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: April 22, 1997
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
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Item 5. Other Events
On April 22, 1997, Farm Family Holdings, Inc. issued a press release announcing
the company's operating results for the quarter ended March 31, 1997.
Item 7. Financial Statements and Exhibits
The following exhibits are filed as part of this report:
Exhibit Index
Exhibit 99 - Press Release
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)
April 22, 1997 /s/ Philip P. Weber
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(Date) Philip P. Weber
President and CEO
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EXHIBIT 99
For Release: Immediate
Contact: Timothy A. Walsh
Executive Vice President - Finance & Treasurer
(518) 431 - 5410
Farm Family Holdings Reports Continued Premium Growth and Increase in Operating
Earnings for the First Quarter Ended March 31, 1997
Glenmont, New York - April 22, 1997 - - Farm Family Holdings, Inc. (NYSE: FFH)
today announced that operating earnings for the first quarter ended March 31,
1997 increased to $3,115,000 from $781,000 for the same period in 1996. On a per
share basis, operating earnings for the first quarter of 1997 were $0.59
compared to $0.26 for the same period in 1996. Operating earnings exclude the
impact of realized investment gains (losses), extraordinary items, and the
related taxes thereon.
The increase in operating earnings is primarily attributable to increased
premium revenue, and reductions in the loss and loss adjustment expense ratio,
as well as the results of the Company's expense management program. In addition,
operating earnings for the first quarter of 1996 were adversely impacted by
abnormally high weather-related losses.
Philip P. Weber, President & CEO of Farm Family Holdings, Inc. said, "The
Company continues to enhance its penetration in the northeastern agribusiness
community and rural and suburban markets. The increase in operating earnings
reflects the continued execution of our strategy to grow profitably. We are
focused on providing outstanding service to our customers and creating value for
our shareholders."
Premiums
Premium revenue increased 10.4% to $34,973,000 for the first quarter of 1997
compared to $31,676,000 for the same period in 1996. Net written premiums
increased 12.1% to $36,728,000 for the first quarter of 1997 compared to
$32,752,000 for the same period in 1996. The increase in net written premiums is
primarily attributable to the growth in direct writings to the customers we
serve and to a lesser extent, an increase in the Company's voluntary assumed
reinsurance business.
Mr. Weber said, "We have continued to increase writings of all of our primary
products: personal and commercial automobile, the Special Farm Package,
businessowners, and homeowners products. The increase in our direct writings
during the first quarter of 1997 came from New Jersey, New York, Massachusetts,
Connecticut, Delaware, West Virginia, and Rhode Island."
Combined Ratio
Farm Family Casualty Insurance Company's statutory combined ratio was 98.4% for
the first quarter of 1997 compared to 107.2% for the same period in 1996. Loss
and loss adjustment
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expenses were 70.6% of premium revenue for the first quarter of 1997 compared to
81.2% for the same period in 1996. The reduction in the loss and loss adjustment
expense ratio was primarily attributable to fewer weather-related losses
incurred during the first quarter of 1997 as compared to the same period in
1996.
Investment Income
Net investment income for the first quarter of 1997 was $4,416,000 compared to
$3,858,000 for the same period in 1996.
Net Income
Net income for the first quarter of 1997 increased to $3,056,000 compared to
$302,000 for the same period in 1996. On a per share basis, net income for the
first quarter of 1997 was $0.58 compared to $0.10 for the same period in 1996.
Net income for the first quarter of 1996 included the impact of abnormally high
weather-related losses and a nonrecurring charge of $521,000 related to the
conversion of Farm Family Casualty from a mutual company to a stockholder owned
company.
Mr. Weber said, "This represents the Company's third consecutive quarter of
profitable underwriting results. The favorable operating results reflect our
knowledge of the market we serve and our focus on profitable growth."
At the annual meeting of shareholders held today, the nominees for directors
were elected, the appointment of Coopers & Lybrand as the Company's auditors for
1997 was ratified and the Company's Omnibus Securities Plan was approved.
