Document_and_Entity_Informatio
Document and Entity Information (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | 15-May-15 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | Unico American Corporation | ||
Entity Central Index Key | 100716 | ||
Document Type | 10-Q | ||
Document Period End Date | 31-Mar-15 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $31,318,260 | ||
Entity Common Stock, Shares Outstanding | 5,339,715 | ||
Document Fiscal Period Focus | Q1 | ||
Document Fiscal Year Focus | 2015 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Available for sale: | ||
Fixed maturities, at fair value (amortized cost: Marach 31, 2015 $44,553,427; December 31, 2014 $35,153,111) | $44,642,905 | $35,158,556 |
Short-term investments, at fair value | 62,111,416 | 72,259,408 |
Total Investments | 106,754,321 | 107,417,964 |
Cash | 149,484 | 309,162 |
Accrued investment income | 41,028 | 42,895 |
Receivables, net | 5,507,597 | 5,170,313 |
Reinsurance Recoverable: | ||
Paid losses and loss adjustment expenses | 393,450 | 201,007 |
Unpaid losses and loss adjustment expenses | 4,786,317 | 5,162,775 |
Deferred policy acquisition costs | 4,058,476 | 3,882,825 |
Property and equipment (net of accumulated depreciation) | 10,578,142 | 10,510,306 |
Deferred income taxes | 1,394,647 | 1,518,534 |
Other assets | 1,892,245 | 1,799,788 |
Total Assets | 135,555,707 | 136,015,569 |
Unpaid losses and loss adjustment expenses | 43,485,083 | 44,396,558 |
Unearned premiums | 17,265,890 | 16,607,179 |
Advance premium and premium deposits | 390,095 | 250,421 |
Income taxes payable | 8,800 | 0 |
Accrued expenses and other liabilities | 2,966,293 | 2,986,317 |
Total Liabilities | 64,116,161 | 64,240,475 |
Common stock, no par, authorized 10,000,000 shares; issued and outstanding shares 5,341,147 at March 31, 2015 and 5,341,147 at December 31, 2014 | 3,737,604 | 3,731,828 |
Accumulated other comprehensive income | 59,055 | 3,594 |
Retained earnings | 67,642,887 | 68,039,672 |
Total Stockholders' Equity | 71,439,546 | 71,775,094 |
Total Liabilities and Stockholders' Equity | $135,555,707 | $136,015,569 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets Parenthetical | ||
Fixed maturity investments at amortized cost | $44,553,427 | $35,153,111 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 5,341,147 | 5,341,147 |
Common stock, shares outstanding | 5,341,147 | 5,341,147 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Consolidated Statements Of Operations | ||
Net premium earned | $6,965,144 | $6,388,241 |
Investment income | 87,323 | 31,267 |
Other income | 72,214 | 255,431 |
Total Insurance Company Revenues | 7,124,681 | 6,674,939 |
Gross commissions and fees | 691,219 | 734,563 |
Investment income | 85 | 77 |
Finance fees earned | 15,773 | 17,420 |
Other income | 441 | 13,112 |
Total Revenues | 7,832,199 | 7,440,111 |
Losses and loss adjustment expenses | 4,893,907 | 2,892,350 |
Policy acquisition costs | 1,492,830 | 1,476,732 |
Salaries and employee benefits | 1,247,907 | 1,281,928 |
Commissions to agents/brokers | 44,588 | 43,839 |
Other operating expenses | 744,004 | 838,925 |
Total Expenses | 8,423,236 | 6,533,774 |
Income before income taxes | -591,037 | 906,337 |
Income Tax Expense | -194,252 | 314,554 |
Net Income | ($396,785) | $591,783 |
Earnings per share | ($0.07) | $0.11 |
Weighted average shares | 5,341,147 | 5,341,147 |
Earnings per share | ($0.07) | $0.11 |
Weighted average shares | 5,341,147 | 5,345,478 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Consolidated Statements Of Comprehensive Income Loss | ||
Net Income | ($396,785) | $591,783 |
Unrealized gains (losses) on securities classified as available-for-sale arising during the period | 84,033 | 6,616 |
Income tax benefit (expense) related to unrealized gains ( losses) on securities classified as available-for-sale arising during the period | -28,571 | -2,249 |
Comprehensive Income (Loss) | ($341,323) | $596,150 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash Flows from Operating Activities: | ||
Net Income | ($396,785) | $591,783 |
Depreciation and amortization | 117,451 | 138,186 |
Bond amortization, net | -4,279 | -594 |
Non-cash stock based compensation | 5,776 | 5,776 |
Net receivables and accrued investment income | -335,417 | 51,181 |
Reinsurance recoverable | 184,015 | -139,867 |
Deferred policy acquisition costs | -175,651 | -32,052 |
Other assets | 203,669 | 119,696 |
Unpaid losses and loss adjustment expenses | -911,475 | -743,982 |
Unearned premium | 658,711 | -128,273 |
Advance premium and premium deposits | 139,674 | 25,132 |
Accrued expenses and other liabilities | -20,024 | 208,803 |
Income taxes current/deferred | -192,011 | 316,826 |
Net Cash Provided (Used) by Operating Activities | -726,346 | 412,615 |
Investing Activities | ||
Purchase of fixed maturity investments | -10,145,037 | 0 |
Proceeds from maturity of fixed maturity investments | 749,000 | 200,000 |
Net decrease (increase) in short-term investments | 10,147,992 | -755,475 |
Additions to property and equipment | -185,287 | -136,271 |
Net Cash Provided (Used) by Investing Activities | 566,668 | -691,746 |
Financing Activities | ||
Net Cash Provided (Used) by Financing Activities | 0 | 0 |
Net increase (decrease) in cash | -159,678 | -279,131 |
Cash at beginning of period | 309,162 | 376,388 |
Cash at End of Period | 149,484 | 97,257 |
Cash paid during the period for: | ||
Interest | 0 | 0 |
Income taxes | $0 | $0 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | ||
Mar. 31, 2015 | |||
Notes to Financial Statements | |||
Summary of Significant Accounting Policies | |||
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Nature of Business | |||
Unico American Corporation is an insurance holding company that underwrites property and casualty insurance through its insurance company subsidiary; provides property, casualty, and health insurance through its agency subsidiaries; and provides insurance premium financing and membership association services through its other subsidiaries. Unico American Corporation is referred to herein as the "Company" or "Unico" and such references include both the corporation and its subsidiaries, all of which are wholly owned. Unico was incorporated under the laws of Nevada in 1969. | |||
Principles of Consolidation | |||
The accompanying consolidated financial statements include the accounts of Unico American Corporation and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. | |||
Basis of Presentation | |||
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X for smaller reporting companies. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2015, are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. Quarterly financial statements should be read in conjunction with the consolidated financial statements and related notes in the Company’s 2014 Annual Report on Form 10-K as filed with the Securities and Exchange Commission. | |||
