UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: October 29, 1996
FARM FAMILY HOLDINGS, INC.
A Delaware Corporation Commission File No. 1-11941 IRS No. 14-1789227
344 Route 9W, Glenmont, New York 12077-2910
Registrant's telephone number: (518) 431-5000
<PAGE>
Item 5. Other Events
On October 29, 1996, Farm Family Holdings, Inc. issued a press
release announcing the company's operating results for the three
month period and the nine month period ended September 30, 1996.
Item 7. Financial Statements and Exhibits
The following exhibits are filed as part of this report:
Exhibit Index
Exhibit 99 - Press Release dated October 29, 1996
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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.
FARM FAMILY HOLDINGS, INC. (Registrant)
October 29, 1996 /s/ Philip P. Weber
(Date) Philip P. Weber President and CEO
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Exhibit 99
FOR IMMEDIATE RELEASE
CONTACT: Timothy A. Walsh (518) 431-5410
Glenmont, New York - October 29, 1996 -- Farm Family Holdings,
Inc. (NYSE symbol: FFH) today announced an 18.7% increase in
operating earnings for the third quarter ended September 30,
1996 to $3,528,000 compared to $2,971,000 for the same period in
1995.
Philip P. Weber, President and CEO of Farm Family Holdings said,
"The dilutive effect of the Company's recent IPO creates a
seemingly negative comparison for operating earnings on a per
share basis: $0.76 per share for the third quarter of 1996
versus $0.99 per share in the third quarter of 1995. In fact,
we are very encouraged by the overall increase in operating
earnings for this quarter and the growth in net premiums."
Operating earnings for the nine month period ended September 30,
1996 were $6,834,000 compared to $8,070,000 for the same period
in 1995. On a per share basis, operating earnings for the nine
months ended September 30, 1996 were $1.92 compared to $2.69 for
the same period in 1995. The decrease in operating earnings
overall and on a per share basis was primarily the result of the
abnormally high weather related losses incurred in the first
quarter of 1996 and the additional shares outstanding from the
Company's initial public offering on July 26, 1996. Losses
believed to be weather related were approximately $9,373,000 for
the nine months ended September 30, 1996 compared to $3,425,000
for the same period in 1995. Operating earnings exclude the
impact of realized capital gains and losses and extraordinary
items.
Premiums and Net Written Premiums
- ---------------------------------
Premium revenue increased 10.2% to $33,015,000 for the third
quarter of 1996 compared to $29,958,000 for the same period in
1995. For the nine months ended September 30, 1996, premium
revenue increased 11.3% to $96,881,000 compared to $87,021,000
for the same period in 1995.
"Our premium growth comes from our continued penetration into
the Northeastern agribusiness, rural, and suburban markets,
particularly in New Jersey, New York, Connecticut, Rhode Island,
and Delaware" said Mr. Weber. "During 1996, we have increased
our writings of all of our primary products: personal and
commercial auto, Special Farm Package, businessowners, and
homeowners products."
Net written premiums increased 11.0% to $33,384,000 for the
third quarter of 1996 compared to $30,074,000 for the same
period in 1995. Net written premiums for the nine months ended
September 30, 1996 increased 9.3% to $102,281,000 compared to
$93,558,000 for the same period in 1995.
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Combined Ratio
- --------------
The Company's statutory combined ratio was 96.9% for the third
quarter of 1996 compared to 100.5% for the same period in 1995.
The combined ratio for the nine month period ended September 30,
1996 was 101.5% compared to 101.0% for the same period in 1995.
Loss and loss adjustment expenses were 69.9% of premium revenue
for the third quarter of 1996 compared to 69.5% for the same
period in 1995. Loss and loss adjustment expenses were 74.2% of
premium revenue for the nine months ended September 30, 1996
compared to 70.7% for the same period in 1995. The increase in
loss and loss adjustment expenses was primarily attributable to
the previously-mentioned, abnormally high weather related losses
incurred during the first quarter of 1996.
"While we have seen some reduction in the expense ratio," said
Mr. Weber, "we are currently exploring an early retirement
program and changes to our employee benefit plans to further
reduce the Company's overall expenses. In addition, a revised
agent compensation program for 1997 will better tie agent
compensation to profitability. We are also considering an
incentive compensation program, including a stock option plan,
in order to better align management's interests with those of
the stockholders."
Net Income
- ----------
Net income for the third quarter of 1996 increased 5.1% to
$3,336,000 compared to $3,173,000 for the same period in 1995
despite certain nonrecurring expenses totaling $126,000 incurred
during the third quarter of 1996 related to the Company's
conversion from a mutual company to a stockholder owned company.
Excluding the nonrecurring expenses, net income for the third
quarter of 1996 increased 9.1% to $3,462,000 compared to
$3,173,000 for the same period in 1995.
Net income for the nine months ended September 30, 1996 was
$5,275,000 compared to $8,201,000 for the same period in 1995.
