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Fremont Michigan InsuraCorp, Inc. Reports Earnings for First Quarter 2009
May 4, 2009 4:30:00 PM
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View Additional ProfilesFREMONT, MI -- (MARKET WIRE) -- 05/04/09 -- Fremont Michigan InsuraCorp, Inc. (Fremont) (OTCBB: FMMH)
-- Net income of $.16 per diluted share in first quarter
-- Combined ratio of 104% for first quarter
-- Book value per share of $22.58 at March 31, 2009
-- Cash dividend paid of $.03 per share
Fremont Michigan InsuraCorp, Inc. (Fremont) (OTCBB: FMMH) today reported our financial results for the first quarter of 2009.
Our net income was $278,000 or $.16 per diluted share in the first quarter of 2009 compared to $1.1 million, or $.61 per diluted share, for the same period a year ago. Operating income was $133,000, or $.08 per share, compared to $1.4 million, or $.83 per share, for the same period a year ago.
The decline in earnings for the first quarter of 2009 is due primarily to increased fire losses concentrated in our homeowner's line and farm segment.
Consolidated Highlights Three Months Ended March 31,
(Unaudited) ----------------------------------------
2009 2008 %
Consolidated revenues $ 13,662,893 $ 12,029,884 13.6%
Net income $ 278,108 $ 1,104,454 -74.8%
Weighted average shares
outstanding 1,744,533 1,779,985 -2.0%
Basic earnings per share $ 0.16 $ 0.62 -74.2%
Diluted earnings per share $ 0.16 $ 0.61 -73.8%
Operating income (1) $ 133,365 $ 1,471,749 -90.9%
Operating income per share (1) $ 0.08 $ 0.83 -90.4%
Cash dividends declared per share $ 0.03 $ - N/M
Book value per share $ 22.58 $ 22.31 1.2%
(1) Please refer to the Non-GAAP financial measures section of this
release for further explanation of this measure.
"The property and casualty business exists for the purpose of managing risk and protecting against the unexpected," stated Richard E. Dunning, President and CEO. "A major risk has always been weather and related exposure from prolonged cold periods, and weather activity adversely impacted our first quarter results. Our business model is strong and focused and is supported by a superior agent network," he added.
Consolidated Statement of Income Three Months Ended
March 31,
--------------------------
2009 2008
------------ ------------
Direct premiums written $ 14,415,684 $ 12,063,702
============ ============
Net premiums written $ 11,742,814 $ 9,576,866
============ ============
Net premiums earned $ 12,820,881 $ 11,216,905
Loss and LAE 9,221,193 6,336,499
Policy acquisition and other underwriting
expenses 4,111,674 4,063,034
------------ ------------
Underwriting gain (loss) (511,986) 817,372
Other revenue items
Net investment income 501,185 516,236
Net realized gains on investments 196,661 158,602
Other income 144,166 138,141
------------ ------------
Total other revenue items 842,012 812,979
------------ ------------
Income before federal income taxes 330,026 1,630,351
Federal income tax expense 51,918 525,897
------------ ------------
Net income $ 278,108 $ 1,104,454
============ ============
Earnings per share
Basic $ .16 $ .62
Diluted $ .16 $ .61
Loss and LAE ratio (1) 71.9% 56.5%
Policy acquisition and other underwriting
expense ratio (1) 32.1% 36.2%
Combined ratio (1) 104.0% 92.7%
(1) Please refer to the Non-GAAP financial measures section of this
release for further explanation of this measure.
Direct premiums written increased 19.5% during the quarter led by our commercial segment, up 30.3%, while the personal and farm segments grew by 18.3% and 14.8%, respectively. Commercial growth came from commercial auto, business owners (BOP), commercial package (CPP) and workers compensation. We have benefited from the solid relationships we have with our agency force and have been able to be very selective in the type of commercial risks we write. The majority of our new commercial business has come from our preferred agents who have a track record of submitting profitable commercial business. We continue to execute on our strategy of expanding our commercial business which reduces our susceptibility to weather related property losses.
Growth in the personal segment came from homeowners and personal auto which were up 13.9% and 21.7%, respectively. Since December 31, 2008, the in-force policy count for homeowners and personal auto is up 1.6% and 4.8%, respectively. Personal lines growth continues to be driven by our efforts of working with agencies on obtaining target market business, providing competitive products and the ease of doing business afforded to agents who utilize our web based platform -- Fremont Complete. The continued growth in personal auto is also attributable to our focus on obtaining the companion auto policy when we already provide the homeowners coverage. Over time, this multi-policy focus results in increased policy retention and improved profitability.
Our underwriters continue to maintain their discipline and selectivity when it comes to underwriting a risk. Furthermore, while the regulatory environment in Michigan remains a challenge when it comes to implementing personal lines rate increases, we are confident that our pricing structure and recent rate increases will provide a consistent level of profitability over time.
Our loss and LAE ratio for personal auto improved to 65.6% in the first quarter of 2009 compared to 69.1% in the first quarter of 2008. While we are pleased with the improved ratio in personal auto our overall loss and LAE ratio was negatively impacted during the first quarter of 2009 by increased fire losses in the homeowner's line and the farm segment coupled with higher losses from the colder weather experienced during the first two months of 2009.
The Company's expense ratio dropped to 32.1% in the first quarter of 2009 compared to 36.2% in the first quarter of 2008. The declining expense ratio is driven by growth in net premiums earned, particularly personal auto which provides a lower commission, lower assessments from state mandated pools and associations in 2009 and a lower depreciation expense.
Kevin G. Kaastra, Vice President of Finance, stated, "Fire and weather related losses impacted our results during the first quarter which elevated our combined ratio and reduced our operating income. However, despite these challenges, book value per share held at $22.58 as of March 31, 2009 compared to $22.59 as of December 31, 2008 as a result of net investment income and realized gains on the investment portfolio."
Investments
Gross investment income was down 2.9% in the first quarter of 2009 compared to 2008 due to a decline in income from cash and cash equivalents. Overall, the interest rate environment in the first quarter of 2009 was lower than in the first quarter of 2008. The fixed portfolio's tax equivalent book yield and effective duration were 4.1% and 3.89 years, respectively, as of March 31, 2009 compared to 5.29% and 5.33 years, respectively, as of March 31, 2008. The decrease in duration has produced a portfolio more defensive to a potential rise in interest rates. Over the last four quarters, the portfolio has been positioned to reduce both credit risk and interest rate risk going forward.
Non-GAAP Financial Measures
We believe that disclosure of certain Non-GAAP financial measures enhances investor understanding of our financial performance. The following Non-GAAP financial measures are utilized in this release:
Operating income is income before federal income tax expense excluding net realized investment gains. Because our calculation may differ from similar measurements used by other companies, investors should be careful when comparing our measure of operating income to that of other companies. We include this measurement because we believe it illustrates the performance of normal, ongoing operation, which is important in understanding and evaluating the company's financial condition and results of operations.
Combined ratio is a commonly used financial measure of underwriting performance. A combined ratio below 100 percent generally indicates a profitable book of business. The combined ratio is the sum of two separately calculated ratios, the loss and loss adjustment expense ratio (referred to as the "loss and LAE ratio") and the expense ratio. When prepared in accordance with GAAP, the loss and LAE ratio is calculated by dividing the sum of losses and loss adjustment expenses by net premium earned. The expense ratio is calculated by dividing policy acquisition and other underwriting expenses by net premiums earned.
About Fremont Michigan InsuraCorp, Inc.
Fremont Michigan InsuraCorp, Inc. is the holding company for Fremont Insurance Company. Headquartered in Fremont, Michigan, the company provides property and casualty insurance to individuals, farms and small businesses exclusively in Michigan. Fremont Michigan InsuraCorp's common stock is listed on the OTC Bulletin Board (OTCBB) under the symbol "FMMH."
Certain of the statements contained herein (other than statements of historical facts) are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include estimates and assumptions related to economic, competitive and legislative developments. These forward-looking statements are subject to change and uncertainty that are, in many instances, beyond the company's control and have been made based upon management's expectations and beliefs concerning future developments and their potential effect on Fremont Michigan InsuraCorp, Inc. For a list of factors which could affect the Company's results, see the Company's filings with the Securities and Exchange Commission, including "Item 1A. Risk Factors," set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008. There can be no assurance that future developments will be in accordance with management's expectations so that the effect of future developments on the Company will be those anticipated by management.
Consolidated Balance Sheets
March 31, December 31,
Assets 2009 2008
------------ ------------
Investments:
Fixed maturities available for sale, at fair
value $ 49,049,685 $ 53,958,783
Equity securities available for sale, at fair
value 4,154,359 4,560,368
Mortgage loans on real estate from related
parties 244,240 247,000
------------ ------------
Total investments 53,448,284 58,766,151
Cash and cash equivalents 10,706,028 6,576,564
Premiums due from policyholders, net 9,080,923 8,888,334
Amounts due from reinsurers 8,028,405 6,844,407
Prepaid reinsurance premiums 504,027 465,006
Accrued investment income 523,684 594,776
Deferred policy acquisition costs 3,499,282 3,596,147
Deferred federal income taxes 4,859,618 4,741,726
Property and equipment, net of accumulated
depreciation 2,487,461 2,455,766
Other assets 6,969 30,670
------------ ------------
$ 93,144,681 $ 92,959,547
============ ============
Liabilities and Stockholders' Equity
Liabilities:
Losses and loss adjustment expenses $ 22,229,849 $ 21,369,524
Unearned premiums 24,395,856 25,455,624
Reinsurance funds withheld and premiums ceded
payable 11,142 161,845
Accrued expenses and other liabilities 6,899,554 6,657,625
------------ ------------
Total liabilities 53,536,401 53,644,618
------------ ------------
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value, authorized
4,500,000 shares, no shares issued and
outstanding - -
Class A common stock, no par value, authorized
5,000,000 shares, 1,754,485 and 1,740,154
shares issued and outstanding at March 31,
2009 and December 31, 2008, respectively - -
Class B common stock, no par value, authorized
500,000 shares, no shares issued and
outstanding - -
Additional paid-in capital 8,864,129 8,653,443
Retained earnings 32,731,007 32,507,143
Accumulated other comprehensive income (loss) (1,986,856) (1,845,657)
------------ ------------
Total stockholders' equity 39,608,280 39,314,929
------------ ------------
Total liabilities and stockholders' equity $ 93,144,681 $ 92,959,547
============ ============
Contact:
Kevin Kaastra
Vice President of Finance
231-924-0300
Fremont Michigan InsuraCorp, Inc. Reports 2008 Annual and Fourth Quarter Earnings
Monday February 23, 8:00 am ET
2008 Annual Net Income of $2.08 per Diluted Share; Fourth Quarter Net Income of $0.13 per Diluted Share; 2008 Annual Combined Ratio of 94.5%; Fourth Quarter Combined Ratio of 104.8%; Book Value per Share of $22.59
FREMONT, MI--(MARKET WIRE)--Feb 23, 2009 -- Fremont Michigan InsuraCorp, Inc. (Fremont) (OTC BB:FMMH.OB - News) today reported net income for the year ended December 31, 2008 of $3.8 million, or $2.08 per diluted share, compared to $4.9 million, or $2.69 per diluted share, for the year ended December 31, 2007. Operating income in the current year was $5.5 million, or $3.09 per share, compared to $4.9 million, or $2.78 per share, in the prior year, an increase of 11.2%.
Net income for the fourth quarter of 2008 was $237,000, or $.13 per diluted share, compared to $2.4 million, or $1.32 per diluted share, for the quarter ended December 31, 2007. Operating income in the current year quarter was $174,000, or $.10 per share, compared to $2.8 million, or $1.59 per share, in the prior year quarter.
Consolidated
Highlights Three Months Ended December 31, Year Ended December 31,
------------------------------ ------------------------------
(Unaudited) 2008 2007 % 2008 2007 %
Consolidated
revenues $13,281,460 $12,327,267 7.7% $50,204,186 $47,388,150 5.9%
Net income $ 237,282 $ 2,399,813 -90.1% $ 3,760,588 $ 4,884,358 -23.0%
Weighted
average
shares
outstanding 1,748,143 1,779,280 -1.7% 1,770,025 1,779,065 -0.5%
Basic
earnings per
share $ 0.14 $ 1.35 -89.6% $ 2.12 $ 2.75 -22.9%
Diluted
earnings per
share $ 0.13 $ 1.32 -90.2% $ 2.08 $ 2.69 -22.7%
Operating
income
(loss) (1) $ 173,516 $ 2,820,460 -93.8% $ 5,464,237 $ 4,943,050 10.5%
Operating
income per
share (1) $ 0.10 $ 1.59 -93.7% $ 3.09 $ 2.78 11.2%
Cash
dividends
declared per
share $ 0.03 $ - $ 0.06 $ -
Book value
per share $ 22.59 $ 22.16 1.9% $ 22.59 $ 22.16 1.9%
(1) Please refer to the Non-GAAP financial measures section of this
release for further explanation of this measure.
