CINCINNATI FINANCIAL CORP FORM 8-K (Current report filing) Filed 05/16/14 for the Period Ending 05/16/14 Address 6200 S GILMORE RD FAIRFIELD, OH, 45014 Telephone 5138702000 CIK 0000020286 Symbol CINF SIC Code 6331 - Fire, Marine and Casualty Insurance Industry Property & Casualty Insurance Sector Financials Fiscal Year 12/31 http://www.edgar-online.com Copyright 2017, EDGAR Online, a division of Donnelley Financial Solutions. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, a division of Donnelley Financial Solutions, Terms of Use.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report: May 16, 2014 (Date of earliest event reported) CINCINNATI FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) Ohio 0-4604 31-0746871 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 6200 S. Gilmore Road, Fairfield, Ohio 45014-5141 (Address of principal executive offices) (Zip Code) Registrant s telephone number, including area code: (513) 870-2000 N/A (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))
Item 7.01 Regulation FD Disclosure On May 16, 2014, Cincinnati Financial Corporation posted presentation slides in PDF format on cinfin.com/investors that will be used in investor and reinsurer presentations beginning May 19, 2014. Exhibit 99.1 is a copy of the slides. The slides are being furnished pursuant to Item 7.01, and the information contained therein shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to the liabilities of that section. This report should not be deemed an admission as to the materiality of any information contained in the investor presentation slides. Item 9.01 Financial Statements and Exhibits (c) Exhibits Exhibit 99.1 Investor presentation slides Safe Harbor Statement This is our Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. Our business is subject to certain risks and uncertainties that may cause actual results to differ materially from those suggested by the forward-looking statements in this report. Some of those risks and uncertainties are discussed in our 2013 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 31. Factors that could cause or contribute to such differences include, but are not limited to: Unusually high levels of catastrophe losses due to risk concentrations, changes in weather patterns, environmental events, terrorism incidents or other causes Increased frequency and/or severity of claims or development of claims that are unforeseen at the time of policy issuance Inadequate estimates or assumptions used for critical accounting estimates Declines in overall stock market values negatively affecting the company s equity portfolio and book value Events resulting in capital market or credit market uncertainty, followed by prolonged periods of economic instability or recession, that lead to: o o o Significant or prolonged decline in the value of a particular security or group of securities and impairment of the asset(s) Significant decline in investment income due to reduced or eliminated dividend payouts from a particular security or group of securities Significant rise in losses from surety and director and officer policies written for financial institutions or other insured entities Prolonged low interest rate environment or other factors that limit the company s ability to generate growth in investment income or interest rate fluctuations that result in declining values of fixed-maturity investments, including declines in accounts in which we hold bank-owned life insurance contract assets Recession or other economic conditions resulting in lower demand for insurance products or increased payment delinquencies Difficulties with technology or data security breaches, including cyberattacks, that could negatively affect our ability to conduct business and our relationships with agents, policyholders and others Disruption of the insurance market caused by technology innovations such as driverless cars that could decrease consumer demand for insurance products Delays or performance inadequacies from ongoing development and implementation of underwriting and pricing methods, including telematics and other usage-based insurance methods, or technology projects and enhancements expected to increase our pricing accuracy, underwriting profit and competitiveness Increased competition that could result in a significant reduction in