| Delaware (State or other jurisdiction of incorporation or organization) | | | 6331 (Primary Standard Industrial Classification Code Number) | | | 14-1957288 (I.R.S. Employer Identification Number) | |
| Michael Murphy Patrick J. O’Malley Bianca J. LaCaille DLA Piper LLP (US) 1251 Avenue of the Americas New York, NY 10020-1104 (212) 335-4500 | | | Marc D. Jaffe Erika L. Weinberg Adam V. Johnson Latham & Watkins LLP 1271 Avenue of the Americas New York, NY 10020 (212) 906-1200 | |
| Large accelerated filer ☐ | | | Accelerated filer ☐ | | | Non-accelerated filer ☒ | | | Smaller reporting company ☐ | |
| | | | | | | | | | Emerging growth company ☒ | |
| | | Per Share | | | Total | | ||||||
| | | $ | | | | | $ | | | |||
Underwriting discount | |||||||||||||
| | | $ | | | | | $ | | | |||
Proceeds, before expenses, to the selling stockholders | | | | $ | | | | | $ | | | |
| Barclays | | | Keefe, Bruyette & Woods A Stifel Company | |
| JMP Securities A CITIZENS COMPANY | | | Piper Sandler | | | Truist Securities | |
| Raymond James | | | BMO Capital Markets | |
| | | Page | | |||
| | | | 1 | | | |
| | | | | | ||
| | | | | | ||
| | | | | | ||
| | | | ||||
| | ||||||
| | | | | | ||
| | | | | | ||
| | | | | | ||
| | | | | | ||
| | | | | | ||
| | | | | | ||
| | | | | | ||
| | | | ||||
| |
Total Gross Written Premiums For the nine months ended September 30, | | ||||||||||||||||||||||||
($ in thousands) | | | 2022 | | | % of Total | | | 2021 | | | % of Total | | ||||||||||||
Industry Solutions | | | | $ | 202,237 | | | | | | 23.0% | | | | | $ | 150,599 | | | | | | 21.0% | | |
Global Property | | | | | 177,565 | | | | | | 20.2% | | | | | | 140,815 | | | | | | 19.7% | | |
Programs | | | | | 131,752 | | | | | | 15.0% | | | | | | 110,301 | | | | | | 15.4% | | |
Accident & Health | | | | | 97,107 | | | | | | 11.0% | | | | | | 83,542 | | | | | | 11.7% | | |
Captives | | | | | 97,580 | | | | | | 11.1% | | | | | | 70,355 | | | | | | 9.8% | | |
Professional Lines | | | | | 62,127 | | | | | | 7.1% | | | | | | 44,060 | | | | | | 6.2% | | |
Surety | | | | | 53,734 | | | | | | 6.1% | | | | | | 33,396 | | | | | | 4.7% | | |
Transactional E&S | | | | | 52,645 | | | | | | 6.0% | | | | | | 17,492 | | | | | | 2.4% | | |
Total continuing business | | | | $ | 874,746 | | | | | | 99.5% | | | | | $ | 650,560 | | | | | | 90.9% | | |
Exited business | | | | | 4,373 | | | | | | 0.5% | | | | | | 65,116 | | | | | | 9.1% | | |
Total gross written premiums | | | | $ | 879,119 | | | | | | 100.0% | | | | | $ | 715,676 | | | | | | 100.0% | | |
($ in thousands) | | | 2022 | | | % of Total | | | 2021 | | | % of Total | | ||||||||||||
Industry Solutions | | | | $ | 267,628 | | | | | | 23.4% | | | | | $ | 219,973 | | | | | | 23.4% | | |
Global Property & Agriculture | | | | | 205,081 | | | | | | 17.9% | | | | | | 167,887 | | | | | | 17.9% | | |
Programs | | | | | 163,653 | | | | | | 14.3% | | | | | | 140,283 | | | | | | 14.9% | | |
Accident & Health | | | | | 130,808 | | | | | | 11.4% | | | | | | 112,146 | | | | | | 11.9% | | |
Captives | | | | | 124,286 | | | | | | 10.9% | | | | | | 87,836 | | | | | | 9.3% | | |
Professional Lines | | | | | 93,011 | | | | | | 8.1% | | | | | | 59,992 | | | | | | 6.4% | | |
Surety | | | | | 79,062 | | | | | | 6.9% | | | | | | 51,792 | | | | | | 5.5% | | |
Transactional E&S | | | | | 75,098 | | | | | | 6.6% | | | | | | 27,997 | | | | | | 3.0% | | |
Total continuing business | | | | $ | 1,138,627 | | | | | | 99.5% | | | | | $ | 867,906 | | | | | | 92.3% | | |
Exited business | | | | | 5,325 | | | | | | 0.5% | | | | | | 71,953 | | | | | | 7.7% | | |
Total gross written premiums | | | | $ | 1,143,952 | | | | | | 100.0% | | | | | $ | 939,859 | | | | | | 100.0% | | |
| | | For the nine months ended September 30, | | | For the years ended December 31, | | ||||||||||||||||||
($ in thousands, except per share amounts) | | | 2022 | | | 2021 | | | 2021 | | | 2020 | | ||||||||||||
Revenues: | | | | | | | | | | | | | | | | ||||||||||
Gross written premiums | | | | $ | 879,119 | | | | | $ | 715,676 | | | | | $ | 939,859 | | | | | $ | 873,613 | | |
Ceded written premiums | | | | | (383,533) | | | | | | (327,512) | | | | | | (410,716) | | | | | | (412,090) | | |
Net written premiums | | | | $ | 495,586 | | | | | $ | 388,164 | | | | | $ | 529,143 | | | | | $ | 461,523 | | |
Net earned premiums | | | | $ | 445,851 | | | | | $ | 366,052 | | | | | $ | 499,823 | | | | | $ | 431,911 | | |
Commission and fee income | | | | | 3,652 | | | | | | 2,664 | | | | | | 3,973 | | | | | | 5,664 | | |
Net investment income | | | | | 31,667 | | | | | | 20,616 | | | | | | 24,646 | | | | | | 14,130 | | |
Net investment (losses) gains | | | | | (26,117) | | | | | | 10,021 | | | | | | 17,107 | | | | | | 139 | | |
Other income and expenses | | | | | — | | | | | | 3,560 | | | | | | 4,632 | | | | | | 128 | | |
Total revenues | | | | $ | 455,053 | | | | | $ | 402,913 | | | | | $ | 550,181 | | | | | $ | 451,972 | | |
Expenses: | | | | | | | | | | | | | | | | ||||||||||
Losses and LAE | | | | | 293,536 | | | | | | 249,828 | | | | | | 354,411 | | | | | | 362,182 | | |
Underwriting, acquisition and insurance expenses | | | | | 132,258 | | | | | | 98,993 | | | | | | 138,498 | | | | | | 119,818 | | |
Impairment charges | | | | | — | | | | | | 2,821 | | | | | | 2,821 | | | | | | 57,582 | | |
Interest expense | | | | | 4,280 | | | | | | 3,465 | | | | | | 4,622 | | | | | | 5,532 | | |
Amortization expense | | | | | 1,160 | | | | | | 1,133 | | | | | | 1,520 | | | | | | 1,390 | | |
Total expenses | | | | $ | 431,234 | | | | | $ | 356,240 | | | | | $ | 501,872 | | | | | $ | 546,504 | | |
Income (loss) before federal income tax | | | | | 23,819 | | | | | | 46,673 | | | | | | 48,309 | | | | | | (94,532) | | |
Federal income tax expense (benefit) | | | | | 4,842 | | | | | | 9,671 | | | | | | 9,992 | | | | | | (19,890) | | |
Net income (loss) | | | | $ | 18,977 | | | | | $ | 37,002 | | | | | $ | 38,317 | | | | | $ | (74,642) | | |
Adjusted operating income(1) | | | | $ | 46,934 | | | | | $ | 28,502 | | | | | $ | 36,062 | | | | | $ | 17,876 | | |
| | | For the nine months ended September 30, | | | For the years ended December 31, | | ||||||||||||||||||
($ in thousands, except per share amounts) | | | 2022 | | | 2021 | | | 2021 | | | 2020 | | ||||||||||||
Share and Per Share Data: | | | | | | | | | | | | | | | | ||||||||||
Basic earnings per share(2) | | | | $ | 0.60 | | | | | $ | 1.17 | | | | | $ | 1.21 | | | | | $ | (4.60) | | |
Diluted earnings per share | | | | $ | 0.58 | | | | | $ | 1.14 | | | | | $ | 1.18 | | | | | $ | (4.60) | | |
Basic adjusted earnings per share(3) | | | | $ | 1.48 | | | | | $ | 0.90 | | | | | $ | 1.14 | | | | | $ | 1.10 | | |
Diluted adjusted earnings per share | | | | $ | 1.44 | | | | | $ | 0.88 | | | | | $ | 1.11 | | | | | $ | 1.10 | | |
Weighted average basic shares | | | | | 16,464,313 | | | | | | 16,297,668 | | | | | | 16,308,712 | | | | | | 16,213,953 | | |
Weighted average diluted shares | | | | | 32,598,669 | | | | | | 32,379,830 | | | | | | 32,468,048 | | | | | | 16,213,953 | | |
Shares outstanding(4) | | | | | 16,544,974 | | | | | | 16,551,386 | | | | | | 16,533,620 | | | | | | 16,411,462 | | |
Fully diluted shares outstanding(4) | | | | | 33,290,681 | | | | | | 33,335,504 | | | | | | 33,082,691 | | | | | | 32,991,220 | | |
Book value(5) per share(6) | | | | $ | 24.58 | | | | | $ | 26.46 | | | | | $ | 26.32 | | | | | $ | 24.13 | | |
Fully diluted book value(5) per share(6) | | | | $ | 12.22 | | | | | $ | 13.14 | | | | | $ | 13.15 | | | | | $ | 12.00 | | |
Fully diluted tangible book value(5) per share(6) | | | | $ | 9.51 | | | | | $ | 10.33 | | | | | $ | 10.39 | | | | | $ | 9.46 | | |
Underwriting and Other Ratio: | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss ratio | | | | | 65.9% | | | | | | 68.3% | | | | | | 70.9% | | | | | | 83.9% | | |
Expense ratio | | | | | 28.8% | | | | | | 26.3% | | | | | | 26.9% | | | | | | 26.4% | | |
Combined ratio | | | | | 94.7% | | | | | | 94.6% | | | | | | 97.8% | | | | | | 110.3% | | |
Adjusted loss ratio(1) | | | | | 63.8% | | | | | | 68.3% | | | | | | 67.7% | | | | | | 70.0% | | |
Expense ratio | | | | | 28.8% | | | | | | 26.3% | | | | | | 26.9% | | | | | | 26.4% | | |
Adjusted combined ratio(1) | | | | | 92.6% | | | | | | 94.6% | | | | | | 94.6% | | | | | | 96.4% | | |
Return on equity(7) | | | | | 6.1% | | | | | | 12.0% | | | | | | 9.4% | | | | | | (19.5)% | | |
Adjusted return on equity(1)(7) | | | | | 15.2% | | | | | | 9.2% | | | | | | 8.8% | | | | | | 4.7% | | |
Return on tangible equity(1)(7) | | | | | 7.9% | | | | | | 15.3% | | | | | | 11.9% | | | | | | (27.7)% | | |
Adjusted return on tangible equity(1)(7) | | | | | 19.4% | | | | | | 11.8% | | | | | | 11.2% | | | | | | 6.6% | | |
| | | As of September 30, 2022 | | |||||||||
($ in thousands, except per share amounts) | | | Actual | | | Pro Forma | | | Pro Forma as Adjusted | | |||
| | | (unaudited) | | | (unaudited) | | | (unaudited) | | |||
Balance sheet data: | | | | | | | | | | | | ||
Investments and cash | | | | $ | 1,048,612 | | | | | | | | |
Restricted cash | | | | | 75,359 | | | | | | | ||
Premiums receivable | | | | | 160,491 | | | | | ||||
Reinsurance recoverables | | | | | 542,895 | | | | | ||||
Ceded unearned premium | | | | | 189,241 | | | | | ||||
Goodwill and intangible assets | | | | | 90,237 | | | | | ||||
Other assets | | | | | 201,571 | | | | | ||||
Total assets | | | | $ | 2,308,406 | | | | | | | | |
Loss and LAE reserves | | | | $ | 1,062,000 | | | | | ||||
Unearned premiums | | | | | 464,291 | | | | | ||||
Reinsurance premiums payable | | | | | 135,056 | | | | | ||||
Notes payable | | | | | 50,000 | | | | | ||||
Subordinated debt | | | | | 78,589 | | | | | ||||
Other liabilities | | | | | 118,653 | | | | | ||||
Total liabilities | | | | $ | 1,908,589 | | | | | ||||
Total stockholders’ equity | | | | $ | 399,817 | | | | | ||||
Total liabilities, temporary equity and stockholders’ equity | | | | $ | 2,308,406 | | | | |
| | | As of September 30, 2022 | | |||||||||
($ in thousands, except per share amounts) | | | Actual | | | Pro Forma | | | Pro Forma as Adjusted | | |||
| | | (unaudited) | | | (unaudited) | | | (unaudited) | | |||
Other Data: | | | | | | | | | | | | ||
Statutory capital and surplus(8) | | | | $ | 379,601 | | | | | | | ||
Debt to total capitalization ratio(9) | | | | | 24.3% | | | | | | | | |
Tangible stockholders’ equity(1) | | | | $ | 309,580 | | | | |
($ in thousands, except per share amounts) | | | As of September 30, 2022 | | |||||||||||||||
| Actual | | | Pro Forma | | | Pro Forma As Adjusted(1) | | |||||||||||
| | | | | | | (unaudited) | | | (unaudited) | | ||||||||
Notes payable | | | | $ | 50,000 | | | | | $ | | | | | $ | | | ||
Subordinated debt | | | | | 78,589 | | | | | | | | | | | | | | |
Total debt | | | | | 128,589 | | | | | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | | | | | | | | | | |
Series A preferred stock, $0.01 par value, 2,000,000 shares authorized, 1,969,660 shares issued and outstanding, actual | | | | | 20 | | | | | | | | | | | | | | |
Common stock, $0.01 par value, 168,000,000 shares authorized, 16,778,263 shares issued and outstanding, actual | | | | | 168 | | | | | | | | | | | | | | |
Treasury stock, at par value, 233,289 shares | | | | | (2) | | | | | | | | | | | | | | |
Additional paid-in capital | | | | | 576,685 | | | | | | | | | | | | | | |
Stock notes receivable | | | | | (6,912) | | | | | | | | | | | | | | |
Accumulated other comprehensive income | | | | | (44,306) | | | | | | | | | | | | | | |
Accumulated deficit | | | | | (125,836) | | | | | | | | | | | | | | |
Total stockholders’ equity | | | | | 399,817 | | | | | | | | | | | | | | |
Total Capitalization | | | | $ | 528,406 | | | | | $ | | | | | $ | | | |
| | | For the nine months ended September 31, 2022 | | | For the years ended December 31, | | ||||||||||||
($ in thousands) | | | 2021 | | | 2020 | | ||||||||||||
Expense to enter the LPT | | | | $ | — | | | | | $ | — | | | | | $ | (43,476) | | |
Strengthening of LPT reserves | | | | | (14,385) | | | | | | (28,000) | | | | | | (49,013) | | |
Reinsurance recoveries from the LPT | | | | | 5,114 | | | | | | 11,937 | | | | | | 32,692 | | |
Net impact of the LPT (pre-tax) | | | | $ | (9,271) | | | | | $ | (16,063) | | | | | $ | (59,797) | | |
| | | For the nine months ended September 30, | | |||||||||||||||||||||
| | | 2022 | | | 2021 | | | Change | | | % Change | | ||||||||||||
Gross written premiums | | | | $ | 879,119 | | | | | $ | 715,676 | | | | | $ | 163,443 | | | | | | 22.8% | | |
Ceded written premiums | | | | | (383,533) | | | | | | (327,512) | | | | | | (56,021) | | | | | | (17.1)% | | |
Net written premiums | | | | $ | 495,586 | | | | | $ | 388,164 | | | | | $ | 107,422 | | | | | | 27.7% | | |
Net earned premiums | | | | $ | 445,851 | | | | | $ | 366,052 | | | | | $ | 79,799 | | | | | | 21.8% | | |
Commission and fee income | | | | | 3,652 | | | | | | 2,664 | | | | | | 988 | | | | | | 37.1% | | |
Losses and LAE | | | | | 293,536 | | | | | | 249,828 | | | | | | 43,708 | | | | | | 17.5% | | |
Underwriting, acquisition and insurance expenses | | | | | 132,258 | | | | | | 98,992 | | | | | | 33,266 | | | | | | 33.6% | | |
Underwriting income (loss)(1) | | | | $ | 23,709 | | | | | $ | 19,896 | | | | | $ | 3,813 | | | | | | (19.2)% | | |
Net investment income | | | | | 31,667 | | | | | | 20,616 | | | | | | 11,051 | | | | | | 53.6% | | |
Net investment (losses) gains | | | | | (26,117) | | | | | | 10,021 | | | | | | (36,138) | | | | | | NM | | |
Impairment charges | | | | | — | | | | | | (2,821) | | | | | | 2,821 | | | | | | NM | | |
Other income and (expenses) | | | | | — | | | | | | 3,560 | | | | | | (3,560) | | | | | | NM | | |
Interest expense | | | | | 4,280 | | | | | | 3,465 | | | | | | 815 | | | | | | 23.5% | | |
Amortization expense | | | | | 1,160 | | | | | | 1,134 | | | | | | 26 | | | | | | 2.3% | | |
Income (loss) before federal income tax | | | | $ | 23,819 | | | | | $ | 46,673 | | | | | $ | (22,854) | | | | | | 49.0% | | |
Income tax expense (benefit) | | | | | 4,842 | | | | | | 9,671 | | | | | | (4,829) | | | | | | 49.9% | | |
Net income (loss) | | | | $ | 18,977 | | | | | $ | 37,002 | | | | | $ | (18,025) | | | | | | 48.7% | | |
Adjusted operating income(1) | | | | $ | 46,934 | | | | | $ | 28,502 | | | | | $ | 18,432 | | | | | | 64.7% | | |
Loss ratio | | | | | 65.9% | | | | | | 68.3% | | | | | | | | | | | | | | |
Expense ratio | | | | | 28.8% | | | | | | 26.3% | | | | | | | | | | | | | | |
Combined ratio | | | | | 94.7% | | | | | | 94.6% | | | | | | | | | | | | | | |
Annualized return on equity | | | | | 6.1% | | | | | | 12.0% | | | | | | | | | | | | | | |
Annualized return on tangible equity(1) | | | | | 7.9% | | | | | | 15.3% | | | | | | | | | | | | | | |
Adjusted loss ratio(1) | | | | | 63.8% | | | | | | 68.3% | | | | | | | | | | | | | | |
Expense ratio | | | | | 28.8% | | | | | | 26.3% | | | | | | | | | | | | | | |
Adjusted combined ratio(1) | | | | | 92.6% | | | | | | 94.6% | | | | | | | | | | | | | | |
Annualized adjusted return on equity(1) | | | | | 15.2% | | | | | | 9.2% | | | | | | | | | | | | | | |
Annualized adjusted return on tangible equity(1) | | | | | 19.4% | | | | | | 11.8% | | | | | | | | | | | | | | |
| | | For the nine months ended September 30, | | |||||||||||||||||||||||||||||||||
($ in thousands) | | | 2022 | | | % of Total | | | 2021 | | | % of Total | | | Change | | | % Change | | ||||||||||||||||||
Industry Solutions | | | | $ | 202,237 | | | | | | 23.0% | | | | | $ | 150,599 | | | | | | 21.0% | | | | | $ | 51,638 | | | | | | 34.3% | | |
Global Property | | | | | 177,565 | | | | | | 20.2% | | | | | | 140,815 | | | | | | 19.7% | | | | | | 36,750 | | | | | | 26.1% | | |
Programs | | | | | 131,752 | | | | | | 15.0% | | | | | | 110,301 | | | | | | 15.4% | | | | | | 21,451 | | | | | | 19.4% | | |
Accident & Health | | | | | 97,107 | | | | | | 11.0% | | | | | | 83,542 | | | | | | 11.7% | | | | | | 13,565 | | | | | | 16.2% | | |
Captives | | | | | 97,580 | | | | | | 11.1% | | | | | | 70,355 | | | | | | 9.8% | | | | | | 27,224 | | | | | | 38.7% | | |
Professional Lines | | | | | 62,127 | | | | | | 7.1% | | | | | | 44,060 | | | | | | 6.2% | | | | | | 18,067 | | | | | | 41.0% | | |
Surety | | | | | 53,734 | | | | | | 6.1% | | | | | | 33,396 | | | | | | 4.7% | | | | | | 20,338 | | | | | | 60.9% | | |
Transactional E&S | | | | | 52,645 | | | | | | 6.0% | | | | | | 17,492 | | | | | | 2.4% | | | | | | 35,153 | | | | | | 201.0% | | |
Total continuing business | | | | $ | 874,746 | | | | | | 99.5% | | | | | $ | 650,560 | | | | | | 90.9% | | | | | $ | 224,186 | | | | | | 34.5% | | |
Exited business | | | | | 4,373 | | | | | | 0.5% | | | | | | 65,116 | | | | | | 9.1% | | | | | | (60,743) | | | | | | (93.3)% | | |
Total gross written premiums | | | | $ | 879,119 | | | | | | 100.0% | | | | | $ | 715,676 | | | | | | 100.0% | | | | | $ | 163,443 | | | | | | 22.8% | | |
| | | For the nine months ended September 30, | | |||||||||||||||||||||
| | | 2022 | | | 2021 | | ||||||||||||||||||
($ in thousands) | | | Losses and LAE | | | % of Net Earned Premiums | | | Losses and LAE | | | % of Net Earned Premiums | | ||||||||||||
Loss Ratio: | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Accident Year(1) – Excluding Catastrophe | | | | $ | 279,765 | | | | | | 62.8% | | | | | $ | 240,500 | | | | | | 65.8% | | |
Current Accident Year – Catastrophe Losses(2) | | | | | 4,500 | | | | | | 1.0% | | | | | | 9,328 | | | | | | 2.5% | | |
Prior Year Development – Non-LPT Related | | | | | — | | | | | | 0.0% | | | | | | — | | | | | | 0.0% | | |
Prior Year Development – Net Impact of LPT(3) | | | | | 9,271 | | | | | | 2.1% | | | | | | — | | | | | | 0.0% | | |
Total | | | | $ | 293,536 | | | | | | 65.9% | | | | | $ | 249,828 | | | | | | 68.3% | | |
Adjusted Loss Ratio(4): | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Accident Year(1) – Excluding Catastrophe | | | | $ | 279,765 | | | | | | 62.8% | | | | | $ | 240,500 | | | | | | 65.8% | | |
Current Accident Year – Catastrophe Losses(2) | | | | | 4,500 | | | | | | 1.0% | | | | | | 9,328 | | | | | | 2.5% | | |
Prior Year Development – Non-LPT Related | | | | | — | | | | | | 0.0% | | | | | | — | | | | | | 0.0% | | |
Total | | | | $ | 284,265 | | | | | | 63.8% | | | | | $ | 249,828 | | | | | | 68.3% | | |
| | | For the nine months ended September 30, | | |||||||||||||||||||||
| | | 2022 | | | 2021 | | ||||||||||||||||||
($ in thousands) | | | Expenses | | | % of Net Earned Premiums | | | Expenses | | | % of Net Earned Premiums | | ||||||||||||
Net policy acquisition expenses | | | | $ | 45,514 | | | | | | 10.2% | | | | | $ | 30,656 | | | | | | 8.4% | | |
Other operating and general expenses | | | | | 86,744 | | | | | | 19.5% | | | | | | 68,336 | | | | | | 18.6% | | |
Underwriting, acquisition and insurance expenses | | | | | 132,258 | | | | | | 29.7% | | | | | | 98,992 | | | | | | 27.0% | | |
Commission and fee income | | | | | (3,652) | | | | | | (0.9)% | | | | | | (2,664) | | | | | | (0.7)% | | |
Total net expenses | | | | $ | 128,606 | | | | | | 28.8% | | | | | $ | 96,328 | | | | | | 26.3% | | |
| | | For the nine months ended September 30, | | | | | | | | | | | | | | |||||||||||||||||||||
| | | 2022 | | | 2021 | | | | | | | | | | | | | | ||||||||||||||||||
($ in thousands) | | | Net Investment Income | | | Net Yield | | | Net Investment Income | | | Net Yield | | | $ Change | | | % Change | | ||||||||||||||||||
Cash and Short-term Investments | | | | $ | 645 | | | | | | 0.5% | | | | | $ | 60 | | | | | | 0.0% | | | | | $ | 585 | | | | | | 975.0% | | |
Core Fixed Income | | | | | 10,637 | | | | | | 2.6% | | | | | | 6,266 | | | | | | 2.2% | | | | | | 4,371 | | | | | | 69.8% | | |
Opportunistic Fixed Income | | | | | 19,106 | | | | | | 13.8% | | | | | | 11,517 | | | | | | 11.2% | | | | | | 7,589 | | | | | | 65.9% | | |
Equities | | | | | 1,279 | | | | | | 1.1% | | | | | | 2,773 | | | | | | 3.4% | | | | | | (1,494) | | | | | | (53.9)% | | |
Net investment income | | | | $ | 31,667 | | | | | | 4.0% | | | | | $ | 20,616 | | | | | | 3.1% | | | | | $ | 11,051 | | | | | | 53.6% | | |
Net unrealized (losses) gains on securities still held | | | | $ | (26,180) | | | | | | | | | | | $ | 9,068 | | | | | | | | | | | $ | (35,248) | | | | | | NM | | |
Net realized investment gains | | | | $ | 63 | | | | | | | | | | | $ | 953 | | | | | | | | | | | $ | (890) | | | | | | (93.4)% | | |
| | | For the years ended December 31, | | |||||||||||||||||||||
| | | 2021 | | | 2020 | | | Change | | | % Change | | ||||||||||||
Gross written premiums | | | | $ | 939,859 | | | | | $ | 873,613 | | | | | $ | 66,246 | | | | | | 7.6% | | |
Ceded written premiums | | | | | (410,716) | | | | | | (412,090) | | | | | | 1,374 | | | | | | 0.3% | | |
Net written premiums | | | | $ | 529,143 | | | | | $ | 461,523 | | | | | $ | 67,620 | | | | | | 14.7% | | |
Net earned premiums | | | | $ | 499,823 | | | | | $ | 431,911 | | | | | $ | 67,912 | | | | | | 15.7% | | |
Commission and fee income | | | | | 3,973 | | | | | | 5,664 | | | | | | (1,691) | | | | | | (29.9)% | | |
Losses and LAE | | | | | 354,411 | | | | | | 362,182 | | | | | | (7,771) | | | | | | (2.1)% | | |
Underwriting, acquisition and insurance expenses | | | | | 138,498 | | | | | | 119,818 | | | | | | 18,680 | | | | | | 15.6% | | |
Underwriting income (loss)(1) | | | | $ | 10,887 | | | | | $ | (44,425) | | | | | $ | 55,312 | | | | | | 124.5% | | |
Net investment income | | | | | 24,646 | | | | | | 14,130 | | | | | | 10,516 | | | | | | 74.4% | | |
Net investment gains | | | | | 17,107 | | | | | | 139 | | | | | | 16,968 | | | | | | NM | | |
Impairment charges | | | | | (2,821) | | | | | | (57,582) | | | | | | 54,761 | | | | | | 95.1% | | |
Other income and (expenses) | | | | | 4,632 | | | | | | 128 | | | | | | 4,504 | | | | | | NM | | |
