Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 18, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | FAC | |
Entity Registrant Name | FIRST ACCEPTANCE CORP /DE/ | |
Entity Central Index Key | 1,017,907 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 41,096,037 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
ASSETS | ||
Investments, available-for-sale at fair value (amortized cost of $121,218 and $128,304, respectively) | $ 129,088 | $ 131,582 |
Cash and cash equivalents | 134,439 | 115,587 |
Premiums, fees, and commissions receivable, net of allowance of $504 and $454, respectively | 79,156 | 69,881 |
Deferred tax assets, net | 30,364 | 18,301 |
Other investments | 10,322 | 11,256 |
Other assets | 5,807 | 6,950 |
Property and equipment, net | 5,227 | 5,141 |
Deferred acquisition costs | 5,692 | 5,509 |
Goodwill | 29,384 | 29,429 |
Identifiable intangible assets, net | 8,054 | 8,491 |
TOTAL ASSETS | 437,533 | 402,127 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Loss and loss adjustment expense reserves | 166,012 | 122,071 |
Unearned premiums and fees | 95,346 | 83,426 |
Debentures payable | 40,279 | 40,256 |
Term loan from principal stockholder | 29,766 | 29,753 |
Accrued expenses | 7,675 | 7,345 |
Other liabilities | 16,946 | 15,606 |
Total liabilities | 356,024 | 298,457 |
Stockholders’ equity: | ||
Preferred stock, $.01 par value, 10,000 shares authorized | ||
Common stock, $.01 par value, 75,000 shares authorized; 41,096 issued and outstanding | 411 | 411 |
Additional paid-in capital | 457,621 | 457,476 |
Accumulated other comprehensive income, net of tax of $1,730 and $62, respectively | 6,589 | 3,491 |
Accumulated deficit | (383,112) | (357,708) |
Total stockholders’ equity | 81,509 | 103,670 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 437,533 | $ 402,127 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Amortized cost of investments | $ 121,218 | $ 128,304 |
Allowance for premiums, fees and Commission receivable | $ 504 | $ 454 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 41,096,000 | 41,096,000 |
Common stock, shares outstanding | 41,096,000 | 41,096,000 |
Accumulated Other Comprehensive Income, tax | $ 1,730 | $ 62 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues: | ||||
Premiums earned | $ 80,850 | $ 67,300 | $ 157,257 | $ 129,915 |
Commission and fee income | 19,183 | 11,929 | 38,764 | 23,278 |
Investment income | 1,646 | 1,406 | 2,608 | 2,551 |
Gain on sale of foreclosed real estate | 1,237 | 1,237 | ||
Net realized losses on investments, available-for-sale (includes $147 of accumulated other comprehensive loss reclassification for unrealized loss in 2016) | (162) | (4) | (164) | (7) |
Total revenues | 102,754 | 80,631 | 199,702 | 155,737 |
Costs and expenses: | ||||
Losses and loss adjustment expenses | 100,765 | 55,003 | 174,184 | 102,937 |
Insurance operating expenses | 30,314 | 23,645 | 59,961 | 48,730 |
Other operating expenses | 283 | 263 | 563 | 586 |
Litigation settlement | 129 | 239 | ||
Stock-based compensation | 68 | 53 | 105 | 72 |
Depreciation | 616 | 392 | 1,267 | 800 |
Amortization of identifiable intangibles assets | 239 | 7 | 477 | 7 |
Interest expense | 1,076 | 449 | 2,126 | 872 |
Total costs and expenses | 133,361 | 79,941 | 238,683 | 154,243 |
(Loss) income before income taxes | (30,607) | 690 | (38,981) | 1,494 |
(Benefit) provision for income taxes | (10,708) | 375 | (13,577) | 693 |
Net (loss) income | $ (19,899) | $ 315 | $ (25,404) | $ 801 |
Net (loss) income per share: | ||||
Basic | $ (0.48) | $ 0.01 | $ (0.62) | $ 0.02 |
Diluted | $ (0.48) | $ 0.01 | $ (0.62) | $ 0.02 |
Number of shares used to calculate net (loss) income per share: | ||||
Basic | 41,064 | 41,020 | 41,062 | 41,018 |
Diluted | 41,064 | 41,384 | 41,062 | 41,347 |
Reconciliation of net (loss) income to other comprehensive loss: | ||||
Net (loss) income | $ (19,899) | $ 315 | $ (25,404) | $ 801 |
Net unrealized change in investments, net of tax of $757, $(938), $1,668 and $(592), respectively | 1,407 | (1,741) | 3,098 | (1,099) |
Comprehensive loss | (18,492) | (1,426) | (22,306) | (298) |
Detail of net realized losses on investments, available-for-sale: | ||||
Net realized losses on redemptions | (15) | (4) | (17) | (7) |
Other-than-temporary impairment charges | (147) | (147) | ||
Net realized losses on investments, available-for-sale | $ (162) | $ (4) | $ (164) | $ (7) |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Accumulated other comprehensive loss reclassification for unrealized loss | $ 147 | $ 147 | ||
Net unrealized change in investments, tax | $ 757 | $ (938) | $ 1,668 | $ (592) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (25,404) | $ 801 |
Adjustments to reconcile net (loss) income to cash provided by operating activities: | ||
Depreciation | 1,267 | 800 |
Amortization of identifiable intangibles assets | 477 | 7 |
Stock-based compensation | 105 | 72 |
Deferred income taxes | (13,736) | 408 |
Other-than-temporary impairment on investments, available-for-sale | 147 | |
Net realized losses on redemptions of investments | 17 | 7 |
Investment income from other investments | (355) | (328) |
Gain on sale of foreclosed real estate, net | (1,237) | |
Other | 61 | 164 |
Change in: | ||
Premiums, fees, and commission receivable | (9,230) | (8,714) |
Deferred acquisition costs | (183) | (1,292) |
Loss and loss adjustment expense reserves | 43,941 | 13,863 |
Unearned premiums and fees | 11,920 | 12,976 |
Other liabilities | 1,347 | 2,237 |
Other | 1,652 | (134) |
Net cash provided by operating activities | 10,789 | 20,867 |
Cash flows from investing activities: | ||
Purchases of investments, available-for-sale | (156) | (18,963) |
Maturities and redemptions of investments, available-for-sale | 6,968 | 5,252 |
Purchases of other investments | (725) | (1,289) |
Distributions from other investments | 2,190 | 571 |
Capital expenditures | (1,983) | (1,197) |
Proceeds from sale of foreclosed real estate, net | 1,769 | |
Acquisition of identifiable intangible assets | (40) | (205) |
Deposit under asset purchase agreement | (33,735) | |
Net cash provided by (used in) investing activities | 8,023 | (49,566) |
Cash flows from financing activities: | ||
Proceeds from term loan from principal stockholder | 30,000 | |
Net proceeds from issuance of common stock | 40 | 44 |
Net cash provided by financing activities | 40 | 30,044 |
Net change in cash and cash equivalents | 18,852 | 1,345 |
Cash and cash equivalents, beginning of period | 115,587 | 102,429 |
Cash and cash equivalents, end of period | $ 134,439 | $ 103,774 |
General
General | 6 Months Ended |
Jun. 30, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
General | 1. General The consolidated financial statements of First Acceptance Corporation (the “Company”) included herein have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been omitted. In the opinion of management, the consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2015. Reclassifications Certain reclassifications have been made to the prior year’s consolidated financial statements to conform with the current presentation. |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 2. Fair Value Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are generally based upon observable and unobservable inputs. Observable inputs are based on market data from independent sources, while unobservable inputs reflect the Company’s view of market assumptions in the absence of observable market information. All assets and liabilities that are carried at fair value are classified and disclosed in one of the following categories: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Quoted market prices for similar assets or liabilities in active markets; quoted prices by independent pricing services for identical or similar assets or liabilities in markets that are not active; and valuations, using models or other valuation techniques, that use observable market data. All significant inputs are observable, or derived from observable information in the marketplace, or are supported by observable levels at which transactions are executed in the marketplace. Level 3 - Instruments that use non-binding broker quotes or model driven valuations that do not have observable market data. NAV - Calculated net asset value (“NAV”) based on an ownership interest to which a proportionate share of net assets is attributed. The Company considers the valuation methods used in both its identifiable intangible assets initial measurement and impairment tests as Level 3. To determine the fair value of acquired trademarks and trade names, the Company uses the relief-from-royalty method, which requires the Company to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital. To determine the fair value of the acquired policy renewal rights and customer relationships, the Company uses an “excess earnings” method that relies on projected future net cash flows and includes key assumptions for the customer retention and renewal rates. The data used in these methods is not observable in the market. Fair Value of Financial Instruments The carrying values and fair values of certain financial instruments were as follows (in thousands). June 30, 2016 December 31, 2015 Carrying Fair Carrying Fair Value Value Value Value Assets: Investments, available-for-sale $ 129,088 $ 129,088 $ 131,582 $ 131,582 Other investments 10,322 10,322 11,256 11,256 Liabilities: Debentures payable 40,279 15,381 40,256 20,275 Term loan from principal stockholder 29,766 22,698 29,753 28,504 The fair values as presented represent the Company’s best estimates and may not be substantiated by comparisons to independent markets. The fair value of the debentures payable and the term loan from principal shareholder are categorized as Level 3, since they were based on current market rates offered for debt with similar risks and maturities, an unobservable input categorized as Level 3. Carrying values of certain financial instruments, such as cash and cash equivalents and premiums, fees, and commissions receivable, approximate fair value due to the short-term nature of the instruments and are not required to be disclosed. Therefore, the aggregate of the fair values presented in the preceding table does not purport to represent the Company’s underlying value. The following tables present the fair-value measurements for each major category of assets that are measured on a recurring basis (in thousands). Other investments are carried at net asset value which approximates fair value. Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Proportionate Markets for Observable Unobservable Share of Identical Assets Inputs Inputs Net Assets June 30, 2016 Total (Level 1) (Level 2) (Level 3) (NAV) Fixed maturities, available-for-sale: U.S. government and agencies $ 11,623 $ 11,623 $ — $ — $ — State 703 — 703 — — Political subdivisions 4,372 — 4,372 — — Revenue and assessment 11,163 — 11,163 — — Corporate bonds 81,170 — 81,170 — — Collateralized mortgage obligations: Agency backed 857 — 857 — — Non-agency backed – residential 3,123 — 3,123 — — Non-agency backed – commercial 2,216 — 2,216 — — Total fixed maturities, available-for-sale 115,227 11,623 103,604 — — Preferred stock, available-for-sale 1,848 1,848 — — — Mutual funds, available-for-sale 12,013 12,013 — — — Total investments, available-for-sale 129,088 25,484 103,604 — — Other investments 10,322 — — 4,177 6,145 Cash and cash equivalents 134,439 134,439 — — — Total $ 273,849 $ 159,923 $ 103,604 $ 4,177 $ 6,145 Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Proportionate Markets for Observable Unobservable Share of Identical Assets Inputs Inputs Net Assets December 31, 2015 Total (Level 1) (Level 2) (Level 3) (NAV) Fixed maturities, available-for-sale: U.S. government and agencies $ 13,113 $ 13,113 $ — $ — $ — State 702 — 702 — — Political subdivisions 4,363 — 4,363 — — Revenue and assessment 12,644 — 12,644 — — Corporate bonds 80,785 — 80,785 — — Collateralized mortgage obligations: Agency backed 873 — 873 — — Non-agency backed – residential 3,455 — 3,455 — — Non-agency backed – commercial 2,507 — 2,507 — — Total fixed maturities, available-for-sale 118,442 13,113 105,329 — — Preferred stock, available-for-sale 1,723 1,723 — — — Mutual funds, available-for-sale 11,417 11,417 — — — Total investments, available-for-sale 131,582 26,253 105,329 — — Other investment 11,256 — — 3,276 7,980 Cash and cash equivalents 115,587 115,587 — — — Total $ 258,425 $ 141,840 $ 105,329 $ 3,276 $ 7,980 The fair values of the Company’s investments are determined by management after taking into consideration available sources of data. All of the portfolio valuations classified as Level 1 or Level 2 in the above tables are priced exclusively by utilizing the services of independent pricing sources using observable market data. The Level 2 classified security valuations are obtained from a single independent pricing service. The Level 3 classified security in the table above consists of an investment in the common stock of a real estate investment trust for which fair value has been determined using a model driven valuation that does not have observable market data. There were no transfers between Level 1 and Level 2 for the three and six months ended June 30, 2016 and 2015. The Company’s policy is to recognize transfers between levels at the end of the reporting period based on specific identification. The Company has not made any adjustments to the prices obtained from the independent pricing sources. The Company has reviewed the pricing techniques and methodologies of the independent pricing service for Level 2 investments and believes that its policies adequately consider market activity, either based on specific transactions for the security valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. The Company monitored security-specific valuation trends and has made inquiries with the pricing service about material changes or the absence of expected changes to understand the underlying factors and inputs and to validate the reasonableness of the pricing. Likewise, the Company reviews the Level 3 valuation model to understand the underlying factors and inputs and to validate the reasonableness of the pricing. The following table represents the quantitative disclosure for the asset classified as Level 3 during the six months ended June 30, 2016 (in thousands). Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Common Stock at Fair Value Balance at December 31, 2015 $ 3,276 Gains included in net loss — Gains included in comprehensive loss 177 Investments and capital calls 724 Distributions received — Transfers into and out of Level 3 — Balance at June 30, 2016 $ 4,177 |
Investments
Investments | 6 Months Ended |
Jun. 30, 2016 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | 3. Investments Investments, Available-for-Sale The following tables summarize the Company’s investment securities (in thousands). Gross Gross Amortized Unrealized Unrealized Fair June 30, 2016 Cost Gains Losses Value U.S. government and agencies $ 11,187 $ 437 $ (1 ) $ 11,623 State 700 3 — 703 Political subdivisions 4,294 78 — 4,372 Revenue and assessment 9,637 1,526 — 11,163 Corporate bonds 77,027 4,147 (4 ) 81,170 Collateralized mortgage obligations: Agency backed 771 86 — 857 Non-agency backed – residential 2,616 515 (8 ) 3,123 Non-agency backed – commercial 1,673 543 — 2,216 Total fixed maturities, available-for-sale 107,905 7,335 (13 ) 115,227 Preferred stock, available-for-sale 1,500 348 — 1,848 Mutual funds, available-for-sale 11,813 324 (124 ) 12,013 $ 121,218 $ 8,007 $ (137 ) $ 129,088 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2015 Cost Gains Losses Value U.S. government and agencies $ 13,036 $ 162 $ (85 ) $ 13,113 State 698 4 — 702 Political subdivisions 4,354 9 — 4,363 Revenue and assessment 11,770 895 (21 ) 12,644 Corporate bonds 79,426 2,022 (663 ) 80,785 Collateralized mortgage obligations: Agency backed 793 80 — 873 Non-agency backed – residential 2,877 579 (1 ) 3,455 Non-agency backed – commercial 1,891 616 — 2,507 Total fixed maturities, available-for-sale 114,845 4,367 (770 ) 118,442 Preferred stock, available-for-sale 1,500 223 — 1,723 Mutual funds, available-for-sale 11,959 120 (662 ) 11,417 $ 128,304 $ 4,710 $ (1,432 ) $ 131,582 The following table sets forth the scheduled maturities of the Company’s fixed maturity securities based on their fair values (in thousands). Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers. Securities Securities Securities with No All with with Unrealized Fixed Unrealized Unrealized Gains or Maturity June 30, 2016 Gains Losses Losses Securities One year or less $ 4,759 $ — $ — $ 4,759 After one through five years 35,669 3,574 — 39,243 After five through ten years 56,093 — — 56,093 After ten years 8,937 — — 8,937 No single maturity date 5,899 296 — 6,195 $ 111,357 $ 3,870 $ — $ 115,227 The following table reflects the number of fixed maturity securities with gross unrealized gains and losses. Gross unrealized losses are further segregated by the length of time that individual securities have been in a continuous unrealized loss position. Gross Unrealized Losses Less than Greater Gross or equal to than 12 Unrealized At: 12 months months Gains June 30, 2016 5 1 80 December 31, 2015 21 4 70 The following tables reflect the fair value and gross unrealized losses of those fixed maturity securities in a continuous unrealized loss position for greater than 12 months. Gross unrealized losses are further segregated by the percentage of amortized cost (in thousands, except number of securities). Number Gross Gross Unrealized Losses of Fair Unrealized at June 30, 2016: Securities Value Losses Less than or equal to 10% 1 $ 3,574 (5 ) Greater than 10% — — — 1 $ 3,574 $ (5 ) Number Gross Gross Unrealized Losses of Fair Unrealized at December 31, 2015: Securities Value Losses Less than or equal to 10% 4 $ 7,689 $ (241 ) Greater than 10% — — — 4 $ 7,689 $ (241 ) The following tables set forth the amount of gross unrealized losses by current severity (as compared to amortized cost) and length of time that individual securities have been in a continuous unrealized loss position (in thousands). Fair Value of Securities with Length of Gross Gross Severity of Gross Unrealized Losses Gross Unrealized Losses Unrealized Unrealized Less 5% to Greater at June 30, 2016: Losses Losses than 5% 10% than 10% Less than or equal to: Three months $ 440 $ (2 ) $ (2 ) $ — $ — Six months 107 (7 ) — (7 ) — Nine months — — — — — Twelve months 7,378 (123 ) (123 ) — — Greater than twelve months 3,574 (5 ) (5 ) — — Total $ 11,499 $ (137 ) $ (130 ) $ (7 ) $ — Fair Value of Securities with Length of Gross Gross Severity of Gross Unrealized Losses Gross Unrealized Losses Unrealized Unrealized Less 5% to Greater at December 31, 2015: Losses Losses than 5% 10% than 10% Less than or equal to: Three months $ 20,899 $ (130 ) $ (130 ) $ — $ — Six months 7,036 (465 ) — (465 ) — Nine months 14,057 (395 ) (197 ) (197 ) (1 ) Twelve months 7,892 (201 ) (201 ) — — Greater than twelve months 7,689 (241 ) (241 ) — — Total $ 57,573 $ (1,432 ) $ (769 ) $ (662 ) $ (1 ) Other-Than-Temporary Impairment For the six months ended June 30, 2016, the Company recognized OTTI charges in net income of $147 thousand related to one mutual fund. The Company believes that the remaining securities having unrealized losses at June 30, 2016 were not other-than-temporarily impaired. The Company also does not intend to sell any of these securities and it is more likely than not that the Company will not be required to sell any of these securities before the recovery of their amortized cost basis. Other Investments Other investments consist of the common stock of a real estate investment trust and limited partnership interests in three funds that invest in (i) commercial real estate and secured commercial real estate loans acquired from financial intuitions, (ii) small balance distressed secured loans and debt securities and (iii) undervalued international publicly-traded equities. These investments have redemption and transfer restrictions. The Company recently withdrew from one of the limited partnership investments and received the final $1.0 million quarterly withdrawal installment in July 2016. The Company does not intend to sell the remaining investments, and it is more likely than not that the Company will not be required to sell them before the expiration of such restrictions. Restrictions At June 30, 2016, fixed maturities and cash equivalents with a fair value and amortized cost of $6.6 million were on deposit with various insurance departments as a requirement of doing business in those states. Cash equivalents with a fair value and amortized cost of $12.1 million were on deposit with another insurance company as collateral for an assumed reinsurance contract. Investment Income and Net Realized Gains and Losses The major categories of investment income follow (in thousands). Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Fixed maturities, available-for-sale $ 981 $ 1,039 $ 1,951 $ 2,054 Mutual funds, available-for-sale 160 145 366 293 Other investments 525 283 355 328 Other 105 59 183 118 Investment expenses (125 ) (120 ) (247 ) (242 ) $ 1,646 $ 1,406 $ 2,608 $ 2,551 The components of net realized losses on investments, available-for-sale at fair value follow (in thousands). Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Gains $ — $ — $ — $ — Losses (15 ) (4 ) (17 ) (7 ) Other-than-temporary impairment (147 ) — (147 ) — $ (162 ) $ (4 ) $ (164 ) $ (7 ) Realized gains and losses on sales and redemptions are computed based on specific identification. The non-credit related portion of other-than-temporary impairment (“OTTI”) is included in other comprehensive loss. The amounts of non-credit OTTI for securities still owned was $0.9 million for non-agency backed residential collateralized mortgage obligations (“CMOs”) and $0.2 million related to non-agency backed commercial CMOs at both June 30, 2016 and December 31, 2015. |
