<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
_________
X Quarterly Report Pursuant to Section 13 or 15(d) of the
___ Securities Exchange Act of 1934 for the quarterly period
ended March 31, 1995
______________
___ Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition
period from ___________ to _____________
Commission File Number 2-39621
UNITED FIRE & CASUALTY COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Iowa 42-0644327
________________________ ________________________________________________
(State of Incorporation) (IRS Employer Identification No.)
118 Second Avenue, S.E.
Cedar Rapids, Iowa 52407
____________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(319) 399-5700
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
______ ______
As of May 8, 1995; 7,219,943 shares of common stock were
outstanding.
<PAGE>
UNITED FIRE & CASUALTY COMPANY
AND SUBSIDIARIES
TABLE OF CONTENTS
PART I: FINANCIAL INFORMATION
Report of Independent Public Accountants...................... 1
Consolidated Balance Sheets for
March 31, 1995 and December 31, 1994.......................... 2
Unaudited Consolidated Statements of
Operations - Three Months Ended
March 31, 1995 and 1994....................................... 3
Unaudited Consolidated Statements of
Cash Flows - Three Months Ended
March 31, 1995 and 1994....................................... 4
Notes to Unaudited Consolidated
Financial Statements.......................................... 5-8
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................................... 9-11
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures.................................................... 12
Exhibit 11. Computation of Earnings Per
Common Share.................................................. 13
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
________________________________________
To the Stockholders and Board of Directors of
United Fire & Casualty Company:
We have reviewed the accompanying consolidated balance sheet of UNITED FIRE &
CASUALTY COMPANY (an Iowa corporation) AND SUBSIDIARIES as of March 31, 1995
and the related consolidated statements of operations and cash flows for the
three-month periods ended March 31, 1995 and 1994. These financial statements
are the responsibility of the company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the financial statements referred to above in order for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of United Fire & Casualty Company and
Subsidiaries as of December 31, 1994, and, in our report dated February 24,
1995, we expressed an unqualified opinion on that statement. In our opinion,
thek information set forth in the accompanying consolidated balance sheet as of
December 31, 1994, is fairly stated, in all material respects, in relation to
the consolidated balance sheet from which it has been derived.
Arthur Andersen LLP
Chicago, Illinois
May 8, 1995
<PAGE>
UNITED FIRE & CASUALTY COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1995 AND DECEMBER 31, 1994
<TABLE>
<CAPTION>
___________________________________________________________________________________________________
1995 1994
UNAUDITED Audited
___________________________________________________________________________________________________
<S> <C> <C>
ASSETS
INVESTMENTS:
Fixed maturities (market value $595,693,018 in 1995
and $571,306,514 in 1994) . . . . . . . . . . . . . . . . . . . . .$603,427,450 $593,637,794
Equity securities (cost $24,808,211
in 1995 and $24,913,743 in 1994). . . . . . . . . . . . . . . . . . 61,039,287 56,196,670
Mortgage loans. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,099,327 3,120,093
Policy loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,912,285 6,802,227
Other long-term investments (cost $6,512,319
in 1995 and $6,556,845 in 1994) . . . . . . . . . . . . . . . . . . 6,722,917 7,071,898
Short-term investments. . . . . . . . . . . . . . . . . . . . . . . 10,114,847 9,954,637
___________________________________________________________________________________________________
691,316,113 676,783,319
CASH AND CASH EQUIVALENTS. . . . . . . . . . . . . . . . . . . . . . . 8,951,013 10,254,892
ACCRUED INVESTMENT INCOME . . . . . . . . . . . . . . . . . . . . . . 9,845,410 10,410,792
ACCOUNTS RECEIVABLE. . . . . . . . . . . . . . . . . . . . . . . . . . 38,733,598 33,864,498
DEFERRED POLICY ACQUISITION COSTS. . . . . . . . . . . . . . . . . . . 48,298,926 47,544,519
PROPERTY AND EQUIPMENT . . . . . . . . . . . . . . . . . . . . . . . . 12,526,158 12,737,712
REINSURANCE RECEIVABLES. . . . . . . . . . . . . . . . . . . . . . . . 18,508,075 24,222,444
PREPAID REINSURANCE PREMIUMS . . . . . . . . . . . . . . . . . . . . . 3,697,383 3,033,531
INTANGIBLES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,777,571 1,882,196
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,977,504 7,391,810
___________________________________________________________________________________________________
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$841,631,751 $828,125,713
===================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
___________________________________________________________________________________________________
LIABILITIES:
Future policy benefits and losses, claims and settlement expenses
