Federated National Holding Company (the “Company”) (Nasdaq:FNHC)
today reported results for the three and twelve months ended
December 31, 2017.
Q4 2017 highlights (as measured against the same
three-month period last year, except where noted):
- Net income of $6.3 million or $0.48 per diluted share.
- Homeowners net premiums earned of $80.4 million, up 18.6%.
- Gross written premiums of $133.9 million.
- Florida homeowners policies of approximately 272,000.
- 49.9% increase in non-Florida homeowners’ policies to
approximately 30,600.
- 13.1% increase in total revenue to $101.8 million.
- $1.5 million of claims, net of recoveries including
reinsurance, from Hurricane Nate and other severe weather events
during the fourth quarter of 2017.
- Book value per share, excluding noncontrolling interest, of
$16.29, as compared to $16.01 as of December 31, 2016.
- Repurchased 75,667 shares of common stock at an average price
of $16.11, during the fourth quarter of 2017.
Mr. Michael H. Braun, the Company’s Chief
Executive Officer, with reference to the quarter’s results, said,
“Our fourth quarter financial results represent a solid end to the
year, which was impacted from weather-related events and challenges
in our non-core business model. Excluding realized gains,
fourth quarter revenue grew by 10% and 14%, respectively, compared
with the third quarter and prior-year fourth quarter, driven by 13%
and 21% increases in our core Homeowners business line over those
respective periods. Net income comparisons with the third
quarter and prior-year fourth quarter are strong, given hurricane
activity that occurred in each period, with Homeowners results up
over $15 million in each case. We’ve entered 2018 in a strong
position in our core operations, with enhanced strategic focus on
our Homeowners business. We recently completed the
acquisition of the minority interests in Monarch, and previously
announced our exit from our non-core Automobile operations.
We have also decided to exit from our commercial general liability
lines, a non-core business that represents less than 2% of our
gross written premium. We believe we have a unique
opportunity in 2018 and beyond to build on our strong presence in
the Florida market, expand selectively in other coastal states, and
invest in initiatives to drive further improvements in underwriting
profitability and operational efficiency.”
Revenues
- Total revenues increased $11.8 million, or 13.1%, to
$101.8 million for the three months ended December 31, 2017,
compared with $89.9 million for the same three-month period
last year.
- Gross written premiums decreased $3.2 million, or 2.3%, to
$133.9 million in the quarter, compared with $137.1 million
for the same three-month period last year. The decrease was
driven by Automobile, which decreased $6.9 million, partially
offset by an increase in Homeowners of $3.6 million. The
Automobile decrease was due to management actions to reduce the
size of our overall program consistent with our previously
disclosed plans to exit the Automobile line of business. As
of December 31, 2017, the Company has only 2 remaining Automobile
programs that will generate premiums earned in 2018.
Homeowners’ non-Florida has continued its significant growth in
2017, specifically in Louisiana, Texas and South
Carolina.
- Gross premiums earned decreased $0.5 million, or 0.3 %, to
$151.9 million. The results include $7.5 million of
Homeowners growth spanning several states offset by an $8.0 million
decrease in Automobile as a result of management actions to reduce
premiums written in this line of business.
- Ceded premiums decreased $11.1 million, or 14.7%, to $64.4
million in the quarter, compared with the same three-month period
last year. The decrease in ceded premiums earned was driven
by lower ceded premiums from Automobile as a result of lower gross
premiums discussed above. Additionally, Homeowners ceded
premiums decreased due to the expiration of the
retrospectively-rated 10% and 30% Florida-only property quota share
treaties, which ended on July 1, 2017 and 2016,
respectively. The effect of these expirations was partially
offset by a new 10% Florida-only property quota share treaty, which
became effective on July 1, 2017.
- Other income increased $2.9 million, or 58.1%, to
$8.0 million in the quarter, compared with the same
three-month period last year. The increase was driven by $1.8
million of partnership income from Southeast Catastrophe Consulting
Company, our 33% owned investee, as well as $1.3 million of
additional brokerage income generated from the reinstatement of an
XOL layer as a result of Hurricane Irma losses.
