Exhibit 99
FPIC INSURANCE GROUP, INC.
ANNOUNCES COMPLETION OF A SECOND
$15 MILLION PRIVATE PLACEMENT, INCLUDING
TRUST PREFERRED SECURITIES AND SENIOR NOTES
JACKSONVILLE, Fla. (Business Wire) - May 29, 2003 - FPIC Insurance Group, Inc.
("FPIC") (Nasdaq Symbol: FPIC) announced today that it has completed a second
$15 million private placement. Sandler O'Neill & Partners, L.P. ("Sandler
O'Neill") acted as placement agent for the offering.
On May 13, 2003, FPIC entered into a placement agreement with Sandler O'Neill
for the private placement of approximately $5.0 million of trust preferred
securities and $10.0 million of unsecured senior notes. The offering was
completed May 22, 2003.
FPIC, through its wholly owned statutory trust, along with other insurance and
insurance holding company participants, issued trust preferred securities to the
Sandler O'Neill investment pool, which in turn issued its securities to
institutional and accredited investors. The securities issued to the investment
pool by FPIC mature in 30 years and will bear a floating per annum interest rate
equal to LIBOR plus 4.2%, for an initial rate of approximately 5.5%. The
floating interest rate will be adjustable quarterly with changes in LIBOR, and
the maximum rate that may be charged under the securities within the first five
years is 12.5%. FPIC has purchased hedging instruments designed to maintain the
ultimate floating rate interest cost on the securities within the range of 5.4%
to 8.6% for five years from closing. FPIC will have the option to call these
securities at par beginning May 23, 2008.
The floating rate 30-year senior notes will bear a per annum interest rate equal
to LIBOR plus 4.2%, for an initial rate of approximately 5.5%. The floating
interest rate will be adjustable quarterly with changes in LIBOR, and the
maximum rate that may be charged under the notes within the first five years is
12.5%. FPIC has purchased a hedging instrument designed to maintain the ultimate
floating rate interest cost on the notes within 5.4% to 8.6% for five years from
closing. FPIC will have the option to call these notes at par beginning May 23,
2008.
The net proceeds from the trust preferred securities and the senior notes are
being used primarily to pay down FPIC's revolving credit facility and to
partially unwind a related hedge agreement. FPIC has secured from its bank
lender group the necessary approvals and amendments to its credit facility to
allow for the issuance of the trust preferred securities and the senior notes
and such use of the proceeds.
John R. Byers, President and Chief Executive Officer of FPIC said, "We are
pleased to be participating in Sandler O'Neill's offering. The trust preferred
securities and senior notes allow us to replace a portion of our existing
commercial bank debt with longer-term institutional debt, which gives us more
operational flexibility. Lowering our debt levels, generally, and replacing a
portion of our commercial bank debt with longer-term institutional instruments
have been important goals in our business model. We are pleased to have made
progress in achieving these goals through the recent completion of two private
offerings. We will continue to explore and pursue opportunities to enhance our
capital position."
FPIC estimates it will incur charges of approximately $1.0 million after tax in
the second quarter of 2003 in connection with the completion of the recent FTN
Financial Capital Markets/Keefe Bruyette & Woods, Inc. and Sandler O'Neill
private placements, consisting primarily of the costs to unwind swap agreements
associated with the pay downs of its bank debt. Other costs associated with the
private placements of approximately $1.0 million will be amortized over the
expected life of the newly issued securities, which have stated maturities of 30
years. During the remainder of 2003, FPIC expects to realize net cost savings of
approximately $0.3 million after tax, primarily from lower interest and hedging
costs associated with the new
Exhibit - 1
securities, with additional savings continuing thereafter. Total incremental
costs associated with the newly issued securities for the year 2003 are expected
to be approximately $1.1 million (approximately $0.7 million after tax).
Kim D. Thorpe, Executive Vice President and Chief Financial Officer, stated,
"The costs we are incurring in the second quarter to unwind the swap agreements
result from the decline in market interest rates that has occurred since we put
them in place. On the flipside, interest costs on our new securities will
initially be at significantly lower interest rates. We have also put hedge
agreements in place that limit our floating rate interest costs on all the new
securities for the first five years, until we have the option to call the
securities. We consider these costs to be good investments in terms of both a
lower cost of capital, as well as a higher quality of capital going forward."
For additional information regarding FPIC's private placement with Sandler
O'Neill, see FPIC's Form 8-K filed with the Securities and Exchange Commission
(SEC) on May 29, 2003.
Corporate Profile
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FPIC Insurance Group, Inc., through its subsidiary companies, is a leading
provider of professional liability insurance for physicians, dentists and other
healthcare providers, primarily in Florida and Missouri. FPIC also provides
management and administration services to Physicians' Reciprocal Insurers, a New
York medical professional liability insurance reciprocal, and third-party
administration services both within and outside the healthcare industry.
Safe Harbor Disclosure
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The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. Any written or oral statements made by or on
behalf of FPIC may include forward-looking statements, which reflect our current
views with respect to future events and financial performance. These
forward-looking statements are subject to certain uncertainties and other
factors that could cause ultimate outcomes to differ materially from such
statements. These uncertainties and other factors include, but are not limited
to:
[ ] Developments in global financial markets that could affect
financing plans;
| | Risk factors associated with financing and refinancing, including
the willingness of credit institutions to provide financing and the
availability of credit generally;
| | Changes in financial ratings resulting from one or more of these
uncertainties or other factors and the potential impact on agents'
ability to place insurance business on behalf of FPIC; and
other risk factors discussed in FPIC's SEC Form 10-K for the year
ended December 31, 2002, filed with the SEC on March 28, 2003, and
Form 10-Q for the quarter ended March 31, 2003, filed with the SEC
on May 14, 2003.
The words "believe," "anticipate," "foresee," "estimate," "project," "plan,"
"expect," "intend," "hope," "should," "will," "will likely result" or "will
continue" and variations thereof or similar expressions identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of their dates. FPIC undertakes
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by law.
Contact
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Roberta Goes Cown
Senior Vice President and Corporate Counsel
(904) 354-2482, Extension 3287
For all your investor needs, FPIC is on the Internet at
HTTP://WWW.FPIC.COM
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Got a Tough Question? E-mail us at ir@fpic.com
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FPIC: Providing Answers in a Changing Market
Exhibit - 2