Use of Estimates in the Preparation of the Financial Statements | |||
The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect its reported amounts of assets and liabilities and its disclosure of any contingent assets and liabilities at the date of its financial statements, as well as its reported amounts of revenues and expenses during the reporting period. The most significant assumptions in the preparation of these consolidated financial statements relate to losses and loss adjustment expenses. While every effort is made to ensure the integrity of such estimates, actual results may differ. | |||
Fair Value of Financial Instruments | |||
The Company employs a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Financial assets and financial liabilities recorded on the consolidated balance sheets at fair value are categorized based on the reliability of inputs to the valuation techniques. (See Note 8) | |||
The Company has used the following methods and assumptions in estimating its fair value disclosures: | |||
Fixed maturities: | |||
1 | Investment securities, excluding long-term certificates of deposit – Fair values are obtained from a national quotation service. | ||
2 | Long-term certificates of deposit – The carrying amounts reported in the Consolidated Balance Sheets for these instruments approximate their fair values. | ||
Cash and short-term investments – The carrying amounts reported in the Consolidated Balance Sheets approximate their fair values given the short term nature of these instruments. | |||
Receivables, net – The carrying amounts reported in the Consolidated Balance Sheets approximate their fair values given the short-term nature of these instruments. | |||
Accrued expenses and other liabilities – The carrying amounts reported in the Consolidated Balance Sheets approximate the fair values given the short-term nature of these instruments. | |||
Repurchase_of_Common_Stock_Eff
Repurchase of Common Stock - Effects on Stockholders' Equity | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
Repurchase of Common Stock - Effects on Stockholders' Equity | |
NOTE 2 – REPURCHASE OF COMMON STOCK – EFFECTS ON STOCKHOLDERS’ EQUITY | |
On December 19, 2008, the Board of Directors authorized a stock repurchase program to acquire from time to time up to an aggregate of 500,000 shares of the Company’s common stock. This program has no expiration date and may be terminated by the Board of Directors at any time. As of March 31, 2015, and December 31, 2014, the Company had remaining authority under the 2008 program to repurchase up to an aggregate of 222,669 shares of its common stock. The 2008 program is the only program under which there is authority to repurchase shares of the Company’s common stock. The Company did not repurchase any stock during the three months ended March 31, 2015 and 2014, respectively. The Company has or will retire all stock repurchased. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Notes to Financial Statements | |||||||||
Earnings Per Share | |||||||||
NOTE 3 – EARNINGS (LOSS) PER SHARE | |||||||||
The following table represents the reconciliation of the Company's basic earnings (loss) per share and diluted earnings (loss) per share computations reported on the Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014: | |||||||||
Three Months Ended | |||||||||
March 31 | |||||||||
2015 | 2014 | ||||||||
Basic Earnings (Loss) Per Share | |||||||||
Net income (loss) | $ | (396,785 | ) | $ | 591,783 | ||||
Weighted average shares outstanding | 5,341,147 | 5,341,147 | |||||||
Basic earnings (loss) per share | $ | (0.07 | ) | $ | 0.11 | ||||
Diluted Earnings (Loss) per Share | |||||||||
Net income (loss) | $ | (396,785 | ) | $ | 591,783 | ||||
Weighted average shares outstanding | 5,341,147 | 5,341,147 | |||||||
Effect of common share equivalents | — | 4,331 | |||||||
Diluted shares outstanding | 5,341,147 | 5,345,478 | |||||||
Diluted earnings (loss) per share | $ | (0.07 | ) | $ | 0.11 | ||||
Basic earnings per share exclude the impact of common share equivalents and are based upon the weighted average common shares outstanding. Diluted earnings per share utilize the average market price per share when applying the treasury stock method in determining common share dilution. When outstanding stock options are dilutive, they are treated as common share equivalents for purposes of computing diluted earnings per share and represent the difference between basic and diluted weighted average shares outstanding. In loss periods, stock options are excluded from the calculation of diluted (loss) per share, as the inclusion of stock options would have an anti-dilutive effect. As of March 31, 2015, the Company had 7,493 common share equivalents which were excluded in the diluted (loss) per share calculation. |
Recently_Issued_Accounting_Sta
Recently Issued Accounting Standards | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Standards | |
NOTE 4 – RECENTLY ISSUED ACCOUNTING STANDARDS | |
During the three months ended March 31, 2015, the Financial Accounting Standards Board (FASB) has not issued any accounting standards that are expected to have a material impact on the Company’s consolidated financial statements. |
Accounting_For_Income_Taxes
Accounting For Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
Accounting For Income Taxes | |
NOTE 5 – ACCOUNTING FOR INCOME TAXES | |
The Company and its wholly owned subsidiaries file consolidated federal and state income tax returns. Pursuant to the tax allocation agreement, Crusader Insurance Company (Crusader) and American Acceptance Corporation (AAC) are allocated taxes or tax credits in the case of losses, at current corporate rates based on their own taxable income or loss. The Company files income tax returns under U.S. federal and various state jurisdictions. The Company is subject to examination by U.S. federal income tax authorities for tax returns filed starting at taxable year 2011 and California state income tax authorities for tax returns filed starting at taxable year 2010. There are no ongoing examinations of income tax returns by federal or state tax authorities. | |
As of March 31, 2015, and December 31, 2014, the Company had no unrecognized tax benefits or liabilities. In addition, the Company had not accrued interest and penalties related to unrecognized tax benefits or liabilities. However, if interest and penalties would need to be accrued related to unrecognized tax benefits or liabilities, such amounts would be recognized as a component of federal income tax expense. | |
As a California insurance company, Crusader is obligated to pay a premium tax on gross premiums written in all states that Crusader is admitted. Premium taxes are deferred and amortized as the related premiums are earned. The premium tax is in lieu of state franchise taxes and is not included in the provision for state taxes. |