Property and casualty insurance . . . . . . . . . . . . . . . . .$200,154,518 $203,910,747
Life insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 347,029,403 344,095,937
Unearned premiums . . . . . . . . . . . . . . . . . . . . . . . . . 87,185,885 83,450,394
Accrued expenses and other liabilities. . . . . . . . . . . . . . . 22,432,285 22,323,899
Postretirement benefits other than pensions . . . . . . . . . . . . 2,501,993 2,366,492
Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . 1,831,100 826,379
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . 2,232,989 498,437
___________________________________________________________________________________________________
TOTAL LIABILITIES. . . . . . . . . . . . . . . . . . . . . . . . . . .$663,368,173 $657,472,285
___________________________________________________________________________________________________
STOCKHOLDERS' EQUITY:
Common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 24,066,490 $ 24,066,490
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . 12,048,856 12,048,856
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . 118,414,783 113,616,829
Net unrealized appreciation, net of applicable
income taxes of $12,780,105 in 1995 and $11,009,092 in 1994 . . . . 23,733,449 20,921,253
___________________________________________________________________________________________________
TOTAL STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . . . . .$178,263,578 $170,653,428
___________________________________________________________________________________________________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . . . . . . . . .$841,631,751 $828,125,713
===================================================================================================
The Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
UNITED FIRE & CASUALTY COMPANY
AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
<TABLE>
<CAPTION>
___________________________________________________________________________________________________
1995 1994
___________________________________________________________________________________________________
<S> <C> <C>
Revenues:
Premiums earned . . . . . . . . . . . . . . . . . . . . . . . . $ 51,446,687 $ 42,608,024
Investment income, net . . . . . . . . . . . . . . . . . . . . 12,311,342 10,761,573
Realized investment gains . . . . . . . . . . . . . . . . . . . 373,227 252,422
Commission and policy fee income. . . . . . . . . . . . . . . . 461,685 454,126
___________________________________________________________________________________________________
$ 64,592,941 $ 54,076,145
___________________________________________________________________________________________________
Benefits, Losses and Expenses:
Losses and settlement expenses. . . . . . . . . . . . . . . . . $ 31,047,115 $ 29,230,326
Increase in liability for future policy benefits. . . . . . . . 2,926,636 929,368
Amortization of deferred policy acquisition costs . . . . . . . 11,523,674 7,642,300
Other underwriting expenses . . . . . . . . . . . . . . . . . . 6,626,028 7,779,136
Interest on policyholders' accounts . . . . . . . . . . . . . . 4,828,044 3,687,891
___________________________________________________________________________________________________
$ 56,951,497 $ 49,269,021
___________________________________________________________________________________________________
Income before income taxes. . . . . . . . . . . . . . . . . . . $ 7,641,444 $ 4,807,124
Federal income taxes . . . . . . . . . . . . . . . . . . . . . 1,393,285 688,217
___________________________________________________________________________________________________
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,248,159 $ 4,118,907
===================================================================================================
Net income per common share . . . . . . . . . . . . . . . . . . $ .87 $ .57
===================================================================================================
Weighted average common shares outstanding . . . . . . . . . . . . 7,219,943 7,219,943
===================================================================================================
Cash dividends declared per common share . . . . . . . . . . . . . $ .20 $ . 18
===================================================================================================
The Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
UNITED FIRE & CASUALTY COMPANY AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
<TABLE>
<CAPTION>
___________________________________________________________________________________________________
1995 1994
___________________________________________________________________________________________________
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,248,159 $ 4,118,907
___________________________________________________________________________________________________
Adjustments to reconcile net income to net cash provided by
operating activities
Net bond discount accretion . . . . . . . . . . . . . . . . . . . . (528,668) (104,677)
Depreciation and amortization . . . . . . . . . . . . . . . . . . . 653,836 645,496
Realized gains on sales and calls of investments. . . . . . . . . . (373,227) (252,422)
Changes in:
Accrued investment income . . . . . . . . . . . . . . . . . . . . 565,382 570,904