Net (Loss) Income Per Share
Net (Loss) Income Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Net (Loss) Income Per Share | 4. Net (Loss) Income Per Share The following table sets forth the computation of basic and diluted net (loss) income per share (in thousands, except per share data). Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Net (loss) income $ (19,899 ) $ 315 $ (25,404 ) $ 801 Weighted average common basic shares 41,064 41,020 41,062 41,018 Effect of dilutive securities — 364 — 329 Weighted average common dilutive shares 41,064 41,384 41,062 41,347 Basic and diluted net (loss) income per share $ (0.48 ) $ 0.01 $ (0.62 ) $ 0.02 On March 15, 2016, the Compensation Committee of the Board of Directors of the Company awarded 146 thousand restricted stock units to executive officers. Such restricted stock units will vest, and an equal number of shares of common stock will be deliverable upon the third anniversary of the date of grant. Compensation expense related to the units was calculated based upon the closing market price of the common stock on the date of grant ($2.30) and is recorded on a straight-line basis over the vesting period. For the three and six months ended June 30, 2016, the computation of diluted net loss per share did not include options to purchase 825 thousand shares and 270 thousand restricted stock units, a dilutive effect of 180 thousand shares and 237 thousand shares, respectively, since their inclusion would have been anti-dilutive. Options to purchase 240 thousand shares were not included in the computation of diluted net loss per share for the three and six months ended June 30, 2016, since their exercise price was in excess of the average stock prices for these periods. For the three and six months ended June 30, 2015, the computation of diluted net income per share included options to purchase 825 thousand shares that had a dilutive effect of 339 thousand shares and 318 thousand shares, respectively, and 141 thousand restricted stock units that had a dilutive effect of 25 thousand shares and 11 thousand share, respectively. Options to purchase 260 thousand shares were not included in the computation of diluted net income per share for the three and six months ended June 30, 2015, since their exercise prices were in excess of the average stock prices for these periods. |
Losses and Loss Adjustment Expe
Losses and Loss Adjustment Expenses Incurred and Paid | 6 Months Ended |
Jun. 30, 2016 | |
Insurance [Abstract] | |
Losses and Loss Adjustment Expenses Incurred and Paid | 5. Losses and Loss Adjustment Expenses Incurred and Paid Information regarding the reserve for unpaid losses and loss adjustment expenses (“LAE”) is as follows (in thousands). Six Months Ended June 30, 2016 2015 Liability for unpaid losses and LAE at beginning of period, gross $ 122,071 $ 96,613 Reinsurance balances receivable (464 ) (362 ) Liability for unpaid losses and LAE at beginning of period, net 121,607 96,251 Add: Provision for losses and LAE: Current period 143,173 104,624 Prior periods 31,011 (1,687 ) Net losses and LAE incurred 174,184 102,937 Less: Losses and LAE paid: Current period 58,750 46,872 Prior periods 71,703 42,293 Net losses and LAE paid 130,453 89,165 Liability for unpaid losses and LAE at end of period, net 165,338 110,023 Reinsurance balances receivable 674 453 Liability for unpaid losses and LAE at end of period, gross $ 166,012 $ 110,476 The unfavorable development for the six months ended June 30, 2016 was the result of increased losses primarily from the 2015 accident year across all major coverages. The most significant causes of the development were a greater than usual emergence of reported claims and higher bodily injury severity. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes The (benefit) provision for income taxes consisted of the following (in thousands). Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Federal: Current $ — $ (21 ) $ — $ 51 Deferred (10,665 ) 209 (13,627 ) 402 (10,665 ) 188 (13,627 ) 453 State: Current 60 185 159 234 Deferred (103 ) 2 (109 ) 6 (43 ) 187 50 240 $ (10,708 ) $ 375 $ (13,577 ) $ 693 The (benefit) provision for income taxes differs from the amounts computed by applying the statutory federal corporate tax rate of 35% to (loss) income before income taxes as a result of the following (in thousands). Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (Benefit) provision for income taxes at statutory rate $ (10,712 ) $ 242 $ (13,643 ) $ 523 Tax effect of: Tax-exempt investment income (10 ) (5 ) (20 ) (10 ) Change in the beginning of the period balance of the valuation allowance for deferred tax assets allocated to federal income taxes 57 2 57 2 Stock-based compensation 13 22 17 22 State income taxes, net of federal income tax benefit and state valuation allowance (65 ) 122 (6 ) 158 Other 9 (8 ) 18 (2 ) $ (10,708 ) $ 375 $ (13,577 ) $ 693 The Company had a deferred tax asset (“DTA”) valuation allowance of $2.0 million at June 30, 2016 and $1.7 million at December 31, 2015, attributable to certain amounts related to state taxes and OTTI that are not more likely than not to be realized. In assessing the Company’s ability to realize the DTA, both positive and negative evidence are used to evaluate the allowance. Although the Company has incurred a six-month pre-tax loss of $39.0 million which is a source of negative evidence, it placed greater weight on its outlook for future taxable income over the allowable time period for realization of the DTA and concluded that it is more likely than not that the remaining DTA will be realized. Regarding the length of time available to realize the DTA, at June 30, 2016, $20.2 million of the DTA related to net operating loss carryforwards do not expire until 2031 through 2036 and $2.0 million in AMT (“Alternative Minimum Tax”) carryforwards have no expiration date. The DTA valuation allowance may be adjusted in future periods if management determines that it is more likely than not that some portion or all of the DTA will not be realized. In the event the DTA valuation allowance is adjusted, the Company would record an income tax expense for the adjustment. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | 7. Segment Information The Company operates in two business segments with its primary focus being the selling, servicing and underwriting of non-standard personal automobile insurance. The real estate and corporate segment consists of the activities related to the disposition of foreclosed real estate held for sale, interest expense associated with all debt and other general corporate overhead expenses. The following table presents selected financial data by business segment (in thousands). Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Revenues: Insurance $ 101,501 $ 80,614 $ 198,434 $ 155,703 Real estate and corporate 1,253 17 1,268 34 Consolidated total $ 102,754 $ 80,631 $ 199,702 $ 155,737 (Loss) income before income taxes: Insurance $ (30,434 ) $ 1,438 $ (37,455 ) $ 2,990 Real estate and corporate (173 ) (748 ) (1,526 ) (1,496 ) Consolidated total $ (30,607 ) $ 690 $ (38,981 ) $ 1,494 June 30, December 31, 2016 2015 Total assets: Insurance $ 395,336 $ 373,475 Real estate and corporate 42,197 28,652 Consolidated total $ 437,533 $ 402,127 |
Litigation
Litigation | 6 Months Ended |
Jun. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Litigation | 8. Litigation The Company is named as a defendant in various lawsuits, arising in the ordinary course of business, generally relating to its insurance operations. All legal actions relating to claims made under insurance policies are considered by the Company in establishing its loss and loss adjustment expense reserves. The Company also faces lawsuits from time to time that seek damages beyond policy limits, commonly known as bad faith claims, as well as class action and individual lawsuits that involve issues arising in the course of the Company’s business. The Company continually evaluates potential liabilities and reserves for litigation of these types using the criteria established by FASB ASC 450, Contingencies |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 9. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board (“IASB”) jointly issued a new revenue recognition standard, Accounting Standard Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers,” In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” In April 2015, the FASB issued ASU No. 2015-05, “ Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” In May 2015, the FASB issued ASU No. 2015-09, “ Financial Services-Insurance (Topic 944): Disclosures about Short-Duration Contracts” In January 2016, the FASB issued ASU No. 2016-01, “ Financial Instruments – Overall (Subtopic 825-20): Recognition and Measure of Financial Assets and Financials Liabilities In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326)” |
Related Parties