Interest expense | | | | | 4,622 | | | | | | 5,532 | | | | | | (910) | | | | | | (16.4)% | | |
Amortization expense | | | | | 1,520 | | | | | | 1,390 | | | | | | 130 | | | | | | 9.4% | | |
Income (loss) before federal income tax | | | | $ | 48,309 | | | | | $ | (94,532) | | | | | $ | 142,841 | | | | | | 151.1% | | |
Income tax expense (benefit) | | | | | 9,992 | | | | | | (19,890) | | | | | | 29,882 | | | | | | 150.2% | | |
Net income (loss) | | | | $ | 38,317 | | | | | $ | (74,642) | | | | | $ | 112,959 | | | | | | 151.3% | | |
Adjusted operating income(1) | | | | $ | 36,062 | | | | | $ | 17,876 | | | | | $ | 18,185 | | | | | | 101.7% | | |
Loss ratio | | | | | 70.9% | | | | | | 83.9% | | | | | | | | | | | | | | |
Expense ratio | | | | | 26.9% | | | | | | 26.4% | | | | | | | | | | | | | | |
Combined ratio | | | | | 97.8% | | | | | | 110.3% | | | | | | | | | | | | | | |
Return on equity | | | | | 9.4% | | | | | | (19.5)% | | | | | | | | | | | | | | |
Return on tangible equity(1) | | | | | 11.9% | | | | | | (27.7)% | | | | | | | | | | | | | | |
Adjusted loss ratio(1) | | | | | 67.7% | | | | | | 70.0% | | | | | | | | | | | | | | |
Expense ratio | | | | | 26.9% | | | | | | 26.4% | | | | | | | | | | | | | | |
Adjusted combined ratio(1) | | | | | 94.6% | | | | | | 96.4% | | | | | | | | | | | | | | |
Adjusted return on equity(1) | | | | | 8.8% | | | | | | 4.7% | | | | | | | | | | | | | | |
Adjusted return on tangible equity(1) | | | | | 11.2% | | | | | | 6.6% | | | | | | | | | | | | | | |
| | | For the years ended December 31, | | |||||||||||||||||||||||||||||||||
($ in thousands) | | | 2021 | | | % of Total | | | 2020 | | | % of Total | | | Change | | | % Change | | ||||||||||||||||||
Industry Solutions | | | | $ | 219,973 | | | | | | 23.4% | | | | | $ | 176,177 | | | | | | 20.2% | | | | | $ | 43,796 | | | | | | 24.9% | | |
Global Property | | | | | 167,887 | | | | | | 17.9% | | | | | | 155,027 | | | | | | 17.7% | | | | | | 12,860 | | | | | | 8.3% | | |
Programs | | | | | 140,283 | | | | | | 14.9% | | | | | | 119,479 | | | | | | 13.7% | | | | | | 20,804 | | | | | | 17.4% | | |
Accident & Health | | | | | 112,146 | | | | | | 11.9% | | | | | | 94,616 | | | | | | 10.8% | | | | | | 17,530 | | | | | | 18.5% | | |
Captives | | | | | 87,836 | | | | | | 9.3% | | | | | | 58,722 | | | | | | 6.7% | | | | | | 29,114 | | | | | | 49.6% | | |
Professional Lines | | | | | 59,992 | | | | | | 6.4% | | | | | | 28,816 | | | | | | 3.3% | | | | | | 31,176 | | | | | | 108.2% | | |
Surety | | | | | 51,792 | | | | | | 5.5% | | | | | | 13,176 | | | | | | 1.5% | | | | | | 38,616 | | | | | | 293.1% | | |
Transactional E&S | | | | | 27,997 | | | | | | 3.0% | | | | | | 2,318 | | | | | | 0.3% | | | | | | 25,679 | | | | | | 1107.8% | | |
Total continuing business | | | | $ | 867,906 | | | | | | 92.3% | | | | | $ | 648,331 | | | | | | 74.2% | | | | | $ | 219,575 | | | | | | 33.9% | | |
Exited business | | | | | 71,953 | | | | | | 7.7% | | | | | | 225,282 | | | | | | 25.8% | | | | | | (153,329) | | | | | | (68.1)% | | |
Total gross written premiums | | | | $ | 939,859 | | | | | | 100.0% | | | | | $ | 873,613 | | | | | | 100.0% | | | | | $ | 66,246 | | | | | | 7.6% | | |
| | | For the years ended December 31, | | |||||||||||||||||||||
| | | 2021 | | | 2020 | | ||||||||||||||||||
($ in thousands) | | | Losses and LAE | | | % of Net Earned Premiums | | | Losses and LAE | | | % of Net Earned Premiums | | ||||||||||||
Loss Ratio: | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Accident Year(1) – Excluding Catastrophe | | | | $ | 326,520 | | | | | | 65.3% | | | | | $ | 297,622 | | | | | | 68.9% | | |
Current Accident Year – Catastrophe Losses(2) | | | | | 11,828 | | | | | | 2.4% | | | | | | 4,223 | | | | | | 1.0% | | |
Prior Year Development – Non-LPT Related | | | | | — | | | | | | 0.0% | | | | | | 540 | | | | | | 0.1% | | |
Prior Year Development – Net Impact of LPT(3) | | | | | 16,063 | | | | | | 3.2% | | | | | | 59,797 | | | | | | 13.8% | | |
Total | | | | $ | 354,411 | | | | | | 70.9% | | | | | $ | 362,182 | | | | | | 83.9% | | |
Adjusted Loss Ratio(4): | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Accident Year(1) – Excluding Catastrophe | | | | $ | 326,520 | | | | | | 65.3% | | | | | $ | 297,622 | | | | | | 68.9% | | |
Current Accident Year – Catastrophe Losses(2) | | | | | 11,828 | | | | | | 2.4% | | | | | | 4,223 | | | | | | 1.0% | | |
Prior Year Development – Non-LPT Related | | | | | — | | | | | | 0.0% | | | | | | 540 | | | | | | 0.1% | | |
Total | | | | $ | 338,348 | | | | | | 67.7% | | | | | $ | 302,385 | | | | | | 70.0% | | |
| | | For the years ended December 31, | | |||||||||||||||||||||
| | | 2021 | | | 2020 | | ||||||||||||||||||
($ in thousands) | | | Expenses | | | % of Net Earned Premiums | | | Expenses | | | % of Net Earned Premiums | | ||||||||||||
Net policy acquisition expenses | | | | $ | 47,061 | | | | | | 9.4% | | | | | $ | 36,971 | | | | | | 8.6% | | |
Other operating and general expenses | | | | | 91,437 | | | | | | 18.3% | | | | | | 82,847 | | | | | | 19.2% | | |
Underwriting, acquisition and insurance expenses | | | | | 138,498 | | | | | | 27.7% | | | | | | 119,818 | | | | | | 27.7% | | |
Commission and fee income | | | | | (3,973) | | | | | | (0.8)% | | | | | | (5,664) | | | | | | (1.3)% | | |
Total net expenses | | | | $ | 134,525 | | | | | | 26.9% | | | | | $ | 114,154 | | | | | | 26.4% | | |
| | | For the years ended December 31, | | | | |||||||||||||||||||||||||||||||
| | | 2021 | | | 2020 | | | | | | | | | | | | | | ||||||||||||||||||
($ in thousands) | | | Net Investment Income | | | Net Yield | | | Net Investment Income | | | Net Yield | | | $ Change | | | % Change | | ||||||||||||||||||
Cash and Short-term Investments | | | | $ | 224 | | | | | | 0.1% | | | | | $ | 1,211 | | | | | | 0.4% | | | | | $ | (987) | | | | | | (81.5)% | | |
Core Fixed Income | | | | | 9,071 | | | | | | 2.3% | | | | | | 6,770 | | | | | | 2.4% | | | | | | 2,301 | | | | | | 34.0% | | |
Opportunistic Fixed Income | | | | | 12,571 | | | | | | 8.6% | | | | | | 5,492 | | | | | | 4.7% | | | | | | 7,079 | | | | | | 128.9% | | |
Equities | | | | | 2,780 | | | | | | 2.3% | | | | | | 657 | | | | | | 0.7% | | | | | | 2,123 | | | | | | 323.1% | | |
Net investment income | | | | $ | 24,646 | | | | | | 2.7% | | | | | $ | 14,130 | | | | | | 1.8% | | | | | $ | 10,516 | | | | | | 74.4% | | |
Net unrealized gains (losses) | | | | $ | 15,251 | | | | | | | | | | | $ | (928) | | | | | | | | | | | $ | 16,179 | | | | | | NM | | |
Net realized investment gains | | | | $ | 1,856 | | | | | | | | | | | $ | 1,067 | | | | | | | | | | | $ | 789 | | | | | | 73.9% | | |
| | | For the nine months ended September 30, | | |||||||||||||||||||||
| | | 2022 | | | 2021 | | ||||||||||||||||||
($ in thousands) | | | Before income taxes | | | After income taxes | | | Before income taxes | | | After income taxes | | ||||||||||||
Income (loss) as reported | | | | $ | 23,819 | | | | | $ | 18,977 | | | | | $ | 46,673 | | | | | $ | 37,002 | | |
Less: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net impact of loss portfolio transfer | | | | | (9,271) | | | | | | (7,324) | | | | | | — | | | | | | — | | |
Net investment gains (losses) | | | | | (26,117) | | | | | | (20,632) | | | | | | 10,021 | | | | | | 7,917 | | |
Impairment charges | | | | | — | | | | | | — | | | | | | (2,821) | | | | | | (2,229) | | |
Other income and (expenses) | | | | | — | | | | | | — | | | | | | 3,560 | | | | | | 2,812 | | |
Adjusted operating income | | | | $ | 59,207 | | | | | $ | 46,934 | | | | | $ | 35,913 | | | | | $ | 28,502 | | |
| | | For the years ended December 31, | | |||||||||||||||||||||
| | | 2021 | | | 2020 | | ||||||||||||||||||
($ in thousands) | | | Before income taxes | | | After income taxes | | | Before income taxes | | | After income taxes | | ||||||||||||
Income (loss) as reported | | | | $ | 48,309 | | | | | $ | 38,317 | | | | | $ | (94,532) | | | | | $ | (74,642) | | |
Less: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net impact of loss portfolio transfer | | | | | (16,063) | | | | | | (12,690) | | | | | | (59,797) | | | | | | (47,240) | | |
Net investment gains (losses) | | | | | 17,107 | | | | | | 13,514 | | | | | | 139 | | | | | | 110 | | |
Impairment charges | | | | | (2,821) | | | | | | (2,229) | | | | | | (57,582) | | | | | | (45,490) | | |
Net realized gain on sale of business | | | | | 5,077 | | | | | | 4,011 | | | | | | — | | | | | | — | | |
Other operating (loss) income | | | | | (445) | | | | | | (352) | | | | | | 128 | | | | | | 101 | | |
Adjusted operating income | | | | $ | 45,454 | | | | | $ | 36,062 | | | | | $ | 22,580 | | | | | $ | 17,876 | | |
| | | For the nine months ended September 30, | | |||||||||
($ in thousands) | | | 2022 | | | 2021 | | ||||||
Income (loss) before federal income tax | | | | $ | 23,819 | | | | | $ | 46,673 | | |
Add: | | | | | | | | | | | | | |
Interest expense | | | | | 4,280 | | | | | | 3,465 | | |
Amortization expense | | | | | 1,160 | | | | | | 1,134 | | |
Less: | | | | | | | | | | | | | |
Net investment income | | | | | 31,667 | | | | | | 20,616 | | |
Net investment (losses) gains | | | | | (26,117) | | | | | | 10,021 | | |
Impairment charges | | | | | — | | | | | | (2,821) | | |
Other income and (expenses) | | | | | — | | | | | | 3,560 | | |
Underwriting income (loss) | | | | $ | 23,709 | | | | | $ | 19,896 | | |
| | | For the years ended December 31, | | |||||||||
($ in thousands) | | | 2021 | | | 2020 | | ||||||
Income (loss) before federal income tax | | | | $ | 48,309 | | | | | $ | (94,532) | | |
Add: | | | | | | | | | | | | | |
Interest expense | | | | | 4,622 | | | | | | 5,532 | | |
Amortization expense | | | | | 1,520 | | | | | | 1,390 | | |
Less: | | | | | | | | | | | | | |
Net investment income | | | | | 24,646 | | | | | | 14,130 | | |
Net investment gains | | | | | 17,107 | | | | | | 139 | | |
Impairment charges | | | | | (2,821) | | | | | | (57,582) | | |
Net realized gain on sale of business | | | | | 5,077 | | | | | | — | | |
Other operating (loss) income | | | | | (445) | | | | | | 128 | | |
Underwriting income (loss) | | | | $ | 10,887 | | | | | $ | (44,425) | | |
| | | For the nine months ended September 30, | | |||||||||
($ in thousands) | | | 2022 | | | 2021 | | ||||||
Net earned premiums | | | | $ | 445,851 | | | | | $ | 366,052 | | |
Losses and LAE | | | | | 293,536 | | | | | | 249,828 | | |
Less: Pre-tax net impact of loss portfolio transfer | | | | | 9,271 | | | | | | — | | |
Adjusted losses and LAE | | | | | 284,265 | | | | | | 249,828 | | |
Loss ratio | | | | | 65.9% | | | | | | 68.3% | | |
Less: Net impact of LPT | | | | | 2.1% | | | | | | 0.0% | | |
Adjusted Loss Ratio | | | | | 63.8% | | | | | | 68.3% | | |
Combined ratio | | | | | 94.7% | | | | | | 94.6% | | |
Less: Net impact of LPT | | | | | 2.1% | | | | | | 0.0% | | |
Adjusted Combined Ratio | | | | | 92.6% | | | | | | 94.6% | | |
| | | For the years ended December 31, | | |||||||||
($ in thousands) | | | 2021 | | | 2020 | | ||||||
Net earned premiums | | | | $ | 499,823 | | | | | $ | 431,911 | | |
Losses and LAE | | | | | 354,411 | | | | | | 362,182 | | |
Less: Pre-tax net impact of loss portfolio transfer | | | | | 16,063 | | | | | | 59,797 | | |
Adjusted losses and LAE | | | | | 338,348 | | | | | | 302,385 | | |
Loss ratio | | | | | 70.9% | | | | | | 83.9% | | |
Less: Net impact of LPT | | | | | 3.2% | | | | | | 13.8% | | |
Adjusted Loss Ratio | | | | | 67.7% | | | | | | 70.0% | | |
Combined ratio | | | | | 97.8% | | | | | | 110.3% | | |
Less: Net impact of LPT | | | | | 3.2% | | | | | | 13.8% | | |
Adjusted Combined Ratio | | | | | 94.6% | | | | | | 96.4% | | |
| | | September 30, 2022 | | | December 31, | | ||||||||||||
($ in thousands) | | | 2021 | | | 2020 | | ||||||||||||
Stockholders’ equity | | | | $ | 399,817 | | | | | $ | 426,080 | | | | | $ | 303,222 | | |
Plus: Temporary Equity | | | | | — | | | | | | — | | | | | | 90,303 | | |
Less: Goodwill and intangible assets | | | | | 90,237 | | | | | | 91,336 | | | | | | 84,014 | | |
Tangible stockholders’ equity | | | | $ | 309,580 | | | | | $ | 334,744 | | | | | $ | 309,511 | | |
| | | For the nine months ended September 30, | | |||||||||
($ in thousands) | | | 2022 | | | 2021 | | ||||||
Numerator: adjusted operating income | | | | $ | 46,934 | | | | | $ | 28,502 | | |
Denominator: average stockholders’ equity including temporary equity | | | | | 412,949 | | | | | | 410,896 | | |
Adjusted return on equity(1) | | | | | 15.2% | | | | | | 9.2% | | |
| | | For the years ended December 31, | | |||||||||
($ in thousands) | | | 2021 | | | 2020 | | ||||||
Numerator: adjusted operating income | | | | $ | 36,062 | | | | | $ | 17,876 | | |
Denominator: average stockholders’ equity including temporary equity | | | | | 409,803 | | | | | | 382,666 | | |
Adjusted return on equity | | | | | 8.8% | | | | | | 4.7% | | |
| | | For the nine months ended September 30, | | |||||||||
($ in thousands) | | | 2022 | | | 2021 | | ||||||
Numerator: net income (loss) | | | | $ | 18,977 | | | | | $ | 37,002 | | |
Denominator: average tangible stockholders’ equity | | | | | 322,162 | | | | | | 322,102 | | |
Return on tangible equity(1) | | | | | 7.9% | | | | | | 15.3% | | |
| | | For the years ended December 31, | | |||||||||
($ in thousands) | | | 2021 | | | 2020 | | ||||||
Numerator: net income (loss) | | | | $ | 38,317 | | | | | $ | (74,642) | | |
Denominator: average tangible stockholders’ equity | | | | | 322,128 | | | | | | 269,206 | | |
Return on tangible equity | | | | | 11.9% | | | | | | (27.7)% | | |
| | | For the nine months ended September 30, | | |||||||||
($ in thousands) | | | 2022 | | | 2021 | | ||||||
Numerator: adjusted operating income | | | | $ | 46,934 | | | | | $ | 28,502 | | |
Denominator: average tangible stockholders’ equity | | | | | 322,162 | | | | | | 322,102 | | |
Adjusted return on tangible equity(1) | | | | | 19.4% | | | | | | 11.8% | | |
| | | For the years ended December 31, | | |||||||||
($ in thousands) | | | 2021 | | | 2020 | | ||||||
Numerator: adjusted operating income | | | | $ | 36,062 | | | | | $ | 17,876 | | |
Denominator: average tangible stockholders’ equity | | | | | 322,128 | | | | | | 269,206 | | |
Adjusted return on tangible equity | | | | | 11.2% | | | | | | 6.6% | | |
| | | For the nine months ended September 30, | | |||||||||
($ in thousands) | | | 2022 | | | 2021 | | ||||||
Cash and cash equivalents provided by (used in): | | | | | | | | | | | | | |
Operating activities | | | | $ | 124,913 | | | | | $ | 137,244 | | |
Investing activities | | | | | (128,281) | | | | | | (160,725) | | |
Financing activities | | | | | 2,180 | | | | | | 1,380 | | |
Change in cash and cash equivalents | | | | $ | (1,188) | | | | | $ | (22,101) | | |
| | | For the years ended December 31, | | |||||||||
($ in thousands) | | | 2021 | | | 2020 | | ||||||
Cash and cash equivalents provided by (used in): | | | | | | | | | | | | | |
Operating activities | | | | $ | 175,285 | | | | | $ | 44,709 | | |
Investing activities | | | | | (183,014) | | | | | | (74,934) | | |
Financing activities | | | | | 1,380 | | | | | | 56,301 | | |
Change in cash and cash equivalents | | | | $ | (6,349) | | | | | $ | 26,076 | | |
| | | Payments due by period | | |||||||||||||||
($ in thousands) | | | Total | | | Less Than One Year | | | One Year or More | | |||||||||
Reserves for losses and LAE | | | | $ | 979,549 | | | | | $ | 345,563 | | | | | $ | 633,986 | | |
Long-term debt | | | | | 129,794 | | | | | | — | | | | | | 129,794 | | |
Interest on debt obligations | | | | | 61,579 | | | | | | 4,427 | | | | | | 57,152 | | |
Operating lease obligations | | | | | 11,966 | | | | | | 2,395 | | | | | | 9,571 | | |
Total | | | | $ | 1,182,888 | | | | | $ | 352,385 | | | | | $ | 830,503 | | |
| | | For the nine months ended September 30, 2022 | | | For the year ended December 31, 2021 | | ||||||||||||||||||||||||||||||
($ in thousands) | | | Fair value | | | % of total | | | Net Yield | | | Fair value | | | % of total | | | Net Yield | | ||||||||||||||||||
Cash and Short-term Investments | | | | $ | 135,966 | | | | | | 13.0% | | | | | | 0.5% | | | | | $ | 207,024 | | | | | | 20.9% | | | | | | 0.0% | | |
Core Fixed Income | | | | | 562,573 | | | | | | 53.6% | | | | | | 2.6% | | | | | | 458,351 | | | | | | 46.2% | | | | | | 2.2% | | |
Opportunistic Fixed Income | | | | | 202,138 | | | | | | 19.3% | | | | | | 13.8% | | | | | | 168,058 | | | | | | 17.0% | | | | | | 11.2% | | |
Equities | | | | | 147,935 | | | | | | 14.1% | | | | | | 1.1% | | | | | | 158,033 | | | | | | 15.9% | | | | | | 3.4% | | |
Total Investments and Cash | | | | $ | 1,048,612 | | | | | | 100.0% | | | | | | 4.0% | | | | | $ | 991,466 | | | | | | 100.0% | | | | | | 3.1% | | |
| | | September 30, 2022 | | | December 31, 2021 | | ||||||||||||||||||
($ in thousands) | | | Fair value | | | % of total fair value | | | Fair value | | | % of total fair value | | ||||||||||||
U.S. government securities | | | | | 43,258 | | | | | | 7.7% | | | | | | 49,263 | | | | | | 10.7% | | |
Corporate securities and miscellaneous | | | | | 218,236 | | | | | | 38.8% | | | | | | 154,163 | | | | | | 33.6% | | |
Municipal securities | | | | | 59,402 | | | | | | 10.6% | | | | | | 56,942 | | | | | | 12.4% | | |
Residential mortgage-backed securities | | | | | 104,395 | | | | | | 18.6% | | | | | | 103,735 | | | | | | 22.6% | | |
Commercial mortgage-backed securities | | | | | 35,594 | | | | | | 6.3% | | | | | | 14,484 | | | | | | 3.2% | | |
Asset-backed securities | | | | | 101,688 | | | | | | 18.1% | | | | | | 79,764 | | | | | | 17.4% | | |
Core Fixed Income securities, available for sale | | | | | 562,573 | | | | | | 100.0% | | | | | | 458,351 | | | | | | 100.0% | | |
| | | September 30, 2022 | | | December 31, 2021 | | ||||||||||||||||||
($ in thousands) | | | Fair value | | | % of total | | | Fair value | | | % of total | | ||||||||||||
AAA | | | | $ | 257,953 | | | | | | 45.9% | | | | | $ | 223,404 | | | | | | 48.7% | | |
AA | | | | | 75,313 | | | | | | 13.4% | | | | | | 67,157 | | | | | | 14.7% | | |
A | | | | | 116,598 | | | | | | 20.7% | | | | | | 87,337 | | | | | | 19.1% | | |
BBB | | | | | 88,343 | | | | | | 15.7% | | | | | | 76,835 | | | | | | 16.8% | | |
BB and Lower | | | | | 24,366 | | | | | | 4.3% | | | | | | 3,618 | | | | | | 0.8% | | |
Total Core Fixed Income | | | | $ | 562,573 | | | | | | 100.0% | | | | | $ | 458,351 | | | | | | 100.0% | | |
| | | September 30, 2022 | | | December 31, 2021 | | ||||||||||||||||||
($ in thousands) | | | Fair Value | | | % of Total | | | Fair Value | | | % of Total | | ||||||||||||
Real Estate | | | | $ | 90,935 | | | | | | 45.0% | | | | | $ | 75,305 | | | | | | 44.8% | | |
Oil & Gas | | | | | 22,522 | | | | | | 11.1% | | | | | | 20,321 | | | | | | 12.1% | | |
Banking, Finance & Insurance | | | | | 14,301 | | | | | | 7.1% | | | | | | 13,683 | | | | | | 8.1% | | |
Other Sectors(1) | | | | | 29,271 | | | | | | 14.5% | | | | | | 16,936 | | | | | | 10.1% | | |
Cash and Cash Equivalents(2) | | | | | 45,109 | | | | | | 22.3% | | | | | | 41,813 | | | | | | 24.9% | | |
Opportunistic Fixed Income | | | | $ | 202,138 | | | | | | 100.0% | | | | | $ | 168,058 | | | | | | 100.0% | | |
| | | September 30, 2022 | | | December 31, 2021 | | ||||||||||||||||||
($ in thousands) | | | Fair value | | | % of total fair value | | | Fair value | | | % of total fair value | | ||||||||||||
Domestic Common Equities | | | | $ | 69,209 | | | | | | 46.8% | | | | | $ | 82,895 | | | | | | 52.5% | | |
International Common Equities | | | | | 30,998 | | | | | | 21.0% | | | | | | 16,911 | | | | | | 10.7% | | |
Preferred Stock | | | | | 9,434 | | | | | | 6.4% | | | | | | 18,166 | | | | | | 11.5% | | |
Other(1) | | | | | 38,294 | | | | | | 25.9% | | | | | | 40,061 | | | | | | 25.3% | | |
Equities | | | | $ | 147,935 | | | | | | 100.0% | | | | | $ | 158,033 | | | | | | 100.0% | | |
| | | December 31, 2021 | | |||||||||||||||
($ in thousands) | | | Estimated Fair Value | | | Estimated Change in Fair Value | | | Estimated % Increase (Decrease) in Fair Value | | |||||||||
300 basis point increase | | | | $ | 401,928 | | | | | $ | (56,423) | | | | | | (12.3)% | | |
200 basis point increase | | | | $ | 419,804 | | | | | $ | (38,547) | | | | | | (8.4)% | | |
100 basis point increase | | | | $ | 438,779 | | | | | $ | (19,572) | | | | | | (4.3)% | | |
No change | | | | $ | 458,351 | | | | | $ | — | | | | | | 0.0% | | |
100 basis point decrease | | | | $ | 473,889 | | | | | $ | 15,538 | | | | | | 3.4% | | |
200 basis point decrease | | | | $ | 480,856 | | | | | $ | 22,505 | | | | | | 4.9% | | |
300 basis point decrease | | | | $ | 481,085 | | | | | $ | 22,734 | | | | | | 5.0% | | |
| | | September 30, 2022 | | |||||||||||||||||||||
($ in thousands) | | | Gross | | | % of Total | | | Net | | | % of Total | | ||||||||||||
Case reserves | | | | $ | 468,910 | | | | | | 44.2% | | | | | $ | 255,559 | | | | | | 37.8% | | |
IBNR | | | | | 593,090 | | | | | | 55.8% | | | | | | 419,690 | | | | | | 62.2% | | |
Total | | | | $ | 1,062,000 | | | | | | 100.0% | | | | | $ | 675,249 | | | | | | 100.0% | | |
| | | December 31, 2021 | | |||||||||||||||||||||
($ in thousands) | | | Gross | | | % of Total | | | Net | | | % of Total | | ||||||||||||
Case reserves | | | | $ | 451,446 | | | | | | 46.1% | | | | | $ | 239,013 | | | | | | 40.0% | | |
IBNR | | | | | 528,103 | | | | | | 53.9% | | | | | | 359,198 | | | | | | 60.0% | | |
Total | | | | $ | 979,549 | | | | | | 100.0% | | | | | $ | 598,211 | | | | | | 100.0% | | |
($ in thousands) | | | | | | | | | | | | | | | December 31, 2021 | | | Potential Impact on 2021 | | ||||||||||||||||||
Sensitivity | | | Accident Year | | | Net Ultimate Loss and LAE Sensitivity Factor | | | Net Ultimate Incurred Losses and LAE | | | Net Loss and LAE Reserve | | | Pre-tax income | | | Stockholders’ Equity(1) | | ||||||||||||||||||