Expenses
- Losses and loss adjustment expenses (“LAE”) decreased
$12.7 million, or 17.8%, to $ 58.9 million for the three
months ended December 31, 2017, compared with $71.6 million for the
same three-month period last year. Lower ceded losses from
the combination of the retrospectively-rated 10% and 30%
Florida-only property quota share treaties and the new 10%
Florida-only property quota share treaty drove losses higher in the
fourth quarter of 2017 by approximately $8.5 million.
Additionally, during the quarter, we strengthened net loss reserves
by approximately $4.7 million of additional losses above the
attritional rates across our lines of business. The Company
was also impacted by claims, net of reinsurance, of $1.5 million
related to Hurricane Nate and other severe weather events in the
Homeowners line of business. Lastly, during the quarter, we
recognized $1.6 million of income for catastrophe claims handling,
which represents a reduction to net losses. These impacts
were offset by fourth quarter 2016 activity which included
approximately $21.4 million of losses, net of reinsurance, related
to the impact of Hurricane Matthew and approximately $4.0 million
of additional losses above the attritional rates across our lines
of business.
- Commissions and other underwriting expenses decreased $0.3
million, or 1.1%, to $27.9 million for the three months ended
December 31, 2017, compared with $28.3 million for the three months
ended December 31, 2017.
2017 vs. 2016 Full Year
Results
- The Company reported $8.0 million, or $0.60 per diluted
share, of net income for 2017 as compared to net income of
$1.0 million, or $0.07 per diluted share, for 2016. Full
year earnings in our Homeowners business were $3.2 million in
2017, as compared to a loss of $3.5 million in 2016. See
the Company’s 2017 Form 10-K, which is being filed
contemporaneously with this press release, for further analysis of
full year results.
Stock Repurchase Program
- During the fourth quarter of 2017, the Company repurchased
approximately 76,000 shares of common stock for $1.2 million at an
average price of $16.11.
- During the full year 2017, the Company repurchased
approximately 654,000 shares of common stock for $10.6 million
at an average price of $16.23.
- During the first quarter of 2018 thus far, the Company
repurchased approximately 280,000 shares of common stock for
$4.3 million at an average price of $15.40.
Revisions to Previously Disclosed
Financial Information
- As further explained in Note 1 to our consolidated financial
statements contained in our Annual Report on Form 10-K for the year
ended December 31, 2017, management identified certain errors in
the previously issued consolidated financial statements for fiscal
years 2016 and 2015, as well as the first three quarters of fiscal
year 2017. The corrections primarily relate to the up-front
recognition of direct written policy fees across all our lines of
business and fee income generated through the Company's personal
automobile business, the over-amortization of deferred acquisition
costs and the accounting for certain limits in our automobile
reinsurance agreements, related to ceded premiums and other items.
The Company has concluded that the errors are not material to
any of the Company's previously-issued financial statements.
Accordingly, the Company has concluded that an amendment of
previously-filed periodic reports is not required.
Conference Call Information
The Company will hold an investor conference
call at 9:00 AM (ET) Wednesday, March 14, 2018. The Company’s CEO,
Michael Braun and its CFO, Ronald Jordan will discuss the financial
results and review the outlook for the Company. Messrs. Braun and
Jordan invite interested parties to participate in the conference
call.
Listeners interested in participating in the
Q&A session may access the conference call as follows:
Toll-Free Dial-in: (877) 303-6913
Conference ID: 8988958
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://www.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, through our wholly owned
subsidiaries, is authorized to underwrite, and/or place homeowners
multi-peril, personal automobile, commercial general liability,
federal flood and other lines of insurance in Florida and other
states. We market, distribute and service our own and third-party
insurers’ products and other services through a network of
independent and general agents.
