Document and Entity Information
Document and Entity Information Document - USD ($) | 3 Months Ended | |||
Mar. 31, 2021 | May 13, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | |
Document Information [Abstract] | ||||
Document Quarterly Report | true | |||
Document Transition Report | false | |||
Entity Registrant Name | KINGSWAY FINANCIAL SERVICES INC. | |||
Entity Central Index Key | 0001072627 | |||
Current Fiscal Year End Date | --03-31 | |||
Entity Interactive Data Current | Yes | |||
Entity Filer Category | Non-accelerated Filer | |||
Entity Small Business | true | |||
Entity Emerging Growth Company | false | |||
Entity Shell Company | false | |||
Document Type | 10-Q | |||
Document Period End Date | Mar. 31, 2021 | |||
Document Fiscal Year Focus | 2021 | |||
Document Fiscal Period Focus | Q1 | |||
Common stock outstanding (in shares) | 22,211,069 | 23,705,631 | 22,211,069 | |
Amendment Flag | false | |||
Entity Well-known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
Entity Current Reporting Status | Yes | |||
Entity Public Float | $ 28,785,944 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Investments: | ||
Fixed maturities, at fair value (amortized cost of $19,699 and $20,488, respectively) | $ 19,864 | $ 20,716 |
Equity investments, at fair value (cost of $1,147 and $1,157, respectively) | 270 | 444 |
Limited liability investments | 3,683 | 3,692 |
Limited liability investments, at fair value | 19,654 | 32,811 |
Investments in private companies, at adjusted cost | 790 | 790 |
Real estate investments, at fair value (cost of $10,225 and $10,225, respectively) | 10,662 | 10,662 |
Other investments, at cost which approximates fair value | 299 | 294 |
Short-term investments, at cost which approximates fair value | 157 | 157 |
Total investments | 55,379 | 69,566 |
Cash and cash equivalents | 15,489 | 14,374 |
Restricted cash | 29,542 | 30,571 |
Accrued investment income | 800 | 757 |
Service fee receivable, net of allowance for doubtful accounts of $289 and $478, respectively | 4,963 | 3,928 |
Other receivables, net of allowance for doubtful accounts of $201 and $201, respectively | 18,187 | 16,323 |
Deferred acquisition costs, net | 8,843 | 8,835 |
Property and equipment, net of accumulated depreciation of $25,492 and $24,441, respectively | 94,192 | 95,015 |
Right-of-use asset | 2,760 | 2,960 |
Goodwill | 121,286 | 121,130 |
Intangible assets, net of accumulated amortization of $15,930 and $15,433, respectively | 83,636 | 84,133 |
Other assets | 4,744 | 4,882 |
Total Assets | 439,821 | 452,474 |
Liabilities: | ||
Accrued expenses and other liabilities | 42,716 | 42,502 |
Income taxes payable | 3,143 | 2,859 |
Deferred service fees | 86,871 | 87,945 |
Unpaid loss and loss adjustment expenses | 1,414 | 1,449 |
Bank loan | 24,089 | 25,303 |
Notes payable | 179,271 | 192,057 |
Subordinated debt, at fair value | 53,668 | 50,928 |
Lease liability | 3,008 | 3,213 |
Net deferred income tax liabilities | 27,037 | 27,555 |
Total Liabilities | 421,217 | 433,811 |
Redeemable Class A preferred stock, no par value; 1,000,000 and 1,000,000 authorized at March 31, 2021 and December 31, 2020, respectively; 182,876 and 182,876 issued and outstanding at March 31, 2021 and December 31, 2020, respectively; redemption amount of $6,742 and $6,658 at March 31, 2021 and December 31, 2020, respectively | 6,742 | 6,504 |
Shareholders' Equity: | ||
Common stock, no par value; 50,000,000 and 50,000,000 authorized at March 31, 2021 and December 31, 2020, respectively; 22,365,631 and 22,211,069 issued and outstanding at March 31, 2021 and December 31, 2020, respectively | 0 | 0 |
Additional paid-in capital | 355,999 | 355,242 |
Treasury stock, at cost; 247,450 and 247,450 outstanding at March 31, 2021 and December 31, 2020, respectively | (492) | (492) |
Accumulated deficit | (394,167) | (394,807) |
Accumulated other comprehensive income | 36,279 | 38,059 |
Shareholders' equity attributable to common shareholders | (2,381) | (1,998) |
Noncontrolling interests in consolidated subsidiaries | 14,243 | 14,157 |
Total Shareholders' Equity | 11,862 | 12,159 |
Total Liabilities, Class A preferred stock and Shareholders' Equity | $ 439,821 | $ 452,474 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Fixed maturities, cost | $ 19,699 | $ 20,488 |
Equity investments, cost | 1,147 | 1,157 |
Real estate investments, cost | 10,225 | 10,225 |
Premiums receivable, allowance for doubtful accounts | 0 | 0 |
Other receivables, allowance for doubtful accounts | 201 | 201 |
Service fee receivable, allowance for doubtful accounts | 289 | 478 |
Property and equipment, accumulated depreciation | 25,492 | 24,441 |
Intangible assets accumulated amortization | $ 15,930 | $ 15,433 |
Liabilities: | ||
Preferred stock authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock issued (in shares) | 182,876 | 182,876 |
Preferred stock outstanding (in shares) | 182,876 | 182,876 |
Redemption amount | $ 6,742 | $ 6,658 |
Shareholders' Equity: | ||
Common stock authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock issued (in shares) | 22,211,069 | 22,211,069 |
Common stock outstanding (in shares) | 22,211,069 | 22,211,069 |
Treasury stock (in shares) | 247,450 | 247,450 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||
Service fee and commission revenue | $ 18,574 | $ 11,186 |
Rental revenue | 3,341 | 3,341 |
Other revenue | 105 | 142 |
Total revenues | 22,020 | 14,669 |
Operating expenses: | ||
Claims authorized on vehicle service agreements | 4,667 | 2,380 |
Loss and loss adjustment expenses | 8 | 13 |
Commissions | 1,504 | 1,303 |
Cost of services sold | 980 | 403 |
General and administrative expenses | 12,466 | 10,693 |
Leased real estate segment interest expense | 1,468 | 1,499 |
Total operating expenses | 21,093 | 16,291 |
Operating income (loss) | 927 | (1,622) |
Other revenues (expenses), net: | ||
Net investment income | 421 | 719 |
Net realized gains | (51) | (208) |
Loss on change in fair value of equity investments | (151) | (597) |
(Loss) gain on change in fair value of limited liability investments, at fair value | (202) | 1,899 |
Net change in unrealized loss on private company investments | 0 | (670) |
Other-than-temporary impairment loss | 0 | (117) |
Non-operating other revenue | (2) | (39) |
Interest expense not allocated to segments | (1,552) | (2,153) |
Amortization of intangible assets | (497) | (574) |
(Loss) gain on change in fair value of debt | (1,019) | 2,645 |
Gain on extinguishment of debt | 2,494 | 0 |
Total other (expenses) revenues, net | (453) | 1,399 |
Income (loss) before income tax (benefit) expense | 474 | (223) |
Income tax (benefit) expense | (425) | 170 |
Net income | 899 | (393) |
Less: net income attributable to noncontrolling interests in consolidated subsidiaries | 259 | 721 |
Less: dividends on preferred stock | 238 | 377 |
Net income (loss) attributable to common shareholders | $ 402 | $ (1,491) |
Earnings (loss) per share – net income (loss) attributable to common shareholders: | ||
Basic: | $ 0.02 | $ (0.07) |
Diluted: | $ 0.02 | $ (0.07) |
Weighted-average shares outstanding (in ‘000s): | ||
Basic: | 22,218 | 22,069 |
Diluted: | 22,219 | 22,069 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 899 | $ (393) |
Unrealized (losses) gains on available-for-sale investments: | ||
Unrealized (losses) gains arising during the period | (75) | 55 |
Reclassification adjustment for amounts included in net income (loss) | 12 | 61 |
Change in fair value of debt attributable to instrument-specific credit risk | (1,721) | 11,623 |
Other comprehensive (loss) income | (1,784) | 11,739 |
Comprehensive (loss) income | (885) | 11,346 |
Less: comprehensive income attributable to noncontrolling interests in consolidated subsidiaries | 256 | 729 |
Comprehensive (loss) income attributable to common shareholders | $ (1,141) | $ 10,617 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Other comprehensive income (loss), tax | $ 0 | $ 0 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Shareholders' Equity Attributable to Common Shareholders | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Consolidated Subsidiaries |
Balance, beginning of period (in shares) at Dec. 31, 2019 | 21,866,959 | |||||||