Sample increases | | | | | 2021 | | | | | | 5.0% | | | | | $ | 338,348 | | | | | $ | 260,797 | | | | | $ | (16,917) | | | | | $ | (13,365) | | |
| | | 2020 | | | | | | 4.0% | | | | | | 302,245 | | | | | | 114,675 | | | | | | (12,090) | | | | | | (9,551) | | | ||
| | | 2019 | | | | | | 3.0% | | | | | | 252,563 | | | | | | 57,913 | | | | | | (7,577) | | | | | | (5,986) | | | ||
| | | Prior | | | | | | 5.0% | | | | | | | | | | | | 164,826 | | | | | | (8,241) | | | | | | (6,511) | | | ||
Sample decreases | | | | | 2021 | | | | | | (5.0)% | | | | | | 338,348 | | | | | | 260,797 | | | | | | 16,917 | | | | | | 13,365 | | |
| | | 2020 | | | | | | (4.0)% | | | | | | 302,245 | | | | | | 114,675 | | | | | | 12,090 | | | | | | 9,551 | | | ||
| | | 2019 | | | | | | (3.0)% | | | | | | 252,563 | | | | | | 57,913 | | | | | | 7,577 | | | | | | 5,986 | | | ||
| | | Prior | | | | | | (5.0)% | | | | | | | | | | | | 164,826 | | | | | | 8,241 | | | | | | 6,511 | | |
Total Gross Written Premiums For the nine months ended September 30, | | ||||||||||||||||||||||||
($ in thousands) | | | 2022 | | | % of Total | | | 2021 | | | % of Total | | ||||||||||||
Industry Solutions | | | | $ | 202,237 | | | | | | 23.0% | | | | | $ | 150,599 | | | | | | 21.0% | | |
Global Property | | | | | 177,565 | | | | | | 20.2% | | | | | | 140,815 | | | | | | 19.7% | | |
Programs | | | | | 131,752 | | | | | | 15.0% | | | | | | 110,301 | | | | | | 15.4% | | |
Accident & Health | | | | | 97,107 | | | | | | 11.0% | | | | | | 83,542 | | | | | | 11.7% | | |
Captives | | | | | 97,580 | | | | | | 11.1% | | | | | | 70,355 | | | | | | 9.8% | | |
Professional Lines | | | | | 62,127 | | | | | | 7.1% | | | | | | 44,060 | | | | | | 6.2% | | |
Surety | | | | | 53,734 | | | | | | 6.1% | | | | | | 33,396 | | | | | | 4.7% | | |
Transactional E&S | | | | | 52,645 | | | | | | 6.0% | | | | | | 17,492 | | | | | | 2.4% | | |
Total continuing business | | | | $ | 874,746 | | | | | | 99.5% | | | | | $ | 650,560 | | | | | | 90.9% | | |
Exited business | | | | | 4,373 | | | | | | 0.5% | | | | | | 65,116 | | | | | | 9.1% | | |
Total gross written premiums | | | | $ | 879,119 | | | | | | 100.0% | | | | | $ | 715,676 | | | | | | 100.0% | | |
Net Ultimate Loss and ALAE | | ||||||||||||||||||||||||||||||
($ in thousands) | | | Calendar Year | | | Development | | ||||||||||||||||||||||||
Accident Year | | | 2019 | | | 2020 | | | 2021 | | | 2019 to 2020 | | | 2020 to 2021 | | |||||||||||||||
Prior | | | | $ | 1,329,014 | | | | | $ | 1,390,905 | | | | | $ | 1,418,885 | | | | | $ | 61,891 | | | | | $ | 27,980 | | |
2019 | | | | | 257,469 | | | | | | 245,131 | | | | | | 243,851 | | | | | | (12,338) | | | | | | (1,280) | | |
2020 | | | | | N/A | | | | | | 291,139 | | | | | | 292,439 | | | | | | N/A | | | | | | 1,300 | | |
2021 | | | | | N/A | | | | | | N/A | | | | | | 323,697 | | | | | | N/A | | | | | | N/A | | |
Total Reserve Development | | | | $ | 49,553 | | | | | $ | 28,000 | | | ||||||||||||||||||
Reserve Development on losses subject to LPT | | | | | 49,013 | | | | | | 28,000 | | | ||||||||||||||||||
Reserve Development on losses excluding losses subject to LPT | | | | $ | 540 | | | | | $ | — | | |
| | | September 30, 2022 | | | December 31, 2021 | | ||||||||||||||||||||||||||||||
($ in thousands) | | | Fair value | | | % of total | | | Net Yield | | | Fair value | | | % of total | | | Net Yield | | ||||||||||||||||||
Cash and Short-term Investments | | | | $ | 135,966 | | | | | | 13.0% | | | | | | 0.5% | | | | | $ | 207,024 | | | | | | 20.9% | | | | | | 0.1% | | |
Core Fixed Income | | | | | 562,573 | | | | | | 53.6% | | | | | | 2.6% | | | | | | 458,351 | | | | | | 46.2% | | | | | | 2.3% | | |
Opportunistic Fixed Income | | | | | 202,138 | | | | | | 19.3% | | | | | | 13.8% | | | | | | 168,058 | | | | | | 17.0% | | | | | | 8.6% | | |
Equities | | | | | 147,935 | | | | | | 14.1% | | | | | | 1.1% | | | | | | 158,033 | | | | | | 15.9% | | | | | | 2.3% | | |
Total Investments and Cash | | | | $ | 1,048,612 | | | | | | 100.0% | | | | | | 4.0% | | | | | $ | 991,466 | | | | | | 100.0% | | | | | | 2.7% | | |
Name and Principal Position | | | Year | | | Salary ($) | | | Stock Awards ($)(1) | | | Non-Equity Incentive Plan Compensation ($)(6) | | | All other Compensation ($) | | | Total ($) | | ||||||||||||||||||
Andrew Robinson Chief Executive Officer | | | | | 2021 | | | | | $ | 750,000 | | | | | $ | 950,000(2) | | | | | $ | 1,285,000(7) | | | | | $ | 172,198(10) | | | | | $ | 3,157,198 | | |
Mark Haushill Chief Financial Officer and Executive Vice President | | | | | 2021 | | | | | $ | 450,000 | | | | | $ | 150,000(3) | | | | | $ | 250,000(8) | | | | | $ | 14,500(11) | | | | | $ | 864,500 | | |
Kirby Hill Executive Vice President and President of Industry Solutions, Captives and Programs | | | | | 2021 | | | | | $ | 425,000 | | | | | $ | 143,333(4) | | | | | $ | 296,667(9) | | | | | $ | 14,500(11) | | | | | $ | 879,500 | | |
John Burkhart Executive Vice President and President of Specialty Lines | | | | | 2021 | | | | | $ | 383,333 | | | | | $ | 133,333(5) | | | | | $ | 276,667(9) | | | | | $ | 39,500(12) | | | | | $ | 832,833 | | |
Name and Principal Position | | | Grant Date(1)(2) | | | Number of Shares or Units of Stock that have not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested(3) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | | ||||||||||||
Andrew Robinson Chief Executive Officer | | | 01/01/2021 | | | | | 40,137(4) | | | | | $ | | | | | | — | | | | | | — | | | |
| 01/01/2021 | | | | | — | | | | | | — | | | | | | 40,137(5) | | | | | $ | (3) | | | ||
| 01/01/2021 | | | | | — | | | | | | — | | | | | | 4,750(6) | | | | | $ | 475,000 | | | ||
| 03/17/2021 | | | | | 42,249(7) | | | | | $ | | | | | | — | | | | | | — | | | |||
Mark Haushill Chief Financial Officer and Executive Vice President | | | 01/01/2021 | | | | | 6,337(4) | | | | | $ | | | | | | — | | | | | | — | | | |
| 01/01/2021 | | | | | — | | | | | | | | | | | | 6,337(5) | | | | | $ | (3) | | | ||
| 01/01/2021 | | | | | — | | | | | | — | | | | | | 750(6) | | | | | $ | 75,000 | | | ||
| 06/30/2016 | | | | | 48,801(8) | | | | | $ | | | | | | — | | | | | | — | | | |||
Kirby Hill Executive Vice President and President of Industry Solutions, Captives and Programs | | | 01/01/2021 | | | | | 6,055(4) | | | | | $ | | | | | | — | | | | | | — | | | |
| 01/01/2021 | | | | | — | | | | | | — | | | | | | 6,055(5) | | | | | $ | (3) | | | ||
John Burkhart Executive Vice President and President of Specialty Lines | | | 01/01/2021 | | | | | 5,633(4) | | | | | $ | | | | | | — | | | | | | — | | | |
| 01/01/2021 | | | | | — | | | | | | — | | | | | | 5,633(5) | | | | | $ | (3) | | |
Name | | | Fees Earned or Paid in Cash ($)(1) | | | Stock Awards ($) | | | All Other Compensation ($) | | | Total ($) | | ||||||||||||
J. Cameron MacDonald | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Bill Andrus(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Robert Creager | | | | $ | 65,000(3) | | | | | $ | 250,000(4)(5) | | | | | $ | 50,000(6) | | | | | $ | 365,000 | | |
James Hays | | | | $ | 50,000 | | | | | $ | 200,000(4) | | | | | | — | | | | | $ | 250,000 | | |
Robert Kittel | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Donald D. Larson(7) | | | | $ | 50,000 | | | | | $ | 200,000(4) | | | | | | — | | | | | $ | 250,000 | | |
Stephen Way(8) | | | | | — | | | | | | — | | | | | $ | 2,600,000(9) | | | | | | | | |
Purchaser(1) | | | Shares of Series A Convertible Preferred Stock | | | Cash purchase price | | ||||||
Daniel Bodnar | | | | | 549.000 | | | | | $ | 27,450 | | |
Robert Creager | | | | | 1,530.798 | | | | | $ | 76,540 | | |
Mark Haushill | | | | | 17,776.240 | | | | | $ | 888,812 | | |
James Hays (held companies JWayne LLC, Marquis Lafayette LLC) | | | | | 309,132.539 | | | | | $ | 15,456,627 | | |
Kirby Hill(2) | | | | | 581.935 | | | | | $ | 29,097 | | |
L. Byron Way | | | | | 10,738.996 | | | | | $ | 536,950 | | |
Stephen Way | | | | | 111,009.820 | | | | | $ | 5,550,491 | | |
Caffrey Partners, LLC | | | | | 197,513.685 | | | | | $ | 9,875,684 | | |
Mt. Whitney Securities, LLC | | | | | 197,534.599 | | | | | $ | 9,876,730 | | |
The Westaim Corporation | | | | | 880,071.479 | | | | | $ | 44,003,574 | | |
| | | Shares Beneficially Owned Prior | | | Shares Offered Hereby | | | Shares Beneficially Owned After this Offering | | |||||||||||||||||||||||||||||||||||||||
| | | No Exercise | | | Full Exercise | | | Assuming No Exerice | | | Assuming Full Exercise | | ||||||||||||||||||||||||||||||||||||
Name of Beneficial Owner | | | Number | | | Percent | | | Number | | | Number | | | Number | | | Percent | | | Number | | | Percent | | ||||||||||||||||||||||||
The Westaim Corporation | | | | | 14,677,596 | | | | | | 38.98% | | | | | | 3,850,000 | | | | | | 3,987,500 | | | | | | 10,827,596 | | | | | | 28.75% | | | | | | 10,690,096 | | | | | | 28.39% | | |
James C. Hays | | | | | 3,005,281 | | | | | | 7.98% | | | | | | — | | | | | | 200,000 | | | | | | 3,005,281 | | | | | | 7.98% | | | | | | 2,805,281 | | | | | | 7.45% | | |
Stephen L. Way | | | | | 2,009,579 | | | | | | 5.34% | | | | | | — | | | | | | 200,000 | | | | | | 2,009,579 | | | | | | 5.34% | | | | | | 1,809,579 | | | | | | 4.81% | | |
Named Executive Officers and Directors: | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Andrew Robinson | | | | | 149,544 | | | | | | * | | | | | | — | | | | | | — | | | | | | 149,544 | | | | | | * | | | | | | 149,544 | | | | | | * | | |
Mark Haushill | | | | | 292,254 | | | | | | * | | | | | | — | | | | | | — | | | | | | 292,254 | | | | | | * | | | | | | 292,254 | | | | | | * | | |
Kirby Hill | | | | | 15,077 | | | | | | * | | | | | | — | | | | | | — | | | | | | 15,077 | | | | | | * | | | | | | 15,077 | | | | | | * | | |
John Burkhart | | | | | 5,065 | | | | | | * | | | | | | — | | | | | | — | | | | | | 5,065 | | | | | | * | | | | | | 5,065 | | | | | | * | | |
J. Cameron MacDonald | | | | | — | | | | | | * | | | | | | — | | | | | | — | | | | | | — | | | | | | * | | | | | | — | | | | | | * | | |
Robert Creager | | | | | 46,266 | | | | | | * | | | | | | — | | | | | | — | | | | | | 46,266 | | | | | | * | | | | | | 46,266 | | | | | | * | | |
Marcia Dall | | | | | 1,666 | | | | | | * | | | | | | — | | | | | | — | | | | | | 1,666 | | | | | | * | | | | | | 1,666 | | | | | | * | | |
James C. Hays | | | | | 3,005,281 | | | | | | 7.98% | | | | | | — | | | | | | 200,000 | | | | | | 3,005,281 | | | | | | 7.98% | | | | | | 2,805,281 | | | | | | 7.45% | | |
Robert Kittel | | | | | — | | | | | | * | | | | | | — | | | | | | — | | | | | | | | | | | | * | | | | | | | | | | | | * | | |
Katharine Terry | | | | | 1,666 | | | | | | * | | | | | | — | | | | | | — | | | | | | 1,666 | | | | | | * | | | | | | 1,666 | | | | | | * | | |
| | | Shares Beneficially Owned Prior | | | Shares Offered Hereby | | | Shares Beneficially Owned After this Offering | | |||||||||||||||||||||||||||||||||||||||
| | | No Exercise | | | Full Exercise | | | Assuming No Exerice | | | Assuming Full Exercise | | ||||||||||||||||||||||||||||||||||||
Name of Beneficial Owner | | | Number | | | Percent | | | Number | | | Number | | | Number | | | Percent | | | Number | | | Percent | | ||||||||||||||||||||||||
All executive officers and directors as a group (15 persons)(9) | | | | | 3,562,649 | | | | | | 9.46% | | | | | | 3,562,649 | | | | | | 200,000 | | | | | | 3,562,649 | | | | | | 9.46% | | | | | | 3,362,649 | | | | | | 8.93% | | |
Other Selling Stockholders: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Philip Schuyler LLC | | | | | 196,988 | | | | | | * | | | | | | — | | | | | | 40,000 | | | | | | 196,988 | | | | | | * | | | | | | 156,988 | | | | | | * | | |
Underwriters | | | Number of Shares | | ||||||
Barclays Capital Inc. | | | | |||||||
Keefe, Bruyette & Woods, Inc. | | | | | | | | |||
| | | | | | | ||||
| | | | | | | ||||
Truist Securities, Inc. | | | | | | | | |||
Raymond James & Associates, Inc. | | | | | | | | |||
| | | | | | | ||||
Siebert Williams Shank & Co., LLC | | | | | | | | |||
Total | | | | | 3,850,000 | | |
Paid by the Selling Stockholders | | | No Exercise | | | Full Exercise | | ||||||
Per Share | | | | $ | | | | | $ | | | ||
Total | | | | $ | | | | | $ | | | |
| | | 2021 | | | 2020 | | ||||||
Assets | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | |
Fixed maturity securities, available for sale, at fair value (amortized cost of $452,478 and $299,454, respectively) | | | | $ | 458,351 | | | | | $ | 315,001 | | |
Fixed maturity securities, held to maturity, at amortized cost | | | | | 47,117 | | | | | | 28,393 | | |
Equity securities, at fair value (cost of $98,986 and $74,112, respectively) | | | | | 117,971 | | | | | | 77,866 | | |
Mortgage loans | | | | | 29,531 | | | | | | 5,228 | | |
Other long-term investments | | | | | 132,111 | | | | | | 102,832 | | |
Short-term investments, at fair value | | | | | 164,278 | | | | | | 235,957 | | |
Total investments | | | | | 949,359 | | | | | | 765,277 | | |
Cash and cash equivalents | | | | | 42,107 | | | | | | 63,455 | | |
Restricted cash | | | | | 65,167 | | | | | | 50,168 | | |
Premiums receivable, net of allowance | | | | | 112,158 | | | | | | 114,302 | | |
Reinsurance recoverables | | | | | 536,327 | | | | | | 538,889 | | |
Ceded unearned premium | | | | | 137,973 | | | | | | 146,624 | | |
Deferred policy acquisition costs | | | | | 59,456 | | | | | | 53,519 | | |
Deferred income taxes | | | | | 33,663 | | | | | | 41,518 | | |
Goodwill and intangible assets, net | | | | | 91,336 | | | | | | 84,014 | | |
Other assets | | | | | 90,666 | | | | | | 90,867 | | |
Total assets | | | | $ | 2,118,212 | | | | | $ | 1,948,633 | | |
Liabilities, Temporary Equity and Stockholders’ Equity | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | |
Losses and loss adjustment expenses (“LAE”) | | | | $ | 979,549 | | | | | $ | 856,780 | | |
Unearned premiums | | | | | 363,288 | | | | | | 342,619 | | |
Deferred ceding commission | | | | | 30,500 | | | | | | 35,757 | | |
Reinsurance and premium payables | | | | | 119,919 | | | | | | 124,125 | | |
Funds held for others | | | | | 29,587 | | | | | | 27,158 | | |
Accounts payable and accrued liabilities | | | | | 40,760 | | | | | | 40,221 | | |
Notes payable | | | | | 50,000 | | | | | | 50,000 | | |
Subordinated debt, net of debt issuance costs | | | | | 78,529 | | | | | | 78,448 | | |
Total liabilities | | | | | 1,692,132 | | | | | | 1,555,108 | | |
Temporary Equity: | | | | | | | | | | | | | |
Series A preferred stock, $0.01 par value, 2,000,000 shares authorized, 1,976,310 issued and outstanding as of December 31, 2020 | | | | | — | | | | | | 90,303 | | |
Total temporary equity | | | | | — | | | | | | 90,303 | | |
Stockholders’ Equity: | | | | | | | | | | | | | |
Series A preferred stock, $0.01 par value, 2,000,000 shares authorized, 1,970,124 shares issued and outstanding as of December 31, 2021 | | | | | 20 | | | | | | — | | |
Common stock, $0.01 par value, 168,000,000 shares authorized and 16,763,069 shares issued as of December 31, 2021 and 2020, respectively | | | | | 168 | | | | | | 168 | | |
Treasury stock, at par value, 229,449 and 351,607 shares, as of December 31, 2021 and 2020, respectively | | | | | (2) | | | | | | (4) | | |
Additional paid-in capital | | | | | 575,159 | | | | | | 476,482 | | |
Stock notes receivable | | | | | (9,092) | | | | | | (2,510) | | |
Accumulated other comprehensive income | | | | | 4,640 | | | | | | 12,216 | | |
Accumulated deficit | | | | | (144,813) | | | | | | (183,130) | | |
Total stockholders’ equity | | | | | 426,080 | | | | | | 303,222 | | |
Total liabilities, temporary equity and stockholders’ equity | | | | $ | 2,118,212 | | | | | $ | 1,948,633 | | |
| | | 2021 | | | 2020 | | ||||||
Revenues: | | | | | | | | | | | | | |
Net earned premium | | | | $ | 499,823 | | | | | $ | 431,911 | | |
Commission and fee income | | | | | 3,973 | | | | | | 5,664 | | |
Net investment income | | | | | 24,646 | | | | | | 14,130 | | |
Net unrealized gains (losses) on equity securities | | | | | 15,251 | | | | | | (928) | | |
Realized investment gains | | | | | 1,856 | | | | | | 1,067 | | |
Net realized gain on sale of business | | | | | 5,077 | | | | | | — | | |
Other operating (loss) income | | | | | (445) | | | | | | 128 | | |
Total revenues | | | | | 550,181 | | | | | | 451,972 | | |
Expenses: | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | | | 354,411 | | | | | | 362,182 | | |
Underwriting, acquisition and insurance expenses | | | | | 138,498 | | | | | | 119,818 | | |
Impairment charges | | | | | 2,821 | | | | | | 57,582 | | |
Interest expense | | | | | 4,622 | | | | | | 5,532 | | |
Amortization expense | | | | | 1,520 | | | | | | 1,390 | | |
Total expenses | | | | | 501,872 | | | | | | 546,504 | | |
Income (loss) before income tax expense | | | | | 48,309 | | | | | | (94,532) | | |
Income tax expense (benefit) | | | | | 9,992 | | | | | | (19,890) | | |
Net income (loss) | | | | | 38,317 | | | | | | (74,642) | | |
Other comprehensive (loss) income: | | | | | | | | | | | | | |
Unrealized gains and losses on investments: | | | | | | | | | | | | | |
Net change in unrealized (losses) and gains on investments, net of tax | | | | | (8,173) | | | | | | 6,693 | | |
Reclassification adjustment for gains and losses on securities no longer held, net of tax | | | | | 597 | | | | | | 508 | | |
Total other comprehensive (loss) income | | | | | (7,576) | | | | | | 7,201 | | |
Comprehensive income (loss) | | | | $ | 30,741 | | | | | $ | (67,441) | | |
Net income (loss) attributable to common shareholders | | | | $ | 19,810 | | | | | $ | (74,642) | | |
Per share data: | | | | | | | | | | | | | |
Basic earnings (loss) per share | | | | $ | 1.21 | | | | | $ | (4.60) | | |
Diluted earnings (loss) per share | | | | $ | 1.18 | | | | | $ | (4.60) | | |
Weighted-average common shares outstanding: | | | | | | | | | | | | | |
Basic | | | | | 16,308,712 | | | | | | 16,213,953 | | |
Diluted | | | | | 32,468,048 | | | | | | 16,213,953 | | |
| | | Preferred Stock | | | Common Stock | | | Treasury Stock | | | Additional Paid-In Capital | | | Stock Notes Receivable | | | Accumulated Other Comprehensive Income | | | Accumulated Deficit | | | Total | | ||||||||||||||||||||||||
Balance at January 1, 2020 | | | | $ | — | | | | | $ | 167 | | | | | $ | (2) | | | | | $ | 478,661 | | | | | $ | (3,547) | | | | | $ | 5,015 | | | | | $ | (108,488) | | | | | $ | 371,806 | | |
Employee equity transactions | | | | | — | | | | | | 1 | | | | | | — | | | | | | (932) | | | | | | 128 | | | | | | — | | | | | | — | | | | | | (803) | | |
Treasury stock transactions | | | | | — | | | | | | — | | | | | | (2) | | | | | | (1,247) | | | | | | 909 | | | | | | — | | | | | | — | | | | | | (340) | | |
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (74,642) | | | | | | (74,642) | | |
Other comprehensive income, net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,201 | | | | | | — | | | | | | 7,201 | | |
Balance at December 31, 2020 | | | | $ | — | | | | | $ | 168 | | | | | $ | (4) | | | | | $ | 476,482 | | | | | $ | (2,510) | | | | | $ | 12,216 | | | | | $ | (183,130) | | | | | $ | 303,222 | | |
Employee equity transactions | | | | | — | | | | | | — | | | | | | 2 | | | | | | 427 | | | | | | 880 | | | | | | — | | | | | | — | | | | | | 1,309 | | |
Net income | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 38,317 | | | | | | 38,317 | | |
Other comprehensive loss, net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (7,576) | | | | | | — | | | | | | (7,576) | | |
Reclassification of temporary equity to stockholders’ equity | | | | | 20 | | | | | | — | | | | | | — | | | | | | 98,250 | | | | | | (7,462) | | | | | | — | | | | | | — | | | | | | 90,808 | | |
Balance at December 31, 2021 | | | | $ | 20 | | | | | $ | 168 | | | | | $ | (2) | | | | | $ | 575,159 | | | | | $ | (9,092) | | | | | $ | 4,640 | | | | | $ | (144,813) | | | | | $ | 426,080 | | |
| | | 2021 | | | 2020 | | ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net income (loss) | | | | $ | 38,317 | | | | | $ | (74,642) | | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | | | | | | | | | | | | | |
Net realized (gains) | | | | | (1,856) | | | | | | (1,067) | | |
Depreciation and amortization expense | | | | | 5,603 | | | | | | 5,985 | | |
Stock-based compensation expense | | | | | 522 | | | | | | (25) | | |
Provision for bad debts | | | | | 79 | | | | | | 812 | | |
Unrealized (gains) losses on equity securities | | | | | (15,251) | | | | | | 928 | | |
Earnings on illiquid investments | | | | | (11,413) | | | | | | (4,991) | | |
Deferred income tax, net | | | | | 9,984 | | | | | | (19,551) | | |
Impairment charges | | | | | 2,821 | | | | | | 57,582 | | |
Net realized (gain) on sale of business | | | | | (5,077) | | | | | | — | | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | |
Premiums receivable, net | | | | | 1,876 | | | | | | (2,316) | | |
Reinsurance recoverables | | | | | 1,062 | | | | | | (114,959) | | |
Ceded unearned premium | | | | | 8,548 | | | | | | 28,430 | | |
Deferred policy acquisition costs | | | | | (5,975) | | | | | | 2,354 | | |
Federal income taxes receivable | | | | | — | | | | | | 662 | | |
Losses and loss adjustment expenses | | | | | 124,270 | | | | | | 172,887 | | |
Unearned premiums | | | | | 20,772 | | | | | | 1,182 | | |
Deferred ceding commission | | | | | (5,219) | | | | | | (6,250) | | |
Reinsurance and premium (receivables) payables | | | | | (4,201) | | | | | | 6,566 | | |
Funds held for others | | | | | 2,649 | | | | | | 496 | | |
Accounts payable and accrued liabilities | | | | | 1,148 | | | | | | 9,240 | | |
Other, net | | | | | 6,626 | | | | | | (18,614) | | |