The Company’s supplemental line of business
information is designed to afford users greater transparency into
our results. The “Homeowners” line of business consists of
our homeowners and fire property and casualty insurance business,
which currently operates in Florida, Alabama, Texas, Louisiana and
South Carolina. The “Automobile” line of business consists of our
nonstandard personal automobile insurance business which currently
operates in Georgia, Texas, Alabama, and Florida. The “Other” line
of business primarily consists of our commercial general liability
and federal flood businesses, along with corporate and investment
operations.
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 or other variations thereof, 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:
- Projections of revenues, income, earnings per share, dividends,
capital structure or other financial items or measures;
- Descriptions of plans or objectives of management for future
operations, insurance products or services;
- Forecasts of future insurable events, economic performance,
liquidity, need for funding and income; and
- Descriptions of assumptions or estimates underlying or relating
to any of the foregoing.
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 losses 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 compliance with 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 our subsidiaries’ operations 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 and security 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
SUBSIDIARIESConsolidated Statements of Operations(Unaudited) |
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
As Adjusted |
|
|
|
As Adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except per share data) |
Revenue: |
|
|
Gross premiums
written |
$ |
133,892 |
|
|
$ |
137,106 |
|
|
$ |
603,417 |
|
|
$ |
605,485 |
|
|
Gross premiums
earned |
|
151,873 |
|
|
|
152,366 |
|
|
|
603,193 |
|
|
|
565,423 |
|
|
Ceded premiums
earned |
|
(64,370) |
|
|
|
(75,444) |
|
|
|
(269,712) |
|
|
|
(304,054) |
|
|
Net premiums
earned |
|
87,503 |
|
|
|
76,922 |
|
|
|
333,481 |
|
|
|
261,369 |
|
|
Net investment
income |
|
2,773 |
|
|
|
2,665 |
|
|
|
10,254 |
|
|
|
9,063 |
|
|
Net realized investment
gains |
|
(96) |
|
|
|
985 |
|
|
|
8,548 |
|
|
|
3,045 |
|
|
Direct written policy
fees |
|
3,556 |
|
|
|
4,328 |
|
|
|
17,173 |
|
|
|
16,619 |
|
|
Other income |
|
8,016 |
|
|
|
5,071 |
|
|
|
22,206 |
|
|
|
17,429 |
|
|
Total
revenue |
|
101,752 |
|
|
|
89,971 |
|
|
|
391,662 |
|
|
|
307,525 |
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
Losses and loss
adjustment expenses |
|
58,874 |
|
|
|
71,594 |
|
|
|
247,557 |
|
|
|
197,810 |
|
|
Commissions and other
underwriting expenses |
|
27,984 |
|
|
|
28,290 |
|
|
|
