☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Puerto Rico | 66-0555678 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
1441 F.D. Roosevelt Avenue | ||
San Juan, Puerto Rico | 00920 | |
(Address of principal executive offices) | (Zip code) |
Large accelerated filer ☐ | Accelerated filer ☑ |
Non-accelerated filer ☐ | Smaller reporting company ☐ |
Emerging growth company ☐ |
Title of each class | Outstanding at | |
Common Stock Class A, $1.00 par value | 950,968 | |
Common Stock Class B, $1.00 par value | 23,494,170 |
3 | |||
Item 1. | 3 | ||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Item 1. | 48 | ||
Item 1A. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Item 5. | |||
Item 6. | |||
March 31, 2017 | December 31, 2016 | June 30, 2017 | December 31, 2016 | |||||||||||||
Assets | ||||||||||||||||
Investments and cash: | ||||||||||||||||
Securities available for sale, at fair value: | ||||||||||||||||
Fixed maturities | $ | 1,153,545 | $ | 1,151,643 | $ | 1,196,161 | $ | 1,151,643 | ||||||||
Equity securities | 277,149 | 270,349 | 287,820 | 270,349 | ||||||||||||
Securities held to maturity, at amortized cost: | ||||||||||||||||
Fixed maturities | 2,514 | 2,836 | 2,835 | 2,836 | ||||||||||||
Policy loans | 8,546 | 8,564 | 8,716 | 8,564 | ||||||||||||
Cash and cash equivalents | 218,884 | 103,428 | 172,526 | 103,428 | ||||||||||||
Total investments and cash | 1,660,638 | 1,536,820 | 1,668,058 | 1,536,820 | ||||||||||||
Premiums and other receivables, net | 292,837 | 286,365 | 320,548 | 286,365 | ||||||||||||
Deferred policy acquisition costs and value of business acquired | 195,513 | 194,787 | 200,034 | 194,787 | ||||||||||||
Property and equipment, net | 66,756 | 66,369 | 69,083 | 66,369 | ||||||||||||
Deferred tax asset | 64,128 | 57,768 | 69,576 | 57,768 | ||||||||||||
Goodwill | 25,397 | 25,397 | 25,397 | 25,397 | ||||||||||||
Other assets | 53,186 | 51,493 | 52,672 | 51,493 | ||||||||||||
Total assets | $ | 2,358,455 | $ | 2,218,999 | $ | 2,405,368 | $ | 2,218,999 | ||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||
Claim liabilities | $ | 530,304 | $ | 487,943 | $ | 504,240 | $ | 487,943 | ||||||||
Liability for future policy benefits | 326,162 | 321,232 | 331,427 | 321,232 | ||||||||||||
Unearned premiums | 163,780 | 79,310 | 175,561 | 79,310 | ||||||||||||
Policyholder deposits | 179,599 | 179,382 | 179,225 | 179,382 | ||||||||||||
Liability to Federal Employees’ Health Benefits and Federal Employees’ Programs | 37,206 | 34,370 | ||||||||||||||
Liability to Federal Employees' Health Benefits and Federal Employees' Programs | 40,363 | 34,370 | ||||||||||||||
Accounts payable and accrued liabilities | 171,643 | 169,449 | 204,194 | 169,449 | ||||||||||||
Deferred tax liability | 19,599 | 18,850 | 22,203 | 18,850 | ||||||||||||
Long-term borrowings | 34,465 | 35,085 | 33,667 | 35,085 | ||||||||||||
Liability for pension benefits | 30,472 | 30,892 | 30,496 | 30,892 | ||||||||||||
Total liabilities | 1,493,230 | 1,356,513 | 1,521,376 | 1,356,513 | ||||||||||||
Stockholders’ equity: | ||||||||||||||||
Triple-S Management Corporation stockholders’ equity | ||||||||||||||||
Common stock Class A, $1 par value. Authorized 100,000,000 shares; issued and outstanding 950,968 at March 31, 2017 and December 31, 2016, respectively | 951 | 951 | ||||||||||||||
Common stock Class B, $1 par value. Authorized 100,000,000 shares; issued and outstanding 23,491,670 and 23,321,163 shares at March 31, 2017 and December 31, 2016, respectively | 23,492 | 23,321 | ||||||||||||||
Triple-S Management Corporation stockholders' equity | ||||||||||||||||
Common stock Class A, $1 par value. Authorized 100,000,000 shares;issued and outstanding 950,968 at June 30, 2017and December 31, 2016, respectively | 951 | 951 | ||||||||||||||
Common stock Class B, $1 par value. Authorized 100,000,000 shares; issued and outstanding 23,494,170 and 23,321,163 shares at June 30, 2017 and December 31, 2016, respectively | 23,494 | 23,321 | ||||||||||||||
Additional paid-in capital | 63,978 | 65,592 | 65,589 | 65,592 | ||||||||||||
Retained earnings | 726,562 | 730,904 | 739,267 | 730,904 | ||||||||||||
Accumulated other comprehensive income | 50,920 | 42,395 | 55,369 | 42,395 | ||||||||||||
Total Triple-S Management Corporation stockholders’ equity | 865,903 | 863,163 | ||||||||||||||
Total Triple-S Management Corporation stockholders' equity | 884,670 | 863,163 | ||||||||||||||
Non-controlling interest in consolidated subsidiary | (678 | ) | (677 | ) | (678 | ) | (677 | ) | ||||||||
Total stockholders’ equity | 865,225 | 862,486 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,358,455 | $ | 2,218,999 | ||||||||||||
Total stockholders' equity | 883,992 | 862,486 | ||||||||||||||
Total liabilities and stockholders' equity | $ | 2,405,368 | $ | 2,218,999 |
Three months ended March 31, | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Premiums earned, net | $ | 702,273 | $ | 738,534 | $ | 722,891 | $ | 729,049 | $ | 1,425,164 | $ | 1,467,583 | ||||||||||||
Administrative service fees | 4,379 | 5,083 | 4,548 | 4,520 | 8,927 | 9,603 | ||||||||||||||||||
Net investment income | 12,016 | 11,358 | 12,698 | 12,875 | 24,714 | 24,233 | ||||||||||||||||||
Other operating revenues | 965 | 812 | 1,121 | 915 | 2,086 | 1,727 | ||||||||||||||||||
Total operating revenues | 719,633 | 755,787 | 741,258 | 747,359 | 1,460,891 | 1,503,146 | ||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||
Total other-than-temporary impairment losses on securities | - | (1,434 | ) | - | (1,434 | ) | ||||||||||||||||||
Net realized gains, excluding other-than-temporary impairment losses on securities | 4,054 | 2,954 | 4,390 | 3,012 | ||||||||||||||||||||
Net realized investment gains on sale of securities | 336 | 58 | 4,054 | 1,520 | 4,390 | 1,578 | ||||||||||||||||||
Other income, net | 2,525 | 875 | 587 | 3,859 | 3,112 | 4,734 | ||||||||||||||||||
Total revenues | 722,494 | 756,720 | 745,899 | 752,738 | 1,468,393 | 1,509,458 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims incurred | 620,863 | 626,694 | 611,297 | 622,087 | 1,232,160 | 1,248,781 | ||||||||||||||||||
Operating expenses | 110,946 | 122,980 | 118,720 | 121,112 | 229,666 | 244,092 | ||||||||||||||||||
Total operating costs | 731,809 | 749,674 | 730,017 | 743,199 | 1,461,826 | 1,492,873 | ||||||||||||||||||
Interest expense | 1,686 | 1,882 | 1,721 | 1,954 | 3,407 | 3,836 | ||||||||||||||||||
Total benefits and expenses | 733,495 | 751,556 | 731,738 | 745,153 | 1,465,233 | 1,496,709 | ||||||||||||||||||
(Loss) income before taxes | (11,001 | ) | 5,164 | |||||||||||||||||||||
Income taxes | (6,658 | ) | 1,709 | |||||||||||||||||||||
Net (loss) income | (4,343 | ) | 3,455 | |||||||||||||||||||||
Income before taxes | 14,161 | 7,585 | 3,160 | 12,749 | ||||||||||||||||||||
Income tax expense (benefit) | 1,456 | 3,707 | (5,202 | ) | 5,416 | |||||||||||||||||||
Net income | 12,705 | 3,878 | 8,362 | 7,333 | ||||||||||||||||||||
Less: Net loss attributable to non-controlling interest | 1 | 1 | - | 2 | 1 | 3 | ||||||||||||||||||
Net (loss) income attributable to Triple-S Management Corporation | $ | (4,342 | ) | $ | 3,456 | |||||||||||||||||||
Net income attributable to Triple-S Management Corporation | $ | 12,705 | $ | 3,880 | $ | 8,363 | $ | 7,336 | ||||||||||||||||
Earnings per share attributable to Triple-S Management Corporation | ||||||||||||||||||||||||
Basic net (loss) income per share | $ | (0.18 | ) | $ | 0.14 | |||||||||||||||||||
Diluted net (loss) income per share | $ | (0.18 | ) | $ | 0.14 | |||||||||||||||||||
Basic net income per share | $ | 0.52 | $ | 0.16 | $ | 0.35 | $ | 0.30 | ||||||||||||||||
Diluted net income per share | $ | 0.52 | $ | 0.16 | $ | 0.34 | $ | 0.30 |
Three months ended March 31, | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Net (loss) income | $ | (4,343 | ) | $ | 3,455 | |||||||||||||||||||
Net income | $ | 12,705 | $ | 3,878 | $ | 8,362 | $ | 7,333 | ||||||||||||||||
Other comprehensive (loss) income, net of tax: | ||||||||||||||||||||||||
