OREANDA-NEWS. July 23, 2015. Allied World Assurance Company Holdings, AG (NYSE:AWH) today reported net income of \\$9.5 million, or \\$0.10per diluted share, for the second quarter of 2015 compared to net income of \\$151.9 million, or \\$1.52 per diluted share, for the second quarter of 2014.

The company reported operating income of \\$25.8 million, or \\$0.27 per diluted share, for the second quarter of 2015, compared to operating income of \\$76.1 million, or \\$0.76 per diluted share, for the second quarter of 2014.

“While we are excited to report our first quarter inclusive of the results of the recently acquired Asian operations, unfortunately this quarter’s results were impacted by catastrophe and current year events,” commented President and Chief Executive Officer Scott Carmilani. “We continue to take steps to grow attractive insurance businesses, and look to manage our growth while mitigating exposure to less attractive risks.”

Second Quarter Summary (Unaudited)

(Expressed in millions of U.S. dollars, except per

share amounts)

Three Months Ended June 30,
Diluted per share
2015 2014 2015 2014
Net income

\\$

9.5 \\$ 151.9 \\$ 0.10 \\$ 1.52
Add after tax effect of:
Net realized investment losses (gains) 15.1 (76.4 ) 0.16 (0.77 )
Foreign exchange loss 1.2 0.6 0.01 0.01
Operating income \\$

25.8

\\$ 76.1 \\$ 0.27 \\$ 0.76

Second Quarter Operating Results

  • Gross premiums written were \\$826.0 million, an 8.6% increase compared to \\$760.4 million in the second quarter of 2014.
    • The North American Insurance segment grew 9.6% led by growth in the Defense Base Act, Excess Casualty and Environmental lines, offset by a continued decrease in the Healthcare line. Healthcare gross premiums written have decreased 16.8% compared to the prior year quarter and 30.1% compared to the same quarter two years ago.
    • The Global Markets Insurance segment grew 83.5% driven by the inclusion of the acquired Asian operations for the first time and 7.7% excluding the impact of the acquired Asian operations results. On a constant dollar basis, the segment grew 99.0% and 16.6% excluding the impact of the acquired Asian operations.
    • Offsetting the growth in the two insurance segments was a 19.1% decrease in the Reinsurance segment driven by the non-renewal of several casualty and property treaties.
  • Net premiums written were \\$603.7 million, a 9.0% increase compared to \\$553.9 million in the second quarter of 2014.
  • Net premiums earned were \\$646.4 million, a 20.3% increase compared to \\$537.2 million in the second quarter of 2014.
  • Underwriting income was \\$5.9 million, compared to underwriting income of \\$51.9 million in the second quarter of 2014.
  • The combined ratio was 99.2% compared to 90.3% in the second quarter of 2014.
  • The loss and loss expense ratio was 66.8% in the second quarter of 2015 compared to 58.6% in the prior year quarter. During the second quarter of 2015, the company recorded net favorable reserve development on prior loss years of \\$21.8 million, a benefit of 3.4 percentage points to the loss and loss expense ratio, compared to \\$45.1 million a year ago, a benefit of 8.4 percentage points. The decrease in net favorable reserve development was mostly driven by reserve strengthening related to selected claims within large account North American professional lines and Healthcare.
  • The company experienced \\$25.0 million of catastrophe losses in the second quarter of 2015 related to the New South Wales storms, which impacted the Reinsurance and Global Markets Insurance segments. The company did not have any reportable catastrophe losses in the prior year quarter.
  • The company's expense ratio was 32.4% for the second quarter of 2015 compared to 31.7% for the second quarter of 2014. The increase was driven mostly by acquisition costs associated with the business of the acquired Asian operations.
  • Net income for the first half of 2015 was \\$133.8 million, a 59.3% decrease compared to \\$328.8 million for the first half of last year. The decrease was driven by elevated catastrophe and non-catastrophe weather and fire-related losses, a decrease in net favorable reserve development, and increased mark-to-market losses on investments.