Property_and_Equipment_Net_of_
Property and Equipment (Net of Accumulated Depreciation) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Notes to Financial Statements | |||||||||
Property and Equipmentr (Net of Accumulated Depreciation) | |||||||||
NOTE 6 – PROPERTY AND EQUIPMENT, NET | |||||||||
Property and equipment consist of the following: | |||||||||
31-Mar | 31-Dec | ||||||||
2015 | 2014 | ||||||||
Building located in Calabasas, California | $ | 7,289,224 | $ | 7,269,449 | |||||
Furniture, fixtures, leasehold improvements, computer and office equipment located in Woodland Hills, California | 2,633,536 | 2,633,536 | |||||||
Accumulated depreciation and amortization | (2,755,417 | ) | (2,637,966 | ) | |||||
Land located in Calabasas, California | 1,787,485 | 1,787,485 | |||||||
Computer software under development | 1,623,314 | 1,457,802 | |||||||
Property and equipment, net | $ | 10,578,142 | $ | 10,510,306 | |||||
Depreciation on the Calabasas, California, building is computed using the straight line methods over 39 years. Depreciation on other property and equipment located in the Calabasas building is computed using the straight line methods over 3 to 15 years. Amortization of leasehold improvements on the property is being computed using the shorter of the useful life of the leasehold improvements or the remaining years of the lease. | |||||||||
Depreciation on property and equipment located in Woodland Hills, California, is computed using the straight line methods over 3 to 7 years. Amortization of leasehold improvements on property located in Woodland Hills is computed using the shorter of the useful life of the leasehold improvements or the remaining years of the lease. | |||||||||
Depreciation and amortization expense on all property and equipment for the three months ended March 31, 2015 and 2014, was $117,451 and $138,186, respectively. | |||||||||
For the three months ended March 31, 2015 and 2014, the Calabasas building has generated rental revenue in the amount of $49,857 and $229,847 and incurred operating expenses in the amount of $178,079 and $202,319 which included depreciation, respectively. These amounts are included in other income from insurance company revenues and other operating expenses, respectively, in the Company’s Consolidated Statements of Operations. | |||||||||
On September 7, 2014, a lease from a single tenant occupying approximately 32,403 square feet of the Calabasas building ended, and the tenant has vacated the premises. The Company intends to occupy most of this recently vacated space as its new home office and is currently in the process of planning and implementing the steps necessary to modify the space to fit its operational needs with a targeted move in date in mid-2015. The Company’s current home office located in Woodland Hills, California, will be vacated, and the month-to-month lease for this office will be terminated upon the completion of the move to the Calabasas building. | |||||||||
As of March 31, 2015, 8,442 square feet of the 46,884 rentable square feet at the Calabasas building was leased to non-affiliated entities. | |||||||||
The Company capitalizes certain computer software costs purchased from outside vendors for internal use. These costs also include configuration and customization activities, coding, testing and installation. Training costs and maintenance are expensed as incurred, while upgrade and enhancements are capitalized if it is probable that such expenditure will result in additional functionality. The capitalized costs will not be depreciated until the software is placed into production. |
Segment_Reporting
Segment Reporting | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Notes to Financial Statements | |||||||||
Segment Reporting | |||||||||
NOTE 7 – SEGMENT REPORTING | |||||||||
ASC Topic 280, “Segment Reporting,” establishes standards for the way information about operating segments is reported in financial statements. The Company has identified its insurance company operation as its primary reporting segment. Revenues from this segment comprised 91% and 90% of consolidated revenues for the three months ended March 31, 2015 and 2014, respectively. The Company’s remaining operations constitute a variety of specialty insurance services, each with unique characteristics and individually insignificant to consolidated revenues. | |||||||||
Revenues, income (loss) before income taxes, and assets by segment are as follows: | |||||||||
Three Months Ended | |||||||||
31-Mar | |||||||||
2015 | 2014 | ||||||||
Revenues | |||||||||
Insurance company operation | $ | 7,124,681 | $ | 6,674,939 | |||||
Other insurance operations | 3,141,640 | 2,822,373 | |||||||
Intersegment eliminations (1) | (2,434,122 | ) | (2,057,201 | ) | |||||
Total other insurance operations | 707,518 | 765,172 | |||||||
Total revenues | $ | 7,832,199 | $ | 7,440,111 | |||||
Income (Loss) before Income Taxes | |||||||||
Insurance company operation | $ | (256,581 | ) | $ | 1,615,934 | ||||
Other insurance operations | (334,456 | ) | (709,597 | ) | |||||
Total income (loss) before income taxes | $ | (591,037 | ) | $ | 906,337 | ||||
As of | |||||||||
31-Mar | 31-Dec | ||||||||
2015 | 2014 | ||||||||
Assets | |||||||||
Insurance company operation | $ | 122,742,701 | $ | 123,048,404 | |||||
Intersegment eliminations (2) | (2,026,853 | ) | (1,657,750 | ) | |||||
Total insurance company operation | 120,715,848 | 121,390,654 | |||||||
Other insurance operations | 14,839,859 | 14,625,915 | |||||||
Total assets | $ | 135,555,707 | $ | 136,015,569 | |||||
-1 | Intersegment revenue eliminations reflect commissions paid by Crusader to Unifax Insurance Systems, Inc. (Unifax), a wholly owned subsidiary of Unico. | ||||||||
-2 | Intersegment asset eliminations reflect the elimination of Crusader receivables from Unifax and Unifax payables to Crusader. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
NOTE 8 – FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||||||
In determining the fair value of its financial instruments, the Company employs a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Financial assets and financial liabilities recorded on the Consolidated Balance Sheets at fair value are categorized based on the reliability of inputs to the valuation techniques as follows: | |||||||||||||||||
Level 1 – Financial assets and financial liabilities whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities as of the reporting date. | |||||||||||||||||
Level 2 – Financial assets and financial liabilities whose values are based on quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in non-active markets; or valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability as of the reporting date. | |||||||||||||||||
Level 3 – Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect the Company’s estimates of the assumptions that market participants would use in valuing the financial assets and financial liabilities as of the reporting date. | |||||||||||||||||
The hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Thus, a Level 3 fair value measurement may include inputs that are observable (Level 1 or Level 2) or unobservable (Level 3). The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. | |||||||||||||||||
The following table presents information about the Company’s consolidated financial instruments and their estimated fair values, which are measured on a recurring basis, and are allocated among the three levels within the fair value hierarchy as of March 31, 2015, and December 31, 2014: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
31-Mar-15 | |||||||||||||||||
Financial instruments: | |||||||||||||||||
Fixed maturity securities: | |||||||||||||||||
U.S. treasury securities | $ | 25,153,905 | $ | — | $ | — | $ | 25,153,905 | |||||||||
Certificates of deposit | — | 19,489,000 | — | 19,489,000 | |||||||||||||
Total fixed maturity securities | 25,153,905 | 19,489,000 | — | 44,642,905 | |||||||||||||
Cash and short-term investments | 62,260,900 | — | — | 62,260,900 | |||||||||||||
Total financial instruments at fair value | $ | 87,414,805 | $ | 19,489,000 | $ | — | $ | 106,903,805 | |||||||||
31-Dec-14 | |||||||||||||||||
Financial instruments: | |||||||||||||||||
Fixed maturity securities: | |||||||||||||||||
U.S. treasury securities | $ | 20,069,556 | $ | — | $ | — | $ | 20,069,556 | |||||||||
Certificates of deposit | — | 15,089,000 | — | 15,089,000 | |||||||||||||
Total fixed maturity securities | 20,069,556 | 15,089,000 | — | 35,158,556 | |||||||||||||
Cash and short-term investments | 72,568,570 | — | — | 72,568,570 | |||||||||||||
Total financial instruments at fair value | $ | 92,638,126 | $ | 15,089,000 | $ | — | $ | 107,727,126 | |||||||||
Fair value measurements are not adjusted for transaction costs. The Company recognizes transfers between levels at either the actual date of the event or a change in circumstances that caused the transfer. The Company did not have any transfers between Levels 1, 2 and 3 of the fair value hierarchy during the three months ended March 31, 2015 and 2014. |
Investments
Investments | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
Investments | |||||||||||||||||
NOTE 9 – INVESTMENTS | |||||||||||||||||
A summary of total investment income is as follows: | |||||||||||||||||
Three Months Ended | |||||||||||||||||
31-Mar | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Fixed maturities | $ | 71,936 | $ | 13,089 | |||||||||||||
Short-term investments | 15,472 | 18,255 | |||||||||||||||
Total investment income | $ | 87,408 | $ | 31,344 | |||||||||||||
The amortized cost and estimated fair values of investments in fixed maturities by category are as follows: | |||||||||||||||||
Gross | Gross | Estimated | |||||||||||||||
Amortized | Unrealized | Unrealized Losses | Fair | ||||||||||||||
Cost | Gains | Value | |||||||||||||||
31-Mar-15 | |||||||||||||||||
Available for sale: | |||||||||||||||||
Fixed maturities | |||||||||||||||||
Certificates of deposit | $ | 19,489,000 | — | — | $ | 19,489,000 | |||||||||||
U.S. treasury securities | 25,064,427 | $ | 90,158 | $ | (680 | ) | 25,153,905 | ||||||||||
Total fixed maturities | $ | 44,553,427 | $ | 90,158 | $ | (680 | ) | $ | 44,642,905 | ||||||||
Gross | Gross | Estimated | |||||||||||||||
Amortized | Unrealized | Unrealized Losses | Fair | ||||||||||||||
Cost | Gains | Value | |||||||||||||||
31-Dec-14 | |||||||||||||||||
Available for sale: | |||||||||||||||||
Fixed maturities | |||||||||||||||||
Certificates of deposit | $ | 15,089,000 | — | — | $ | 15,089,000 | |||||||||||
U.S. treasury securities | 20,064,111 | $ | 14,476 | $ | (9,031 | ) | 20,069,556 | ||||||||||
Total fixed maturities | $ | 35,153,111 | $ | 14,476 | $ | (9,031 | ) | $ | 35,158,556 | ||||||||
A summary of the unrealized gains (losses) on investments carried at fair value and the applicable deferred federal income taxes are shown below: | |||||||||||||||||
31-Mar | 31-Dec | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Gross unrealized gains of fixed maturities | $ | 90,158 | $ | 14,476 | |||||||||||||
Gross unrealized (losses) of fixed maturities | (680 | ) | (9,031 | ) | |||||||||||||
Net unrealized gains on investments | 89,478 | 5,445 | |||||||||||||||
Deferred federal tax expense | (30,423 | ) | (1,851 | ) | |||||||||||||
Net unrealized gains, net of deferred income taxes | $ | 59,055 | $ | 3,594 | |||||||||||||
At March 31, 2015, the Company had one U.S. treasury security in an unrealized loss position for a continuous period of more than twelve months. At December 31, 2014, the Company had one U.S. treasury security in an unrealized loss position for a continuous period of less than twelve months and one U.S. treasury security in an unrealized loss position for a continuous period of more than twelve months. | |||||||||||||||||
The Company closely monitors its investments. If an unrealized loss is determined to be other-than-temporary, it is written off as a realized loss through the Consolidated Statements of Operations. The Company’s methodology of assessing other-than-temporary impairments is based on security-specific analysis as of the balance sheet date and considers various factors including the length of time to maturity and the extent to which the fair value has been less than the cost, the financial condition and the near-term prospects of the issuer, and whether the debtor is current on its contractually obligated interest and principal payments. The unrealized losses on the U.S. treasury securities in unrealized loss positions as of March 31, 2015, and December 31, 2014 were determined to be temporary. | |||||||||||||||||
The Company does not have the intent to sell its fixed maturity investments and has the ability to hold its fixed maturity investments to their maturity. It is not likely that the Company would be required to sell any of its fixed maturity investments prior to recovery of its amortized costs. The Company did not sell any fixed maturity investments during the three months ended March 31, 2015 and 2014; therefore, there were no realized investment gains or losses in the corresponding periods. The unrealized gains or losses from fixed maturities are reported as “Accumulated other comprehensive income,” which is a separate component of stockholders’ equity, net of any deferred tax effect. | |||||||||||||||||