Related Parties | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Parties | 10. Related Parties In April 2016, the Company entered into standard agreements for Treasury and Custodial Services with a bank indirectly owned 15% by our principal stockholder. The fees under these agreements for the three months ended June 30, 2016 were $46 thousand. |
Business Combination
Business Combination | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Business Combination | 11. Business Combination Acquisition of the Titan Agencies On July 1, 2015, in order to expand its geographic presence, the Company completed the acquisition of certain assets of Titan Insurance Services, Inc. and Titan Auto Insurance of New Mexico, Inc. (the “Titan Agencies”). These agencies sell private passenger non-standard automobile insurance and complimentary products, principally in California, but also in Texas, Arizona, Florida, Nevada and New Mexico. The Titan Agencies were previously owned and operated by Nationwide. Pursuant to the Asset Purchase Agreement (the “APA”), the Company acquired the assets of 83 retail stores for total consideration of $36.0 million, which included liabilities assumed estimated to be $2.3 million. The Company has accounted for the acquisition as a business combination applying the acquisition method. Liabilities assumed included a $2.0 million estimate of the expected liability for returned commissions as of the closing date. This liability was subject to change based on the actual amount of returned commissions and the Company’s final estimation of this liability resulted in a $0.8 million reduction in goodwill through June 30, 2016. The Company considers this acquisition to be a separate reporting unit for goodwill impairment analysis purposes. At June 30, 2016, the Company concluded that there was no indication of impairment and that a quantitative analysis was not necessary as of this date. The date of the Company’s annual impairment analysis is each October 1. Pro Forma Information The following unaudited pro forma combined statement of income for the three and six months ended June 30, 2015 are based on our historical consolidated financial statements and gives effect to the acquisition of the Titan Agencies as if it had occurred on January 1, 2014. The pro forma combined financial statements do not necessarily reflect what the combined results of operations would have been had the acquisition occurred on the date indicated. They also may not be useful in predicting the future combined results of operations. The actual combined results of operations may differ significantly from the combined pro forma amounts reflected herein due to a variety of factors. Pro Forma Statement of Income Three Months Ended June 30, 2015 Company Historical Titan Agencies Historical Pro Forma Adjustments Pro Forma Combined Revenues: Premiums earned $ 67,300 $ — $ — $ 67,300 Commission and fee income 11,929 6,422 — 18,351 Investment income 1,406 — — 1,406 Net realized losses on investments, available-for-sale (4) — — (4) 80,631 6,422 — 87,053 Costs and expenses: Losses and loss adjustment expenses 55,003 — — 55,003 Insurance operating expenses 23,645 7,296 — 30,941 Other operating expenses 263 — — 263 Litigation settlement 129 — — 129 Stock-based compensation 53 — — 53 Depreciation 392 — 25 (a) 417 Amortization of identifiable intangibles assets 7 — 228 (b) 235 Interest expense 449 — 598 (c) 1,047 79,941 7,296 851 88,088 Income (loss) before income taxes 690 (874) (851) (1,035) Provision (benefit) for income taxes 375 (350) (340) (d) (315) Net income (loss) $ 315 $ (524) $ (511) $ (720) Net income (loss) per share: Basic $ 0.01 $ (0.02) Diluted $ 0.01 $ (0.02) Number of shares used to calculate net income (loss) per share: Basic 41,020 41,020 Diluted 41,384 41,384 Pro Forma Statement of Income Six Months Ended June 30, 2015 Company Historical Titan Agencies Historical Pro Forma Adjustments Pro Forma Combined Revenues: Premiums earned $ 129,915 $ — $ — $ 129,915 Commission and fee income 23,278 14,547 — 37,825 Investment income 2,551 — — 2,551 Net realized gains on investments, available-for-sale (7) — — (7) 155,737 14,547 — 170,284 Costs and expenses: Losses and loss adjustment expenses 102,937 — — 102,937 Insurance operating expenses 48,730 14,555 — 63,285 Other operating expenses 586 — — 586 Litigation settlement 239 — — 239 Stock-based compensation 72 — — 72 Depreciation 800 — 50 (a) 850 Amortization of identifiable intangibles assets 7 — 455 (b) 462 Interest expense 872 — 1,190 (c) 2,062 154,243 14,555 1,695 170,493 Income (loss) before income taxes 1,494 (8) (1,695) (209) Provision (benefit) for income taxes 693 (3) (678) (d) 12 Net income (loss) $ 801 $ (5) $ (1,017) $ (221) Net income (loss) per share: Basic $ 0.02 $ (0.01) Diluted $ 0.02 $ (0.01) Number of shares used to calculate net income (loss) per share: Basic 41,018 41,018 Diluted 41,347 41,347 Pro forma adjustments The following adjustments have been reflected in the unaudited pro forma combined financial information. (a) Depreciation expense related to acquired tangible asset (b) Amortization expense related to acquired identifiable intangible asset (c) Interest expense related to acquisition financing (d) Calculated income tax effect of pro forma adjustments at the estimated combined federal and state statutory rate of 40% |
Current Liquidity and Statutory
Current Liquidity and Statutory Capital and Surplus | 6 Months Ended |
Jun. 30, 2016 | |
Current Liquidity And Statutory Capital And Surplus [Abstract] | |
Current Liquidity and Statutory Capital and Surplus | 12. Current Liquidity and Statutory Capital and Surplus The Company has $70.0 million in long-term borrowings of which $40.0 million matures in 2037 and $30.0 million matures in 2025. At June 30, 2016, the Company was in compliance with the covenants related to these borrowings. Such borrowings are not obligations of the Company’s regulated insurance company subsidiaries who at June 30, 2016 had combined statutory capital and surplus of $60.2 million. The Company believes that it has sufficient liquidity to meet its current obligations in the foreseeable future, including the payment of interest on its long-term borrowings which it currently funds through the cash flows of its agency operations which are generated outside the Company’s regulated insurance company subsidiaries and are not subject to any limitation on the payment of dividends to the holding company. The Company has three insurance company subsidiaries that are organized and domiciled under the insurance statutes of Texas, Georgia, and Tennessee. The insurance company subsidiaries operate under licenses issued by various state insurance authorities. Such licenses may be of perpetual duration or periodically renewable, provided the insurance company subsidiaries continue to meet applicable regulatory requirements. For the six months ended June 30, 2016, the insurance company subsidiaries experienced a reduction in combined statutory capital and surplus of $38.6 million as a result of the unfavorable loss development during the period. The National Association of Insurance Commissioners (“NAIC”) Model Act for risk-based capital provides formulas to determine each December 31 on an annual basis the amount of statutory capital and surplus that an insurance company needs to ensure that it has an acceptable expectation of not becoming financially impaired. Failure to meet applicable risk-based capital requirements could subject our insurance company subsidiaries to further examination or corrective action imposed by state regulators, including limitations on their writing of additional business, state supervision or even liquidation. Although statutory risk-based capital calculations are only made as of each December 31, the Company estimated that the three insurance company subsidiaries remain above the regulatory company action levels as of June 30, 2016. There are also statutory guidelines that suggest that on an annual calendar year basis an insurance company should not exceed a ratio of net premiums written to statutory capital and surplus of 3-to-1. On a combined basis, the ratio for our insurance company subsidiaries of net premiums written for the last twelve months to statutory capital and surplus was 5.13-to-1 at June 30, 2016 which is in excess of the suggested guidelines. Management is developing a business plan with the objectives of reducing premium writings and increasing statutory capital and surplus to address the net premiums written to statutory capital and surplus guidelines. |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Presentation of Carrying Values and Fair Values of Certain Financial Instruments | The carrying values and fair values of certain financial instruments were as follows (in thousands). June 30, 2016 December 31, 2015 Carrying Fair Carrying Fair Value Value Value Value Assets: Investments, available-for-sale $ 129,088 $ 129,088 $ 131,582 $ 131,582 Other investments 10,322 10,322 11,256 11,256 Liabilities: Debentures payable 40,279 15,381 40,256 20,275 Term loan from principal stockholder 29,766 22,698 29,753 28,504 |
Presentation of Fair-Value Measurements for Each Major Category of Assets Measured on Recurring Basis | The following tables present the fair-value measurements for each major category of assets that are measured on a recurring basis (in thousands). Other investments are carried at net asset value which approximates fair value. Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Proportionate Markets for Observable Unobservable Share of Identical Assets Inputs Inputs Net Assets June 30, 2016 Total (Level 1) (Level 2) (Level 3) (NAV) Fixed maturities, available-for-sale: U.S. government and agencies $ 11,623 $ 11,623 $ — $ — $ — State 703 — 703 — — Political subdivisions 4,372 — 4,372 — — Revenue and assessment 11,163 — 11,163 — — Corporate bonds 81,170 — 81,170 — — Collateralized mortgage obligations: Agency backed 857 — 857 — — Non-agency backed – residential 3,123 — 3,123 — — Non-agency backed – commercial 2,216 — 2,216 — — Total fixed maturities, available-for-sale 115,227 11,623 103,604 — — Preferred stock, available-for-sale 1,848 1,848 — — — Mutual funds, available-for-sale 12,013 12,013 — — — Total investments, available-for-sale 129,088 25,484 103,604 — — Other investments 10,322 — — 4,177 6,145 Cash and cash equivalents 134,439 134,439 — — — Total $ 273,849 $ 159,923 $ 103,604 $ 4,177 $ 6,145 Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Proportionate Markets for Observable Unobservable Share of Identical Assets Inputs Inputs Net Assets December 31, 2015 Total (Level 1) (Level 2) (Level 3) (NAV) Fixed maturities, available-for-sale: U.S. government and agencies $ 13,113 $ 13,113 $ — $ — $ — State 702 — 702 — — Political subdivisions 4,363 — 4,363 — — Revenue and assessment 12,644 — 12,644 — — Corporate bonds 80,785 — 80,785 — — Collateralized mortgage obligations: Agency backed 873 — 873 — — Non-agency backed – residential 3,455 — 3,455 — — Non-agency backed – commercial 2,507 — 2,507 — — Total fixed maturities, available-for-sale 118,442 13,113 105,329 — — Preferred stock, available-for-sale 1,723 1,723 — — — Mutual funds, available-for-sale 11,417 11,417 — — — Total investments, available-for-sale 131,582 26,253 105,329 — — Other investment 11,256 — — 3,276 7,980 Cash and cash equivalents 115,587 115,587 — — — Total $ 258,425 $ 141,840 $ 105,329 $ 3,276 $ 7,980 |