Investment Results

  • The total financial statement return on the company's investment portfolio for the three months ended June 30, 2015 was 0.3% compared to 1.4% for the three months ended June 30, 2014.
  • The decrease in total return was driven by an increase in unrealized losses within the fixed income portfolio due to rising bond yields.
  • Net investment income increased 16.2% compared to the prior year quarter as a result of contributions from the fixed income portfolio as well as higher returns from our hedge fund and private equity portfolios.
  • See the table below for the components of our investment returns:

(Expressed in millions of U.S. dollars, except

percentages)

Three Months Ended June 30,
2015 2014
Net investment income \\$42.8 \\$36.8
Net realized investment (losses) gains (20.2) 85.2
Total financial statement portfolio return \\$22.6 \\$122.0
Average invested assets, at fair value \\$8,601.8 \\$8,703.0
Financial statement portfolio return 0.3% 1.4%

Note: net investment income, realized gains and unrealized gains are disclosed on a pre-tax basis.

Shareholders' Equity

  • As of June 30, 2015, the company’s total shareholders' equity decreased to \\$3,624.8 million, compared to \\$3,778.3 million as of December 31, 2014.
  • As of June 30, 2015, diluted book value per share was \\$38.75, a decrease of 0.6% compared to \\$38.99 as of March 31, 2015, and an increase of 1.3% compared to \\$38.27 as of December 31, 2014.

Capital Management

  • During the second quarter of 2015, the company repurchased 4,776,224 of its common shares at an average price of \\$40.69 per share and an aggregate cost of \\$194.4 million. This included \\$164.4 million directly repurchased from Exor S.A. at a price of \\$40.55 per share, a 3.0% discount to the most recent closing price prior to execution.
  • As of June 30, 2015, the company had \\$173.0 million remaining on its outstanding share repurchase authorization.
  • In May 2015, the company’s shareholders approved four quarterly dividends equal to \\$0.26 per share. The first dividend was paid on July 2, 2015.

Supplementary Information

Allied World will be providing both a Financial Supplement and an Investment Supplement as of June 30, 2015. This information will be available in the "Investor Relations" section of the company's website at www.awac.com.

Conference Call

Allied World will host a conference call on Thursday, July 23, 2015 at 9:00 a.m. (Eastern Time) to discuss the results for the second quarter ended June 30, 2015. The public may access a live webcast of the conference call at the "Investor Relations" section of the company's website at www.awac.com. In addition, the conference call can be accessed by dialing (888) 317-6003 (U.S. callers) or (412) 317-6061 (international callers) and entering the passcode 8655462 approximately ten minutes prior to the call.

Following the conclusion of the presentation, a replay of the call will be available through Friday, August 7, 2015 by dialing (877) 344-7529 (U.S. callers) or (412) 317-0088 (international callers) and entering the passcode 10067643. In addition, the webcast will remain available online through Friday, August 7, 2015 at www.awac.com.

Non-GAAP Financial Measures

In presenting the company's results, management has included and discussed in this press release certain non-generally accepted accounting principles ("non-GAAP") financial measures within the meaning of Regulation G as promulgated by the U.S. Securities and Exchange Commission. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain the company's results of operations in a manner that allows for a more complete understanding of the underlying trends in the company's business. However, these measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles ("U.S. GAAP").

"Operating income" is an internal performance measure used in the management of the company's operations and represents after-tax operational results excluding, as applicable, net realized investment gains or losses, net foreign exchange gain or loss, and other non-recurring items. The company excludes net realized investment gains or losses, net foreign exchange gain or loss, and other non-recurring items from the calculation of operating income because these amounts are heavily influenced by and fluctuate in part according to the availability of market opportunities and other factors. In addition to presenting net income determined in accordance with U.S. GAAP, the company believes that showing operating income enables investors, analysts, rating agencies and other users of the company's financial information to more easily analyze our results of operations and underlying business performance. Operating income should not be viewed as a substitute for U.S. GAAP net income.

The company has included "diluted book value per share" because it takes into account the effect of dilutive securities; therefore, the company believes it is an important measure of calculating shareholder returns.