Balance, beginning of period at Dec. 31, 2019 | $ 13,954 | $ 874 | $ 0 | $ 354,101 | $ (388,082) | $ 35,347 | $ 13,080 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Vesting of restricted stock awards, net of share settlements for tax withholdings (in shares) | 94,110 | |||||||
Conversion of redeemable Class A preferred stock to common stock (in shares) | 1,381,000 | 1,381,000 | 250,000 | 1,381,000 | ||||
Net income | $ (393) | $ (1,114) | (1,114) | 721 | ||||
Preferred stock dividends | (377) | (377) | $ (377) | |||||
Distributions to noncontrolling interest holders | (43) | (43) | ||||||
Other comprehensive (loss) income | 11,739 | 11,731 | 11,731 | 8 | ||||
Stock-based compensation, net of forfeitures | (38) | (38) | (38) | |||||
Balance, end of period (in shares) at Mar. 31, 2020 | 22,211,069 | |||||||
Balance, end of period at Mar. 31, 2020 | $ 26,223 | 12,457 | $ 0 | 355,067 | (389,196) | 47,078 | 13,766 | |
Balance, beginning of period (in shares) at Dec. 31, 2020 | 22,211,069 | 22,211,069 | ||||||
Balance, beginning of period at Dec. 31, 2020 | $ 12,159 | (1,998) | $ 0 | 355,242 | $ (492) | (394,807) | 38,059 | 14,157 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Vesting of restricted stock awards, net of share settlements for tax withholdings (in shares) | 154,562 | |||||||
Net income | 899 | 640 | 640 | 0 | 259 | |||
Preferred stock dividends | (238) | (238) | (238) | 0 | ||||
Distributions to noncontrolling interest holders | (169) | (169) | ||||||
Other comprehensive (loss) income | (1,784) | (1,780) | (1,780) | (4) | ||||
Stock-based compensation, net of forfeitures | $ 995 | 995 | 995 | |||||
Balance, end of period (in shares) at Mar. 31, 2021 | 22,211,069 | 22,365,631 | ||||||
Balance, end of period at Mar. 31, 2021 | $ 11,862 | $ (2,381) | $ 0 | $ 355,999 | $ (492) | $ (394,167) | $ 36,279 | $ 14,243 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities: | ||
Net income (loss) | $ 899 | $ (393) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||
Equity in net loss (income) of limited liability investments | 9 | (23) |
Depreciation and amortization expense | 1,548 | 1,667 |
Stock-based compensation expense (benefit), net of forfeitures | 1,699 | (38) |
Net realized gains | (51) | (208) |
Loss on change in fair value of equity investments | 151 | 597 |
Loss (gain) on change in fair value of limited liability investments, at fair value | (202) | 1,899 |
Net change in unrealized loss on private company investments | 0 | 670 |
Loss (gain) on change in fair value of debt | 1,019 | (2,645) |
Deferred income taxes | (518) | 131 |
Other-than-temporary impairment loss | 0 | 117 |
Amortization of fixed maturities premiums and discounts | 44 | 31 |
Amortization of note payable premium | (218) | (225) |
Gain on extinguishment of debt | (2,494) | 0 |
Service fee receivable, net | (1,035) | 138 |
Other receivables, net, | (1,864) | 2,274 |
Deferred acquisition costs, net | (8) | (140) |
Unpaid loss and loss adjustment expenses | (35) | (83) |
Deferred service fees | (1,074) | (33) |
Other, net | (143) | 675 |
Net cash (used in) provided by operating activities | (1,869) | 613 |
Investing activities: | ||
Proceeds from sales and maturities of fixed maturities | 1,970 | 8,646 |
Proceeds from sales of equity investments | 23 | 0 |
Purchases of fixed maturities | (1,214) | (1,549) |
Net proceeds from limited liability investments | 0 | 87 |
Net proceeds from limited liability investments, at fair value | 12,977 | 77 |
Payments for (Proceeds from) Investments in Private Companies | (17) | (60) |
Net proceeds from investments in private companies | 5 | |
Net (purchases of) proceeds from other investments | 52 | |
Net purchases of from short-term investments | 0 | (1) |
Acquisition of business, net of cash acquired | (50) | 0 |
Net purchases of property and equipment | (228) | (40) |
Net cash provided by investing activities | 13,490 | 7,332 |
Financing activities: | ||
Distributions to noncontrolling interest holders | (169) | (43) |
Taxes paid related to net share settlements of restricted stock awards | (38) | (83) |
Principal payments on bank loan | (1,235) | (562) |
Principal payments on notes payable | (10,093) | (991) |
Net cash used in financing activities | (11,535) | (1,679) |
Net increase in cash and cash equivalents and restricted cash | 86 | 6,266 |
Cash and cash equivalents and restricted cash at beginning of period | 45,031 | 31,927 |
Cash and cash equivalents and restricted cash at end of period | $ 44,945 | $ 25,661 |
BUSINESS
BUSINESS | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | BUSINESSKingsway Financial Services Inc. (the "Company" or "Kingsway") was incorporated under the Business Corporations Act (Ontario) on September 19, 1989. Effective December 31, 2018, the Company changed its jurisdiction of incorporation from the province of Ontario, Canada, to the State of Delaware. Kingsway is a holding company with operating subsidiaries located in the United States. The Company owns or controls subsidiaries primarily in the extended warranty, asset management and real estate industries. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements of the Company. In the opinion of management, all adjustments necessary for a fair presentation have been included and are of a normal recurring nature. Interim results are not necessarily indicative of the results that may be expected for the year. The accompanying unaudited consolidated interim financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and footnotes included within our Annual Report on Form 10-K ("2020 Annual Report") for the year ended December 31, 2020. The unaudited consolidated interim financial statements include the accounts of the Company and its subsidiaries, as well as certain variable interest entities as further described in Note 6, "Variable Interest Entities," to the consolidated financial statements in the 2020 Annual Report. All material intercompany transactions and balances have been eliminated in consolidation. The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Estimates and their underlying assumptions are reviewed on an ongoing basis. Changes in estimates are recorded in the accounting period in which they are determined. The critical accounting estimates and assumptions in the accompanying unaudited consolidated interim financial statements include the provision for unpaid loss and loss adjustment expenses; valuation of fixed maturities and equity investments; impairment assessment of investments; valuation of limited liability investments, at fair value; valuation of real estate investments; valuation of deferred income taxes; valuation of mandatorily redeemable preferred stock; valuation and impairment assessment of intangible assets; goodwill recoverability; deferred acquisition costs; fair value assumptions for subordinated debt obligations; fair value assumptions for stock-based compensation liabilities; and revenue recognition. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExcept as set forth below there have been no material changes to our significant accounting policies as reported in our 2020 Annual Report. COVID-19 In March 2020, the outbreak of COVID-19 caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization, and the outbreak has become increasingly widespread in the United States, including in the markets in which we operate. The COVID-19 outbreak has had a notable impact on general economic conditions, including but not limited to the temporary closures of many businesses; "shelter in place" and other governmental regulations; and reduced consumer spending due to both job losses and other effects attributable to COVID-19. The near-term impacts of COVID-19 are primarily with respect to the Company’s Extended Warranty segment. As consumer spending has been impacted, including a decline in the purchase of new and used vehicles, and many businesses through which the Company distributes its products either remain closed or are open but with capacity constraints, the Company has seen cash flows being affected by a reduction in new warranty sales for vehicle service agreements. With respect to homeowner warranties, the Company experienced an initial reduction in new enrollments in its home warranty programs associated with the impact of COVID-19 on new home sales in the United States. There remain many unknowns and the Company continues to monitor the expected trends and related demand for its services and has and will continue to adjust its operations accordingly. The Company could experience other potential impacts as a result of COVID-19, including, but not limited to, potential impairment charges to the carrying amounts of goodwill, indefinite-lived intangibles and long-lived assets, the loss in value of investments, as well as the potential for adverse impacts on the Company's debt covenant financial ratios. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Quarterly Report on Form 10-Q. Actual results may differ materially from the Company’s current estimates as the scope of COVID-19 evolves or if the duration of business disruptions is longer than initially anticipated. Holding Company Liquidity The Company's Extended Warranty subsidiaries fund their obligations primarily through service fee and commission revenue. The Company's Leased Real Estate subsidiary funds its obligations through rental income. The Company's insurance subsidiaries fund their obligations primarily through available cash and cash equivalents. The liquidity of the holding company is managed separately from its subsidiaries. The obligations of the holding company primarily consist of holding company operating expenses; transaction-related expenses; investments; certain debt and associated interest; and any other extraordinary demands on the holding company. Actions available to the holding company to increase liquidity in order to meet its obligations include the sale of passive investments; sale of subsidiaries; issuance of debt or equity securities; distributions from the Company’s Extended Warranty subsidiaries, subject to certain restrictions; and giving notice to its Trust Preferred trustees of its intention to exercise its voluntary right to defer interest payments for up to 20 quarters on the six subsidiary trusts of the Company’s subordinated debt, which right the Company exercised during the third quarter of 2018. Historically, dividends from the Leased Real Estate segment are not generally considered a source of liquidity for the holding company, except upon the occurrence of certain events that would trigger payment of service fees. However, as more fully described in Note 20, "Commitments and Contingencies," the holding company is now permitted to receive 20% of the proceeds from the increased rental payments resulting from an earlier amendment to the lease (or any borrowings against such increased rental payments). The holding company’s liquidity, defined as the amount of cash in the bank accounts of Kingsway Financial Services Inc. and Kingsway America Inc., was $3.8 million (approximately eight months of operating cash outflows) and $1.1 million at March 31, 2021 and December 31, 2020, respectively. The amount as of March 31, 2021 excludes future actions available to the holding company that could be taken to increase liquidity. The holding company cash amounts are reflected in the cash and cash equivalents of $15.5 million and $14.4 million reported at March 31, 2021 and December 31, 2020, respectively, on the Company’s consolidated balance sheets. The cash and cash equivalents and restricted cash other than the holding company’s liquidity represent restricted and unrestricted cash held by Kingsway Amigo Insurance Company ("Amigo"), Kingsway Reinsurance Corporation and the Company’s Extended Warranty and Leased Real Estate segments. As of March 31, 2021, there are 182,876 shares of the Company’s Class A Preferred Stock (the "Preferred Shares"), issued and outstanding. The outstanding Preferred Shares are required to be redeemed by the Company on April 1, 2021 ("Redemption Date") at a redemption value of $6.7 million, if the Company has sufficient legally available funds to do so. Additionally, the Company has exercised its right to defer payment of interest on its outstanding subordinated debt ("trust preferred securities") and, because of the deferral which totaled $15.2 million at March 31, 2021, the Company is prohibited from redeeming any shares of its capital stock while payment of interest on the trust preferred securities is being deferred. If the Company was required to pay either the Preferred Shares redemption value or both the deferred interest on the trust preferred securities and redeem all the Preferred Shares currently outstanding, then the Company currently projects that it would not have sufficient legally available funds to do so. However, the Company would be prohibited from doing so under Delaware law and, as such, (a) the interest which totaled $15.2 million on March 31, 2021 on the trust preferred securities would remain on deferral as permitted under the indentures and (b) in accordance with Delaware law the Preferred Shares would not be redeemed on the Redemption Date (with a redemption value of $6.7 million) and would instead remain outstanding and continue to accrue dividends until such time as the Company has sufficient legally available funds to redeem the Preferred Shares and is not otherwise prohibited from doing so. In such a situation, the Company would continue to operate in the ordinary course. The Company notes there are several variables to consider in such a situation, and management is currently exploring the following opportunities: negotiating with the holders of the Preferred Shares with respect to the Redemption Date and/or other key provisions, raising additional funds through capital market transactions, as well as the Company’s continued strategy of working to monetize its non-core investments while attempting to maximize the tradeoff between liquidity and value received. |
RECENTLY ISSUED ACCOUNTING STAN
RECENTLY ISSUED ACCOUNTING STANDARDS | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
RECENTLY ISSUED ACCOUNTING STANDARDS | RECENTLY ISSUED ACCOUNTING STANDARDS (a) Adoption of New Accounting Standards: Effective January 1, 2021, the Company adopted Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 is intended to simplify accounting for income taxes by eliminating certain exceptions to the guidance in ASC Topic 740, Income Taxes , related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. Further, ASU 2019-12 clarifies that single-member limited liability companies and similar disregarded entities that are not subject to income tax are not required to recognize an allocation of consolidated income tax expense in their separate financial statements, but they could elect to do so. The adoption of ASU 2019-12 did not have a material effect on the Company’s consolidated financial statements. Effective January 1, 2021, the Company adopted ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 . ASU 2020-01 clarifies the interaction between accounting standards related to equity securities (ASC 321), equity method investments (ASC 323), and certain derivatives (ASC815). The adoption of ASU 2020-01 did not have an impact on the Company's consolidated financial statements. (b) Accounting Standards Not Yet Adopted: In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 replaces the current incurred loss model used to measure impairment losses with an expected loss model for trade, reinsurance, and other receivables as well as financial instruments measured at amortized cost. ASU 2016-13 will require a financial asset measured at amortized cost, including reinsurance balances recoverable, to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income (loss). Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses. However, the amendments would limit the amount of the allowance to the amount by which fair value is below amortized cost. The measurement of credit losses on available-for-sale investments is similar under current GAAP, but the update requires the use of the allowance account through which amounts can be reversed, rather than through irreversible write-downs. On November 15, 2019, the FASB issued ASU 2019-10, which (1) provides a framework to stagger effective dates for future major accounting standards and (2) amends the effective dates for certain major new accounting standards to give implementation relief to certain types of entities. Specifically, per ASU 2019-10 the Company would adopt ASU 2016-13 beginning January 1, 2023, as the Company is a |
Acquisition