114,867 |
|
|
|
90,378 |
|
|
General and
administrative expenses |
|
5,226 |
|
|
|
3,975 |
|
|
|
19,963 |
|
|
|
17,186 |
|
|
Interest expense |
|
101 |
|
|
|
89 |
|
|
|
348 |
|
|
|
348 |
|
|
Total
costs and expenses |
|
92,185 |
|
|
|
103,948 |
|
|
|
382,735 |
|
|
|
305,722 |
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes |
|
9,567 |
|
|
|
(13,977) |
|
|
|
8,927 |
|
|
|
1,803 |
|
|
Income taxes |
|
3,943 |
|
|
|
(5,191) |
|
|
|
3,585 |
|
|
|
542 |
|
Net Income
(loss) |
|
5,624 |
|
|
|
(8,786) |
|
|
|
5,342 |
|
|
|
1,261 |
|
|
Net (loss) income
attributable to noncontrolling interest |
|
(672) |
|
|
|
7 |
|
|
|
(2,647) |
|
|
|
246 |
|
Net income
(loss) attributable to Federated National Holding Company
shareholders |
$ |
6,296 |
|
|
$ |
(8,793) |
|
|
$ |
7,989 |
|
|
$ |
1 ,015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per share: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.48 |
|
|
$ |
(0.65) |
|
|
$ |
0.61 |
|
|
$ |
0.07 |
|
|
Diluted |
$ |
0.48 |
|
|
$ |
(0.65) |
|
|
$ |
0.60 |
|
|
$ |
0.07 |
|
Number of
shares used to calculate net income per share: |
|
|
|
|
|
|
|
|
Basic |
|
13,131 |
|
|
|
13,611 |
|
|
|
13,170 |
|
|
|
13,758 |
|
|
Diluted |
|
13,197 |
|
|
|
13,611 |
|
|
|
13,250 |
|
|
|
13,922 |
|
|
|
|
|
|
|
|
|
|
Dividends
declared per share of common stock |
$ |
0.08 |
|
|
$ |
0.08 |
|
|
$ |
0.32 |
|
|
$ |
0.27 |
|
FEDERATED NATIONAL HOLDING COMPANY AND
SUBSIDIARIESSelected Operating Metrics(Unaudited) |
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums
written: |
(in thousands) |
Homeowners Florida |
$ |
108,106 |
|
|
$ |
109,680 |
|
|
$ |
482,038 |
|
|
$ |
477,489 |
|
Homeowners non-Florida |
|
14,393 |
|
|
|
9,210 |
|
|
|
54,717 |
|
|
|
35,248 |
|
Personal
automobile |
|
6,416 |
|
|
|
13,271 |
|
|
|
43,505 |
|
|
|
69,479 |
|
Commercial general liability |
|
2,280 |
|
|
|
2,763 |
|
|
|
11,048 |
|
|
|
13,256 |
|
Federal
flood |
|
2,697 |
|
|
|
2,182 |
|
|
|
12,109 |
|
|
|
10,013 |
|
Total gross premiums
written |
$ |
133,892 |
|
|
$ |
137,106 |
|
|
$ |
603,417 |
|
|
$ |
605,485 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums
earned: |
(in thousands) |
Homeowners Florida |
$ |
122,188 |
|
|
$ |
119,216 |
|
|
$ |
481,541 |
|
|
$ |
455,252 |
|
Homeowners non-Florida |
|
13,125 |
|
|
|
8,604 |
|
|
|
43,983 |
|
|
|
29,101 |
|
Personal
automobile |
|
10,747 |
|
|
|
18,733 |
|
|
|
54,679 |
|
|
|
58,312 |
|
Commercial general liability |
|
2,877 |
|
|
|
3,350 |
|
|
|
12,216 |
|
|
|
13,675 |
|
Federal
flood |
|
2,936 |
|
|
|
2,463 |
|
|
|
10,774 |
|
|
|
9,083 |
|
Total gross premiums
earned |
$ |
151,873 |
|
|
$ |
152,366 |
|
|
$ |
603,193 |
|
|
$ |
565,423 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
As Adjusted |
|
|
|
As Adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums
earned: |
(in thousands) |
Homeowners |
$ |
80,435 |
|
|
$ |
67,825 |
|
|
$ |
298,255 |
|
|
$ |
234,381 |
|
Personal
automobile |
|
4,339 |
|
|
|
5,921 |
|
|
|
23,642 |
|
|
|
14,021 |
|
Commercial general liability |
|
2,729 |
|
|
|
3,176 |
|
|
|
11,584 |
|
|
|
12,967 |
|
Total net premiums
earned |
$ |
87,503 |
|
|
$ |
76,922 |
|
|
$ |
333,481 |
|
|
$ |
261,369 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
As Adjusted |
|
|
|
As Adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions and other
underwriting expenses: |
(in thousands) |
Homeowners |
$ |
18,092 |
|
|
$ |
16,874 |
|
|
$ |
69,124 |
|
|
$ |
62,378 |
|
All other
lines of business |
|
3,207 |
|
|
|
6,194 |
|
|
|
20,132 |
|
|
|
21,712 |
|
Ceding
commissions |
|
(4,688) |
|
|
|
(5,451) |
|
|
|
(19,199) |
|
|
|
(36,445) |
|
Total
commissions and other fees |
|
16,611 |
|
|
|
17,617 |
|
|
|
70,057 |
|
|
|
47,645 |
|
Salaries
and wages |
|
3,160 |
|
|
|
3,330 |
|
|
|
14,521 |
|
|
|
13,748 |
|
Other
underwriting expenses |
|
8,213 |
|
|
|
7,343 |
|
|
|
30,289 |
|
|
|
28,985 |
|
Total commissions and
other underwriting expenses |
$ |
27,984 |
|
|
$ |
28,290 |
|
|
$ |
114,867 |
|
|
$ |
90,378 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FEDERATED NATIONAL HOLDING COMPANY AND
SUBSIDIARIESSelected Operating Metrics (continued)(Unaudited) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
As Adjusted |
|
|
|
As Adjusted |
Net loss ratio |
|
67.3% |
|
|
|
93.1% |
|
|
|
74.2% |
|
|
|
75.7% |
|
Net expense ratio |
|
38.0% |
|
|
|
41.9% |
|
|
|
40.4% |
|
|
|
41.2% |
|
Combined ratio |
|
105.3% |
|
|
|
135.0% |
|
|
|
114.6% |
|
|
|
116.9% |
|
Gross loss ratio |
|
77.4% |
|
|
|
79.6% |
|
|
|
108.3% |
|
|
|
57.0% |
|
Gross expense
ratio |
|
25.0% |
|
|
|
24.8% |
|
|
|
25.5% |
|
|
|
25.5% |
|
Book value per share
excluding noncontrolling interest |
$ |
16.29 |
|
|
$ |
16.01 |
|
|
$ |
16.29 |
|
|
$ |
16.01 |
|
FEDERATED NATIONAL HOLDING COMPANY AND
SUBSIDIARIESConsolidated Balance Sheets(Unaudited) |
|
|
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
2016 |
|
|
|
|
|
As Adjusted |
ASSETS |
(in thousands, except share and per share data) |
Investments |
|
|
|
|
Debt
securities, available-for-sale, at fair value |
$ |
423,238 |
|
$ |
374,756 |
|
Debt
securities, held-to-maturity, at amortized cost |
|
5,349 |
|
|
5,551 |
|
Equity
securities, available-for-sale, at fair value |
|
15,434 |
|
|
29,375 |
|
|
Total investments |
|
444,021 |
|
|
409,682 |
|
|
|
|
|
|
Cash and
cash equivalents |
|
86,228 |
|
|
74,593 |
Prepaid
reinsurance premiums |
|
135,492 |
|
|
156,932 |
Premiums
receivable, net of allowance |
|
46,393 |
|
|
54,854 |
Reinsurance
recoverable, net |
|
124,601 |
|
|
47,863 |
Deferred
acquisition costs |
|
40,893 |
|
|
41,892 |
Income
taxes receivable |