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . (4,869,100) (2,479,274)
Deferred policy acquisition costs . . . . . . . . . . . . . . . . (754,407) 427,352
Reinsurance receivables . . . . . . . . . . . . . . . . . . . . . 5,714,369 (3,585,372)
Prepaid reinsurance premiums. . . . . . . . . . . . . . . . . . . (663,852) 214,876
Income taxes receivable . . . . . . . . . . . . . . . . . . . . . -- 221,077
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . (585,694) 475,043
Future policy benefits and losses, claims and
settlement expenses . . . . . . . . . . . . . . . . . . . . . . . (213,951) 6,491,411
Unearned premiums . . . . . . . . . . . . . . . . . . . . . . . . 3,735,491 766,581
Accrued expenses and other liabilities. . . . . . . . . . . . . . 1,408,019 (5,637,456)
Postretirement benefits other than pensions . . . . . . . . . . . 135,501 153,233
Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . 1,004,721 945,324
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . (36,461) (692,611)
___________________________________________________________________________________________________
Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,191,959 $ (1,840,515)
___________________________________________________________________________________________________
Net cash provided by operating activities . . . . . . . . . . . . . $ 11,440,118 $ 2,278,392
___________________________________________________________________________________________________
Cash Flows From Investing Activities:
Proceeds from sale of available-for-sale investments. . . . . . . . 85,149 144,920
Proceeds from call and maturity of held-to-maturity investments . . 7,585,267 21,622,579
Proceeds from call and maturity of available-for-sale investments . 513,880 147,857
Proceeds from sale of other investments . . . . . . . . . . . . . . 4,641,235 5,039,479
Purchase of investments held-to-maturity. . . . . . . . . . . . . . (17,132,545) (33,464,950)
Purchase of investments available-for-sale. . . . . . . . . . . . . -- (481,341)
Purchase of other investments . . . . . . . . . . . . . . . . . . . (4,740,676) (6,317,629)
Proceeds from sale of property and equipment. . . . . . . . . . . . 15,242 19,684
Purchase of property and equipment. . . . . . . . . . . . . . . . . (352,899) (396,823)
___________________________________________________________________________________________________
Net cash used in investing activities . . . . . . . . . . . . . . . $ (9,385,347) $(13,686,224)
___________________________________________________________________________________________________
Cash Flows From Financing Activities:
Policyholders' account balances
Deposits to investment and universal life type contracts. . . . . $ 19,004,683 $ 12,488,606
Withdrawals from investment and universal life type contracts . . (19,613,495) (6,907,384)
Purchase and retirement of common stock . . . . . . . . . . . . . . (6,219) (6,935)
Payment of cash dividends . . . . . . . . . . . . . . . . . . . . . (2,743,619) (2,599,260)
___________________________________________________________________________________________________
Net cash provided by financing activities . . . . . . . . . . . . . $ (3,358,650) $ 2,975,027
___________________________________________________________________________________________________
Decrease in Cash and Cash Equivalents . . . . . . . . . . . . . . . $ (1,303,879) $ (8,432,805)
Cash and Cash Equivalents at Beginning of Year. . . . . . . . . . . 10,254,892 13,704,164
___________________________________________________________________________________________________
Cash and Cash Equivalents at End of Period . . . . . . . . . . . . . . $ 8,951,013 $ 5,271,359
===================================================================================================
The Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
UNITED FIRE & CASUALTY COMPANY
AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1.
_______
In the opinion of the management of United Fire & Casualty
Company and Subsidiaries (the "Company"), the accompanying
unaudited consolidated financial statements contain all adjustments
(consisting of normal recurring accruals) necessary to present
fairly the financial position, the results of operations, and cash
flows for the periods presented. The results for the interim
periods are not necessarily indicative of the results of operations
that may be expected for the year. The financial statements
contained herein should be read in conjunction with the Company's
annual report on Form 10-K for the year ended December 31, 1994.
The review report of Arthur Andersen LLP accompanies the unaudited
consolidated financial statements included in Item 1 of Part I.
NOTE 2.
_______
The Company maintains its records in conformity with the
accounting practices prescribed or permitted by the Insurance
Department of the State of Iowa. To the extent that certain of
these practices differ from generally accepted accounting
principles, adjustments have been made in order to present the
accompanying financial statements on the basis of generally
accepted accounting principles.
Certain amounts included in the financial statements for the
previous year have been reclassified to conform with the financial
statement presentation at March 31, 1995.
NOTE 3.