"Annualized net income return on average shareholders' equity" ("ROAE") is calculated using average shareholders' equity, excluding the average after tax unrealized gains (or losses) on investments. Unrealized gains (losses) on investments are primarily the result of interest rate and credit spread movements and the resultant impact on fixed income securities. Such gains (losses) are not related to management actions or operational performance, nor are they likely to be realized. Therefore, the company believes that excluding these unrealized gains (losses) provides a more consistent and useful measurement of operating performance, which supplements U.S. GAAP information. In calculating ROAE, the net income (loss) available to shareholders for the period is multiplied by the number of such periods in a calendar year in order to arrive at annualized net income (loss) available to shareholders. The company presents ROAE as a measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information.

"Annualized operating return on average shareholders' equity" is calculated using operating income (as defined above and annualized in the manner described for net income (loss) available to shareholders under ROAE above) and average shareholders' equity, excluding the average after tax unrealized gains (losses) on investments. Unrealized gains (losses) are excluded from equity for the reasons outlined in the annualized net income return on average shareholders' equity explanation above.

Reconciliations of these financial measures to their most directly comparable U.S. GAAP measures are included in the attached tables.

About Allied World Assurance Company

Allied World Assurance Company Holdings, AG, through its subsidiaries and brand known as Allied World, is a global provider of innovative property, casualty and specialty insurance and reinsurance solutions. Allied World offers superior client service through a global network of offices and branches. All of Allied World's rated insurance and reinsurance subsidiaries are rated A by A.M. Best Company, A by Standard & Poor's, and A2 by Moody's, and our Lloyd's Syndicate 2232 is rated A+ by Standard & Poor's and AA- by Fitch.

Please visit the following sites for further information about Allied World: Web: www.awac.com | Facebook: www.facebook.com/alliedworld | LinkedIn: http://www.linkedin.com/company/Allied-World.

Cautionary Statement Regarding Forward-Looking Statements

Any forward-looking statements made in this press release reflect our current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties, which may cause actual results to differ materially from those set forth in these statements. For example, our forward-looking statements could be affected by risks that the acquisitions of the Hong Kong and Singapore operations of Royal & Sun Alliance Insurance plc disrupt the company's current plans and operations; the ability to retain key personnel; the ability to recognize the benefits of the acquisitions; the amounts of costs, fees, expenses, and charges related to the acquisitions; pricing and policy term trends; increased competition; the adequacy of our loss reserves; negative rating agency actions; greater frequency or severity of unpredictable catastrophic events; the impact of acts of terrorism and acts of war; the company or its subsidiaries becoming subject to significant income taxes in the United States or elsewhere; changes in regulations or tax laws; changes in the availability, cost or quality of reinsurance or retrocessional coverage; adverse general economic conditions; and judicial, legislative, political and other governmental developments, as well as management's response to these factors, and other factors identified in our filings with the U.S. Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We are under no obligation (and expressly disclaim any such obligation) to update or revise any forward-looking statement that may be made from time to time, whether as a result of new information, future developments or otherwise.

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in thousands of United States dollars, except share and per share amounts)

