Mercury General Corp. on Monday reported that its net income rose almost 2 percent in the second quarter as the Los Angeles auto and home insurer benefited from an investment gain. But the company’s net premiums and other financials disappointed Wall Street.

Mercury General earned $70.7 million, or $1.29 per share, for the quarter ended June 30, compared to $69.5 million, or $1.27, a year ago.

Excluding the impact of a $23.7 million investment gain, operating income last quarter was $47 million, or 86 cents per share. That was lower than the consensus of analysts polled by Thomson Financial, who had expected 97 cents per share.

Mercury General said net premiums written fell more than 7 percent during the quarter to $684 million. Its combined ratio the amount paid in claims and expenses compared with the amount received writing premiums rose to 97 percent compared to a year ago. A ratio above 100 percent would mean an insurer is paying out more than it receives from writing premiums.

The company’s share price was down 90 cents, or 2 percent, to $49.33 in late morning trading on the New York Stock Exchange.

The company also said its directors had approved a quarterly dividend of 58 cents per share, 12 percent more than for the same period last year.