Net cash provided by operating activities | | | | | 175,285 | | | | | | 44,709 | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Purchase of fixed maturity securities, available for sale | | | | | (255,155) | | | | | | (146,639) | | |
Purchase of illiquid investments | | | | | (48,060) | | | | | | (36,091) | | |
Purchase of equity securities | | | | | (60,328) | | | | | | (36,880) | | |
Purchase of business | | | | | (10,554) | | | | | | — | | |
Investment in direct and indirect loans | | | | | (16,079) | | | | | | 17,920 | | |
Purchase of property and equipment | | | | | (2,154) | | | | | | (2,072) | | |
Sale of investment in subsidiary | | | | | 8,188 | | | | | | — | | |
Sales and maturities of investment securities | | | | | 135,289 | | | | | | 136,065 | | |
Distributions from equity method investments | | | | | 2,387 | | | | | | 1,000 | | |
Change in short-term investments | | | | | 70,207 | | | | | | 24,206 | | |
Receivable for securities sold | | | | | (725) | | | | | | — | | |
Cash used in deposit accounting | | | | | (6,074) | | | | | | (32,940) | | |
Other, net | | | | | 44 | | | | | | 497 | | |
Net cash used in investing activities | | | | | (183,014) | | | | | | (74,934) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Employee share purchases | | | | | 1,380 | | | | | | 255 | | |
Issuance of preferred shares | | | | | — | | | | | | 90,413 | | |
Repayments of notes payable | | | | | — | | | | | | (33,827) | | |
Repurchase of common stock | | | | | — | | | | | | (540) | | |
Net cash provided by financing activities | | | | | 1,380 | | | | | | 56,301 | | |
Net (decrease) increase in cash and cash equivalents and restricted cash | | | | | (6,349) | | | | | | 26,076 | | |
Cash and cash equivalents and restricted cash at beginning of year | | | | | 113,623 | | | | | | 87,547 | | |
Cash and cash equivalents and restricted cash at end of year | | | | $ | 107,274 | | | | | $ | 113,623 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | |
Cash paid for interest | | | | $ | 4,669 | | | | | $ | 5,530 | | |
| | | A.M. Best Rating | | | 2021 | | | 2020 | | ||||||
Everest Reinsurance Co. | | | A+ | | | | | 28.9% | | | | | | 28.9% | | |
Randall & Quilter (R&Q Bermuda (SAC) Ltd) | | | Not rated | | | | | 12.0% | | | | | | 16.0% | | |
| | | Accident and Health | | | Surety | | | Energy | | | Exterminator Pro | | | Other | | | Total | | ||||||||||||||||||
Goodwill | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gross balance at December 31, 2020 | | | | $ | 91,577 | | | | | $ | — | | | | | $ | 10,052 | | | | | $ | 11,810 | | | | | $ | 4,681 | | | | | | 118,120 | | |
Accumulated impairment at December 31, 2020 | | | | | (44,821) | | | | | | — | | | | | | — | | | | | | (9,248) | | | | | | — | | | | | | (54,069) | | |
Additions | | | | | — | | | | | | 6,956 | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,956 | | |
Disposals | | | | | — | | | | | | (175) | | | | | | — | | | | | | (1,680) | | | | | | (650) | | | | | | (2,505) | | |
Impairment | | | | | — | | | | | | — | | | | | | — | | | | | | (882) | | | | | | (1,886) | | | | | | (2,768) | | |
Net balance at December 31, 2021 | | | | $ | 46,756 | | | | | $ | 6,781 | | | | | $ | 10,052 | | | | | $ | — | | | | | $ | 2,145 | | | | | $ | 65,734 | | |
| | | Accident and Health | | | Hospitality | | | Energy | | | Exterminator Pro | | | Other | | | Total | | ||||||||||||||||||
Goodwill | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gross balance at December 31, 2019 | | | | $ | 91,577 | | | | | $ | 10,361 | | | | | $ | 10,052 | | | | | $ | 11,810 | | | | | $ | 4,681 | | | | | | 128,481 | | |
Accumulated impairment at December 31, 2019 | | | | | (6,846) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (6,846) | | |
Disposals | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Impairment | | | | | (37,975) | | | | | | (10,361) | | | | | | — | | | | | | (9,248) | | | | | | — | | | | | | (57,584) | | |
Net balance at December 31, 2020 | | | | $ | 46,756 | | | | | $ | — | | | | | $ | 10,052 | | | | | $ | 2,562 | | | | | $ | 4,681 | | | | | $ | 64,051 | | |
| | | Agent Relationships | | | Non-competes | | | Trade-marks | | | Licenses | | | Total | | |||||||||||||||
Other Intangible Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gross balance at December 31, 2020 | | | | $ | 16,355 | | | | | $ | 1,117 | | | | | $ | 1,122 | | | | | $ | 15,019 | | | | | $ | 33,613 | | |
Accumulated amortization at December 31, 2020 | | | | | (13,203) | | | | | | (447) | | | | | | — | | | | | | — | | | | | | (13,650) | | |
Additions | | | | | 8,300 | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,300 | | |
Disposals | | | | | (45) | | | | | | — | | | | | | (123) | | | | | | (1,000) | | | | | | (1,168) | | |
Impairment | | | | | (52) | | | | | | — | | | | | | — | | | | | | — | | | | | | (52) | | |
Amortization | | | | | (1,218) | | | | | | (223) | | | | | | — | | | | | | — | | | | | | (1,441) | | |
Net balance at December 31, 2021 | | | | $ | 10,137 | | | | | $ | 447 | | | | | $ | 999 | | | | | $ | 14,019 | | | | | $ | 25,602 | | |
| | | Agent Relation-ships | | | Policy Renewals | | | Non-competes | | | Trade-marks | | | Licenses | | | Total | | ||||||||||||||||||
Other Intangible Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gross balance at December 31, 2019 | | | | $ | 13,164 | | | | | $ | 3,826 | | | | | $ | 3,755 | | | | | $ | 1,122 | | | | | $ | 15,019 | | | | | $ | 36,886 | | |
Accumulated amortization at December 31, 2019 | | | | | (9,295) | | | | | | (3,702) | | | | | | (2,617) | | | | | | — | | | | | | — | | | | | | (15,614) | | |
Amortization | | | | | (717) | | | | | | (124) | | | | | | (468) | | | | | | — | | | | | | — | | | | | | (1,309) | | |
Net balance at December 31, 2020 | | | | $ | 3,152 | | | | | $ | — | | | | | $ | 670 | | | | | $ | 1,122 | | | | | $ | 15,019 | | | | | $ | 19,963 | | |
Year Ending December 31, | | | Amount | | |||
2022 | | | | $ | 1,466 | | |
2023 | | | | | 1,466 | | |
2024 | | | | | 1,074 | | |
2025 | | | | | 998 | | |
2026 | | | | | 553 | | |
| | | Gross Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | ||||||||||||
December 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available for sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government securities | | | | $ | 48,816 | | | | | $ | 716 | | | | | $ | (269) | | | | | $ | 49,263 | | |
Corporate securities and miscellaneous | | | | | 151,053 | | | | | | 3,698 | | | | | | (588) | | | | | | 154,163 | | |
Municipal securities | | | | | 53,179 | | | | | | 3,799 | | | | | | (36) | | | | | | 56,942 | | |
Residential mortgage-backed securities | | | | | 103,758 | | | | | | 1,232 | | | | | | (1,255) | | | | | | 103,735 | | |
Commercial mortgage-backed securities | | | | | 14,634 | | | | | | 38 | | | | | | (188) | | | | | | 14,484 | | |
Asset-backed securities | | | | | 81,038 | | | | | | 226 | | | | | | (1,500) | | | | | | 79,764 | | |
Total fixed maturity securities, available for sale | | | | $ | 452,478 | | | | | $ | 9,709 | | | | | $ | (3,836) | | | | | $ | 458,351 | | |
Fixed maturity securities, held to maturity: | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset-backed securities | | | | $ | 47,117 | | | | | $ | — | | | | | $ | — | | | | | $ | 47,117 | | |
Total fixed maturity securities, held to maturity | | | | $ | 47,117 | | | | | $ | — | | | | | $ | — | | | | | $ | 47,117 | | |
Equity securities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stocks | | | | $ | 47,379 | | | | | $ | 13,887 | | | | | $ | (2,841) | | | | | $ | 58,425 | | |
Preferred stocks | | | | | 17,821 | | | | | | 349 | | | | | | (4) | | | | | | 18,166 | | |
Mutual funds | | | | | 33,786 | | | | | | 7,611 | | | | | | (17) | | | | | | 41,380 | | |
Total equity securities | | | | $ | 98,986 | | | | | $ | 21,847 | | | | | $ | (2,862) | | | | | $ | 117,971 | | |
| | | Gross Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | ||||||||||||
December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available for sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government securities | | | | $ | 53,304 | | | | | $ | 1,515 | | | | | $ | (2) | | | | | $ | 54,817 | | |
Corporate securities and miscellaneous | | | | | 63,573 | | | | | | 5,859 | | | | | | (8) | | | | | | 69,424 | | |
Municipal securities | | | | | 53,200 | | | | | | 5,153 | | | | | | — | | | | | | 58,353 | | |
Residential mortgage-backed securities | | | | | 78,678 | | | | | | 2,849 | | | | | | (3) | | | | | | 81,524 | | |
Commercial mortgage-backed securities | | | | | 2,872 | | | | | | 56 | | | | | | (27) | | | | | | 2,901 | | |
Asset-backed securities | | | | | 47,827 | | | | | | 544 | | | | | | (389) | | | | | | 47,982 | | |
Total fixed maturity securities, available for sale | | | | $ | 299,454 | | | | | $ | 15,976 | | | | | $ | (429) | | | | | $ | 315,001 | | |
Fixed maturity securities, held to maturity: | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset-backed securities | | | | $ | 28,393 | | | | | $ | — | | | | | $ | — | | | | | $ | 28,393 | | |
Total fixed maturity securities, held to maturity | | | | $ | 28,393 | | | | | $ | — | | | | | $ | — | | | | | $ | 28,393 | | |
Equity securities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stocks | | | | $ | 44,742 | | | | | $ | 6,738 | | | | | $ | (4,250) | | | | | $ | 47,230 | | |
Mutual funds | | | | | 29,370 | | | | | | 1,268 | | | | | | (2) | | | | | | 30,636 | | |
Total equity securities | | | | $ | 74,112 | | | | | $ | 8,006 | | | | | $ | (4,252) | | | | | $ | 77,866 | | |
| | | Amortized Cost | | | Fair Value | | ||||||
December 31, 2021 | | | | | | | | | | | | | |
Due in less than one year | | | | $ | 10,614 | | | | | $ | 10,724 | | |
Due after one year through five years | | | | | 138,804 | | | | | | 141,714 | | |
Due after five years through ten years | | | | | 81,933 | | | | | | 83,864 | | |
Due after ten years | | | | | 21,697 | | | | | | 24,066 | | |
Mortgage-backed securities | | | | | 118,392 | | | | | | 118,219 | | |
Asset-backed securities | | | | | 81,038 | | | | | | 79,764 | | |
Total | | | | $ | 452,478 | | | | | $ | 458,351 | | |
| | | Amortized Cost | | | Fair Value | | ||||||
December 31, 2021 | | | | | | | | | | | | | |
Asset-backed securities | | | | $ | 47,117 | | | | | $ | 47,117 | | |
Total | | | | $ | 47,117 | | | | | $ | 47,117 | | |
| | | Less than 12 Months | | | 12 Months or More | | | Total | | |||||||||||||||||||||||||||
| Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | ||||||||||||||||||||
December 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government securities | | | | $ | 19,819 | | | | | $ | (267) | | | | | $ | 108 | | | | | $ | (2) | | | | | $ | 19,927 | | | | | $ | (269) | | |
Corporate securities and miscellaneous | | | | | 47,308 | | | | | | (588) | | | | | | — | | | | | | — | | | | | | 47,308 | | | | | | (588) | | |
Municipal securities | | | | | 4,549 | | | | | | (36) | | | | | | — | | | | | | — | | | | | | 4,549 | | | | | | (36) | | |
Residential mortgage-backed securities | | | | | 72,672 | | | | | | (1,252) | | | | | | 145 | | | | | | (3) | | | | | | 72,817 | | | | | | (1,255) | | |
Commercial mortgage-backed securities | | | | | 12,653 | | | | | | (175) | | | | | | 241 | | | | | | (12) | | | | | | 12,894 | | | | | | (187) | | |
Asset-backed securities | | | | | 34,266 | | | | | | (1,463) | | | | | | 1,256 | | | | | | (38) | | | | | | 35,522 | | | | | | (1,501) | | |
Total fixed maturity securities, available for sale | | | | | 191,267 | | | | | | (3,781) | | | | | | 1,750 | | | | | | (55) | | | | | | 193,017 | | | | | | (3,836) | | |
Common stocks | | | | | 2,493 | | | | | | (1,066) | | | | | | 7,885 | | | | | | (1,775) | | | | | | 10,378 | | | | | | (2,841) | | |
Preferred stocks | | | | | 1,353 | | | | | | (4) | | | | | | — | | | | | | — | | | | | | 1,353 | | | | | | (4) | | |
Mutual funds | | | | | 5,441 | | | | | | (17) | | | | | | — | | | | | | — | | | | | | 5,441 | | | | | | (17) | | |
Equity securities | | | | | 9,287 | | | | | | (1,087) | | | | | | 7,885 | | | | | | (1,775) | | | | | | 17,172 | | | | | | (2,862) | | |
Total | | | | $ | 200,554 | | | | | $ | (4,868) | | | | | $ | 9,635 | | | | | $ | (1,830) | | | | | $ | 210,189 | | | | | $ | (6,698) | | |
| | | Less than 12 Months | | | 12 Months or More | | | Total | | |||||||||||||||||||||||||||
| | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | ||||||||||||||||||
December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government securities | | | | $ | 108 | | | | | $ | (2) | | | | | $ | — | | | | | $ | — | | | | | $ | 108 | | | | | $ | (2) | | |
Corporate securities and miscellaneous | | | | | 976 | | | | | | (8) | | | | | | — | | | | | | — | | | | | | 976 | | | | | | (8) | | |
Residential mortgage-backed securities | | | | | 5,502 | | | | | | (3) | | | | | | — | | | | | | — | | | | | | 5,502 | | | | | | (3) | | |
Commercial mortgage-backed securities | | | | | 327 | | | | | | (27) | | | | | | — | | | | | | — | | | | | | 327 | | | | | | (27) | | |
Asset-backed securities | | | | | 3,247 | | | | | | (389) | | | | | | — | | | | | | — | | | | | | 3,247 | | | | | | (389) | | |
Total fixed maturity securities, available for sale | | | | | 10,160 | | | | | | (429) | | | | | | — | | | | | | — | | | | | | 10,160 | | | | | | (429) | | |
Common stocks | | | | | 7,102 | | | | | | (2,034) | | | | | | 7,940 | | | | | | (2,216) | | | | | | 15,042 | | | | | | (4,250) | | |
Mutual funds | | | | | 150 | | | | | | (2) | | | | | | — | | | | | | — | | | | | | 150 | | | | | | (2) | | |
Equity securities | | | | | 7,252 | | | | | | (2,036) | | | | | | 7,940 | | | | | | (2,216) | | | | | | 15,192 | | | | | | (4,252) | | |
Total | | | | $ | 17,412 | | | | | $ | (2,465) | | | | | $ | 7,940 | | | | | $ | (2,216) | | | | | $ | 25,352 | | | | | $ | (4,681) | | |
| | | 2021 | | | 2020 | | ||||||
Gross realized gains | | | | | | | | | | | | | |
Fixed maturity securities, available for sale | | | | $ | 474 | | | | | $ | 982 | | |
Equity securities | | | | | 2,763 | | | | | | 6,817 | | |
Other | | | | | 13 | | | | | | 258 | | |
Total | | | | | 3,250 | | | | | | 8,057 | | |
Gross realized losses | | | | | | | | | | | | | |
Fixed maturity securities, available for sale | | | | | (1,160) | | | | | | (885) | | |
Equity securities | | | | | (230) | | | | | | (5,678) | | |
Other invested assets | | | | | — | | | | | | (283) | | |
Other | | | | | (4) | | | | | | (144) | | |
Total | | | | | (1,394) | | | | | | (6,990) | | |
Net realized gains | | | | $ | 1,856 | | | | | $ | 1,067 | | |
| | | 2021 | | | 2020 | | ||||||
Income: | | | | | | | | | | | | | |
Fixed maturity securities, available for sale | | | | $ | 9,931 | | | | | $ | 7,479 | | |
Fixed maturity securities, held to maturity | | | | | 4,840 | | | | | | 792 | | |
Equity securities | | | | | 2,572 | | | | | | 1,638 | | |
Equity method investments | | | | | 9,280 | | | | | | 4,084 | | |
Mortgage loans | | | | | 1,188 | | | | | | 327 | | |
Indirect loans | | | | | 1,852 | | | | | | 1,756 | | |
Short term investments and cash | | | | | 141 | | | | | | 1,278 | | |
Other | | | | | 241 | | | | | | 494 | | |
Total investment income | | | | | 30,045 | | | | | | 17,848 | | |
Investment expenses | | | | | (5,399) | | | | | | (3,718) | | |
Net investment income | | | | $ | 24,646 | | | | | $ | 14,130 | | |
| | | 2021 | | | 2020 | | ||||||
Fixed maturity securities | | | | $ | (9,674) | | | | | $ | 9,015 | | |
Deferred income taxes | | | | | 2,098 | | | | | | (1,814) | | |
Total | | | | $ | (7,576) | | | | | $ | 7,201 | | |
| | | December 31, 2021 | | | December 31, 2020 | | ||||||||||||||||||
| | | Carrying Value | | | Fair Value | | | Carrying Value | | | Fair Value | | ||||||||||||
| | ||||||||||||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available for sale | | | | $ | 458,351 | | | | | $ | 458,351 | | | | | $ | 315,001 | | | | | $ | 315,001 | | |
Fixed maturity securities, held to maturity | | | | | 47,117 | | | | | | 47,117 | | | | | | 28,393 | | | | | | 28,393 | | |
Equity securities | | | | | 117,971 | | | | | | 117,971 | | | | | | 77,866 | | | | | | 77,866 | | |
Mortgage loans | | | | | 29,531 | | | | | | 29,264 | | | | | | 5,228 | | | | | | 5,142 | | |
Short-term investments | | | | | 164,278 | | | | | | 164,278 | | | | | | 235,957 | | | | | | 235,957 | | |
Cash and cash equivalents | | | | | 42,107 | | | | | | 42,107 | | | | | | 63,455 | | | | | | 63,455 | | |
Restricted cash | | | | | 65,167 | | | | | | 65,167 | | | | | | 50,168 | | | | | | 50,168 | | |
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Notes payable | | | | $ | 50,000 | | | | | $ | 50,000 | | | | | $ | 50,000 | | | | | $ | 50,000 | | |
Subordinated debt | | | | | 78,529 | | | | | | 83,235 | | | | | | 78,448 | | | | | | 83,235 | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
December 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available for sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government securities | | | | $ | 49,263 | | | | | $ | — | | | | | $ | — | | | | | $ | 49,263 | | |
Corporate securities and miscellaneous | | | | | — | | | | | | 154,163 | | | | | | — | | | | | | 154,163 | | |
Municipal securities | | | | | — | | | | | | 56,942 | | | | | | — | | | | | | 56,942 | | |
Residential mortgage-backed securities | | | | | — | | | | | | 103,735 | | | | | | — | | | | | | 103,735 | | |
Commercial mortgage-backed securities | | | | | — | | | | | | 14,484 | | | | | | — | | | | | | 14,484 | | |
Asset-backed securities | | | | | — | | | | | | 79,764 | | | | | | — | | | | | | 79,764 | | |
Total fixed maturity securities, available for sale | | | | | 49,263 | | | | | | 409,088 | | | | | | — | | | | | | 458,351 | | |
Common stocks: | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer discretionary | | | | | 2,102 | | | | | | — | | | | | | — | | | | | | 2,102 | | |
Consumer staples | | | | | 13,643 | | | | | | — | | | | | | — | | | | | | 13,643 | | |
Energy | | | | | 2,781 | | | | | | — | | | | | | — | | | | | | 2,781 | | |
Finance | | | | | 24,657 | | | | | | — | | | | | | — | | | | | | 24,657 | | |
Industrial | | | | | 8,806 | | | | | | — | | | | | | — | | | | | | 8,806 | | |
Information technology | | | | | 2,408 | | | | | | — | | | | | | — | | | | | | 2,408 | | |
Materials | | | | | 3,160 | | | | | | — | | | | | | — | | | | | | 3,160 | | |
Other | | | | | 868 | | | | | | — | | | | | | — | | | | | | 868 | | |
Total common stocks | | | | | 58,425 | | | | | | — | | | | | | — | | | | | | 58,425 | | |
Preferred stocks: | | | | | | | | | | | | | | | | | | | | | | | | | |
Finance | | | | | — | | | | | | 17,018 | | | | | | — | | | | | | 17,018 | | |
Other | | | | | — | | | | | | 1,148 | | | | | | — | | | | | | 1,148 | | |
Total preferred stocks | | | | | — | | | | | | 18,166 | | | | | | — | | | | | | 18,166 | | |
Mutual funds: | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed income | | | | | 5,374 | | | | | | — | | | | | | — | | | | | | 5,374 | | |
Equity | | | | | 35,471 | | | | | | — | | | | | | — | | | | | | 35,471 | | |
Commodity | | | | | 535 | | | | | | — | | | | | | — | | | | | | 535 | | |
Total mutual funds | | | | | 41,380 | | | | | | — | | | | | | — | | | | | | 41,380 | | |
Total equity securities | | | | | 99,805 | | | | | | 18,166 | | | | | | — | | | | | | 117,971 | | |
Short-term investments | | | | | 164,278 | | | | | | — | | | | | | — | | | | | | 164,278 | | |
Total assets measured at fair value | | | | $ | 313,346 | | | | | $ | 427,254 | | | | | $ | — | | | | | $ | 740,600 | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available for sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government securities | | | | $ | 54,817 | | | | | $ | — | | | | | $ | — | | | | | $ | 54,817 | | |
Corporate securities and miscellaneous | | | | | — | | | | | | 69,424 | | | | | | — | | | | | | 69,424 | | |
Municipal securities | | | | | — | | | | | | 58,353 | | | | | | — | | | | | | 58,353 | | |
Residential mortgage-backed securities | | | | | — | | | | | | 81,524 | | | | | | — | | | | | | 81,524 | | |
Commercial mortgage-backed securities | | | | | — | | | | | | 2,901 | | | | | | — | | | | | | 2,901 | | |
Asset-backed securities | | | | | — | | | | | | 47,982 | | | | | | — | | | | | | 47,982 | | |
Total fixed maturity securities, available for sale | | | | | 54,817 | | | | | | 260,184 | | | | | | — | | | | | | 315,001 | | |
Common stocks: | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer discretionary | | | | | 1,462 | | | | | | — | | | | | | — | | | | | | 1,462 | | |
Consumer staples | | | | | 11,415 | | | | | | — | | | | | | — | | | | | | 11,415 | | |
Energy | | | | | 2,294 | | | | | | — | | | | | | — | | | | | | 2,294 | | |
Finance | | | | | 22,105 | | | | | | — | | | | | | — | | | | | | 22,105 | | |
Industrial | | | | | 5,669 | | | | | | — | | | | | | — | | | | | | 5,669 | | |
Information technology | | | | | 1,706 | | | | | | — | | | | | | — | | | | | | 1,706 | | |
Materials | | | | | 1,923 | | | | | | — | | | | | | — | | | | | | 1,923 | | |
Other | | | | | 656 | | | | | | — | | | | | | — | | | | | | 656 | | |
Total common stocks | | | | | 47,230 | | | | | | — | | | | | | — | | | | | | 47,230 | | |
Mutual funds: | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed income | | | | | 808 | | | | | | — | | | | | | — | | | | | | 808 | | |
Equity | | | | | 29,229 | | | | | | — | | | | | | — | | | | | | 29,229 | | |
Commodity | | | | | 599 | | | | | | — | | | | | | — | | | | | | 599 | | |
Total mutual funds | | | | | 30,636 | | | | | | — | | | | | | — | | | | | | 30,636 | | |
Total equity securities | | | | | 77,866 | | | | | | — | | | | | | — | | | | | | 77,866 | | |
Short-term investments | | | | | 235,957 | | | | | | — | | | | | | — | | | | | | 235,957 | | |
Total assets measured at fair value | | | | $ | 368,640 | | | | | $ | 260,184 | | | | | $ | — | | | | | $ | 628,824 | | |