The results for the nine months ended September 30, 1996
included abnormally high weather related losses incurred in the
first quarter of 1996 and certain nonrecurring expenses totaling
$1,543,000 related to the Company's conversion from a mutual
company to a stockholder owned company.
Investment Income
- -----------------
Net investment income for the third quarter of 1996 increased
11.9% to $4,132,000 compared to $3,692,000 for the same period
in 1995. Net investment income increased 8.7% to $11,635,000
for the nine months ended September 30, 1996 compared to
$10,701,000 for the same period in 1995.
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"We will continue to grow our core business and pursue
opportunities to enhance our penetration in, and service to
niche markets," said Mr. Weber. "For example, we are planning
to reenter the Massachusetts workers' compensation market in
1997. We wrote profitable business there once before, got out
of the state as the regulatory environment deteriorated, and now
see a renewed opportunity."
Farm Family Casualty is a specialized, regional property and
casualty insurer of farms, agricultural-related businesses and
residents of rural and suburban communities.
Safe Harbor Statement under The Private Securities Litigation
Reform Act of 1995: All forward-looking information or
statements contained in this press release are based on
management's current knowledge of factors, all with inherent
risks and uncertainties, affecting Farm Family Holdings, Inc.'s
business. Actual results may differ materially if these
assumptions prove invalid. Significant risk factors as outlined
in the Prospectus dated July 22, 1996, pp. 10-15, include but
are not limited to: Variability of Operating Results, Geographic
Concentration of Business, Competition, and Effect of Regulation
and Reinsurance Considerations.
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<TABLE>
FARM FAMILY HOLDINGS, INC.
Condensed Consolidated Statements of Income
($ in thousands)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Premiums $33,015 $29,958 $96,881 $87,021
Net investment income 4,132 3,692 11,635 10,701
Realized investment gains
(losses), net (102) 306 (25) 198
Other income 219 189 689 580
--------- --------- --------- ---------
Total revenues 37,264 34,145 109,180 98,500
--------- --------- --------- ---------
Losses and Expenses:
Losses and loss adjustment
expenses 23,089 20,826 71,842 61,491
Underwriting expenses 9,120 8,774 27,087 25,184
Interest expense 33 54 141 162
Dividends to policyholders 43 43 156 134
--------- --------- --------- ---------
Total losses and expenses 32,285 29,697 99,226 86,971
--------- --------- --------- ---------
Income before federal income tax
expense and extraordinary item 4,979 4,448 9,954 11,529
Federal income tax expense 1,517 1,275 3,136 3,328
--------- --------- --------- ---------
Income before extraordinary item 3,462 3,173 6,818 8,201
Extraordinary item -
demutualization expenses 126 - 1,543 -
--------- --------- --------- ---------
Net income $3,336 $3,173 $5,275 $8,201
========= ========= ========= =========
Income before extraordinary
item per share $0.75 $1.06 $1.92 $2.73
========= ========= ========= =========
Net income per share $0.72 $1.06 $1.48 $2.73
========= ========= ========= =========
Net operating income per share (1) $0.76 $0.99 $1.92 $2.69
========= ========= ========= =========
Shares outstanding (2) 4,641,411 3,000,000 3,553,150 3,000,000
========= ========= ========= =========
(1) Operating income excludes the impact of realized capital
gains and losses and extraordinary items.
(2) Gives effect in the three month and nine month periods
ended September 30, 1995 to the allocation of 3,000,000 shares
to eligible policyholders' on July 26, 1996 pursuant to the
Company's conversion from a mutual company to a stockholder
owned company.
</TABLE>
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<TABLE>
FARM FAMILY HOLDINGS, INC.
Condensed Consolidated Balance Sheets
($ in thousands)
<CAPTION>
(Unaudited)
09/30/96 12/31/95
<S> <C> <C>
Assets:
Investments $237,560 $207,921
Cash 3,944 2,410
Insurance receivables 35,748 35,564
Deferred acquisition costs 11,299 10,527
Accrued investment income 4,224 4,260
Other assets 21,112 17,606
--------- ---------
Total Assets $313,887 $278,288
========= =========
Liabilities:
Reserves for losses and
loss adjustment expenses 138,090 137,978
Unearned premium reserve 58,451 52,799
Debt 1,309 2,707
Other liabilities 9,421 10,640
--------- ---------
Total liabilities 207,271 204,124
--------- ---------
Stockholders' equity 106,616 74,164
--------- ---------
Total Liabilities and
Stockholders' Equity $313,887 $278,288
========= =========
Book Value Per Share $20.29 $24.72
========= =========
Book Value Per Share
(excluding SFAS 115 adjustment) $19.47 $21.72
========= =========
Shares Outstanding 5,253,878 3,000,000 (1)
========= =========
(1) Gives effect to the allocation of 3,000,000 shares to
eligible policyholders on July 26, 1996 pursuant to the
Company's conversion from a mutual company to a stockholder
owned company.
</TABLE>
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