The Company’s investment in Certificates of Deposit (CDs) included $18,889,000 and $14,489,000 of brokered CDs as of March 31, 2015, and December 31, 2014, respectively. Brokered CDs provide the safety and security of a CD combined with the convenience gained by one-stop shopping for rates at various institutions. This allows the Company to spread its investments across multiple institutions so that all of its CD investments are insured by the Federal Deposit Insurance Corporation (FDIC). Brokered CDs are purchased through UnionBanc Investment Services, LLC, a registered broker-dealer, investment advisor, member of FINRA/SIPC, and a subsidiary of Union Bank, N.A. Brokered CDs are a direct obligation of the issuing depository institution, are bank products of the issuing depository institution, are held in the name of Union Bank as Custodian for the benefit of the Company, and are FDIC insured within permissible limits. All the Company’s brokered CDs are within the FDIC insured permissible limits. As of March 31, 2015, and December 31, 2014, the Company’s remaining CDs totaling $600,000 are from four different banks and represent statutory deposits that are assigned to and are held by the California State Treasurer and the Insurance Commissioner of the State of Nevada. These deposits are required for writing certain lines of business in California and for admission in the state of Nevada. All the Company’s brokered and non-brokered CDs are within the FDIC insured permissible limits. | |||||||||||||||||
Short-term investments have an initial maturity of one year or less and consist of the following: | |||||||||||||||||
March 31 2015 | December 31 2014 | ||||||||||||||||
U.S. treasury bills | $ | 58,980,481 | $ | 69,968,988 | |||||||||||||
U.S. treasury money market fund | 2,478,559 | 1,450,451 | |||||||||||||||
Bank money market accounts | 650,614 | 838,207 | |||||||||||||||
Bank savings accounts | 1,762 | 1,762 | |||||||||||||||
Total short-term investments | $ | 62,111,416 | $ | 72,259,408 |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
Contingencies | |
NOTE 10 – CONTINGENCIES | |
The Company, by virtue of the nature of the business conducted by it, becomes involved in numerous legal proceedings as either plaintiff or defendant. The Company is also required to resort to legal proceedings from time to time in order to enforce collection of premiums, commissions, or fees for the services rendered to customers or to their agents. These routine items of litigation do not materially affect the Company and are handled on a routine basis by the Company through its counsel. | |
The Company establishes reserves for lawsuits, regulatory actions, and other contingencies for which the Company is able to estimate its potential exposure and believes a loss is probable. For loss contingencies believed to be reasonably possible, the Company discloses the nature of the loss contingency and an estimate of the possible loss, range of loss, or a statement that such an estimate cannot be made. | |
Likewise, the Company is sometimes named as a cross-defendant in litigation, which is principally directed against an insured who was issued a policy of insurance directly or indirectly through the Company. Incidental actions related to disputes concerning the issuance or non-issuance of individual policies are sometimes brought by customers or others. These items are also handled on a routine basis by the counsel, and they do not generally affect the operations of the Company. Management is confident that the ultimate outcome of pending litigation should not have an adverse effect on the Company's consolidated results of operations or financial position. The Company vigorously defends itself unless a reasonable settlement appears appropriate. | |
One of the Company’s agents, which was appointed in 2008 to assist the Company in implementing its Trucking Program, failed to pay the net premium and policy fees due Unifax, the exclusive general agent for Crusader. The agent was initially late in paying its February 2009 production that was due to Unifax on April 15, 2009. In May 2009, as a result of the agent’s failure to timely pay its balance due to Unifax, the Company terminated its agency agreement and assumed ownership and control of that agent’s policy expirations written with the Company. The Company subsequently commenced legal proceedings against the agent corporation, its three principals (who personally guaranteed the agent’s obligations), and a fourth individual for the recovery of the balance due and any related recovery costs incurred. All related recovery costs have been expensed as incurred. The agent corporation and two of its principals filed bankruptcy. The corporation was adjudicated bankrupt. The Company obtained judgments, non-dischargeable in bankruptcy, for the full amount due from the two principals who filed bankruptcy. The other principal stipulated to a judgment of $1,200,000, and that person has not filed for bankruptcy. The claim against the fourth individual was resolved. The Company collected $0 and $75,000 during the three months ended March 31, 2015 and 2014, respectively. As of March 31, 2015, and December 31, 2014, the agent’s balance due to Unifax was $1,181,272. As of March 31, 2015, and December 31, 2014, the Company’s bad debt reserve associated with this matter was $1,181,272, which represents 100% of the balance due to Unifax. Although the receivable is fully reserved for financial reporting purposes at March 31, 2015, the Company continues to pursue collection of the judgments from the three principals. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Notes to Financial Statements | |||
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Nature of Business | |||
Unico American Corporation is an insurance holding company that underwrites property and casualty insurance through its insurance company subsidiary; provides property, casualty, and health insurance through its agency subsidiaries; and provides insurance premium financing and membership association services through its other subsidiaries. Unico American Corporation is referred to herein as the "Company" or "Unico" and such references include both the corporation and its subsidiaries, all of which are wholly owned. Unico was incorporated under the laws of Nevada in 1969. | |||
Principles of Consolidation | |||
The accompanying consolidated financial statements include the accounts of Unico American Corporation and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. | |||
Basis of Presentation | |||
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X for smaller reporting companies. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2015, are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. Quarterly financial statements should be read in conjunction with the consolidated financial statements and related notes in the Company’s 2014 Annual Report on Form 10-K as filed with the Securities and Exchange Commission. | |||
Use of Estimates in the Preparation of the Financial Statements | |||
The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect its reported amounts of assets and liabilities and its disclosure of any contingent assets and liabilities at the date of its financial statements, as well as its reported amounts of revenues and expenses during the reporting period. The most significant assumptions in the preparation of these consolidated financial statements relate to losses and loss adjustment expenses. While every effort is made to ensure the integrity of such estimates, actual results may differ. | |||