_______
For purposes of reporting cash flows, cash and cash equivalents
include cash and non-negotiable certificates of deposit with
original maturities of three months or less. Income taxes paid,
net of refunds for the three months ended March 31, 1995 and 1994
were $400,000, and $131,000, respectively. There were no
significant payments of interest through March 31, 1995 and 1994,
other than interest credited to policyholders' accounts.
<PAGE>
UNITED FIRE & CASUALTY COMPANY
AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4.
_______
Effective December 31, 1994, the Company adopted Statement of
Financial Accounting Standards No. 119, "Disclosure about
Derivative Financial Instruments and Fair Value of Financial
Instruments" ("SFAS No. 119") SFAS No. 119 expands disclosure
requirements concerning derivative investments, including whether
investments are held for trading or other purposes, such as
hedging. The Company does not own any derivative investments as
defined by SFAS No. 119, and therefore is not subject to the
expanded disclosure requirements.
Effective January 1, 1994, the Company adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" ("SFAS No. 115"). SFAS
No. 115 addresses the accounting and reporting for investments in
equity securities that have readily determinable fair values and
for all investments in debt securities. The statement requires
that those investments be classified into the following three
categories: 1) debt securities that the enterprise has the positive
intent and ability to hold to maturity are classified as held-to-
maturity securities and reported at amortized cost; 2) debt and
equity securities that are bought and held principally for the
purpose of selling them in the near term are classified as trading
securities and reported at fair value, with unrealized gains and
losses included in net income; and 3) debt securities and
marketable equity securities not classified as either held-to-
maturity securities or trading securities are classified as
available-for-sale securities and reported at fair value, with
unrealized gains and losses excluded from net income and reported
as a separate component of stockholders' equity. The Company
classifies a majority of its investments in fixed income securities
as held-to-maturity.
A reconciliation of the amortized cost to fair values of
investments in held-to-maturity and available-for-sale fixed
maturities, marketable equity securities and other long-term
investments as of March 31, 1995 is reported on the next page.
<PAGE>
UNITED FIRE & CASUALTY COMPANY
AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
_______________________________________________________________________________________________________
March 31, 1995 Gross Gross
Amortized Unrealized Unrealized Fair
Type of Investment Cost Appreciation Depreciation Value
_______________________________________________________________________________________________________
<S> <C> <C> <C> <C>
HELD-TO-MATURITY
Fixed Maturities
Bonds
U.S. Government,
government agencies and authorities
Collateralized mortgage obligations $ 81,936,947 $ 1,340,915 $ 8,712,856 $ 74,565,006
Mortgage-backed securities 32,227,695 1,520,715 32,946 33,715,464
All others 3,679,833 236,539 142,681 3,773,691
States, municipalities and
political subdivisions 171,046,045 8,043,784 1,215,499 177,874,330
Foreign 4,525,427 45,498 99,375 4,471,550
Public utilities 38,607,377 113,490 3,118,099 35,602,768
Corporate bonds
Collateralized mortgage obligations 97,910,716 505,139 5,135,616 93,280,239
All other corporate bonds 172,172,431 3,495,042 4,578,482 171,088,991
_______________________________________________________________________________________________________
Total held-to-maturity $602,106,471 $ 15,301,122 $ 23,035,554 $594,372,039
_______________________________________________________________________________________________________
AVAILABLE-FOR-SALE
Fixed Maturities
Bonds
U.S. Government,
government agencies and authorities
Mortgage-backed securities $ 107,548 $ 4,092 $ -- $ 111,640
All others 316,909 345 25,221 292,033
Public utilities 206,000 -- 38,000 168,000
Corporate bonds 618,643 161,954 31,291 749,306
______________________________________________________________________________________________________
Total fixed maturities $ 1,249,100 $ 166,391 $ 94,512 $ 1,320,979
______________________________________________________________________________________________________
Equity Securities
Common stocks
Public Utilities $ 3,561,403 $ 3,376,738 $ -- $ 6,938,141
Banks, trust and insurance companies 11,052,759 20,478,242 -- 31,531,001
All other common stocks 9,039,715 12,467,067 312,013 21,194,769
Nonredeemable preferred stocks 1,154,334 268,809 47,767 1,375,376
_______________________________________________________________________________________________________
Total equity securities $ 24,808,211 $ 36,590,856 $ 359,780 $ 61,039,287
_______________________________________________________________________________________________________
Total available-for-sale $ 26,057,351 $ 36,757,207 $ 454,292 $ 62,360,266
=======================================================================================================
Other long-term investments $ 6,512,319 $ 489,987 $ 279,388 $ 6,722,917
=======================================================================================================
</TABLE>
<PAGE>
UNITED FIRE & CASUALTY COMPANY
AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The amortized cost and fair value of held-to-maturity and
available-for-sale fixed maturities at March 31, 1995 by
contractual maturity are shown below. Expected maturities
will differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without
call or prepayment penalties.