Net unrealized change in fair value of available for sale securities, net of taxes | 8,472 | 19,577 | 4,396 | 15,830 | 12,868 | 35,407 | ||||||||||||||||||
Defined benefit pension plan: | ||||||||||||||||||||||||
Actuarial loss, net | 53 | 722 | 53 | 507 | 106 | 1,229 | ||||||||||||||||||
Prior service credit, net | - | (88 | ) | - | (62 | ) | - | (150 | ) | |||||||||||||||
Total other comprehensive income, net of tax | 8,525 | 20,211 | 4,449 | 16,275 | 12,974 | 36,486 | ||||||||||||||||||
Comprehensive income | 4,182 | 23,666 | 17,154 | 20,153 | 21,336 | 43,819 | ||||||||||||||||||
Comprehensive income attributable to non-controlling interest | 1 | 1 | - | 2 | 1 | 3 | ||||||||||||||||||
Comprehensive income attributable to Triple-S Management Corporation | $ | 4,183 | $ | 23,667 | $ | 17,154 | $ | 20,155 | $ | 21,337 | $ | 43,822 |
2017 | 2016 | 2017 | 2016 | |||||||||||||
Balance at January 1 | $ | 863,163 | $ | 847,526 | $ | 863,163 | $ | 847,526 | ||||||||
Share-based compensation | (1,443 | ) | 1,421 | 170 | 2,649 | |||||||||||
Stock issued upon the exercise of stock options | - | 55 | ||||||||||||||
Repurchase and retirement of common stock | - | (8,027 | ) | - | (14,616 | ) | ||||||||||
Comprehensive income | 4,183 | 23,667 | 21,337 | 43,822 | ||||||||||||
Total Triple-S Management Corporation stockholders’ equity | 865,903 | 864,587 | ||||||||||||||
Total Triple-S Management Corporation stockholders' equity | 884,670 | 879,436 | ||||||||||||||
Non-controlling interest in consolidated subsidiary | (678 | ) | (671 | ) | (678 | ) | (673 | ) | ||||||||
Balance at March 31 | $ | 865,225 | $ | 863,916 | ||||||||||||
Balance at June 30 | $ | 883,992 | $ | 878,763 |
Three months ended March 31, | Six months ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net (loss) income | $ | (4,343 | ) | $ | 3,455 | |||||||||||
Net income | $ | 8,362 | 7,333 | |||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 2,990 | 3,700 | 6,454 | 7,300 | ||||||||||||
Net amortization of investments | 2,356 | 1,936 | 4,787 | 3,981 | ||||||||||||
(Reductions) additions to the allowance for doubtful receivables | (3,209 | ) | 1,531 | |||||||||||||
Deferred tax benefit | (7,525 | ) | (2,435 | ) | ||||||||||||
Reductions to the allowance for doubtful receivables | (2,390 | ) | (313 | ) | ||||||||||||
Deferred tax (benefit) expense | (11,734 | ) | 4,301 | |||||||||||||
Net realized investment gain on sale of securities | (336 | ) | (58 | ) | (4,390 | ) | (1,578 | ) | ||||||||
Interest credited to policyholder deposits | 991 | 1,195 | 2,144 | 2,436 | ||||||||||||
Share-based compensation | (1,443 | ) | 1,085 | 170 | 2,313 | |||||||||||
(Increase) decrease in assets: | ||||||||||||||||
Premium and other receivables, net | (3,263 | ) | (35,687 | ) | (25,078 | ) | (63,589 | ) | ||||||||
Deferred policy acquisition costs and value of business acquired | (822 | ) | (685 | ) | (5,621 | ) | (3,562 | ) | ||||||||
Deferred taxes | (265 | ) | 162 | (280 | ) | 178 | ||||||||||
Other assets | (37 | ) | (26,485 | ) | (1,229 | ) | (31,425 | ) | ||||||||
Increase (decrease) in liabilities: | ||||||||||||||||
Claim liabilities | 42,361 | 33,301 | 16,297 | (9,901 | ) | |||||||||||
Liability for future policy benefits | 4,930 | 17,395 | 10,195 | 19,961 | ||||||||||||
Unearned premiums | 84,470 | (4,387 | ) | 96,251 | 1,791 | |||||||||||
Liability to Federal Employees’ Health Benefits and Federal Employees’ Programs | 2,836 | 1,663 | ||||||||||||||
Liability to Federal Employees' Health Benefits and Federal Employees' Programs | 5,993 | (2,141 | ) | |||||||||||||
Accounts payable and accrued liabilities | 11,274 | 35,574 | 33,774 | 52,350 | ||||||||||||
Net cash provided by operating activities | 130,965 | 31,260 | ||||||||||||||
(Continued) | ||||||||||||||||
Net cash provided by (used in) operating activities | 133,705 | (10,565 | ) |
Three months ended March 31, | Six months ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Proceeds from investments sold or matured: | ||||||||||||||||
Securities available for sale: | ||||||||||||||||
Fixed maturities sold | $ | 26,023 | $ | 90,328 | $ | 88,141 | $ | 163,150 | ||||||||
Fixed maturities matured/called | 5,001 | 699 | 8,938 | 14,301 | ||||||||||||
Equity securities sold | 10,272 | 11,257 | 21,499 | 32,252 | ||||||||||||
Securities held to maturity: | ||||||||||||||||
Fixed maturities matured/called | 703 | - | 703 | 700 | ||||||||||||
Acquisition of investments: | ||||||||||||||||
Securities available for sale: | ||||||||||||||||
Fixed maturities | (33,738 | ) | (118,039 | ) | (141,116 | ) | (150,005 | ) | ||||||||
Equity securities | (5,482 | ) | (92,956 | ) | (20,424 | ) | (136,104 | ) | ||||||||
Securities held to maturity: | ||||||||||||||||
Fixed maturities | (382 | ) | - | (703 | ) | (609 | ) | |||||||||
Increase in other investments | (2,044 | ) | (182 | ) | (731 | ) | (1,383 | ) | ||||||||
Net change in policy loans | 18 | (231 | ) | (152 | ) | (400 | ) | |||||||||
Net capital expenditures | (3,295 | ) | (1,465 | ) | (8,704 | ) | (2,716 | ) | ||||||||
Net cash used in investing activities | (2,924 | ) | (110,589 | ) | (52,549 | ) | (80,814 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Change in outstanding checks in excess of bank balances | (11,401 | ) | 1,916 | (8,545 | ) | 4,074 | ||||||||||
Repayments of long-term borrowings | (24,676 | ) | (410 | ) | (1,212 | ) | (820 | ) | ||||||||
Proceeds from long-term borrowings | 24,266 | - | ||||||||||||||
Repurchase and retirement of common stock | - | (8,027 | ) | - | (14,560 | ) | ||||||||||
Proceeds from policyholder deposits | 4,116 | 3,403 | 8,166 | 7,942 | ||||||||||||
Surrenders of policyholder deposits | (4,890 | ) | (2,905 | ) | (10,467 | ) | (6,935 | ) | ||||||||
Net cash used in financing activities | (12,585 | ) | (6,023 | ) | (12,058 | ) | (10,299 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | 115,456 | (85,352 | ) | 69,098 | (101,678 | ) | ||||||||||
Cash and cash equivalents: | ||||||||||||||||
Beginning of period | 103,428 | 197,818 | 103,428 | 197,818 | ||||||||||||
End of period | $ | 218,884 | $ | 112,466 | $ | 172,526 | $ | 96,140 |
(1) | Basis of Presentation |
(2) | Recent Accounting Standards |
(3) | Investment in Securities |
March 31, 2017 | June 30, 2017 | |||||||||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | |||||||||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||||||||||||||
Fixed maturities: | ||||||||||||||||||||||||||||||||
Obligations of government-sponsored enterprises | $ | 41,485 | $ | 61 | $ | - | $ | 41,546 | $ | 40,358 | $ | 29 | $ | (4 | ) | $ | 40,383 | |||||||||||||||
U.S. Treasury securities and obligations of U.S. government instrumentalities | 72,723 | 169 | (14 | ) | 72,878 | 79,932 | 180 | (115 | ) | 79,997 | ||||||||||||||||||||||
Obligations of the Commonwealth of Puerto Rico and its instrumentalities | 18,248 | 857 | (37 | ) | 19,068 | 11,719 | 445 | (3 | ) | 12,161 | ||||||||||||||||||||||
Municipal securities | 651,091 | 34,191 | (304 | ) | 684,978 | 682,576 | 34,459 | (393 | ) | 716,642 | ||||||||||||||||||||||
Corporate bonds | 279,540 | 12,457 | (367 | ) | 291,630 | 278,417 | 15,626 | (89 | ) | 293,954 | ||||||||||||||||||||||
Residential mortgage-backed securities | 638 | 29 | - | 667 | 11,877 | 35 | (3 | ) | 11,909 | |||||||||||||||||||||||
Collateralized mortgage obligations | 42,919 | 83 | (224 | ) | 42,778 | 41,129 | 97 | (111 | ) | 41,115 | ||||||||||||||||||||||
Total fixed maturities | 1,106,644 | 47,847 | (946 | ) | 1,153,545 | 1,146,008 | 50,871 | (718 | ) | 1,196,161 | ||||||||||||||||||||||
Equity securities - Mutual funds | 236,356 | 40,910 | (117 | ) | 277,149 | |||||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||||||||
Mutual funds | 214,923 | 43,446 | (6 | ) | 258,363 | |||||||||||||||||||||||||||
Alternative investments | 29,336 | 368 | (247 | ) | 29,457 | |||||||||||||||||||||||||||
Total equity maturites | 244,259 | 43,814 | (253 | ) | 287,820 | |||||||||||||||||||||||||||