| | | 2021 | | | 2020 | | ||||||||||||||||||
| | | Carrying Value | | | Gross Investment Income | | | Carrying Value | | | Gross Investment Income | | ||||||||||||
Retail | | | | $ | 10,593 | | | | | $ | 66 | | | | | $ | — | | | | | $ | — | | |
Industrial | | | | | 6,314 | | | | | | 90 | | | | | | — | | | | | | — | | |
Commercial | | | | | 6,298 | | | | | | 151 | | | | | | — | | | | | | — | | |
Multi-Family | | | | | 3,296 | | | | | | 143 | | | | | | — | | | | | | — | | |
Office | | | | | 1,691 | | | | | | 64 | | | | | | — | | | | | | — | | |
Land | | | | | — | | | | | | 451 | | | | | | 4,293 | | | | | | 264 | | |
Hospitality | | | | | 1,339 | | | | | | 223 | | | | | | 935 | | | | | | 63 | | |
Total | | | | $ | 29,531 | | | | | $ | 1,188 | | | | | $ | 5,228 | | | | | $ | 327 | | |
| | | 2021 | | | 2020 | | ||||||
Dowling Capital Partners LP units | | | | $ | 2,416 | | | | | $ | 2,166 | | |
RISCOM | | | | | 3,366 | | | | | | 4,508 | | |
Arena Special Opportunities Fund, LP units | | | | | 41,763 | | | | | | 38,958 | | |
Arena Rated Product LP units | | | | | 5,692 | | | | | | 974 | | |
KIC Surety | | | | | — | | | | | | 1 | | |
Hudson Ventures Fund 2 LP units | | | | | 1,913 | | | | | | — | | |
Universa Black Swan LP units | | | | | 4,354 | | | | | | — | | |
JVM Funds LLC units | | | | | 24,000 | | | | | | — | | |
Total | | | | $ | 83,504 | | | | | $ | 46,607 | | |
| | | 2021 | | | 2020 | | ||||||
Net investment income | | | | | | | | | | | | | |
Dowling Capital Partners LP units | | | | $ | 438 | | | | | $ | (454) | | |
RISCOM | | | | | 1,058 | | | | | | 973 | | |
Arena Special Opportunities Fund, LP units | | | | | 3,729 | | | | | | 3,514 | | |
Arena Rated Product LP units | | | | | 4,717 | | | | | | 975 | | |
PVI Agency LLC | | | | | — | | | | | | (924) | | |
Hudson Ventures Fund 2 LP units | | | | | (16) | | | | | | — | | |
Universa Black Swan LP units | | | | | (646) | | | | | | — | | |
Total | | | | $ | 9,280 | | | | | $ | 4,084 | | |
| | | 2021 | | | 2020 | | ||||||
Dowling Capital Partners LP units | | | | $ | 368 | | | | | $ | 350 | | |
Arena Rated Product LP units | | | | | — | | | | | | 16,937 | | |
Hudson Ventures Fund 2 LP units | | | | | 3,063 | | | | | | — | | |
Total | | | | $ | 3,431 | | | | | $ | 17,287 | | |
| | | Underlying Equity | | | Difference | | | Recorded Investment Balance | | |||||||||
December 31, 2021 | | | | | | | | | | | | | | | | | | | |
RISCOM | | | | $ | 1,378 | | | | | $ | 1,988 | | | | | $ | 3,366 | | |
| | | Underlying Equity | | | Difference | | | Recorded Investment Balance | | |||||||||
December 31, 2020 | | | | | | | | | | | | | | | | | | | |
RISCOM | | | | $ | 2,276 | | | | | $ | 2,232 | | | | | $ | 4,508 | | |
| | | Carrying Value | | | Unfunded Commitment | | ||||||
December 31, 2021 | | | | ||||||||||
SMA1 | | | | $ | 33,100 | | | | | $ | — | | |
SMA2 | | | | | 10,855 | | | | | | 16,563 | | |
Total | | | | $ | 43,955 | | | | | $ | 16,563 | | |
| | | Carrying Value | | | Unfunded Commitment | | ||||||
December 31, 2020 | | | | ||||||||||
SMA1 | | | | $ | 39,993 | | | | | $ | 1,517 | | |
SMA2 | | | | | 12,121 | | | | | | 33,027 | | |
Total | | | | $ | 52,114 | | | | | $ | 34,544 | | |
| | | 2021 | | | 2020 | | ||||||
Leasehold improvements | | | | $ | 2,761 | | | | | $ | 2,777 | | |
Furniture and equipment | | | | | 30,791 | | | | | | 29,295 | | |
Other | | | | | 39 | | | | | | 94 | | |
| | | | | 33,591 | | | | | | 32,166 | | |
Accumulated depreciation | | | | | (23,964) | | | | | | (20,796) | | |
Total | | | | $ | 9,627 | | | | | $ | 11,370 | | |
| | | 2021 | | | 2020 | |
Operating lease right-of-use assets | | | $10,532 | | | $11,259 | |
Operating lease liabilities | | | 10,921 | | | 11,594 | |
Operating lease weighted-average remaining lease term | | | 5.73 years | | | 6.64 years | |
Operating lease weighted-average discount rate | | | 3.12% | | | 3.16% | |
| | | 2021 | | | 2020 | | ||||||
Operating lease expense | | | | $ | 2,607 | | | | | $ | 2,613 | | |
Short-term lease expense | | | | | 127 | | | | | | 291 | | |
Total lease expense | | | | $ | 2,734 | | | | | $ | 2,904 | | |
Operating cash outflows from operating leases | | | | $ | 2,361 | | | | | $ | 2,505 | | |
| | | 2021 | | |||
2022 | | | | $ | 2,395 | | |
2023 | | | | | 2,313 | | |
2024 | | | | | 2,106 | | |
2025 | | | | | 1,577 | | |
2026 | | | | | 1,270 | | |
Thereafter | | | | | 2,305 | | |
Total future minimum operating lease payments | | | | $ | 11,966 | | |
Less imputed interest | | | | | (1,045) | | |
Total operating lease liability | | | | $ | 10,921 | | |
| | | 2021 | | | 2020 | | ||||||
Junior Subordinated Interest Debentures, due September 15, 2036, interest payable quarterly Principal | | | | $ | 59,794 | | | | | $ | 59,794 | | |
Less: debt issuance costs | | | | | (705) | | | | | | (753) | | |
Unsecured Subordinated Notes, due May 24, 2039, interest payable quarterly Principal | | | | | 20,000 | | | | | | 20,000 | | |
Less: debt issuance costs | | | | | (560) | | | | | | (593) | | |
Subordinated debt, net of debt issuance costs | | | | $ | 78,529 | | | | | $ | 78,448 | | |
| | | 2021 | | | 2020 | | ||||||
Term loan, due December 31, 2024, interest payable quarterly | | | | $ | 50,000 | | | | | $ | 50,000 | | |
Revolving line of credit, due December 31, 2024, interest payable quarterly | | | | | — | | | | | | — | | |
Notes payable | | | | $ | 50,000 | | | | | $ | 50,000 | | |
| | | 2021 | | | 2020 | | ||||||
Current income tax expense | | | | $ | — | | | | | $ | 190 | | |
Deferred tax (benefit) expense related to temporary differences | | | | | 9,992 | | | | | | (20,080) | | |
Total income tax (benefit) expense | | | | $ | 9,992 | | | | | $ | (19,890) | | |
| | | 2021 | | | 2020 | | ||||||||||||||||||
| | | Amount | | | Percentage | | | Amount | | | Percentage | | ||||||||||||
Income tax (benefit) expense at federal statutory rate | | | | $ | 10,145 | | | | | | 21.0% | | | | | $ | (19,852) | | | | | | 21.0% | | |
Tax advantaged investments | | | | | (256) | | | | | | (0.5) | | | | | | (197) | | | | | | 0.2 | | |
Other | | | | | 103 | | | | | | 0.2 | | | | | | 159 | | | | | | (0.2) | | |
Total income tax (benefit) expense | | | | $ | 9,992 | | | | | | 20.7% | | | | | $ | (19,890) | | | | | | 21.0% | | |
| | | 2021 | | | 2020 | | ||||||
Deferred tax assets: | | | | | | | | | | | | | |
Net operating losses | | | | $ | 28,009 | | | | | $ | 32,032 | | |
Losses and loss adjustment expenses | | | | | 7,782 | | | | | | 5,591 | | |
Unearned premiums | | | | | 9,461 | | | | | | 8,255 | | |
Intangibles | | | | | 1,632 | | | | | | 3,485 | | |
Stock options/awards | | | | | 627 | | | | | | 527 | | |
Other | | | | | 1,034 | | | | | | 1,841 | | |
Total deferred tax assets | | | | | 48,545 | | | | | | 51,731 | | |
Less valuation allowance | | | | | (586) | | | | | | (586) | | |
Total deferred tax assets after valuation allowance | | | | | 47,959 | | | | | | 51,145 | | |
Deferred tax liabilities: | | | | | | | | | | | | | |
Deferred policy acquisition costs | | | | | 6,063 | | | | | | 3,712 | | |
Depreciation | | | | | 1,459 | | | | | | 1,595 | | |
Investments | | | | | 5,507 | | | | | | 1,038 | | |
Unrealized gains on investments | | | | | 1,230 | | | | | | 3,261 | | |
Other | | | | | 37 | | | | | | 21 | | |
Total deferred tax liabilities | | | | | 14,296 | | | | | | 9,627 | | |
Net deferred tax assets | | | | $ | 33,663 | | | | | $ | 41,518 | | |
| | | 2021 | | | 2020 | | ||||||
Balance at beginning of year | | | | $ | 586 | | | | | $ | 586 | | |
Increase (decrease) related to: | | | | | | | | | | | | | |
Net operating losses | | | | | — | | | | | | — | | |
Balance at end of year | | | | $ | 586 | | | | | $ | 586 | | |
| | | 2021 | | | 2020 | | ||||||
Reserves for losses and LAE, beginning of period | | | | $ | 856,780 | | | | | $ | 683,970 | | |
Less: reinsurance recoverable on unpaid claims, beginning of period | | | | | (375,178) | | | | | | (333,286) | | |
Reserves for losses and LAE, beginning of period, net of reinsurance | | | | | 481,602 | | | | | | 350,684 | | |
Incurred, net of reinsurance, related to: | | | | ||||||||||
Current period | | | | | 338,348 | | | | | | 301,845 | | |
Prior years | | | | | 28,000 | | | | | | 49,553 | | |
Total incurred, net of reinsurance | | | | | 366,348 | | | | | | 351,398 | | |
Paid, net of reinsurance, related to: | | | | ||||||||||
Current period | | | | | 77,551 | | | | | | 98,781 | | |
Prior years | | | | | 172,188 | | | | | | 121,699 | | |
Total paid | | | | | 249,739 | | | | | | 220,480 | | |
Net reserves for losses and LAE, end of period | | | | | 598,211 | | | | | | 481,602 | | |
Plus: reinsurance recoverable on unpaid claims, end of period | | | | | 381,338 | | | | | | 375,178 | | |
Reserves for losses and LAE, end of period | | | | $ | 979,549 | | | | | $ | 856,780 | | |
Multi-line Solutions Incurred Losses and LAE, Net of Reinsurance Years Ended December 31, | | | As of December 31, 2021 | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | | | |-------------------------------------------Supplemental and unaudited-------------------------------------------| | | | | | | | | | IBNR | | | Cumulative Number of Reported Claims | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2012 | | | 2013 | | | 2014 | | | 2015 | | | 2016 | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | ||||||||||||||||||||||||||||||||||||||||||||
2012 | | | | $ | 20,529 | | | | | $ | 24,952 | | | | | $ | 25,952 | | | | | $ | 30,046 | | | | | $ | 30,524 | | | | | $ | 29,696 | | | | | $ | 29,696 | | | | | $ | 29,714 | | | | | $ | 29,616 | | | | | $ | 29,242 | | | | | $ | 317 | | | | | | 1,784 | | |
2013 | | | | | | | | | | | 66,517 | | | | | | 71,800 | | | | | | 64,439 | | | | | | 73,382 | | | | | | 75,196 | | | | | | 74,701 | | | | | | 74,987 | | | | | | 75,419 | | | | | | 69,496 | | | | | | 1,478 | | | | | | 3,323 | | |
2014 | | | | | | | | 100,355 | | | | | | 100,355 | | | | | | 115,749 | | | | | | 116,970 | | | | | | 116,970 | | | | | | 117,783 | | | | | | 118,995 | | | | | | 120,697 | | | | | | 1,873 | | | | | | 4,972 | | | |||||||||
2015 | | | | | | | | 103,191 | | | | | | 114,266 | | | | | | 117,024 | | | | | | 117,024 | | | | | | 119,216 | | | | | | 121,746 | | | | | | 122,839 | | | | | | 2,814 | | | | | | 5,355 | | | |||||||||||||||
2016 | | | | | | | | 63,223 | | | | | | 62,843 | | | | | | 62,843 | | | | | | 62,643 | | | | | | 69,701 | | | | | | 73,200 | | | | | | 2,422 | | | | | | 4,686 | | | |||||||||||||||||||||
2017 | | | | | | | | 65,332 | | | | | | 65,332 | | | | | | 64,260 | | | | | | 72,913 | | | | | | 78,578 | | | | | | 3,254 | | | | | | 5,505 | | | |||||||||||||||||||||||||||
2018 | | | | | | | | 74,476 | | | | | | 74,476 | | | | | | 73,868 | | | | | | 73,868 | | | | | | 11,704 | | | | | | 5,027 | | | |||||||||||||||||||||||||||||||||
2019 | | | | | | | | 107,432 | | | | | | 106,432 | | | | | | 106,432 | | | | | | 8,576 | | | | | | 5,982 | | | |||||||||||||||||||||||||||||||||||||||
2020 | | | | | | | | 140,880 | | | | | | 140,880 | | | | | | 47,439 | | | | | | 5,306 | | | |||||||||||||||||||||||||||||||||||||||||||||
2021 | | | | | | | | 173,568 | | | | | | 103,596 | | | | | | 5,470 | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total | | | | | | | $ | 988,800 | | | | | $ | 183,473 | | | | | | 47,410 | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative net paid loss and LAE from the table below | | | | | (708,372) | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net reserves for loss and LAE before 2012 | | | | | 6,414 | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total net reserves for loss and LAE | | | | $ | 286,842 | | | | | | | | | | | | | | |
Multi-line Solutions Cumulative Paid Losses and ALAE, Net of Reinsurance Years Ended December 31, | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | |---------------------------------------------------------Supplemental and unaudited---------------------------------------------------------| | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | | | 2012 | | | 2013 | | | 2014 | | | 2015 | | | 2016 | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | ||||||||||||||||||||||||||||||
2012 | | | | | 909 | | | | | | 10,103 | | | | | | 20,146 | | | | | | 24,571 | | | | | | 26,837 | | | | | | 27,666 | | | | | | 28,454 | | | | | | 28,436 | | | | | | 28,541 | | | | | | 29,171 | | |
2013 | | | | | | | | | | | 19,912 | | | | | | 40,425 | | | | | | 48,673 | | | | | | 59,460 | | | | | | 67,857 | | | | | | 73,511 | | | | | | 75,117 | | | | | | 75,340 | | | | | | 75,030 | | |
2014 | | | | | | | | 32,530 | | | | | | 63,699 | | | | | | 81,251 | | | | | | 96,639 | | | | | | 101,984 | | | | | | 104,984 | | | | | | 105,756 | | | | | | 106,214 | | | |||||||||
2015 | | | | | | | | 44,152 | | | | | | 72,137 | | | | | | 88,833 | | | | | | 99,401 | | | | | | 108,291 | | | | | | 114,098 | | | | | | 117,295 | | | |||||||||||||||
2016 | | | | | | | | 23,239 | | | | | | 42,528 | | | | | | 53,352 | | | | | | 58,895 | | | | | | 60,864 | | | | | | 63,893 | | | |||||||||||||||||||||
2017 | | | | | | | | 23,770 | | | | | | 41,945 | | | | | | 53,093 | | | | | | 64,235 | | | | | | 67,243 | | | |||||||||||||||||||||||||||
2018 | | | | | | | | 26,201 | | | | | | 42,568 | | | | | | 50,320 | | | | | | 64,119 | | | |||||||||||||||||||||||||||||||||
2019 | | | | | | | | 33,019 | | | | | | 59,529 | | | | | | 78,803 | | | |||||||||||||||||||||||||||||||||||||||
2020 | | | | | | | | 33,538 | | | | | | 67,216 | | | |||||||||||||||||||||||||||||||||||||||||||||
2021 | | | | | | | | 39,388 | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total | | | | | | | $ | 708,372 | | |
Short Tail/Monoline Specialty Incurred Losses and LAE, Net of Reinsurance Years Ended December 31, | | | As of December 31, 2021 | | |||||||||||||||||||||||||||||||||||||||
| | | |---------------------Supplemental and unaudited---------------------| | | | | | | | | | IBNR | | | Cumulative Number of Reported Claims | | |||||||||||||||||||||||||||
Accident Year | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | |||||||||||||||||||||||||||
2017 | | | | $ | 28,989 | | | | | $ | 28,989 | | | | | $ | 29,359 | | | | | $ | 29,799 | | | | | $ | 28,923 | | | | | $ | — | | | | | | 891 | | |
2018 | | | | | | | | | | | 33,570 | | | | | | 33,570 | | | | | | 33,570 | | | | | | 36,863 | | | | | | 2,957 | | | | | | 857 | | |
2019 | | | | | | | | 62,922 | | | | | | 48,101 | | | | | | 45,301 | | | | | | (217) | | | | | | 1,006 | | | |||||||||
2020 | | | | | | | | 66,359 | | | | | | 64,859 | | | | | | 14,390 | | | | | | 1,213 | | | |||||||||||||||
2021 | | | | | | | | 100,172 | | | | | | 48,988 | | | | | | 1,265 | | | |||||||||||||||||||||
Total | | | | | | | $ | 276,118 | | | | | $ | 66,118 | | | | | | 5,232 | | | |||||||||||||||||||||
Cumulative net paid loss and LAE from the table below | | | | | (167,018) | | | | | | | | | | | | | | | ||||||||||||||||||||||||
Net reserves for loss and LAE before 2017 | | | | | 101 | | | | | | | | | | | | | | | ||||||||||||||||||||||||
Total net reserves for loss and LAE | | | | $ | 109,201 | | | | | | | | | | | | | | |
Short Tail/Monoline Specialty Cumulative Paid Losses and ALAE, Net of Reinsurance Years Ended December 31, | | | | | | | | ||||||||||||||||||||||||||||||
| | | |---------------------Supplemental and unaudited---------------------| | | | | | | | | | | | | | | |||||||||||||||||||||
Accident Year | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | | | | | | | |||||||||||||||
2017 | | | | | 16,575 | | | | | | 16,989 | | | | | | 19,556 | | | | | | 19,440 | | | | | | 20,759 | | | | | | | | |
2018 | | | | | | | | | | | 24,754 | | | | | | 31,907 | | | | | | 31,323 | | | | | | 33,522 | | | | | | | | |
2019 | | | | | | | | 33,714 | | | | | | 40,228 | | | | | | 41,484 | | | | | | | | | |||||||||
2020 | | | | | | | | 30,974 | | | | | | 56,499 | | | | | | | | | |||||||||||||||
2021 | | | | | | | | 14,754 | | | | | | | | | |||||||||||||||||||||
Total | | | | | | | $ | 167,018 | | | | | | | | |
Exited Lines Incurred Losses and LAE, Net of Reinsurance Years Ended December 31, | | | As of December 31, 2021 | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | | | |--------------------------------------------Supplemental and unaudited--------------------------------------------| | | | | | | | | | IBNR | | | Cumulative Number of Reported Claims | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2012 | | | 2013 | | | 2014 | | | 2015 | | | 2016 | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | ||||||||||||||||||||||||||||||||||||||||||||
2012 | | | | $ | 31,816 | | | | | $ | 25,101 | | | | | $ | 37,960 | | | | | $ | 44,957 | | | | | $ | 45,097 | | | | | $ | 44,213 | | | | | $ | 44,213 | | | | | $ | 46,528 | | | | | $ | 49,025 | | | | | $ | 50,159 | | | | | $ | 5,495 | | | | | | 1,629 | | |
2013 | | | | | | | | | | | 44,791 | | | | | | 37,993 | | | | | | 44,909 | | | | | | 46,437 | | | | | | 48,372 | | | | | | 48,372 | | | | | | 49,850 | | | | | | 49,486 | | | | | | 53,236 | | | | | | 1,299 | | | | | | 2,624 | | |
2014 | | | | | | | | 64,186 | | | | | | 57,904 | | | | | | 62,425 | | | | | | 63,729 | | | | | | 63,729 | | | | | | 68,855 | | | | | | 69,920 | | | | | | 71,219 | | | | | | 11,797 | | | | | | 4,124 | | | |||||||||
2015 | | | | | | | | 61,810 | | | | | | 65,063 | | | | | | 68,008 | | | | | | 70,803 | | | | | | 75,187 | | | | | | 80,678 | | | | | | 83,365 | | | | | | 2,257 | | | | | | 4,535 | | | |||||||||||||||
2016 | | | | | | | | 93,526 | | | | | | 92,743 | | | | | | 91,119 | | | | | | 93,324 | | | | | | 103,602 | | | | | | 104,612 | | | | | | 6,489 | | | | | | 4,840 | | | |||||||||||||||||||||
2017 | | | | | | | | 75,919 | | | | | | 80,341 | | | | | | 82,545 | | | | | | 95,119 | | | | | | 97,011 | | | | | | 29,002 | | | | | | 4,281 | | | |||||||||||||||||||||||||||
2018 | | | | | | | | 73,492 | | | | | | 68,125 | | | | | | 78,902 | | | | | | 90,348 | | | | | | 2,078 | | | | | | 4,815 | | | |||||||||||||||||||||||||||||||||
2019 | | | | | | | | 87,115 | | | | | | 90,598 | | | | | | 92,118 | | | | | | 1,064 | | | | | | 5,489 | | | |||||||||||||||||||||||||||||||||||||||
2020 | | | | | | | | 83,900 | | | | | | 86,700 | | | | | | 18,026 | | | | | | 4,618 | | | |||||||||||||||||||||||||||||||||||||||||||||
2021 | | | | | | | | 49,957 | | | | | | 35,451 | | | | | | 1,992 | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total | | | | | | | $ | 778,725 | | | | | | 112,958 | | | | | | 38,947 | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative net paid loss and LAE from the table below | | | | | (589,463) | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net reserves for loss and LAE before 2012 | | | | | 5,226 | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total net reserves for loss and LAE | | | | $ | 194,488 | | | | | | | | | | | | | | |
Exited Lines Cumulative Paid Losses and ALAE, Net of Reinsurance Years Ended December 31, | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | |---------------------------------------------------------Supplemental and unaudited---------------------------------------------------------| | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | | | 2012 | | | 2013 | | | 2014 | | | 2015 | | | 2016 | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | ||||||||||||||||||||||||||||||
2012 | | | | | 12,927 | | | | | | 23,293 | | | | | | 31,636 | | | | | | 37,736 | | | | | | 40,850 | | | | | | 43,303 | | | | | | 44,797 | | | | | | 45,789 | | | | | | 45,938 | | | | | | 45,968 | | |
2013 | | | | | | | | | | | 4,763 | | | | | | 17,904 | | | | | | 36,890 | | | | | | 42,995 | | | | | | 41,158 | | | | | | 44,186 | | | | | | 47,101 | | | | | | 48,069 | | | | | | 48,322 | | |
2014 | | | | | | | | 9,700 | | | | | | 30,863 | | | | | | 42,141 | | | | | | 50,785 | | | | | | 49,906 | | | | | | 52,450 | | | | | | 53,290 | | | | | | 53,615 | | | |||||||||
2015 | | | | | | | | 9,026 | | | | | | 41,653 | | | | | | 55,610 | | | | | | 65,269 | | | | | | 73,100 | | | | | | 77,981 | | | | | | 80,312 | | | |||||||||||||||
2016 | | | | | | | | 36,592 | | | | | | 57,638 | | | | | | 70,253 | | | | | | 78,070 | | | | | | 81,516 | | | | | | 85,794 | | | |||||||||||||||||||||
2017 | | | | | | | | 34,177 | | | | | | 52,103 | | | | | | 51,985 | | | | | | 56,839 | | | | | | 63,516 | | | |||||||||||||||||||||||||||
2018 | | | | | | | | 25,552 | | | | | | 60,149 | | | | | | 67,262 | | | | | | 80,448 | | | |||||||||||||||||||||||||||||||||
2019 | | | | | | | | 28,636 | | | | | | 63,243 | | | | | | 66,682 | | | |||||||||||||||||||||||||||||||||||||||
2020 | | | | | | | | 24,468 | | | | | | 54,950 | | | |||||||||||||||||||||||||||||||||||||||||||||
2021 | | | | | | | | 9,856 | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total | | | | | | | $ | 589,463 | | |
| | | 2021 | | |||
Net reserves for losses and LAE: | | | |||||
Multi-line Solutions | | | | $ | 286,842 | | |
Short Tail/Monoline Specialty | | | | | 109,201 | | |
Exited Lines | | | | | 194,488 | | |
Reserves for losses and LAE, net of reinsurance | | | | | 590,531 | | |
Reinsurance recoverable on unpaid claims: | | | |||||
Multi-line Solutions | | | | | 232,146 | | |
Short Tail/Monoline Specialty | | | | | 121,717 | | |
Exited Lines | | | | | 27,475 | | |
Total reinsurance recoverable on unpaid claims | | | | | 381,338 | | |
Unallocated LAE | | | | | 7,680 | | |
Gross reserves for losses and LAE at end of year | | | | $ | 979,549 | | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (unaudited required supplementary information) | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Years | | | 1 | | | 2 | | | 3 | | | 4 | | | 5 | | | 6 | | | 7 | | | 8 | | | 9 | | | 10 and older | | ||||||||||||||||||||||||||||||
Multi-line Solutions | | | | | 25.8% | | | | | | 19.7% | | | | | | 14.9% | | | | | | 10.7% | | | | | | 8.1% | | | | | | 5.5% | | | | | | 4.0% | | | | | | 3.4% | | | | | | 3.6% | | | | | | 4.4% | | |