Quantitative Disclosure for Assets Classified as Level 3 | The following table represents the quantitative disclosure for the asset classified as Level 3 during the six months ended June 30, 2016 (in thousands). Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Common Stock at Fair Value Balance at December 31, 2015 $ 3,276 Gains included in net loss — Gains included in comprehensive loss 177 Investments and capital calls 724 Distributions received — Transfers into and out of Level 3 — Balance at June 30, 2016 $ 4,177 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Investments Debt And Equity Securities [Abstract] | |
Summary of Company's Investment Securities | The following tables summarize the Company’s investment securities (in thousands). Gross Gross Amortized Unrealized Unrealized Fair June 30, 2016 Cost Gains Losses Value U.S. government and agencies $ 11,187 $ 437 $ (1 ) $ 11,623 State 700 3 — 703 Political subdivisions 4,294 78 — 4,372 Revenue and assessment 9,637 1,526 — 11,163 Corporate bonds 77,027 4,147 (4 ) 81,170 Collateralized mortgage obligations: Agency backed 771 86 — 857 Non-agency backed – residential 2,616 515 (8 ) 3,123 Non-agency backed – commercial 1,673 543 — 2,216 Total fixed maturities, available-for-sale 107,905 7,335 (13 ) 115,227 Preferred stock, available-for-sale 1,500 348 — 1,848 Mutual funds, available-for-sale 11,813 324 (124 ) 12,013 $ 121,218 $ 8,007 $ (137 ) $ 129,088 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2015 Cost Gains Losses Value U.S. government and agencies $ 13,036 $ 162 $ (85 ) $ 13,113 State 698 4 — 702 Political subdivisions 4,354 9 — 4,363 Revenue and assessment 11,770 895 (21 ) 12,644 Corporate bonds 79,426 2,022 (663 ) 80,785 Collateralized mortgage obligations: Agency backed 793 80 — 873 Non-agency backed – residential 2,877 579 (1 ) 3,455 Non-agency backed – commercial 1,891 616 — 2,507 Total fixed maturities, available-for-sale 114,845 4,367 (770 ) 118,442 Preferred stock, available-for-sale 1,500 223 — 1,723 Mutual funds, available-for-sale 11,959 120 (662 ) 11,417 $ 128,304 $ 4,710 $ (1,432 ) $ 131,582 |
Scheduled Maturities of Company's Fixed Maturity Securities Based on their Fair Values | The following table sets forth the scheduled maturities of the Company’s fixed maturity securities based on their fair values (in thousands). Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers. Securities Securities Securities with No All with with Unrealized Fixed Unrealized Unrealized Gains or Maturity June 30, 2016 Gains Losses Losses Securities One year or less $ 4,759 $ — $ — $ 4,759 After one through five years 35,669 3,574 — 39,243 After five through ten years 56,093 — — 56,093 After ten years 8,937 — — 8,937 No single maturity date 5,899 296 — 6,195 $ 111,357 $ 3,870 $ — $ 115,227 |
Number of Fixed Maturity Securities with Gross Unrealized Gains and Losses | The following table reflects the number of fixed maturity securities with gross unrealized gains and losses. Gross unrealized losses are further segregated by the length of time that individual securities have been in a continuous unrealized loss position. Gross Unrealized Losses Less than Greater Gross or equal to than 12 Unrealized At: 12 months months Gains June 30, 2016 5 1 80 December 31, 2015 21 4 70 |
Fair Value and Gross Unrealized Losses of Fixed Maturity Securities in Continuous Unrealized Loss Position for Greater than 12 Months | The following tables reflect the fair value and gross unrealized losses of those fixed maturity securities in a continuous unrealized loss position for greater than 12 months. Gross unrealized losses are further segregated by the percentage of amortized cost (in thousands, except number of securities). Number Gross Gross Unrealized Losses of Fair Unrealized at June 30, 2016: Securities Value Losses Less than or equal to 10% 1 $ 3,574 (5 ) Greater than 10% — — — 1 $ 3,574 $ (5 ) Number Gross Gross Unrealized Losses of Fair Unrealized at December 31, 2015: Securities Value Losses Less than or equal to 10% 4 $ 7,689 $ (241 ) Greater than 10% — — — 4 $ 7,689 $ (241 ) |
Gross Unrealized Losses by Current Severity and Length of Time that Individual Securities have been in Continuous Unrealized Loss Position | The following tables set forth the amount of gross unrealized losses by current severity (as compared to amortized cost) and length of time that individual securities have been in a continuous unrealized loss position (in thousands). Fair Value of Securities with Length of Gross Gross Severity of Gross Unrealized Losses Gross Unrealized Losses Unrealized Unrealized Less 5% to Greater at June 30, 2016: Losses Losses than 5% 10% than 10% Less than or equal to: Three months $ 440 $ (2 ) $ (2 ) $ — $ — Six months 107 (7 ) — (7 ) — Nine months — — — — — Twelve months 7,378 (123 ) (123 ) — — Greater than twelve months 3,574 (5 ) (5 ) — — Total $ 11,499 $ (137 ) $ (130 ) $ (7 ) $ — Fair Value of Securities with Length of Gross Gross Severity of Gross Unrealized Losses Gross Unrealized Losses Unrealized Unrealized Less 5% to Greater at December 31, 2015: Losses Losses than 5% 10% than 10% Less than or equal to: Three months $ 20,899 $ (130 ) $ (130 ) $ — $ — Six months 7,036 (465 ) — (465 ) — Nine months 14,057 (395 ) (197 ) (197 ) (1 ) Twelve months 7,892 (201 ) (201 ) — — Greater than twelve months 7,689 (241 ) (241 ) — — Total $ 57,573 $ (1,432 ) $ (769 ) $ (662 ) $ (1 ) |
Major Categories of Investment Income | The major categories of investment income follow (in thousands). Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Fixed maturities, available-for-sale $ 981 $ 1,039 $ 1,951 $ 2,054 Mutual funds, available-for-sale 160 145 366 293 Other investments 525 283 355 328 Other 105 59 183 118 Investment expenses (125 ) (120 ) (247 ) (242 ) $ 1,646 $ 1,406 $ 2,608 $ 2,551 |
Components of Net Realized Losses on Investments, Available-For-Sale at Fair Value | The components of net realized losses on investments, available-for-sale at fair value follow (in thousands). Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Gains $ — $ — $ — $ — Losses (15 ) (4 ) (17 ) (7 ) Other-than-temporary impairment (147 ) — (147 ) — $ (162 ) $ (4 ) $ (164 ) $ (7 ) |
Net (Loss) Income Per Share (Ta
Net (Loss) Income Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net (Loss) Income Per Share | The following table sets forth the computation of basic and diluted net (loss) income per share (in thousands, except per share data). Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Net (loss) income $ (19,899 ) $ 315 $ (25,404 ) $ 801 Weighted average common basic shares 41,064 41,020 41,062 41,018 Effect of dilutive securities — 364 — 329 Weighted average common dilutive shares 41,064 41,384 41,062 41,347 Basic and diluted net (loss) income per share $ (0.48 ) $ 0.01 $ (0.62 ) $ 0.02 |
Losses and Loss Adjustment Ex22
Losses and Loss Adjustment Expenses Incurred and Paid (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Insurance [Abstract] | |
Information Regarding the Reserve for Unpaid Losses and Loss Adjustment Expenses | Information regarding the reserve for unpaid losses and loss adjustment expenses (“LAE”) is as follows (in thousands). Six Months Ended June 30, 2016 2015 Liability for unpaid losses and LAE at beginning of period, gross $ 122,071 $ 96,613 Reinsurance balances receivable (464 ) (362 ) Liability for unpaid losses and LAE at beginning of period, net 121,607 96,251 Add: Provision for losses and LAE: Current period 143,173 104,624 Prior periods 31,011 (1,687 ) Net losses and LAE incurred 174,184 102,937 Less: Losses and LAE paid: Current period 58,750 46,872 Prior periods 71,703 42,293 Net losses and LAE paid 130,453 89,165 Liability for unpaid losses and LAE at end of period, net 165,338 110,023 Reinsurance balances receivable 674 453 Liability for unpaid losses and LAE at end of period, gross $ 166,012 $ 110,476 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
(Benefit) Provision for Income Taxes | The (benefit) provision for income taxes consisted of the following (in thousands). Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Federal: Current $ — $ (21 ) $ — $ 51 Deferred (10,665 ) 209 (13,627 ) 402 (10,665 ) 188 (13,627 ) 453 State: Current 60 185 159 234 Deferred (103 ) 2 (109 ) 6 (43 ) 187 50 240 $ (10,708 ) $ 375 $ (13,577 ) $ 693 |
(Benefit) Provision for Income Taxes Differs from Amounts Computed by Applying Statutory Federal Corporate Tax Rate | The (benefit) provision for income taxes differs from the amounts computed by applying the statutory federal corporate tax rate of 35% to (loss) income before income taxes as a result of the following (in thousands). Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 (Benefit) provision for income taxes at statutory rate $ (10,712 ) $ 242 $ (13,643 ) $ 523 Tax effect of: Tax-exempt investment income (10 ) (5 ) (20 ) (10 ) Change in the beginning of the period balance of the valuation allowance for deferred tax assets allocated to federal income taxes 57 2 57 2 Stock-based compensation 13 22 17 22 State income taxes, net of federal income tax benefit and state valuation allowance (65 ) 122 (6 ) 158 Other 9 (8 ) 18 (2 ) $ (10,708 ) $ 375 $ (13,577 ) $ 693 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Selected Financial Data by Business Segment | The following table presents selected financial data by business segment (in thousands). Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Revenues: Insurance $ 101,501 $ 80,614 $ 198,434 $ 155,703 Real estate and corporate 1,253 17 1,268 34 Consolidated total $ 102,754 $ 80,631 $ 199,702 $ 155,737 (Loss) income before income taxes: Insurance $ (30,434 ) $ 1,438 $ (37,455 ) $ 2,990 Real estate and corporate (173 ) (748 ) (1,526 ) (1,496 ) Consolidated total $ (30,607 ) $ 690 $ (38,981 ) $ 1,494 June 30, December 31, 2016 2015 Total assets: Insurance $ 395,336 $ 373,475 Real estate and corporate 42,197 28,652 Consolidated total $ 437,533 $ 402,127 |