Total | $ | 1,343,000 | $ | 88,757 | $ | (1,063 | ) | $ | 1,430,694 | $ | 1,390,267 | $ | 94,685 | $ | (971 | ) | $ | 1,483,981 |
December 31, 2016 | ||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | |||||||||||||
Securities available for sale: | ||||||||||||||||
Fixed maturities: | ||||||||||||||||
Obligations of government-sponsored enterprises | $ | 41,442 | $ | 87 | $ | (15 | ) | $ | 41,514 | |||||||
U.S. Treasury securities and obligations of U.S.government instrumentalities | 85,652 | 157 | (9 | ) | 85,800 | |||||||||||
Obligations of the Commonwealth of Puerto Rico and its instrumentalities | 17,930 | 2,189 | (68 | ) | 20,051 | |||||||||||
Municipal securities | 650,175 | 34,187 | (559 | ) | 683,803 | |||||||||||
Corporate bonds | 263,351 | 12,182 | (661 | ) | 274,872 | |||||||||||
Residential mortgage-backed securities | 684 | 34 | - | 718 | ||||||||||||
Collateralized mortgage obligations | 45,069 | 58 | (242 | ) | 44,885 | |||||||||||
Total fixed maturities | 1,104,303 | 48,894 | (1,554 | ) | 1,151,643 | |||||||||||
Equity securities - Mutual funds | 240,699 | 30,101 | (451 | ) | 270,349 | |||||||||||
Total | $ | 1,345,002 | $ | 78,995 | $ | (2,005 | ) | $ | 1,421,992 |
December 31, 2016 | ||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | |||||||||||||
Securities available for sale: | ||||||||||||||||
Fixed maturities: | ||||||||||||||||
Obligations of government-sponsored enterprises | $ | 41,442 | $ | 87 | $ | (15 | ) | $ | 41,514 | |||||||
U.S. Treasury securities and obligations of U.S. government instrumentalities | 85,652 | 157 | (9 | ) | 85,800 | |||||||||||
Obligations of the Commonwealth of Puerto Rico and its instrumentalities | 17,930 | 2,189 | (68 | ) | 20,051 | |||||||||||
Municipal securities | 650,175 | 34,187 | (559 | ) | 683,803 | |||||||||||
Corporate bonds | 263,351 | 12,182 | (661 | ) | 274,872 | |||||||||||
Residential mortgage-backed securities | 684 | 34 | - | 718 | ||||||||||||
Collateralized mortgage obligations | 45,069 | 58 | (242 | ) | 44,885 | |||||||||||
Total fixed maturities | 1,104,303 | 48,894 | (1,554 | ) | 1,151,643 | |||||||||||
Equity securities - Mutual funds | 240,699 | 30,101 | (451 | ) | 270,349 | |||||||||||
Total | $ | 1,345,002 | $ | 78,995 | $ | (2,005 | ) | $ | 1,421,992 |
March 31, 2017 | June 30, 2017 | |||||||||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | |||||||||||||||||||||||||
Securities held to maturity: | ||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government instrumentalities | $ | 619 | $ | 160 | $ | - | $ | 779 | ||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S.government instrumentalities | $ | 618 | $ | 166 | $ | - | $ | 784 | ||||||||||||||||||||||||
Residential mortgage-backed securities | 191 | 18 | - | 209 | 191 | 2 | - | 193 | ||||||||||||||||||||||||
Certificates of deposit | 1,704 | - | - | 1,704 | 2,026 | - | - | 2,026 | ||||||||||||||||||||||||
Total | $ | 2,514 | $ | 178 | $ | - | $ | 2,692 | $ | 2,835 | $ | 168 | $ | - | $ | 3,003 |
December 31, 2016 | ||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | |||||||||||||
Securities held to maturity: | ||||||||||||||||
U.S. Treasury securities and obligations of U.S.government instrumentalities | $ | 619 | $ | 158 | $ | - | $ | 777 | ||||||||
Residential mortgage-backed securities | 191 | 18 | - | 209 | ||||||||||||
Certificates of deposit | 2,026 | - | - | 2,026 | ||||||||||||
Total | $ | 2,836 | $ | 176 | $ | - | $ | 3,012 |
December 31, 2016 | ||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | |||||||||||||
Securities held to maturity: | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. government instrumentalities | $ | 619 | $ | 158 | $ | - | $ | 777 | ||||||||
Residential mortgage-backed securities | 191 | 18 | - | 209 | ||||||||||||
Certificates of deposit | 2,026 | - | - | 2,026 | ||||||||||||
Total | $ | 2,836 | $ | 176 | $ | - | $ | 3,012 |
March 31, 2017 | June 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Fair Value | Gross Unrealized Loss | Number of Securities | Estimated Fair Value | Gross Unrealized Loss | Number of Securities | Estimated Fair Value | Gross Unrealized Loss | Number of Securities | Estimated Fair Value | Gross Unrealized Loss | Number of Securities | Estimated Fair Value | Gross Unrealized Loss | Number of Securities | Estimated Fair Value | Gross Unrealized Loss | Number of Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities available for sale | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of government-sponsored enterprises | $ | 6,495 | $ | (4 | ) | 2 | $ | - | $ | - | - | $ | 6,495 | $ | (4 | ) | 2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. governmental instrumentalities | $ | 12,940 | $ | (14 | ) | 1 | $ | - | $ | - | - | $ | 12,940 | $ | (14 | ) | 1 | 41,408 | (115 | ) | 5 | - | - | - | 41,408 | (115 | ) | 5 | ||||||||||||||||||||||||||||||||||||||||||||
Obligations of the Commonwealth of Puerto Rico and its instrumentalities | 12,704 | (37 | ) | 6 | - | - | - | 12,704 | (37 | ) | 6 | 7,939 | (3 | ) | 5 | - | - | - | 7,939 | (3 | ) | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Municipal securities | 64,518 | (304 | ) | 9 | - | - | - | 64,518 | (304 | ) | 9 | 90,575 | (393 | ) | 12 | - | - | - | 90,575 | (393 | ) | 12 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | 84,093 | (367 | ) | 18 | - | - | - | 84,093 | (367 | ) | 18 | 32,355 | (89 | ) | 10 | - | - | - | 32,355 | (89 | ) | 10 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | 2,017 | (3 | ) | 1 | - | - | - | 2,017 | (3 | ) | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | 26,043 | (222 | ) | 6 | 665 | (2 | ) | 1 | 26,708 | (224 | ) | 7 | 25,454 | (108 | ) | 6 | 564 | (3 | ) | 1 | 26,018 | (111 | ) | 7 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total fixed maturities | 200,298 | (944 | ) | 40 | 665 | (2 | ) | 1 | 200,963 | (946 | ) | 41 | 206,243 | (715 | ) | 41 | 564 | (3 | ) | 1 | 206,807 | (718 | ) | 42 | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity securities-Mutual funds | 2,831 | (49 | ) | 4 | 2,006 | (68 | ) | 1 | 4,837 | (117 | ) | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mutual funds | 1,994 | (6 | ) | 1 | - | - | - | 1,994 | (6 | ) | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alternative investments | 4,983 | (129 | ) | 7 | 2,431 | (118 | ) | 1 | 7,414 | (247 | ) | 8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total equity securities | 6,977 | (135 | ) | 8 | 2,431 | (118 | ) | 1 | 9,408 | (253 | ) | 9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total for securities available for sale | $ | 203,129 | $ | (993 | ) | 44 | $ | 2,671 | $ | (70 | ) | 2 | $ | 205,800 | $ | (1,063 | ) | 46 | $ | 213,220 | $ | (850 | ) | 49 | $ | 2,995 | $ | (121 | ) | 2 | $ | 216,215 | $ | (971 | ) | 51 |
December 31, 2016 | December 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Fair Value | Gross Unrealized Loss | Number of Securities | Estimated Fair Value | Gross Unrealized Loss | Number of Securities | Estimated Fair Value | Gross Unrealized Loss | Number of Securities | Estimated Fair Value | Gross Unrealized Loss | Number of Securities | Estimated Fair Value | Gross Unrealized Loss | Number of Securities | Estimated Fair Value | Gross Unrealized Loss | Number of Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securites available for sale | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of government-sponsored enterprises | $ | 9,483 | $ | (15 | ) | 1 | $ | - | $ | - | - | $ | 9,483 | $ | (15 | ) | 1 | $ | 9,483 | $ | (15 | ) | 1 | $ | - | $ | - | - | $ | 9,483 | $ | (15 | ) | 1 | ||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. governmental instrumentalities | 12,937 | (9 | ) | 1 | - | - | - | 12,937 | (9 | ) | 1 | 12,937 | (9 | ) | 1 | - | - | - | 12,937 | (9 | ) | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations of the Commonwealth of Puerto Rico and its instrumentalities | 7,758 | (68 | ) | 5 | - | - | - | 7,758 | (68 | ) | 5 | 7,758 | (68 | ) | 5 | - | - | - | 7,758 | (68 | ) | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Municipal securities | 84,252 | (559 | ) | 13 | - | - | - | 84,252 | (559 | ) | 13 | 84,252 | (559 | ) | 13 | - | - | - | 84,252 | (559 | ) | 13 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | 105,054 | (661 | ) | 22 | - | - | - | 105,054 | (661 | ) | 22 | 105,054 | (661 | ) | 22 | - | - | - | 105,054 | (661 | ) | 22 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | 32,120 | (239 | ) | 8 | 784 | (3 | ) | 1 | 32,904 | (242 | ) | 9 | 32,120 | (239 | ) | 8 | 784 | (3 | ) | 1 | 32,904 | (242 | ) | 9 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total fixed maturities | 251,604 | (1,551 | ) | 50 | 784 | (3 | ) | 1 | 252,388 | (1,554 | ) | 51 | 251,604 | (1,551 | ) | 50 | 784 | (3 | ) | 1 | 252,388 | (1,554 | ) | 51 | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity securities-Mutual funds | 22,615 | (451 | ) | 4 | - | - | - | 22,615 | (451 | ) | 4 | 22,615 | (451 | ) | 4 | - | - | - | 22,615 | (451 | ) | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total for securities available for sale | $ | 274,219 | $ | (2,002 | ) | 54 | $ | 784 | $ | (3 | ) | 1 | $ | 275,003 | $ | (2,005 | ) | 55 | $ | 274,219 | $ | (2,002 | ) | 54 | $ | 784 | $ | (3 | ) | 1 | $ | 275,003 | $ | (2,005 | ) | 55 |
March 31, 2017 | June 30, 2017 | |||||||||||||||
Amortized cost | Estimated fair value | Amortized cost | Estimated fair value | |||||||||||||
Securities available for sale: | ||||||||||||||||
Due in one year or less | $ | 48,742 | $ | 48,946 | $ | 71,618 | $ | 71,772 | ||||||||
Due after one year through five years | 322,122 | 325,519 | 324,426 | 327,707 | ||||||||||||
Due after five years through ten years | 131,128 | 137,138 | 131,235 | 137,195 | ||||||||||||
Due after ten years | 561,095 | 598,497 | 565,723 | 606,463 | ||||||||||||
Residential mortgage-backed securities | 638 | 667 | 11,877 | 11,909 | ||||||||||||
Collateralized mortgage obligations | 42,919 | 42,778 | 41,129 | 41,115 | ||||||||||||
$ | 1,106,644 | $ | 1,153,545 | $ | 1,146,008 | $ | 1,196,161 | |||||||||
Securities held to maturity: | ||||||||||||||||
Due in one year or less | $ | 1,704 | $ | 1,704 | $ | 2,026 | $ | 2,026 | ||||||||
Due after ten years | 619 | 779 | 618 | 784 | ||||||||||||
Residential mortgage-backed securities | 191 | 209 | 191 | 193 | ||||||||||||
$ | 2,514 | $ | 2,692 | $ | 2,835 | $ | 3,003 |
Three months ended March 31, | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Realized gains (losses): | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||||||
Gross gains from sales | $ | 17 | $ | 961 | $ | 384 | $ | 912 | $ | 401 | $ | 1,873 | ||||||||||||
Gross losses from sales | (119 | ) | (1,359 | ) | (517 | ) | (103 | ) | (636 | ) | (1,462 | ) | ||||||||||||
Total fixed maturity securities | (102 | ) | (398 | ) | (133 | ) | 809 | (235 | ) | 411 | ||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||||||
Gross gains from sales | 438 | 587 | 4,189 | 2,525 | 4,627 | 3,112 | ||||||||||||||||||
Gross losses from sales | - | (131 | ) | (2 | ) | (380 | ) | (2 | ) | (511 | ) | |||||||||||||
Gross losses from other-than-temporary impairments | - | (1,434 | ) | - | (1,434 | ) | ||||||||||||||||||
Total equity securities | 438 | 456 | 4,187 | 711 | 4,625 | 1,167 | ||||||||||||||||||
Net realized gains on securities available for sale | $ | 336 | $ | 58 | $ | 4,054 | $ | 1,520 | $ | 4,390 | $ | 1,578 |
Three months ended March 31, | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Changes in net unrealized gains (losses): | ||||||||||||||||||||||||
Recognized in accumulated other comprehensive income: | ||||||||||||||||||||||||
Fixed maturities – available for sale | $ | (439 | ) | $ | 22,589 | $ | 3,252 | $ | 18,739 | $ | 2,813 | $ | 41,328 | |||||||||||
Equity securities – available for sale | 11,143 | 6,769 | 2,768 | 2,908 | 13,911 | 9,677 | ||||||||||||||||||
$ | 10,704 | $ | 29,358 | $ | 6,020 | $ | 21,647 | $ | 16,724 | $ | 51,005 | |||||||||||||
Not recognized in the consolidated financial statements: | ||||||||||||||||||||||||
Fixed maturities – held to maturity | $ | 2 | $ | 36 | $ | (10 | ) | $ | 27 | $ | (8 | ) | $ | 63 |
(4) | Premiums and Other Receivables, Net |
March 31, 2017 | December 31, 2016 | June 30, 2017 | December 31, 2016 | |||||||||||||
Premium | $ | 100,691 | $ | 91,528 | $ | 107,058 | $ | 91,528 | ||||||||
Self-funded group receivables | 50,643 | 57,728 | 51,646 | 57,728 | ||||||||||||
FEHBP | 14,274 | 14,321 | 15,582 | 14,321 | ||||||||||||
Agent balances | 27,468 | 25,495 | 40,340 | 25,495 | ||||||||||||
Accrued interest | 11,338 | 13,668 | 13,839 | 13,668 | ||||||||||||
Reinsurance recoverable | 54,854 | 58,295 | 55,772 | 58,295 | ||||||||||||
Unsettled sales | 6,715 | - | ||||||||||||||
Other | 65,152 | 62,637 | 62,859 | 62,637 | ||||||||||||
324,420 | 323,672 | 353,811 | 323,672 | |||||||||||||
Less allowance for doubtful receivables: | ||||||||||||||||
Premium | 23,584 | 27,320 | 23,949 | 27,320 | ||||||||||||
Other | 7,999 | 9,987 | 9,314 | 9,987 | ||||||||||||
31,583 | 37,307 | 33,263 | 37,307 | |||||||||||||
Total premium and other receivables, net | $ | 292,837 | $ | 286,365 | $ | 320,548 | $ | 286,365 |
(5) | Fair Value Measurements |
March 31, 2017 | June 30, 2017 | |||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||||
Obligations of government-sponsored enterprises | $ | - | $ | 41,546 | $ | - | $ | 41,546 | $ | - | $ | 40,383 | $ | - | $ | 40,383 | ||||||||||||||||
U.S. Treasury securities and obligations of U.S government instrumentalities | 72,878 | - | - | 72,878 | 79,997 | - | - | 79,997 | ||||||||||||||||||||||||
Obligations of the Commonwealth of Puerto Rico and its instrumentalities | - | 19,068 | - | 19,068 | - | 12,161 | - | 12,161 | ||||||||||||||||||||||||
Municipal securities | - | 684,978 | - | 684,978 | - | 716,642 | - | 716,642 | ||||||||||||||||||||||||
Corporate bonds | - | 291,630 | - | 291,630 | - | 293,954 | - | 293,954 | ||||||||||||||||||||||||
Residential agency mortgage-backed securities | - | 667 | - | 667 | - | 11,909 | - | 11,909 | ||||||||||||||||||||||||
Collateralized mortgage obligations | - | 42,778 | - | 42,778 | - | 41,115 | - | 41,115 | ||||||||||||||||||||||||
Total fixed maturities | 72,878 | 1,080,667 | - | 1,153,545 | 79,997 | 1,116,164 | - | 1,196,161 | ||||||||||||||||||||||||
Equity securities - Mutual funds | 174,593 | 78,803 | 23,753 | 277,149 | 173,957 | 84,406 | - | 258,363 | ||||||||||||||||||||||||
Alternative investments - measured at net asset value | - | - | - | 29,457 | ||||||||||||||||||||||||||||
Total | $ | 247,471 | $ | 1,159,470 | $ | 23,753 | $ | 1,430,694 | $ | 253,954 | $ | 1,200,570 | $ | - | $ | 1,483,981 |
December 31, 2016 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Securities available for sale: | ||||||||||||||||
Fixed maturity securities | ||||||||||||||||
Obligations of government-sponsored enterprises | $ | - | $ | 41,514 | $ | - | $ | 41,514 | ||||||||
U.S. Treasury securities and obligations of U.S government instrumentalities | 85,800 | - | - | 85,800 | ||||||||||||
Obligations of the Commonwealth of Puerto Rico and its instrumentalities | - | 20,051 | - | 20,051 | ||||||||||||
Municipal securities | - | 683,803 | - | 683,803 | ||||||||||||
Corporate bonds | - | 274,872 | - | 274,872 | ||||||||||||
Residential agency mortgage-backed securities | - | 718 | - | 718 | ||||||||||||
Collateralized mortgage obligations | - | 44,885 | - | 44,885 | ||||||||||||
Total fixed maturities | 85,800 | 1,065,843 | - | 1,151,643 | ||||||||||||
Equity securities - Mutual funds | 166,595 | 76,222 | 27,532 | 270,349 | ||||||||||||
Total | $ | 252,395 | $ | 1,142,065 | $ | 27,532 | $ | 1,421,992 |
December 31, 2016 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Securities available for sale: | ||||||||||||||||
Fixed maturity securities | ||||||||||||||||
Obligations of government-sponsored enterprises | $ | - | $ | 41,514 | $ | - | $ | 41,514 | ||||||||
U.S. Treasury securities and obligations of U.S government instrumentalities | 85,800 | - | - | 85,800 | ||||||||||||
