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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Mercer Insurance Grp., Inc. (MM) | NASDAQ:MIGP | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 28.23 | 0 | 01:00:00 |
On November 30, 2010, Mercer Insurance Group, Inc. ("Mercer Insurance" or the "Company") and United Fire & Casualty Company ("United Fire") of Cedar Rapids, Iowa, issued a joint press release announcing that Mercer Insurance had entered into an agreement and plan of merger with United Fire (the "Merger Agreement") pursuant to which it will acquire all of the outstanding shares of Mercer Insurance for $28.25 per share. The consummation of the merger is subject to United Fire receiving the appropriate regulatory approvals from state insurance regulators, the approval of Mercer Insurance's shareholders, and other terms and conditions set forth in the Merger Agreement. The Merger Agreement was unanimously approved by the Board of Directors of Mercer Insurance. A copy of the agreement was provided as Exhibit 2.1 to the Form 8-K filed by Mercer Insurance with the Securities and Exchange Commission on December 1, 2010. Pursuant to the terms of the Merger Agreement, Mercer Insurance has discontinued its quarterly dividend.
The Company's fourth quarter highlights include:
-- Net income of $0.55 per diluted share versus $0.57 per diluted share in the prior year's quarter, -- Operating income of $0.53 per diluted share versus $0.54 per diluted share in the prior year's quarter, -- A GAAP combined ratio of 94.3% versus 96.5% in the prior year's quarter, and -- Book value per share of $27.88. Financial Summary (in thousands, except per share data) Three Months Ended Year Ended December 31, December 31, (unaudited) (unaudited) -------------------- -------------------- 2010 2009 2010 2009 --------- --------- --------- --------- Total revenue $ 38,243 $ 39,315 $ 153,558 $ 157,312 Net premiums written 31,807 32,293 132,696 137,830 Net premiums earned 34,136 35,198 135,964 140,413 Net investment income 3,445 3,365 13,878 14,198 Net realized gains on investments 210 228 1,786 621 Net income 3,618 3,626 14,736 13,821 Earnings per share - Basic $ 0.57 $ 0.58 $ 2.34 $ 2.23 Earnings per share - Diluted $ 0.55 $ 0.57 $ 2.28 $ 2.18 Combined ratio 94.3% 96.5% 96.4% 97.6% Book value per share $ 27.88 $ 25.63 Reconciliation of non-GAAP financial measures: Net income $ 3,618 $ 3,626 $ 14,736 $ 13,821 Net realized gains on investments, net of tax 138 150 1,179 410 Net operating income 3,480 3,476 13,557 13,411 Operating earnings per share - Basic $ 0.55 $ 0.56 $ 2.15 $ 2.16 Operating earnings per share - Diluted $ 0.53 $ 0.54 $ 2.10 $ 2.11
In the quarter ended December 31, 2010, the Company reported GAAP net income of $3.6 million, or $0.55 per diluted share, as compared to approximately the same amount, or $0.57 per diluted share, in the same quarter of the prior year. Operating earnings remained approximately the same as the prior year's quarter at $3.5 million, and $0.53 and $0.54 per diluted share for the three months ended December 31, 2010 and 2009, respectively. Included in the expenses of the current year's quarter was an after-tax charge of $204,000 for merger-related expenses, or $0.03 per diluted share.
In the year ended December 31, 2010, the Company reported GAAP net income of $14.7 million, or $2.28 per diluted share. This result compares to net income of $13.8 million, or $2.18 per diluted share, for the same period in the previous year. Operating earnings increased to $13.6 million from $13.4 million in the prior year, or $2.10 and $2.11 per diluted share, respectively. Included in the full year results for 2010 was an after-tax charge of $1.6 million for catastrophes 94 and 96, and an after-tax charge for merger-related expenses of $204,000.
Operating income and operating earnings per share are non-GAAP financial measures that we present because we believe they enhance an investor's understanding of Mercer Insurance's core operating performance. Operating income and operating earnings per share consist of net earnings adjusted for after-tax net realized investment gains and losses.
Mercer Insurance Group, Inc. offers commercial and personal lines of insurance to businesses and individuals principally in seven states through its insurance subsidiaries: Mercer Insurance Company, Mercer Insurance Company of New Jersey, Inc., Financial Pacific Insurance Company and Franklin Insurance Company.