Consolidated Statement of Income
Three Months Ended Year Ended
December 31, December 31,
---------------------------- ----------------------------
2008 2007 2008 2007
------------- ------------- ------------- -------------
Direct premiums
written $ 15,749,781 $ 13,564,772 $ 60,882,499 $ 53,956,318
============= ============= ============= =============
Net premiums
written $ 12,867,846 $ 10,952,595 $ 50,025,098 $ 44,003,623
============= ============= ============= =============
Net premiums
earned $ 12,441,291 $ 11,033,800 $ 47,503,121 $ 42,773,737
Loss and LAE 9,212,659 4,739,271 29,019,298 24,424,346
Policy
acquisition
and other
underwriting
expenses 3,828,840 4,235,825 15,847,386 15,896,842
------------- ------------- ------------- -------------
Underwriting
gain (loss) (600,208) 2,058,704 2,636,437 2,452,549
Other revenue
(expense)
items
Net investment
income 598,125 628,308 2,212,972 2,165,070
Net realized
gains
(losses) on
investments 66,445 531,711 (126,735) 1,977,742
Other income 175,599 133,448 614,828 471,601
Interest
expense - - - (146,170)
------------- ------------- ------------- -------------
Total other
revenue
(expense)
items 840,169 1,293,467 2,701,065 4,468,243
------------- ------------- ------------- -------------
Income before
federal income
taxes 239,961 3,352,171 5,337,502 6,920,792
Federal income
tax expense 2,679 952,358 1,576,914 2,036,434
------------- ------------- ------------- -------------
Net income $ 237,282 $ 2,399,813 $ 3,760,588 $ 4,884,358
============= ============= ============= =============
Earnings per
share
Basic $ .14 $ 1.35 $ 2.12 $ 2.75
Diluted $ .13 $ 1.32 $ 2.08 $ 2.69
Loss and LAE
ratio 74.0% 43.0% 61.1% 57.1%
Policy
acquisition
and other
underwriting
expense ratio 30.8% 38.4% 33.4% 37.2%
Combined ratio 104.8% 81.4% 94.5% 94.3%
Consolidated Balance Sheets
December 31, December 31,
Assets 2008 2007
------------ -------------
Investments:
Fixed maturities available for sale, at fair
value $ 53,958,783 $ 50,528,874
Equity securities available for sale, at fair
value 4,560,368 8,305,133
Mortgage loans on real estate from related
parties 247,000 253,656
------------ -------------
Total investments 58,766,151 59,087,663
Cash and cash equivalents 6,576,564 4,033,158
Premiums due from policyholders, net 8,888,334 7,852,730
Amounts due from reinsurers 6,844,407 6,588,847
Prepaid reinsurance premiums 465,006 258,875
Accrued investment income 594,776 533,843
Deferred policy acquisition costs 3,596,147 3,334,001
Deferred federal income taxes 4,741,726 2,920,648
Property and equipment, net of accumulated
depreciation 2,455,766 2,500,988
Other assets 30,670 43,905
------------ -------------
$ 92,959,547 $ 87,154,658
============ =============
Liabilities and Stockholders' Equity
Liabilities:
Losses and loss adjustment expenses $ 21,369,524 $ 18,058,919
Unearned premiums 25,455,624 22,727,515
Reinsurance funds withheld and premiums ceded
payable 161,845 199,463
Accrued expenses and other liabilities 6,657,625 6,742,803
------------ -------------
Total liabilities 53,644,618 47,728,700
------------ -------------
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value, authorized
4,500,000 shares, no shares
issued and outstanding - -
Class A common stock, no par value, authorized
5,000,000 shares, 1,740,154 and 1,779,321
shares issued and outstanding at December 31,
2008 and 2007, respectively - -
Class B common stock, no par value, authorized
500,000 shares, no shares issued and
outstanding - -
Additional paid-in capital 8,653,443 7,722,424
Retained earnings 32,507,143 30,395,771
Accumulated other comprehensive income (loss) (1,845,657) 1,307,763
------------ -------------
Total stockholders' equity 39,314,929 39,425,958
------------ -------------
Total liabilities and stockholders' equity $ 92,959,547 $ 87,154,658
============ =============
Fremont Michigan InsuraCorp, Inc. Reports Third Quarter 2008 Net Income of $1.3 Million, or $0.72 per Share
Monday November 10, 8:00 am ET
FREMONT, Mich., Nov. 10 /PRNewswire-FirstCall/ -- Fremont Michigan InsuraCorp, Inc. (Fremont) (OTC Bulletin Board: FMMH - News) today reported:
-- Third quarter recognized net income of $1.3 million, or $0.72 per
diluted share / $3.5 million, or $1.94 per diluted share, year-to-date
-- Third quarter combined ratio registered of 87.1% / 90.8%, year-to-date
-- Third quarter operating income of $2.3 million / $5.3 million,
year-to-date
-- Book value of $22.65 per share as of September 30, 2008
Consolidated Highlights Three Months Ended September 30,
(Unaudited) 2008 2007 %
Consolidated revenues $12,430,693 $12,647,956 -1.7%
Net income $1,301,866 $569,490 128.6%
Weighted average shares outstanding 1,771,044 1,779,280 -0.5%
Basic earnings per share $0.74 $0.32 131.3%
Diluted earnings per share $0.72 $0.31 132.3%
Operating income (loss) (1) $2,281,000 $(348,002) 755.5%
Operating income per share (1) $1.29 $(0.20) 745.0%
Book value per share $22.65 $20.79 8.9%
Consolidated Highlights Nine Months Ended September 30,
(Unaudited) 2008 2007 %
Consolidated revenues $36,922,726 $35,060,883 5.3%
Net income $3,523,306 $2,484,545 41.8%
Weighted average shares outstanding 1,777,364 1,778,992 -0.1%
Basic earnings per share $1.98 $1.40 41.4%
Diluted earnings per share $1.94 $1.37 41.6%
Operating income (loss) (1) $5,290,721 $2,122,590 149.3%
Operating income per share (1) $2.98 $1.19 150.4%
Book value per share $22.65 $20.79 8.9%
(1) Please refer to the Non-GAAP financial measures section of this
release for further explanation of this measure.
Consolidated
Statements of
Operations Three Months Ended Nine Months Ended
(Unaudited) September 30, September 30,
2008 2007 2008 2007
Revenues:
Direct premiums
written $16,620,491 $14,892,593 $45,132,718 $40,391,546
Net premiums written $13,920,858 $12,399,487 $37,157,252 $33,051,028
Net premiums earned $12,066,502 $10,874,446 $35,061,830 $31,739,937
Net investment income 563,572 527,002 1,614,847 1,536,762
Net realized gains
(losses) on
investments (351,782) 1,124,059 (193,180) 1,446,031
Other income, net 152,401 122,449 439,229 338,153
Total revenues 12,430,693 12,647,956 36,922,726 35,060,883
Expenses:
Losses and loss
adjustment expenses,
net 6,559,562 7,768,458 19,806,639 19,685,075
Policy acquisition
and other
underwriting
expenses 3,941,913 4,058,431 12,018,546 11,661,017
Interest expense - 45,010 - 146,170
Total expenses 10,501,475 11,871,899 31,825,185 31,492,262
Income before
federal income tax
expense 1,929,218 776,057 5,097,541 3,568,621
Federal income tax
expense 627,352 206,567 1,574,235 1,084,076
Net income $1,301,866 $569,490 $3,523,306 $2,484,545
Earnings per share
Basic $.74 $.32 $1.98 $1.40
Diluted $.72 $.31 $1.94 $1.37
Combined ratio:
Loss and LAE ratio 54.4% 71.4% 56.5% 62.0%
Expense ratio 32.7% 37.3% 34.3% 36.7%
Combined ratio 87.1% 108.7% 90.8% 98.7%
Consolidated Balance Sheets September 30, December 31,
(Unaudited) 2008 2007
Assets
Investments:
Fixed maturities available for
sale, at fair value $52,866,633 $50,528,874
Equity securities available for
sale, at fair value 6,245,502 8,305,133
Mortgage loans on real estate from
related parties 248,212 253,656
Total investments 59,360,347 59,087,663
Cash and cash equivalents 5,764,437 4,033,158
Premiums due from policyholders, net 8,766,527 7,852,730
Amounts due from reinsurers 6,034,673 6,588,847
Prepaid reinsurance premiums 409,335 258,875
Accrued investment income 612,877 533,843
Deferred policy acquisition costs 3,551,265 3,334,001
Deferred federal income taxes 4,461,070 2,920,648
Property and equipment, net of
accumulated depreciation 2,500,906 2,500,988
Other assets 5,376 43,905
$91,466,813 $87,154,658
Liabilities and Stockholders' Equity
Liabilities:
Losses and loss adjustment expenses $18,193,233 $18,058,919
Unearned premiums 24,973,398 22,727,515
Reinsurance balances payable 48,665 199,463
Accrued expenses and other liabilities 8,367,598 6,742,803
Total liabilities 51,582,894 47,728,700
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value,
authorized 4,500,000 shares, no
shares issued and outstanding - -
Class A common stock, no par
value, authorized 5,000,000
shares, 1,761,154 and 1,779,321
shares issued and outstanding at
September 30, 2008 and December
31, 2007, respectively - -
Class B common stock, no par
value, authorized 500,000 shares,
no shares issued and outstanding - -
Additional paid-in capital 8,728,816 7,722,424
Retained earnings 32,580,726 30,395,771
Accumulated other comprehensive
(loss) income (1,425,623) 1,307,763
Total stockholders' equity 39,883,919 39,425,958
Total liabilities and
stockholders' equity $91,466,813 $87,154,658
Fremont Michigan InsuraCorp, Inc. Announces Quarterly Cash Dividend, Share Repurchases and Election of Officers
FREMONT, Mich., Oct. 20 /PRNewswire-FirstCall/ -- Fremont Michigan InsuraCorp, Inc. (Fremont) (OTC Bulletin Board: FMMH) announced today that its Board of Directors has declared a quarterly cash dividend of $0.03 per share on the common stock of the Company payable on December 30, 2008 to the shareholders of record at the close of business on December 10, 2008.
Richard E. Dunning, President and CEO stated, "We remain focused on both growth and profitability to successfully enhance shareholder value. We have also been active in repurchasing shares under our previously announced share repurchase plan."
On May 8, 2008, the Board of Directors authorized share repurchases up to 100,000 shares. During July 2008, the Company repurchased 10,000 shares at an average price of $18.49 and in September 2008, the Company repurchased 10,000 shares at an average price of $18.80.
"We are also very proud of the fact that the Company was recently recognized with the national 'Ease of Doing Business' award by the Applied Systems Client Network, the user group for Applied Systems agency management technology," stated Dunning. "This award, along with being ranked in the 'Top Five' performing companies by the Michigan Association of Insurance Agents, is evidence of the excellent momentum we have generated in the Michigan market."
The Company also announced that the Board of Directors has elected Kent B. Shantz, Executive Vice President and Chief Operating Officer and David Mangin, Executive Vice President and Chief Information Officer to be officers of the Company.
About Fremont Michigan InsuraCorp, Inc.
Fremont Michigan InsuraCorp, Inc. is the holding company for Fremont Insurance Company. Headquartered in Fremont, Michigan, the company provides property and casualty insurance to individuals, farms and small businesses exclusively in Michigan. Fremont Michigan InsuraCorp's common stock is listed on the OTC Bulletin Board (OTCBB) under the symbol "FMMH."
Certain of the statements contained herein (other than statements of historical facts) are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include estimates and assumptions related to economic, competitive and legislative developments. These forward- looking statements are subject to change and uncertainty that are, in many instances, beyond the company's control and have been made based upon management's expectations and beliefs concerning future developments and their potential effect on Fremont Michigan InsuraCorp, Inc. For a list of factors which could affect the Company's results, see the Company's filings with the Securities and Exchange Commission, including "Item 1A. Risk Factors," set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007. There can be no assurance that future developments will be in accordance with management's expectations so that the effect of future developments on the Company will be those anticipated by management.
SOURCE Fremont Michigan InsuraCorp, Inc.
I sold out of my small position in FMMH today.
Mike
Fremont Michigan InsuraCorp, Inc. Reports Second Quarter 2008 Net Income of $1.1 Million, or $0.62 per Share
Wednesday August 6, 8:00 am ET
FREMONT, Mich., Aug. 6 /PRNewswire-FirstCall/ -- Fremont Michigan InsuraCorp, Inc. (Fremont) (OTC Bulletin Board: FMMH - News) today reported:
-- Second quarter recognized net income of $1.1 million, or $0.62 per
diluted share / $2.2 million, or $1.22 per diluted share, year-to-date
-- Second quarter revenues grow to $12.5 million / $24.5 million,
year-to-date
-- Second quarter combined ratio registered of 92.8% / 92.7%, year-to-date
-- Book value increased to $22.74 per share as of June 30, 2008
Consolidated Highlights
Quarter Ended June 30, Six Months Ended June 30,
2008 2007 % 2008 2007 %
Consolidated
revenues $12,462,149 $11,523,842 8.1% $24,492,033 $22,412,927 9.3%
Net income $1,116,986 $1,111,580 0.5% $2,221,440 $1,915,055 16.0%
Weighted
average
shares
outstanding 1,781,154 1,779,280 0.1% 1,780,581 1,778,847 0.1%
Basic earnings
per share $0.63 $0.62 1.6% $1.25 $1.08 15.7%
Diluted earnings
per share $0.62 $0.61 1.6% $1.22 $1.06 15.1%
Operating
income (1) $1,537,972 $1,338,870 14.9% $3,009,721 $2,470,592 21.8%
Operating
income per
share (1) $0.86 $0.75 14.7% $1.69 $1.39 21.6%
Book value per
share $22.74 $20.60 10.4% $22.74 $20.60 10.4%
(1) Please refer to the Non-GAAP financial measures section of this
release for further explanation of this measure.
