage loans, and 4.2% in investment real estate. Our mortgage loan portfolio has grown significantly in the past few years. The Company has been very active in purchasing seasoned mortgage loans on the secondary market.
Purchasing loans on the secondary market allows the Company to review past loan payment histories and the ability of the mortgagor to pay their obligations. All of the loans in the Company’s portfolio have been individually evaluated and meet our stringent requirements for purchase. The Company does not purchase pools of loans or Collateralized Mortgage Obligations. All loans have a maximum of 80% loan to value based on new appraisals. However, the actual loan to value for the entire portfolio as of December 31, 2014 is 54.5% based on the carrying value of the mortgage loans compared to the appraised value of the property.
TLIC and FBLIC Statutory Life and Annuity Premiums:
Combined statutory premiums and annuity considerations from our life insurance operations grew 31.2% from $29,455,717 in 2013 to $38,642,793 in 2014, an increase of $9,187,076. This increase was a direct result of the organic growth of our life insurance subsidiaries.
States of Operations:
TLIC and FBLIC are now licensed in a combined 25 states! During 2014 and 2015, FBLIC was approved to conduct business in the states of Alabama, Georgia, Louisiana, Michigan, Mississippi, North Carolina, Ohio, Tennessee, and Virginia. Additional expansion plans in the near future include the states of Florida, Idaho, Minnesota, Montana, Nevada, Utah, Wisconsin, and Wyoming.