Fair Value of Financial Instruments | |||
The Company employs a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Financial assets and financial liabilities recorded on the consolidated balance sheets at fair value are categorized based on the reliability of inputs to the valuation techniques. (See Note 8) | |||
The Company has used the following methods and assumptions in estimating its fair value disclosures: | |||
Fixed maturities: | |||
1 | Investment securities, excluding long-term certificates of deposit – Fair values are obtained from a national quotation service. | ||
2 | Long-term certificates of deposit – The carrying amounts reported in the Consolidated Balance Sheets for these instruments approximate their fair values. | ||
Cash and short-term investments – The carrying amounts reported in the Consolidated Balance Sheets approximate their fair values given the short term nature of these instruments. | |||
Receivables, net – The carrying amounts reported in the Consolidated Balance Sheets approximate their fair values given the short-term nature of these instruments. | |||
Accrued expenses and other liabilities – The carrying amounts reported in the Consolidated Balance Sheets approximate the fair values given the short-term nature of these instruments. | |||
Nature of Business | |||
Nature of Business | |||
Unico American Corporation is an insurance holding company that underwrites property and casualty insurance through its insurance company subsidiary; provides property, casualty, and health insurance through its agency subsidiaries; and provides insurance premium financing and membership association services through its other subsidiaries. Unico American Corporation is referred to herein as the "Company" or "Unico" and such references include both the corporation and its subsidiaries, all of which are wholly owned. Unico was incorporated under the laws of Nevada in 1969. | |||
Principles of Consolidation | |||
Principles of Consolidation | |||
The accompanying consolidated financial statements include the accounts of Unico American Corporation and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. | |||
Basis of Presentation | |||
Basis of Presentation | |||
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X for smaller reporting companies. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2015, are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. Quarterly financial statements should be read in conjunction with the consolidated financial statements and related notes in the Company’s 2014 Annual Report on Form 10-K as filed with the Securities and Exchange Commission. | |||
Use of Estimtes in the Preparation of the Financial Statements | |||
Use of Estimates in the Preparation of the Financial Statements | |||
The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect its reported amounts of assets and liabilities and its disclosure of any contingent assets and liabilities at the date of its financial statements, as well as its reported amounts of revenues and expenses during the reporting period. The most significant assumptions in the preparation of these consolidated financial statements relate to losses and loss adjustment expenses. While every effort is made to ensure the integrity of such estimates, actual results may differ. | |||
Fair Value of Financial Instruments | |||
Fair Value of Financial Instruments | |||
The Company employs a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Financial assets and financial liabilities recorded on the consolidated balance sheets at fair value are categorized based on the reliability of inputs to the valuation techniques. (See Note 8) | |||
The Company has used the following methods and assumptions in estimating its fair value disclosures: | |||
Fixed maturities: | |||
1 | Investment securities, excluding long-term certificates of deposit – Fair values are obtained from a national quotation service. | ||
2 | Long-term certificates of deposit – The carrying amounts reported in the Consolidated Balance Sheets for these instruments approximate their fair values. | ||
Cash and short-term investments – The carrying amounts reported in the Consolidated Balance Sheets approximate their fair values given the short term nature of these instruments. | |||
Receivables, net – The carrying amounts reported in the Consolidated Balance Sheets approximate their fair values given the short-term nature of these instruments. | |||
Accrued expenses and other liabilities – The carrying amounts reported in the Consolidated Balance Sheets approximate the fair values given the short-term nature of these instruments. | |||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share Tables | |||||||||||||||||
Basic and diluted earnings per share calculation data | |||||||||||||||||
The following table represents the reconciliation of the Company's basic earnings per share and diluted earnings per share computations reported on the Consolidated Statements of Operations for the three and nine months ended September 30, 2014 and 2013: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
30-Sep | 30-Sep | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Basic Earnings (Loss) Per Share | |||||||||||||||||
Net income (loss) | $ | 32,774 | $ | (368,366 | ) | $ | 894,563 | $ | (109,823 | ) | |||||||
Weighted average shares outstanding | 5,341,147 | 5,341,147 | 5,341,147 | 5,341,147 | |||||||||||||
Basic earnings (loss) per share | $ | 0.01 | $ | (0.07 | ) | $ | 0.17 | $ | (0.02 | ) | |||||||
Diluted Earnings (Loss) Per Share | |||||||||||||||||
Net income (loss) | $ | 32,774 | $ | (368,366 | ) | $ | 894,563 | $ | (109,823 | ) | |||||||
Weighted average shares outstanding | 5,341,147 | 5,341,147 | 5,341,147 | 5,341,147 | |||||||||||||
Effect of dilutive securities | 2,736 | — | 3,667 | — | |||||||||||||
Diluted shares outstanding | 5,343,883 | 5,341,147 | 5,344,814 | 5,341,147 | |||||||||||||
Diluted earnings (loss) per share | $ | 0.01 | $ | (0.07 | ) | $ | 0.17 | $ | (0.02 | ) |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property And Equipment Tables | |||||||||
[us-gaap:PropertyPlantAndEquipmentTextBlock] | |||||||||
Property and equipment consist of the following: | |||||||||
30-Sep | 31-Dec | ||||||||
2014 | 2013 | ||||||||
Land located in Calabasas, California | $ | 1,787,485 | $ | 1,787,485 | |||||
Building located in Calabasas, California | 7,220,529 | 7,212,515 | |||||||
Leasehold improvements & office equipment located in Woodland Hills, California | 3,762,351 | 3,268,298 | |||||||
Accumulated depreciation and amortization | (2,520,367 | ) | (2,098,358 | ) | |||||
Net property and equipment | $ | 10,249,998 | $ | 10,169,940 |
