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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): April 13, 1998
Philadelphia Consolidated Holding Corp.
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(Exact name of Registrant as specified in its charter)
Pennsylvania 0-22280 23-2202671
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(State or other juris- (Commission (IRS Employer
diction of incorporation) File No.) Identification No.)
One Bala Plaza, Suite 100
Bala Cynwyd, Pennsylvania 19004
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 617-7900
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On April 13, 1998, Philadelphia Consolidated Holding Corp. (the "Company")
issued a press release announcing that A.M. Best Company had upgraded its rating
of the Company's insurance subsidiaries from "A" (Excellent) Class VII to "A+"
(Superior) Class VIII. A copy of the April 13, 1998 press release is filed
herewith as Exhibit 99.1.
On April 16, 1998, the Company issued a press release relating to its
results for the first quarter of 1998. A copy of the April 16, 1998 press
release is filed herewith as Exhibit 99.2.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
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(c) Exhibits.
Exhibit 99.1 Press Release dated April 13, 1998.
Exhibit 99.2 Press Release dated April 16, 1998.
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SIGNATURE
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.
Philadelphia Consolidated Holding Corp.
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(Registrant)
Date: April 16, 1998
By: /s/ Craig P. Keller
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Craig P. Keller
Vice President, Secretary
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit Description Method of Filing
- ------- ----------- ----------------
99.1 Press Release dated April 13, 1998. Filed electronically
herewith.
99.2 Press Release dated April 16, 1998. Filed electronically
herewith.
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Exhibit 99.1
[PHILADELPHIA CONSOLIDATED HOLDING CORP. LOGO]
[PHILADELPHIA CONSOLIDATED HOLDING CORP. LETTERHEAD]
PHILADELPHIA INSURANCE COMPANIES
(NASDAQ-PHLY)
April 13, 1998
For Immediate Release
- --------------------------------------------------------------------------------
Philadelphia Consolidated Holding Corp. today announced that A.M. Best Company
has upgraded their rating of the Company's insurance subsidiaries from "A"
(Excellent) Class VII to "A+" (Superior) Class VIII. In awarding the higher
rating, A.M. Best said "the rating action reflects the group's superior
operating performance, very strong capitalization, favorable loss reserve
development . . . successful diversification strategies, and its consistent
track record of growing profitability". A.M. Best went on to note that... "the
group's operating returns have been outstanding, with a five year pre-tax
return on premiums of 20% and underwriting profit in each of the past 10 years".
Philadelphia Insurance Companies markets and underwrites specialty property and
casualty insurance products through 38 proprietary underwriting offices across
the U.S. of A. It is debt free and is also rated "A" by Standard & Poor's.
<PAGE> 1
EXHIBIT 99.2
[PHILADELPHIA CONSOLIDATED HOLDING CORP. LOGO]
[PHILADELPHIA CONSOLIDATED HOLDING CORP. LETTERHEAD]
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PHILADELPHIA CONSOLIDATED HOLDING CORP.
FIRST QUARTER RESULTS
MARCH 31, 1998
APRIL 16, 1998 PRESS RELEASE
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Bala Cynwyd, PA--Philadelphia Consolidated Holding Corp. (PHLY-NASDAQ) today
reported net income for the first quarter ended March 31, 1998 increased 25.0%
to $4.5 million ($0.30 diluted earnings per share and $0.37 basic earnings per
share) vs. $3.6 million ($0.25 diluted earnings per share and $0.30 basic
earnings per share) for the same period in 1997. The Company's combined ratio
for the current quarter was 85.7% vs. 86.8% for the same quarter in 1997. Gross
written premiums, excluding involuntary plans, increased 17.2% in the quarter
to $40.3 million vs. $34.4 million in the first quarter 1997. Shareholders'
equity grew to $119.7 million ($9.74 per outstanding common share) as of
3/31/98 from $111.3 million ($9.09 per outstanding common share) at 12/31/97.
Additionally, the insurance subsidiaries' rating was upgraded by A.M. Best
Company to "A+" (Superior) from "A" (Excellent) and Standard & Poor's
reaffirmed its "A" rating for the insurance subsidiaries.
James J. Maguire, Chairman, President & CEO said "The first quarter developed
nicely with 90% retention of existing accounts and a good spread of new
business. The Preferred Agent Program is also developing as planned with four
new contracts executed during the quarter."
Philadelphia Insurance Companies, rated "A+ (Superior)" by A.M. Best Company,
and "A" by Standard & Poor's, markets and underwrites specialty property and
casualty insurance products through 38 proprietary underwriting offices across
the U.S. of A.