Three Months Ended

June 30,

Six Months Ended

June 30,

2015 2014 2015 2014
Revenues:
Gross premiums written \\$ 825,970 \\$ 760,405 \\$ 1,706,584 \\$ 1,661,798
Premiums ceded (222,301) (206,481) (330,387) (336,260)
Net premiums written 603,669 553,924 1,376,197 1,325,538
Change in unearned premiums 42,707 (16,677) (161,273) (258,006)
Net premiums earned 646,376 537,247 1,214,924 1,067,532
Net investment income 42,760 36,793 87,311 84,412
Net realized investment (losses) gains (20,182) 85,217 24,843 139,422
Other income 924 — 1,778 —
Total revenues 669,878 659,257 1,328,856 1,291,366
Expenses:
Net losses and loss expenses 431,521 314,855 756,697 590,141
Acquisition costs 100,618 74,279 179,317 142,001
General and administrative expenses 108,363 96,188 205,501 176,528
Other expenses 1,235 — 3,058 —
Amortization of intangible assets 2,819 634 3,452 1,267
Interest expense 14,466 14,592 28,803 29,126
Foreign exchange loss 1,265 651 11,162 700
Total expenses 660,287 501,199 1,187,990 939,763
Income before income taxes 9,591 158,058 140,866 351,603
Income tax expense 133 6,195 7,052 22,768
NET INCOME \\$ 9,458 \\$ 151,863 \\$ 133,814 \\$ 328,835
PER SHARE DATA:
Basic earnings per share \\$ 0.10 \\$ 1.55 \\$ 1.42 \\$ 3.33
Diluted earnings per share \\$ 0.10 \\$ 1.52 \\$ 1.40 \\$ 3.27
Weighted average common shares outstanding 92,441,730 97,809,639 94,178,989 98,672,618
Weighted average common shares and common share equivalents outstanding 93,984,226 99,724,802 95,830,455 100,691,568
Dividends paid per share (1) \\$ 0.225 \\$ 0.167 \\$ 0.450 \\$ 0.333
(1) A dividend of \\$0.26 was also paid on July 2, 2015 to shareholders of record on June 23, 2015.
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States dollars, except share and per share amounts)
As of As of
June 30, December 31,
ASSETS: 2015 2014
Fixed maturity investments trading, at fair value \\$ 6,431,543 \\$ 6,069,010
Equity securities trading, at fair value 815,641 844,163
Other invested assets 896,790 955,509
Total investments 8,143,974 7,868,682
Cash and cash equivalents 768,916 670,310
Insurance balances receivable 944,539 664,815
Funds held 462,493 724,021
Prepaid reinsurance 399,169 360,732
Reinsurance recoverable 1,433,109 1,340,256
Reinsurance recoverable on paid losses 88,421 86,075
Accrued investment income 31,739 28,456
Net deferred acquisition costs 208,034 151,546
Goodwill 357,729 278,258
Intangible assets 136,368 46,298
Balances receivable on sale of investments 122,660 47,149
Net deferred tax assets 19,818 33,615
Other assets 190,025 121,350
Total assets \\$ 13,306,994 \\$ 12,421,563
LIABILITIES:
Reserve for losses and loss expenses \\$ 6,363,948 \\$ 5,881,165
Unearned premiums 1,894,484 1,555,313
Reinsurance balances payable 231,350 180,060
Balances due on purchases of investments 205,430 5,428
Senior notes 798,962 798,802
Other long-term debt 24,472 19,213
Dividends payable 23,606 21,669
Accounts payable and accrued liabilities 139,941 181,622
Total liabilities 9,682,193 8,643,272
SHAREHOLDERS' EQUITY:

Common shares: 2015 and 2014: par value CHF 4.10 per share (2015:

95,523,230; 2014: 100,775,256 shares issued and 2015: 90,796,360; 2014:

96,195,482 shares outstanding)