Segment_Reporting_Tables
Segment Reporting (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Notes to Financial Statements | |||||||||
Revenues, income before income taxes and assets by segment | |||||||||
Revenues and income (loss) before income taxes by segment are as follows: | |||||||||
Three Months Ended | |||||||||
31-Mar | |||||||||
2015 | 2014 | ||||||||
Revenues | |||||||||
Insurance company operation | $ | 7,124,681 | $ | 6,674,939 | |||||
Other insurance operations | 3,141,640 | 2,822,373 | |||||||
Intersegment eliminations (1) | (2,434,122 | ) | (2,057,201 | ) | |||||
Total other insurance operations | 707,518 | 765,172 | |||||||
Total revenues | $ | 7,832,199 | $ | 7,440,111 | |||||
Income (Loss) before Income Taxes | |||||||||
Insurance company operation | $ | (256,581 | ) | $ | 1,615,934 | ||||
Other insurance operations | (334,456 | ) | (709,597 | ) | |||||
Total income (loss) before income taxes | $ | (591,037 | ) | $ | 906,337 | ||||
1) | Intersegment revenue eliminations reflect commissions paid by Crusader to Unifax Insurance Systems, Inc., (Unifax) a wholly owned subsidiary of Unico. | ||||||||
Reconcilation of assets from segemnt to consoldated | |||||||||
Assets by segment are as follows: | |||||||||
As of | |||||||||
31-Mar | 31-Dec | ||||||||
2015 | 2014 | ||||||||
Assets | |||||||||
Insurance company operation | $ | 122,742,701 | $ | 123,048,404 | |||||
Intersegment eliminations (2) | (2,026,853 | ) | (1,657,750 | ) | |||||
Total insurance company operation | 120,715,848 | 121,390,654 | |||||||
Other insurance operations | 14,839,859 | 14,625,915 | |||||||
Total assets | $ | 135,555,707 | $ | 136,015,569 | |||||
-2 | Intersegment asset eliminations reflect the elimination of Crusader receivables from Unifax and Unifax payables to Crusader. |
Recovered_Sheet1
Fair Value Of Financial Instruments (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Of Financial Instruments Tables | |||||||||||||||||
Fair value of financial instruments | |||||||||||||||||
The following table presents information about the Company’s consolidated financial instruments and their estimated fair values, which are measured on a recurring basis, and are allocated among the three levels within the fair value hierarchy as of March 31, 2015, and December 31, 2014: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
31-Mar-15 | |||||||||||||||||
Financial instruments: | |||||||||||||||||
Fixed maturity securities: | |||||||||||||||||
U.S. treasury securities | $ | 25,153,905 | $ | — | $ | — | $ | 25,153,905 | |||||||||
Certificates of deposit | — | 19,489,000 | — | 19,489,000 | |||||||||||||
Total fixed maturity securities | 25,153,905 | 19,489,000 | — | 44,642,905 | |||||||||||||
Cash and short-term investments | 62,260,900 | — | — | 62,260,900 | |||||||||||||
Total financial instruments at fair value | $ | 87,414,805 | $ | 19,489,000 | $ | — | $ | 106,903,805 | |||||||||
31-Dec-14 | |||||||||||||||||
Financial instruments: | |||||||||||||||||
Fixed maturity securities: | |||||||||||||||||
U.S. treasury securities | $ | 20,069,556 | $ | — | $ | — | $ | 20,069,556 | |||||||||
Certificates of deposit | — | 15,089,000 | — | 15,089,000 | |||||||||||||
Total fixed maturity securities | 20,069,556 | 15,089,000 | — | 35,158,556 | |||||||||||||
Cash and short-term investments | 72,568,570 | — | — | 72,568,570 | |||||||||||||
Total financial instruments at fair value | $ | 92,638,126 | $ | 15,089,000 | $ | — | $ | 107,727,126 |
Investments_Tables
Investments (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Investments Tables | |||||||||||||||||
Investment Income | |||||||||||||||||
A summary of total investment income is as follows: | |||||||||||||||||
Three Months Ended | |||||||||||||||||
31-Mar | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Fixed maturities | $ | 71,936 | $ | 13,089 | |||||||||||||
Short-term investments | 15,472 | 18,255 | |||||||||||||||
Total investment income | $ | 87,408 | $ | 31,344 | |||||||||||||
Available for sale investments | |||||||||||||||||
The amortized cost and estimated fair values of investments in fixed maturities by category are as follows: | |||||||||||||||||
Gross | Gross | Estimated | |||||||||||||||
Amortized | Unrealized | Unrealized Losses | Fair | ||||||||||||||
Cost | Gains | Value | |||||||||||||||
31-Mar-15 | |||||||||||||||||
Available for sale: | |||||||||||||||||
Fixed maturities | |||||||||||||||||
Certificates of deposit | $ | 19,489,000 | — | — | $ | 19,489,000 | |||||||||||
U.S. treasury securities | 25,064,427 | $ | 90,158 | $ | (680 | ) | 25,153,905 | ||||||||||
Total fixed maturities | $ | 44,553,427 | $ | 90,158 | $ | (680 | ) | $ | 44,642,905 | ||||||||
Gross | Gross | Estimated | |||||||||||||||
Amortized | Unrealized | Unrealized Losses | Fair | ||||||||||||||
Cost | Gains | Value | |||||||||||||||
31-Dec-14 | |||||||||||||||||
Available for sale: | |||||||||||||||||
Fixed maturities | |||||||||||||||||
Certificates of deposit | $ | 15,089,000 | — | — | $ | 15,089,000 | |||||||||||
U.S. treasury securities | 20,064,111 | $ | 14,476 | $ | (9,031 | ) | 20,069,556 | ||||||||||
Total fixed maturities | $ | 35,153,111 | $ | 14,476 | $ | (9,031 | ) | $ | 35,158,556 | ||||||||
Unrealized appreciation (depreciation) on investments | |||||||||||||||||
A summary of the unrealized gains (losses) on investments carried at fair value and the applicable deferred federal income taxes are shown below: | |||||||||||||||||
31-Mar | 31-Dec | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Gross unrealized gains of fixed maturities | $ | 90,158 | $ | 14,476 | |||||||||||||
Gross unrealized (losses) of fixed maturities | (680 | ) | (9,031 | ) | |||||||||||||
Net unrealized gains on investments | 89,478 | 5,445 | |||||||||||||||
Deferred federal tax expense | (30,423 | ) | (1,851 | ) | |||||||||||||
Net unrealized gains, net of deferred income taxes | $ | 59,055 | $ | 3,594 | |||||||||||||
Investment in short term assets | |||||||||||||||||
Short-term investments have an initial maturity of one year or less and consist of the following: | |||||||||||||||||
March 31 2015 | December 31 2014 | ||||||||||||||||
U.S. treasury bills | $ | 58,980,481 | $ | 69,968,988 | |||||||||||||
U.S. treasury money market fund | 2,478,559 | 1,450,451 | |||||||||||||||
Bank money market accounts | 650,614 | 838,207 | |||||||||||||||
Bank savings accounts | 1,762 | 1,762 | |||||||||||||||
Total short-term investments | $ | 62,111,416 | $ | 72,259,408 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Notes to Financial Statements | ||
Earnings per share - diluted | ($0.07) | $0.11 |
Earnings per share - basic | ($0.07) | $0.11 |
Net income | ($396,785) | $591,783 |
Effect of common share equivalents | 0 | 4,331 |
Weighted average shares outstanding - diluted | 5,341,147 | 5,345,478 |
Weighted average shares outstanding - basic | 5,341,147 | 5,341,147 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Property And Equipment Details | ||