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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
As of
----------------------------------
March 31, December 31,
1998 1997
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(Unaudited)
<S> <C> <C>
ASSETS
INVESTMENTS:
FIXED MATURITIES AVAILABLE FOR SALE AT MARKET
(AMORTIZED COST $181,518 AND $165,052)...................................... $186,847 $170,678
EQUITY SECURITIES AT MARKET (COST $29,836
AND $29,501)................................................................ 53,205 46,988
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TOTAL INVESTMENTS......................................................... 240,052 217,666
CASH AND CASH EQUIVALENTS..................................................... 8,337 11,933
ACCRUED INVESTMENT INCOME..................................................... 2,488 2,786
PREMIUMS RECEIVABLE........................................................... 16,753 15,269
PREPAID REINSURANCE PREMIUMS AND REINSURANCE
RECEIVABLES................................................................. 18,432 18,573
DEFERRED ACQUISITION COSTS.................................................... 11,932 10,970
PROPERTY AND EQUIPMENT........................................................ 5,901 5,797
OTHER ASSETS.................................................................. 7,250 5,132
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TOTAL ASSETS.............................................................. $311,145 $288,126
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LIABILITIES AND SHAREHOLDERS' EQUITY
POLICY LIABILITIES AND ACCRUALS:
UNPAID LOSS AND LOSS ADJUSTMENT EXPENSES...................................... $128,081 $122,430
UNEARNED PREMIUMS............................................................. 44,964 42,116
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TOTAL POLICY LIABILITIES AND ACCRUALS..................................... 173,045 164,546
PAYABLE FOR SECURITY PURCHASES................................................ 4,895 --
OTHER LIABILITIES............................................................. 5,803 7,948
DEFERRED INCOME TAXES......................................................... 6,130 4,348
INCOME TAXES PAYABLE.......................................................... 1,571 --
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TOTAL LIABILITIES.......................................................... 191,444 176,842
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COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
PREFERRED STOCK $.01 PAR VALUE,
10,000,000 SHARES AUTHORIZED,
NONE ISSUED AND OUTSTANDING...............................................
COMMON STOCK, NO PAR VALUE,
50,000,000 SHARES AUTHORIZED, 12,284,870 AND
12,242,431 SHARES ISSUED AND OUTSTANDING.................................. 43,386 42,788
NOTES RECEIVABLE FROM SHAREHOLDERS............................................ (1,752) (1,422)
UNREALIZED INVESTMENT APPRECIATION
(DEPRECIATION), NET OF DEFERRED INCOME TAXES............................... 18,654 15,023
RETAINED EARNINGS............................................................. 59,413 54,895
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TOTAL SHAREHOLDERS' EQUITY................................................ 119,701 111,284
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY................................. $311,145 $288,126
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</TABLE>
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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(Unaudited)
<TABLE>
For the Three Months
Ended March 31,
------------------------
1998 1997
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<S> <C> <C>
REVENUE:
GROSS EARNED PREMIUMS ........................................ $ 37,466 $ 32,617
CEDED EARNED PREMIUMS ........................................ (10,551) (10,229)
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NET EARNED PREMIUMS .......................................... 26,915 22,388
NET INVESTMENT INCOME ........................................ 2,700 2,211
NET REALIZED INVESTMENT GAIN ................................. 3 28
OTHER INCOME ................................................. 57 57
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TOTAL REVENUE ........................................... 29,675 24,684
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LOSSES AND EXPENSES:
LOSS AND LOSS ADJUSTMENT EXPENSES ............................ 16,064 13,385
NET REINSURANCE RECOVERIES ................................... (1,206) (904)
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NET LOSS AND LOSS ADJUSTMENT EXPENSES ........................ 14,858 12,481
ACQUISITION COSTS AND OTHER UNDERWRITING EXPENSES ............ 8,219 6,946
OTHER OPERATING EXPENSES ..................................... 533 523
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TOTAL LOSSES AND EXPENSES ............................... 23,610 19,950
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INCOME BEFORE INCOME TAXES ........................................ 6,065 4,734
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INCOME TAX EXPENSE (BENEFIT):
CURRENT ...................................................... 1,720 1,562
DEFERRED ..................................................... (173) (450)
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TOTAL INCOME TAX EXPENSE ................................ 1,547 1,112
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NET INCOME .............................................. $ 4,518 $ 3,622
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PER AVERAGE SHARE DATA:
BASIC EARNINGS PER SHARE(1) .................................. $0.37 $0.30
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DILUTED EARNINGS PER SHARE(1) ................................ $0.30 $0.25
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WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING(1) ..................... 12,262,983 12,133,216
WEIGHTED-AVERAGE SHARE EQUIVALENTS OUTSTANDING(1) ................. 2,790,988 2,570,174
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WEIGHTED-AVERAGE SHARES AND SHARE EQUIVALENTS OUTSTANDING(1) ...... 15,053,971 14,703,390
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</TABLE>
(1) 1997 restated to reflect a two for one split of the Company's common stock
distributed in November 1997.