386,702 408,020
Treasury shares, at cost (2015: 4,726,870; 2014: 4,579,774) (159,186 ) (143,075 )
Accumulated other comprehensive loss (3,272 ) —
Retained earnings 3,400,557 3,513,346
Total shareholders' equity 3,624,801 3,778,291
Total liabilities and shareholders' equity \\$ 13,306,994 \\$ 12,421,563
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONSOLIDATED SEGMENT DATA
(Expressed in thousands of United States dollars, except for ratio information)
North American Global Markets
Three Months Ended June 30, 2015 Insurance Insurance Reinsurance Total
Gross premiums written \\$ 517,483 \\$ 134,997 \\$ 173,490 \\$ 825,970
Net premiums written 372,193 69,260 162,216 603,669
Net premiums earned 328,541 102,626 215,209 646,376
Net losses and loss expenses (237,747) (65,754) (128,020) (431,521)
Acquisition costs (34,201) (24,337) (42,080) (100,618)
General and administrative expenses (58,144) (30,724) (19,495) (108,363)
Underwriting (loss) income (1,551) (18,189) 25,614 5,874
Other insurance-related income 924 — — 924
Other insurance-related expenses (591) (644) — (1,235)
Segment (loss) income (1,218) (18,833) 25,614 5,563
Net investment income 42,760
Net realized investment losses (20,182)
Amortization of intangible assets (2,819)
Interest expense (14,466)
Foreign exchange loss (1,265)
Income before income taxes \\$ 9,591
GAAP Ratios:
Loss and loss expense ratio 72.4 % 64.1 % 59.5 % 66.8 %
Acquisition cost ratio 10.4 % 23.7 % 19.6 % 15.6 %
General and administrative expense ratio 17.7 % 29.9 % 9.1 % 16.8 %
Expense ratio 28.1 % 53.6 % 28.7 % 32.4 %
Combined ratio 100.5 % 117.7 % 88.2 % 99.2 %
North American Global Markets
Three Months Ended June 30, 2014 Insurance Insurance Reinsurance Total
Gross premiums written \\$ 472,340 \\$ 73,564 \\$ 214,501 \\$ 760,405
Net premiums written 293,388 50,733 209,803 553,924
Net premiums earned 265,800 37,998 233,449 537,247
Net losses and loss expenses (178,732) (2,673) (133,450) (314,855)
Acquisition costs (25,829) (4,423) (44,027) (74,279)
General and administrative expenses (58,527) (17,477) (20,184) (96,188)
Underwriting income 2,712 13,425 35,788 51,925
Other insurance-related income — — — —
Other insurance-related expenses — — — —
Segment income 2,712 13,425 35,788 51,925
Net investment income 36,793
Net realized investment gains 85,217
Amortization of intangible assets (634)
Interest expense (14,592)
Foreign exchange loss (651)
Income before income taxes \\$ 158,058
GAAP Ratios:
Loss and loss expense ratio 67.2 % 7.0 % 57.2 % 58.6 %
Acquisition cost ratio 9.7 % 11.6 % 18.9 % 13.8 %
General and administrative expense ratio 22.0 % 46.0 % 8.6 % 17.9 %
Expense ratio 31.7 % 57.6 % 27.5 % 31.7 %
Combined ratio 98.9 % 64.6 % 84.7 % 90.3 %
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONSOLIDATED SEGMENT DATA
(Expressed in thousands of United States dollars, except for ratio information)
North American Global Markets
Six Months Ended June 30, 2015 Insurance Insurance Reinsurance Total
Gross premiums written \\$ 898,249 \\$ 195,559 \\$ 612,776 \\$ 1,706,584
Net premiums written 669,075 112,155 594,967 1,376,197
Net premiums earned 641,511 152,666 420,747 1,214,924
Net losses and loss expenses (433,226) (86,264) (237,207) (756,697)
Acquisition costs (65,233) (31,345) (82,739) (179,317)
General and administrative expenses (117,432) (48,749) (39,320) (205,501)
Underwriting income (loss) 25,620 (13,692) 61,481 73,409
Other insurance-related income 1,778 — — 1,778
Other insurance-related expenses (1,445) (1,613) — (3,058)
Segment income (loss) 25,953 (15,305) 61,481 72,129
Net investment income 87,311
Net realized investment gains 24,843
Amortization of intangible assets (3,452)
Interest expense (28,803)
Foreign exchange loss (11,162)
Income before income taxes \\$ 140,866
GAAP Ratios:
Loss and loss expense ratio 67.5 % 56.5 % 56.4 % 62.3 %
Acquisition cost ratio 10.2 % 20.5 % 19.7 % 14.8 %
General and administrative expense ratio 18.3 % 31.9 % 9.3 % 16.9 %
Expense ratio 28.5 % 52.4 % 29.0 % 31.7 %
Combined ratio 96.0 % 108.9 % 85.4 % 94.0 %
North American Global Markets
Six Months Ended June 30, 2014 Insurance Insurance Reinsurance Total
Gross premiums written \\$ 818,252 \\$ 131,961 \\$ 711,585 \\$ 1,661,798
Net premiums written 540,540 81,780 703,218 1,325,538
Net premiums earned 531,251 73,009 463,272 1,067,532