Acquisition | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisition | ACQUISITION On December 1, 2020, the Company acquired 100% of the outstanding shares of PWI Holdings, Inc. for cash consideration of $24.4 million. The final purchase price was subject to a working capital true-up that was finalized during the first quarter of 2021 of $0.1 million. PWI Holdings, Inc., through its subsidiaries Preferred Warranties, Inc., Superior Warranties, Inc., Preferred Warranties of Florida, Inc., and Preferred Nationwide Reinsurance Company, Ltd. (collectively, "PWI"), markets, sells and administers vehicle service agreements in all fifty states, primarily through a network of automobile dealer partners. As further discussed in Note 17, "Segmented Information," PWI is included in the Extended Warranty segment. This acquisition allows the Company to grow its portfolio of warranty companies and further expand into the vehicle service agreement business. The Company has not completed its purchase price allocation associated with the acquisition of PWI due to the timing of the acquisition occurring in December and intends to finalize during 2021 its purchase price allocation fair value analysis of the assets acquired and liabilities assumed. The assets acquired and liabilities assumed are recorded in the consolidated financial statements at their estimated fair values before recognition of any identifiable intangible assets or other fair value adjustments with the excess purchase price all being provisionally allocated to goodwill. These estimates, allocations and calculations are subject to change as we obtain further information; therefore, the final fair values of the assets acquired and liabilities assumed are expected to change from the estimates included in these consolidated financial statements. Based upon historical acquisitions and a preliminary analysis of PWI, the Company would expect to record intangible assets relating to customer relationships and trade names, as well as to record a net deferred income tax liability and a reduction in deferred service fees. Other adjustments may be necessary as a result of finalizing the purchase price allocation. Any such adjustments would be made against the preliminary goodwill amount shown in the table below. The goodwill is not deductible for tax purposes. To the extent PWI records a net deferred income tax liability, the Company may be able to release a portion of its deferred income tax valuation allowance in the consolidated statements of operations. The following table summarizes the estimated allocation of the PWI assets acquired and liabilities assumed at the date of acquisition: (in thousands) December 1, 2020 Cash and cash equivalents $ 90 Restricted cash 21,578 Service fee receivable 1,459 Other receivables 2,748 Income taxes recoverable 60 Property and equipment, net 175 Right-of-use asset 254 Goodwill 39,182 Other assets 1,321 Total assets $ 66,867 Accrued expenses and other liabilities $ 8,162 Lease liability 255 Deferred service fees 34,026 Total liabilities $ 42,443 Purchase price $ 24,424 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2021 | |
Investments [Abstract] | |
INVESTMENTS | INVESTMENTS The amortized cost, gross unrealized gains and losses, and estimated fair value of the Company's available-for-sale investments at March 31, 2021 and December 31, 2020 are summarized in the tables shown below: (in thousands) March 31, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Fixed maturities: U.S. government, government agencies and authorities $ 10,547 $ 84 $ 7 $ 10,624 States, municipalities and political subdivisions 1,296 6 — 1,302 Mortgage-backed 4,709 50 6 4,753 Corporate 3,147 38 — 3,185 Total fixed maturities $ 19,699 $ 178 $ 13 $ 19,864 (in thousands) December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Fixed maturities: U.S. government, government agencies and authorities $ 9,999 $ 105 $ — $ 10,104 States, municipalities and political subdivisions 1,447 7 — 1,454 Mortgage-backed 5,334 66 6 5,394 Corporate 3,708 56 — 3,764 Total fixed maturities $ 20,488 $ 234 $ 6 $ 20,716 The table below summarizes the Company's fixed maturities at March 31, 2021 by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturity of these obligations. (in thousands) March 31, 2021 Amortized Cost Estimated Fair Value Due in one year or less $ 4,260 $ 4,287 Due after one year through five years 14,022 14,153 Due after five years through ten years 319 328 Due after ten years 1,098 1,096 Total $ 19,699 $ 19,864 The following tables highlight the aggregate unrealized loss position, by security type, of available-for-sale investments in unrealized loss positions as of March 31, 2021 and December 31, 2020. The tables segregate the holdings based on the period of time the investments have been continuously held in unrealized loss positions. (in thousands) March 31, 2021 Less than 12 Months Greater than 12 Months Total Estimated Fair Value Unrealized Loss Estimated Fair Value Unrealized Loss Estimated Fair Value Unrealized Loss Fixed maturities: U.S. government, government agencies and authorities $ 4,542 $ 7 $ — $ — $ 4,542 $ 7 States, municipalities and political subdivisions 200 — — — 200 — Mortgage-backed 809 6 — — 809 6 Corporate 208 — — — 208 — Total fixed maturities $ 5,759 $ 13 $ — $ — $ 5,759 $ 13 (in thousands) December 31, 2020 Less than 12 Months Greater than 12 Months Total Estimated Fair Value Unrealized Loss Estimated Fair Value Unrealized Loss Estimated Fair Value Unrealized Loss Fixed maturities: U.S. government, government agencies and authorities $ 511 $ — $ — $ — $ 511 $ — Mortgage-backed 834 6 — — 834 6 Total fixed maturities $ 1,345 $ 6 $ — $ — $ 1,345 $ 6 There are approximately sixteen and five individual available-for-sale investments that were in unrealized loss positions as of March 31, 2021 and December 31, 2020, respectively. The establishment of an other-than-temporary impairment on an investment requires a number of judgments and estimates. The Company performs a quarterly analysis of the individual investments to determine if declines in market value are other-than-temporary. See the "Significant Accounting Policies and Critical Estimates" section of Management's Discussion and Analysis of Financial Condition included in the 2020 Annual Report for further information regarding the Company's detailed analysis and factors considered in establishing an other-than-temporary impairment on an investment. As a result of the analysis performed by the Company to determine declines in market value that are other-than-temporary, the Company recorded write-downs for other-than-temporary impairment related to other investments of zero and $0.1 million for the three months ended March 31, 2021 and March 31, 2020, respectively. The Company has reviewed currently available information regarding investments with estimated fair values less than their carrying amounts and believes these unrealized losses are not other-than-temporary and are primarily due to temporary market and sector-related factors rather than to issuer-specific factors. The Company does not intend to sell those investments, and it is not likely it will be required to sell those investments before recovery of its amortized cost. The Company does not have any exposure to subprime mortgage-backed investments. Limited liability investments include investments in limited liability companies and limited partnerships. The Company's interests in these investments are not deemed minor and, therefore, are accounted for under the equity method of accounting. The most recently available financial statements are used in applying the equity method. The difference between the end of the reporting period of the limited liability entities and that of the Company is no more than three months. As of March 31, 2021 and December 31, 2020, the carrying value of limited liability investments totaled $3.7 million. Income or loss from limited liability investments is recognized based on the Company's share of the earnings of the limited liability entities and is included in net investment income in the consolidated statements of operations. At March 31, 2021, the Company has no unfunded commitments related to limited liability investments. Limited liability investments, at fair value represents the