Farm Family Casualty Insurance Company is a specialized, regional property and
casualty insurer of farms, agricultural related businesses, and residents and
businesses of rural and suburban communities.
Safe Harbor Statement under The Private Securities Litigation Reform Act of
1995: All forward looking information or statements contained in this press
release are based on management's current knowledge of factors, and are subject
to a number of important risks and uncertainties that could cause actual results
to differ materially. These risks and uncertainties include, but are not limited
to, the risk factors outlined in the Company's SEC filings, including the 1996
Form 10-K and the Prospectus dated July 22, 1996.
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FARM FAMILY HOLDINGS, INC.
Condensed Consolidated Statements of Income
($ in thousands except per share data)
<CAPTION>
(Unaudited)
Three Months Ended
March 31,
1997 1996
Revenues:
<S> <C> <C>
Premiums $34,973 $31,676
Net investment income 4,416 3,858
Realized investment gains (losses), net (90) 63
Other income 220 213
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Total Revenues 39,519 35,810
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Losses and Expenses:
Losses and loss adjustment expenses 24,697 25,722
Underwriting expenses 10,090 8,787
Interest expense 26 54
Dividends to policyholders 38 27
--------------------------
Total Losses and Expenses 34,851 34,590
--------------------------
Income before federal income tax expense and extraordinary item 4,668 1,220
--------------------------
Federal income tax expense 1,612 397
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Income before extraordinary item 3,056 823
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Extraordinary item - demutualization expenses - 521
--------------------------
Net Income $3,056 $302
--------------------------
Net operating income per share (1) $0.59 $0.26
--------------------------
Income before extraordinary item per share $0.58 $0.27
--------------------------
Net income per share $0.58 $0.10
--------------------------
Weighted average shares outstanding (2) 5,253,813 3,000,000
--------------------------
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(1) Operating income excludes the impact of realized investment gains (losses),
extraordinary items, and the related taxes thereon.
(2) Gives effect to the allocation of 3,000,000 shares to eligible policyholders
on July 26, 1996 pursuant to Farm Family Casualty Insurance Company's conversion
from a mutual company to a stockholder owned company.
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FARM FAMILY HOLDINGS, INC.
Condensed Consolidated Balance Sheets
($ in thousands except per share data)
<CAPTION>
(Unaudited)
3/31/97 12/31/96
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Assets:
<S> <C> <C>
Investments $247,969 $244,704
Cash 3,886 4,110
Insurance receivables 35,955 33,406
Deferred acquisition costs 10,721 10,682
Accrued investment income 4,473 4,861
Other assets 23,759 21,649
--------------------------------
Total Assets $326,763 $319,412
--------------------------------
Liabilities:
Reserves for losses and loss adjustment expenses 143,205 141,220
Unearned premium reserve 58,143 55,945
Debt 1,293 1,304
Other liabilities 13,320 10,202
--------------------------------
Total Liabilities 215,961 208,671
--------------------------------
Stockholders' equity 110,802 110,741
--------------------------------
Total Liabilities and Stockholders' Equity $326,763 $319,412
--------------------------------
Book Value Per Share $21.09 $21.08
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Book Value Per Share (excluding SFAS 115 adjustment) $20.38 $19.80
--------------------------------
Shares Outstanding 5,253,813 5,253,813
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<TABLE>
<CAPTION>
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Farm Family Casualty Insurance Company
Quarterly Statutory Combined Ratio (1)
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Q1 Q2 Q3 Q4
-- -- -- --
<S> <C> <C> <C> <C> <C>
1995 100.3 102.4 100.5 100.0
1996 107.2 100.5 96.9 98.7
1997 98.4 N/A N/A N/A
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(1) Excludes the expenses related to the Company's conversion from
a mutual company to a stockholder owned company.
</TABLE>
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