Obligations of the Commonwealth of Puerto Rico and its instrumentalities | - | 20,051 | - | 20,051 | ||||||||||||
Municipal securities | - | 683,803 | - | 683,803 | ||||||||||||
Corporate bonds | - | 274,872 | - | 274,872 | ||||||||||||
Residential agency mortgage-backed securities | - | 718 | - | 718 | ||||||||||||
Collateralized mortgage obligations | - | 44,885 | - | 44,885 | ||||||||||||
Total fixed maturities | 85,800 | 1,065,843 | - | 1,151,643 | ||||||||||||
Equity securities - Mutual funds | 166,595 | 76,222 | 27,532 | 270,349 | ||||||||||||
Total | $ | 252,395 | $ | 1,142,065 | $ | 27,532 | $ | 1,421,992 |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||
2017 | 2016 | |||||||
Beginning balance | $ | 27,532 | $ | 7,958 | ||||
Realized gains | 119 | 151 | ||||||
Unrealized in other accumulated comprehensive income | (64 | ) | (649 | ) | ||||
Purchases | 5,260 | 8 | ||||||
Capital distributions | (9,094 | ) | (471 | ) | ||||
Ending balance | $ | 23,753 | $ | 6,997 |
March 31, 2017 | June 30, 2017 | |||||||||||||||||||||||||||||||||||||||
Carrying Value | Fair Value | Carrying | Fair Value | |||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Value | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||
Policy loans | $ | 8,546 | $ | - | $ | 8,546 | $ | - | $ | 8,546 | $ | 8,716 | $ | - | $ | 8,716 | $ | - | $ | 8,716 | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||
Policyholder deposits | $ | 179,599 | $ | - | $ | 179,599 | $ | - | $ | 179,599 | $ | 179,225 | $ | - | $ | 179,225 | $ | - | $ | 179,225 | ||||||||||||||||||||
Long-term borrowings: | ||||||||||||||||||||||||||||||||||||||||
Loans payable to bank - variable | 34,465 | - | 34,465 | - | 34,465 | 33,968 | - | 33,968 | - | 33,968 | ||||||||||||||||||||||||||||||
Total long-term borrowings | 34,465 | - | 34,465 | - | 34,465 | 33,968 | - | 33,968 | - | 33,968 | ||||||||||||||||||||||||||||||
Total liabilities | $ | 214,064 | $ | - | $ | 214,064 | $ | - | $ | 214,064 | $ | 213,193 | $ | - | $ | 213,193 | $ | - | $ | 213,193 |
December 31, 2016 | December 31, 2016 | |||||||||||||||||||||||||||||||||||||||
Carrying Value | Fair Value | Carrying | Fair Value | |||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Value | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||
Policy loans | $ | 8,564 | $ | - | $ | 8,564 | $ | - | $ | 8,564 | $ | 8,564 | $ | - | $ | 8,564 | $ | - | $ | 8,564 | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||
Policyholder deposits | $ | 179,382 | $ | - | $ | 179,382 | $ | - | $ | 179,382 | $ | 179,382 | $ | - | $ | 179,382 | $ | - | $ | 179,382 | ||||||||||||||||||||
Long-term borrowings: | ||||||||||||||||||||||||||||||||||||||||
Loans payable to bank - variable | 11,187 | - | 11,187 | - | 11,187 | 11,187 | - | 11,187 | - | 11,187 | ||||||||||||||||||||||||||||||
6.6% senior unsecured notes payable | 24,000 | - | 24,000 | - | 24,000 | 24,000 | - | 24,000 | - | 24,000 | ||||||||||||||||||||||||||||||
Total long-term borrowings | 35,187 | - | 35,187 | - | 35,187 | 35,187 | - | 35,187 | - | 35,187 | ||||||||||||||||||||||||||||||
Total liabilities | $ | 214,569 | $ | - | $ | 214,569 | $ | - | $ | 214,569 | $ | 214,569 | $ | - | $ | 214,569 | $ | - | $ | 214,569 |
(6) | Claim Liabilities |
Three months ended March 31, 2017 | Three months ended June 30, 2017 | Six months ended June 30, 2017 | ||||||||||||||||||||||||||||||||||
Managed Care | Other Business Segments * | Consolidated | Managed Care | Other Business Segments * | Consolidated | Managed Care | Other Business Segments * | Consolidated | ||||||||||||||||||||||||||||
Claim liabilities at beginning of year | $ | 349,047 | $ | 138,896 | $ | 487,943 | $ | 393,525 | $ | 136,779 | $ | 530,304 | $ | 349,047 | $ | 138,896 | $ | 487,943 | ||||||||||||||||||
Reinsurance recoverable on claim liabilities | - | (38,998 | ) | (38,998 | ) | - | (35,898 | ) | (35,898 | ) | - | (38,998 | ) | (38,998 | ) | |||||||||||||||||||||
Net claim liabilities at beginning of year | 349,047 | 99,898 | 448,945 | 393,525 | 100,881 | 494,406 | 349,047 | 99,898 | 448,945 | |||||||||||||||||||||||||||
Claims incurred | ||||||||||||||||||||||||||||||||||||
Current period insured events | 602,620 | 28,226 | 630,846 | 580,608 | 26,282 | 606,890 | 1,183,241 | 54,508 | 1,237,749 | |||||||||||||||||||||||||||
Prior period insured events | (15,340 | ) | (1,333 | ) | (16,673 | ) | (1,355 | ) | (1,196 | ) | (2,551 | ) | (16,695 | ) | (2,529 | ) | (19,224 | ) | ||||||||||||||||||
Total | 587,280 | 26,893 | 614,173 | 579,253 | 25,086 | 604,339 | 1,166,546 | 51,979 | 1,218,525 | |||||||||||||||||||||||||||
Payments of losses and loss-adjustment expenses | ||||||||||||||||||||||||||||||||||||
Current period insured events | 350,450 | 7,965 | 358,415 | 576,135 | 14,944 | 591,079 | 926,585 | 22,917 | 949,502 | |||||||||||||||||||||||||||
Prior period insured events | 192,352 | 17,945 | 210,297 | 25,208 | 11,586 | 36,794 | 217,573 | 29,523 | 247,096 | |||||||||||||||||||||||||||
Total | 542,802 | 25,910 | 568,712 | 601,343 | 26,530 | 627,873 | 1,144,158 | 52,440 | 1,196,598 | |||||||||||||||||||||||||||
Net claim liabilities at end of year | 393,525 | 100,881 | 494,406 | 371,435 | 99,437 | 470,872 | 371,435 | 99,437 | 470,872 | |||||||||||||||||||||||||||
Reinsurance recoverable on claim liabilities | - | 35,898 | 35,898 | - | 33,368 | 33,368 | - | 33,368 | 33,368 | |||||||||||||||||||||||||||
Claim liabilities at end of year | $ | 393,525 | $ | 136,779 | $ | 530,304 | $ | 371,435 | $ | 132,805 | $ | 504,240 | $ | 371,435 | $ | 132,805 | $ | 504,240 |
Three months ended June 30, 2016 | Six months ended June 30, 2016 | |||||||||||||||||||||||
Managed Care | Other Business Segments * | Consolidated | Managed Care | Other Business Segments * | Consolidated | |||||||||||||||||||
Claim liabilities at beginning of year | $ | 381,448 | $ | 143,618 | $ | 525,066 | $ | 348,297 | $ | 143,468 | $ | 491,765 | ||||||||||||
Reinsurance recoverable on claim liabilities | - | (39,871 | ) | (39,871 | ) | - | (40,714 | ) | (40,714 | ) | ||||||||||||||
Net claim liabilities at beginning of year | 381,448 | 103,747 | 485,195 | 348,297 | 102,754 | 451,051 | ||||||||||||||||||
Claims incurred | ||||||||||||||||||||||||
Current period insured events | 596,909 | 25,950 | 622,859 | 1,192,499 | 51,840 | 1,244,339 | ||||||||||||||||||
Prior period insured events | (6,728 | ) | (686 | ) | (7,414 | ) | (6,028 | ) | (2,934 | ) | (8,962 | ) | ||||||||||||
Total | 590,181 | 25,264 | 615,445 | 1,186,471 | 48,906 | 1,235,377 | ||||||||||||||||||
Payments of losses and loss-adjustment expenses | ||||||||||||||||||||||||
Current period insured events | 583,381 | 16,557 | 599,938 | 948,420 | 21,653 | 970,073 | ||||||||||||||||||
Prior period insured events | 46,743 | 10,204 | 56,947 | 244,843 | 27,757 | 272,600 | ||||||||||||||||||
Total | 630,124 | 26,761 | 656,885 | 1,193,263 | 49,410 | 1,242,673 | ||||||||||||||||||
Net claim liabilities at end of year | 341,505 | 102,250 | 443,755 | 341,505 | 102,250 | 443,755 | ||||||||||||||||||
Reinsurance recoverable on claim liabilities | - | 38,109 | 38,109 | - | 38,109 | 38,109 | ||||||||||||||||||
Claim liabilities at end of year | $ | 341,505 | $ | 140,359 | $ | 481,864 | $ | 341,505 | $ | 140,359 | $ | 481,864 |
Three months ended March 31, 2016 | ||||||||||||
Managed Care | Other Business Segments * | Consolidated | ||||||||||
Claim liabilities at beginning of year | $ | 348,297 | $ | 143,468 | $ | 491,765 | ||||||
Reinsurance recoverable on claim liabilities | - | (40,714 | ) | (40,714 | ) | |||||||
Net claim liabilities at beginning of year | 348,297 | 102,754 | 451,051 | |||||||||
Claims incurred | ||||||||||||
Current period insured events | 614,754 | 25,890 | 640,644 | |||||||||
Prior period insured events | (18,464 | ) | (2,248 | ) | (20,712 | ) | ||||||
Total | 596,290 | 23,642 | 619,932 | |||||||||
Payments of losses and loss-adjustment expenses | ||||||||||||
Current period insured events | 365,039 | 5,096 | 370,135 | |||||||||