underlying investments of the Company’s consolidated entities Net Lease Investment Grade Portfolio LLC ("Net Lease") and Argo Holdings Fund I, LLC ("Argo Holdings"). As of March 31, 2021 and December 31, 2020, the carrying value of the Company's limited liability investments, at fair value was $19.7 million and $32.8 million, respectively. The Company recorded impairments related to limited liability investments, at fair value of less than $0.1 million and zero for the three months ended March 31, 2021 and March 31, 2020, respectively, which are included in (loss) gain on change in fair value of limited liability investments, at fair value in the consolidated statements of operations. At March 31, 2021, the Company has no unfunded commitments to fund limited liability investments, at fair value. The Company consolidates the financial statements of Net Lease on a three-month lag. Net Lease owns investments in limited liability companies that hold investment properties. During the fourth quarter of 2020, one of Net Lease's limited liability companies sold their investment property. A portion of the proceeds from the sale were distributed to Net Lease who used them primarily to repay their $9.0 million mezzanine loan. As a result of the distribution, Net Lease recorded a gain of $1.2 million related to its investment in the limited liability company, with an offsetting change in unrealized gain of $1.2 million, which collectively are included in net investment income in the consolidated statement of operations for the three months ended March 31, 2021. Investments in private companies consist of convertible preferred stocks and notes in privately owned companies and investments in limited liability companies in which the Company’s interests are deemed minor. The Company's investments in private companies do not have readily determinable fair values. The Company has elected to record investments in private companies at cost, adjusted for observable price changes and impairments. As of March 31, 2021 and December 31, 2020, the carrying value of the Company's investments in private companies totaled $0.8 million. For the three months ended March 31, 2021 and March 31, 2020, the Company did not record any adjustments to the fair value of its investments in private companies for observable price changes. The Company performs a quarterly impairment analysis of its investments in private companies. As a result of the analysis performed, the Company recorded impairments related to investments in private companies of zero and $0.7 million for the three months ended March 31, 2021 and March 31, 2020, respectively, which are included in net change in unrealized loss on private company investments in the consolidated statements of operations. The impairment recorded for the three months ended March 31, 2020 is a result of the impact of COVID-19 on the investment's underlying business. The Company previously had issued promissory notes (the "Notes") to five former employees (the "Debtors"), which were recorded as other investments in the consolidated balance sheets. During the third and fourth quarters of 2020, the Company agreed to accept partial payment from the Debtors as full satisfaction of the Debtors' obligations under the Notes and recognized a loss of $0.2 million for the year ended December 31, 2020. During the three months ended March 31, 2020, the Company recorded a write-down of $0.1 million for other-than-temporary impairment related to the Notes for one of the Debtors. The remaining principal amount outstanding on the Notes was zero as of March 31, 2021 and December 31, 2020. Net investment income for the three months ended March 31, 2021 and March 31, 2020 is comprised as follows: (in thousands) Three months ended March 31, 2021 2020 Investment income: Interest from fixed maturities $ 51 $ 102 Dividends 32 45 (Loss) income from limited liability investments (9) 23 Income from limited liability investments, at fair value 81 234 Income from real estate investments 200 200 Other 90 127 Gross investment income 445 731 Investment expenses (24) (12) Net investment income $ 421 $ 719 Gross realized gains and losses on available-for-sale investments, limited liability investments, at fair value and investments in private companies for the three months ended March 31, 2021 and March 31, 2020 are comprised as follows: (in thousands) Three months ended March 31, 2021 2020 Gross realized gains $ 51 $ 208 Gross realized losses — — Net realized gains $ 51 $ 208 Loss on change in fair value of equity investments for the three months ended March 31, 2021 and March 31, 2020 is comprised as follows: (in thousands) Three months ended March 31, 2021 2020 Net gains recognized on equity investments sold during the period $ 13 $ — Change in unrealized losses on equity investments held at end of the period (164) (597) Loss on change in fair value of equity investments $ (151) $ (597) Impact of COVID-19 on Investments The Company continues to assess the impact that the COVID-19 pandemic may have on the value of its various investments, which could result in future material decreases in the underlying investment values. Such decreases may be considered temporary or could be deemed to be other-than-temporary, and management may be required to record write-downs of the related investments in future reporting periods. |
Deferred Acquisition Costs
Deferred Acquisition Costs | 3 Months Ended |
Mar. 31, 2021 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
DEFERRED ACQUISITION COSTS | DEFERRED ACQUISITION COSTS Deferred acquisition costs consist primarily of commissions and agency expenses incurred directly related to the acquisition of vehicle service agreements and are amortized over the period in which the related revenues are earned. The components of deferred acquisition costs and the related amortization expense for the three months ended March 31, 2021 and March 31, 2020 are comprised as follows: (in thousands) Three months ended March 31, 2021 2020 Beginning balance, net $ 8,835 $ 8,604 Additions 1,351 1,096 Amortization (1,343) (956) Balance at March 31, net $ 8,843 $ 8,744 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangible assets at March 31, 2021 and December 31, 2020 are comprised as follows: (in thousands) March 31, 2021 Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets subject to amortization: Database $ 4,918 $ 4,120 $ 798 Vehicle service agreements in-force 3,680 3,680 — Customer relationships 12,646 7,650 4,996 In-place lease 1,125 297 828 Non-compete 266 183 83 Intangible assets not subject to amortization: Tenant relationship 73,667 — 73,667 Trade names 3,264 — 3,264 Total $ 99,566 $ 15,930 $ 83,636 (in thousands) December 31, 2020 Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets subject to amortization: Database $ 4,918 $ 3,997 $ 921 Vehicle service agreements in-force 3,680 3,680 — Customer relationships 12,646 7,305 5,341 In-place lease 1,125 281 844 Non-compete 266 170 96 Intangible assets not subject to amortization: Tenant relationship 73,667 — 73,667 Trade names 3,264 — 3,264 Total $ 99,566 $ 15,433 $ 84,133 The Company's intangible assets with definite useful lives are amortized either based on the patterns in which the economic benefits of the intangible assets are expected to be consumed or using the straight-line method over their estimated useful lives, which range from 5 to 18 years. Amortization of intangible assets was $0.5 million and $0.6 million for the three months ended March 31, 2021 and March 31, 2020, respectively. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment at March 31, 2021 and December 31, 2020 are comprised as follows: (in thousands) March 31, 2021 Cost Accumulated Depreciation Carrying Value Land $ 21,120 $ — $ 21,120 Site improvements 91,308 19,461 71,847 Buildings 580 68 512 Leasehold improvements 296 138 158 Furniture and equipment 1,149 1,003 146 Computer hardware 5,231 4,822 409 Total $ 119,684 $ 25,492 $ 94,192 (in thousands) December 31, 2020 Cost Accumulated Depreciation Carrying Value Land $ 21,120 $ — $ 21,120 Site improvements 91,308 18,428 72,880 Buildings 580 65 515 Leasehold improvements 296 125 171 Furniture and equipment 1,223 1,074 149 Computer hardware 4,929 4,749 180 Total $ 119,456 $ 24,441 $ 95,015 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Debt consists of the following instruments at March 31, 2021 and December 31, 2020: (in thousands) March 31, 2021 December 31, 2020 Principal Carrying Value Fair Value Principal Carrying Value Fair Value Bank loan: 2020 KWH Loan $ 24,465 $ 24,089 $ 24,707 $ 25,700 $ 25,303 $ 25,893 Total bank loan 24,465 24,089 24,707 25,700 25,303 25,893 Notes payable: Mortgage 165,130 172,502 180,767 166,106 173,696 194,158 Flower Note 6,769 6,769 7,368 6,885 6,885 7,863 Net Lease Note — — — 9,000 9,000 9,054 PPP — — — 2,476 2,476 2,476 Total notes payable 171,899 179,271 188,135 184,467 192,057 213,551 Subordinated debt 90,500 53,668 53,668 90,500 50,928 50,928 Total $ 286,864 $ 257,028 $ 266,510 $ 300,667 $ 268,288 $ 290,372 Subordinated debt mentioned above consists of the following trust preferred debt instruments: Issuer Principal (in thousands) Issue date Interest Redemption date Kingsway CT Statutory Trust I $ 15,000 12/4/2002 annual interest rate equal to LIBOR, plus 4.00% payable quarterly 12/4/2032 Kingsway CT Statutory Trust II $ 17,500 5/15/2003 annual interest rate equal to LIBOR, plus 4.10% payable quarterly 5/15/2033 Kingsway CT Statutory Trust III $ 20,000 10/29/2003 annual interest rate equal to LIBOR, plus 3.95% payable quarterly 10/29/2033 Kingsway DE Statutory Trust III $ 15,000 5/22/2003 annual interest rate equal to LIBOR, plus 4.20% payable quarterly 5/22/2033 Kingsway DE Statutory Trust IV $ 10,000 9/30/2003 annual interest rate equal to LIBOR, plus 3.85% payable quarterly 9/30/2033 Kingsway DE Statutory Trust VI $ 13,000 12/16/2003 annual interest rate equal to LIBOR, plus 4.00% payable quarterly 1/8/2034 (a) Bank loan: In 2019, the Company formed Kingsway Warranty Holdings LLC ("KWH"), whose subsidiaries include IWS Acquisition Corporation ("IWS"), Geminus Holdings Company, Inc. ("Geminus") and Trinity Warranty Solutions LLC ("Trinity"). As part of the acquisition of PWI on December 1, 2020, PWI became a wholly owned subsidiary of KWH, which borrowed a principal amount of $25.7 million from a bank, consisting of a $24.7 million term loan and a $1.0 million revolving credit facility (the "2020 KWH Loan"). The proceeds from the 2020 KWH Loan were used to partially fund the acquisition of PWI and to fully repay the prior outstanding loan at KWH, which occurred on December 1, 2020. The 2020 KWH Loan has an annual interest rate equal to the London interbank offered interest rate for three-month U.S. dollar deposits ("LIBOR") having a floor of 0.75%, plus 3.00%. At March 31, 2021, the interest rate was 3.75%. The 2020 KWH Loan matures on December 1, 2025. The Company also recorded as a discount to the carrying value of the 2020 KWH Loan issuance costs of $0.4 million specifically related to the 2020 KWH Loan. The 2020 KWH Loan is carried in the consolidated balance sheets at its amortized cost, which reflects the quarterly pay-down of principal as well as the amortization of the debt discount and issuance costs using the effective interest rate method. The fair value of the 2020 KWH Loan disclosed in the table above is derived from quoted market prices of B and BB minus rated industrial bonds with similar maturities and is categorized within Level 2 of the fair value hierarchy. The 2020 KWH Loan is secured by certain of the equity interests and assets of KWH and its subsidiaries. The 2020 KWH Loan contains a number of covenants, including, but not limited to, a leverage ratio, a fixed charge ratio and limits on annual capital expenditures, all of which are as defined in and calculated pursuant to the 2020 KWH Loan that, among other things, restrict KWH’s ability to incur additional indebtedness, create liens, make dividends and distributions, engage in mergers, acquisitions and consolidations, make certain payments and investments and dispose of certain assets. (b) Notes payable: As part of the acquisition of CMC Industries, Inc. ("CMC") in July 2016, the Company assumed a mortgage, which is recorded as note payable in the consolidated balance sheets ("the Mortgage"). The Mortgage is nonrecourse indebtedness with respect to CMC and its subsidiaries, and the Mortgage is not, nor will it be, guaranteed by Kingsway or its affiliates. The Mortgage is collateralized by a parcel of real property consisting of approximately 192 acres located in the State of Texas (the "Real Property") and the assignment of leases and rents related to a long-term triple net lease agreement with an unrelated third-party. The Mortgage, which is recorded as note payable in the consolidated balance sheets, was recorded at its estimated fair value of $191.7 million, which included the unpaid principal amount of $180.0 million as of the date of acquisition plus a premium of $11.7 million. The Mortgage matures on May 15, 2034 and has a fixed interest rate of 4.07%. The Mortgage is carried in the consolidated balance sheets at its amortized cost, which reflects the monthly pay-down of principal as well as the amortization of the premium using the effective interest rate method. The fair value of the Mortgage disclosed in the table above is derived from quoted market prices of A-rated industrial bonds with similar maturities and is categorized within Level 2 of the fair value hierarchy. On January 5, 2015, Flower Portfolio 001, LLC ("Flower") assumed a $9.2 million mortgage in conjunction with the purchase of investment real estate properties, which is recorded as note payable in the consolidated balance sheets ("the Flower Note"). The Flower Note requires monthly payments of principal and interest and is secured by certain investments of Flower. The Flower Note matures on December 10, 2031 and has a fixed interest rate of 4.81%. The carrying value of the Flower Note at March 31, 2021 of $6.8 million represents its unpaid principal balance. The fair value of the Flower Note disclosed in the table above is derived from quoted market prices of A and BBB plus rated industrial bonds with similar maturities and is categorized within Level 2 of the fair value hierarchy. On October 15, 2015, Net Lease assumed a $9.0 million mezzanine debt in conjunction with the purchase of investment real estate properties, which is recorded as note payable in the consolidated balance sheets ("the Net Lease Note"). The Net Lease Note required monthly payments of interest and was secured by certain investments of Net Lease. The Net Lease Note matured on November 1, 2020 and had a fixed interest rate of 10.25%. In conjunction with the maturity of the Net Lease Note on November 1, 2020, Net Lease explored alternatives to maximize the value of its investment portfolio. As a result of this process, Net Lease elected to sell one of its three investment real estate properties while refinancing the remaining properties and the existing financing was repaid. Each of these transactions closed on October 30, 2020, however because the Company reports Net Lease on a three-month lag, the consolidated balance sheet at December 31, 2020 continues to report the $9.0 million mezzanine debt, which represents its unpaid principal balance. The fair value of the Net Lease Note disclosed in the table above is derived from quoted market prices of B and B minus rated industrial bonds with similar maturities and is categorized within Level 2 of the fair value hierarchy. In April 2020, certain subsidiaries of the Company received loan proceeds under the Paycheck Protection Program ("PPP"), totaling $2.9 million with a stated annual interest rate of 1.00%. The PPP, established as part of the Coronavirus Aid, Relief, and Economic Security Act and administered by the U.S. Small Business Administration (the "SBA"), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll costs (as defined for purposes of the PPP) of the qualifying business. The loans and accrued interest are forgivable as long as the borrower uses the loan proceeds for eligible purposes, including payroll, costs, rent and utilities, during the twenty-four week period following the borrower’s receipt of the loan and maintains its payroll levels and employee headcount. The amount of loan forgiveness will be reduced if the borrower reduces its employee headcount below its average employee headcount during a benchmark period or significantly reduces salaries for certain employees during the