Land | $1,787,485 | $1,787,485 |
Office building including improvements | 7,289,224 | 7,269,449 |
Furniture, fixtures, computers and office equipment- Gross | 2,633,536 | 2,633,536 |
Computer software under development | 1,623,314 | 1,457,802 |
Accumulated depreciation and amortization | 2,755,417 | 2,637,966 |
Net property and equipment | $10,578,142 | $10,510,306 |
Segment_Reporting_Revenues_Det
Segment Reporting - Revenues (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Notes to Financial Statements | ||
Insurance company operation | $7,124,681 | $6,674,939 |
Revenues from other insurance operations | 3,141,640 | 2,822,373 |
Intersegment revenue eliminations (1) | -2,434,122 | -2,057,201 |
Revenues from other insurance operations net of intersegment eliminations | 707,518 | 765,172 |
Total revenues | 7,832,199 | 7,440,111 |
Income before taxes from insurance company operation | -256,581 | 1,615,934 |
Income before taxes from other insurance operations | -334,456 | -709,597 |
Income before income taxes | ($591,037) | $906,337 |
Segment_Reporting_Assets_Detai
Segment Reporting - Assets (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Notes to Financial Statements | ||
Insurance company operation assets | $122,742,701 | $123,048,404 |
Intersegment asset eliminations | -2,026,853 | -1,657,750 |
Total insurance company operation | 120,715,848 | 121,390,654 |
Other insurance operations assets | 14,839,859 | 14,625,915 |
Total assets | $135,555,707 | $136,015,569 |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments - Fair Value of Invested Assets (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
U.S. treasury securities | $25,153,905 | $20,069,556 |
Certificates of deposit | 19,489,000 | 15,089,000 |
Total fixed maturities | 44,642,905 | 35,158,556 |
Cash and short term investments | 62,260,900 | 72,568,570 |
Total financial instruments at fair value | 106,903,805 | 107,727,126 |
Level 1 | ||
U.S. treasury securities | 25,153,905 | 20,069,556 |
Certificates of deposit | 0 | 0 |
Total fixed maturities | 25,153,905 | 20,069,556 |
Cash and short term investments | 62,260,900 | 72,568,570 |
Total financial instruments at fair value | 87,414,805 | 92,638,126 |
Level 2 | ||
U.S. treasury securities | 0 | 0 |
Certificates of deposit | 19,489,000 | 15,089,000 |
Total fixed maturities | 19,489,000 | 15,089,000 |
Cash and short term investments | 0 | 0 |
Total financial instruments at fair value | 19,489,000 | 15,089,000 |
Level 3 | ||
U.S. treasury securities | 0 | 0 |
Certificates of deposit | 0 | 0 |
Total fixed maturities | 0 | 0 |
Cash and short term investments | 0 | 0 |
Total financial instruments at fair value | $0 | $0 |
Investments_Investment_Income_
Investments - Investment Income (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Notes to Financial Statements | ||
Investment income fixed maturities | $71,936 | $13,089 |
Investment Income short-term investments | 15,472 | 18,255 |
Total investment income | $87,408 | $31,344 |
Investments_Available_for_sale
Investments - Available for sale investments (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Certificates of deposit | ||
Amortized cost of fixed maturity investments by asset type | $19,489,000 | $15,089,000 |
Gross unrealized gains by asset type | 0 | 0 |
Gross unrealized losses by asset type | 0 | 0 |
Investments at fair value | 19,489,000 | 15,089,000 |
U.S. treasury securities | ||
Amortized cost of fixed maturity investments by asset type | 25,064,427 | 20,064,111 |
Gross unrealized gains by asset type | 90,158 | 14,476 |
Gross unrealized losses by asset type | -680 | -9,031 |
Investments at fair value | 25,153,905 | 20,069,556 |
Total fixed maturities | ||
Amortized cost of fixed maturity investments by asset type | 44,553,427 | 35,153,111 |
Gross unrealized gains by asset type | 90,158 | 14,476 |
Gross unrealized losses by asset type | -680 | -9,031 |
Investments at fair value | $44,642,905 | $35,158,556 |
Investments_Unrealized_appreci
Investments - Unrealized appreciation on investments (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Notes to Financial Statements | ||
Gross unrealized gains of fixed maturities | $90,158 | $14,476 |
Gross unrealized gains (losses) of fixed maturities | -680 | -9,031 |
Net unrealized gains (losses) on investments | 89,478 | 5,445 |
Deferred federal tax benefit (expense) | -30,423 | -1,851 |
Net unrealized gains, net of deferred income taxes | $59,055 | $3,594 |
Investments_Short_term_invesmt
Investments - Short term invesmtments (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Notes to Financial Statements | ||
U.S. treasury money market fund | $2,478,559 | $1,450,451 |
Short-term U.S. treasury bills | 58,980,481 | 69,968,988 |
Bank money market accounts | 650,614 | 838,207 |
Bank savings accounts | 1,762 | 1,762 |
Total short-term investments | $62,111,416 | $72,259,408 |
Repurchase_of_Common_Stock_Eff1
Repurchase of Common Stock - Effects on Stockholders' Equity (Details Narrative) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
Cost of common stock repurchase | $0 |
Share repurchase allocated to paid in capital | 0 |
Share repurchase allocated to retained earnings | $0 |
Stock repurchase authority remiaining | 222,669 |
Shares repurchased and retired during period - shares | 0 |
Repurchase of common stock previously authorized | 500,000 |
Property_and_Equipment_Narrati
Property and Equipment (Narrative) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Property And Equipment Narrative | ||
Square footage of building | 46,884 | |
Building square footage leased | 844200.00% | |
Square footage of expired lease | 3240300.00% | |
Depreciation and amortization | $117,451 | $138,186 |
Office building revenue from leases | $49,857 | $229,847 |
Segment_Reporting_Narrative
Segment Reporting (Narrative) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Segment Reporting Narrative | ||
Percentage of consolidatedr revenues from insurance company operations segment | 91% | 90% |
Investments_Details_Narrative
Investments (Details Narrative) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Notes to Financial Statements | ||
Brokered certificates of deposit | $18,889,000 | $14,489,000 |
Statutory deposit of certificates of deposit | $600,000 | $600,000 |
Number of banks used to purchase statutory deposits | 4 | 4 |
Contingencies_Details_Narrativ
Contingencies (Details Narrative) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Notes to Financial Statements | |||
Agent balance receivable | $1,181,272 | $1,181,272 | |
Agent balance bad debt reserve | 1,181,272 | 1,181,272 | |
Agent balance bad debt reserve allowance percentage | 10000.00% | 10000.00% | |
Agent balance collected | 0 | 75,000 | |
Stipulated judgement from one principal | $1,200,000 | $1,200,000 | |
Judgements obtained from two principles | Full amount due | Full amount due |