<TABLE>
<CAPTION>
_______________________________________________________________________________________________________
Held-to-maturity Available-for-sale
_______________________________________________________________________________________________________
Amortized Cost Fair Value Amortized Cost Fair Value
_______________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Due in one year or less $ 7,263,466 $ 7,351,772 $ 123,301 $ 281,532
Due after one year through five years 49,918,353 51,556,917 233,234 221,006
Due after five years through ten years 171,046,852 171,802,261 785,017 706,801
Due after ten years 161,802,440 162,100,378 -- --
Mortgage-backed securities 32,227,695 33,715,464 107,548 111,640
Collateralized mortgage obligations 179,847,665 167,845,247 -- --
_______________________________________________________________________________________________________
$ 602,106,471 $ 594,372,039 $ 1,249,100 $ 1,320,979
=======================================================================================================
</TABLE>
<PAGE>
UNITED FIRE & CASUALTY COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION AND LIQUIDITY
ASSETS
The Company's total fixed maturity portfolio grew by 1.7% or
$9,790,000 during the first three months of 1995. Approximately
30% of these securities are collateralized mortgage obligations
("CMOs"), compared to approximately 28% at December 31, 1994.
Continuing review of the fixed income market has shown that CMOs
are an attractive investment alternative. The Company minimizes
its prepayment risk by buying most issues priced at a slight
discount. While buying at a discount does not prevent prepayment,
the yield is not penalized as is the case when a premium is paid.
In addition, although the stated maturity is longer than the
average life of the issues, the Company is concentrating on buying
issues with expected maturity in the seven to twelve year range.
The Company's equity securities consists of readily marketable
common and preferred stocks, all of which are classified as
available-for-sale. Growth in this asset is primarily the result
of unrealized appreciation in market value. Other long-term
investments are primarily holdings in limited partnership funds
investing in banks.
The Company's accounts receivable are amounts due from property
and casualty insurance agents and brokers for premiums written net
of commissions. Losses payable to reinsurance brokers on assumed
business are also netted against accounts receivable. The growth
in this asset of $4,869,000 or 14.4% is largely the result of two
factors. Utilization of the Company's deferred billing plans has
increased, which has the effect of increasing the direct agents
accounts receivable. The other factor relates to reinsurance. The
Company deposits funds with one reinsurer in January and July, and
records the deposits as accounts receivable. This asset is reduced
as premiums are ceded to the reinsurer. The Company pays deposits
to other reinsurers on a quarterly basis, although the aggregate
amount of these deposits is smaller than the semi-annual payments.
<PAGE>
UNITED FIRE & CASUALTY COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION AND LIQUIDITY (continued)
Reinsurance receivables are ceded losses, expenses and reserves
that are due the Company from reinsurers. The balance in this
asset decreased $5,714,000 or 23.6% due primarily to the settlement
of two large claims during the first quarter of 1995, one of which
relates to the Northridge earthquake. The Company does not
anticipate collection problems with regard to reinsurance
receivables.
LIABILITIES
Gross reserves for property and casualty losses and settlement
expenses decreased $3,756,000 or 1.8% between March 31, 1995 and
December 31, 1994. Gross reserves relating to the Northridge
earthquake were $4,711,000 through March 31, 1995. The Company
has made one small payment on the Kobe earthquake, and has received
very limited information on further exposure.
The Company is not aware of any significant contingent
liabilities as far as environmental issues are concerned. Because
of the type of business the Company writes, i.e. property coverage,
there exists the potential for exposure for environmental pollution
and asbestos claims. The Company's underwriters are aware of these
exposures and use limited riders or endorsements to limit exposure.
Accrued expenses and other liabilities increased less than 1%.
