Good morning. My name is William, and I will be your conference operator today. At this time, I would like to welcome everyone to the United Fire Group's Second Quarter 2016 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded. Thank you. I will now like to turn the event over to Randy Patten, Assistant Vice President of Finance and Investor Relations.

Good morning, everyone, and thank you for joining this call. Earlier today, we issued a news release on our results. To find a copy of this document, please visit our website at unitedfiregroup.com. Press releases and slides are located under the Investor Relations tab. Our speakers today are Chief Executive Officer, Randy Ramlo; Michael Wilkins, our Chief Operating Officer; and Dawn Jaffray, Chief Financial Officer. Please note that our presentation today may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The company cautions investors that any forward-looking statements include risks and uncertainties that are not a guarantee of future performance. These forward-looking statements are based on management’s current expectations and we assume no obligation to update them. The actual results may differ materially due to a variety of factors, which are described in our press release and SEC filings. Please also note that in our discussion today, we may use some non-GAAP financial measures. Reconciliations of these measures to the most comparable GAAP measures are also available in our press release and SEC filings. At this time, I’m pleased to present Mr. Randy Ramlo, Chief Executive Officer of United Fire Group.

Thanks, Randy. Good morning, everyone, and welcome to UFG Insurance first quarter 2016 conference call. Earlier this morning we reported net income of $0.12 per diluted share, operating income of $0.08 per diluted share and a GAAP combined ratio of 104.8% for the second quarter. This compares with net income of $0.59 per diluted share, operating income of $0.57 per diluted share and a GAAP combined Ratio of 97.7% in the second quarter of 2015. Our second quarter 2016 results were impacted by catastrophe losses from hail and wind storms in Texas and the Midwest. During the second quarter, we were affected by over a dozen catastrophe-designated storms for a total of $35.5 million of catastrophe losses. These losses added 15.3 percentage points to the combined ratio which is 5 percentage points above our 10-year historical average for the second quarter catastrophe losses of 10.3 percentage points. Mike and Dawn will go into more detail on our catastrophe losses and the impact to our loss ratio in a few moments. Our expectations for catastrophe losses in any given year is six percentage points of the combined ratio, with second and third quarters being the most significant quarters with storms and catastrophe events in geographic areas where we conduct much of our business. In the Property and Casualty segment, net premiums earned increased 11% and are the results of continued organic growth and geographical expansion. Rate increases on commercial lines were in the low single digits in the second quarter in our commercial auto and commercial property lines of business. Rate increases on personal lines were in the low-single digits, primarily in our homeowners and personal auto lines of business. I’ll let Mike address more specifics with respect to P&C market conditions and performance in a few moments. Moving on to…

Thanks Randy and good morning everyone. As Randy indicated and as we pre-released this quarter, we experienced an increase in catastrophe losses during second quarter. In the second quarter, we had 13 catastrophe designated events, with 5 of those events accounting for a majority of the total catastrophe losses during the quarter. The losses were due to hail and wind storms in Texas and the Midwest. In Texas, the most significant losses were to commercial property in the San Antonio area. The losses throughout the remaining parts of the Midwest and Texas impacted our commercial property, commercial auto, personal auto and homeowners lines of business. In 2016, we continue to see an improvement in large losses, excluding catastrophe losses, which we define as losses greater than $500,000. Large losses totaled $19 million in the second quarter of 2016 compared to $21 million in the second quarter of 2015. Year-to-date, large losses totaled $37 million in 2016 compared to $43 million in 2015. The decrease in large losses is due to an improvement in severity. By their very nature we expect large losses to vary from quarter-to-quarter and year-to-year. Claim counts increased 11% in the first half of 2016 as compared to the first half of the prior year, but as a percent of written premiums are flat. This increase was impacted by the weather related catastrophe activity in Texas and the Midwest as previously discussed. During the second quarter, our loss ratio on workers’ compensation increased 32 points over an unusually low loss ratio in the second quarter of 2015. We attribute this change to an increase in severity of claims over $100,000 and a decrease in favorable reserve development on prior year claims. Despite the increase, the loss ratio continues to be within our expectations for this line of…

Thanks, Mike, and good morning. For the second quarter of 2016, we reported consolidated net income of $3.1 million, or $0.12 per diluted share, compared to $15 million, or $0.59 per diluted share, in the second quarter of 2015. Through six months, 2016 year-to-date consolidated net income was $25.5 million and $1.00 per diluted share as compared to $38.7 million and $1.54 per diluted share in 2015. The decrease in net income in the second quarter and year to date as compared to 2015 is primarily due to the catastrophe losses previously discussed by Randy and Mike. Our shareholders’ equity increased 9%, to $961 million at June 30, 2016, from $879 million at December 31, 2015. Book value increased $2.91 to $37.85 at June 30, 2016, from $34.94 at December 31, 2015. The increases in shareholders’ equity and book value are primarily due to net income of $25.5 million and an increase in unrealized investment gains of $59 million. Consolidated unrealized investment gains are $187.4 million at June 30, 2016. Return on equity was 5.6% in the first half of 2016 compared to 9.4% in the first half of 2015. Further adjusting ROE to exclude the impact of unrealized gains, our adjusted ROE was 6.7% in the first half of 2016 as compared to 11.3% in the first half of 2015. The decrease in ROE as compared to the same quarter last year was primarily due to a combination of a decrease in net income and an increase in shareholders’ equity. Losses and loss settlement expenses increased by $30 million, or 20%, during the second quarter 2016 as compared with the second quarter of 2015. On a year-to-date basis, losses and loss settlement expenses increased by $45.8 million, or 16.5%, compared to the same period of 2015. The primary driver…

[Operator Instructions] Our first question comes from Paul Newsome with Sandler O’Neill. Please go ahead.

Good morning. At one point in time, I think there was a project to develop some internal models to figure out just how much excess capital United Fire had, in your opinion. Were those projects completed, and if so, what were the results?

Yes, they were. I’d probably characterize those as ongoing, but we look at our capital structure from kind of two different, separate sources, and we do have excess capital, but we don’t disclose the amount we have. So, yes, we continually monitor that from year to year.

Was there any change, in your opinion, because of these projects?

Not really, no.

Fair enough. Thanks.

Thank you, Paul.

[Operator Instructions] There are no further questions. So this concludes our question-and-answer session. I would now like to turn the conference back over to Randy Patten for any closing remarks.

This now concludes our conference call. As a reminder, a transcript of this call will be available on the company website at unitedfiregroup.com. On behalf of the management of United Fire Group, I wish all of you a pleasant day. Thank you.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.