the company s premium volume Changing consumer insurance-buying habits and consolidation of independent insurance agencies that could alter our competitive advantages Inability to obtain adequate reinsurance on acceptable terms, amount of reinsurance purchased, financial strength of reinsurers and the potential for nonpayment or delay in payment by reinsurers Inability to defer policy acquisition costs for any business segment if pricing and loss trends would lead management to conclude that segment could not achieve sustainable profitability Events or conditions that could weaken or harm the company s relationships with its independent agencies and hamper opportunities to add new agencies, resulting in limitations on the company s opportunities for growth, such as:
o o o o Downgrades of the company s financial strength ratings Concerns that doing business with the company is too difficult Perceptions that the company s level of service, particularly claims service, is no longer a distinguishing characteristic in the marketplace Inability or unwillingness to nimbly develop and introduce coverage product updates and innovations that our competitors offer and consumers expect to find in the marketplace Actions of insurance departments, state attorneys general or other regulatory agencies, including a change to a federal system of regulation from a state-based system, that: o o o o o o o o o Impose new obligations on us that increase our expenses or change the assumptions underlying our critical accounting estimates Place the insurance industry under greater regulatory scrutiny or result in new statutes, rules and regulations Restrict our ability to exit or reduce writings of unprofitable coverages or lines of business Add assessments for guaranty funds, other insurance related assessments or mandatory reinsurance arrangements; or that impair our ability to recover such assessments through future surcharges or other rate changes Increase our provision for federal income taxes due to changes in tax law Increase our other expenses Limit our ability to set fair, adequate and reasonable rates Place us at a disadvantage in the marketplace Restrict our ability to execute our business model, including the way we compensate agents Adverse outcomes from litigation or administrative proceedings Events or actions, including unauthorized intentional circumvention of controls, that reduce the company s future ability to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002 Unforeseen departure of certain executive officers or other key employees due to retirement, health or other causes that could interrupt progress toward important strategic goals or diminish the effectiveness of certain longstanding relationships with insurance agents and others Events, such as an epidemic, natural catastrophe or terrorism, that could hamper our ability to assemble our workforce at our headquarters location Further, the company s insurance businesses are subject to the effects of changing social, economic and regulatory environments. Public and regulatory initiatives have included efforts to adversely influence and restrict premium rates, restrict the ability to cancel policies, impose underwriting standards and expand overall regulation. The company also is subject to public and regulatory initiatives that can affect the market value for its common stock, such as measures affecting corporate financial reporting and governance. The ultimate changes and eventual effects, if any, of these initiatives are uncertain.
Signature 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 hereunto duly authorized. CINCINNATI FINANCIAL CORPORATION Date: May 16, 2014 /S/ Michael J. Sewell Michael J. Sewell, CPA Chief Financial Officer, Senior Vice President and Treasurer
Investor Handout May 2014
This presentation contains forward - looking statements that involve risks and uncertainties. Please refer to our various filings with the U.S. Securities and Exchange Commission for factors that could cause results to materially differ from those discussed. The forward - looking information in this presentation has been publicly disclosed, most recently on April 24, 2014, and should be considered to be effective only as of that date. Its inclusion in this document is not intended to be an update or reaffirmation of the forward - looking information as of any later date. Reconciliations of non - GAAP measures are in our most recent quarterly earnings news release, which is available on the Investors page of our website cinfin.com. Nasdaq : CINF