Consolidated
Statements of
Operations Three Months Ended Six Months Ended
(Unaudited) June 30, June 30,
2008 2007 2008 2007
Revenues:
Direct premiums
written $16,448,525 $14,536,048 $28,512,227 $25,498,953
Net premiums written $13,659,528 $12,019,732 $23,236,394 $20,651,541
Net premiums earned $11,778,423 $10,600,198 $22,995,328 $20,865,491
Net investment income 535,039 518,353 1,051,275 1,009,760
Net realized gains
(losses) on
investments - 293,993 158,602 321,972
Other income, net 148,687 111,298 286,828 215,704
Total revenues 12,462,149 11,523,842 24,492,033 22,412,927
Expenses:
Losses and loss
adjustment expenses,
net 6,910,578 6,085,947 13,247,077 11,916,617
Policy acquisition
and other
underwriting
expenses 4,013,599 3,754,452 8,076,633 7,602,586
Interest expense - 50,580 - 101,160
Total expenses 10,924,177 9,890,979 21,323,710 19,620,363
Income before
federal income tax
expense 1,537,972 1,632,863 3,168,323 2,792,564
Federal income tax
expense 420,986 521,283 946,883 877,509
Net income $1,116,986 $1,111,580 $2,221,440 $1,915,055
Earnings per share
Basic $.63 $.62 $1.25 $1.08
Diluted $.62 $.61 $1.22 $1.06
Combined ratio:
Loss and LAE ratio 58.7% 57.4% 57.6% 57.1%
Expense ratio 34.1% 35.4% 35.1% 36.4%
Combined ratio 92.8% 92.8% 92.7% 93.5%
Consolidated Balance Sheets June 30, December 31,
(Unaudited) 2008 2007
Assets
Investments:
Fixed maturities available for
sale, at fair value $52,251,394 $50,528,874
Equity securities available for
sale, at fair value 7,613,834 8,305,133
Mortgage loans on real estate from
related parties 250,137 253,656
Total investments 60,115,365 59,087,663
Cash and cash equivalents 4,375,054 4,033,158
Premiums due from policyholders, net 8,409,165 7,852,730
Amounts due from reinsurers 6,362,256 6,588,847
Prepaid reinsurance premiums 385,440 258,875
Accrued investment income 565,764 533,843
Deferred policy acquisition costs 3,294,953 3,334,001
Deferred federal income taxes 3,538,262 2,920,648
Property and equipment, net of
accumulated depreciation 2,563,189 2,500,988
Other assets 4,812 43,905
$89,614,260 $87,154,658
Liabilities and Stockholders' Equity
Liabilities:
Losses and loss adjustment
expenses $18,641,446 $18,058,919
Unearned premiums 23,085,792 22,727,515
Reinsurance balances payable 54,284 199,463
Accrued expenses and other liabilities 7,325,198 6,742,803
Total liabilities 49,106,720 47,728,700
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value,
authorized 4,500,000 shares, no
shares issued and outstanding - -
Class A common stock, no par
value, authorized 5,000,000
shares, 1,781,154 and 1,779,321
shares issued and outstanding at
June 30, 2008 and December 31,
2007, respectively - -
Class B common stock, no par
value, authorized 500,000 shares,
no shares issued and outstanding - -
Additional paid-in capital 7,790,353 7,722,424
Retained earnings 32,617,211 30,395,771
Accumulated other comprehensive income 99,976 1,307,763
Total stockholders' equity 40,507,540 39,425,958
Total liabilities and
stockholders' equity $89,614,260 $87,154,658
Fremont Michigan InsuraCorp, Inc. Announces Declaration of First Quarterly Cash Dividend
Tuesday July 22, 8:00 am ET
FREMONT, Mich., July 22 /PRNewswire-FirstCall/ -- Fremont Michigan InsuraCorp, Inc. (Fremont) (OTC Bulletin Board: FMMH - News) announced today that its Board of Directors declared its first quarterly cash dividend of $.03 per share on the common stock of the Company payable on September 26, 2008 to the shareholders of record at the close of business on September 10, 2008.
Richard E. Dunning, President and CEO stated, "The Fremont Insurance team continues to demonstrate its cooperative efforts to generate solid top line and bottom line stability, and this dividend is further evidence to our shareholders and agents of our business partnership."
About Fremont Michigan InsuraCorp, Inc.
Fremont Michigan InsuraCorp, Inc. is the holding company for Fremont Insurance Company. Headquartered in Fremont, Michigan, the company provides property and casualty insurance to individuals, farms and small businesses exclusively in Michigan. Fremont Michigan InsuraCorp's common stock is listed on the OTC Bulletin Board (OTCBB) under the symbol "FMMH."
Certain of the statements contained herein (other than statements of historical facts) are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include estimates and assumptions related to economic, competitive and legislative developments. These forward- looking statements are subject to change and uncertainty that are, in many instances, beyond the company's control and have been made based upon management's expectations and beliefs concerning future developments and their potential effect on Fremont Michigan InsuraCorp, Inc. For a list of factors which could affect the Company's results, see the Company's filings with the Securities and Exchange Commission, including "Item 1A. Risk Factors," set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007. There can be no assurance that future developments will be in accordance with management's expectations so that the effect of future developments on the Company will be those anticipated by management.
--------------------------------------------------------------------------------
Source: Fremont Michigan InsuraCorp, Inc.
Fremont Michigan InsuraCorp, Inc. Reports First Quarter 2008 Results Highlighted by 37.5% Increase in Net Income
Monday May 5, 7:00 am ET
FREMONT, Mich., May 5 /PRNewswire-FirstCall/ -- Fremont Michigan InsuraCorp, Inc. (Fremont) (OTC Bulletin Board: FMMH - News) reported net income increased 37.5% for the first quarter 2008 to $1,104,000, or $.63 per share, compared to net income for the first quarter 2007 of $803,000 or $.46 per share. Underwriting profit increased 39.4% to $817,000 for the first quarter 2008 compared to $586,000 for the first quarter 2007. Stockholders' equity increased to $39.7 million or $22.98 per share at March 31, 2008 compared to $39.4 million or $22.82 as of December 31, 2007.
"Fremont Insurance continues to provide exceptional top line growth in the highly competitive Michigan marketplace. Risk selection within our target markets by our agency partners coupled with sound internal underwriting, provides the framework for improvement in the comparative net income," said Richard E. Dunning, President and CEO.
Consolidated Statement of Income (Unaudited)
Quarter Ended March 31,
2008 2007
Direct premiums written $12,063,702 $10,962,905
Net premiums written $9,576,866 $8,631,809
Net premiums earned $11,216,905 $10,265,293
Loss and LAE 6,336,499 5,830,670
Policy acquisition and other
underwriting expenses 4,063,034 3,848,134
Underwriting gain 817,372 586,489
Other revenue (expense) items
Net investment income 516,236 491,407
Net realized gains on investments 158,602 27,979
Other income 138,141 104,406
Interest expense - (50,580)
Total other revenue (expense) items 812,979 573,212
Income before federal income taxes 1,630,351 1,159,701
Federal income tax expense (525,897) (356,226)
Net income $1,104,454 $803,475
Loss and LAE ratio 56.5% 56.8%
Policy acquisition and other
underwriting expense ratio 36.2% 37.5%
Combined ratio 92.7% 94.3%
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
March 31, December 31,
Assets 2008 2007
Investments:
Fixed maturities available for
sale, at fair value $49,823,840 $50,528,874
Equity securities available for
sale, at fair value 7,356,610 8,305,133
Mortgage loans on real estate from
related parties 251,792 253,656
Total investments 57,432,242 59,087,663
Cash and cash equivalents 4,561,774 4,033,158
Premiums due from policyholders, net 7,426,189 7,852,730
Amounts due from reinsurers 6,202,141 6,588,847
Prepaid reinsurance premiums 319,942 258,875
Accrued investment income 561,082 533,843
Deferred policy acquisition costs 3,075,821 3,334,001
Deferred federal income taxes 3,311,254 2,920,648
Property and equipment, net of
accumulated depreciation 2,485,196 2,500,988
Other assets 3,327 43,905
$85,378,968 $87,154,658
Liabilities and Stockholders' Equity
Liabilities:
Losses and loss adjustment expenses $17,928,231 $18,058,919
Unearned premiums 21,068,457 22,727,515
Reinsurance balances payable 35,791 199,463
Accrued expenses and other
liabilities 6,612,179 6,742,803
Total liabilities 45,644,658 47,728,700
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value,
authorized 4,500,000 shares, no
shares issued and outstanding - -
Class A common stock, no par
value, authorized 5,000,000
shares, 1,729,236 and 1,727,456
shares issued and outstanding at - -
March 31, 2008 and December 31,
2007, respectively
Class B common stock, no par
value, authorized 500,000 shares,
no shares issued and outstanding - -
Additional paid-in capital 7,765,021 7,722,424
Retained earnings 31,500,225 30,395,771
Accumulated other comprehensive
income 469,064 1,307,763
Total stockholders' equity 39,734,310 39,425,958
Total liabilities and
stockholders' equity $85,378,968 $87,154,658
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
Quarter Ended
March 31,
2008 2007
Revenues:
Net premiums earned $11,216,905 $10,265,293
Net investment income 516,236 491,407
Net realized gains on investments 158,602 27,979
Other income, net 138,141 104,406
Total revenues 12,029,884 10,889,085
Expenses:
Losses and loss
adjustment expenses, net 6,336,499 5,830,670
Policy acquisition and other underwriting
expenses 4,063,034 3,848,134
Interest expense - 50,580
Total expenses 10,399,533 9,729,384
Income before federal income tax expense 1,630,351 1,159,701
Federal income tax expense 525,897 356,226
Net income $1,104,454 $803,475
Earnings per share
Basic $.64 $.47
Diluted $.63 $.46
An 8-K with an investor presentation was filed for FMMH today. It was prepared for broker and investor presentations. This is the first time I remember them doing this. I picked up a few shares because of the 8-K, their recent strong performance, and their very strong balance sheet.
Here is a link to the 8-K:
http://yahoo.brand.edgar-online.com/DisplayFiling.aspx?dcn=0001193125-08-141164
The presentation is contained in EXHIBIT 99.1.
Mike
[As I wrote on Google Finance, and plan to post on Fremont's yahoo message board]:
---------------
Here is a link to an analysis I co-wrote on Fremont:
http://seekingalpha.com/article/81560-fremont-michigan-insuracorp-a-f...
And here's a link to a letter I sent Fremont's Board of Directors:
http://apassionreborn.wordpress.com/
If you're a shareholder and think our analysis and letter make sense, please contact Fremont's management and its Board of Directors with your feedback.
Fremont Michigan InsuraCorp, Inc. Announces Stock Dividend and Authorization to Repurchase Up to 100,000 Shares of Outstanding Common Stock
Thursday May 8, 9:45 am ET
FREMONT, Mich., May 8 /PRNewswire-FirstCall/ -- Fremont Michigan InsuraCorp, Inc. (Fremont) (OTC Bulletin Board: FMMH - News) announced that its board of directors has declared a 3% stock dividend, to be paid June 5, 2008, to stockholders of record on May 22, 2008. "This dividend is recognition to shareholders of the continuing solid performance of the Company and further acknowledgement of management's confidence in our future growth potential," said Richard E. Dunning, President and CEO.
The Company also announced that its board of directors has authorized the Company to repurchase up to 100,000 shares of its outstanding common stock. The authorized repurchases will be funded with available cash and made from time-to-time in either the open market or through privately negotiated transactions. The timing, volume and nature of share repurchases will be at the sole discretion of management, dependent on market conditions, other priorities for cash investment, applicable securities laws and other factors, and may be suspended or discontinued at any time. The repurchased shares will be held as treasury shares available for issuance in connection with the Company's Stock-Based Compensation Plan and Stock Incentive Plan of 2006.
About Fremont Michigan InsuraCorp, Inc.
Fremont Michigan InsuraCorp, Inc. is the holding company for Fremont Insurance Company. Headquartered in Fremont, Michigan, the company provides property and casualty insurance to individuals, farms and small businesses exclusively in Michigan. Fremont Michigan InsuraCorp's common stock is listed on the OTC Bulletin Board (OTCBB) under the symbol "FMMH."
Certain of the statements contained herein (other than statements of historical facts) are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include estimates and assumptions related to economic, competitive and legislative developments. These forward-looking statements are subject to change and uncertainty that are, in many instances, beyond the company's control and have been made based upon management's expectations and beliefs concerning future developments and their potential effect on Fremont Michigan InsuraCorp, Inc. For a list of factors which could affect the Company's results, see the Company's filings with the Securities and Exchange Commission, including "Item 1A. Risk Factors," set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007. There can be no assurance that future developments will be in accordance with management's expectations so that the effect of future developments on the Company will be those anticipated by management.
--------------------------------------------------------------------------------
Source: Fremont Michigan InsuraCorp, Inc.
They do look pretty good. I don't have a position in FMMH at present. I'll have to look closer.
Mike
Earnings out and they appear good to me: http://biz.yahoo.com/prnews/080505/clm011.html?.v=101
Best.
An S-8 was filed on 4/4/08 for 150,000 options.
Mike
Fremont Michigan InsuraCorp, Inc. Reports Fourth Quarter and Year End 2007 Results
Monday February 25, 8:00 am ET
FREMONT, Mich., Feb. 25 /PRNewswire-FirstCall/ -- Fremont Michigan InsuraCorp, Inc. (Fremont) (OTC Bulletin Board: FMMH - News) today announced net income of $2.4 million or $1.36 per diluted share for the fourth quarter of 2007. For the year ended December 31, 2007, Fremont generated net income of $4.9 million or $2.77 per diluted share. At December 31, 2007, Fremont's book value per share was $22.82 based on 1,727,456 shares outstanding, an increase of 14.4% from $19.95 at December 31, 2006.
Fremont generated net income of $3.4 million or $1.90 per diluted share in the fourth quarter of 2006 and net income of $7.2 million or $4.10 per diluted share for the year ended December 31, 2006.
"Fremont Insurance produced a solid underwriting profit supported by exceptional top line growth in 2007 despite the soft market and sluggish Michigan economy," said Richard E. Dunning, President and CEO. "Our 2007 net income represents a return on beginning shareholders' equity (ROE) of 14.2% which exceeds the Company's ROE goal of 12 - 14%. The strong relationship and support of our 175 agencies across the state of Michigan is very evident and is further enhanced by the talent and service of Company personnel."
