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): August 15, 2011
Penn Millers Holding Corporation
(Exact name of registrant as specified in its charter)
| Pennsylvania | 001-34496 | 80-0482459 | ||
| (State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 72 North Franklin Street, P.O. Box P Wilkes-Barre, Pennsylvania |
18773 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (800) 233-8347
| 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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events.
On August 15, 2011, Penn Millers Holding Corporation (the Company) issued a press release to announce that the Company’s Board of Directors has established a Special Committee, consisting entirely of independent directors, to review strategic alternatives for the Company. Willis Capital Markets & Advisory has been retained as exclusive financial advisor to the Special Committee. The process is ongoing and is expected to conclude this year. No further announcements are expected to be made until the conclusion of the process, except as required by law.
A copy of the press release is furnished as part of this Form 8-K and is attached hereto as Exhibit 99.1. Also furnished as Exhibit 99.2 to this Form 8-K is a copy of the Agent/Broker letter the Company expects to mail to its Agents and Brokers in the near future.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1
|
Press Release of Penn Millers Holding Corporation, dated August 15, 2011 | |
99.2
|
Agent/Broker Letter |
SIGNATURES
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.
| PENN MILLERS HOLDING CORPORATION | ||||
Dated: August 15, 2011
|
By: | /s/ Michael O. Banks | ||
| Michael O. Banks | ||||
| Executive Vice President and Chief Financial Officer | ||||
EXHIBIT INDEX
Exhibit Number |
Description |
|
99.1
|
Press Release of Penn Millers Holding Corporation, dated August 15, 2011 | |
99.2
|
Agent/Broker Letter |
Exhibit 99.1
PRESS RELEASE
For Immediate Release
Contact: Michael O. Banks – 570-200-1340
PENN MILLERS HOLDING CORPORATION
ANNOUNCES REVIEW OF STRATEGIC ALTERNATIVES
WILKES-BARRE, PA (August 15, 2011) – Penn Millers Holding Corporation (NASDAQ: PMIC), providing property and casualty insurance through its wholly owned subsidiary, Penn Millers Insurance Company, today announced its Board of Directors has authorized a review of strategic alternatives for the Company aimed at enhancing shareholder value. The Board of Directors has established a Special Committee consisting entirely of independent directors to review strategic alternatives. Willis Capital Markets & Advisory has been retained as exclusive financial advisor to the Special Committee.
Although the Company has high quality franchises, well-established agency relationships and state-of-the-art loss control and claim services in agribusiness and other specialty niches, its cost structure has historically been challenged by a relative lack of scale. Both the Company and the property and casualty insurance industry are experiencing a protracted soft pricing environment and increased catastrophic storm activity. Management has worked toward improving underwriting results by increasing the quality of the Company’s commercial lines book and continuing its focus on underwriting discipline while growing its agribusiness segment. The Company’s A- (Excellent) rating was recently reaffirmed by A.M. Best Company.
The process is ongoing and is expected to conclude this year. No further announcements are expected to be made until the conclusion of the process, except as required by law.
“Penn Millers’ Board and Management are committed to serving the best interests of shareholders and other stakeholders. All of our constituencies stand to benefit from building our valuable franchise. The entire Penn Millers’ team remains committed to our mission of providing superior insurance products and customer service,” said President and CEO Douglas A. Gaudet, CPCU.
Penn Millers Holding Corporation provides property and casualty insurance through its wholly owned subsidiary, Penn Millers Insurance Company. Penn Millers Insurance Company provides agribusiness insurance and commercial lines insurance in 34 states. The Company is located at 72 North Franklin Street in Wilkes-Barre, PA. The Company’s web address is www.pennmillers.com.
Some of the statements contained herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “stand to,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” or the negative of these terms or other terminology. Forward-looking statements, including results of the review of strategic alternatives, are based on the opinions and estimates of management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could affect the Company’s actual results include, among others, the fact that our loss reserves are based on estimates and may be inadequate to cover our actual losses; the uncertain effects of emerging claim and coverage issues on our business, including the effects of climate change; the geographic concentration of our business; an inability to obtain or collect on our reinsurance protection; a downgrade in the A.M. Best rating of our insurance subsidiaries; the impact of extensive regulation of the insurance industry and legislative and regulatory changes; a failure to realize our investment objectives; the effects of intense competition; the loss of one or more principal employees; the inability to acquire additional capital on favorable terms; a failure of independent insurance brokers to adequately market our products; and the effects of acts of terrorism or war. More information about these and other factors that potentially could affect our financial results is included in our Annual Report on Form 10-K, filed with the SEC and in our other public filings with the SEC. Readers are cautioned not to place undue reliance upon these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to update any forward-looking statements.
###
Exhibit 99.2
Agent/Broker Letter
Dear Valued Business Partner:
The Board of Directors of Penn Millers Holding Corporation has authorized a Special Committee, consisting entirely of independent directors, to review strategic alternatives for the Company aimed at enhancing shareholder value. The process is ongoing and is expected to conclude this year.
Penn Millers’ cost structure has historically been challenged by a relative lack of scale, and both the Company and the property and casualty industry are challenged by a continued soft market and unprecedented catastrophe losses.
Penn Millers is seeking opportunities to enhance shareholder and agent/broker value by increasing the number of states where we sell our products, cost effectively expanding our capacity to write larger and multi-state accounts and by building on our product offerings to include more specialty offerings. We expect that these actions will increase sales opportunities for our agents and brokers and improve career opportunities for our employees.
All Penn Millers stakeholders stand to benefit from building our franchise. Please be assured that our employees are committed to Penn Millers’ mission and our specialized personal customer service will continue throughout the strategic review process.
We are grateful for your partnership and continued business, and look forward to growing together profitably.
Sincerely,
Douglas A. Gaudet, CPCU