Competitive advantages: Relationships leading to agents best accounts Financial strength for stability and confidence Local decision making and claims excellence Other distinguishing factors: 53 years of shareholder dividend increases Common stocks for roughly 30% of investments 25 years of favorable reserve development Strategy Overview
16.1% value creation ratio for full - year 2013 exceeded 10% to 13% target Related performance drivers were on track at year - end: 12% premium growth more than doubled 5% industry average 93.8% combined ratio was below 95% target Consecutive quarter investment income growth, 31.7% equity portfolio 2013 total return essentially matched 32.4% for S&P 500 Index Ranked #1 or #2 in ~75% of agencies appointed 5 + years Improving through strategic profit and growth initiatives Performance Targets & Trends
Top 25 U.S. P/C insurer A.M. Best rating: A+ Superior $3.9 billion 2013 premiums: 67% commercial 25 % personal 5% life 3 % excess & surplus Competitive advantages: Relationships leading to agents best accounts Financial strength for stability and confidence Local decision making and claims excellence Increased shareholder dividend for 53 rd consecutive year August 2013, another 4.8% January 2014 increase Only nine U.S. public companies can match that record Yield is attractive, over 3.5% in early May 2014 Cincinnati Financial at a Glance
EPS of 55 cents vs. 2013 of 94 cents per share Operating earnings were $51 million less than first - quarter 2013, reflecting a $50 million increase in after - tax losses from natural catastrophes Property casualty net written premiums grew 7 % Higher average renewal pricing: commercial lines and personal lines rose mid - single - digits, excess and surplus lines rose high - single - digits Combined ratio of 100.3% rose 9.1 points Up 7.7 points from natural catastrophe losses, up 3.6 points from other weather effects Excellent financial flexibility Over $1.5 billion cash and securities at parent company Low debt leverage at 12.7% First - Quarter 2014 Highlights
Targeting annual rate of growth in book value plus the rate of dividend contribution to average 10% to 13% from 2013 through 2017 Value creation ratio (VCR) for 2009 through 2013 averaged 13.1% 2.6% VCR for 1Q14 was down 4.4 points from 1Q13 Realized plus unrealized capital gain component was 3.3 points lower Operating earnings netted with other components was 1.1 points lower Three performance drivers: Premium growth above industry average Combined ratio consistently within the range of 95% to 100% Investment contribution Investment income growth Compound annual total return for equity portfolio over five - year period exceeding return for S&P 500 Index Long - Term Value Creation
Increase Value for Shareholders Measured by Value Creation Ratio (VCR) -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 2009 2010 2011 2012 2013 VCR - Investment Income & Other VCR - P&C Underwriting VCR - Bond Portfolio Gains VCR - Equity Portfolio Gains Total Shareholder Return (TSR) 19.7% 16.1% Target for the period 2013-2017: Annual VCR averaging 10% to 13% 11.1% 6.0% 12.6%
Combined Ratio Reflects Improving Underwriting Profitability Trends 94.7% 86.1% 89.2% 103.9% 96.8% 92.5% 70% 75% 80% 85% 90% 95% 100% 105% Year 2011 Year 2012 Year 2013 AY 2011 at 12 mos AY 2012 at 12 mos AY 2013 at 12 mos Calendar Year basis - excl. cat. losses Accident Year basis - excl. cat. losses 2011 ratios exclude the effects of $42 million reinsurance reinstatement premium All combined ratios in the graph above exclude the effects of catastrophe losses
Financial strength for consistent support to agencies Diversified fixed - maturity portfolio, laddered maturity structure No corporate exposure exceeded 0.7% of total bond portfolio at 12-31 - 13, no municipal exposure exceeded 0.3% 31.3% of investment portfolio in common stocks to grow book value No single security exceeded 3.2% of publicly traded common stock portfolio Portfolio composition helps mitigate anticipated effects of inflation and a rise in interest rates Low reliance on debt, with debt - to - total - capital target < 20% Nonconvertible, noncallable debentures due in 2028 and 2034 Capacity for growth with premiums - to - surplus at 0.9 - to - 1 Operating structure reflects agency - centered model Field focus staffed for local decision - making, agency support Superior claims service and broad insurance product offerings Profit improvement and premium growth initiatives Strategies for Long - Term Success