Consolidated Statement of Income
Quarter Ended December 31, Year Ended December 31,
2007 2006 2007 2006
Direct premiums
written $13,564,772 $12,555,235 $53,956,318 $48,869,232
Net premiums
written $10,952,595 $10,284,119 $44,003,623 $40,263,135
Net premiums earned $11,033,800 $10,109,076 $42,773,737 $39,249,248
Loss and LAE 4,739,271 2,580,772 24,424,346 17,564,611
Policy acquisition
and other
underwriting expenses 4,235,825 3,467,668 15,896,842 13,599,846
Underwriting gain 2,058,704 4,060,636 2,452,549 8,084,791
Other revenue
(expense) items
Net investment
income 628,308 582,583 2,165,070 1,887,719
Net realized gains
on investments 531,711 224,341 1,977,742 519,835
Other income 133,448 111,940 471,601 417,392
Interest expense - (50,580) (146,170) (228,403)
Total other revenue
(expense) items 1,293,467 868,284 4,468,243 2,596,543
Income before federal
income taxes 3,352,171 4,928,920 6,920,792 10,681,334
Federal income
tax expense (952,358) (1,576,441) (2,036,434) (3,466,001)
Net income $2,399,813 $3,352,479 $4,884,358 $7,215,333
Loss and LAE ratio 42.9% 25.5% 57.1% 44.8%
Policy acquisition and
other underwriting
expense ratio 38.4% 34.3% 37.2% 34.6%
Combined ratio 81.3% 59.8% 94.3% 79.4%
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
December 31, December 31,
Assets 2007 2006
Investments:
Fixed maturities available for sale,
at fair value $50,528,874 $44,959,266
Equity securities available for sale,
at fair value 8,305,133 11,689,756
Mortgage loans on real estate from
related parties 253,656 260,808
Total investments 59,087,663 56,909,830
Cash and cash equivalents 4,033,158 4,598,843
Premiums due from policyholders, net 7,852,730 7,528,683
Amounts due from reinsurers 6,588,847 7,883,153
Prepaid reinsurance premiums 258,875 404,016
Accrued investment income 533,843 447,411
Deferred policy acquisition costs 3,334,001 3,235,383
Deferred federal income taxes 2,920,648 3,070,713
Property and equipment, net of
accumulated depreciation 2,500,988 1,771,323
Other assets 43,905 28,078
$87,154,658 $85,877,433
Liabilities and Stockholders' Equity
Liabilities:
Losses and loss adjustment expenses $18,058,919 $20,176,555
Unearned premiums 22,727,515 21,463,019
Reinsurance balances payable 199,463 50,313
Accrued expenses and other liabilities 6,742,803 6,867,081
Surplus notes - 2,890,288
Total liabilities 47,728,700 51,447,256
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value, authorized
4,500,000 shares, no shares issued
and outstanding - -
Class A common stock, no par value,
authorized 5,000,000 shares,
1,727,456 and 1,725,456 shares issued
and outstanding at December 31, 2007
and 2006, respectively - -
Class B common stock, no par value,
authorized 500,000 shares,
no shares issued and outstanding - -
Additional paid-in capital 7,722,424 7,605,096
Retained earnings 30,395,771 25,511,413
Accumulated other comprehensive income 1,307,763 1,313,668
Total stockholders' equity 39,425,958 34,430,177
Total liabilities and
stockholders' equity $87,154,658 $85,877,433
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
Revenues:
Net premiums earned $11,033,800 $10,109,076 $42,773,737 $39,249,248
Net investment
income 628,308 582,583 2,165,070 1,887,719
Net realized gains
(losses) on
investments 531,711 224,341 1,977,742 519,835
Other income, net 133,448 111,940 471,601 417,392
Total revenues 12,327,267 11,027,940 47,388,150 42,074,194
Expenses:
Losses and loss
adjustment
expenses, net 4,739,271 2,580,772 24,424,346 17,564,611
Policy acquisition
and other
underwriting
expenses 4,235,825 3,467,668 15,896,842 13,599,846
Interest expense - 50,580 146,170 228,403
Total expenses 8,975,096 6,099,020 40,467,358 31,392,860
Income before
federal income
tax expense 3,352,171 4,928,920 6,920,792 10,681,334
Federal income
tax expense 952,358 1,576,441 2,036,434 3,466,001
Net income $2,399,813 $3,352,479 $4,884,358 $7,215,333
Earnings per share
Basic $1.39 $1.94 $2.83 $4.18
Diluted $1.36 $1.90 $2.77 $4.10
A.M. Best Revises Outlook of Issuer Credit Ratings of Fremont Insurance Company and Fremont Michigan InsuraCorp
Wednesday January 30, 4:30 pm ET
OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has affirmed the issuer credit rating (ICR) of “bbb” and the financial strength rating (FSR) of B++ (Good) of Fremont Insurance Company (Fremont) (PNK: FMMH). The outlook for the ICR has been revised to positive from stable, while the outlook for the FSR remains stable. A.M. Best also has affirmed the ICR of “bb” of Fremont’s holding company, Fremont Michigan InsuraCorp, Inc, and revised the outlook to positive from stable. Both companies are domiciled in Fremont, MI.
The ratings reflect Fremont’s well-established market presence as a writer of personal lines insurance in Michigan, strong capitalization, improved overall operating results, tightened underwriting guidelines and expansion into less catastrophe-prone areas of Michigan.
These favorable rating factors are offset by Fremont’s somewhat elevated net premium leverage and the risks inherent in the company's geographic concentration in Michigan, which may subject it to weather-related loss exposure, potentially adverse legal and regulatory conditions, as well as competitive market pressures.
For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
Contact:
A.M. Best Co.
Analysts:
Joel Silverthorn, 908-439-2200, ext. 5120
joel.silverthorn@ambest.com
or
Gary Davis, 908-439-2200, ext. 5665
gary.davis@ambest.com
or
Public Relations:
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
--------------------------------------------------------------------------------
Source: A.M. Best Co.
Note that I do not have a position in this stock anymore. I'm just keeping the board updated.
Mike
Fremont Michigan InsuraCorp, Inc. Reports Third Quarter 2007 Results
Monday November 5, 8:25 am ET
FREMONT, Mich., Nov. 5 /PRNewswire-FirstCall/ -- Fremont Michigan InsuraCorp, Inc. (OTC Bulletin Board: FMMH - News), a Michigan-based provider of property and casualty insurance, today announced net income of $569,000 or $.32 per diluted share for the third quarter of 2007, compared to net income of $781,000 or $.44 per diluted share in the third quarter of 2006.
For the first nine months of 2007, the Company generated net income of $2.5 million or $1.41 per diluted share, compared to net income of $3.9 million or $2.20 per diluted share for the 2006 period.
At September 30, 2007, the Company's book value per share was $21.42, up 7.4% from December 31, 2006 and 22.5% from September 30, 2006.
"We continue to focus on bottom line profitability in the continuing soft market conditions. Our top line growth is strong on a peer comparable basis and is recognition of the business focus, talent and teamwork of all Company associates. We are committed to delivering long-term profitable growth for our shareholders," stated Richard E. Dunning, President and CEO. "Although the competitive market has necessitated providing additional premium discounts it is important to note that we only provide increased discounts when it is supported by reduced loss experience."
Direct premiums written increased 10% during the quarter ended September 30, 2007 and 11.2%, during the nine month period. Year to date new business volume is up 27.7% while renewal volume grew 8.2%. All four of our segments (personal, commercial, farm and marine) are showing positive growth year to date. The growth is being driven by the relationships we have cultivated with our agency force and agent's ease of doing business with Fremont through Fremont Complete -- our online web-based rating platform. Total in-force policy count continues to grow and is up 8.2% over the in-force policy count as of December 31, 2006.
The loss and LAE ratio for the 2007 quarter was 71.4% compared to 58.5% in 2006 while the 2007 year to date loss and LAE ratio was 62% compared to 51.4% in 2006. The elevated loss ratio was affected by increased weather related losses. During the quarter we experienced losses from thunderstorm activity producing hail and wind damage which can be typical of the third quarter. Weather also impacted the loss ratio on a year to date basis given the winter weather experienced during the first quarter of 2007 coupled with the third quarter storm activity.
The expense ratio for the 2007 quarter was 37.3% and 35% in 2006 while the 2007 year to date expense ratio was 36.7% compared to 34.8% in 2006. Both the quarter and year to date expense ratios were impacted by higher depreciation expense associated with our investment in Fremont Complete coupled with increased assessments from state mandated pools and associations.
The combined ratios for the quarter ended September 30, 2007 and 2006 were 108.7% and 93.5%, respectively. For the nine months ended September 30, 2007 and 2006 the combined ratio was 98.7% and 86.2%, respectively.
Kevin G. Kaastra, Vice President of Finance stated, "We are pleased to report that for the 12th consecutive quarter the Company generated profitable operating results as well as quarter over quarter growth in direct premiums written. Strong investment results from this component of our business offset the weather challenges experienced during the third quarter."
The Company's investment portfolio produced solid investment income during both the quarter and year to date period. During the third quarter 2007 the Company generated net realized gains of $1.1 million. For the nine months ended September 30, 2007 and 2006 the Company generated $1.4 million and $295,000, respectively, in net realized gains.
Net investment income for the quarter and nine months grew 14.6% and 17.7%, respectively. The increase came primarily from the fixed maturity portfolio and cash and cash equivalents and is a result of a higher invested asset base and higher pre-tax yields during the 2007 periods. At September 30, 2007 the fixed maturity portfolio had a tax equivalent book yield of 5.31% compared to 4.78% at September 30, 2006.
Fremont's portfolio does not include investments in the sub-prime mortgage-backed market. The Company looks to higher-quality pools that are well-diversified, avoiding any regional concentrations. As added protection, the majority of Fremont's fixed maturity securities within the portfolio are agency-backed issues.
Certain of the statements contained herein (other than statements of historical facts) are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include estimates and assumptions related to economic, competitive and legislative developments. These forward- looking statements are subject to change and uncertainty that are, in many instances, beyond the company's control and have been made based upon management's expectations and beliefs concerning future developments and their potential effect on Fremont Michigan InsuraCorp, Inc.
There can be no assurance that future developments will be in accordance with management's expectations so that the effect of future developments on Fremont Michigan InsuraCorp, Inc. will be those anticipated by management. Actual financial results including premium growth and underwriting results could differ materially from those anticipated by Fremont Michigan InsuraCorp, Inc. depending on the outcome of certain factors, which may include changes in property and casualty loss trends and reserves; catastrophe losses; the insurance product pricing environment; changes in applicable law; government regulation and changes therein that may impede the ability to charge adequate rates; change in accounting principles; performance of the financial markets; fluctuations in interest rates; availability and price of reinsurance; and the status of the labor markets in which the company operates.
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Revenues:
Net premiums earned $10,874,446 $9,908,832 $31,739,937 $29,140,172
Net investment income 527,002 459,670 1,536,762 1,305,136
Net realized gains
(losses) on
investments 1,124,059 (217) 1,446,031 295,494
Other income, net 122,449 107,201 338,153 305,452
Total revenues 12,647,956 10,475,486 35,060,883 31,046,254
Expenses:
Losses and loss
adjustment expenses,
net 7,768,458 5,804,215 19,685,075 14,983,839
Policy acquisition
and other
underwriting expenses 4,058,431 3,463,918 11,661,017 10,132,178
Interest expense 45,010 50,580 146,170 177,823
Total expenses 11,871,899 9,318,713 31,492,262 25,293,840
Income before
federal income
tax expense 776,057 1,156,773 3,568,621 5,752,414
Federal income tax
expense 206,567 375,589 1,084,076 1,889,560
Net income $569,490 $781,184 $2,484,545 $3,862,854
Earnings per share
Basic $.33 $0.45 $1.44 $2.24
Diluted $.32 $0.44 $1.41 $2.20
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
September 30, December 31,
Assets 2007 2006
Investments:
Fixed maturities available for sale,
at fair value $46,602,694 $44,959,266
Equity securities available for sale,
at fair value 8,346,773 11,689,756
Mortgage loans on real estate from
related parties 255,490 260,808
Total investments 55,204,957 56,909,830
Cash and cash equivalents 6,852,937 4,598,843
Premiums due from policyholders, net 8,186,900 7,528,683
Amounts due from reinsurers 8,164,790 7,883,153
Prepaid reinsurance premiums 1,619,975 404,016
Accrued investment income 518,490 447,411
Deferred policy acquisition costs 3,356,690 3,235,383
Deferred federal income taxes 3,097,493 3,070,713
Property and equipment, net of
accumulated depreciation 1,993,249 1,771,323
Other assets 5,525 28,078
$89,001,006 $85,877,433
Liabilities and Stockholders' Equity
Liabilities:
Losses and loss adjustment expenses $22,015,170 $20,176,555
Unearned premiums 22,794,870 21,463,019
Reinsurance balances payable 48,060 50,313
Accrued expenses and other
liabilities 7,144,756 6,867,081
Surplus notes - 2,890,288
Total liabilities 52,002,856 51,447,256
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value,
authorized 4,500,000 shares, no
shares issued and outstanding - -
Class A common stock, no par
value, authorized 5,000,000
shares, 1,727,456 and 1,725,456
shares issued and outstanding at - -
September 30, 2007 and December 31,
2006, respectively
Class B common stock, no par value,
authorized 500,000 shares,
no shares issued and outstanding - -
Additional paid-in capital 7,700,209 7,605,096
Retained earnings 27,995,958 25,511,413
Accumulated other comprehensive
income 1,301,983 1,313,668
Total stockholders' equity 36,998,150 34,430,177
Total liabilities and
stockholders' equity $89,001,006 $85,877,433
Historical LAE (lower is better)....
2007 2006 2005 2004
Q4 25.5% 44.5% ???
Q3 58.5% 50.6% 65.4%
Q2 57.4% 48.0% 55.5% 52.6%
Q1 56.8% 47.5% 63.8% 77.0%
Fremont Michigan InsuraCorp, Inc. Reports Second Quarter 2007 Results
Monday August 6, 8:15 am ET
FREMONT, Mich., Aug. 6 /PRNewswire-FirstCall/ -- Fremont Michigan InsuraCorp, Inc. (OTC Bulletin Board: FMMH - News), a Michigan-based provider of property and casualty insurance, today announced net income of $1.1 million or $.63 per diluted share for the second quarter of 2007, compared to net income of $1.4 million or $.81 per diluted share in the second quarter of 2006.