Business Combination (Tables)
Business Combination (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Business Combination Pro Forma Information | Pro Forma Statement of Income Three Months Ended June 30, 2015 Company Historical Titan Agencies Historical Pro Forma Adjustments Pro Forma Combined Revenues: Premiums earned $ 67,300 $ — $ — $ 67,300 Commission and fee income 11,929 6,422 — 18,351 Investment income 1,406 — — 1,406 Net realized losses on investments, available-for-sale (4) — — (4) 80,631 6,422 — 87,053 Costs and expenses: Losses and loss adjustment expenses 55,003 — — 55,003 Insurance operating expenses 23,645 7,296 — 30,941 Other operating expenses 263 — — 263 Litigation settlement 129 — — 129 Stock-based compensation 53 — — 53 Depreciation 392 — 25 (a) 417 Amortization of identifiable intangibles assets 7 — 228 (b) 235 Interest expense 449 — 598 (c) 1,047 79,941 7,296 851 88,088 Income (loss) before income taxes 690 (874) (851) (1,035) Provision (benefit) for income taxes 375 (350) (340) (d) (315) Net income (loss) $ 315 $ (524) $ (511) $ (720) Net income (loss) per share: Basic $ 0.01 $ (0.02) Diluted $ 0.01 $ (0.02) Number of shares used to calculate net income (loss) per share: Basic 41,020 41,020 Diluted 41,384 41,384 Pro Forma Statement of Income Six Months Ended June 30, 2015 Company Historical Titan Agencies Historical Pro Forma Adjustments Pro Forma Combined Revenues: Premiums earned $ 129,915 $ — $ — $ 129,915 Commission and fee income 23,278 14,547 — 37,825 Investment income 2,551 — — 2,551 Net realized gains on investments, available-for-sale (7) — — (7) 155,737 14,547 — 170,284 Costs and expenses: Losses and loss adjustment expenses 102,937 — — 102,937 Insurance operating expenses 48,730 14,555 — 63,285 Other operating expenses 586 — — 586 Litigation settlement 239 — — 239 Stock-based compensation 72 — — 72 Depreciation 800 — 50 (a) 850 Amortization of identifiable intangibles assets 7 — 455 (b) 462 Interest expense 872 — 1,190 (c) 2,062 154,243 14,555 1,695 170,493 Income (loss) before income taxes 1,494 (8) (1,695) (209) Provision (benefit) for income taxes 693 (3) (678) (d) 12 Net income (loss) $ 801 $ (5) $ (1,017) $ (221) Net income (loss) per share: Basic $ 0.02 $ (0.01) Diluted $ 0.02 $ (0.01) Number of shares used to calculate net income (loss) per share: Basic 41,018 41,018 Diluted 41,347 41,347 Pro forma adjustments The following adjustments have been reflected in the unaudited pro forma combined financial information. (a) Depreciation expense related to acquired tangible asset (b) Amortization expense related to acquired identifiable intangible asset (c) Interest expense related to acquisition financing (d) Calculated income tax effect of pro forma adjustments at the estimated combined federal and state statutory rate of 40% |
Fair Value - Presentation of Ca
Fair Value - Presentation of Carrying Values and Fair Values of Certain Financial Instruments (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Assets: | ||
Investments, available-for-sale | $ 129,088 | $ 131,582 |
Other investments | 10,322 | 11,256 |
Liabilities: | ||
Debentures payable | 40,279 | 40,256 |
Term loan from principal stockholder | 29,766 | 29,753 |
Carrying Value | ||
Assets: | ||
Investments, available-for-sale | 129,088 | 131,582 |
Other investments | 10,322 | 11,256 |
Liabilities: | ||
Debentures payable | 40,279 | 40,256 |
Term loan from principal stockholder | 29,766 | 29,753 |
Fair Value | ||
Assets: | ||
Investments, available-for-sale | 129,088 | 131,582 |
Other investments | 10,322 | 11,256 |
Liabilities: | ||
Debentures payable | 15,381 | 20,275 |
Term loan from principal stockholder | $ 22,698 | $ 28,504 |
Fair Value - Presentation of Fa
Fair Value - Presentation of Fair-Value Measurements for Each Major Category of Assets Measured on Recurring Basis (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | $ 129,088 | $ 131,582 |
Other investments | 10,322 | 11,256 |
Cash and cash equivalents | 134,439 | 115,587 |
Total | 273,849 | 258,425 |
Fixed Maturities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 115,227 | 118,442 |
Fixed Maturities | U.S. government and agencies | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 11,623 | 13,113 |
Fixed Maturities | State | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 703 | 702 |
Fixed Maturities | Political subdivisions | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 4,372 | 4,363 |
Fixed Maturities | Revenue and assessment | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 11,163 | 12,644 |
Fixed Maturities | Corporate bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 81,170 | 80,785 |
Fixed Maturities | Collateralized mortgage obligations: Agency Backed | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 857 | 873 |
Fixed Maturities | Collateralized mortgage obligations: Non-agency backed - residential | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 3,123 | 3,455 |
Fixed Maturities | Collateralized mortgage obligations: Non-agency backed - commercial | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 2,216 | 2,507 |
Preferred stock, available-for-sale | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 1,848 | 1,723 |
Mutual funds, available-for-sale | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 12,013 | 11,417 |
Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 25,484 | 26,253 |
Cash and cash equivalents | 134,439 | 115,587 |
Total | 159,923 | 141,840 |
Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed Maturities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 11,623 | 13,113 |
Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed Maturities | U.S. government and agencies | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 11,623 | 13,113 |
Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1) | Preferred stock, available-for-sale | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 1,848 | 1,723 |
Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1) | Mutual funds, available-for-sale | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 12,013 | 11,417 |
Fair Value Measurements Using Significant Other Observable Inputs (Level 2) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 103,604 | 105,329 |
Total | 103,604 | 105,329 |
Fair Value Measurements Using Significant Other Observable Inputs (Level 2) | Fixed Maturities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 103,604 | 105,329 |
Fair Value Measurements Using Significant Other Observable Inputs (Level 2) | Fixed Maturities | State | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 703 | 702 |
Fair Value Measurements Using Significant Other Observable Inputs (Level 2) | Fixed Maturities | Political subdivisions | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 4,372 | 4,363 |
Fair Value Measurements Using Significant Other Observable Inputs (Level 2) | Fixed Maturities | Revenue and assessment | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 11,163 | 12,644 |
Fair Value Measurements Using Significant Other Observable Inputs (Level 2) | Fixed Maturities | Corporate bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 81,170 | 80,785 |
Fair Value Measurements Using Significant Other Observable Inputs (Level 2) | Fixed Maturities | Collateralized mortgage obligations: Agency Backed | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 857 | 873 |
Fair Value Measurements Using Significant Other Observable Inputs (Level 2) | Fixed Maturities | Collateralized mortgage obligations: Non-agency backed - residential | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 3,123 | 3,455 |
Fair Value Measurements Using Significant Other Observable Inputs (Level 2) | Fixed Maturities | Collateralized mortgage obligations: Non-agency backed - commercial | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Investments, available-for-sale | 2,216 | 2,507 |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments | 4,177 | 3,276 |
Total | 4,177 | 3,276 |
Fair Value Measurements Using Proportionate Share of Net Assets (NAV) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments | 6,145 | 7,980 |
Total | $ 6,145 | $ 7,980 |
Fair Value - Additional Informa
Fair Value - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | ||||
Transfers between level 1 and level 2 | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value - Quantitative Discl
Fair Value - Quantitative Disclosure for Assets Classified as Level 3 (Detail) - Common Stock at Fair Value $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Line Items] | |
Balance at December 31, 2015 | $ 3,276 |
Gains included in comprehensive loss | 177 |
Investments and capital calls | 724 |
Balance at June 30, 2016 | $ 4,177 |
Investments - Summary of Compan
Investments - Summary of Company's Investment Securities (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Investment Securities [Line Items] | ||
Amortized Cost | $ 121,218 | $ 128,304 |
Gross Unrealized Gains | 8,007 | 4,710 |
Gross Unrealized Losses | (137) | (1,432) |
Fair Value | 129,088 | 131,582 |
Fixed Maturities | ||
Investment Securities [Line Items] | ||
Amortized Cost | 107,905 | 114,845 |
Gross Unrealized Gains | 7,335 | 4,367 |
Gross Unrealized Losses | (13) | (770) |
Fair Value | 115,227 | 118,442 |
Fixed Maturities | U.S. government and agencies | ||
Investment Securities [Line Items] | ||
Amortized Cost | 11,187 | 13,036 |
Gross Unrealized Gains | 437 | 162 |
Gross Unrealized Losses | (1) | (85) |
Fair Value | 11,623 | 13,113 |
Fixed Maturities | State | ||
Investment Securities [Line Items] | ||
Amortized Cost | 700 | 698 |
Gross Unrealized Gains | 3 | 4 |
Fair Value | 703 | 702 |
Fixed Maturities | Political subdivisions | ||
Investment Securities [Line Items] | ||
Amortized Cost | 4,294 | 4,354 |
