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 (Date of earliest event Reported): March 7, 2016
FEDERATED NATIONAL HOLDING COMPANY
(Exact Name of Registrant as Specified in Charter)
FLORIDA | 0-2500111 | 65-0248866 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
14050 NW 14 Street, Suite 180, Sunrise, Florida 33323 |
(Address of Principal Executive Offices) (Zip Code) |
(800) 293-2532
(Registrant's telephone number, including area code)
NOT APPLICABLE
(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 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On March 7, 2016, Federated National Holding Company (the “Company”) issued a press release to report its results for its fiscal quarter and year ended December 31, 2015. A copy of the press release is attached to this current report on Form 8-K as Exhibit 99.1 and incorporated herein by reference.
The information in this Current Report on Form 8-K and Exhibit 99.1 attached hereto is hereby intended to be furnished pursuant to Item 2.02, “Results of Operations and Financial Condition.” As provided in General Instruction B.6 of SEC Form 8-K, such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and it shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Federated National Holding Company Press Release, dated March 7, 2016.
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.
FEDERATED NATIONAL HOLDING COMPANY | ||
Date: March 7, 2016 | By: | /s/ Peter J. Prygelski, III |
Name: Peter J. Prygelski, III | ||
Title: Chief Financial Officer (Principal Accounting and Financial Officer) | ||
EXHIBIT INDEX
Exhibit No. | Exhibit Title | |
99.1 | Federate National Holding Company Press Release, dated March 7, 2016. |
EXHIBIT 99.1
Federated National Holding Company Announces a 20% Dividend Increase and Reports 2015 Fourth Quarter and Full Year Financial Results
SUNRISE, Fla., March 07, 2016 (GLOBE NEWSWIRE) -- Federated National Holding Company (the “Company”) (Nasdaq:FNHC) today reported results for the quarter and year ended December 31, 2015.
2015 full year highlights as compared to 2014 full year (except where noted) include:
Mr. Michael H. Braun, the Company’s Chief Executive Officer and President, said, “Our business continues to demonstrate strong momentum with solid organic growth in both written premiums and policy count. This organic growth truly reflects the hard work and dedication of our employees and the trust that our partner agents have in our organization. While the Florida property insurance market is becoming more competitive, we remain focused on providing best-in-class service to our policyholders and partner agents, which continues to generate significant goodwill in the marketplace. In addition, we have recently filed for a rate decrease on Monarch National’s program which, if approved, we believe will be very well received in the Florida homeowners market.
Finally, I am pleased to announce that the Board has approved a dividend increase of 20%. The dividend of $0.06 per share will be paid on June 1, 2016 to shareholders of record as of May 2, 2016. This action reflects both our commitment to returning capital to our shareholders and the Board’s confidence in our business plan.”
Fourth Quarter 2015 Financial Review
Full Year 2015 Financial Review
Conference Call Information
The Company will hold an investor conference call at 10:00 AM (ET) today, March 7, 2016. The Company’s CEO and its CFO, Peter J. Prygelski III, will discuss the financial results and review the outlook for the Company. Messrs. Braun and Prygelski III invite interested parties to participate in the conference call.
Listeners interested in participating in the Q&A session may dial-in with the number below: 877-303-6913
A live webcast of the call will be available online via the “Conference Calls” section of the Company’s website at FedNat.com or interested parties can click on the following link:
http://fednat.com/investors/conference-calls/
Please call at least five minutes in advance to ensure that you are connected prior to the presentation. A webcast replay of the conference call will be available shortly after the live webcast is completed and may be accessed via the Company’s website.
About the Company
The Company is authorized to underwrite, and/or place through our wholly owned subsidiaries, homeowners’ multi-peril (“homeowners”), commercial general liability, federal flood, personal auto and various other lines of insurance in Florida and various other states. The Company also serves as managing general agent for its joint venture, Monarch National Insurance Company. The Company markets and distributes its own and third-party insurers’ products and our other services through a network of independent agents. The Company also utilizes a select number of general agents for the same purpose.
Forward-Looking Statements /Safe Harbor Statements
Safe harbor statement under the Private Securities Litigation Reform Act of 1995:
Statements that are not historical fact are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. Without limiting the generality of the foregoing, words such as “anticipate,” “believe,” “budget,” “contemplate,” “continue,” “could,” “envision,” “estimate,” “expect,” “guidance,” “indicate,” “intend,” “may,” “might,” “plan,” “possibly,” “potential,” “predict,” “probably,” “pro-forma,” “project,” “seek,” “should,” “target,” or “will” or the negative thereof or other variations thereon and similar words or phrases or comparable terminology are intended to identify forward-looking statements.