For the first six months of 2007, the Company generated net income of $1.9 million or $1.09 per diluted share, compared to net income of $3.1 million or $1.76 per diluted share for the first half of 2006.
Direct premiums written increased 9.9% and 12% during the quarter and six months ended June 30, 2007, with the bulk of premium growth coming from personal auto and homeowner policies. At June 30, 2007, the Company's book value per share was $21.22, up 6.4% from December 31, 2006 and 28.1% from June 30, 2006.
Richard E. Dunning, President and CEO stated, "We remain focused on growing our business profitably and executing our business plan. During the quarter and six months ended June 30, 2007 we delivered solid growth in written premium and generated strong underwriting profits across our four segments as well as double digit growth in net investment income. We are committed to delivering long-term shareholder value which is evident by the growth in book value per share of 28.1% since June 30, 2006."
Consolidated Statement of Income
Quarter Ended June 30, Six Months Ended June 30,
2007 2006 2007 2006
Direct premiums
written $14,536,048 $13,221,896 $25,498,953 $22,774,771
Net premiums written $12,019,732 $11,044,571 $20,651,541 $18,589,326
Net premiums earned $10,600,198 $9,677,745 $20,865,491 $19,231,340
Loss and LAE 6,085,947 4,645,431 11,916,617 9,179,624
Policy acquisition and
other underwriting
expenses 3,754,452 3,360,114 7,602,586 6,668,260
Underwriting gain
(loss) 759,799 1,672,200 1,346,288 3,383,456
Other revenue
(expense) items
Net investment income 518,353 425,698 1,009,760 845,466
Net realized gains on
investments 293,993 (22,792) 321,972 295,711
Other income 111,298 102,038 215,704 198,251
Interest expense (50,580) (50,580) (101,160) (127,243)
Total other revenue
(expense) items 873,064 454,364 1,446,276 1,212,185
Income before federal
income taxes 1,632,863 2,126,564 2,792,564 4,595,641
Federal income tax
expense (521,283) (706,143) (877,509) (1,513,971)
Net income $1,111,580 $1,420,421 $1,915,055 $3,081,670
Loss and LAE ratio 57.4% 48.0% 57.1% 47.7%
Policy acquisition and
other underwriting
expense ratio 35.4% 34.7% 36.4% 34.7%
Combined ratio 92.8% 82.7% 93.5% 82.4%
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
June 30, December 31,
Assets 2007 2006
Investments:
Fixed maturities available for
sale, at fair value $42,547,679 $44,959,266
Equity securities available for
sale, at fair value 11,935,345 11,689,756
Mortgage loans on real estate from
related parties 257,292 260,808
Total investments 54,740,316 56,909,830
Cash and cash equivalents 7,872,738 4,598,843
Receivable from sale of investments 1,634,107 -
Premiums due from policyholders, net 7,831,013 7,528,683
Amounts due from reinsurers 7,926,126 7,883,153
Prepaid reinsurance premiums 252,782 404,016
Accrued investment income 466,780 447,411
Deferred policy acquisition costs 3,147,918 3,235,383
Deferred federal income taxes 2,939,005 3,070,713
Property and equipment, net of
accumulated depreciation 2,006,786 1,771,323
Other assets 6,229 28,078
$88,823,800 $85,877,433
Liabilities and Stockholders'
Equity
Liabilities:
Losses and loss adjustment
expenses $21,445,631 $20,176,555
Unearned premiums 21,277,585 21,463,019
Reinsurance balances payable 125,796 50,313
Accrued expenses and other
liabilities 6,425,330 6,867,081
Surplus notes 2,890,288 2,890,288
Total liabilities 52,164,630 51,447,256
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value,
authorized 4,500,000 shares, no
shares
issued and outstanding - -
Class A common stock, no par
value, authorized 5,000,000
shares, 1,727,456 and 1,725,456
shares issued and outstanding at - -
June 30, 2007 and December 31,
2006, respectively
Class B common stock, no par value,
authorized 500,000 shares, no
shares issued and outstanding - -
Additional paid-in capital 7,679,736 7,605,096
Retained earnings 27,426,468 25,511,413
Accumulated other comprehensive
income 1,552,966 1,313,668
Total stockholders' equity 36,659,170 34,430,177
Total liabilities and
stockholders' equity $88,823,800 $85,877,433
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
Revenues:
Net premiums earned $10,600,198 $9,677,745 $20,865,491 $19,231,340
Net investment income 518,353 425,698 1,009,760 845,466
Net realized gains
(losses) on
investments 293,993 (22,792) 321,972 295,711
Other income, net 111,298 102,038 215,704 198,251
Total revenues 11,523,842 10,182,689 22,412,927 20,570,768
Expenses:
Losses and loss
adjustment expenses,
net 6,085,947 4,645,431 11,916,617 9,179,624
Policy acquisition and
other underwriting
expenses 3,754,452 3,360,114 7,602,586 6,668,260
Interest expense 50,580 50,580 101,160 127,243
Total expenses 9,890,979 8,056,125 19,620,363 15,975,127
Income before federal
income tax expense 1,632,863 2,126,564 2,792,564 4,595,641
Federal income tax
expense 521,283 706,143 877,509 1,513,971
Net income $1,111,580 $1,420,421 $1,915,055 $3,081,670
Earnings per share
Basic $.64 $.82 $1.11 $1.79
Diluted $.63 $.81 $1.09 $1.76
There were some recent insider purchases in FMMH:
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=5198347&Type=HTML
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=5189963&Type=HTML
Mike
Yes it wasn't the best of quarters but it was mostly due to increased claims due to weather. I think that subsequent quarters will be better as I think Q1 is likely to be their worst quarter. The stock price is essentially unchanged today so the market seems to agree with this assessment. On the other hand, maybe the market in general is not aware of the report.
Mike
MIKES97707, that wasn't that good of a quarter in my opinion. Was thinking of buying in before this quarters earnings, but decided against it. Happy I didn't buy in, because I was disappointed (Right or wrong). All is just my opinion, and I could always be wrong though.
Disclosure: I do not own FMMH.OB
Fremont Michigan InsuraCorp, Inc. Announces First Quarter 2007 Results
Monday May 7, 9:07 am ET
Premium Growth Continues, Colder Weather Increases Claims
FREMONT, Mich., May 7 /PRNewswire-FirstCall/ -- Fremont Michigan InsuraCorp, Inc. (OTC Bulletin Board: FMMH - News), today announced its 2007 first quarter operating results, highlighted by solid growth in premiums, led by the personal auto, homeowner and marine product lines.
Fremont, a Michigan-based provider of property and casualty insurance, posted net income of $803,000, or $0.46 per diluted share, on revenues of $10.9 million for the first quarter ended March 31, 2007. This compares to net income of $1.7 million, or $0.95 per diluted share, on revenues of $10.4 million for the first quarter of 2006.
The Company said net income for the first quarter of 2007 was comparatively normal, given the level of losses caused by the colder, winter weather experienced in Michigan during the first quarter compared to the first quarter of 2006 -- a period of less severe winter weather. The Company's first quarter loss ratio increased to 56.8% in 2007 from 47.5% in 2006. The Company noted that its loss experience in 2007 actually represented an average level of these costs in comparison to the record results generated in 2006.
Direct premiums written increased 14.8% during the first quarter, led by personal auto, up 36%, homeowners, up 14.1%, and marine, up 14.1%. Despite the soft market the Company is experiencing solid growth particularly in product lines that are available through Fremont Complete, the Company's web- based rating platform. Currently, the Company's independent agency force is able to quote and bind policies via Fremont Complete for businessowners, personal auto, homeowners, mobilowners and marine policies.
The Company's first quarter Loss and LAE Ratio (incurred losses and LAE divided by net premiums earned) grew to 56.8% compared to 47.5% last year, driven by higher losses in the personal and farm segments. The higher losses in 2007 were due to the colder weather which resulted in an increase in fire losses, ice and snow related claims as well as water damage claims due to freezing pipes.
The Company's expense ratio during the first quarter 2007 rose to 37.5% compared to 34.6% in the 2006 quarter. The increase in the expense ratio is primarily attributable to higher depreciation in 2007 associated with the development of Fremont's web-based rating platform, Fremont Complete. The increased depreciation added 1.1 percentage points to the first quarter 2007 expense ratio. In addition, the expense ratio for the first quarter 2006 was lower by 1.8 percentage points as a result of premium tax refunds received during the 2006 quarter.
Fremont Complete is a significant technological step forward for the Company and provides a strong foundation for future growth. Not only does the rating platform enhance the 'ease of doing business' with agencies, it also provides a direct connection between the independent agents' management systems and the Company's policy processing system. Feedback from the agency force has been very positive and Fremont said it continues to experience growth in the product lines available through Fremont Complete.
The Company noted that the additional depreciation of the system's development costs puts pressure on the expense ratio over the short term, particularly during the current soft market. However, from a longer term perspective Fremont Complete provides the kind of robust processing infrastructure necessary for the Company to achieve its long-term growth goals while ultimately reducing operating expenses.
The Company's combined ratio for the first quarter increased to 94.3%, from 82.1% in the year-ago period. A combined ratio is the sum of net losses, loss adjustment expenses and policy acquisition and other underwriting expenses divided by net premiums earned. A key indicator of an insurer's financial health, a combined ratio of less than 100% means a company is making an underwriting profit.
"While a return to a more traditional loss ratio did impact our bottom line for the period, our top line growth and underwriting results were solid and demonstrate our ability to gain market share within a continuing soft market," said Richard E. Dunning, President and CEO of Fremont Michigan InsuraCorp, Inc. "Thanks to our disciplined approach to pricing and our outstanding network of independent agents, we saw good premium growth in the quarter, particularly in our personal auto line."
Fremont ended the first quarter of 2007 with total investments of $57.8 million, up from $56.9 million as of December 31, 2006. The Company realized a 17.1% increase in net investment income for the first quarter, driven by an increase in the balance of invested assets and higher yields generated by the portfolio. Net realized investment gains were $28,000 for the first quarter 2007 compared to $319,000 in 2006. The change is due to higher selling activity in the 2006 quarter as the Company completed its reallocation of its equity portfolio from common and preferred stocks into mutual funds.
For the eighth consecutive quarter the Company has increased stockholders equity and book value per share which amounted to $35.6 million and $20.59 per share, respectively as of March 31, 2007.
"We remain pleased with our overall financial performance and continue to see a solid rate of return in our investments," said Kevin Kaastra, Vice President of Finance of Fremont Michigan InsuraCorp, Inc. "The performance of our portfolio, combined with our ability to generate top line growth and a solid underwriting profit for the period keeps us well positioned as we head into the remainder of 2007."
First Quarter 2007 Key Highlights
* Revenues were $10.9 million in the first quarter of 2007 as compared to
$10.4 million in first quarter 2006.
* Direct premiums written increased 14.8% in the first quarter 2007 to
$11.0 million, up from $9.6 million in the first quarter of 2006.
* Net investment income increased 17.1% in the first quarter of 2007 over
the same period in 2006.
* As of March 31, 2007 stockholders' equity was $35.6 million, an increase
of 3.3% over the December 31, 2006 balance, and book value per share was
$20.59. Stockholders' equity has grown each year since 2002.
Certain of the statements contained herein (other than statements of historical facts) are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include estimates and assumptions related to economic, competitive and legislative developments. These forward- looking statements are subject to change and uncertainty that are, in many instances, beyond the company's control and have been made based upon management's expectations and beliefs concerning future developments and their potential effect on Fremont Michigan InsuraCorp, Inc.
There can be no assurance that future developments will be in accordance with management's expectations so that the effect of future developments on Fremont Michigan InsuraCorp, Inc. will be those anticipated by management. Actual financial results including premium growth and underwriting results could differ materially from those anticipated by Fremont Michigan InsuraCorp, Inc. depending on the outcome of certain factors, which may include changes in property and casualty loss trends and reserves; catastrophe losses; the insurance product pricing environment; changes in applicable law; government regulation and changes therein that may impede the ability to charge adequate rates; change in accounting principles; performance of the financial markets; fluctuations in interest rates; availability and price of reinsurance; and the status of the labor markets in which the company operates.