covered period. The Company used the entire loan amount for qualifying expenses. The U.S. Department of the Treasury has announced that it will conduct audits for PPP loans that exceed $2.0 million. If the Company were to be audited and receive an adverse outcome in such an audit, it could be required to return the full amount of the PPP Loan and may potentially be subject to civil and criminal fines and penalties. On December 21, 2020 the SBA approved the forgiveness of the full amount of one of the five PPP loans, which included principal and interest of $0.4 million. In January 2021 and March 2021, the SBA provided the Company with notices of forgiveness of the full amount of the remaining four loans. The forgiveness in the first quarter of 2021 included total principal and interest of $2.5 million. The carrying value of the PPP at December 31, 2020 of $2.5 million represents its unpaid principal balance. (c) Subordinated debt: Between December 4, 2002 and December 16, 2003, six subsidiary trusts of the Company issued $90.5 million of 30-year capital securities to third-parties in separate private transactions. In each instance, a corresponding floating rate junior subordinated deferrable interest debenture was then issued by KAI to the trust in exchange for the proceeds from the private sale. The floating rate debentures bear interest at the rate of LIBOR, plus spreads ranging from 3.85% to 4.20%. The Company has the right to call each of these securities at par value any time after five years from their issuance until their maturity. The subordinated debt is carried in the consolidated balance sheets at fair value. See Note 18, "Fair Value of Financial Instruments," for further discussion of the subordinated debt. The portion of the change in fair value of subordinated debt related to the instrument-specific credit risk is recognized in other comprehensive (loss) income. Of the $2.7 million increase in fair value of the Company’s subordinated debt between December 31, 2020 and March 31, 2021, $1.7 million is reported as increase in fair value of debt attributable to instrument-specific credit risk in the Company's consolidated statements of comprehensive (loss) income and $1.0 million reported as loss on change in fair value of debt in the Company’s consolidated statements of operations. During the third quarter of 2018, the Company gave notice to its Trust Preferred trustees of its intention to exercise its voluntary right to defer interest payments for up to 20 quarters, pursuant to the contractual terms of its outstanding Trust Preferred indentures, which permit interest deferral. This action does not constitute a default under the Company's Trust Preferred indentures or any of its other debt indentures. At March 31, 2021 and December 31, 2020, deferred interest payable of $15.2 million and $14.1 million, respectively, is included in accrued expenses and other liabilities in the consolidated balance sheets. The agreements governing the subordinated debt contain a number of covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, make dividends and distributions, and make certain payments in respect of the Company’s outstanding securities. Pursuant to indentures governing the Company’s subordinated debt, the Company is obligated to deliver audited financial statements for certain of its subsidiaries as of and for the year ended December 31, 2020. The Company has been unable to meet this obligation, the failure of which could be declared an event of default under the respective indentures. As of the date of the filing of this report on Form 10-Q for the three months ended March 31, 2021, none of the trustees responsible for administering any of our outstanding debt has declared an event of default, if required by the applicable indenture, notified us of an intent to accelerate any portion of the outstanding debt or charge default interest thereon, or pursued any other remedies available to it. Were any of these trustees to declare an event of default, the Company would have a period of time to cure the default. The Company expects to be in a position to deliver to the trustees the requisite audited financial statements for certain of its subsidiaries as of and for the year ended December 31, 2020, shortly after the filing of the Form 10-Q for the three months ended March 31, 2021. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
LEASES | LEASES (a) Lessee leases: The Company has operating leases for office space that include fixed base rent payments, as well as variable rent payments to reimburse the landlord for operating expenses and taxes. The Company’s variable lease payments do not depend on a published index or rate, and therefore, are expensed as incurred. The Company includes only fixed payments for lease components in the measurement of the right-of-use asset and lease liability. There are no residual value guarantees. Operating lease costs and variable lease costs included in general and administrative expenses for the three months ended March 31, 2021 were $0.3 million and less than $0.1 million, respectively. The annual maturities of lease liabilities as of March 31, 2021 were as follows: (in thousands) Lease Commitments 2021 $ 737 2022 899 2023 624 2024 550 2025 381 2026 and thereafter 165 Total undiscounted lease payments 3,356 Imputed interest 348 Total lease liabilities $ 3,008 The weighted-average remaining lease term for our operating leases was 4.33 years as of March 31, 2021. The weighted average discount rate of our operating leases was 5.28% as of March 31, 2021. Cash paid for amounts included in the measurement of lease liabilities was $0.2 million and $0.2 million for the three months ended March 31, 2021 and March 31, 2020, respectively. (b) Lessor leases: The Company owns the Real Property that is subject to a long-term triple net lease agreement with an unrelated third-party. The lease provides for future rent escalations and renewal options. The initial lease term ends in May 2034. The lessee bears the cost of maintenance and property taxes. Rental income from operating leases is recognized on a straight-line basis, based on contractual lease terms with fixed and determinable increases over the non-cancellable term of the related lease when collectability is reasonably assured. Rental revenue includes a de minimus amount of amortization of below market lease liabilities for the three months ended March 31, 2021 and March 31, 2020. The estimated aggregate future amortization of below market lease liabilities is $0.1 million for 2021, $0.1 million for 2022, $0.1 million for 2023, $0.1 million for 2024 and $0.1 million for 2025. Realization of the residual values of the assets under lease is dependent on the future ability to market the assets under prevailing market conditions. The lease is classified as an operating lease and the underlying leased assets are included in property and equipment in the consolidated balance sheets. Refer to Note 9, "Property and Equipment". Lease revenue related to operating leases was $3.3 million for each of the three months ended March 31, 2021 and March 31, 2020. The following table provides the net book value of operating lease property included in property and equipment in the consolidated balance sheets at March 31, 2021 and December 31, 2020: (in thousands) March 31, 2021 December 31, 2020 Land $ 21,120 $21,120 Site improvements 91,308 91,308 Buildings 580 580 Gross property and equipment leased 113,008 113,008 Accumulation depreciation (19,529) (18,493) Net property and equipment leased $ 93,479 $ 94,515 As of March 31, 2021, future undiscounted cash flows to be received in each of the next five years and thereafter, on non-cancelable operating leases are as follows: (in thousands) 2021 $ 9,113 2022 12,371 2023 12,649 2024 12,934 2025 13,225 Thereafter 123,738 |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue from contracts with customers relates to Extended Warranty segment service fee and commission revenue. Service fee and commission revenue represents vehicle service agreement fees, GAP commissions, maintenance support service fees, warranty product commissions, homebuilder warranty service fees and homebuilder warranty commissions based on terms of various agreements with credit unions, consumers, businesses