|
9,510 |
|
|
13,871 |
Deferred
tax assets, net |
|
307 |
|
|
- |
Property
and equipment, net |
|
4,025 |
|
|
4,194 |
Other
assets |
|
13,403 |
|
|
11,509 |
TOTAL ASSETS |
$ |
904,873 |
|
$ |
815,390 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
Loss and
loss adjustment expense reserves |
$ |
230,515 |
|
$ |
158,110 |
Unearned
premiums |
|
294,423 |
|
|
294,022 |
Reinsurance
payable |
|
71,944 |
|
|
79,154 |
Long –term
debt, net of deferred financing cost of $749 and $91,
respectively |
|
49,251 |
|
|
4,909 |
Deferred
revenue |
|
6,222 |
|
|
6,834 |
Deferred
tax liabilities, net |
|
- |
|
|
253 |
Other
liabilities |
|
25,059 |
|
|
37,643 |
|
Total
liabilities |
$ |
677,414 |
|
$ |
580,925 |
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY |
|
|
|
Preferred
stock, $0.01 par value: 1,000,000 shares authorized |
|
- |
|
|
- |
Common
stock, $0.01 par value: 25,000,000 shares authorized; 12,988,247
and 13,473,120 shares issued and outstanding, respectively |
$ |
130 |
|
$ |
134 |
Additional
paid-in capital |
|
139,728 |
|
|
136,779 |
Accumulated
other comprehensive income |
|
1,770 |
|
|
1,941 |
Retained
earnings |
|
70,009 |
|
|
76,884 |
|
Total
Federated National Holding Company shareholders’ equity |
|
211,637 |
|
|
215,738 |
Noncontrolling interest |
|
15,822 |
|
|
18,727 |
|
Total
shareholders' equity |
|
227,459 |
|
|
234,465 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
904,873 |
|
$ |
815,390 |
|
|
|
|
|
|
FEDERATED NATIONAL HOLDING COMPANY AND
SUBSIDIARIESSUPPLEMENTAL INFORMATIONStatements of Operations and
Operating Metrics by Line of Business(Unaudited) |
|
|
Three Months Ended December 31, |
|
|
2017 |
|
|
2016 - As Adjusted |
|
Homeowners |
Automobile |
Other |
Consolidated |
|
Homeowners |
Automobile |
Other |
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Revenue: |
|
|
|
|
|
|
|
|
|
Gross
premiums written |
$ |
122,499 |
|
$ |
6,416 |
|
$ |
4,977 |
|
$ |
133,892 |
|
|
$ |
118,890 |
|
$ |
13,271 |
|
$ |
4,945 |
|
$ |
137,106 |
|
Gross
premiums earned |
|
135,313 |
|
|
10,747 |
|
|
5,813 |
|
|
151,873 |
|
|
|
127,820 |
|
|
18,733 |
|
|
5,813 |
|
|
152,366 |
|
Ceded
premiums earned |
|
(54,878) |
|
|
(6,408) |
|
|
(3,084) |
|
|
(64,370) |
|
|
|
(59,995) |
|
|
(12,812) |
|
|
(2,637) |
|
|
(75,444) |
|
Net
premiums earned |
|
80,435 |
|
|
4,339 |
|
|
2,729 |
|
|
87,503 |
|
|
|
67,825 |
|
|
5,921 |
|
|
3,176 |
|
|
76,922 |
|
Net
investment income |
|
— |
|
|
— |
|
|
2,773 |
|
|
2,773 |
|
|
|
— |
|
|
— |
|
|
2,665 |
|
|
2,665 |
|
Net
realized investment (losses) gains |
|
— |
|
|
— |
|
|
(96) |
|
|
(96) |
|
|
|
— |
|
|
— |
|
|
985 |
|
|
985 |
|
Direct
written policy fees |
|
2,214 |
|
|
1,194 |
|
|
148 |
|
|
3,556 |
|
|
|
2,065 |
|
|
2,101 |
|
|
162 |
|
|
4,328 |
|
Other
income |
|
4,957 |