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
2007 2006
Revenues:
Net premiums earned $10,265,293 $9,553,595
Net investment income 491,407 419,768
Net realized gains on investments 27,979 318,503
Other income, net 104,406 96,213
Total revenues 10,889,085 10,388,079
Expenses:
Losses and loss adjustment
expenses, net 5,830,670 4,534,193
Policy acquisition and other
underwriting expenses 3,848,134 3,308,146
Interest expense 50,580 76,663
Total expenses 9,729,384 7,919,002
Income before federal income tax
expense 1,159,701 2,469,077
Federal income tax expense 356,226 807,828
Net income $803,475 $1,661,249
Earnings per share
Basic $.47 $.96
Diluted $.46 $.95
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
March 31, December 31,
Assets 2007 2006
Investments:
Fixed maturities available for
sale, at fair value $45,466,335 $44,959,266
Equity securities available for
sale, at fair value 12,079,095 11,689,756
Mortgage loans on real estate from
related parties 259,065 260,808
Total investments 57,804,495 56,909,830
Cash and cash equivalents 3,256,846 4,598,843
Premiums due from policyholders,
net 7,142,002 7,528,683
Amounts due from reinsurers 7,418,637 7,883,153
Prepaid reinsurance premiums 388,078 404,016
Accrued investment income 504,614 447,411
Deferred policy acquisition costs 2,957,853 3,235,383
Deferred federal income taxes 2,798,832 3,070,713
Property and equipment, net of
accumulated depreciation 1,835,048 1,771,323
Other assets 127,166 28,078
$84,233,571 $85,877,433
Liabilities and Stockholders'
Equity
Liabilities:
Losses and loss adjustment
expenses $20,514,928 $20,176,555
Unearned premiums 19,833,960 21,463,019
Reinsurance funds withheld and
premiums ceded payable 31,957 50,313
Accrued expenses and other
liabilities 5,391,100 6,867,081
Surplus notes 2,890,288 2,890,288
Total liabilities 48,662,233 51,447,256
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value,
authorized 4,500,000 shares, no
shares issued and outstanding - -
Class A common stock, no par
value, authorized 5,000,000
shares, 1,727,456 and 1,725,256
shares issued and outstanding at
March 31, 2007 and December 31,
2006, respectively - -
Class B common stock, no par
value, authorized 500,000 shares,
no shares issued and outstanding - -
Additional paid-in capital 7,660,890 7,605,096
Retained earnings 26,314,888 25,511,413
Accumulated other comprehensive
income 1,595,560 1,313,668
Total stockholders' equity 35,571,338 34,430,177
Total liabilities and
stockholders' equity $84,233,571 $85,877,433
More interesting 10-K notes:
Underwriting income is projected to grow in the future as a result of many initiatives of the Insurance Company, including:
• Focus on underwriting for profit in every line of business;
• Increased utilization of technology internally and with our agency force to improve work flow;
• Higher reliance on analytical factors to evaluate risks;
• Development of web-based automation for agency rating and application input using Fremont Complete;
• Adequate analysis of pricing of risk within the industry;
• Increased fee income from partial payment, late payment and policy reinstatement;
• Increased emphasis on profit sharing for agencies and employees;
• Recognition of agency relationship value created by strong marketing efforts;
• Results of intense agency review and development of clearer expectations and business plans from agencies;
• Diversification of geographic risk to reduce reinsurance costs from a maximum probable loss standpoint;
• Increased recognition of the value and return that smaller companies, such as the Insurance Company, can provide agencies;
• Development of stronger relationships between agents and the Insurance Company; and
• Increased emphasis for agencies to maximize total return through equity investment within the Company.
Mike
Here are some interesting notes from the 10-K:
Web-based Rating and Automation. Major emphasis is occurring within the Information Technology area to develop and implement the Fremont Complete web-based rating and underwriting applications. During 2006 our business owners and personal automobile lines were converted to the Fremont Complete platform with very good success. By mid 2007 the homeowners, mobilowners and marine lines will be fully operational with Fremont Complete. This will include the capability for agents to make on-line endorsement and improve the ease of doing business with Fremont Insurance.
Management of Lines of Business. A primary strategy is to closely monitor and manage the profitability of each of our lines of business which include personal, commercial, farm and marine. The allocation of resources and capital to each of these categories is much like asset allocation strategy within an investment portfolio. The growth and profit opportunity of each line shifts with time and often do not move together. Strength in one category offsets weakness in another to assist in maintaining good operating results. Our product categories are broad enough to meet the overall property and casualty needs of our agents.
The strongest growth line of business in 2006 was our personal automobile area. It grew at an annualized rate of over 24%. The Company expects this rate of growth to continue during 2007. The shift in property risk associated with automobile is viewed favorably by the Company as risk balancing.
Mike
An insider purchase for 200 shares by a director was posted yesterday. Here is a link:
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=4999107&Type=HTML
Mike
I've been adding shares since the earnings announcement. I added a few more shares today at $27.55.
Mike
Fremont Michigan InsuraCorp, Inc. Announces Fourth Quarter and 2006 Results
Monday February 26, 7:30 am ET
FREMONT, Mich., Feb. 26 /PRNewswire-FirstCall/ -- Fremont Michigan InsuraCorp, Inc. (OTC Bulletin Board: FMMH - News), today announced its 2006 fourth- quarter and year-end operating results, highlighted by best-ever annual revenue and significant increases in quarterly and annual pre-tax income.
Fremont, a Michigan-based provider of property and casualty insurance, posted net income of $3.3 million, or $1.90 per diluted share, on revenue of $11 million for the fourth quarter ended Dec. 31, 2006. For the fiscal year 2006, the Company generated net income of $7.2 million, or $4.10 per diluted share, on record revenues of $42.1 million. Pre-tax income increased 43% to $4.9 million for the fourth quarter, and 35% to $10.7 million for the full year.
In the fourth quarter of 2005, Fremont posted net income of $2.3 million or $1.31 per diluted share on $10.6 million in revenues. For fiscal 2005, the Company reported net income of $9.1 million, or $5.24 per diluted share, on revenues of $41.5 million.
Fremont noted that their 2005 net income included a non-recurring federal income tax benefit of $3.8 million, or $2.23 per diluted share. In addition, revenue totals in the third and fourth quarters of 2005 included $1 million and $400,000, respectively, ($1.4 million total for 2005) in premium revenue relating to Fremont's quota share reinsurance agreement, which had previously been placed into runoff.
Excluding these extraordinary items realized in 2005, Fremont's fourth quarter 2006 results reflect a 65.8% increase in net income and an 8% increase in total revenues, and a 67.7% increase in net income and 5.1% increase in total revenues for the year.
Fremont continued to drive new business growth and maintain solid renewal rates across the majority of its product lines in 2006. Net premiums earned were up for the fourth quarter and year. Excluding the non-recurring 2005 quota-share impact, 2006 net premiums earned rose 7.3% for the quarter and 5.1% for the year. Direct premiums written increased 9.5% for the fourth quarter and 7.4% for the year, with the automobile product line continuing to lead the way with a 24% increase in 2006.
"We are pleased with our results for the fourth quarter and fiscal year, as it is clear that the disciplined growth strategy we established several years ago has served us well and remains the best path for continued success," said Richard E. Dunning, President and CEO of Fremont Michigan InsuraCorp, Inc. "We have established our current momentum by maintaining our discipline and avoiding the pricing battles that come with a softening market. We continue to focus our energy on product segments that offer the best sustainable return. This approach will help ensure that we remain efficient as an organization, in the market's continuing cycles."
The Company's fourth-quarter loss and loss adjusting expense (LAE) ratio (incurred losses and LAE divided by net premiums earned) dropped to 25.5% compared to 44.5% in the fourth quarter of 2005. For the year, Fremont's loss and LAE ratio dropped to 44.8% from 53.4% in 2005. The decrease was driven primarily by a drop in claim severity.
The 2006 expense ratio was 34.6% compared to 32.3 % in 2005. Excluding the non-recurring 2005 quota-share impact on net premiums earned, the 2005 expense ratio was 33.5%. The increase in the expense ratio was attributable to increased depreciation associated with the Company's web-based rating platform --Fremont Complete -- coupled with increased underwriting survey and inspection costs.
In the fourth quarter, the Company's combined ratio declined to 59.8%, down from 72.2% in the year-ago period. For the full-year 2006, the combined ratio declined to 79.4% from 85.7% in 2005. A combined ratio is the sum of net losses, loss adjustment expenses and policy acquisition and other underwriting expenses divided by net premiums earned. A key indicator of an insurer's financial health, a combined ratio of less than 100% means a company is making an underwriting profit.
"From an operating and finance perspective, the fourth quarter and fiscal year were excellent, both in terms of our record revenue and our ability to drop more of that revenue to the bottom line. If you remove the non-recurring gains in our 2005 results, the overall growth, efficiency and increased profitability generated in 2006 is even more apparent," said Kevin Kaastra, Vice President of Finance of Fremont Michigan InsuraCorp, Inc. "I would also note that our investment portfolio performed quite well and we continue to strengthen our balance sheet, increasing shareholders equity by more than 33% for the year."
Fremont ended the fourth quarter of 2006 with total investments of $56.9 million, up 10.7% for the year. The Company realized a 24.1% increase in net investment income for the fourth quarter and a 11.8% increase in net investment income in 2006 driven by growth in invested assets as well as increased yields in the fixed maturity portfolio. Stockholders' equity at year-end had increased 33% to $34.4 million, compared to $25.8 million as of December 31, 2005.
In October of 2006, Fremont executed a two-for-one stock split on its common stock in the form of a 100% stock dividend. As a result of the split, Fremont Michigan InsuraCorp, Inc. has approximately 1,725,000 shares outstanding. All share and per share numbers disclosed in this press release and the accompanying financial statements are presented post-split.
Key Highlights
* Pretax income increased 35% to $10.7 million in 2006 from $7.9 million
in 2005.
* For 2006, Fremont generated net income of $7.2 million, or $4.10 per
diluted share and 2006 revenues were $42.1 million, the highest in
Company history.
* 2005 net income included a one-time tax benefit of $3.8 million, or
$2.23 per diluted share. Revenue in 2005 included $1.4 million in
premium revenue relating to a quota share reinsurance agreement, which
had previously been placed into runoff.
* Excluding non-recurring items in 2005, Fremont posted a 67.7% increase
in net income and 5.1% increase in total revenues for 2006.
* Direct premiums written increased 9.5% for the fourth quarter and 7.4%
for the year, with the automobile product line continuing to lead the
way with a 24% increase in 2006.
* During 2006, shareholders' equity increased 33% to $34.4 million, up
from $25.8 million in 2005. Shareholders' equity has almost doubled
since 2004.
* For the year-end 2006, total assets increased 13% to $85.9 million,
while total liabilities increased 2.6% to $51.4 million.
Certain of the statements contained herein (other than statements of historical facts) are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include estimates and assumptions related to economic, competitive and legislative developments. These forward- looking statements are subject to change and uncertainty that are, in many instances, beyond the company's control and have been made based upon management's expectations and beliefs concerning future developments and their potential effect on Fremont Michigan InsuraCorp, Inc.
There can be no assurance that future developments will be in accordance with management's expectations so that the effect of future developments on Fremont Michigan InsuraCorp, Inc. will be those anticipated by management. Actual financial results including premium growth and underwriting results could differ materially from those anticipated by Fremont Michigan InsuraCorp, Inc. depending on the outcome of certain factors, which may include changes in property and casualty loss trends and reserves; catastrophe losses; the insurance product pricing environment; changes in applicable law; government regulation and changes therein that may impede the ability to charge adequate rates; change in accounting principles; performance of the financial markets; fluctuations in interest rates; availability and price of reinsurance; and the status of the labor markets in which the company operates.
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2006 2005 2006 2005
Revenues
Net premiums earned $10,109,076 $9,820,257 $39,249,248 $38,755,853
Net investment
income 582,583 469,415 1,887,719 1,688,853
Net realized gains
on investments 224,341 220,813 519,835 608,819
Other income,
net 111,940 100,729 417,392 397,673
Total revenues 11,027,940 10,611,214 42,074,194 41,451,198
Expenses:
Losses and loss
adjustment expenses,
net 2,580,772 4,373,726 17,564,611 20,703,929
Policy acquisition
and other underwriting
expenses 3,467,668 2,711,930 13,599,846 12,508,098
Interest expense 50,580 76,653 228,403 308,805
Total expenses 6,099,020 7,162,309 31,392,860 33,520,832
Income before
federal income tax
expense 4,928,920 3,448,905 10,681,334 7,930,366
Federal income tax
expense (benefit) 1,576,441 1,162,620 3,466,001 (1,151,903)
Net income $3,352,479 $2,286,285 $7,215,333 $9,082,269
Net income per
common share
Basic $1.94 $1.33 $4.18 $5.27
Diluted $1.90 $1.31 $4.10 $5.24
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
December 31, December 31,
Assets 2006 2005
Investments:
Fixed maturities available for
sale, at fair value $44,959,266 $41,644,429
Equity securities available
for sale, at fair value 11,689,756 9,508,185
Mortgage loans on real estate
from related parties 260,808 262,294
Total investments 56,909,830 51,414,908
Cash and cash equivalents 4,598,843 1,542,581
Premiums due from policyholders,
net 7,528,683 7,143,537
Amounts due from reinsurers 7,883,153 7,286,936
Prepaid reinsurance premiums 404,016 212,291
Accrued investment income 447,411 402,937
Deferred policy acquisition costs 3,235,383 3,092,618
Deferred federal income taxes 3,070,713 3,774,445
Property and equipment, net of
accumulated depreciation 1,771,323 1,082,547
Other assets 28,078 7,827
$85,877,433 $75,960,627
Liabilities and Stockholders' Equity
Liabilities:
Losses and loss adjustment expenses $20,176,555 $18,866,814
Unearned premiums 21,463,019 20,437,157
Reinsurance funds withheld and
premiums ceded payable 50,313 1,026,340
Accrued expenses and other
liabilities 6,867,081 6,903,968
Surplus notes 2,890,288 2,890,288
Total liabilities 51,447,256 50,124,567
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value,
authorized 4,500,000 shares,
no shares issued and outstanding -- --
Class A common stock, no par
value, authorized 5,000,000 shares,
1,725,456 and 1,724,256 shares
issued and outstanding at
December 31, 2006 and 2005, respectively -- --
Class B common stock, no par
value, authorized 500,000 shares,
no shares issued and outstanding -- --
Additional paid-in capital 7,605,096 7,550,304
Retained earnings 25,511,413 18,296,080
Accumulated other comprehensive income 1,313,668 (10,324)
Total stockholders' equity 34,430,177 25,836,060
Total liabilities and stockholders'
equity $85,877,433 $75,960,627
Insurance Industry Basics: Combined Ratio
Tuesday December 12, 12:27 pm ET
By Emil Lee
Investors who buy insurance companies with low long-term combined ratios should eventually be rewarded with superior investment returns. Just ask Warren Buffett.
An insurer's combined ratio measures the percentage of premiums an insurer has to pay out in claims and expenses. This is done simply by combining the expense and loss ratios. A combined ratio of 102% means that an insurer is underwriting at a loss -- for every $1 in premiums taken in, $1.02 in claims and expenses are paid out. Fortunately, insurers also earn investment income from their float, so an insurer can still earn a profit even with a combined ratio in excess of 100%.