Gross Unrealized Gains | 78 | 9 |
Fair Value | 4,372 | 4,363 |
Fixed Maturities | Revenue and assessment | ||
Investment Securities [Line Items] | ||
Amortized Cost | 9,637 | 11,770 |
Gross Unrealized Gains | 1,526 | 895 |
Gross Unrealized Losses | (21) | |
Fair Value | 11,163 | 12,644 |
Fixed Maturities | Corporate bonds | ||
Investment Securities [Line Items] | ||
Amortized Cost | 77,027 | 79,426 |
Gross Unrealized Gains | 4,147 | 2,022 |
Gross Unrealized Losses | (4) | (663) |
Fair Value | 81,170 | 80,785 |
Fixed Maturities | Collateralized mortgage obligations: Agency Backed | ||
Investment Securities [Line Items] | ||
Amortized Cost | 771 | 793 |
Gross Unrealized Gains | 86 | 80 |
Fair Value | 857 | 873 |
Fixed Maturities | Collateralized mortgage obligations: Non-agency backed - residential | ||
Investment Securities [Line Items] | ||
Amortized Cost | 2,616 | 2,877 |
Gross Unrealized Gains | 515 | 579 |
Gross Unrealized Losses | (8) | (1) |
Fair Value | 3,123 | 3,455 |
Fixed Maturities | Collateralized mortgage obligations: Non-agency backed - commercial | ||
Investment Securities [Line Items] | ||
Amortized Cost | 1,673 | 1,891 |
Gross Unrealized Gains | 543 | 616 |
Fair Value | 2,216 | 2,507 |
Preferred stock, available-for-sale | ||
Investment Securities [Line Items] | ||
Amortized Cost | 1,500 | 1,500 |
Gross Unrealized Gains | 348 | 223 |
Fair Value | 1,848 | 1,723 |
Mutual funds, available-for-sale | ||
Investment Securities [Line Items] | ||
Amortized Cost | 11,813 | 11,959 |
Gross Unrealized Gains | 324 | 120 |
Gross Unrealized Losses | (124) | (662) |
Fair Value | $ 12,013 | $ 11,417 |
Investments - Scheduled Maturit
Investments - Scheduled Maturities of Company's Fixed Maturity Securities Based on their Fair Values (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Securities with Unrealized Losses, Total | $ 11,499 | $ 57,573 |
Fixed Maturities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities with Unrealized Gains, One year or less | 4,759 | |
Securities with Unrealized Gains, After one through five years | 35,669 | |
Securities with Unrealized Gains, After five through ten years | 56,093 | |
Securities with Unrealized Gains, After ten years | 8,937 | |
Securities with Unrealized Gains, No single maturity date | 5,899 | |
Securities with Unrealized Gains, Total | 111,357 | |
Securities with Unrealized Losses, After one through five years | 3,574 | |
Securities with Unrealized Losses, No single maturity date | 296 | |
Securities with Unrealized Losses, Total | 3,870 | |
All Fixed Maturity Securities, One year or less | 4,759 | |
All Fixed Maturity Securities, After one through five years | 39,243 | |
All Fixed Maturity Securities, After five through ten years | 56,093 | |
All Fixed Maturity Securities, After ten years | 8,937 | |
All Fixed Maturity Securities, No single maturity date | 6,195 | |
All Fixed Maturity Securities, Total | $ 115,227 |
Investments - Number of Fixed M
Investments - Number of Fixed Maturity Securities with Gross Unrealized Gains and Losses (Detail) - Security | Jun. 30, 2016 | Dec. 31, 2015 |
Investments Debt And Equity Securities [Abstract] | ||
Number of Securities with Gross Unrealized Losses Less than or equal to 12 months | 5 | 21 |
Number of Securities with Gross Unrealized Losses Greater than 12 months | 1 | 4 |
Number of Securities with Gross Unrealized Gains | 80 | 70 |
Investments - Fair Value and Gr
Investments - Fair Value and Gross Unrealized Losses of Fixed Maturity Securities in Continuous Unrealized Loss Position for Greater than 12 Months (Detail) $ in Thousands | Jun. 30, 2016USD ($)Security | Dec. 31, 2015USD ($)Security |
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Securities | Security | 1 | 4 |
Fair Value | $ 3,574 | $ 7,689 |
Gross Unrealized Losses | $ (5) | $ (241) |
Percentage of amortized cost less than or equal to 10% | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Securities | Security | 1 | 4 |
Fair Value | $ 3,574 | $ 7,689 |
Gross Unrealized Losses | $ (5) | $ (241) |
Investments - Gross Unrealized
Investments - Gross Unrealized Losses by Current Severity and Length of Time that Individual Securities have been in Continuous Unrealized Loss Position (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Investment Maturity Date [Line Items] | ||
Fair Value of Securities with Gross Unrealized Losses | $ 11,499 | $ 57,573 |
Gross Unrealized Losses | (137) | (1,432) |
Percentage of amortized cost less than 5% | ||
Investment Maturity Date [Line Items] | ||
Gross Unrealized Losses | (130) | (769) |
Percentage of amortized cost 5% to 10% | ||
Investment Maturity Date [Line Items] | ||
Gross Unrealized Losses | (7) | (662) |
Percentage of amortized cost greater than 10% | ||
Investment Maturity Date [Line Items] | ||
Gross Unrealized Losses | (1) | |
Less than or equals to three months | ||
Investment Maturity Date [Line Items] | ||
Fair Value of Securities with Gross Unrealized Losses | 440 | 20,899 |
Gross Unrealized Losses | (2) | (130) |
Less than or equals to three months | Percentage of amortized cost less than 5% | ||
Investment Maturity Date [Line Items] | ||
Gross Unrealized Losses | (2) | (130) |
Less than or equals to six months | ||
Investment Maturity Date [Line Items] | ||
Fair Value of Securities with Gross Unrealized Losses | 107 | 7,036 |
Gross Unrealized Losses | (7) | (465) |
Less than or equals to six months | Percentage of amortized cost 5% to 10% | ||
Investment Maturity Date [Line Items] | ||
Gross Unrealized Losses | (7) | (465) |
Less than or equals to nine months | ||
Investment Maturity Date [Line Items] | ||
Fair Value of Securities with Gross Unrealized Losses | 14,057 | |
Gross Unrealized Losses | (395) | |
Less than or equals to nine months | Percentage of amortized cost less than 5% | ||
Investment Maturity Date [Line Items] | ||
Gross Unrealized Losses | (197) | |
Less than or equals to nine months | Percentage of amortized cost 5% to 10% | ||
Investment Maturity Date [Line Items] | ||
Gross Unrealized Losses | (197) | |
Less than or equals to nine months | Percentage of amortized cost greater than 10% | ||
Investment Maturity Date [Line Items] | ||
Gross Unrealized Losses | (1) | |
Less than or equals to twelve months | ||
Investment Maturity Date [Line Items] | ||
Fair Value of Securities with Gross Unrealized Losses | 7,378 | 7,892 |
Gross Unrealized Losses | (123) | (201) |
Less than or equals to twelve months | Percentage of amortized cost less than 5% | ||
Investment Maturity Date [Line Items] | ||
Gross Unrealized Losses | (123) | (201) |
Greater than 12 months | ||
Investment Maturity Date [Line Items] | ||
Fair Value of Securities with Gross Unrealized Losses | 3,574 | 7,689 |
Gross Unrealized Losses | (5) | (241) |
Greater than 12 months | Percentage of amortized cost less than 5% | ||
Investment Maturity Date [Line Items] | ||
Gross Unrealized Losses | $ (5) | $ (241) |
Investments - Additional Inform
Investments - Additional Information (Detail) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jul. 31, 2016USD ($) | Jun. 30, 2016USD ($)Fund | Jun. 30, 2016USD ($)Fund | Dec. 31, 2015USD ($) | |
Schedule of Available-for-sale Securities [Line Items] | ||||
OTTI charges recognized in net income | $ 147 | $ 147 | ||
Number of investment funds | Fund | 3 | 3 | ||
Unfunded commitments | $ 400 | $ 400 | ||
Fixed maturities and cash equivalents on deposit with various insurance departments at fair value and amortized cost | 6,600 | 6,600 | ||
Cash equivalents on deposit with another insurance company at fair value and amortized cost | $ 12,100 | 12,100 | ||
Collateralized mortgage obligations: Non-agency backed - residential | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Non credit other than temporary impairment for securities | 900 | $ 900 | ||
Collateralized mortgage obligations: Non-agency backed - commercial | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Non credit other than temporary impairment for securities | $ 200 | $ 200 | ||
Subsequent Event | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Final quarterly withdrawal from the limited partnership investments | $ 1,000 |
Investments - Major Categories
Investments - Major Categories of Investment Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Net Investment Income [Line Items] | ||||
Investment expenses | $ (125) | $ (120) | $ (247) | $ (242) |
Net investment income | 1,646 | 1,406 | 2,608 | 2,551 |
Fixed Maturities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 981 | 1,039 | 1,951 | 2,054 |
Mutual funds, available-for-sale | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 160 | 145 | 366 | 293 |
Other investments | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 525 | 283 | 355 | 328 |
Other | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | $ 105 | $ 59 | $ 183 | $ 118 |
Investments - Components of Net
Investments - Components of Net Realized Losses on Investments, Available-for-Sale at Fair Value (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Investments Debt And Equity Securities [Abstract] | ||||
Losses | $ (15) | $ (4) | $ (17) | $ (7) |
Other-than-temporary impairment | (147) | (147) | ||
Net realized losses on investments, available-for-sale | $ (162) | $ (4) | $ (164) | $ (7) |
Net (Loss) Income Per Share - C
Net (Loss) Income Per Share - Computation of Basic and Diluted Net (Loss) Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income | $ (19,899) | $ 315 | $ (25,404) | $ 801 |
Weighted average common basic shares | 41,064 | 41,020 | 41,062 | 41,018 |
Effect of dilutive securities | 364 | 329 | ||
Weighted average common dilutive shares | 41,064 | 41,384 | 41,062 | 41,347 |
Basic and diluted net (loss) income per share | $ (0.48) | $ 0.01 | $ (0.62) | $ 0.02 |
Net (Loss) Income Per Share - A
Net (Loss) Income Per Share - Additional Information (Detail) - $ / shares shares in Thousands | Mar. 15, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 |
Earnings Per Share [Line Items] | |||||
Exercisable options outstanding that enable to purchase shares | 825 | 825 | 825 | 825 | |
Equity option | |||||
Earnings Per Share [Line Items] | |||||
Shares with dilutive effect and included in computation of diluted income (loss) per share | 180 | 339 | 237 | 318 | |
Options excluded from computation of diluted income (loss) per share due to anti-dilutive effect | 240 | 260 | 240 | 260 | |