Enhancing underwriting expertise and knowledge Property loss mitigation efforts supplement rate increases and gradual geographic diversification: Increasing specialized expertise of our claims and loss control staff Revising underwriting guidelines and increasing property inspections Implementing higher wind and hail deductibles in selected areas Covering older roofs at actual cash value instead of replacement cost Ongoing enhancement initiatives for predictive modeling tools and analytics to improve pricing precision Data management for better underwriting and pricing decisions; long - term data warehouse project continues to be developed over time Technology is improving efficiencies and streamlining processing for agencies and the company Ongoing efforts for greater efficiency and effectiveness Additional field positions staffed for better risk selection and specialized claims service without adding to overall staffing levels Seven full - time - equivalent decrease in total staff at year - end 2013 versus 2009 9% increase in field staff and 4% decrease in headquarters staff 33% or $1.0 billion increase in property casualty direct written premiums Improve Profitability
New agency appointments bring potential for growth over time Target for 2014: appoint approximately 100 agencies 27 appointed YTD 03-31 - 14, $800M aggregate premiums from all carriers 96 appointed in 2013, $ 2.0B aggregate premiums from all carriers Expanding marketing and service capabilities Ongoing development of target market programs and cross - selling Customer care center pilot for small commercial policies Growth includes gradual geographic diversification Personal lines 2013 earned premium growth rate in 26 smallest states nearly tripled the rate for our four largest personal lines states of operation Double - digit growth in 2013 property casualty net written premiums Commercial up 12%, Personal up 9%, E&S up 22% Total P&C up 12%, Term life insurance earned premiums up 6% Recent - year growth reflects strategic targeting; almost half of the growth since mid - 2012 was from higher pricing 7% total P&C growth for 1Q14, within the range we expected Drive Premium Growth
Historically, we earn approximately 10% market share in new agencies within 10 years after appointment demonstrated by: 2% share on average earned in 2012 for all agencies appointed in 2011, 5% for appointments during 2008-11, 8% for appointments during 2003-07 $52 million of $543 million total 2013 new business written premiums produced by agencies appointed since early 2012 Our agencies currently write significant amounts of business with other carriers, representing potential for us Agencies appointed during 2009-13 place $10 billion in annual premiums for standard lines business with all carriers they represent Excess and surplus lines for all of our agents approximately $2 billion We help our agencies grow their businesses by attracting more clients in their communities through our unique service Premium Growth Potential
Select Group of Agencies in 39 States P&C Market Share: 1% and higher Less than 1% Inactive states Headquarters (no branches) 1,450 agency relationships with 1,836 locations Our Commercial Top Five = 41% Ohio, Illinois, Pennsylvania, Indiana, North Carolina Our Personal Top Five = 57% Ohio, Georgia, Indiana, Illinois, Michigan (as of March 31, 2014) Market Share Top Three Ohio at 4.8% Indiana at 2.8% Illinois at 1.4% Based on 2012 data excluding A&H
APPENDIX Income, Dividend & Cash Flow Trends Underwriting & Premium Growth Trends Business Mix & Premium Growth Potential Reserve Adequacy & Development Trends Investment Portfolio Management & Performance Reinsurance, Ratings & Valuation Comparison to Peers
Income and Shareholder Dividends $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 2010 2011 2012 2013 3 mos 13 3 mos 14 Operating Income Net Income Dividends Per share basis