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Expense ratio
Calculated as underwriting expenses divided by net premiums earned, the expense ratio measures an insurer's efficiency. To attract customers, insurers have to advertise. They also must pay commissions to insurance agents and brokers, give their employees a salary, and pay taxes and other operational expenses. Every dollar paid in underwriting expense is a dollar that doesn't flow to the insurer's bottom line, so investors naturally should look for insurers that run a tight ship.
Some insurers have low expense ratios because of economies of scale -- they can leverage advertising spending and have well-known brand names that help attract customers. Other insurers employ direct-sales techniques to cut out the insurance agents and brokers. In the auto-insurance industry, GEICO, a unit of Berkshire Hathaway and Progressive (NYSE: PGR - News), has contributed to its own long-term success by having eliminated the middleman -- similar to how Dell's direct sales method gives it a pricing advantage over competitors by cutting out the retailing middlemen.
Loss ratio
The loss ratio, calculated as loss and loss adjustment expense divided by net premium earned, measures the percentage of premium paid out in claims and associate expenses. It is an indicator of an insurer's underwriting discipline and skill at mitigating risk.
The underwriting cycle
Because most insurance policies are commodities, insurers generally lack pricing power. In other words, most people don't care who writes their insurance policy as long as the price is cheap. Thus, insurance prices are a function of supply and demand. When times are good, insurers make underwriting profits, and loss ratios decrease. As a result of the smaller losses, some insurers, driven by short-term greed, increase capacity by writing more policies. This increase in supply results in decreasing prices. Eventually, the cycle turns, losses increase, and insurers who wrote a lot of policies at low prices are left holding the bag. This situation is extremely similar to the boom-bust cycle of the stock market.
Investors should therefore look for insurers that stay disciplined. When loss ratios are low and insurance prices are soft, the disciplined insurers cut back on premium growth, even if it means giving up short-term profits -- similar to how great value investors refused to jump on dot-com stocks, even if not investing made them look like idiots in the short term. The value investors had the last laugh. Similarly with insurance, the underwriting cycle turns, and undisciplined insurers will be saddled with large losses. Some will even go out of business. The resulting decrease in capacity means tantalizing profits for insurers who patiently waited for better pricing.
Invest with the best
Investors should generally stick to investing in low-cost and disciplined insurers. In 2005, Zenith's (NYSE: ZNT - News) combined ratio in workers' compensation insurance was 80.9%, a whopping 25.3 percentage points better than the industry's 106.2% combined average. Investors who bought shares in this disciplined insurer would've seen their shares nearly triple over the past four years. Some other disciplined insurers that investors might want to consider include Alleghany (NYSE: Y - News), Old Republic International (NYSE: ORI - News), Progressive, Markel (NYSE: MKL - News) and White Mountains (NYSE: WTM - News).
Dell is a recommendation of both Stock Advisor and Inside Value. Berkshire Hathaway is an Inside Value pick.
Fool contributor Emil Lee is an analyst and a disciple of value investing. He owns shares of Dell and appreciates your comments, concerns, and complaints. The Motley Fool has a disclosure policy.
A.M. Best Upgrades Ratings of Fremont Insurance and Fremont Michigan; Revises Outlook to Stable
Tuesday December 19, 12:38 pm ET
OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. upgraded the financial strength rating to B++ (Very Good) from B+ (Very Good) and the issuer credit rating (ICR) to "bbb" from "bbb-"of Fremont Insurance Company (Fremont). A.M. Best has also upgraded the ICR to "bb" from "bb-" for Fremont's holding company, Fremont Michigan InsuraCorp, Inc. (OTCBB: FMMH - News). Both companies are domiciled in Fremont, MI. The outlook for the ratings has been revised to stable from positive.
The ratings reflect Fremont's well-established market presence as a writer of homeowners insurance in Michigan, strong capitalization, improved overall operating results, tightened underwriting guidelines and expansion into less catastrophe-prone areas of Michigan.
These favorable rating factors are offset by Fremont's historically flat performance measures, somewhat elevated net premium leverage and the risks inherent in the company's geographic concentration in Michigan, which may subject the company to weather-related loss exposure and potential adverse legal and regulatory conditions.
Fremont writes commercial and personal auto, homeowners, mobile homeowners, farm owners, commercial multi-peril and inland marine coverages exclusively in Michigan. In recent years, the company added boiler and machinery coverage, personal, farm and commercial umbrella, as well as a yacht program to its product offerings.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.
Contact:
A.M. Best Co.
Analysts
Joel Silverthorn, 908-439-2200, ext. 5120
joel.silverthorn@ambest.com
or
Gary Davis, 908-439-2200, ext. 5665
gary.davis@ambest.com
or
Public Relations
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
--------------------------------------------------------------------------------
Source: A.M. Best Co.
Fremont Michigan InsuraCorp, Inc. Announces Results for Third Quarter
Monday November 6, 7:28 am ET
FREMONT, Mich., Nov. 6 /PRNewswire-FirstCall/ -- Fremont Michigan InsuraCorp, Inc. (OTC Bulletin Board: FMMH - News), today announced net income of $781,184 or $0.89 per diluted share for the third-quarter of 2006. For the nine months of 2006, net income was $3.9 million, or $4.40 per diluted share. In the third quarter of 2005, the Company generated net income of $5.4 million or $6.20 per diluted share and $6.8 million or $7.86 per diluted for the nine months of 2005; however, both the 2005 third quarter and nine month period included the impact of reversing a deferred tax asset valuation allowance which increased net income by $3.8 million or $4.39 per diluted share for the 2005 third quarter and $4.46 per diluted share for the first nine months of 2005.
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Direct premiums written increased 5.7% during the third quarter and 6.7% during the nine month period. Led by strong new business opportunities and consistent policy renewal rates in the quarter, direct premiums written for the personal auto line realized the largest increase, growing 9.1 percent over the year ago period. Personal auto was further boosted by increased market penetration by several of the Company's independent agents. "We continue to face a highly competitive Michigan market. Although the pricing environment remains soft we continue to grow by focusing on target markets that we feel are appropriately priced," said Richard E. Dunning, President and CEO of Fremont Michigan InsuraCorp, Inc.
Net premiums earned in the third quarter 2006 decreased $605,000, however, the decline was a result of higher net premiums earned of approximately $1,000,000 in the 2005 quarter relating to the quota share reinsurance agreement which had previously been placed into runoff. Net premiums earned for the 2006 quarter increased $396,000 or 4.2% as compared to the 2005 quarter after excluding the $1,000,000 quota share impact as a result of growth in direct premiums earned of approximately $650,000 offset by higher ceded premiums earned of approximately $254,000 under the Company's ongoing reinsurance agreements.
The Company's third-quarter Loss and LAE Ratio (incurred losses and LAE divided by net premiums earned) grew to 58.5 percent compared to 50.6 percent last year. The increase was driven primarily by weather-related losses during July triggered by strong thunderstorms coupled with an increase in the volume and severity of personal auto claims. "Typically the third quarter can be our most volatile quarter as a result of weather conditions in Michigan. The third quarter of 2005 was a very mild quarter from a weather standpoint while the third quarter of 2006 was a more normal quarter in terms of expected weather related losses," said Kevin Kaastra, Vice President of Finance of Fremont Michigan InsuraCorp, Inc. Despite the increase in the loss ratio in the third quarter, the loss ratio for the nine months of 2006 was 51.4% which is still below the 2005 loss ratio of 56.4% as a result of overall lower loss severity during the nine months of 2006.
The expense ratio during the third quarter 2006 was 35.0% compared to 30.8% in the 2005 quarter. For the nine months of 2006 the expense ratio was 34.8% compared to 33.9% in the prior year period. The increase in the expense ratio for the quarter was driven by the reduction in net premiums earned during the 2006 quarter coupled with increased operating expenses including depreciation, salaries and costs associated with agent incentives.
"While weather trends were less favorable during the quarter, we continue to experience growth in premiums written within key product segments, including personal and farm," said Kaastra. "Our continued premium growth is a testament to our ability to service our agents and policyholders despite a continuing soft market, including increased competition from out-of-state players."
The Company's combined ratio for the quarter was 93.5 percent, as compared to 81.4 percent in the 3rd quarter of 2005 quarter while the nine month combined ratio was 86.2% in 2006 compared to 90.3% in 2005.
Fremont ended the third quarter of 2006 with total investments of $54.5 million, up 6 percent for the first nine months of 2006. The Company realized a 23.5 percent increase in net investment income for the third quarter and a 7 percent increase in net investment income thus far in 2006 driven by growth in invested assets as well as increased yields in the fixed maturity portfolio. During the first nine months of 2006, cash and cash equivalents have increased to $4.5 million, compared to $1.5 million as of December 31, 2005. Stockholders' equity at quarter-end had increased 16.7 percent to $30.1 million, compared to $25.8 million as of December 31, 2005.
In October 2006 the Company's Board of Directors approved a two-for-one stock split on its common stock in the form of a 100% stock dividend. The record date is October 31, 2006, and stockholders of record at the close of business on the record date will receive one additional share for every share held. The dividend shares will be payable on November 17, 2006. After the split, Fremont Michigan InsuraCorp, Inc. will have approximately 1,725,000 shares outstanding. All share and per share numbers disclosed in this press release and the accompanying financial statements are presented pre-stock split.
Third Quarter 2006 Key Highlights
-- Net income was $781,184 in the third quarter of 2006 as compared to
net income of $5.4 million in the third quarter of 2005. Net income
for the 2005 quarter was significantly higher as a result of a $3.8
million tax benefit coupled with higher net premiums earned of
$1,000,000 associated with a quota share reinsurance agreement that
had previously been placed into runoff.
-- Revenues were $10.5 million in the third quarter of 2006 as compared
to $10.9 million in third quarter 2005. Revenue for the 2005 quarter
was higher as a result of increased net premiums earned of $1,000,000
associated with a quota share reinsurance agreement.
-- Stockholders' equity increased 16.7 percent to $30.1 million as of
September 30, 2006, up from $25.8 million at December 31, 2005.
-- Direct premiums written increased 5.7 percent in the third quarter
2006 to $13.5 million, up from $12.8 million in the third quarter of
2005.
-- As of September 30, 2006, total assets increased 9.2 percent to $82.9
million, while total liabilities increased 5.2 percent to $52.7
million compared to the balances at December 31, 2005.
Certain of the statements contained herein (other than statements of historical facts) are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include estimates and assumptions related to economic, competitive and legislative developments. These forward- looking statements are subject to change and uncertainty that are, in many instances, beyond the company's control and have been made based upon management's expectations and beliefs concerning future developments and their potential effect on Fremont Michigan InsuraCorp, Inc.
There can be no assurance that future developments will be in accordance with management's expectations so that the effect of future developments on Fremont Michigan InsuraCorp, Inc. will be those anticipated by management. Actual financial results including premium growth and underwriting results could differ materially from those anticipated by Fremont Michigan InsuraCorp, Inc. depending on the outcome of certain factors, which may include changes in property and casualty loss trends and reserves; catastrophe losses; the insurance product pricing environment; changes in applicable law; government regulation and changes therein that may impede the ability to charge adequate rates; change in accounting principles; performance of the financial markets; fluctuations in interest rates; availability and price of reinsurance; and the status of the labor markets in which the company operates.
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
Revenues:
Net premiums earned $9,908,832 $10,513,429 $29,140,172 $28,935,596
Net investment
income 459,670 372,203 1,305,136 1,219,438
Net realized gains
(losses) on
investments (217) 5,586 295,494 388,006
Other income, net 107,201 103,033 305,452 296,944
Total revenues 10,475,486 10,994,251 31,046,254 30,839,984
Expenses:
Losses and loss
adjustment expenses,
net 5,804,215 5,317,945 14,983,839 16,330,203
Policy acquisition
and other
underwriting
expenses 3,463,918 3,237,258 10,132,178 9,796,168
Interest expense 50,580 77,111 177,823 232,152
Total expenses 9,318,713 8,632,314 25,293,840 26,358,523
Income before
federal income
tax expense 1,156,773 2,361,937 5,752,414 4,481,461
Federal income tax
expense 375,589 (3,022,245) 1,889,560 (2,314,523)
Net income $781,184 $5,384,182 $3,862,854 $6,795,984
Net income per common share
Basic $.91 $6.25 $ 4.48 $7.88
Diluted $.89 $6.20 $ 4.40 $7.86
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
September 30, December 31,
Assets 2006 2005
Investments:
Fixed maturities available for sale,
at fair value $43,475,477 $41,644,429
Equity securities available for sale,
at fair value 10,809,029 9,508,185
Mortgage loans on real estate from
related parties 262,731 262,294
Total investments 54,547,237 51,414,908
Cash and cash equivalents 4,475,410 1,542,581
Receivable from investments 997,249 -
Premiums due from policyholders, net 7,619,751 7,143,537
Amounts due from reinsurers 6,257,873 7,499,227
Accrued investment income 453,615 402,937
Deferred policy acquisition costs 3,243,275 3,092,618
Deferred federal income taxes 3,474,536 3,774,445
Property and equipment, net of
accumulated depreciation 1,709,247 1,082,547
Other assets 151,115 7,827
$82,929,308 $75,960,627
Liabilities and Stockholders' Equity
Liabilities:
Losses and loss adjustment expenses $21,250,687 $18,866,814
Unearned premiums 21,265,334 20,437,157
Reinsurance funds withheld and
premiums ceded payable 19,730 1,026,340
Accrued expenses and other liabilities 7,345,186 6,903,968
Surplus notes 2,890,288 2,890,288
Total liabilities 52,771,225 50,124,567
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value, authorized
4,500,000 shares, no shares issued and
outstanding - -
Class A common stock, no par value,
authorized 5,000,000 shares, 862,728 and
862,128 shares issued and outstanding at
September 30, 2006 and December 31, 2005,
respectively - -
Class B common stock, no par value,
authorized 500,000 shares, no shares
issued and outstanding - -
Additional paid-in capital 7,596,519 7,550,304
Retained earnings 22,158,934 18,296,080
Accumulated other comprehensive income
(loss):
Net unrealized gains (losses) on
investments, net of deferred federal
income taxes 402,630 (10,324)
Total stockholders' equity 30,158,083 25,836,060
Total liabilities and stockholders'
equity $82,929,308 $ 75,960,627
--------------------------------------------------------------------------------
Source: Fremont Michigan InsuraCorp, Inc.