Certain of the statements in this press release (other than statements of historical facts) are forward-looking statements. Such forward-looking statements 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 Mercer Insurance. There can be no assurance that future developments will be in accordance with management's expectations. Therefore, the effect of future developments on Mercer Insurance may be different from that anticipated by management. Actual financial results including premium growth and underwriting results could differ materially from those anticipated by Mercer Insurance, 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, including those that may impede its 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.
Consolidated Statements of Income (in thousands, except per share and share data) Quarter Ended December 31, 2010 2009 (unaudited) (unaudited) Net premiums earned $ 34,136 $ 35,198 Investment income, net of investment expenses 3,445 3,365 Realized investment gains 210 228 Other revenue 452 524 Total revenue 38,243 39,315 Losses and loss adjustment expenses 20,886 21,499 Amortization of deferred policy acquisition costs 9,307 9,803 Other expenses 2,002 2,652 Interest expense 358 356 Merger-related expenses 314 - Total expenses 32,867 34,310 Income before income taxes 5,376 5,005 Income taxes 1,758 1,379 Net income $ 3,618 $ 3,626 Net income per common share: Basic $ 0.57 $ 0.58 Diluted $ 0.55 $ 0.57 Weighted average number of shares outstanding: Basic 6,353,814 6,243,618 Diluted 6,542,171 6,402,686 Supplementary Financial Data Net premiums written $ 31,807 $ 32,293 Book value per common share $ 27.88 $ 25.63 GAAP combined ratio 94.3% 96.5% Consolidated Statements of Income (in thousands, except per share and share data) Year Ended December 31, 2010 2009 (unaudited) Net premiums earned $ 135,964 $ 140,413 Investment income, net of investment expenses 13,878 14,198 Realized investment gains 1,786 621 Other revenue 1,930 2,080 Total revenue 153,558 157,312 Losses and loss adjustment expenses 83,737 86,142 Amortization of deferred policy acquisition costs 37,091 38,805 Other expenses 10,181 12,090 Interest expense 1,419 1,423 Merger-related expense 314 - Total expenses 132,742 138,460 Income before income taxes 20,816 18,852 Income taxes 6,080 5,031 Net income $ 14,736 $ 13,821 Net income per common share: Basic $ 2.34 $ 2.23 Diluted $ 2.28 $ 2.18 Weighted average number of shares outstanding: Basic 6,305,754 6,211,623 Diluted 6,465,863 6,345,164 Supplementary Financial Data Net premiums written $ 132,696 $ 137,830 GAAP combined ratio 96.4% 97.6% Consolidated Balance Sheet (in thousands, except share amounts) December 31, December 31, 2010 2009 (unaudited) ASSETS Investments, at fair value: Fixed income securities, available-for-sale $ 397,130 $ 365,464 Equity securities, at fair value 10,691 9,484 Short-term investments, at cost, which approximates fair value 9,849 - Total investments 417,670 374,948 Cash and cash equivalents 16,345 39,927 Premiums receivable 35,172 36,405 Reinsurance receivable 72,905 79,599 Prepaid reinsurance premiums 6,331 5,871 Deferred policy acquisition costs 18,192 18,876 Accrued investment income 4,261 4,287 Property and equipment, net 20,316 21,516 Deferred income taxes 3,141 4,941 Goodwill 5,416 5,416 Other assets 3,846 3,568 Total assets $ 603,595 $ 595,354 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Losses and loss adjustment expenses $ 304,641 $ 311,348 Unearned premiums 73,793 76,601 Accounts payable and accrued expenses 11,685 12,150 Other reinsurance balances 12,906 12,386 Trust preferred securities 15,609 15,592 Advances under line of credit 3,000 3,000 Other liabilities 4,412 4,069 Total liabilities $ 426,045 $ 435,146 Stockholders' Equity: Preferred Stock, no par value, authorized - - 5,000,000 shares, no shares issued and outstanding Common stock, no par value, - - authorized 15,000,000 shares, issued 7,126,233 and 7,074,333 shares, outstanding 7,000,009 and 6,883,498 shares Additional paid-in-capital $ 73,386 $ 72,139 Accumulated other comprehensive income 15,315 12,220 Retained earnings 98,481 86,101 Unearned ESOP shares (1,253) (1,878) Treasury Stock, 632,391 and 632,076 shares (8,379) (8,374) Total stockholders' equity 177,550 160,208 Total liabilities and stockholders' equity $ 603,595 $ 595,354
Company Contacts: Andrew R. Speaker President & CEO Mercer Insurance Group, Inc. (609) 737-0426 David B. Merclean Senior Vice President & CFO Mercer Insurance Group, Inc. (609) 737-0426
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