Prior period insured events | 198,100 | 17,553 | 215,653 | |||||||||
Total | 563,139 | 22,649 | 585,788 | |||||||||
Net claim liabilities at end of year | 381,448 | 103,747 | 485,195 | |||||||||
Reinsurance recoverable on claim liabilities | - | 39,871 | 39,871 | |||||||||
Claim liabilities at end of year | $ | 381,448 | $ | 143,618 | $ | 525,066 |
* | Other Business Segments include the Life Insurance and Property and Casualty segments, as well as intersegment eliminations. |
Incurred Year | Total of IBNR Liabilities Plus Expected Development on Reported Claims | Total of IBNR Liabilities Plus Expected Development on Reported Claims | |||||||
2015 | 60,717 | 68,022 | |||||||
2016 | 80,062 | 46,181 | |||||||
2017 | 252,163 | 256,656 |
(7) | Long-Term Borrowings |
March 31, 2017 | December 31, 2016 | |||||||
Senior unsecured notes payable of $60,000 issued on December 2005; due December 2020. Interest is payable monthly at a fixed rate of 6.60%. | $ | - | $ | 24,000 | ||||
Secured loan payable of $11,187, payable in monthly installments of $137 through October 1, 2023, plus interest at a rate reset periodically of 100 basis points over selected LIBOR maturity (which was 1.79% at March 31, 2017.) | 10,777 | 11,187 | ||||||
Secured loan payable of $20,150, payable in monthly installments of $84 through January 1, 2024, plus interest at a rate reset periodically of 275 basis points over selected LIBOR maturity (which was 3.77% at March 31, 2017.) | 19,982 | - | ||||||
Secured loan payable of $4,116, payable in monthly installments of $49 through January 1, 2024, plus interest at a rate reset periodically of 325 basis points over selected LIBOR maturity (which was 4.27% at March 31, 2017.) | 4,018 | - | ||||||
Total borrowings | 34,777 | 35,187 | ||||||
Less unamortized debt issuance costs | 312 | 102 | ||||||
$ | 34,465 | $ | 35,085 |
June 30, | December 31, | |||||||
2017 | 2016 | |||||||
Senior unsecured notes payable of $60,000 issued on December 2005; due December 2020. Interest is payable monthly at a fixed rate of 6.60%. | $ | - | $ | 24,000 | ||||
Secured loan payable of $11,187, payable in monthly installments of $137 through October 1, 2023, plus interest at a rate reset periodically of 100 basis points over selected LIBOR maturity (which was 2.00% at June 30, 2017.) | 10,367 | 11,187 | ||||||
Secured loan payable of $20,150, payable in monthly installments of $84 through January 1, 2024, plus interest at a rate reset periodically of 275 basis points over selected LIBOR maturity (which was 3.90% at June 30, 2017.) | 19,730 | - | ||||||
Secured loan payable of $4,116, payable in monthly installments of $49 through January 1, 2024, plus interest at a rate reset periodically of 325 basis points over selected LIBOR maturity (which was 4.40% at June 30, 2017.) | 3,871 | - | ||||||
Total borrowings | 33,968 | 35,187 | ||||||
Less: unamortized debt issuance costs | 301 | 102 | ||||||
$ | 33,667 | $ | 35,085 |
(8) | Pension Plan |
Three months ended March 31, | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Components of net periodic benefit cost: | ||||||||||||||||||||||||
Service cost | $ | - | $ | 1,250 | $ | - | $ | 878 | $ | - | $ | 2,128 | ||||||||||||
Interest cost | 1,798 | 2,762 | 1,798 | 1,939 | 3,596 | 4,701 | ||||||||||||||||||
Expected return on assets | (2,199 | ) | (2,926 | ) | (2,199 | ) | (2,054 | ) | (4,398 | ) | (4,980 | ) | ||||||||||||
Amortization of prior service benefit | - | (144 | ) | - | (102 | ) | - | (246 | ) | |||||||||||||||
Amortization of actuarial loss | 86 | 1,183 | 86 | 831 | 172 | 2,014 | ||||||||||||||||||
Settlement loss | 631 | - | 631 | - | ||||||||||||||||||||
Net periodic benefit cost | $ | (315 | ) | $ | 2,125 | $ | 316 | $ | 1,492 | $ | 1 | $ | 3,617 |
(9) | Comprehensive Income |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||
Three months ended March 31, | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||
Net Unrealized Gain on Securities Beginning Balance | $ | 62,371 | $ | 62,478 | $ | 70,843 | $ | 82,055 | $ | 62,371 | $ | 62,478 | ||||||||||||
Other comprehensive income before reclassifications | 8,741 | 19,623 | 7,639 | 18,193 | 16,380 | 37,817 | ||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (269 | ) | (46 | ) | (3,243 | ) | (2,363 | ) | (3,512 | ) | (2,410 | ) | ||||||||||||
Net current period change | 8,472 | 19,577 | 4,396 | 15,830 | 12,868 | 35,407 | ||||||||||||||||||
Ending Balance | 70,843 | 82,055 | 75,239 | 97,885 | 75,239 | 97,885 | ||||||||||||||||||
Liability for Pension Benefits Beginning Balance | (19,976 | ) | (36,855 | ) | (19,923 | ) | (36,221 | ) | (19,976 | ) | (36,855 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | 53 | 634 | 53 | 445 | 106 | 1,079 | ||||||||||||||||||
Ending Balance | (19,923 | ) | (36,221 | ) | (19,870 | ) | (35,776 | ) | (19,870 | ) | (35,776 | ) | ||||||||||||
Accumulated Other Comprehensive Income Beginning Balance | 42,395 | 25,623 | 50,920 | 45,834 | 42,395 | 25,623 | ||||||||||||||||||
Other comprehensive income before reclassifications | 8,741 | 19,623 | 7,639 | 18,193 | 16,380 | 37,817 | ||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (216 | ) | 588 | (3,190 | ) | (1,918 | ) | (3,406 | ) | (1,331 | ) | |||||||||||||
Net current period change | 8,525 | 20,211 | 4,449 | 16,275 | 12,974 | 36,486 | ||||||||||||||||||
Ending Balance | $ | 50,920 | $ | 45,834 | $ | 55,369 | $ | 62,109 | $ | 55,369 | $ | 62,109 |
(10) | Share-Based Compensation |
(11) | Net Income Available to Stockholders and Net Income per Share |
Three months ended March 31, | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Numerator for earnings per share: | ||||||||||||||||||||||||
Net (loss) income attributable to TSM available to stockholders | $ | (4,342 | ) | $ | 3,456 | |||||||||||||||||||
Net income attributable to TSM available to stockholders | $ | 12,705 | $ | 3,880 | $ | 8,363 | $ | 7,336 | ||||||||||||||||
Denominator for basic earnings per share: | ||||||||||||||||||||||||
Weighted average of common shares | 24,143,261 | 24,587,681 | 24,246,591 | 24,624,070 | 24,195,211 | 24,609,749 | ||||||||||||||||||
Effect of dilutive securities | - | 72,353 | 36,687 | 45,364 | 50,220 | 58,892 | ||||||||||||||||||
Denominator for diluted earnings per share | 24,143,261 | 24,660,034 | 24,283,278 | 24,669,434 | 24,245,431 | 24,668,641 | ||||||||||||||||||
Basic net (loss) income per share attributable to TSM | $ | (0.18 | ) | $ | 0.14 | |||||||||||||||||||
Diluted net (loss) income per share attributable to TSM | $ | (0.18 | ) | $ | 0.14 | |||||||||||||||||||
Basic net income per share attributable to TSM | $ | 0.52 | $ | 0.16 | $ | 0.35 | $ | 0.30 | ||||||||||||||||
Diluted net income per share attributable to TSM | $ | 0.52 | $ | 0.16 | $ | 0.34 | $ | 0.30 |
(12) | Contingencies |
(13) | Segment Information |
Three months ended March 31, | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Operating revenues: | ||||||||||||||||||||||||
Managed Care: | ||||||||||||||||||||||||
Premiums earned, net | $ | 640,147 | $ | 678,380 | $ | 661,365 | $ | 668,932 | $ | 1,301,512 | $ | 1,347,312 | ||||||||||||
Administrative service fees | 4,379 | 5,083 | 4,548 | 4,520 | 8,927 | 9,603 | ||||||||||||||||||
Intersegment premiums/service fees | 1,534 | 1,485 | 1,631 | 1,652 | 3,165 | 3,137 | ||||||||||||||||||
Net investment income | 3,892 | 3,480 | 4,146 | 4,107 | 8,038 | 7,587 | ||||||||||||||||||
Total managed care | 649,952 | 688,428 | 671,690 | 679,211 | 1,321,642 | 1,367,639 | ||||||||||||||||||
Life Insurance: | ||||||||||||||||||||||||
Premiums earned, net | 40,298 | 38,966 | 39,858 | 38,591 | 80,156 | 77,557 | ||||||||||||||||||
Intersegment premiums | 191 | 137 | 111 | 202 | 302 | 339 | ||||||||||||||||||
Net investment income | 6,087 | 5,914 | 6,330 | 6,412 | 12,417 | 12,326 | ||||||||||||||||||
Total life insurance | 46,576 | 45,017 | 46,299 | 45,205 | 92,875 | 90,222 | ||||||||||||||||||
Property and Casualty Insurance: | ||||||||||||||||||||||||
Premiums earned, net | 21,548 | 21,188 | 21,668 | 21,526 | 43,216 | 42,714 | ||||||||||||||||||