It is typical to report a decrease for the first quarter, because
many of the Company's expenses that were accrued at December 31, of
the prior year, such as contingent commissions and state premium
taxes, are substantially paid by the end of the first quarter. At
March 31, 1995, the Company had payables to investment brokers
offsetting the usual reduction in accrued expenses.
Income taxes payable increased $1,005,000 over December 31, 1994,
because there have been no prepayments made in 1995. The major
contributing factor to the growth of $1,735,000 in deferred taxes
payable is the increase in unrealized appreciation.
<PAGE>
UNITED FIRE & CASUALTY COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
MATERIAL CHANGES IN RESULTS OF OPERATIONS:
The Company's first quarter net premiums earned increased
$8,839,000 or 20.7% over the same period in 1994, with the life
segment contributing $2,659,000 of the increase. The property and
casualty segment has experienced growth in its direct and assumed
business, and has had to pay less for its ceded protection due to
a decrease in ceded premium rates.
Investment income rose 14.4% over the first three months of 1995,
which is attributable to a larger fixed maturity portfolio. Losses
and settlement expenses increased 6.2% between years. Gross losses
related to the Northridge earthquake were $526,000 for the first
three months of 1995, with ceded incurred of $154,000.
Amortization of deferred acquisition costs increased by
$3,881,000 or 50.8% over March 31, 1994 due to an increase in
premiums earned. This premium growth, coupled with increasing
interest rates, contributed to the increase in the life segment's
interest on policyholders' accounts.
<PAGE>
UNITED FIRE & CASUALTY COMPANY AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits-Exhibit 11 - Computation of Earnings Per Common
Share (Page 13).
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 thereunto duly authorized.
UNITED FIRE & CASUALTY COMPANY
__________________________________________
(Registrant)
May 8, 1995
___________________________________________
(Date)
/s/ Scott McIntyre, Jr.
____________________________________________
Scott McIntyre, Jr.
Chairman and Chief Executive Officer
/s/ K.G. Baker
____________________________________________
K.G. Baker, Vice President
Chief Financial Officer and Principal
Accounting Officer
<PAGE>
UNITED FIRE & CASUALTY COMPANY AND SUBSIDIARIES
PART II - OTHER INFORMATION
Exhibit 11. Computation of Earnings Per Common Share
<TABLE>
<CAPTION>
______________________________________________________________________________________________
Weighted Average Net Earnings per
Number of Shares Income Common Share
Outstanding
______________________________________________________________________________________________
Three months ended March 31:
<C> <C> <C> <C>
1995 . . . . . . . . . . 7,219,943 $ 6,248,159 $ .87
1994 . . . . . . . . . . 7,219,943 4,118,907 .57
</TABLE>
<TABLE>
<CAPTION>
Computation of weighted average number of common
and common equivalent shares:
____________________________
Three Months Ended March 31,
1995 1994
____________________________
<S> <C> <C>
Common shares outstanding throughout the period 7,219,943 7,219,943
========= =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
This schedule contains summary information extracted from the Form 10-Q
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000101199
<NAME> UNITED FIRE AND CASUALTY COMPANY
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> MAR-31-1995
<DEBT-HELD-FOR-SALE> 1,320,979
<DEBT-CARRYING-VALUE> 602,106,471
<DEBT-MARKET-VALUE> 594,372,039
<EQUITIES> 61,039,287
<MORTGAGE> 3,099,327
<REAL-ESTATE> 12,526,158
<TOTAL-INVEST> 691,316,113
<CASH> 8,951,013
<RECOVER-REINSURE> 18,508,075
<DEFERRED-ACQUISITION> 48,298,926
<TOTAL-ASSETS> 841,631,751
<POLICY-LOSSES> 547,183,921
<UNEARNED-PREMIUMS> 87,185,885
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
<COMMON> 24,066,490
0
0
<OTHER-SE> 130,463,639
<TOTAL-LIABILITY-AND-EQUITY> 841,631,751
51,446,687
<INVESTMENT-INCOME> 12,311,342
<INVESTMENT-GAINS> 373,227
<OTHER-INCOME> 461,685
<BENEFITS> 33,973,751
<UNDERWRITING-AMORTIZATION> 11,523,674
<UNDERWRITING-OTHER> 11,454,072
<INCOME-PRETAX> 7,641,444
<INCOME-TAX> 1,393,285
<INCOME-CONTINUING> 6,248,159
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,248,159
<EPS-PRIMARY> .87
<EPS-DILUTED> .87
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