Forward-looking statements might also include, but are not limited to, one or more of the following:
The risks and uncertainties include, without limitation, risks and uncertainties related to estimates, assumptions and projections generally; the nature of the Company’s business; the adequacy of its reserves for loss and loss adjustment expense; claims experience; weather conditions (including the severity and frequency of storms, hurricanes, tornadoes and hail) and other catastrophic losses; reinsurance costs and the ability of reinsurers to indemnify the Company; raising additional capital and our potential failure to meet minimum capital and surplus requirements; potential assessments that support property and casualty insurance pools and associations; the effectiveness of internal financial controls; the effectiveness of our underwriting, pricing and related loss limitation methods; changes in loss trends, including as a result of insureds’ assignment of benefits; court decisions and trends in litigation; our potential failure to pay claims accurately; ability to obtain regulatory approval applications for requested rate increases, or to underwrite in additional jurisdictions, and the timing thereof; the impact that the results of the Monarch joint venture may have on our results of operations; inflation and other changes in economic conditions (including changes in interest rates and financial markets); pricing competition and other initiatives by competitors; legislative and regulatory developments; the outcome of litigation pending against the Company, and any settlement thereof; dependence on investment income and the composition of the Company’s investment portfolio; insurance agents; ratings by industry services; the reliability of our information technology systems; reliance on key personnel; acts of war and terrorist activities; and other matters described from time to time by the Company in releases and publications, and in periodic reports and other documents filed with the United States Securities and Exchange Commission.
In addition, investors should be aware that generally accepted accounting principles prescribe when a company may reserve for particular risks, including claims and litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when a reserve is established for a contingency. Reported results may therefore appear to be volatile in certain accounting periods.
Readers 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 do not undertake any obligation to update publicly or revise any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
FEDERATED NATIONAL HOLDING COMPANY and SUBSIDIARIES | ||||||||||||
Consolidated Statements of Operations | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||
(in thousands, except per share data) | ||||||||||||
Revenue: | ||||||||||||
Net premiums earned | $ | 53,722 | $ | 40,951 | $ | 210,020 | $ | 170,905 | ||||
Net investment income | 2,072 | 1,627 | 7,226 | 5,385 | ||||||||
Net realized investment (losses) gains | (127 | ) | 379 | 3,616 | 4,426 | |||||||
Other income | 7,900 | 5,867 | 29,031 | 19,976 | ||||||||
Total revenue | 63,567 | 48,824 | 249,893 | 200,692 | ||||||||
Costs and expenses: | ||||||||||||
Losses and loss adjustment expenses | 28,844 | 20,560 | 104,353 | 81,036 | ||||||||
Commissions and other underwriting expenses | 17,200 | 11,220 | 65,315 | 52,077 | ||||||||
General and administrative expenses | 3,078 | 2,914 | 15,032 | 10,272 | ||||||||
Total costs and expenses | 49,122 | 34,694 | 184,700 | 143,385 | ||||||||
Income before income taxes | 14,445 | 14,130 | 65,193 | 57,307 | ||||||||
Income taxes | 5,233 | 4,135 | 24,753 | 20,108 | ||||||||
Net income | 9,212 | 9,995 | 40,440 | 37,199 | ||||||||
Net loss attributable to noncontrolling interest | (62 | ) | - | (445 | ) | - | ||||||
Net income attributable to Federated National Holding Company shareholders | $ | 9,274 | $ | 9,995 | $ | 40,885 | $ | 37,199 | ||||
Net income per share attributable to Federated National Holding Company shareholders: | ||||||||||||
Basic | $ | 0.67 | $ | 0.73 | $ | 2.98 | $ | 3.08 | ||||
Diluted | $ | 0.66 | $ | 0.72 | $ | 2.92 | $ | 2.99 | ||||
FEDERATED NATIONAL HOLDING COMPANY and SUBSIDIARIES | ||||||
Other Selected Data | ||||||
(Unaudited) | ||||||
Balance Sheet | ||||||
Period Ended | ||||||
12/31/15 | 12/31/14 | |||||
(in thousands, except per share data) | ||||||
Total Cash and Investments | $ | 437,369 | $ | 370,920 | ||
Total Assets | $ | 638,298 | $ | 503,631 | ||
Loss and Loss Adjustment Expense Reserves | $ | 97,340 | $ | 78,330 | ||
Total Liabilities | $ | 387,539 | $ | 311,052 | ||
Total Shareholders’ Equity | $ | 250,759 | $ | 192,579 | ||
Common Stock Outstanding | 13,799 | 13,632 | ||||
Book Value Per Share including noncontrolling interest | $ | 18.17 | $ | 14.13 | ||
Book Value Per Share excluding noncontrolling interest | $ | 16.86 | $ | 14.13 |
Gross Written Premium Breakout | |||||||||||||||
3 Months Ended | 12 Months Ended | ||||||||||||||
Line of Business | 12/31/15 | 12/31/14 | 12/31/15 | 12/31/14 | |||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Homeowners | $ | 109,561 | $ | 89,081 | $ | 449,766 | $ | 344,939 | |||||||
Automobile | 11,077 | 3,413 | 21,912 | 12,377 | |||||||||||
Commercial General Liability | 2,805 | 2,959 | 13,928 | 12,432 | |||||||||||
Federal Flood | 1,767 | 1,216 | 8,164 | 7,408 | |||||||||||
Gross Written Premiums | $ | 125,210 | $ | 96,669 | $ | 493,770 | $ | 377,156 |
Loss Ratios | |||||||||||||||
3 Months Ended | 12 Months Ended | ||||||||||||||
12/31/15 | 12/31/14 | 12/31/15 | 12/31/14 | ||||||||||||
Net Loss Ratio - All Lines | 53.69 | % | 50.21 | % | 49.69 | % | 47.42 | % | |||||||
Gross Loss Ratio - All Lines | 38.06 | % | 32.31 | % | 34.28 | % | 33.00 | % |
CONTACT: Michael H. Braun, CEO (954) 308-1322
or Peter J. Prygelski III, CFO (954) 308-1252
Federated National Holding Company