Short Tail/Monoline Specialty | | | | | 36.1% | | | | | | 51.4% | | | | | | 5.4% | | | | | | 2.4% | | | | | | 1.5% | | | | | | 0.9% | | | | | | 0.5% | | | | | | 0.3% | | | | | | 0.2% | | | | | | 1.3% | | |
Exited Lines | | | | | 27.4% | | | | | | 28.6% | | | | | | 12.3% | | | | | | 8.5% | | | | | | 6.5% | | | | | | 4.4% | | | | | | 3.2% | | | | | | 2.7% | | | | | | 2.9% | | | | | | 3.5% | | |
| | | 2021 | | | 2020 | | ||||||||||||||||||
Property | | | | $ | 235,686 | | | | | | 25.1% | | | | | $ | 163,025 | | | | | | 18.7% | | |
Commercial Auto Liability | | | | | 227,853 | | | | | | 24.2% | | | | | | 181,295 | | | | | | 20.8% | | |
General Liability | | | | | 116,953 | | | | | | 12.4% | | | | | | 110,962 | | | | | | 12.7% | | |
Group Accident & Health | | | | | 112,146 | | | | | | 11.9% | | | | | | 94,616 | | | | | | 10.8% | | |
Professional Liability | | | | | 61,466 | | | | | | 6.5% | | | | | | 48,298 | | | | | | 5.5% | | |
Excess Liability | | | | | 52,176 | | | | | | 5.6% | | | | | | 29,123 | | | | | | 3.3% | | |
Surety | | | | | 51,792 | | | | | | 5.6% | | | | | | 13,176 | | | | | | 1.5% | | |
Workers’ Compensation | | | | | 41,890 | | | | | | 4.5% | | | | | | 198,793 | | | | | | 22.8% | | |
Commercial Auto Physical Damage | | | | | 39,897 | | | | | | 4.2% | | | | | | 34,325 | | | | | | 3.9% | | |
Total | | | | $ | 939,859 | | | | | | 100.0% | | | | | $ | 873,613 | | | | | | 100.0% | | |
| | | 2021 | | | 2020 | | ||||||
California | | | | | 11.6% | | | | | | 8.1% | | |
Louisiana | | | | | 10.4 | | | | | | 10.3 | | |
Texas | | | | | 10.1 | | | | | | 12.0 | | |
Florida | | | | | 6.2 | | | | | | 6.3 | | |
New York | | | | | 6.0 | | | | | | 6.4 | | |
Georgia | | | | | 3.6 | | | | | | 3.5 | | |
Pennsylvania | | | | | 3.5 | | | | | | 3.2 | | |
Illinois | | | | | 3.3 | | | | | | 3.8 | | |
Massachusetts | | | | | 3.1 | | | | | | 2.4 | | |
Ohio | | | | | 2.8 | | | | | | 1.7 | | |
All other states | | | | | 39.4 | | | | | | 42.3 | | |
Total | | | | | 100.0% | | | | | | 100.0% | | |
| | | 2021 | | | 2020 | | ||||||
SUA commission revenue | | | | $ | 2,037 | | | | | $ | 2,090 | | |
SUA fee income | | | | | 1,185 | | | | | | 2,067 | | |
Other | | | | | 751 | | | | | | 1,507 | | |
Total commission and fee income | | | | $ | 3,973 | | | | | $ | 5,664 | | |
| | | 2021 | | | 2020 | | ||||||
Contract asset | | | | $ | 1,209 | | | | | $ | 1,097 | | |
| | | 2021 | | | 2020 | | ||||||
Amortization of policy acquisition costs | | | | $ | 47,061 | | | | | $ | 36,971 | | |
Other operating and general expenses | | | | | 91,437 | | | | | | 82,847 | | |
Total underwriting, acquisition and insurance expenses | | | | $ | 138,498 | | | | | $ | 119,818 | | |
| | | 2021 | | | 2020 | | ||||||||||||||||||
| | | Written | | | Earned | | | Written | | | Earned | | ||||||||||||
Direct premiums | | | | $ | 842,318 | | | | | $ | 816,837 | | | | | $ | 774,436 | | | | | $ | 775,666 | | |
Assumed premiums | | | | | 97,541 | | | | | | 102,352 | | | | | | 99,177 | | | | | | 96,765 | | |
Ceded premiums | | | | | (410,716) | | | | | | (419,366) | | | | | | (412,090) | | | | | | (440,520) | | |
Net premiums | | | | $ | 529,143 | | | | | $ | 499,823 | | | | | $ | 461,523 | | | | | $ | 431,911 | | |
Ceded losses and LAE incurred | | | | | | | | | | $ | 248,360 | | | | | | | | | | | $ | 335,503 | | |
| | | 2021 | | | 2020 | | ||||||
Expense to enter the LPT | | | | $ | — | | | | | $ | (43,476) | | |
Strengthening of reserves | | | | | (28,000) | | | | | | (49,013) | | |
Reinsurance recoveries under the LPT | | | | | 11,937 | | | | | | 32,692 | | |
Pretax net impact of the LPT and strengthening of reserves subject to the LPT | | | | $ | (16,063) | | | | | $ | (59,797) | | |
| | | Weighted-average Grant-date Fair Value | | | Number of Common Shares | | ||||||
Non-vested at January 1, 2020 | | | | $ | 20.12 | | | | | | 132,563 | | |
Granted | | | | | 12.96 | | | | | | 7,717 | | |
Vested | | | | | 17.79 | | | | | | (3,867) | | |
Forfeited | | | | | 20.29 | | | | | | (51,742) | | |
Non-vested at December 31, 2020 | | | | | 19.47 | | | | | | 84,671 | | |
Granted | | | | | 11.95 | | | | | | 332,658 | | |
Vested | | | | | 14.20 | | | | | | (6,514) | | |
Forfeited | | | | | 16.01 | | | | | | (35,172) | | |
Non-vested at December 31, 2021 | | | | $ | 13.23 | | | | | | 375,643 | | |
| | | 2021 | | | 2020 | | ||||||
Stock-based compensation expense (income) | | | | | | | | | | | | | |
Stock-based compensation expense | | | | $ | 1,365 | | | | | $ | 72 | | |
Forfeitures | | | | | (843) | | | | | | (97) | | |
Total | | | | $ | 522 | | | | | $ | (25) | | |
| | | 2021 | | | 2020 | | ||||||
Numerator | | | | ||||||||||
Net income (loss) | | | | $ | 38,317 | | | | | $ | (74,642) | | |
Less: undistributed (income) loss allocated to participating Securities | | | | | (18,507) | | | | | | — | | |
Net income (loss) attributable to common shareholders (numerator for basic earnings per share) | | | | | 19,810 | | | | | | (74,642) | | |
Add back: undistributed income (loss) allocated to participating securities | | | | | 18,507 | | | | | | — | | |
Net income (loss) (numerator for diluted earnings per share under the two class method) | | | | $ | 38,317 | | | | | $ | (74,642) | | |
Denominator | | | | | | | | | | | | | |
Basic weighted-average common shares | | | | | 16,308,712 | | | | | | 16,213,953 | | |
Preferred shares (if converted method) | | | | | 15,235,568 | | | | | | — | | |
Contingently issuable instruments (treasury stock method) | | | | | 723,146 | | | | | | — | | |
Market condition awards (contingently issuable) | | | | | 67,598 | | | | | | — | | |
Restricted stock units (treasury stock method) | | | | | 133,024 | | | | | | — | | |
Diluted weighted-average common share equivalents | | | | | 32,468,048 | | | | | | 16,213,953 | | |
Basic earnings (loss) per share | | | | $ | 1.21 | | | | | $ | (4.60) | | |
Diluted earnings (loss) per share | | | | $ | 1.18 | | | | | $ | (4.60) | | |
| | | 2021 | | | 2020 | | ||||||
Unvested common shares | | | | | — | | | | | | 3 | | |
Preferred Shares, if converted | | | | | — | | | | | | 10,388,590 | | |
Total | | | | | — | | | | | | 10,388,593 | | |
| | | 2021 | | | 2020 | | ||||||
Common shares | | | | | — | | | | | | 253,258 | | |
Preferred Shares, if converted | | | | | — | | | | | | 1,384,965 | | |
Total | | | | | — | | | | | | 1,638,223 | | |
| | | 2021 | | | 2020 | | ||||||
Net earned premium | | | | $ | 76,701 | | | | | $ | 66,971 | | |
Gross commission expense | | | | | 21,256 | | | | | | 19,788 | | |
| | | 2021 | | | 2020 | | ||||||
Premiums receivable | | �� | | $ | 11,334 | | | | | $ | 12,516 | | |
| | | 2021 | | | 2020 | | ||||||
Statutory capital and surplus | | | | $ | 369,583 | | | | | $ | 342,256 | | |
RBC authorized control level | | | | | 84,968 | | | | | | 67,838 | | |
| | | 2021 | | | 2020 | | ||||||
HSIC | | | | $ | 369,583 | | | | | $ | 342,256 | | |
IIC | | | | | 215,508 | | | | | | 149,623 | | |
GMIC | | | | | 209,347 | | | | | | 144,280 | | |
BIC | | | | | — | | | | | | 26,058 | | |
OSIC | | | | | 21,095 | | | | | | 21,063 | | |
| | | 2021 | | | 2020 | | ||||||
HSIC | | | | $ | 5,880 | | | | | $ | (4,044) | | |
IIC | | | | | 7,315 | | | | | | (21,038) | | |
GMIC | | | | | (947) | | | | | | (17,526) | | |
BIC | | | | | (67) | | | | | | (38) | | |
OSIC | | | | | 31 | | | | | | 143 | | |
| | | Cost | | | Fair Value | | | Amount on Balance Sheet | | |||||||||
December 31, 2021 | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available for sale: | | | | | | | | | | | | | | | | | | | |
U.S. government securities | | | | $ | 48,816 | | | | | $ | 49,263 | | | | | $ | 49,263 | | |
Corporate securities and miscellaneous | | | | | 151,053 | | | | | | 154,163 | | | | | | 154,163 | | |
Municipal securities | | | | | 53,179 | | | | | | 56,942 | | | | | | 56,942 | | |
Residential mortgage-backed securities | | | | | 103,758 | | | | | | 103,735 | | | | | | 103,735 | | |
Commercial mortgage-backed securities | | | | | 14,634 | | | | | | 14,484 | | | | | | 14,484 | | |
Asset-backed securities | | | | | 81,038 | | | | | | 79,764 | | | | | | 79,764 | | |
Total fixed maturity securities, available for sale | | | | | 452,478 | | | | | | 458,351 | | | | | | 458,351 | | |
Fixed maturity securities, held to maturity: | | | | | | | | | | | | | | | | | | | |
Asset-backed securities | | | | | 47,117 | | | | | | 47,117 | | | | | | 47,117 | | |
Total fixed maturity securities, held to maturity | | | | | 47,117 | | | | | | 47,117 | | | | | | 47,117 | | |
Equity securities: | | | | | | | | | | | | | | | | | | | |
Common stocks | | | | | 47,379 | | | | | | 58,425 | | | | | | 58,425 | | |
Preferred stocks | | | | | 17,821 | | | | | | 18,166 | | | | | | 18,166 | | |
Mutual funds | | | | | 33,786 | | | | | | 41,380 | | | | | | 41,380 | | |
Total equity securities | | | | | 98,986 | | | | | | 117,971 | | | | | | 117,971 | | |
Mortgage loans | | | | | 29,447 | | | | | | 29,264 | | | | | | 29,531 | | |
Short-term investments | | | | | 164,278 | | | | | | 164,278 | | | | | | 164,278 | | |
Total investments | | | | $ | 792,306 | | | | | $ | 816,981 | | | | | $ | 817,248 | | |
| | | 2021 | | | 2020 | | ||||||
Assets | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | |
Investment in subsidiaries | | | | $ | 517,326 | | | | | $ | 478,426 | | |
Short-term investments, at fair value | | | | | 25 | | | | | | 25 | | |
Total investments | | | | | 517,351 | | | | | | 478,451 | | |
Cash and cash equivalents | | | | | 5,849 | | | | | | 12,604 | | |
Restricted cash | | | | | 156 | | | | | | 151 | | |
Deferred income taxes | | | | | 15,182 | | | | | | 13,314 | | |
Goodwill and intangible assets, net | | | | | 12,641 | | | | | | 12,641 | | |
Other assets | | | | | 4,218 | | | | | | 5,559 | | |
Total assets | | | | $ | 555,397 | | | | | $ | 522,720 | | |
Liabilities, Temporary Equity and Stockholders’ Equity | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | |
Accounts payable and accrued liabilities | | | | $ | 788 | | | | | $ | 747 | | |
Notes payable | | | | | 50,000 | | | | | | 50,000 | | |
Subordinated debt, net of debt issuance costs | | | | | 78,529 | | | | | | 78,448 | | |
Total liabilities | | | | | 129,317 | | | | | | 129,195 | | |
Temporary Equity: | | | | | | | | | | | | | |
Temporary equity | | | | | — | | | | | | 90,303 | | |
Stockholders’ Equity: | | | | | | | | | | | | | |
Stockholders’ equity | | | | | 426,080 | | | | | | 303,222 | | |
Total liabilities, temporary equity and stockholders’ equity | | | | $ | 555,397 | | | | | $ | 522,720 | | |
| | | 2021 | | | 2020 | | ||||||
Revenues: | | | | | | | | | | | | | |
Commission and fee income | | | | $ | — | | | | | $ | 625 | | |
Net investment income | | | | | 2,383 | | | | | | 1,469 | | |
Realized investment losses | | | | | — | | | | | | (315) | | |
Total revenues | | | | | 2,383 | | | | | | 1,779 | | |
Expenses | | | | | | | | | | | | | |
Operating expenses | | | | | — | | | | | | 3,149 | | |
Interest expense | | | | | 4,621 | | | | | | 5,531 | | |
Amortization expense | | | | | 81 | | | | | | 81 | | |
Total expenses | | | | | 4,702 | | | | | | 8,761 | | |
Loss before income tax expense | | | | | (2,319) | | | | | | (6,982) | | |
Income tax (benefit) expense | | | | | (487) | | | | | | 3,017 | | |
Net loss before equity in earnings of subsidiaries | | | | | (1,832) | | | | | | (9,999) | | |
Equity in undistributed earnings of subsidiaries | | | | | 40,149 | | | | | | (64,643) | | |
Net income (loss) | | | | $ | 38,317 | | | | | $ | (74,642) | | |
| | | 2021 | | | 2020 | | ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net income (loss) | | | | $ | 38,317 | | | | | $ | (74,642) | | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities | | | | | (40,447) | | | | | | 73,531 | | |
Net cash provided by operating activities | | | | | (2,130) | | | | | | (1,111) | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Capital contribution to subsidiaries | | | | | (10,000) | | | | | | (50,600) | | |
Distributions from investment in subsidiaries | | | | | 4,000 | | | | | | 4,000 | | |
Other, net | | | | | — | | | | | | 1 | | |
Net cash (used in) provided by investing activities | | | | | (6,000) | | | | | | (46,599) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Employee share purchases | | | | | 1,380 | | | | | | 255 | | |
Issuance of preferred shares | | | | | — | | | | | | 90,413 | | |
Repayments of notes payable | | | | | — | | | | | | (33,827) | | |
Repurchase of common stock | | | | | — | | | | | | (540) | | |
Net cash provided by financing activities | | | | | 1,380 | | | | | | 56,301 | | |
Net (decrease) increase in cash and cash equivalents and restricted cash | | | | | (6,750) | | | | | | 8,591 | | |
Cash and cash equivalents and restricted cash at beginning of year | | | | | 12,755 | | | | | | 4,164 | | |
Cash and cash equivalents and restricted cash at end of year | | | | $ | 6,005 | | | | | $ | 12,755 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | |
Cash paid for interest | | | | $ | 4,669 | | | | | $ | 5,530 | | |
| | | 2021 | | | 2020 | | ||||||||||||||||||
| | | Accident & Health | | | Property & Casualty | | | Accident & Health | | | Property & Casualty | | ||||||||||||
Gross amount | | | | $ | 111,759 | | | | | $ | 730,559 | | | | | $ | 94,616 | | | | | $ | 679,820 | | |
Ceded to other companies | | | | | (68,350) | | | | | | (342,366) | | | | | | (57,364) | | | | | | (354,726) | | |
Assumed from other companies | | | | | 387 | | | | | | 97,154 | | | | | | — | | | | | | 99,177 | | |
Net amount | | | | $ | 43,796 | | | | | $ | 485,347 | | | | | $ | 37,252 | | | | | $ | 424,271 | | |
Percentage of amount assumed to net | | | | | 0.9% | | | | | | 20.0% | | | | | | 0.0% | | | | | | 23.4% | | |
| | | Valuation Allowance For Deferred Tax Assets | | | Allowance for Uncollectable Reinsurance Recoverable | | | Allowance for Uncollectable Premiums Receivable | | |||||||||
Balance at January 1, 2020 | | | | $ | 586 | | | | | $ | — | | | | | $ | 1,076 | | |
Charged to costs and expenses | | | | | — | | | | | | — | | | | | | 781 | | |
Amounts written off | | | | | — | | | | | | — | | | | | | (711) | | |
Balance at December 31, 2020 | | | | | 586 | | | | | | — | | | | | | 1,146 | | |
Charged to costs and expenses | | | | | — | | | | | | — | | | | | | 18 | | |
Amounts written off | | | | | — | | | | | | — | | | | | | (903) | | |
Balance at December 31, 2021 | | | | $ | 586 | | | | | $ | — | | | | | $ | 261 | | |
| | | 2021 | | | 2020 | | ||||||
Deferred policy acquisition costs | | | | $ | 59,456 | | | | | $ | 53,519 | | |
Reserve for losses and loss adjustment expenses | | | | | 979,549 | | | | | | 856,780 | | |
Unearned premiums | | | | | 363,288 | | | | | | 342,619 | | |
Net earned premium(1) | | | | | 499,823 | | | | | | 431,911 | | |
Net investment income | | | | | 24,646 | | | | | | 14,130 | | |
Losses and loss adjustment expenses (current year)(1) | | | | | 338,348 | | | | | | 301,845 | | |
Losses and loss adjustment expenses (prior years)(1)(2) | | | | | 28,000 | | | | | | 49,553 | | |
Amortization of policy acquisition costs(1) | | | | | 47,061 | | | | | | 36,971 | | |
Paid claims and claim adjustment expenses(1) | | | | | 249,739 | | | | | | 220,480 | | |
Net premiums written(1) | | | | | 529,143 | | | | | | 461,523 | | |
Ceded unearned premium | | | | | 137,973 | | | | | | 146,624 | | |
Deferred ceding commission | | | | | 30,500 | | | | | | 35,757 | | |
| | | September 30, 2022 | | | December 31, 2021 | | ||||||
(In thousands, except for share and per share amounts) | | | (Unaudited) | | | | | | | | |||
Assets | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | |
Fixed maturity securities, available for sale, at fair value (amortized cost of $618,656 and $452,478, respectively) | | | | $ | 562,573 | | | | | $ | 458,351 | | |
Fixed maturity securities, held to maturity, at amortized cost | | | | | 51,857 | | | | | | 47,117 | | |
Equity securities, at fair value | | | | | 109,640 | | | | | | 117,971 | | |
Mortgage loans | | | | | 52,072 | | | | | | 29,531 | | |
Other long-term investments | | | | | 136,828 | | | | | | 132,111 | | |
Short-term investments, at fair value | | | | | 104,915 | | | | | | 164,278 | | |
Total investments | | | | | 1,017,885 | | | | | | 949,359 | | |
Cash and cash equivalents | | | | | 30,727 | | | | | | 42,107 | | |
Restricted cash | | | | | 75,359 | | | | | | 65,167 | | |
Premiums receivable, net of allowance | | | | | 160,491 | | | | | | 112,158 | | |
Reinsurance recoverables | | | | | 542,895 | | | | | | 536,327 | | |
Ceded unearned premium | | | | | 189,241 | | | | | | 137,973 | | |
Deferred policy acquisition costs | | | | | 73,888 | | | | | | 59,456 | | |
Deferred income taxes | | | | | 41,891 | | | | | | 33,663 | | |
Goodwill and intangible assets, net | | | | | 90,237 | | | | | | 91,336 | | |
Other assets | | | | | 85,792 | | | | | | 90,666 | | |
Total assets | | | | $ | 2,308,406 | | | | | $ | 2,118,212 | | |
Liabilities and stockholders’ equity | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | |
Losses and loss adjustment expenses (“LAE”) | | | | $ | 1,062,000 | | | | | $ | 979,549 | | |
Unearned premiums | | | | | 464,291 | | | | | | 363,288 | | |
Deferred ceding commission | | | | | 34,931 | | | | | | 30,500 | | |
Reinsurance and premium payables | | | | | 135,056 | | | | | | 119,919 | | |
Funds held for others | | | | | 34,164 | | | | | | 29,587 | | |
Accounts payable and accrued liabilities | | | | | 49,558 | | | | | | 40,760 | | |
Notes payable | | | | | 50,000 | | | | | | 50,000 | | |
Subordinated debt, net of debt issuance costs | | | | | 78,589 | | | | | | 78,529 | | |
Total liabilities | | | | | 1,908,589 | | | | | | 1,692,132 | | |
Stockholders’ equity | | | | | | | | | | | | | |
Series A preferred stock, $0.01 par value; 2,000,000 shares authorized, 1,969,660 and 1,970,124 shares issued and outstanding, respectively | | | | | 20 | | | | | | 20 | | |
Common stock, $0.01 par value, 168,000,000 shares authorized, 16,778,263 and 16,763,069 shares issued, respectively | | | | | 168 | | | | | | 168 | | |
Treasury stock, $0.01 par value, 233,289 and 229,449 shares, respectively | | | | | (2) | | | | | | (2) | | |
Additional paid-in capital | | | | | 576,685 | | | | | | 575,159 | | |
Stock notes receivable | | | | | (6,912) | | | | | | (9,092) | | |
Accumulated other comprehensive (loss) income | | | | | (44,306) | | | | | | 4,640 | | |
Accumulated deficit | | | | | (125,836) | | | | | | (144,813) | | |
Total stockholders’ equity | | | | | 399,817 | | | | | | 426,080 | | |
Total liabilities and stockholders’ equity | | | | $ | 2,308,406 | | | | | $ | 2,118,212 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(In thousands, except for share and per share amounts) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net earned premiums | | | | $ | 158,048 | | | | | $ | 130,012 | | | | | $ | 445,851 | | | | | $ | 366,052 | | |
Commission and fee income | | | | | 1,362 | | | | | | 963 | | | | | | 3,652 | | | | | | 2,664 | | |
Net investment income | | | | | 5,988 | | | | | | 8,105 | | | | | | 31,667 | | | | | | 20,616 | | |
Net investment (losses) gains | | | | | (7,305) | | | | | | (1,217) | | | | | | (26,117) | | | | | | 10,021 | | |
Net realized gain on sale of business | | | | | — | | | | | | — | | | | | | — | | | | | | 3,453 | | |
Other income | | | | | — | | | | | | — | | | | | | — | | | | | | 107 | | |
Total revenues | | | | | 158,093 | | | | | | 137,863 | | | | | | 455,053 | | | | | | 402,913 | | |
Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | | | 111,746 | | | | | | 89,713 | | | | | | 293,536 | | | | | | 249,828 | | |
Underwriting, acquisition and insurance expenses | | | | | 47,340 | | | | | | 34,054 | | | | | | 132,258 | | | | | | 98,993 | | |
Impairment charges | | | | | — | | | | | | — | | | | | | — | | | | | | 2,821 | | |
Interest expense | | | | | 1,738 | | | | | | 1,155 | | | | | | 4,280 | | | | | | 3,465 | | |
Amortization expense | | | | | 387 | | | | | | 391 | | | | | | 1,160 | | | | | | 1,133 | | |
Total expenses | | | | | 161,211 | | | | | | 125,313 | | | | | | 431,234 | | | | | | 356,240 | | |
(Loss) income before income taxes | | | | | (3,118) | | | | | | 12,550 | | | | | | 23,819 | | | | | | 46,673 | | |
Income tax (benefit) expense | | | | | (719) | | | | | | 2,588 | | | | | | 4,842 | | | | | | 9,671 | | |
Net (loss) income | | | | | (2,399) | | | | | | 9,962 | | | | | | 18,977 | | | | | | 37,002 | | |
Net income attributable to participating securities | | | | | — | | | | | | 4,808 | | | | | | 9,124 | | | | | | 17,885 | | |
Net (loss) income attributable to common shareholders | | | | $ | (2,399) | | | | | $ | 5,154 | | | | | $ | 9,853 | | | | | $ | 19,117 | | |
Comprehensive (loss) income: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net (loss) income | | | | $ | (2,399) | | | | | $ | 9,962 | | | | | $ | 18,977 | | | | | $ | 37,002 | | |
Other comprehensive loss: | | | | | | | | | | | | | | | | | | | | | | | | | |
Unrealized gains and losses on investments: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net change in unrealized losses on investments, net of tax | | | | | (17,806) | | | | | | (1,648) | | | | | | (49,308) | | | | | | (4,721) | | |
Reclassification adjustment for gains on securities no longer held, net of tax | | | | | 31 | | | | | | 186 | | | | | | 362 | | | | | | 413 | | |
Total other comprehensive loss | | | | | (17,775) | | | | | | (1,462) | | | | | | (48,946) | | | | | | (4,308) | | |
Comprehensive (loss) income | | | | $ | (20,174) | | | | | $ | 8,500 | | | | | $ | (29,969) | | | | | $ | 32,694 | | |
Per share data: | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic (loss) earnings per share | | | | $ | (0.15) | | | | | $ | 0.32 | | | | | $ | 0.60 | | | | | $ | 1.17 | | |