|
|
616 |
|
|
2,443 |
|
|
8,016 |
|
|
|
2,452 |
|
|
1,604 |
|
|
1,015 |
|
|
5,071 |
|
Total
revenue |
|
87,606 |
|
|
6,149 |
|
|
7,997 |
|
|
101,752 |
|
|
|
72,342 |
|
|
9,626 |
|
|
8,003 |
|
|
89,971 |
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
Losses
and loss adjustment expenses |
|
47,345 |
|
|
7,633 |
|
|
3,896 |
|
|
58,874 |
|
|
|
58,709 |
|
|
7,658 |
|
|
5,227 |
|
|
71,594 |
|
Commissions and other underwriting expenses |
|
25,038 |
|
|
1,885 |
|
|
1,061 |
|
|
27,984 |
|
|
|
23,301 |
|
|
3,774 |
|
|
1,215 |
|
|
28,290 |
|
General
and administrative expenses |
|
4,115 |
|
|
150 |
|
|
961 |
|
|
5,226 |
|
|
|
2,952 |
|
|
150 |
|
|
873 |
|
|
3,975 |
|
Interest
expense |
|
101 |
|
|
— |
|
|
— |
|
|
101 |
|
|
|
89 |
|
|
— |
|
|
— |
|
|
89 |
|
Total
costs and expenses |
|
76,599 |
|
|
9,668 |
|
|
5,918 |
|
|
92,185 |
|
|
|
85,051 |
|
|
11,582 |
|
|
7,315 |
|
|
103,948 |
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes |
|
11,007 |
|
|
(3,519) |
|
|
2,079 |
|
|
9,567 |
|
|
|
(12,709) |
|
|
(1,956) |
|
|
688 |
|
|
(13,977) |
|
Income taxes |
|
4,246 |
|
|
(1,358) |
|
|
1,055 |
|
|
3,943 |
|
|
|
(4,901) |
|
|
(754) |
|
|
464 |
|
|
(5,191) |
|
Net income (loss) |
|
6,761 |
|
|
(2,161) |
|
|
1,024 |
|
|
5,624 |
|
|
|
(7,808) |
|
|
(1,202) |
|
|
224 |
|
|
(8,786) |
|
Net
(loss) income attributable to noncontrolling interest |
|
(672) |
|
|
— |
|
|
— |
|
|
(672) |
|
|
|
7 |
|
|
— |
|
|
— |
|
|
7 |
|
Net income (loss)
attributable to Federated National Holding Company
shareholders |
$ |
7,433 |
|
$ |
(2,161) |
|
$ |
1,024 |
|
$ |
6,296 |
|
|
$ |
(7,815) |
|
$ |
(1,202) |
|
$ |
224 |
|
$ |
(8,793) |
|
|
|
|
|
|
|
|
|
|
|
Net loss
ratio |
|
58.9% |
|
|
175.9% |
|
|
142.8% |
|
|
67.3% |
|
|
|
86.6% |
|
|
129.3% |
|
|
164.6% |
|
|
93.1% |
|
Net
expense ratio |
|
36.2% |
|
|
|
|
38.0% |
|
|
|
38.7% |
|
|
|
|
41.9% |
|
Combined
ratio |
|
95.1% |
|
|
|
|
105.3% |
|
|
|
125.3% |
|
|
|
|
135.0% |
|
FEDERATED NATIONAL HOLDING COMPANY AND
SUBSIDIARIESSUPPLEMENTAL INFORMATIONStatements of Operations and
Operating Metrics by Line of Business(Unaudited)(Continued) |
|
|
Year Ended December 31, |
|
|
2017 |
|
|
2016 - As Adjusted |
|
Homeowners |
Automobile |
Other |
Consolidated |
|
Homeowners |
Automobile |
Other |
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Revenue: |
|
|
|
|
|
|
|
|
|
Gross
premiums written |
$ |
536,755 |
|
$ |
43,505 |
|
$ |
23,157 |
|
$ |
603,417 |
|
|
$ |
512,737 |
|
$ |
69,479 |
|
$ |
23,269 |
|
$ |
605,485 |
|
Gross
premiums earned |
|
525,524 |
|
|
54,679 |
|
|
22,990 |
|
|
603,193 |
|
|
|
484,353 |
|
|
58,312 |
|
|
22,758 |
|
|
565,423 |
|
Ceded
premiums earned |
|
(227,269) |
|
|
(31,037) |
|
|
(11,406) |
|
|
(269,712) |
|
|
|
(249,972) |
|
|
(44,291) |
|
|
(9,791) |
|
|
(304,054) |
|
Net
