A small Midwestern mutual life insurer has turned itself into a public company.
The insurer, Federal Life Insurance Company of Riverwoods, Illinois, is now a subsidiary of Federal Life Group Inc., a company with stock that trades on the Nasdaq Capital Market.
Shares trade under the symbol Nasdaq:FLF.
Federal Life’s stock may not stay on the Nasdaq Capital Market for very long: The company warned in the offering prospectus that it may try to avoid U.S. Securities and Exchange Commission quarterly and annual reporting requirements by getting its stock delisted from the Nasdaq Capital Market.
“This would materially and adversely affect the liquidity of our stock,” the company said in a list of offering risk factors.
The Deal Structure
A mutual insurer is owned by the policyholders.
Federal Life’s previous holding company, Federal Life Mutual Holding Company, completed a subscription offering, for the eligible policyholders and annuity holders, Dec. 4.
The company completed a community offering — for directors, officers, employees, “strategic partners,” and Insurance Capital Group LLC (ICG) — Tuesday.
Federal Life said in its prospectus that it hoped to 3.4 million shares to 4.6 million shares, at an initial price of $10 per share.
The company actually sold 3.53 million shares, according to Federal Life.
The total proceeds amounted to $35.3 million.
Federal Life received $32 million of the proceeds. The company has said that it hopes to use some of the offering proceeds to launch a variable annuity product.
The Deal Players
ICG is a New York-based investment firm led by two veterans of Reservoir Capital, Craig Huff and Matt Popoli. ICG’s board includes Jose Montemayor, a former Texas insurance commissioner, and Anne Dowling, a former Illinois insurance director.
Griffin Financial Group LLC placed the offering. Stevens and Lee acted as the counsel for Federal Life.
William Austin, who has been president and chief operating officer at Federal Life Group, will now be the president and chief executive officer, the company said. Joseph Austin, who has been the chairman and CEO, will continue to be Federal Life’s chairman.
The initial securities ownership filings for Federal Life show that Popoli, who is a Federal Life director but not an officer, now controls 1.5 million shares, on behalf of ICG.
Three other directors who are not company officers — Wayne Ebersberger, William Springer and James Stacke — own 5,000 shares each.
William Austin, Joseph Austin and Michael Austin, Federal Life’s chief marketing officer, who are all company directors, own a total of about 325,000 shares.
Anders Raaum, Federal Life’s chief financial officer, who is not a director, owns about 29,000 shares.
Federal Life’s SEC filings are available here.
The Nasdaq Capital Market page for Federal Life’s stock is available here.
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