UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report:  February 21, 2018
(Date of earliest event reported)

FEDERATED NATIONAL HOLDING COMPANY
(Exact name of registrant as specified in its charter)

Florida
 
000-25001
 
65-0248866
(State or other jurisdiction of incorporation)
 
(Commission  File Number)
 
(I.R.S. Employer Identification No.)

14050 N.W. 14 th Street, Suite 180
   
Sunrise, FL
 
33323
(Address of principal executive offices)
 
(Zip Code)

Registrant’s telephone number, including area code:  (800) 293-2532

NOT   APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company            ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.           ☐
 
Item 2.01
Completion of Acquisition or Disposition of Assets .
 
Federated National Holding Company (the “Company”) (NASDAQ: FNHC), an insurance holding company, has announced that its wholly owned subsidiary, Federated National Insurance Company (“FNIC”), completed on February 21, 2018 the purchase of interests in Monarch Delaware Holdings LLC (“MDH”) held by the Company’s joint venture partners and repayment of the related debt.

FNIC purchased for $12,282,000 in cash the Class A membership interests of MDH held by Crosswinds Investor Monarch LP (“Crosswinds”), representing 42.4% of MDH’s membership interests, and purchased for $4,403,000 in cash the Class B membership interests of MDH held by Transatlantic Reinsurance Company (“TransRe”), representing 15.2% of MDH’s membership interests.  The outstanding principal and accrued but unpaid interest due on the $5.0 million note to TransRe was also repaid in full.  With the closing of this acquisition, FNIC now owns 100% of Monarch National Insurance Company, the primary operating subsidiary of MDH.

In connection with the closing, the Company and an affiliate of Crosswinds entered into a consulting agreement whereby such affiliate will serve in an advisory capacity to the Company for a fee of $75,000 per calendar quarter through December 31, 2018.  In addition, TransRe and a subsidiary of Crosswinds entered into right-of-first-refusal agreements with FNIC to participate in FNIC’s catastrophe excess-of-loss reinsurance program through December 31, 2018, at market rates and terms, up to a placement of $10 million in reinsurance limit in excess of its placement on FNIC’s current catastrophe excess-of-loss reinsurance program from TransRe and up to a placement of $10 million in reinsurance limit in the aggregate from Crosswinds.
 
Item 8.01
Other Events .
 
The Company also announced that it has rescheduled the release of its 2017 fourth quarter and year-end financial results to after 4:00 PM (ET) on Tuesday, March 13, 2018. The investor conference call will be held on Wednesday, March 14, 2018, at 9:00 AM (ET).
 
A copy of the Company’s press release is attached to this Current Report on Form 8-K as Exhibit 99.1, which shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and it shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.
 
Item 9.01
Financial Statements and Exhibits .
 
(d)
Exhibits.
 
99.1 Federated National Holding Company press release dated February 22, 2018
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
   
FEDERATED NATIONAL HOLDING COMPANY
         
Date: February 22, 2018
  By:
    /s/   Ronald A. Jordan
 
   
Name:    Ronald A. Jordan
 
   
Title:      Chief Financial Officer
 
   
(Principal Financial Officer)
 


Exhibit 99.1
FOR IMMEDIATE RELEASE, CONTACT:
Michael H. Braun , CEO (954) 308-1322,
Ronald Jordan, CFO (954) 308-1363,
or Erick A . Fernandez, CAO (954) 308-1341
Federated National Holding Company


FEDERATED NATIONAL HOLDING COMPANY
ANNOUNCES CLOSING OF MONARCH ACQUISITION
AND UPDATE TO FINANCIAL RESULTS RELEASE DATE
 
Sunrise , Florida , February 22, 2018   - Federated National Holding Company (the “Company”) (NASDAQ: FNHC), an insurance holding company, announced today that its wholly owned subsidiary, Federated National Insurance Company (“FNIC”), has completed the previously announced purchase of interests in Monarch Delaware Holdings LLC (“MDH”) held by the Company’s joint venture partners and repayment of the related debt.

