FedNat Holding Company Announces Pricing of Offering of Common Stock

Rhea-AI Summary

FedNat Holding Company (Nasdaq: FNHC) has announced a public offering of 3,500,000 shares of common stock, priced at $4.75 each, raising gross proceeds of $16.625 million. After expenses, net proceeds are expected to be about $15.2 million. The funds will be used for general corporate purposes, including liquidity for future capital contributions to subsidiaries. The offering is subject to market conditions and is anticipated to close on March 15, 2021. Additionally, the underwriter has a 30-day option to purchase up to 525,000 more shares.

Positive

• Gross proceeds of $16.625 million from the offering.
• Net proceeds of approximately $15.2 million will support liquidity and potential capital contributions.

Negative

• Dilution of existing shareholders due to additional shares being offered.
• Market conditions may impact the offering's finalization.

SUNRISE, Fla., March 12, 2021 (GLOBE NEWSWIRE) -- FedNat Holding Company (Nasdaq: FNHC), a regional insurance holding company, announced that it has priced an underwritten public offering of 3,500,000 shares of its common stock at a price to the public of $4.75 per share for gross proceeds of $16.625 million. The net proceeds from the sale of the shares, after deducting the underwriter’s discount and other estimated offering expenses payable by the Company, will be approximately $15.2 million. In addition, the underwriter has been granted a 30-day option to purchase up to 525,000 additional shares of common stock from the Company at the public offering price, less the underwriter’s discount.

The Company will use the net proceeds from the sale of the common stock for general corporate purposes, including to provide additional liquidity in its holding company to be available for future capital contributions to its insurance company subsidiaries, if necessary. The closing of the offering is subject to market and other conditions and is expected to close on March 15, 2021.

Piper Sandler & Co. is serving as sole bookrunner for the offering.

The offering is being made pursuant to an effective shelf registration statement (File No. 333-225464) previously filed with the U.S. Securities Exchange Commission (“SEC”). A preliminary prospectus supplement related to the offering was filed with the SEC on March 5, 2021. A final prospectus supplement and accompanying prospectus describing the terms of the offering will be filed with the SEC on March 12, 2021 and will be available on its website at http://www.sec.gov. Alternatively, the underwriter will arrange to send you the prospectus and prospectus supplement if you request it by calling toll free at 866-805-4128.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offer of these securities will be solely by means of the prospectus included in the registration statement and the prospectus supplement that will be issued in connection with the offering.

About the Company

FedNat Holding Company is a regional insurance holding company that controls substantially all aspects of the insurance underwriting, distribution and claims processes through our subsidiaries and contractual relationships with independent agents and general agents. The Company, through its wholly owned subsidiaries FedNat Insurance Company, Maison Insurance Company, and Monarch National Insurance Company, is focused on providing homeowners insurance in Florida, Texas, Louisiana, Alabama, South Carolina and Mississippi. More information is available at https://www.fednat.com/investor-relations/.

Forward-Looking Statements

Except for historical information contained herein, this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about the Company’s expectations regarding the completion, terms, size, and timing of the public offering, and with respect to granting the underwriters a 30-day option to purchase additional shares. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements, including risks and uncertainties related to completion of the public offering on the anticipated terms or at all, market conditions and the satisfaction of customary closing conditions related to the public offering, and those factors described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, and the Company’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2020, June 30, 2020, and September 30, 2020, all of which have been filed with the Securities and Exchange Commission.

FAQ

What is the purpose of FedNat Holding Company's stock offering on March 12, 2021?

The stock offering aims to raise funds for general corporate purposes, including enhancing liquidity for future capital contributions.

How many shares are being offered in the FedNat Holding Company stock offering?

FedNat is offering 3,500,000 shares of common stock.

What is the price per share for FedNat Holding Company's stock offering?

The shares are priced at $4.75 each.

When is the expected closing date for FedNat Holding Company's stock offering?

The offering is expected to close on March 15, 2021.

What are the total gross proceeds from the FedNat Holding Company stock offering?

The total gross proceeds are $16.625 million.