Diluted (loss) earnings per share | | | | $ | (0.15) | | | | | $ | 0.31 | | | | | $ | 0.58 | | | | | $ | 1.14 | | |
Weighted-average common shares outstanding | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | | | 16,465,588 | | | | | | 16,341,010 | | | | | | 16,464,313 | | | | | | 16,297,668 | | |
Diluted | | | | | 16,465,588 | | | | | | 32,466,335 | | | | | | 32,598,669 | | | | | | 32,379,830 | | |
(In thousands) | | | Preferred Stock | | | Common Stock | | | Treasury Stock | | | Additional Paid-in Capital | | | Stock Notes Receivable | | | Accumulated Other Comprehensive (Loss) Income | | | Accumulated Deficit | | | Total | | ||||||||||||||||||||||||
Balance at December 31, 2021 | | | | $ | 20 | | | | | $ | 168 | | | | | $ | (2) | | | | | $ | 575,159 | | | | | $ | (9,092) | | | | | $ | 4,640 | | | | | $ | (144,813) | | | | | $ | 426,080 | | |
Employee equity transactions | | | | | — | | | | | | — | | | | | | — | | | | | | 502 | | | | | | 188 | | | | | | — | | | | | | — | | | | | | 690 | | |
Reclassification of stock notes receivable to other assets | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,942 | | | | | | — | | | | | | — | | | | | | 1,942 | | |
Net income | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 16,311 | | | | | | 16,311 | | |
Other comprehensive loss, net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (16,404) | | | | | | — | | | | | | (16,404) | | |
Balance at March 31, 2022 | | | | $ | 20 | | | | | $ | 168 | | | | | $ | (2) | | | | | $ | 575,661 | | | | | $ | (6,962) | | | | | $ | (11,764) | | | | | $ | (128,502) | | | | | $ | 428,619 | | |
Employee equity transactions | | | | | — | | | | | | — | | | | | | — | | | | | | 670 | | | | | | 20 | | | | | | — | | | | | | — | | | | | | 690 | | |
Net income | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,065 | | | | | | 5,065 | | |
Other comprehensive loss, net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (14,767) | | | | | | — | | | | | | (14,767) | | |
Balance at June 30, 2022 | | | | $ | 20 | | | | | $ | 168 | | | | | $ | (2) | | | | | $ | 576,331 | | | | | $ | (6,942) | | | | | $ | (26,531) | | | | | $ | (123,437) | | | | | $ | 419,607 | | |
Employee equity transactions | | | | | — | | | | | | — | | | | | | — | | | | | | 354 | | | | | | 30 | | | | | | — | | | | | | — | | | | | | 384 | | |
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,399) | | | | | | (2,399) | | |
Other comprehensive loss, net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (17,775) | | | | | | — | | | | | | (17,775) | | |
Balance at September 30, 2022 | | | | $ | 20 | | | | | $ | 168 | | | | | $ | (2) | | | | | $ | 576,685 | | | | | $ | (6,912) | | | | | $ | (44,306) | | | | | $ | (125,836) | | | | | $ | 399,817 | | |
(In thousands) | | | Common Stock | | | Treasury Stock | | | Additional Paid-in Capital | | | Stock Notes Receivable | | | Accumulated Other Comprehensive (Loss) Income | | | Accumulated Deficit | | | Total | | |||||||||||||||||||||
Balance at December 31, 2020 | | | | $ | 168 | | | | | $ | (4) | | | | | $ | 476,482 | | | | | $ | (2,510) | | | | | $ | 12,216 | | | | | $ | (183,130) | | | | | $ | 303,222 | | |
Employee equity transactions | | | | | — | | | | | | 2 | | | | | | 385 | | | | | | 344 | | | | | | — | | | | | | — | | | | | | 731 | | |
Net income | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,920 | | | | | | 14,920 | | |
Other comprehensive loss, net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (4,408) | | | | | | — | | | | | | (4,408) | | |
Balance at March 31, 2021 | | | | $ | 168 | | | | | $ | (2) | | | | | $ | 476,867 | | | | | $ | (2,166) | | | | | $ | 7,808 | | | | | $ | (168,210) | | | | | $ | 314,465 | | |
Employee equity transactions | | | | | — | | | | | | — | | | | | | 408 | | | | | | — | | | | | | — | | | | | | — | | | | | | 408 | | |
Net income | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 12,120 | | | | | | 12,120 | | |
Other comprehensive income, net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,562 | | | | | | — | | | | | | 1,562 | | |
Balance at June 30, 2021 | | | | $ | 168 | | | | | $ | (2) | | | | | $ | 477,275 | | | | | $ | (2,166) | | | | | $ | 9,370 | | | | | $ | (156,090) | | | | | $ | 328,555 | | |
Employee equity transactions | | | | | — | | | | | | — | | | | | | 271 | | | | | | 45 | | | | | | — | | | | | | — | | | | | | 316 | | |
Net income | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 9,962 | | | | | | 9,962 | | |
Other comprehensive loss, net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,462) | | | | | | — | | | | | | (1,462) | | |
Balance at September 30, 2021 | | | | $ | 168 | | | | | $ | (2) | | | | | $ | 477,546 | | | | | $ | (2,121) | | | | | $ | 7,908 | | | | | $ | (146,128) | | | | | $ | 337,371 | | |
| | | Nine months ended September 30, | | |||||||||
(in thousands) | | | 2022 | | | 2021 | | ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net income | | | | $ | 18,977 | | | | | $ | 37,002 | | |
Adjustments to reconcile net income to net cash provided by operating activities | | | | | 105,936 | | | | | | 100,242 | | |
Net cash provided by operating activities | | | | | 124,913 | | | | | | 137,244 | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Purchase of fixed maturity securities, available-for-sale | | | | | (211,097) | | | | | | (219,340) | | |
Purchase of illiquid investments | | | | | (4,431) | | | | | | (23,783) | | |
Purchase of equity securities | | | | | (49,018) | | | | | | (51,328) | | |
Purchase of business | | | | | — | | | | | | (10,554) | | |
(Investment in) proceeds from direct and indirect loans | | | | | (13,134) | | | | | | 2,864 | | |
Purchase of property and equipment | | | | | (834) | | | | | | (1,942) | | |
Sales and maturities of investment securities | | | | | 76,765 | | | | | | 94,315 | | |
Distributions from equity method investments | | | | | 2,052 | | | | | | 1,187 | | |
Change in short-term investments | | | | | 59,363 | | | | | | 52,132 | | |
Receivable for securities sold | | | | | 3,273 | | | | | | 1,812 | | |
Cash provided by (used in) deposit accounting | | | | | 8,780 | | | | | | (6,133) | | |
Other, net | | | | | — | | | | | | 45 | | |
Net cash used in investment activities | | | | | (128,281) | | | | | | (160,725) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Employee share purchases | | | | | 2,180 | | | | | | 1,380 | | |
Net cash provided by financing activities | | | | | 2,180 | | | | | | 1,380 | | |
Net decrease in cash and cash equivalents and restricted cash | | | | | (1,188) | | | | | | (22,101) | | |
Cash and cash equivalents and restricted cash at beginning of period | | | | | 107,274 | | | | | | 113,623 | | |
Cash and cash equivalents and restricted cash at end of period | | | | $ | 106,086 | | | | | $ | 91,522 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | |
Cash paid for interest | | | | $ | 3,860 | | | | | $ | 4,669 | | |
(In thousands) | | | Gross Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Loss | | | Fair Value | | ||||||||||||
September 30, 2022 | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available-for-sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government securities | | | | $ | 44,593 | | | | | $ | 241 | | | | | $ | (1,576) | | | | | $ | 43,258 | | |
Corporate securities and miscellaneous | | | | | 239,869 | | | | | | 162 | | | | | | (21,795) | | | | | | 218,236 | | |
Municipal securities | | | | | 67,390 | | | | | | 9 | | | | | | (7,997) | | | | | | 59,402 | | |
Residential mortgage-backed securities | | | | | 120,518 | | | | | | — | | | | | | (16,123) | | | | | | 104,395 | | |
Commercial mortgage-backed securities | | | | | 38,912 | | | | | | — | | | | | | (3,318) | | | | | | 35,594 | | |
Asset-backed securities | | | | | 107,374 | | | | | | 8 | | | | | | (5,694) | | | | | | 101,688 | | |
Total fixed maturity securities, available-for-sale | | | | $ | 618,656 | | | | | $ | 420 | | | | | $ | (56,503) | | | | | $ | 562,573 | | |
Fixed maturity securities, held-to-maturity: | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset-backed securities | | | | $ | 51,857 | | | | | $ | — | | | | | $ | (4,561) | | | | | $ | 47,296 | | |
Total fixed maturity securities, held-to-maturity | | | | $ | 51,857 | | | | | $ | — | | | | | $ | (4,561) | | | | | $ | 47,296 | | |
(In thousands) | | | Gross Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Loss | | | Fair Value | | ||||||||||||
Equity securities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stocks | | | | $ | 51,172 | | | | | $ | 5,693 | | | | | $ | (6,593) | | | | | $ | 50,272 | | |
Preferred stocks | | | | | 11,768 | | | | | | 42 | | | | | | (2,376) | | | | | | 9,434 | | |
Mutual funds | | | | | 53,898 | | | | | | 871 | | | | | | (4,835) | | | | | | 49,934 | | |
Total equity securities | | | | $ | 116,838 | | | | | $ | 6,606 | | | | | $ | (13,804) | | | | | $ | 109,640 | | |
|
(In thousands) | | | Gross Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Loss | | | Fair Value | | | ||||||||||||||
December 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Fixed maturity securities, available-for-sale: | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
U.S. government securities | | | | $ | 48,816 | | | | | $ | 716 | | | | | $ | (269) | | | | | $ | 49,263 | | | | ||
Corporate securities and miscellaneous | | | | | 151,053 | | | | | | 3,698 | | | | | | (588) | | | | | | 154,163 | | | | ||
Municipal securities | | | | | 53,179 | | | | | | 3,799 | | | | | | (36) | | | | | | 56,942 | | | | ||
Residential mortgage-backed securities | | | | | 103,758 | | | | | | 1,232 | | | | | | (1,255) | | | | | | 103,735 | | | | ||
Commercial mortgage-backed securities | | | | | 14,634 | | | | | | 38 | | | | | | (188) | | | | | | 14,484 | | | | ||
Asset-backed securities | | | | | 81,038 | | | | | | 226 | | | | | | (1,500) | | | | | | 79,764 | | | | ||
Total fixed maturity securities, available-for-sale | | | | $ | 452,478 | | | | | $ | 9,709 | | | | | $ | (3,836) | | | | | $ | 458,351 | | | | ||
Fixed maturity securities, held-to-maturity: | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Asset-backed securities | | | | $ | 47,117 | | | | | $ | — | | | | | $ | — | | | | | $ | 47,117 | | | | ||
Total fixed maturity securities, held-to-maturity | | | | $ | 47,117 | | | | | $ | — | | | | | $ | — | | | | | $ | 47,117 | | | | ||
Equity securities: | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Common stocks | | | | $ | 47,379 | | | | | $ | 13,887 | | | | | $ | (2,841) | | | | | $ | 58,425 | | | | ||
Preferred stocks | | | | | 17,821 | | | | | | 349 | | | | | | (4) | | | | | | 18,166 | | | | | |
Mutual funds | | | | | 33,786 | | | | | | 7,611 | | | | | | (17) | | | | | | 41,380 | | | | | |
Total equity securities | | | | $ | 98,986 | | | | | $ | 21,847 | | | | | $ | (2,862) | | | | | $ | 117,971 | | | |
| | | September 30, 2022 | | |||||||||
(In thousands) | | | Amortized Cost | | | Fair Value | | ||||||
Due in less than one year | | | | $ | 17,260 | | | | | $ | 17,164 | | |
Due after one year through five years | | | | | 186,306 | | | | | | 174,115 | | |
Due after five years through ten years | | | | | 99,243 | | | | | | 86,477 | | |
Due after ten years | | | | | 49,043 | | | | | | 43,140 | | |
Mortgage-backed securities | | | | | 159,430 | | | | | | 139,989 | | |
Asset-backed securities | | | | | 107,374 | | | | | | 101,688 | | |
Total | | | | $ | 618,656 | | | | | $ | 562,573 | | |
| | | Less than 12 Months | | | 12 Months or More | | | Total | | |||||||||||||||||||||||||||
(In thousands) | | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | ||||||||||||||||||
September 30, 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available-for-sale: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government securities | | | | $ | 16,271 | | | | | $ | (224) | | | | | $ | 18,552 | | | | | $ | (1,352) | | | | | $ | 34,823 | | | | | $ | (1,576) | | |
Corporate securities and miscellaneous | | | | | 197,717 | | | | | | (19,370) | | | | | | 16,962 | | | | | | (2,425) | | | | | | 214,679 | | | | | | (21,795) | | |
Municipal securities | | | | | 58,689 | | | | | | (7,869) | | | | | | 496 | | | | | | (128) | | | | | | 59,185 | | | | | | (7,997) | | |
Residential mortgage-backed securities | | | | | 71,084 | | | | | | (8,938) | | | | | | 32,630 | | | | | | (7,185) | | | | | | 103,714 | | | | | | (16,123) | | |
Commercial mortgage-backed securities | | | | | 29,688 | | | | | | (1,948) | | | | | | 5,732 | | | | | | (1,370) | | | | | | 35,420 | | | | | | (3,318) | | |
Asset-backed securities | | | | | 66,764 | | | | | | (4,652) | | | | | | 13,164 | | | | | | (1,042) | | | | | | 79,928 | | | | | | (5,694) | | |
Total fixed maturity securities, available-for- sale | | | | | 440,213 | | | | | | (43,001) | | | | | | 87,536 | | | | | | (13,502) | | | | | | 527,749 | | | | | | (56,503) | | |
Fixed maturity securities, held-to-maturity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset-backed securities | | | | | 47,296 | | | | | | (4,561) | | | | | | — | | | | | | — | | | | | | 47,296 | | | | | | (4,561) | | |
Total fixed maturity securities, held-to-maturity | | | | | 47,296 | | | | | | (4,561) | | | | | | — | | | | | | — | | | | | | 47,296 | | | | | | (4,561) | | |
Equity securities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stocks | | | | | 16,449 | | | | | | (4,640) | | | | | | 6,554 | | | | | | (1,953) | | | | | | 23,003 | | | | | | (6,593) | | |
Preferred stocks | | | | | 8,046 | | | | | | (2,253) | | | | | | 247 | | | | | | (123) | | | | | | 8,293 | | | | | | (2,376) | | |
Mutual funds | | | | | 40,486 | | | | | | (4,827) | | | | | | 74 | | | | | | (8) | | | | | | 40,560 | | | | | | (4,835) | | |
Total equity securities | | | | | 64,981 | | | | | | (11,720) | | | | | | 6,875 | | | | | | (2,084) | | | | | | 71,856 | | | | | | (13,804) | | |
Total | | | | $ | 552,490 | | | | | $ | (59,282) | | | | | $ | 94,411 | | | | | $ | (15,586) | | | | | $ | 646,901 | | | | | $ | (74,868) | | |
| | | Less than 12 Months | | | 12 Months or More | | | Total | | |||||||||||||||||||||||||||
(In thousands) | | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | ||||||||||||||||||
December 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available-for-sale: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government securities | | | | $ | 19,819 | | | | | $ | (267) | | | | | $ | 108 | | | | | $ | (2) | | | | | $ | 19,927 | | | | | $ | (269) | | |
Corporate securities and miscellaneous | | | | | 47,308 | | | | | | (588) | | | | | | — | | | | | | — | | | | | | 47,308 | | | | | | (588) | | |
Municipal securities | | | | | 4,549 | | | | | | (36) | | | | | | — | | | | | | — | | | | | | 4,549 | | | | | | (36) | | |
Residential mortgage-backed securities | | | | | 72,672 | | | | | | (1,252) | | | | | | 145 | | | | | | (3) | | | | | | 72,817 | | | | | | (1,255) | | |
Commercial mortgage-backed securities | | | | | 12,653 | | | | | | (175) | | | | | | 241 | | | | | | (12) | | | | | | 12,894 | | | | | | (187) | | |
Asset-backed securities | | | | | 34,266 | | | | | | (1,463) | | | | | | 1,256 | | | | | | (38) | | | | | | 35,522 | | | | | | (1,501) | | |
Total fixed maturity securities, available-for-sale | | | | | 191,267 | | | | | | (3,781) | | | | | | 1,750 | | | | | | (55) | | | | | | 193,017 | | | | | | (3,836) | | |
Equity securities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stocks | | | | $ | 2,493 | | | | | $ | (1,066) | | | | | $ | 7,885 | | | | | $ | (1,775) | | | | | $ | 10,378 | | | | | $ | (2,841) | | |
Preferred stocks | | | | | 1,353 | | | | | | (4) | | | | | | — | | | | | | — | | | | | | 1,353 | | | | | | (4) | | |
Mutual funds | | | | | 5,441 | | | | | | (17) | | | | | | — | | | | | | — | | | | | | 5,441 | | | | | | (17) | | |
Total equity securities | | | | | 9,287 | | | | | | (1,087) | | | | | | 7,885 | | | | | | (1,775) | | | | | | 17,172 | | | | | | (2,862) | | |
Total | | | | $ | 200,554 | | | | | $ | (4,868) | | | | | $ | 9,635 | | | | | $ | (1,830) | | | | | $ | 210,189 | | | | | $ | (6,698) | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(in thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Gross realized gains | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available-for sale | | | | $ | 64 | | | | | $ | 60 | | | | | $ | 174 | | | | | $ | 425 | | |
Equity securities | | | | | 605 | | | | | | 211 | | | | | | 3,481 | | | | | | 1,517 | | |
Other | | | | | — | | | | | | — | | | | | | 36 | | | | | | 13 | | |
Total | | | | | 669 | | | | | | 271 | | | | | | 3,691 | | | | | | 1,955 | | |
Gross realized losses | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available-for sale | | | | | (288) | | | | | | (266) | | | | | | (781) | | | | | | (893) | | |
Equity securities | | | | | (1,388) | | | | | | (9) | | | | | | (2,825) | | | | | | (105) | | |
Other | | | | | (1) | | | | | | — | | | | | | (22) | | | | | | (4) | | |
Total | | | | | (1,677) | | | | | | (275) | | | | | | (3,628) | | | | | | (1,002) | | |
Net unrealized (losses) gains on securities still held | | | | | | | | | | | | | | | | | | | | | | | | | |
Equity securities | | | | | (6,297) | | | | | | (1,213) | | | | | | (26,180) | | | | | | 9,068 | | |
Net investment (losses) gains | | | | $ | (7,305) | | | | | $ | (1,217) | | | | | $ | (26,117) | | | | | $ | 10,021 | | |
| | | Nine months ended September 30, | | |||||||||
(in thousands) | | | 2022 | | | 2021 | | ||||||
Fixed maturity securities, available-for sale | | | | $ | 9,646 | | | | | $ | 9,528 | | |
Equity securities | | | | | 32,356 | | | | | | 29,342 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(in thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Income: | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available- for sale | | | | $ | 4,912 | | | | | $ | 2,675 | | | | | $ | 12,103 | | | | | $ | 7,013 | | |
Fixed maturity securities, held-to-maturity | | | | | 805 | | | | | | 1,292 | | | | | | 4,147 | | | | | | 3,609 | | |
Equity securities | | | | | 912 | | | | | | 626 | | | | | | 2,650 | | | | | | 1,849 | | |
Equity method investments | | | | | (3,861) | | | | | | 2,680 | | | | | | 7,615 | | | | | | 8,721 | | |
Mortgage loans | | | | | 1,275 | | | | | | 232 | | | | | | 3,109 | | | | | | 742 | | |
Indirect loans | | | | | 3,104 | | | | | | 1,937 | | | | | | 7,783 | | | | | | 1,994 | | |
Short-term investments and cash | | | | | 505 | | | | | | 27 | | | | | | 716 | | | | | | 117 | | |
Other | | | | | (135) | | | | | | 281 | | | | | | (153) | | | | | | 596 | | |
Total investment income | | | | | 7,517 | | | | | | 9,750 | | | | | | 37,970 | | | | | | 24,641 | | |
Investment expenses | | | | | (1,529) | | | | | | (1,645) | | | | | | (6,303) | | | | | | (4,025) | | |
Net investment income | | | | $ | 5,988 | | | | | $ | 8,105 | | | | | $ | 31,667 | | | | | $ | 20,616 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(in thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Fixed maturity securities | | | | $ | (22,500) | | | | | $ | (1,610) | | | | | $ | (61,957) | | | | | $ | (5,155) | | |
Deferred income taxes | | | | | 4,725 | | | | | | 148 | | | | | | 13,011 | | | | | | 847 | | |
Total | | | | $ | (17,775) | | | | | $ | (1,462) | | | | | $ | (48,946) | | | | | $ | (4,308) | | |
| | | September 30, 2022 | | | December 31, 2021 | | ||||||||||||||||||
(in thousands) | | | Carrying Value | | | Fair Value | | | Carrying Value | | | Fair Value | | ||||||||||||
Assets | | | | | | ||||||||||||||||||||
Fixed maturity securities, available-for-sale | | | | $ | 562,573 | | | | | $ | 562,573 | | | | | $ | 458,351 | | | | | $ | 458,351 | | |
Fixed maturity securities, held-to-maturity | | | | | 51,857 | | | | | | 47,296 | | | | | | 47,117 | | | | | | 47,117 | | |
Equity securities | | | | | 109,640 | | | | | | 109,640 | | | | | | 117,971 | | | | | | 117,971 | | |
Mortgage loans | | | | | 52,072 | | | | | | 51,626 | | | | | | 29,531 | | | | | | 29,264 | | |
Short-term investments | | | | | 104,915 | | | | | | 104,915 | | | | | | 164,278 | | | | | | 164,278 | | |
Cash and cash equivalents | | | | | 30,727 | | | | | | 30,727 | | | | | | 42,107 | | | | | | 42,107 | | |
Restricted cash | | | | | 75,359 | | | | | | 75,359 | | | | | | 65,167 | | | | | | 65,167 | | |
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Notes payable | | | | $ | 50,000 | | | | | $ | 50,000 | | | | | $ | 50,000 | | | | | $ | 50,000 | | |
Subordinated debt | | | | | 78,589 | | | | | | 79,040 | | | | | | 78,529 | | | | | | 83,235 | | |
(in thousands) | | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
September 30, 2022 | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available-for-sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government securities | | | | $ | 43,258 | | | | | $ | — | | | | | $ | — | | | | | $ | 43,258 | | |
Corporate securities and miscellaneous | | | | | — | | | | | | 218,236 | | | | | | — | | | | | | 218,236 | | |
Municipal securities | | | | | — | | | | | | 59,402 | | | | | | — | | | | | | 59,402 | | |
Residential mortgage-backed securities | | | | | — | | | | | | 104,395 | | | | | | — | | | | | | 104,395 | | |
Commercial mortgage-backed securities | | | | | — | | | | | | 35,594 | | | | | | — | | | | | | 35,594 | | |
Asset-backed securities | | | | | — | | | | | | 101,688 | | | | | | — | | | | | | 101,688 | | |
Total fixed maturity securities, available-for-sale | | | | | 43,258 | | | | | | 519,315 | | | | | | — | | | | | | 562,573 | | |
Common stocks: | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer discretionary | | | | | 2,039 | | | | | | — | | | | | | — | | | | | | 2,039 | | |
Consumer staples | | | | | 10,092 | | | | | | — | | | | | | — | | | | | | 10,092 | | |
Energy | | | | | 2,611 | | | | | | — | | | | | | — | | | | | | 2,611 | | |
Finance | | | | | 22,264 | | | | | | — | | | | | | — | | | | | | 22,264 | | |