FNIC purchased for $12,282,000 in cash the Class A membership interests of MDH held by Crosswinds Investor Monarch LP, representing 42.4% of MDH’s membership interests, and purchased for $4,403,000 in cash the Class B membership interests of MDH held by Transatlantic Reinsurance Company (“TransRe”), representing 15.2% of MDH’s membership interests.  The outstanding principal and accrued but unpaid interest due on the $5.0 million   note to TransRe was also repaid in full.  With the closing of this acquisition, FNIC now owns 100% of Monarch National Insurance Company, the primary operating subsidiary of MDH.

The Company also announced that it has rescheduled the release of its 2017 fourth quarter and year-end financial results to after 4:00 PM (ET) on Tuesday, March 13, 2018. The investor conference call will be held on Wednesday, March 14, 2018, at 9:00 AM (ET).

The Company’s CEO and President, Michael H. Braun, and its CFO, Ronald A. Jordan, will discuss the financial results and review the outlook for the Company. Messrs. Braun and Jordan invite interested parties to participate in the conference call. A live webcast of the call will be available online at www.FedNat.com   (in the Conference Calls section). Listeners interested in participating in the Q&A session can access the conference call by dialing toll free 877-303-6913. Participants are advised to join the call at least five minutes in advance. A webcast replay of the conference call will be available shortly after the live webcast is completed and may be accessed via the Company’s website.

About the Company

The Company is authorized to underwrite , and/or place through its wholly owned subsidiaries , homeowners’ multi-peril, personal automobile, commercial general liability , federal flood , and various other lines of insurance in Florida and various other states . The Company also serves as managing general agent for its joint venture , Monarch National Insurance Company . The Company markets and distributes its own and third-party insurers’ products and our other services through a network of independent agents. The Company also utilizes a select number of general agents for the same purpose .

Forward-Looking Statements /Safe Harbor Statements

Safe harbor statement under the Private Securities Litigation Reform Act of 1995:

Statements that are not historical fact are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. Without limiting the generality of the foregoing, words such as “anticipate,” “believe,” “budget,” “contemplate,” “continue,” “could,” “envision,” “estimate,” “expect,” “guidance,” “indicate,” “intend,” “may,” “might,” “plan,” “possibly,” “potential,” “predict,” “probably,” “pro-forma,” “project,” “seek,” “should,” “target,” or “will” or the negative thereof or other variations thereon and similar words or phrases or comparable terminology are intended to identify forward-looking statements.

Forward-looking statements might also include, but are not limited to, one or more of the following:
·
Projections of revenues, income, earnings per share, dividends, capital structure or other financial items or measures;
·
Descriptions of plans or objectives of management for the proposed use of offering proceeds, future operations or termination of certain operations, or insurance products or services;
·
Forecasts of future insurable events, economic performance, liquidity, need for funding and income; and
·
Descriptions of assumptions or estimates underlying or relating to any of the foregoing.

The risks and uncertainties include, without limitation, risks and uncertainties related to estimates, assumptions and projections generally; the nature of the Company’s business; the adequacy of its reserves for losses and loss adjustment expense; claims experience; weather conditions (including the severity and frequency of storms, hurricanes, tornadoes and hail) and other catastrophic losses; reinsurance costs and the ability of reinsurers to indemnify the Company; raising additional capital and our potential failure to meet minimum capital and surplus requirements; potential assessments that support property and casualty insurance pools and associations; the effectiveness of internal financial controls; the effectiveness of our underwriting, pricing and related loss limitation methods; changes in loss trends, including as a result of insureds’ assignment of benefits; court decisions and trends in litigation; our potential failure to pay claims accurately; ability to obtain regulatory approval applications for requested rate increases, or to underwrite in additional jurisdictions, and the timing thereof; the impact our subsidiaries’ operations may have on our results of operations; inflation and other changes in economic conditions (including changes in interest rates and financial markets); pricing competition and other initiatives by competitors; legislative and regulatory developments; the outcome of litigation pending against the Company, and any settlement thereof; dependence on investment income and the composition of the Company’s investment portfolio; insurance agents; ratings by industry services; the reliability and security of our information technology systems; reliance on key personnel; acts of war and terrorist activities; and other matters described from time to time by the Company in releases and publications, and in periodic reports and other documents filed with the United States Securities and Exchange Commission.

In addition, investors should be aware that generally accepted accounting principles prescribe when a company may reserve for particular risks, including claims and litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when a reserve is established for a contingency. Reported results may therefore appear to be volatile in certain accounting periods.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made.  We do not undertake any obligation to update publicly or revise any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.