AM Best Revises Issuer Credit Rating Outlook to Positive for Pedcor Assurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term ICR of “bbb” (Good) of Pedcor Assurance Company (Pedcor) (Colchester, VT). The outlook of the FSR is stable.

The Credit Ratings (ratings) reflect Pedcor’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The revision of the Long-Term ICR outlook to positive reflects AM Best’s view of the company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). Additional factors include the future benefits to be gained from Pedcor’s solid retained earnings, more moderate premium growth, and the elimination of credit derivative business in 2024, which on a combined basis could potentially lead to a higher overall balance sheet strength assessment. Pedcor previously wrote a fair amount of credit derivatives to support its parents’ banking operation. This business was discontinued in the third quarter of 2024 and Pedcor no longer has any exposure to credit derivatives. The company’s reserving practice has been conservative and prior year reserve development has been favorable in recent years.

United Fidelity Bank, FSB (UFB) is a sister company of Pedcor, both owned by Fidelity Federal Bancorp (FFED). UFB is regulated by the Office of Comptroller of Currency (OCC), which issued a consent order to UFB effective Oct. 31, 2023. The bulk of the items that the OCC had asked UFB to address were related to strengthening policies and procedures in view of the bank’s recent significant growth. UFB is working to clear the remaining articles of the consent order and is in compliance with all capital ratios that it is required to maintain. The OCC has thus far not lifted its consent order. The direct impact of UFB’s consent order to Pedcor is modest in that dividends on $11 million of UFB’s non-cumulative perpetual preferred shares held on Pedcor’s balance sheet were not declared and paid in 2024 and 2025, while Pedcor has temporarily suspended dividends on the $24.8 million non-cumulative perpetual preferreds due to its affiliates. AM Best expects the overall impact of the consent order on Pedcor’s operations to be limited and temporary.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.