premiums earned |
|
298,255 |
|
|
23,642 |
|
|
11,584 |
|
|
333,481 |
|
|
|
234,381 |
|
|
14,021 |
|
|
12,967 |
|
|
261,369 |
|
Net
investment income |
|
- |
|
|
- |
|
|
10,254 |
|
|
10,254 |
|
|
|
- |
|
|
- |
|
|
9,063 |
|
|
9,063 |
|
Net
realized investment gains |
|
- |
|
|
- |
|
|
8,548 |
|
|
8,548 |
|
|
|
- |
|
|
- |
|
|
3,045 |
|
|
3,045 |
|
Direct
written policy fees |
|
8,715 |
|
|
7,846 |
|
|
612 |
|
|
17,173 |
|
|
|
7,844 |
|
|
8,171 |
|
|
604 |
|
|
16,619 |
|
Other
income |
|
13,662 |
|
|
3,277 |
|
|
5,267 |
|
|
22,206 |
|
|
|
9,106 |
|
|
5,479 |
|
|
2,844 |
|
|
17,429 |
|
Total
revenue |
|
320,632 |
|
|
34,765 |
|
|
36,265 |
|
|
391,662 |
|
|
|
251,331 |
|
|
27,671 |
|
|
28,523 |
|
|
307,525 |
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
Losses
and loss adjustment expenses |
|
206,842 |
|
|
32,752 |
|
|
7,963 |
|
|
247,557 |
|
|
|
169,920 |
|
|
14,885 |
|
|
13,005 |
|
|
197,810 |
|
Commissions and other underwriting expenses |
|
97,111 |
|
|
12,976 |
|
|
4,780 |
|
|
114,867 |
|
|
|
73,215 |
|
|
12,471 |
|
|
4,692 |
|
|
90,378 |
|
General
and administrative expenses |
|
15,403 |
|
|
650 |
|
|
3,910 |
|
|
19,963 |
|
|
|
13,079 |
|
|
600 |
|
|
3,507 |
|
|
17,186 |
|
Interest
expense |
|
348 |
|
|
- |
|
|
- |
|
|
348 |
|
|
|
348 |
|
|
- |
|
|
- |
|
|
348 |
|
Total
costs and expenses |
|
319,704 |
|
|
46,378 |
|
|
16,653 |
|
|
382,735 |
|
|
|
256,562 |
|
|
27,956 |
|
|
21,204 |
|
|
305,722 |
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes |
|
928 |
|
|
(11,613) |
|
|
19,612 |
|
|
8,927 |
|
|
|
(5,231) |
|
|
(285) |
|
|
7,319 |
|
|
1,803 |
|
Income
taxes |
|
360 |
|
|
(4,481) |
|
|
7,706 |
|
|
3,585 |
|
|
|
(2,015) |
|
|
(111) |
|
|
2,668 |
|
|
542 |
|
Net income (loss) |
|
568 |
|
|
(7,132) |
|
|
11,906 |
|
|
5,342 |
|
|
|
(3,216) |
|
|
(174) |
|
|
4,651 |
|
|
1,261 |
|
Net
(loss) income attributable to noncontrolling interest |
|
(2,647) |
|
|
- |
|
|
- |
|
|
(2,647) |
|
|
|
246 |
|
|
- |
|
|
- |
|
|
246 |
|
Net income (loss)
attributable to Federated National Holding Company
shareholders |
$ |
3,215 |
|
$ |
(7,132) |
|
$ |
11,906 |
|
$ |
7,989 |
|
|
$ |
(3,462) |
|
$ |
(174) |
|
$ |
4,651 |
|
$ |
1,015 |
|
|
|
|
|
|
|
|
|
|
|
Net loss
ratio |
|
69.4% |
|
|
138.5% |
|
|
68.7% |
|
|
74.2% |
|
|
|
72.5% |
|
|
106.2% |
|
|
100.3% |
|
|
75.7% |
|
Net
expense ratio |
|
37.7% |
|
|
|
|
40.4% |
|
|
|
36.8% |
|
|
|
|
41.2% |
|
Combined
ratio |
|
107.1% |
|
|
|
|
114.6% |
|
|
|
109.3% |
|
|
|
|
116.9% |
|
|
|
|
|
|
|
|
|
|
|
CONTACT:
Michael H. Braun, CEO (954) 308-1322,
Ronald Jordan, CFO (954) 308-1363,
or Erick A. Fernandez, CAO (954) 308-1341
Federated National Holding Company
FedNat (NASDAQ:FNHC)
Historical Stock Chart
From Apr 2024 to May 2024
FedNat (NASDAQ:FNHC)
Historical Stock Chart
From May 2023 to May 2024