A new form 3 was filed on Friday indicating that a director owns 2,131 shares. See the following:
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=4712443&Type=HTML
Also, price action has been strong today. We are up $4 to $59 which is a new all time high!
Mike
FMMH - Fremont Michigan InsuraCorp, Inc. Announces Two-For-One Stock Split
Wednesday October 18, 7:43 am ET
FREMONT, Mich., Oct. 18 /PRNewswire-FirstCall/ -- Fremont Michigan InsuraCorp, Inc. (OTC Bulletin Board: FMMH - News), a Michigan-based provider of property and casualty insurance, today announced that its Board of Directors has approved a two-for-one stock split on its common stock in the form of a 100% stock dividend. The record date is October 31, 2006, and stockholders of record at the close of business on the record date will receive one additional share for every share held. The dividend shares will be payable on November 17, 2006.
No paper stock certificates will be issued as the distribution will be made through the book-entry system maintained by the Corporation's stock transfer agent, Registrar and Transfer Company. After the split, Fremont Michigan InsuraCorp, Inc. will have approximately 1,725,000 shares outstanding.
ABOUT FREMONT MICHIGAN INSURACORP, INC.
Fremont Michigan InsuraCorp, Inc. through its wholly owned subsidiary Fremont Insurance Company provides property and casualty insurance to individuals, small businesses and farms throughout the state of Michigan. We have served Michigan policyholders for over 130 years. For more information, visit our website at www.fmic.com.
Certain of the statements contained herein (other than statements of historical facts) are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include estimates and assumptions related to economic, competitive and legislative developments. These forward- looking statements are subject to change and uncertainty that are, in many instances, beyond the company's control and have been made based upon management's expectations and beliefs concerning future developments and their potential effect on Fremont Michigan InsuraCorp, Inc.
There can be no assurance that future developments will be in accordance with management's expectations so that the effect of future developments on Fremont Michigan InsuraCorp, Inc. will be those anticipated by management. Actual financial results including premium growth and underwriting results could differ materially from those anticipated by Fremont Michigan InsuraCorp, Inc. depending on the outcome of certain factors, which may include changes in property and casualty loss trends and reserves; catastrophe losses; the insurance product pricing environment; changes in applicable law; government regulation and changes therein that may impede the ability to charge adequate rates; changes in accounting principles; performance of the financial markets; fluctuations in interest rates; availability and price of reinsurance; and the status of the labor markets in which the company operates.
--------------------------------------------------------------------------------
Source: Fremont Michigan InsuraCorp, Inc.
FMMH just traded at $48/share up $4.45....
It looks to me like someone placed a market order since only 700 shares traded so far and there isn't any news.
Mike
FMMH just printed $43.00 which puts it at the 52 week high. Currently the bid/ask is $41.75 X $43.00.
Mike
Now the price is $41 which is up $1.75 for the day! The current bid/ask is $41 X $42.
Mike
FMMH.OB posted excellent Q2 earnings of $1.62 vs. $1.09 last year. First half earnings are $3.51! The current share price is $40.50 which is up $1.25 for the day so far. In my opinion, insurance companies with the right type of risk profile are one of the best places to be in this challenging environment. Fremont only operates in Michigan and therefore doesn't have major risk such as hurricanes.
Mike
-----------
Fremont Michigan InsuraCorp, Inc. Announces Improved Net Income for Second Quarter and First Half of 2006
Monday August 7, 8:26 am ET
Posts $1.62 per Diluted Share for Quarter vs. $1.09
FREMONT, Mich., Aug. 7 /PRNewswire-FirstCall/ -- Fremont Michigan InsuraCorp, Inc. (OTC Bulletin Board: FMMH - News), a Michigan-based provider of property and casualty insurance, today announced second-quarter 2006 operating results including its wholly owned subsidiary, Fremont Insurance Company, highlighted by a substantial increase in net income on flat total revenues for the quarter ended June 30, 2006.
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Net income for the quarter rose 51.2 percent to $1.4 million, or $1.62 per diluted share ($1.65 per basic share), compared with net income of $939,000 for the second quarter of 2005, or $1.09 per diluted share ($1.09 per basic share). Fremont reported total revenues of $10.2 million in the second quarter of 2006, a 0.1 percent decrease from the year-ago period.
For the six-month period ended June 30, 2006, net income rose 118.3 percent to $3 million, or $3.51 per diluted share ($3.57 per basic share) as compared to $1.4 million, or $1.64 per diluted share ($1.64 per basic share) for the same period in 2005. Total revenues for the six-month period increased 3.7 percent to $20.5 million, compared to $19.8 million last year.
Fremont ended the second quarter of 2006 with total investments of $51.3 million, a .3 percent decrease from the December 31, 2005 balance. The decrease is driven by a decline in the fair market value of the fixed maturity portfolio as a result of rising interest rates. Cash and cash equivalents rose to $5.5 million at quarter-end, as compared to $1.5 million as of December 31, 2005. Stockholders' equity at quarter-end grew to $28.6 million, compared to $25.8 million as of December 31, 2005.
Despite an increase in net premiums earned of 3.9 percent, Fremont said total revenues were flat for the quarter due to a decline of $385,000 in net realized gains on investments for the period compared to last year. Direct premiums written for the quarter increased 6.3 percent to $13.2 million, compared to $12.4 million in the year ago period. Despite the highly competitive and soft market conditions in Michigan, Fremont continued to grow its personal auto product line during the quarter. Direct premiums written for the personal auto product line, which is our fastest growing line, increased 23.4 percent during the quarter as compared to the prior year period.
On the expense side, Fremont's second-quarter losses and loss adjustment expenses (LAE) as compared to the prior year quarter dropped 10.5 percent to $4.6 million, primarily due to a decline in claim severity -- despite an increasing number of claims in the period. The Company's second-quarter Loss and LAE Ratio (incurred losses and LAE divided by net premiums earned) improved to 48.0 percent compared to 55.7 percent last year.
"While our overall revenues were flat for the period, we are pleased with both our ability to drive premium growth in our target markets as well as our strong net earnings," said Richard E. Dunning, President and CEO of Fremont Michigan InsuraCorp, Inc. "We continue to operate in a sluggish market, however our overall operating efficiency, results-orientated network of agents, and muted weather patterns combined to drive bottom line growth for the quarter."
The Company also reported improvement in its second-quarter combined ratio: the sum of net losses, loss adjustment expenses and policy acquisition and other underwriting expenses divided by the net premiums earned. A combined ratio of less than 100% means a company is making an underwriting profit.
Fremont's combined ratio improved 10.8 percentage points to 82.7 percent, as compared to 93.5 percent in the year-ago period. The decrease is primarily attributable to a decline in losses and loss adjustment expenses as well as a decline in policy acquisition and other underwriting expenses coupled with growth in premiums earned.
The Company was also pleased with the results of the recently published Michigan Association of Insurance Agents' 2006 Agent Survey which ranked the Company 7th out of 50 other insurance companies. Over 1,200 insurance agents responded to the survey which covered areas including: competitiveness, service, claims handling, management, automation and underwriting. "The survey results are reflective of the solid relationship the Company has with its agency force particularly at a time when competition is at its height in Michigan," noted Kevin Kaastra, Vice President of Finance.
Second Quarter 2006 Key Highlights
* Net income grew to $1.4 million in the quarter, up 51.2 percent, as
compared to a net income of $939,000 in the second quarter of 2005.
* Revenues decreased 0.1 percent to $10.18 million in the second quarter
of 2006, down from $10.19 million in second quarter 2005.
* Since June 30, 2005, stockholders' equity has increased 54.2 percent to
$28.6 million, up from $18.5 million at June 30, 2005. Stockholders'
equity (book value) per share was $33.14 as of June 30, 2006.
* Direct premiums written increased 6.3 percent in the second quarter
2006 to $13.2 million, up from $12.4 million in the second quarter of
2005. Net premiums written increased 4.1 percent to $11.0 million
during the quarter, up from $10.6 million in the second quarter of
2005. Net premiums earned grew steadily in the quarter, up 3.9 percent
to $9.7 million compared to the same period in 2005.
* As of June 30, 2006, total assets increased 3.7 percent to $78.8
million, while total liabilities increased .2 percent to $50.2 million
compared to the balances at December 31, 2005.
Certain of the statements contained herein (other than statements of historical facts) are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include estimates and assumptions related to economic, competitive and legislative developments. These forward- looking statements are subject to change and uncertainty that are, in many instances, beyond the company's control and have been made based upon management's expectations and beliefs concerning future developments and their potential effect on Fremont Michigan InsuraCorp, Inc.
There can be no assurance that future developments will be in accordance with management's expectations so that the effect of future developments on Fremont Michigan InsuraCorp, Inc. will be those anticipated by management. Actual financial results including premium growth and underwriting results could differ materially from those anticipated by Fremont Michigan InsuraCorp, Inc. depending on the outcome of certain factors, which may include changes in property and casualty loss trends and reserves; catastrophe losses; the insurance product pricing environment; changes in applicable law; government regulation and changes therein that may impede the ability to charge adequate rates; changes in accounting principles; performance of the financial markets; fluctuations in interest rates; availability and price of reinsurance; and the status of the labor markets in which the company operates.
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Revenues:
Net premiums earned $9,677,745 $9,311,489 $19,231,340 $18,422,167
Net investment
income 425,698 424,812 845,466 847,235
Net realized gains
(losses) on
investments (22,792) 362,111 295,711 382,420
Other income, net 102,038 98,656 198,251 193,911
Total revenues 10,182,689 10,197,068 20,570,768 19,845,733
Expenses:
Losses and loss
adjustment expenses,
net 4,645,431 5,189,001 9,179,624 11,012,258
Policy acquisition
and other
underwriting
expenses 3,360,114 3,520,055 6,668,260 6,558,910
Interest expense 50,580 77,435 127,243 155,041
Total expenses 8,056,125 8,786,491 15,975,127 17,726,209
Income before
federal income
tax expense 2,126,564 1,410,577 4,595,641 2,119,524
Federal income tax
expense 706,143 471,172 1,513,971 707,722
Net income $1,420,421 $939,405 $3,081,670 $1,411,802
Net income per common share
Basic $1.65 $1.09 $3.57 $1.64
Diluted $1.62 $1.09 $3.51 $1.64
FREMONT MICHIGAN INSURACORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
June 30, December 31,
Assets 2006 2005
Investments:
Fixed maturities available for sale,
at fair value $40,961,654 $41,644,429
Equity securities available for sale,
at fair value 10,049,434 9,508,185
Mortgage loans on real estate from
related parties 264,616 262,294
Total investments 51,275,704 51,414,908
Cash and cash equivalents 5,466,914 1,542,581
Premiums due from policyholders, net 7,226,531 7,143,537
Amounts due from reinsurers 6,096,962 7,499,227
Accrued investment income 402,467 402,937
Deferred policy acquisition costs 3,019,119 3,092,618
Deferred federal income taxes 3,848,229 3,774,445
Property and equipment, net of accumulated
depreciation 1,345,425 1,082,547
Other assets 94,045 7,827
$78,775,396 $75,960,627
Liabilities and Stockholders' Equity
Liabilities:
Losses and loss adjustment expenses $19,954,016 $18,866,814
Unearned premiums 19,801,802 20,437,157
Reinsurance funds withheld and premiums
ceded payable 45,258 1,026,340
Accrued expenses and other liabilities 7,515,974 6,903,968
Surplus notes 2,890,288 2,890,288
Total liabilities 50,207,338 50,124,567
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value, authorized
4,500,000 shares, no shares issued and
outstanding - -
Class A common stock, no par value,
authorized 5,000,000 shares, 862,128
shares issued and outstanding - -
Class B common stock, no par value,
authorized 500,000 shares, no shares
issued and outstanding - -
Additional paid-in capital 7,573,831 7,550,304
Retained earnings 21,377,750 18,296,080
Accumulated other comprehensive loss:
Net unrealized losses on
investments, net of deferred
federal income taxes (383,523) (10,324)
Total stockholders' equity 28,568,058 25,836,060
Total liabilities and
stockholders' equity $78,775,396 $75,960,627
--------------------------------------------------------------------------------
Source: Fremont Michigan InsuraCorp, Inc.
I think FMMH is a great value at $37/share. Here are a few thoughts on this stock:
- Since it is in the midwest it doesn't have the hurricane risk that many insurance companies have.
- The price has been steadily increasing since they had their IPO last year.
- The BV for this stock is $31.82
- They are adding market share. For Q1 net premiums earned rose 4.9% and premiums written increased 8.4%.
- They reinsure although I haven't found information regarding the terms (e.g. level of risk taken on by the reinsurer).
- If you annualize their earnings from Q1 and assume a PE of 12, their value would be $91.20!
Mike
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Company Description
Fremont Michigan InsuraCorp, Inc., through its subsidiary Fremont Insurance Company (FMIC), operates as a property and casualty insurance company that provides insurance to farms, small businesses, and individuals in Michigan. FMIC operates in four segments: Personal, Commercial, Farm, and Marine. The Personal segment serves homeowners, mobile owners, rental dwelling, and personal auto categories. The Commercial segment offers business owners policy, commercial package policy, commercial auto, workers compensation, and other commercial products. The Farm segment provides coverage for the agricultural industry. Its products include farmowners for fully operating farms, country estate for the hobby or part time farmer, and farm for nonowner occupied farms. The Marine segment offers boat owner’s program and the yacht program for the marine industry. The company markets its policies through approximately 170 independent insurance agencies. As of December 31, 2005, it had approximately 51,000 policies in force. The company was founded in 1876 and is headquartered in Fremont, Michigan.
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