Today the board of directors of State Auto Financial Corporation
(NASDAQ:STFC) declared an increase in the company’s
regular quarterly cash dividend from $0.10 to $0.15 per share. The
dividend is payable September 28, 2007 to shareholders of record at the
close of business on September 14, 2007. The board also announced
changing its annual dividend policy review from the third quarter to the
fourth quarter, beginning in 2008.
At the same time, the STFC board authorized the company to repurchase,
from time to time, up to 4.0 million shares, or approximately 10% of its
outstanding common stock, through an open market purchase program
subject to the provisions of SEC Rule 10b-18 and in privately negotiated
transactions over a period extending to and through December 31, 2009.
The company will repurchase shares from State Automobile Mutual
Insurance Company, which owns approximately 65 percent of State Auto
Financial’s stock, and other shareholders, in
amounts that are proportional to the respective current ownership
percentages of State Automobile Mutual and other shareholders. STFC’s
management will determine the timing and amount of any repurchase based
upon its evaluation of market conditions, share price and other factors.
It is currently management’s intention that
the stock repurchase program be funded from STFC’s
working capital. The stock repurchase program may be terminated at any
time.
"The substantial dividend increase and share
repurchase program announced today reflect the strength of the company’s
financial position and our confidence in the continued long-term success
of State Auto Financial. Our dividend policy, share repurchase program
and ability to successfully integrate acquisitions and affiliations are
critical components of our overall capital management strategy. We will
continue to do what is necessary to build the company and enhance
shareholder value,” said STFC Chairman,
President and CEO Bob Restrepo.
This is the 65th consecutive quarterly cash dividend declared by the
company’s board since STFC had its initial
public offering of common stock in 1991, and represents a 50% increase
in the annual dividend rate. STFC’s dividend
payments have increased at a compound average annual growth rate of 17%
since 1991.
State Auto Financial Corporation, headquartered in Columbus, Ohio, is a
super regional property and casualty insurance holding company. STFC
stock is traded on the
Nasdaq Global Select Market, which represents the
top third of all NASDAQ-listed companies. The company markets its
personal and business insurance products exclusively through independent
insurance agencies in 29 states and is proud to be a Trusted Choice®
company partner. The company is one of only 98 NASDAQ-listed companies
to earn the 2007 Mergent Dividend Achiever Award for having increased
its dividends for ten or more years in succession.
The State Auto Insurance Companies are rated A+ (Superior) by the A.M.
Best Company. The State Auto Insurance Companies include State
Automobile Mutual, State Auto Property & Casualty, State Auto National,
State Auto Ohio, State Auto Wisconsin, State Auto Florida, Milbank,
Farmers Casualty, Meridian Security and Meridian Citizens Mutual. Other
State Auto affiliated companies include Beacon National Insurance.
Additional information on State Auto Financial Corporation and the State
Auto Insurance Companies can be found at www.STFC.com
and www.StateAuto.com.
Except for historical information, all other information in this
news release consists of forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those projected,
anticipated or implied. The most significant of these uncertainties are
described in State Auto Financial's Form 10-K and Form 10-Q reports and
exhibits to those reports, and include (but are not limited to)
legislative changes at both the state and federal level, state and
federal regulatory rule making promulgations and adjudications, class
action litigation involving the insurance industry and judicial
decisions affecting claims, policy coverages and the general costs of
doing business, the impact of competition on products and pricing,
inflation in the costs of the products and services insurance pays for,
product development, geographic spread of risk, weather and
weather-related events, and other types of catastrophic events. State
Auto Financial undertakes no obligation to update or revise any
forward-looking statements.
