Erie Indemnity Company (ERIE, Financial) filed Quarterly Report for the period ended 2010-09-30.
Erie Indemnity Company has a market cap of $2.98 billion; its shares were traded at around $58.97 with a P/E ratio of 21.5 and P/S ratio of 2.5. The dividend yield of Erie Indemnity Company stocks is 3.2%. Erie Indemnity Company had an annual average earning growth of 0.9% over the past 10 years.ERIE is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
If the financial market volatility continues, we have the ability to meet our future funding requirements through various alternatives available to us. Outside of our normal operating and investing cash activities, future funding requirements could be met through (1) a $200 million bank line of credit held by the Exchange, from which there were no borrowings at September 30, 2010, (2) a $100 million bank line of credit held by Indemnity, from which there were no borrowings as of September 30, 2010, and (3) our more liquid investments that can be sold, such as our common stock and cash and cash equivalents, which total approximately $2.3 billion at September 30, 2010. Indemnity has no rights to the assets or capital of the Exchange and, conversely, the Exchange has no rights to the assets or capital of Indemnity.
The Exchange and Indemnity had no borrowings under their respective lines of credit at September 30, 2010. At September 30, 2010, bonds with fair values of $258 million and $128 million were pledged as collateral on the Exchanges and Indemnitys lines of credit, respectively. These securities have no restrictions. The bank requires compliance with certain covenants, which include statutory surplus and risk based capital ratios for the Exchange line of credit and minimum net worth and leverage ratios for Indemnity line of credit. The Exchange and Indemnity were in compliance with all bank covenants at September 30, 2010.
Indemnity has a surplus note for $25 million with EFL that is payable on demand on or after December 31, 2018. EFL accrued interest to Indemnity on the surplus note of $1.3 million through September 30, 2010 and 2009. No other interest is charged or received on these intercompany balances due to the timely settlement terms and nature of the items.
In June 2009, the Exchange made a $43 million capital contribution to EFL and Indemnity made a $12 million capital contribution to EFL to strengthen its surplus. This $55 million in capital contributions increased EFLs investments and total shareholders equity.
In addition, the month of July 2010 includes a repurchase of 4,800 shares of our Class A nonvoting common stock for $0.2 million, or $48.75 per share, for the vesting of stock-based awards for executive management. These shares were delivered in July 2010.
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Erie Indemnity Company has a market cap of $2.98 billion; its shares were traded at around $58.97 with a P/E ratio of 21.5 and P/S ratio of 2.5. The dividend yield of Erie Indemnity Company stocks is 3.2%. Erie Indemnity Company had an annual average earning growth of 0.9% over the past 10 years.ERIE is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, Issuer Purchases of Equity Securities.) Dividends paid to shareholders totaled $74 million and $70 million for the first nine months of 2010 and 2009, respectively. Indemnity increased both its Class A and Class B shareholder quarterly dividend by 6.7% in 2010, compared to 2009. There are no regulatory restrictions on the payment of dividends to Indemnity shareholders, although there are state law restrictions on the payment of dividends from Indemnitys property and casualty insurance subsidiaries.If the financial market volatility continues, we have the ability to meet our future funding requirements through various alternatives available to us. Outside of our normal operating and investing cash activities, future funding requirements could be met through (1) a $200 million bank line of credit held by the Exchange, from which there were no borrowings at September 30, 2010, (2) a $100 million bank line of credit held by Indemnity, from which there were no borrowings as of September 30, 2010, and (3) our more liquid investments that can be sold, such as our common stock and cash and cash equivalents, which total approximately $2.3 billion at September 30, 2010. Indemnity has no rights to the assets or capital of the Exchange and, conversely, the Exchange has no rights to the assets or capital of Indemnity.
The Exchange and Indemnity had no borrowings under their respective lines of credit at September 30, 2010. At September 30, 2010, bonds with fair values of $258 million and $128 million were pledged as collateral on the Exchanges and Indemnitys lines of credit, respectively. These securities have no restrictions. The bank requires compliance with certain covenants, which include statutory surplus and risk based capital ratios for the Exchange line of credit and minimum net worth and leverage ratios for Indemnity line of credit. The Exchange and Indemnity were in compliance with all bank covenants at September 30, 2010.
Indemnity has a surplus note for $25 million with EFL that is payable on demand on or after December 31, 2018. EFL accrued interest to Indemnity on the surplus note of $1.3 million through September 30, 2010 and 2009. No other interest is charged or received on these intercompany balances due to the timely settlement terms and nature of the items.
In June 2009, the Exchange made a $43 million capital contribution to EFL and Indemnity made a $12 million capital contribution to EFL to strengthen its surplus. This $55 million in capital contributions increased EFLs investments and total shareholders equity.
In addition, the month of July 2010 includes a repurchase of 4,800 shares of our Class A nonvoting common stock for $0.2 million, or $48.75 per share, for the vesting of stock-based awards for executive management. These shares were delivered in July 2010.
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