Industrial | | | | | 7,606 | | | | | | — | | | | | | — | | | | | | 7,606 | | |
Information technology | | | | | 1,582 | | | | | | — | | | | | | — | | | | | | 1,582 | | |
Materials | | | | | 2,449 | | | | | | — | | | | | | — | | | | | | 2,449 | | |
Other | | | | | 1,629 | | | | | | — | | | | | | — | | | | | | 1,629 | | |
Total common stocks | | | | | 50,272 | | | | | | — | | | | | | — | | | | | | 50,272 | | |
Preferred stocks: | | | | | | | | | | | | | | | | | | | | | | | | | |
Finance | | | | | — | | | | | | 8,114 | | | | | | — | | | | | | 8,114 | | |
Industrial | | | | | — | | | | | | 690 | | | | | | — | | | | | | 690 | | |
Other | | | | | — | | | | | | 630 | | | | | | — | | | | | | 630 | | |
Total preferred stocks | | | | | — | | | | | | 9,434 | | | | | | — | | | | | | 9,434 | | |
Mutual stocks: | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed income | | | | | 4,998 | | | | | | — | | | | | | — | | | | | | 4,998 | | |
Equity | | | | | 44,484 | | | | | | — | | | | | | — | | | | | | 44,484 | | |
Commodity | | | | | 452 | | | | | | — | | | | | | — | | | | | | 452 | | |
Total mutual funds | | | | | 49,934 | | | | | | — | | | | | | — | | | | | | 49,934 | | |
Total equity securities | | | | | 100,206 | | | | | | 9,434 | | | | | | — | | | | | | 109,640 | | |
Short-term investments | | | | | 104,915 | | | | | | — | | | | | | — | | | | | | 104,915 | | |
Total assets measured at fair value | | | | $ | 248,379 | | | | | $ | 528,749 | | | | | $ | — | | | | | $ | 777,128 | | |
(in thousands) | | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
December 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available-for-sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government securities | | | | $ | 49,263 | | | | | $ | — | | | | | $ | — | | | | | $ | 49,263 | | |
Corporate securities and miscellaneous | | | | | — | | | | | | 154,163 | | | | | | — | | | | | | 154,163 | | |
Municipal securities | | | | | — | | | | | | 56,942 | | | | | | — | | | | | | 56,942 | | |
Residential mortgage-backed securities | | | | | — | | | | | | 103,735 | | | | | | — | | | | | | 103,735 | | |
Commercial mortgage-backed securities | | | | | — | | | | | | 14,484 | | | | | | — | | | | | | 14,484 | | |
Asset-backed securities | | | | | — | �� | | | | | 79,764 | | | | | | — | | | | | | 79,764 | | |
Total fixed maturity securities, available-for-sale | | | | | 49,263 | | | | | | 409,088 | | | | | | — | | | | | | 458,351 | | |
Common stocks: | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer discretionary | | | | | 2,102 | | | | | | — | | | | | | — | | | | | | 2,102 | | |
Consumer staples | | | | | 13,643 | | | | | | — | | | | | | — | | | | | | 13,643 | | |
Energy | | | | | 2,781 | | | | | | — | | | | | | — | | | | | | 2,781 | | |
Finance | | | | | 24,657 | | | | | | — | | | | | | — | | | | | | 24,657 | | |
Industrial | | | | | 8,806 | | | | | | — | | | | | | — | | | | | | 8,806 | | |
Information technology | | | | | 2,408 | | | | | | — | | | | | | — | | | | | | 2,408 | | |
Materials | | | | | 3,160 | | | | | | — | | | | | | — | | | | | | 3,160 | | |
Other | | | | | 868 | | | | | | — | | | | | | — | | | | | | 868 | | |
Total common stocks | | | | | 58,425 | | | | | | — | | | | | | — | | | | | | 58,425 | | |
Preferred stocks: | | | | | | | | | | | | | | | | | | | | | | | | | |
Finance | | | | | — | | | | | | 17,018 | | | | | | — | | | | | | 17,018 | | |
Other | | | | | — | | | | | | 1,148 | | | | | | — | | | | | | 1,148 | | |
Total preferred stocks | | | | | — | | | | | | 18,166 | | | | | | — | | | | | | 18,166 | | |
Mutual stocks: | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed income | | | | | 5,374 | | | | | | — | | | | | | — | | | | | | 5,374 | | |
Equity | | | | | 35,471 | | | | | | — | | | | | | — | | | | | | 35,471 | | |
Commodity | | | | | 535 | | | | | | — | | | | | | — | | | | | | 535 | | |
Total mutual funds | | | | | 41,380 | | | | | | — | | | | | | — | | | | | | 41,380 | | |
Total equity securities | | | | | 99,805 | | | | | | 18,166 | | | | | | — | | | | | | 117,971 | | |
Short-term investments | | | | | 164,278 | | | | | | — | | | | | | — | | | | | | 164,278 | | |
Total assets measured at fair value | | | | $ | 313,346 | | | | | $ | 427,254 | | | | | $ | — | | | | | $ | 740,600 | | |
(in thousands) | | | September 30, 2022 | | | December 31, 2021 | | ||||||
Retail | | | | $ | 13,338 | | | | | $ | 10,593 | | |
Industrial | | | | | 6,323 | | | | | | 6,314 | | |
Commercial | | | | | 15,298 | | | | | | 6,298 | | |
Multi-family | | | | | 9,020 | | | | | | 3,296 | | |
Office | | | | | 3,184 | | | | | | 1,691 | | |
Hospitality | | | | | 4,909 | | | | | | 1,339 | | |
| | | | $ | 52,072 | | | | | $ | 29,531 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(in thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Retail | | | | $ | 337 | | | | | $ | — | | | | | $ | 846 | | | | | $ | — | | |
Industrial | | | | | 181 | | | | | | — | | | | | | 433 | | | | | | — | | |
Commercial | | | | | 320 | | | | | | 28 | | | | | | 707 | | | | | | 28 | | |
Multi-family | | | | | 237 | | | | | | 70 | | | | | | 553 | | | | | | 73 | | |
Office | | | | | 84 | | | | | | 23 | | | | | | 306 | | | | | | 23 | | |
Land | | | | | — | | | | | | 63 | | | | | | — | | | | | | 166 | | |
Hospitality | | | | | 116 | | | | | | 48 | | | | | | 264 | | | | | | 452 | | |
| | | | $ | 1,275 | | | | | $ | 232 | | | | | $ | 3,109 | | | | | $ | 742 | | |
(In thousands) | | | September 30, 2022 | | | December 31, 2021 | | ||||||
Dowling Capital Partners LP units | | | | $ | 1,986 | | | | | $ | 2,416 | | |
RISCOM | | | | | 4,565 | | | | | | 3,366 | | |
Arena Special Opportunities Fund, LP units | | | | | 45,563 | | | | | | 41,763 | | |
Arena Rated Product LP units | | | | | 9,394 | | | | | | 5,692 | | |
Hudson Ventures Fund 2 LP units | | | | | 3,397 | | | | | | 1,913 | | |
Universa Black Swan LP units | | | | | 1,992 | | | | | | 4,354 | | |
JVM Funds LLC units | | | | | 22,354 | | | | | | 24,000 | | |
| | | | $ | 89,251 | | | | | $ | 83,504 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(In thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Dowling Capital Partners LP units | | | | $ | (31) | | | | | $ | 305 | | | | | $ | 524 | | | | | $ | 393 | | |
RISCOM | | | | | 373 | | | | | | 332 | | | | | | 1,199 | | | | | | 598 | | |
Arena Special Opportunities Fund, LP units | | | | | 483 | | | | | | 1,400 | | | | | | 4,729 | | | | | | 3,627 | | |
Arena Rated Product LP units | | | | | (4,068) | | | | | | 949 | | | | | | 3,702 | | | | | | 4,409 | | |
JVM Funds LLC | | | | | 220 | | | | | | — | | | | | | (548) | | | | | | — | | |
Hudson Ventures Fund 2 LP units | | | | | (26) | | | | | | (19) | | | | | | 371 | | | | | | (19) | | |
Universa Black Swan LP units | | | | | (812) | | | | | | (287) | | | | | | (2,362) | | | | | | (287) | | |
| | | | $ | (3,861) | | | | | $ | 2,680 | | | | | $ | 7,615 | | | | | $ | 8,721 | | |
(In thousands) | | | September 30, 2022 | | | December 31, 2021 | | ||||||
Dowling Capital Partners LP units | | | | $ | 386 | | | | | $ | 368 | | |
Hudson Ventures Fund 2 LP units | | | | | 1,942 | | | | | | 3,063 | | |
| | | | $ | 2,328 | | | | | $ | 3,431 | | |
(In thousands) | | | September 30, 2022 | | | December 31, 2021 | | ||||||
Investment in RISCOM: | | | | | | | | | | | | | |
Underlying equity | | | | $ | 2,760 | | | | | $ | 1,378 | | |
Difference | | | | | 1,805 | | | | | | 1,988 | | |
Recorded investment balance | | | | $ | 4,565 | | | | | $ | 3,366 | | |
| | | September 30, 2022 | | | December 31, 2021 | | ||||||||||||||||||
(In thousands) | | | Carrying Value | | | Unfunded Commitment | | | Carrying Value | | | Unfunded Commitment | | ||||||||||||
SMA1 | | | | $ | 40,573 | | | | | $ | — | | | | | $ | 33,100 | | | | | $ | — | | |
SMA2 | | | | | 3,679 | | | | | | — | | | | | | 10,855 | | | | | | 16,563 | | |
Investment in indirect loans and loan collateral | | | | $ | 44,252 | | | | | $ | — | | | | | $ | 43,955 | | | | | $ | 16,563 | | |
(In thousands) | | | September 30, 2022 | | | December 31, 2021 | | ||||||
Junior subordinated interest debentures, due September 15, 2036, payable quarterly | | | | | | | | | | | | | |
Principal | | | | $ | 59,794 | | | | | $ | 59,794 | | |
Less: Debt issuance costs | | | | | (669) | | | | | | (705) | | |
Unsecured subordinated notes, due May 24, 2039, interest payable quarterly | | | | | | | | | | | | | |
Principal | | | | | 20,000 | | | | | | 20,000 | | |
Less: Debt issuance costs | | | | | (536) | | | | | | (560) | | |
Subordinated debt, net of debt issuance costs | | | | $ | 78,589 | | | | | $ | 78,529 | | |
(In thousands) | | | September 30, 2022 | | | December 31, 2021 | | ||||||
Term loan, due December 31, 2024, interest payable quarterly | | | | $ | 50,000 | | | | | $ | 50,000 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(In thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Interest payments on term loan | | | | $ | 364 | | | | | $ | 221 | | | | | $ | 884 | | | | | $ | 221 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(In thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Interest payments on revolving line of credit | | | | $ | — | | | | | $ | 32 | | | | | $ | — | | | | | $ | 95 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(In thousands, except for effective tax rates) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Income tax (benefit) expense | | | | $ | (719) | | | | | $ | 2,588 | | | | | $ | 4,842 | | | | | $ | 9,671 | | |
Effective tax rate | | | | | 23.1% | | | | | | 20.6% | | | | | | 20.3% | | | | | | 20.7% | | |
(In thousands) | | | September 30, 2022 | | | September 30, 2021 | | ||||||
Reserves for losses and LAE, beginning of period | | | | $ | 979,549 | | | | | $ | 856,780 | | |
Less: reinsurance recoverable on unpaid claims, beginning of period | | | | | (381,338) | | | | | | (375,182) | | |
Reserves for losses and LAE, beginning of period, net of reinsurance | | | | | 598,211 | | | | | | 481,598 | | |
Incurred, net of reinsurance, related to: | | | | | | | | | | | | | |
Current period | | | | | 284,265 | | | | | | 249,828 | | |
Prior years | | | | | 14,385 | | | | | | — | | |
Total incurred, net of reinsurance | | | | | 298,650 | | | | | | 249,828 | | |
Paid, net of reinsurance, related to: | | | | | | | | | | | | | |
Current period | | | | | 62,864 | | | | | | 43,817 | | |
Prior years | | | | | 158,749 | | | | | | 132,412 | | |
Total paid | | | | | 221,613 | | | | | | 176,229 | | |
Net reserves for losses and LAE, end of period | | | | | 675,248 | | | | | | 555,197 | | |
Plus: reinsurance recoverable on unpaid claims, end of period | | | | | 386,752 | | | | | | 400,776 | | |
Reserves for losses and LAE, end of period | | | | $ | 1,062,000 | | | | | $ | 955,973 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(In thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
SUA commission revenue | | | | $ | 967 | | | | | $ | 574 | | | | | $ | 2,626 | | | | | $ | 1,502 | | |
SUA fee income | | | | | 280 | | | | | | 286 | | | | | | 785 | | | | | | 844 | | |
Other | | | | | 115 | | | | | | 103 | | | | | | 241 | | | | | | 318 | | |
Total commission and fee income | | | | $ | 1,362 | | | | | $ | 963 | | | | | $ | 3,652 | | | | | $ | 2,664 | | |
(In thousands) | | | September 30, 2022 | | | December 31, 2021 | | ||||||
Contract asset | | | | $ | 1,686 | | | | | $ | 1,209 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(In thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Amortization of policy acquisition costs | | | | $ | 17,379 | | | | | $ | 11,433 | | | | | $ | 45,514 | | | | | $ | 30,657 | | |
Other operating and general expenses | | | | | 29,961 | | | | | | 22,621 | | | | | | 86,744 | | | | | | 68,336 | | |
Underwriting, acquisition and insurance expenses | | | | $ | 47,340 | | | | | $ | 34,054 | | | | | $ | 132,258 | | | | | $ | 98,993 | | |
| | | Three months ended September 30, | | |||||||||||||||||||||
| | | 2022 | | | 2021 | | ||||||||||||||||||
(In thousands) | | | Written | | | Earned | | | Written | | | Earned | | ||||||||||||
Direct premiums | | | | $ | 246,339 | | | | | $ | 242,727 | | | | | $ | 200,484 | | | | | $ | 209,415 | | |
Assumed premiums | | | | | 23,910 | | | | | | 30,020 | | | | | | 14,657 | | | | | | 26,754 | | |
Ceded premiums | | | | | (98,795) | | | | | | (114,699) | | | | | | (84,382) | | | | | | (106,157) | | |
Net premiums | | | | $ | 171,454 | | | | | $ | 158,048 | | | | | $ | 130,759 | | | | | $ | 130,012 | | |
Ceded losses and LAE incurred | | | | | | | | | | $ | 60,878 | | | | | | | | | | | $ | 75,534 | | |
| | | Nine months ended September 30, | | |||||||||||||||||||||
| | | 2022 | | | 2021 | | ||||||||||||||||||
(In thousands) | | | Written | | | Earned | | | Written | | | Earned | | ||||||||||||
Direct premiums | | | | $ | 771,668 | | | | | $ | 695,567 | | | | | $ | 629,410 | | | | | $ | 607,510 | | |
Assumed premiums | | | | | 107,451 | | | | | | 82,549 | | | | | | 86,266 | | | | | | 77,498 | | |
Ceded premiums | | | | | (383,532) | | | | | | (332,265) | | | | | | (327,513) | | | | | | (318,956) | | |
Net premiums | | | | $ | 495,587 | | | | | $ | 445,851 | | | | | $ | 388,163 | | | | | $ | 366,052 | | |
Ceded losses and LAE incurred | | | | | | | | | | $ | 190,465 | | | | | | | | | | | $ | 188,532 | | |
(In thousands) | | | September 30, 2022 | | | December 31, 2021 | | ||||||
Unpaid losses and loss adjustment expenses ceded | | | | $ | 386,752 | | | | | $ | 381,338 | | |
Paid losses and loss adjustment expense ceded | | | | ��� | 113,354 | | | | | | 90,761 | | |
Loss portfolio transfer | | | | | 42,789 | | | | | | 64,228 | | |
Reinsurance recoverables | | | | $ | 542,895 | | | | | $ | 536,327 | | |
Ceded unearned premium | | | | $ | 189,241 | | | | | $ | 137,973 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(In thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Strengthening of reserves subject to the LPT | | | | $ | (14,385) | | | | | $ | — | | | | | $ | (14,385) | | | | | $ | — | | |
Reinsurance recoveries under the LPT | | | | | 5,114 | | | | | | — | | | | | | 5,114 | | | | | | — | | |
Pretax net impact of the LPT and strengthening of reserves subject to the LPT | | | | $ | (9,271) | | | | | $ | — | | | | | $ | (9,271) | | | | | $ | — | | |
| | | Weighted-Average Grant-Date Fair Value | | | Number of Common Shares | | ||||||
Non-vested at January 1, 2022 | | | | $ | 13.23 | | | | | | 375,643 | | |
Granted | | | | | 14.17 | | | | | | 198,842 | | |
Vested | | | | | 15.55 | | | | | | (126,978) | | |
Forfeited | | | | | 12.51 | | | | | | (10,547) | | |
Non-vested at September 30, 2022 | | | | $ | 12.54 | | | | | | 436,960 | | |
Non-vested at January 1, 2021 | | | | $ | 19.47 | | | | | | 84,671 | | |
Granted | | | | | 11.94 | | | | | | 328,690 | | |
Vested | | | | | 14.57 | | | | | | (6,764) | | |
Forfeited | | | | | 15.77 | | | | | | (31,123) | | |
Non-vested at September 30, 2021 | | | | $ | 13.28 | | | | | | 375,474 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(In thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Stock-based compensation expense (income) | | | | | | | | | | | | | | | | | | | | | | | | | |
Stock-based compensation expense | | | | $ | 549 | | | | | $ | 340 | | | | | $ | 1,721 | | | | | $ | 1,020 | | |
Forfeitures | | | | | (38) | | | | | | (35) | | | | | | (38) | | | | | | (352) | | |
Total | | | | $ | 511 | | | | | $ | 305 | | | | | $ | 1,683 | | | | | $ | 668 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(In thousands, except for share and per share amounts) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Numerator | | | | | | | | | | | | | | | | | | | | | | | | | |
Net (loss) income | | | | $ | (2,399) | | | | | $ | 9,962 | | | | | $ | 18,977 | | | | | $ | 37,002 | | |
Less: Undistributed income allocated to participating securities | | | | | — | | | | | | (4,808) | | | | | | (9,124) | | | | | | (17,885) | | |
Net (loss) income attributable to common shareholders (numerator for basic earnings per share) | | | | | (2,399) | | | | | | 5,154 | | | | | | 9,853 | | | | | | 19,117 | | |
Add back: Undistributed income allocated to participating securities | | | | | — | | | | | | 4,808 | | | | | | 9,124 | | | | | | 17,885 | | |
Net (loss) income (numerator for diluted earnings per share under the two-class method) | | | | $ | (2,399) | | | | | $ | 9,962 | | | | | $ | 18,977 | | | | | $ | 37,002 | | |
Denominator | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic weighted-average common shares | | | | | 16,465,588 | | | | | | 16,341,010 | | | | | | 16,464,313 | | | | | | 16,297,668 | | |
Unvested common shares | | | | | — | | | | | | 489 | | | | | | — | | | | | | 720 | | |
Preferred shares (if converted method) | | | | | — | | | | | | 15,247,539 | | | | | | 15,245,533 | | | | | | 15,247,540 | | |
Contingently issuable instruments (treasury stock method) | | | | | — | | | | | | 687,332 | | | | | | 518,727 | | | | | | 639,135 | | |
Market condition awards (contingently issuable) | | | | | — | | | | | | 38,024 | | | | | | 103,811 | | | | | | 38,024 | | |
Performance awards (contingently issuable) | | | | | — | | | | | | 21,348 | | | | | | 39,231 | | | | | | 22,839 | | |
Restricted stock units (treasury stock method) | | | | | — | | | | | | 130,593 | | | | | | 227,054 | | | | | | 133,904 | | |
Diluted weighted-average common share equivalents | | | | | 16,465,588 | | | | | | 32,466,335 | | | | | | 32,598,669 | | | | | | 32,379,830 | | |
Basic (loss) earnings per share | | | | $ | (0.15) | | | | | $ | 0.32 | | | | | $ | 0.60 | | | | | $ | 1.17 | | |
Diluted (loss) earnings per share | | | | $ | (0.15) | | | | | $ | 0.31 | | | | | $ | 0.58 | | | | | $ | 1.14 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
| | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Preferred shares (if converted method) | | | | | 15,247,437 | | | | | | — | | | | | | — | | | | | | — | | |
Contingently issuable instruments (treasury stock method) | | | | | 510,577 | | | | | | — | | | | | | 3,024 | | | | | | — | | |
Market condition awards (contingently issuable) | | | | | 112,454 | | | | | | — | | | | | | — | | | | | | — | | |
Performance awards (contingently issuable) | | | | | 42,411 | | | | | | — | | | | | | — | | | | | | — | | |
Restricted stock units (treasury stock method) | | | | | 252,180 | | | | | | — | | | | | | — | | | | | | — | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
| | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Common shares | | | | | 80,526 | | | | | | 210,376 | | | | | | 80,526 | | | | | | 210,376 | | |
Preferred shares, if converted | | | | | 1,059,602 | | | | | | 1,251,944 | | | | | | 1,059,602 | | | | | | 1,251,944 | | |
Total | | | | | 1,140,128 | | | | | | 1,462,320 | | | | | | 1,140,128 | | | | | | 1,462,320 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(In thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Management services agreement | | | | $ | 250 | | | | | $ | 125 | | | | | $ | 500 | | | | | $ | 375 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(In thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Net earned premium | | | | $ | 23,712 | | | | | $ | 19,829 | | | | | $ | 67,239 | | | | | $ | 56,717 | | |
Gross commission expense | | | | | 5,558 | | | | | | 5,205 | | | | | | 18,666 | | | | | | 16,590 | | |
(In thousands) | | | September 30, 2022 | | | December 31, 2021 | | ||||||
Premiums receivable | | | | $ | 12,985 | | | | | $ | 11,334 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(In thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Reinsurance premiums ceded | | | | $ | 10,965 | | | | | $ | 15,696 | | | | | $ | 53,201 | | | | | $ | 79,970 | | |
(In thousands) | | | September 30, 2022 | | | December 31, 2021 | | ||||||
Reinsurance recoverable, net of premium payables | | | | $ | 178,345 | | | | | $ | 168,847 | | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | ||||||||||||||||||
(In thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
Professional fees and reimbursements | | | | $ | 580 | | | | | $ | 679 | | | | | $ | 2,785 | | | | | $ | 2,995 | | |
| ||||||||
Barclays | | | Keefe, Bruyette & Woods A Stifel Company | |
| JMP Securities A CITIZENS COMPANY | | ||||||
| Piper Sandler | | | Truist Securities | |
| Raymond James | |
| |
| SEC registration fee | | | | $ | 9,270 | | |
| FINRA filing fee | | | | | 15,500 | | |
| Exchange listing fee | | | | | * | | |
| Printing and engraving expenses | | | | | * | | |
| Legal fees and expenses | | | | | * | | |
| Accounting fees and expenses | | | | | * | | |
| Transfer agent and registrar fees | | | | | * | | |
| Miscellaneous expenses | | | | | * | | |
| Total | | | | $ | * | | |
| SEC registration fee | | | | $ | | | |
| FINRA filing fee | | | | | | | |
| Printing and engraving expenses | | | | | | | |
| Legal fees and expenses | | | | | | | |
| Accounting fees and expenses | | | | | | | |
| Transfer agent and registrar fees | | | | | | | |
| Miscellaneous expenses | | | | | | | |
| Total | | | | $ | | | |
| Exhibit Number | | | Exhibit Description | |
| | | | ||
| 3.1 | | | | |
| 3.2 | | | ||
| |||||
| 4.1 | | | | |
| | | | ||
| 10.1+ | | | | |
| 10.2+ | | | | |
| 10.3+ | | | ||
|
| Signature | | | Title | | | Date | |
| /s/ Andrew Robinson Andrew Robinson | | | Chief Executive Officer and Director (Principal Executive Officer) | | | | |
| /s/ Mark Haushill Mark Haushill | | | Chief Financial Officer (Principal Financial and Accounting Officer) | | | | |
| /s/ J. Cameron MacDonald J. Cameron MacDonald | | | Director | | | | |
| /s/ Robert Creager Robert Creager | | | Director | | | | |
| /s/ Marcia Dall Marcia Dall | | | Director | | | | |
| /s/ James Hays James Hays | | | Director | | | | |
| /s/ Robert Kittel Robert Kittel | | | Director | | | | |
| /s/ Katharine Terry Katharine Terry | | | Director | | | |