Net losses and loss expenses (339,904) (7,062) (243,175) (590,141)
Acquisition costs (49,504) (7,302) (85,195) (142,001)
General and administrative expenses (106,142) (32,059) (38,327) (176,528)
Underwriting income 35,701 26,586 96,575 158,862
Other insurance-related income — — — —
Other insurance-related expenses — — — —
Segment income 35,701 26,586 96,575 158,862
Net investment income 84,412
Net realized investment gains 139,422
Amortization of intangible assets (1,267)
Interest expense (29,126)
Foreign exchange loss (700)
Income before income taxes \\$ 351,603
GAAP Ratios:
Loss and loss expense ratio 64.0 % 9.7 % 52.5 % 55.3 %
Acquisition cost ratio 9.3 % 10.0 % 18.4 % 13.3 %
General and administrative expense ratio 20.0 % 43.9 % 8.3 % 16.5 %
Expense ratio 29.3 % 53.9 % 26.7 % 29.8 %
Combined ratio 93.3 % 63.6 % 79.2 % 85.1 %
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED OPERATING INCOME RECONCILIATION
(Expressed in thousands of United States dollars, except share and per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
Net income \\$ 9,458 \\$ 151,863 \\$ 133,814 \\$ 328,835
Add after tax effect of:
Net realized investment losses (gains) 15,112 (76,443) (27,460) (123,605)
Foreign exchange loss 1,265 651 11,162 700
Operating income \\$ 25,835 \\$ 76,071 \\$ 117,516 \\$ 205,930
Weighted average common shares outstanding:
Basic 92,441,730 97,809,639 94,178,989 98,672,618
Diluted 93,984,226 99,724,802 95,830,455 100,691,568
Basic per share data:
Net income \\$ 0.10 \\$ 1.55 1.42 \\$ 3.33
Add after tax effect of:
Net realized investment losses (gains) 0.16 (0.78) (0.29) (1.25)
Foreign exchange loss 0.02 0.01 0.12 0.01
Operating income \\$ 0.28 \\$ 0.78 \\$ 1.25 \\$ 2.09
Diluted per share data:
Net income \\$ 0.10 \\$ 1.52 \\$ 1.40 \\$ 3.27
Add after tax effect of:
Net realized investment losses (gains) 0.16 (0.77) (0.29) (1.23)
Foreign exchange loss 0.01 0.01 0.12 0.01
Operating income \\$ 0.27 \\$ 0.76 \\$ 1.23 \\$ 2.05
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED DILUTED BOOK VALUE PER SHARE RECONCILIATION
(Expressed in thousands of United States dollars, except share and per share amounts)
As of As of
June 30, December 31,
2015 2014
Price per share at period end \\$ 43.22 \\$ 37.92
Total shareholders' equity \\$ 3,624,801 \\$ 3,778,291
Basic common shares outstanding 90,796,360 96,195,482
Add: unvested restricted share units 829,622 502,506
Add: performance based equity awards 591,683 616,641
Add: employee share purchase plan 43,538 42,176
Add: dilutive options outstanding 2,096,048 2,426,674
Weighted average exercise price per share \\$ 16.66 \\$ 16.41
Deduct: options bought back via treasury method (807,727) (1,050,151)
Common shares and common share
equivalents outstanding 93,549,524 98,733,328
Basic book value per common share \\$ 39.92 \\$ 39.28
Diluted book value per common share \\$ 38.75 \\$ 38.27
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED ANNUALIZED RETURN ON SHAREHOLDERS' EQUITY RECONCILIATION
(Expressed in thousands of United States dollars, except for percentage information)
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
Opening shareholders' equity \\$ 3,829,067 \\$ 3,616,678 \\$ 3,778,291 \\$ 3,519,826
Deduct: accumulated other comprehensive income — — — —
Adjusted opening shareholders' equity 3,829,067 3,616,678 3,778,291 3,519,826
Closing shareholders' equity \\$ 3,624,801 \\$ 3,682,762 \\$ 3,624,801 \\$ 3,682,762
Add: accumulated other comprehensive income 3,272 — 3,272 —
Adjusted closing shareholders' equity 3,628,073 3,682,762 3,628,073 3,682,762
Average shareholders' equity \\$ 3,728,570 \\$ 3,649,720 \\$ 3,703,182 \\$ 3,601,294
Net income available to shareholders \\$ 9,458 \\$ 151,863 \\$ 133,814 \\$ 328,835
Annualized net income available to shareholders 37,832 607,452 267,628 657,670
Annualized return on average shareholders' equity -
net income available to shareholders 1.0 % 16.6 % 7.2 % 18.3 %
Operating income available to shareholders \\$ 25,835 \\$ 76,071 \\$ 117,516 \\$ 205,930
Annualized operating income available to shareholders 103,340 304,284 235,032 411,860
Annualized return on average shareholders' equity -
operating income available to shareholders 2.8 % 8.3 % 6.3 % 11.4 %

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