Intersegment premiums | 153 | 153 | 154 | 154 | 307 | 307 | ||||||||||||||||||
Net investment income | 1,924 | 1,929 | 2,134 | 2,325 | 4,058 | 4,254 | ||||||||||||||||||
Total property and casualty insurance | 23,625 | 23,270 | 23,956 | 24,005 | 47,581 | 47,275 | ||||||||||||||||||
Other segments: * | ||||||||||||||||||||||||
Intersegment service revenues | 1,586 | 2,545 | 2,259 | 2,617 | 3,845 | 5,162 | ||||||||||||||||||
Operating revenues from external sources | 1,000 | 856 | 1,154 | 959 | 2,154 | 1,815 | ||||||||||||||||||
Total other segments | 2,586 | 3,401 | 3,413 | 3,576 | 5,999 | 6,977 | ||||||||||||||||||
Total business segments | 722,739 | 760,116 | 745,358 | 751,997 | 1,468,097 | 1,512,113 | ||||||||||||||||||
TSM operating revenues from external sources | 78 | 4 | 55 | 1 | 133 | 5 | ||||||||||||||||||
Elimination of intersegment premiums/service fees | (1,598 | ) | (1,775 | ) | (1,896 | ) | (2,008 | ) | (3,494 | ) | (3,783 | ) | ||||||||||||
Elimination of intersegment service revenues | (1,586 | ) | (2,545 | ) | (2,259 | ) | 2,518 | (3,845 | ) | (27 | ) | |||||||||||||
Other intersegment eliminations | - | (13 | ) | - | (5,149 | ) | - | (5,162 | ) | |||||||||||||||
Consolidated operating revenues | $ | 719,633 | $ | 755,787 | $ | 741,258 | $ | 747,359 | $ | 1,460,891 | $ | 1,503,146 |
* | Includes segments that are not required to be reported separately, primarily the data processing services organization and the health clinic. |
Three months ended March 31, | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Operating income (loss): | ||||||||||||||||||||||||
Managed care | $ | (18,582 | ) | $ | (641 | ) | $ | 2,920 | $ | (3,780 | ) | $ | (15,662 | ) | $ | (4,421 | ) | |||||||
Life insurance | 3,935 | 5,598 | 4,990 | 5,054 | 8,925 | 10,652 | ||||||||||||||||||
Property and casualty insurance | 2,067 | 2,111 | 3,775 | 3,388 | 5,842 | 5,499 | ||||||||||||||||||
Other segments * | 143 | (179 | ) | 1 | (182 | ) | 144 | (361 | ) | |||||||||||||||
Total business segments | (12,437 | ) | 6,889 | 11,686 | 4,480 | (751 | ) | 11,369 | ||||||||||||||||
TSM operating revenues from external sources | 78 | 4 | 55 | 1 | 133 | 5 | ||||||||||||||||||
TSM unallocated operating expenses | (2,217 | ) | (3,167 | ) | (2,900 | ) | (2,707 | ) | (5,117 | ) | (5,874 | ) | ||||||||||||
Elimination of TSM intersegment charges | 2,400 | 2,387 | 2,400 | 2,386 | 4,800 | 4,773 | ||||||||||||||||||
Consolidated operating (loss) income | (12,176 | ) | 6,113 | |||||||||||||||||||||
Consolidated operating income (loss) | 11,241 | 4,160 | (935 | ) | 10,273 | |||||||||||||||||||
Consolidated net realized investment gains | 336 | 58 | 4,054 | 1,520 | 4,390 | 1,578 | ||||||||||||||||||
Consolidated interest expense | (1,686 | ) | (1,882 | ) | (1,721 | ) | (1,954 | ) | (3,407 | ) | (3,836 | ) | ||||||||||||
Consolidated other income, net | 2,525 | 875 | 587 | 3,859 | 3,112 | 4,734 | ||||||||||||||||||
Consolidated (loss) income before taxes | $ | (11,001 | ) | $ | 5,164 | |||||||||||||||||||
Consolidated income before taxes | $ | 14,161 | $ | 7,585 | $ | 3,160 | $ | 12,749 | ||||||||||||||||
Depreciation and amortization expense: | ||||||||||||||||||||||||
Managed care | $ | 2,239 | $ | 2,934 | $ | 2,649 | $ | 2,839 | $ | 4,888 | $ | 5,773 | ||||||||||||
Life insurance | 280 | 255 | 318 | 249 | 598 | 504 | ||||||||||||||||||
Property and casualty insurance | 114 | 161 | 138 | 150 | 252 | 311 | ||||||||||||||||||
Other segments* | 160 | 153 | 163 | 166 | 323 | 319 | ||||||||||||||||||
Total business segments | 2,793 | 3,503 | 3,268 | 3,404 | 6,061 | 6,907 | ||||||||||||||||||
TSM depreciation expense | 197 | 197 | 196 | 196 | 393 | 393 | ||||||||||||||||||
Consolidated depreciation and amortization expense | $ | 2,990 | $ | 3,700 | $ | 3,464 | $ | 3,600 | $ | 6,454 | $ | 7,300 |
* | Includes segments that are not required to be reported separately, primarily the data processing services organization and the health clinic. |
March 31, 2017 | December 31, 2016 | June 30, 2017 | December 31, 2016 | |||||||||||||
Assets: | ||||||||||||||||
Managed care | $ | 1,144,927 | $ | 1,013,872 | $ | 1,156,585 | $ | 1,013,872 | ||||||||
Life insurance | 820,481 | 816,920 | 841,401 | 816,920 | ||||||||||||
Property and casualty insurance | 347,282 | 349,159 | 377,020 | 349,159 | ||||||||||||
Other segments * | 26,274 | 26,034 | 27,031 | 26,034 | ||||||||||||
Total business segments | 2,338,964 | 2,205,985 | 2,402,037 | 2,205,985 | ||||||||||||
Unallocated amounts related to TSM: | ||||||||||||||||
Cash, cash equivalents, and investments | 22,531 | 17,033 | 9,889 | 17,033 | ||||||||||||
Property and equipment, net | 22,228 | 22,380 | 22,130 | 22,380 | ||||||||||||
Other assets | 21,337 | 21,646 | 20,842 | 21,646 | ||||||||||||
66,096 | 61,059 | 52,861 | 61,059 | |||||||||||||
Elimination entries-intersegment receivables and others | (46,605 | ) | (48,045 | ) | (49,530 | ) | (48,045 | ) | ||||||||
Consolidated total assets | $ | 2,358,455 | $ | 2,218,999 | $ | 2,405,368 | $ | 2,218,999 |
* | Includes segments that are not required to be reported separately, primarily the data processing services organization and the health clinic. |
(14) | Subsequent Events |
As of March 31, | As of June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Managed care enrollment: | ||||||||||||||||
Commercial 1 | 505,848 | 544,846 | 498,393 | 528,902 | ||||||||||||
Medicare | 121,352 | 119,224 | 121,240 | 116,215 | ||||||||||||
Medicaid | 389,130 | 402,933 | 386,070 | 402,661 | ||||||||||||
Total | 1,016,330 | 1,067,003 | 1,005,703 | 1,047,778 | ||||||||||||
Managed care enrollment by funding arrangement: | ||||||||||||||||
Fully-insured | 847,327 | 886,547 | 839,299 | 868,157 | ||||||||||||
Self-insured | 169,003 | 180,456 | 166,404 | 179,621 | ||||||||||||
Total | 1,016,330 | 1,067,003 | 1,005,703 | 1,047,778 |
(1) | Commercial membership includes corporate accounts, self-funded employers, individual accounts, Medicare Supplement, Federal government employees and local government employees. |
Three months ended March 31, | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(dollar amounts in millions) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Premiums earned, net | $ | 702.3 | $ | 738.5 | $ | 722.9 | $ | 729.1 | $ | 1,425.2 | $ | 1,467.6 | ||||||||||||
Administrative service fees | 4.4 | 5.1 | 4.5 | 4.5 | 8.9 | 9.6 | ||||||||||||||||||
Net investment income | 12.0 | 11.4 | 12.7 | 12.9 | 24.7 | 24.2 | ||||||||||||||||||
Other operating revenues | 0.9 | 0.8 | 1.1 | 0.9 | 2.1 | 1.7 | ||||||||||||||||||
Total operating revenues | 719.6 | 755.8 | 741.2 | 747.4 | 1,460.9 | 1,503.1 | ||||||||||||||||||
Net realized investment gains | 0.3 | - | 4.1 | 1.5 | 4.4 | 1.6 | ||||||||||||||||||
Other income, net | 2.6 | 0.9 | 0.6 | 3.8 | 3.1 | 4.7 | ||||||||||||||||||
Total revenues | 722.5 | 756.7 | 745.9 | 752.7 | 1,468.4 | 1,509.4 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims incurred | 620.9 | 626.7 | 611.3 | 622.1 | 1,232.2 | 1,248.8 | ||||||||||||||||||
Operating expenses | 110.9 | 123.0 | 118.7 | 121.1 | 229.6 | 244.1 | ||||||||||||||||||
Total operating expenses | 731.8 | 749.7 | 730.0 | 743.2 | 1,461.8 | 1,492.9 | ||||||||||||||||||
Interest expense | 1.7 | 1.9 | 1.7 | 1.9 | 3.4 | 3.8 | ||||||||||||||||||
Total benefits and expenses | 733.5 | 751.6 | 731.7 | 745.1 | 1,465.2 | 1,496.7 | ||||||||||||||||||
(Loss) income before taxes | (11.0 | ) | 5.1 | |||||||||||||||||||||
Income taxes (benefit) / expense | (6.7 | ) | 1.7 | |||||||||||||||||||||
Net (loss) income attributable to TSM | $ | (4.3 | ) | $ | 3.4 | |||||||||||||||||||
Income before taxes | 14.2 | 7.6 | 3.2 | 12.7 | ||||||||||||||||||||
Income tax expense (benefit) | 1.5 | 3.7 | (5.2 | ) | 5.4 | |||||||||||||||||||
Net income attributable to TSM | 12.7 | 3.9 | 8.4 | 7.3 |
Three months ended March 31, | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(dollar amounts in millions) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