Cash Dividend Payout Ratio 0% 20% 40% 60% 80% 100% 120% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* 2012 2013 Dividend Payout Ratio Net Income Dividend Payout Ratio Operating Income 58% average for years 2004 through 2013 (net income basis) Strong Capital and Cash Flow Support Recent - Year Payout Level * 2011 payout ratios (159% net income basis, 211% operating income basis) not fully shown on graph due to record - high catastrophe losses
Dividend as a Percentage of Net Cash Flow From Operations 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Operating Cash Flow Generally Trending Favorably, Aligned With Profitability $0 $100 $200 $300 $400 $500 $600 $700 $800 2009 2010 2011 2012 2013 3 mos 13 3 mos 14 Record - high catastrophe losses in 2011 (In millions)
Outperforming the Industry 65% 70% 75% 80% 85% 90% 95% 100% 105% 2009 2010 2011 2012 2013 Cincinnati excl. cat. losses Est. Industry (A.M. Best) excl. cat. Losses Cincinnati incl. cat. losses Est. Industry (A.M. Best) incl. cat. Losses Statutory combined ratio Industry data excludes mortgage and financial guaranty Cincinnati s historical catastrophe loss annual averages as of 12-31 - 13: 5 - year = 7.7%, 10 - year = 6.1%
Greater Pricing Precision Is Improving Profit Margins 0% 15% Most adequately priced Near (+ or -) price adequacy Least adequately priced Commercial package p olicy mid - 2013 renewal price increase averages by modeled pricing segments illustrates pricing precision effects Most adequate refers to policies that need less price increase based on pricing adequacy of expiring premium per pricing mode ls
Premium Growth Versus Industry Growth Rate Outpaced the Industry as the Market Firmed -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2009 2010 2011 2012 2013 Cincinnati Estimated industry excluding mortgage and financial guaranty (A.M. Best) Property casualty net written premium growth
Market for 75% of Agency s Typical Risks 2013 Net Earned Premiums Commercial Property 17% Machinery and Equipment 1% Commercial Casualty 23% Specialty Packages 4% Commercial Auto 13% Workers' Compensation 10% Management liability and surety 3% Excess & Surplus 3% Homeowner 11% Personal Auto 12% Other Personal 3% E&S Lines 3% Commercial Lines 67% Personal Lines 25% Life 5% Consolidated $ 3.902 Billion Property Casualty $3.713 Billion
Premium Growth Potential Steadily Increase Our Share Within Cincinnati - Appointed Agencies 1.8% 5.4% 8.0% 16.1% 1 year or less 2-5 years 6-10 years 10 years or more Cincinnati share of estimated $33 billion total property casualty premiums produced by currently appointed agencies is approximately 12% Market share per agency reporting location by year appointed Based on 2012 standard market P&C agency written premiums (Excludes excess and surplus lines) New appointments also drive premium growth opportunity. The net amount of agency relationships has increased by 23% since the end of 2009.
Property Casualty Reserves Favorable Development for 25 Consecutive Years $3,661 $3,811 $3,905 $3,813 $ 3,942 2009 2010 2011 2012 2013 Reserve range at 12-31 - 13 Low end $ 3,727 High end $4,078 Carried at 61 st percentile Values shown are carried loss and loss expense reserves net of reinsurance Vertical bar represents reasonably likely range Calendar year development (Favorable) ($188) ($304) ($285) ($396) ($147) In millions Ex - cat development: (ratio to earned premiums) 9.3 % 10.7 % 3.3 %
Accident Year Trends Profitable Underwriting in 2013 is Similar to a Decade Ago 93% 92% 104% - 4% - 5% - 10% 89.2% 87.4% 94.3% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2013 2003-06 Average 2008-12 Average Current accident year Prior accident year development Calendar year basis Consolidated Property Casualty Combined Ratios Before Catastrophe Losses Current Accident Year Ratios Are Measured at 12 months Duration of loss & loss expense reserves is approximately 4.3 years, reflecting timing for majority of reserve development.
Investment Income 5 % Growth for 1Q14, 1.4% CAGR since 2009 (pretax) $400 $425 $450 $475 $500 $525 $550 2009 2010 2011 2012 2013 After - tax yield: 3.45% 3.52% 3.45% 3.39 % 3.13 % (Bonds at amortized cost, stocks at fair value) Pretax yield to book as of 12-31 - 13 for bonds maturing in 2014=4.8%, 2015=4.5%, 2016=4.5% Portion of bond portfolio maturing: 6.1% in 2014, 7.6% in 2015, 7.9% in 2016, 22.6% in 2017-18
