Republic American's Net Income Declines by 35%

Republic American Corp.'s net income was $6.43 million, or 28 cents a share for the fourth quarter ended Dec. 31, a 35% drop compared to the fourth quarter of 1985 when it had $3.8 million in capital gains from the sale of securities.

The Encino-based workers compensation insurance holding company said its operating earnings for the fourth quarter rose 8.5% to $6.4 million, or 28 cents a share, from a year earlier.

For the full year, Republic American said net income was $44.2 million or $2.07 a share, a 133% increase compared to 1985. Capital gains accounted for $17 million, or 8 cents a share, of profit in 1986.

Republic American, which is controlled by Cincinnati financier Carl H. Lindner's American Financial Corp., also said its board of directors approved a plan to exchange bonds for at least 2.25 million shares of its common stock.

The exchange would cut the amount of Republic's outstanding stock, and as a result would boost American Financial's stake in Republic from 32% to 36%.

Republic American went public last July, when American Financial spun off a 69% interest in the firm. Republic American is the holding company for Republic Indemnity Co. of American, one of California's 10 largest writers of workers' compensation insurance.

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