Operating revenues: | ||||||||||||||||||||||||
Medical premiums earned, net: | ||||||||||||||||||||||||
Commercial | $ | 205.1 | $ | 215.5 | $ | 203.3 | $ | 215.0 | $ | 408.4 | $ | 430.5 | ||||||||||||
Medicare | 257.7 | 261.0 | 266.6 | 273.1 | 524.3 | 534.0 | ||||||||||||||||||
Medicaid | 177.7 | 202.2 | 191.8 | 181.2 | 369.5 | 383.4 | ||||||||||||||||||
Medical premiums earned, net | 640.5 | 678.7 | 661.7 | 669.3 | 1,302.2 | 1,347.9 | ||||||||||||||||||
Administrative service fees | 5.6 | 6.3 | 5.8 | 5.8 | 11.4 | 12.1 | ||||||||||||||||||
Net investment income | 3.9 | 3.5 | 4.1 | 4.1 | 8.0 | 7.6 | ||||||||||||||||||
Total operating revenues | 650.0 | 688.5 | 671.6 | 679.2 | 1,321.6 | 1,367.6 | ||||||||||||||||||
Medical operating costs: | ||||||||||||||||||||||||
Medical claims incurred | 587.3 | 596.3 | 579.2 | 590.2 | 1,166.5 | 1,186.5 | ||||||||||||||||||
Medical operating expenses | 81.3 | 92.8 | 89.5 | 92.8 | 170.8 | 185.5 | ||||||||||||||||||
Total medical operating costs | 668.6 | 689.1 | 668.7 | 683.0 | 1,337.3 | 1,372.0 | ||||||||||||||||||
Medical operating loss | $ | (18.6 | ) | $ | (0.6 | ) | ||||||||||||||||||
Medical operating income (loss) | $ | 2.9 | $ | (3.8 | ) | $ | (15.7 | ) | $ | (4.4 | ) | |||||||||||||
Additional data: | ||||||||||||||||||||||||
Member months enrollment: | ||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||
Fully-insured | 1,013,205 | 1,096,282 | 1,001,638 | 1,063,422 | 2,014,843 | 2,159,704 | ||||||||||||||||||
Self-funded | 507,167 | 543,026 | 501,500 | 540,221 | 1,008,667 | 1,083,247 | ||||||||||||||||||
Total Commercial | 1,520,372 | 1,639,308 | ||||||||||||||||||||||
Medicare | 363,727 | 364,427 | ||||||||||||||||||||||
Medicaid | 1,173,273 | 1,221,892 | ||||||||||||||||||||||
Total Commercial member months | 1,503,138 | 1,603,643 | 3,023,510 | 3,242,951 | ||||||||||||||||||||
Medicare member months | 363,257 | 351,108 | 726,984 | 715,535 | ||||||||||||||||||||
Medicaid member months | 1,169,090 | 1,206,345 | 2,342,363 | 2,428,237 | ||||||||||||||||||||
Total member months | 3,057,372 | 3,225,627 | 3,035,485 | 3,161,096 | 6,092,857 | 6,386,723 | ||||||||||||||||||
Medical loss ratio | 91.7 | % | 87.9 | % | 87.5 | % | 88.2 | % | 89.6 | % | 88.0 | % | ||||||||||||
Operating expense ratio | 12.6 | % | 13.5 | % | 13.4 | % | 13.7 | % | 13.0 | % | 13.6 | % |
Three months ended March 31, | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(dollar amounts in millions) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
Operating revenues: | ||||||||||||||||||||||||
Premiums earned, net: | ||||||||||||||||||||||||
Premiums earned | $ | 41.8 | $ | 39.8 | $ | 41.8 | $ | 39.7 | $ | 83.6 | $ | 79.5 | ||||||||||||
Assumed earned premiums | 0.9 | 1.5 | 0.5 | 1.2 | 1.4 | 2.7 | ||||||||||||||||||
Ceded premiums earned | (2.2 | ) | (2.2 | ) | (2.3 | ) | (2.1 | ) | (4.5 | ) | (4.3 | ) | ||||||||||||
Premiums earned, net | 40.5 | 39.1 | 40.0 | 38.8 | 80.5 | 77.9 | ||||||||||||||||||
Net investment income | 6.1 | 5.9 | 6.3 | 6.4 | 12.4 | 12.3 | ||||||||||||||||||
Total operating revenues | 46.6 | 45.0 | 46.3 | 45.2 | 92.9 | 90.2 | ||||||||||||||||||
Operating costs: | ||||||||||||||||||||||||
Policy benefits and claims incurred | 23.7 | 21.4 | 21.9 | 21.9 | 45.6 | 43.4 | ||||||||||||||||||
Underwriting and other expenses | 19.0 | 18.0 | 19.4 | 18.2 | 38.4 | 36.2 | ||||||||||||||||||
Total operating costs | 42.7 | 39.4 | 41.3 | 40.1 | 84.0 | 79.6 | ||||||||||||||||||
Operating income | $ | 3.9 | $ | 5.6 | $ | 5.0 | $ | 5.1 | $ | 8.9 | $ | 10.6 | ||||||||||||
Additional data: | ||||||||||||||||||||||||
Loss ratio | 58.5 | % | 54.7 | % | 54.8 | % | 56.4 | % | 56.6 | % | 55.7 | % | ||||||||||||
Operating expense ratio | 46.9 | % | 46.0 | % | 48.5 | % | 46.9 | % | 47.7 | % | 46.5 | % |
Three months ended March 31, | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(dollar amounts in millions) | 2017 | 2016 | ||||||||||||||||||||||
(Dollar amounts in millions) | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
Operating revenues: | ||||||||||||||||||||||||
Premiums earned, net: | ||||||||||||||||||||||||
Premiums written | $ | 27.4 | $ | 27.6 | $ | 46.4 | $ | 40.9 | $ | 73.8 | $ | 68.5 | ||||||||||||
Premiums ceded | (10.1 | ) | (10.4 | ) | (16.6 | ) | (13.1 | ) | (26.7 | ) | (23.5 | ) | ||||||||||||
Change in unearned premiums | 4.4 | 4.1 | (8.0 | ) | (6.1 | ) | (3.6 | ) | (2.0 | ) | ||||||||||||||
Premiums earned, net | 21.7 | 21.3 | 21.8 | 21.7 | 43.5 | 43.0 | ||||||||||||||||||
Net investment income | 1.9 | 1.9 | 2.1 | 2.3 | 4.1 | 4.3 | ||||||||||||||||||
Total operating revenues | 23.6 | 23.2 | 23.9 | 24.0 | 47.6 | 47.3 | ||||||||||||||||||
Operating costs: | ||||||||||||||||||||||||
Claims incurred | 10.6 | 9.7 | 10.9 | 10.8 | 21.5 | 20.6 | ||||||||||||||||||
Underwriting and other expenses | 10.9 | 11.4 | 9.3 | 9.8 | 20.3 | 21.2 | ||||||||||||||||||
Total operating costs | 21.5 | 21.1 | 20.2 | 20.6 | 41.8 | 41.8 | ||||||||||||||||||
Operating income | $ | 2.1 | $ | 2.1 | $ | 3.7 | $ | 3.4 | $ | 5.8 | $ | 5.5 | ||||||||||||
Additional data: | ||||||||||||||||||||||||
Loss ratio | 48.8 | % | 45.5 | % | 50.0 | % | 49.8 | % | 49.4 | % | 47.9 | % | ||||||||||||
Operating expense ratio | 50.2 | % | 53.5 | % | 42.7 | % | 45.2 | % | 46.7 | % | 49.3 | % |
Three months ended March 31, | Six months ended June 30, | |||||||||||||||
(dollar amounts in millions) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Sources (uses) of cash: | ||||||||||||||||
Cash provided by operating activities | $ | 131.0 | $ | 31.3 | ||||||||||||
Net proceeds (purchases) of investment securities | 0.4 | (108.9 | ) | |||||||||||||
Cash provided by (used in) operating activities | $ | 133.7 | $ | (10.6 | ) | |||||||||||
Net purchases of investment securities | (43.0 | ) | (76.3 | ) | ||||||||||||
Net capital expenditures | (3.3 | ) | (1.5 | ) | (8.7 | ) | (2.7 | ) | ||||||||
Proceeds from long-term borrowings | 24.3 | - | 24.3 | - | ||||||||||||
Payments of long-term borrowings | (24.7 | ) | (0.4 | ) | (25.5 | ) | (0.8 | ) | ||||||||
Proceeds from policyholder deposits | 4.1 | 3.4 | 8.2 | 7.9 | ||||||||||||
Surrenders of policyholder deposits | (4.9 | ) | (2.9 | ) | (10.5 | ) | (6.9 | ) | ||||||||
Repurchase and retirement of common stock | - | (8.0 | ) | - | (14.6 | ) | ||||||||||
Other | (11.4 | ) | 1.6 | (9.4 | ) | 2.3 | ||||||||||
Net increase (decrease) in cash and cash equivalents | $ | 115.5 | $ | (85.4 | ) | $ | 69.1 | $ | (101.7 | ) |
· | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
· | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and |
· | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the consolidated financial statements. |
· | After hiring additional personnel in the actuarial department, effective 2017 we reinforced the review process over the accuracy of the claims paid data within the claim lags. |
· | In addition we strengthened the claims paid reconciliation process to include the incurred date component within the claim lags on a monthly and historical basis. |
Exhibits | Description |
3(i)(c) | Articles of Incorporation of Triple-S Management Corporation, incorporated by reference to Exhibit 3(i)(c) to TSM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 (File No. 001-33865). |
Certification of the President and Chief Executive Officer required by Rule 13a-14(a)/15d-14(a). | |
Certification of the Executive Vice President and Chief Financial Officer required by Rule 13a-14(a)/15d-14(a). | |
Certification of the President and Chief Executive Officer required pursuant to 18 U.S.C Section 1350. | |
Certification of the Executive Vice President and Chief Financial Officer required pursuant to 18 U.S.C Section 1350. |
* | Filed herein. |
Triple-S Management Corporation | |||||
Registrant | |||||
Date: | By: | /s/ Roberto García-Rodríguez | |||
Roberto García-Rodríguez | |||||
President and Chief Executive Officer | |||||
Date: | By: | /s/ Juan J. Román-Jiménez | |||
Juan J. Román-Jiménez | |||||
Executive Vice President and Chief Financial Officer |