Investment Portfolio Invest for Income and Appreciation Taxable Fixed Maturities $6.247 Tax - Exempt Fixed Maturities $2.933 Common Equities $4.257 Preferred Equities $0.169 $ 13.6 billion fair value at March 31, 2014 Investment leverage: 222% at March 31, 2014 Bond portfolio fair value exceeds insurance reserves liability by 35%
Diversified Equity Portfolio * Balances Income Stability & Capital Appreciation Potential March 31, 2014 Sector CFC S&P 500 Weightings Information technology 19.0% 18.6% Industrials 13.9 10.7 Financial 11.9 16.4 Healthcare 11.6 13.4 Energy 10.4 10.1 Consumer staples 10.3 9.7 Consumer discretionary 9.9 12.0 Materials 5.6 3.5 Utilities 4.4 3.1 Telecom services 3.0 2.5 * Publicly traded common stock core portfolio, approximately 50 holdings (excludes energy MLP s, one private equity) Portfolio Highlights at 3-31 - 14 JPMorgan Chase - largest holding 3.2% of publicly traded common stock portfolio 1.0% of total investment portfolio 19% increase in 1Q14 dividend income 50 of 50 companies in core portfolio improved their annual regular dividend over the past 12 months Unrealized gains totaled $ 1.9 billion (pretax) Exxon Mobil, P&G, Honeywell, Chevron and Dover combined represent 23% Annual portfolio returns: (2013 & 2012) 31.7 % & 10.9% ( S&P 500: 32.4% & 16.0%)
Bond Portfolio Risk Profile $9.180 Billion at March 31, 2014 Credit risk A2/A average rating 60% rated >=A, 35% rated BBB, 3% rated <=BB, 2% unrated No European sovereign debt Euro - based securities are 5% of bond portfolio (mostly corporate bonds) Interest rate risk 4.5 years effective duration, 6.2 years weighted average maturity Generally laddered maturity structure 22% of year - end 2013 portfolio matures by the end of 2016, 44% by 2018, 85% by 2023 With 31.3% of the investment portfolio invested in common stocks at 03-31 - 13, we estimated shareholders equity would decline 4.4% if interest rates were to rise by 100 basis points Bond portfolio is well - diversified Largest issuer (corporate bond) = 0.7% of total bond portfolio Municipal bond portfolio (approximately 1,000 issuers) Almost 60% insured at 12-31 - 13, 97% with underlying rating >=A3/A - Texas issuers = 15%, Michigan = 8 %, 13 other states each 1% to 8% 67% locally issued general obligations, 33% special revenue bonds
Solid Reinsurance Program Balances Costs With Shareholders Equity Protection Major Treaties (Estimated 2014 ceded premiums) Coverage and Retention Summary at 01-01 - 14 Property catastrophe ($50 million) Treaty has one reinstatement provision $100 million additional coverage collateralized by catastrophe bond for severe convective storm or earthquake losses in certain geographic regions For a single event: Retain 100% of first $75 million in losses Retain 60.8% for losses at $75-100 million Retain 5.0% at $100-600 million Max exposure for $600M event = $115 million Property per risk & $10 million property excess treaty ($33 million) For a single loss: Retain 100% of first $8 million in losses Retain 0% of losses $8-35 million Facultative reinsurance for >$35 million Casualty per occurrence ($24 million) For a single loss: Retain 100% of first $8 million in losses Retain 0% of losses $8-25 million Facultative reinsurance for >$25 million Casualty excess treaties ($3 million for two treaties combined) Workers comp, extra - contractual & clash coverage $25 million excess of $25 million (first excess treaty) $20 million excess of $50 million (second treaty) Primary reinsurers are Swiss Re, Munich Re, Hannover Re, Partner Re and Lloyds of London
Source: SNL Financial as of April 14, 2014. Ratings are under continuous review and subject to change and/or affirmation. A.M. Best Fitch Moody's S&P Cincinnati A+ A+ A1 A Auto Owners A++ - - A Chubb A++ AA Aa2 AA Acuity A+ - - A+ Allied A+ - A1 A+ Harleysville A+ - A1 A+ Travelers A+ AA Aa2 AA Central Mutual A - - - CNA A A A3 A EMC A - - BBB Fireman's Fund A - A2 A Frankenmuth A - - - General Casualty A A+ - A+ Hanover A A - A3 A - Hartford A A+ A2 A Liberty Mutual A A - A2 A - Safeco A A - A2 A - Selective A A+ A2 A - State Auto A - A3 BBB+ United Fire Group A - - - West Bend A - - BBB Westfield A - - A Zurich A - A2 A+ Financial Strength Ratings Comparison
Valuation Comparison to Peers 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 Ratio of closing price on 05-14 - 14 to latest reported tangible book value