Restricted stock | |||||
Earnings Per Share [Line Items] | |||||
Exercisable options outstanding that enable to purchase shares | 270 | 141 | 270 | 141 | |
Shares with dilutive effect and included in computation of diluted income (loss) per share | 25 | 11 | |||
Restricted stock | Executive Officer | |||||
Earnings Per Share [Line Items] | |||||
Compensation awarded restricted stock units | 146 | ||||
Closing market price of the common stock | $ 2.30 |
Losses and Loss Adjustment Ex40
Losses and Loss Adjustment Expenses Incurred and Paid - Information Regarding the Reserve for Unpaid Losses and Loss Adjustment Expenses (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Insurance [Abstract] | ||
Liability for unpaid losses and LAE at beginning of period, gross | $ 122,071 | $ 96,613 |
Reinsurance balances receivable, beginning balance | (464) | (362) |
Liability for unpaid losses and LAE at beginning of period, net | 121,607 | 96,251 |
Add: Provision for losses and LAE: | ||
Current period | 143,173 | 104,624 |
Prior periods | 31,011 | (1,687) |
Net losses and LAE incurred | 174,184 | 102,937 |
Less: Losses and LAE paid: | ||
Current period | 58,750 | 46,872 |
Prior periods | 71,703 | 42,293 |
Net losses and LAE paid | 130,453 | 89,165 |
Liability for unpaid losses and LAE at end of period, net | 165,338 | 110,023 |
Reinsurance balances receivable, ending balance | 674 | 453 |
Liability for unpaid losses and LAE at end of period, gross | $ 166,012 | $ 110,476 |
Income Taxes - (Benefit) Provis
Income Taxes - (Benefit) Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Federal: | ||||
Current | $ (21) | $ 51 | ||
Deferred | $ (10,665) | 209 | $ (13,627) | 402 |
Gross Federal | (10,665) | 188 | (13,627) | 453 |
State: | ||||
Current | 60 | 185 | 159 | 234 |
Deferred | (103) | 2 | (109) | 6 |
Gross State | (43) | 187 | 50 | 240 |
Income tax expense (benefit) | $ (10,708) | $ 375 | $ (13,577) | $ 693 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||
Statutory federal corporate tax rate | 35.00% | ||||
Valuation allowance | $ 2,000 | $ 2,000 | $ 1,700 | ||
Pre-tax loss | (30,607) | $ 690 | (38,981) | $ 1,494 | |
DTA related to net operating loss carryforwards | 20,200 | $ 20,200 | |||
DTA related to operating loss carryforwards expiration, description | do not expire until 2031 through 2036 | ||||
AMT carryforwards | $ 2,000 | $ 2,000 |
Income Taxes - (Benefit) Prov43
Income Taxes - (Benefit) Provision for Income Taxes Differs from Amounts Computed by Applying Statutory Federal Corporate Tax Rate (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
(Benefit) provision for income taxes at statutory rate | $ (10,712) | $ 242 | $ (13,643) | $ 523 |
Tax effect of: | ||||
Tax-exempt investment income | (10) | (5) | (20) | (10) |
Change in the beginning of the period balance of the valuation allowance for deferred tax assets allocated to federal income taxes | 57 | 2 | 57 | 2 |
Stock-based compensation | 13 | 22 | 17 | 22 |
State income taxes, net of federal income tax benefit and state valuation allowance | (65) | 122 | (6) | 158 |
Other | 9 | (8) | 18 | (2) |
Income tax expense (benefit) | $ (10,708) | $ 375 | $ (13,577) | $ 693 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2016Segment | |
Segment Reporting [Abstract] | |
Number of business segments | 2 |
Segment Information - Selected
Segment Information - Selected Financial Data by Business Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 102,754 | $ 80,631 | $ 199,702 | $ 155,737 | |
(Loss) income before income taxes | (30,607) | 690 | (38,981) | 1,494 | |
Total assets | 437,533 | 437,533 | $ 402,127 | ||
Insurance | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 101,501 | 80,614 | 198,434 | 155,703 | |
(Loss) income before income taxes | (30,434) | 1,438 | (37,455) | 2,990 | |
Total assets | 395,336 | 395,336 | 373,475 | ||
Real estate and Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 1,253 | 17 | 1,268 | 34 | |
(Loss) income before income taxes | (173) | $ (748) | (1,526) | $ (1,496) | |
Total assets | $ 42,197 | $ 42,197 | $ 28,652 |
Recent Accounting Pronounceme46
Recent Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Amount included in identifiable intangibles assets | $ 8,054 | $ 8,491 |
Accounting Standards Update, 2015-05 | Software Licenses | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Amount included in identifiable intangibles assets | $ 5 |
Related Parties - Additional In
Related Parties - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended |
Apr. 30, 2016 | Jun. 30, 2016 | |
Related Party Transaction [Line Items] | ||
Percentage of indirect ownership by principal stockholder | 15.00% | |
Treasury And Custodial Services Agreements | ||
Related Party Transaction [Line Items] | ||
Fees for related party services | $ 46 |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) - Titan Acquisition $ in Millions | Jul. 01, 2015USD ($)Stores | Jun. 30, 2016USD ($) |
Business Acquisition [Line Items] | ||
Estimate of expected liability | $ 2 | |
Reduction in goodwill | $ 0.8 | |
Asset Purchase Agreement | ||
Business Acquisition [Line Items] | ||
Business acquisition, effective date of completion | Jul. 1, 2015 | |
Payments to acquire businesses, gross | $ 36 | |
Number of retail stores | Stores | 83 | |
Business combination, liabilities assumed | $ 2.3 |
Business Combinations - Busines
Business Combinations - Business Combination Pro Forma Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Revenues: | |||||
Premiums earned | $ 80,850 | $ 67,300 | $ 157,257 | $ 129,915 | |
Commission and fee income | 19,183 | 11,929 | 38,764 | 23,278 | |
Investment income | 1,646 | 1,406 | 2,608 | 2,551 | |
Net realized losses on investments, available-for-sale | (162) | (4) | (164) | (7) | |
Total revenues | 102,754 | 80,631 | 199,702 | 155,737 | |
Costs and expenses: | |||||
Losses and loss adjustment expenses | 100,765 | 55,003 | 174,184 | 102,937 | |
Insurance operating expenses | 30,314 | 23,645 | 59,961 | 48,730 | |
Other operating expenses | 283 | 263 | 563 | 586 | |
Litigation settlement | 129 | 239 | |||
Stock-based compensation | 68 | 53 | 105 | 72 | |
Depreciation | 616 | 392 | 1,267 | 800 | |
Amortization of identifiable intangibles assets | 239 | 7 | 477 | 7 | |
Interest expense | 1,076 | 449 | 2,126 | 872 | |
Total costs and expenses | 133,361 | 79,941 | 238,683 | 154,243 | |
(Loss) income before income taxes | (30,607) | 690 | (38,981) | 1,494 | |
Provision (benefit) for income taxes | (10,708) | 375 | (13,577) | 693 | |
Net (loss) income | $ (19,899) | $ 315 | $ (25,404) | $ 801 | |
Net (loss) income per share: | |||||
Basic | $ (0.48) | $ 0.01 | $ (0.62) | $ 0.02 | |
Diluted | $ (0.48) | $ 0.01 | $ (0.62) | $ 0.02 | |
Number of shares used to calculate net (loss) income per share: | |||||
Basic | 41,064 | 41,020 | 41,062 | 41,018 | |
Diluted | 41,064 | 41,384 | 41,062 | 41,347 | |
Titan Agencies Historical | |||||
Revenues: | |||||
Commission and fee income | $ 6,422 | $ 14,547 | |||
Total revenues | 6,422 | 14,547 | |||
Costs and expenses: | |||||
Insurance operating expenses | 7,296 | 14,555 | |||
Total costs and expenses | 7,296 | 14,555 | |||
(Loss) income before income taxes | (874) | (8) | |||
Provision (benefit) for income taxes | (350) | (3) | |||
Net (loss) income | (524) | (5) | |||
Pro Forma Adjustments | |||||
Costs and expenses: | |||||
Depreciation | [1] | 25 | 50 | ||
Amortization of identifiable intangibles assets | [2] | 228 | 455 | ||
Interest expense | [3] | 598 | 1,190 | ||
Total costs and expenses | 851 | 1,695 | |||
(Loss) income before income taxes | (851) | (1,695) | |||
Provision (benefit) for income taxes | [4] | (340) | (678) | ||
Net (loss) income | (511) | (1,017) | |||
Pro Forma Combined | |||||
Revenues: | |||||
Premiums earned | 67,300 | 129,915 | |||
Commission and fee income | 18,351 | 37,825 | |||
Investment income | 1,406 | 2,551 | |||
Net realized losses on investments, available-for-sale | (4) | (7) | |||
Total revenues | 87,053 | 170,284 | |||
Costs and expenses: | |||||
Losses and loss adjustment expenses | 55,003 | 102,937 | |||
Insurance operating expenses | 30,941 | 63,285 | |||
Other operating expenses | 263 | 586 | |||
Litigation settlement | 129 | 239 | |||
Stock-based compensation | 53 | 72 | |||
Depreciation | 417 | 850 | |||
Amortization of identifiable intangibles assets | 235 | 462 | |||
Interest expense | 1,047 | 2,062 | |||
Total costs and expenses | 88,088 | 170,493 | |||
(Loss) income before income taxes | (1,035) | (209) | |||
Provision (benefit) for income taxes | (315) | 12 | |||
Net (loss) income | $ (720) | $ (221) | |||
Net (loss) income per share: | |||||
Basic | $ (0.02) | $ (0.01) | |||
Diluted | $ (0.02) | $ (0.01) | |||
Number of shares used to calculate net (loss) income per share: | |||||
Basic | 41,020 | 41,018 | |||
Diluted | 41,384 | 41,347 | |||
[1] | Depreciation expense related to acquired tangible asset | ||||
[2] | Amortization expense related to acquired identifiable intangible asset | ||||
[3] | Interest expense related to acquisition financing | ||||
[4] | Calculated income tax effect of pro forma adjustments at the estimated combined federal and state statutory rate of 40% |
Business Combinations - Busin50
Business Combinations - Business Combination Pro Forma Information (Parenthetical) (Detail) | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Business acquisition, pro forma adjustments estimated combined federal and state statutory tax rate | 40.00% |
Current Liquidity and Statuto51
Current Liquidity and Statutory Capital and Surplus - Additional Information (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Current Liquidity And Statutory Capital And Surplus [Line Items] | |
Long-term debt obligations | $ 70 |
Statutory capital and surplus balance | 60.2 |
Reduction in statutory capital and surplus | $ 38.6 |
Ratio of net premiums to statutory capital and surplus | 5.13% |
Minimum | |
Current Liquidity And Statutory Capital And Surplus [Line Items] | |
Ratio of net premiums to statutory capital and surplus | 3.00% |
Long-term debt matures on 2037 | |
Current Liquidity And Statutory Capital And Surplus [Line Items] | |
Long-term debt obligations | $ 40 |
Long-term debt matures on 2025 | |
Current Liquidity And Statutory Capital And Surplus [Line Items] | |
Long-term debt obligations | $ 30 |