and homebuilders. Customers either pay in full at the inception of a warranty contract or commission product sale, or on terms subject to the Company’s customary credit reviews. The following table disaggregates revenues from contracts with customers by revenue type: (in thousands) Three months ended March 31, 2021 2020 Vehicle service agreement fees and GAP commissions - IWS, Geminus and PWI $ 14,674 $ 7,976 Maintenance support service fees - Trinity 1,050 554 Warranty product commissions - Trinity 929 861 Homebuilder warranty service fees - PWSC 1,725 1,437 Homebuilder warranty commissions - PWSC 196 358 Service fee and commission revenue $ 18,574 $ 11,186 Vehicle service agreement fees include the fees collected to cover the costs of future automobile mechanical breakdown claims and the associated administration of those claims. Vehicle service agreement fees are earned over the duration of the vehicle service agreement contracts as the single performance obligation is satisfied. Vehicle service agreement fees are initially recorded as deferred service fees. The Company compares the remaining deferred service fees balance to the estimated amount of expected future claims under the vehicle service agreement contracts and records an additional accrual if the deferred service fees balance is less than expected future claims costs. In certain jurisdictions the Company is required to refund to a customer a pro-rata share of the vehicle service agreement fees if a customer cancels the agreement prior to the end of the term. Depending on the jurisdiction, the Company may be entitled to deduct from the refund a cancellation fee and/or amounts for claims incurred prior to cancellation. While refunds vary depending on the term and type of product offered, historically refunds have averaged 6% to 13% of the original amount of the vehicle service agreement fee. Revenues recorded by the Company are net of variable consideration related to refunds and the associated refund liability is included in accrued expenses and other liabilities. The Company estimates refunds based on the actual historical refund rates by warranty type taking into consideration current observable refund trends in estimating the expected amount of future customer refunds to be paid at each reporting period. GAP commissions include commissions from the sale of GAP products. The Company acts as an agent on behalf of the third-party insurance company that underwrites and guaranties these GAP contracts. The Company receives a single commission fee as its transaction price at the time it sells a GAP contract to a customer. Each GAP contract contains two separate performance obligations - sale of a GAP contract and GAP claims administration. The first performance obligation is related to the sale of a GAP contract and is satisfied upon closing the sale. The second performance obligation is related to the administration of claims during the GAP contract period. The amount of revenue the Company recognizes is based the costs to provide services during the GAP contract period, including an appropriate estimate of profit margin. Maintenance support service fees include the service fees collected to administer equipment breakdown and maintenance support services and are earned as services are rendered. Warranty product commissions include the commissions from the sale of warranty contracts for certain new and used heating, ventilation, air conditioning ("HVAC"), standby generator, commercial LED lighting and refrigeration equipment. The Company acts as an agent on behalf of the third-party insurance companies that underwrite and guaranty these warranty contracts. The Company does not guaranty the performance underlying the warranty contracts it sells. Warranty product commissions are earned at the time of the warranty product sales. Homebuilder warranty service fees include fees collected from the sale of warranties issued by new homebuilders. The Company receives a single warranty service fee as its transaction price at the time it enters into a written contract with each of its builder customers. Each contract contains two separate performance obligations - warranty administrative services and other warranty services. Warranty administrative services include enrolling each home sold by the builder into the program and the warranty administrative system and delivering the warranty product, and is earned at the time the home is enrolled and the warranty product is delivered. Other warranty services include answering builder or homeowner questions regarding the home warranty and dispute resolution services, and is earned as services are performed over the warranty coverage period. Homebuilder warranty commissions include commissions from the sale of warranty contracts for those builders who have requested and receive insurance backing of their warranty obligations. The Company acts as an agent on behalf of the third-party insurance company that underwrites and guaranties these warranty contracts. Homebuilder warranty commissions are earned on the certification date, which is typically the date of the closing of the sale of the home to the buyer. The Company also earns fees to manage remediation or repair services related to claims on insurance-backed warranty obligations, which are earned when the claims are closed. The Company's revenue recognition policies are further described in Note 2(p), "Summary of Significant Accounting Policies - Revenue recognition," to the consolidated financial statements in the 2020 Annual Report. Receivables from contracts with customers are reported as service fee receivable, net in the consolidated balance sheets and at March 31, 2021 and December 31, 2020 were $5.0 million and $3.9 million, respectively. The Company records deferred service fees resulting from contracts with customers when payment is received in advance of satisfying the performance obligations. Deferred service fees were $86.9 million and $87.9 million at March 31, 2021 and December 31, 2020, respectively. The decrease in deferred service fees between December 31, 2020 and March 31, 2021 is primarily due to the recognition of deferred service fees in excess of additions to deferred service fees during the three months ended March 31, 2021. The Company expects to recognize within one year as service fee and commission revenue approximately 49.7% of the deferred service fees as of March 31, 2021. Approximately $12.2 million and $5.5 million of service fee and commission revenue recognized during the three months ended March 31, 2021 and March 31, 2020 was included in deferred service fees as of December 31, 2020 and December 31, 2019, respectively. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income tax (benefit) expense for the three months ended March 31, 2021 and March 31, 2020 varies from the amount that would result by applying the applicable U.S. federal corporate income tax rate of 21% to income (loss) before income tax (benefit) expense. The following table summarizes the differences: (in thousands) Three months ended March 31, 2021 2020 Income tax (benefit) expense at United States statutory income tax rate $ 100 $ (47) Valuation allowance (299) 241 Non-deductible compensation 138 (43) Non-taxable income (524) — Investment income 17 (128) State income tax 53 38 Change in unrecognized tax benefits (1) 38 68 Indefinite life intangibles 54 54 Other (2) (13) Income tax (benefit) expense $ (425) $ 170 (1) Includes interest and penalty expense related to unrecognized tax benefits. The Company maintains a valuation allowance for its gross deferred tax assets at March 31, 2021 and December 31, 2020. The Company's operations have generated substantial operating losses in prior years. These losses can be available to reduce income taxes that might otherwise be incurred on future taxable income; however, it is uncertain whether the Company will generate the taxable income necessary to utilize these losses or other reversing temporary differences. This uncertainty has caused management to place a full valuation allowance on its March 31, 2021 and December 31, 2020 net deferred tax asset, excluding the deferred income tax asset and liability amounts set forth in the paragraph below. For the three months ended March 31, 2021 and March 31, 2020, the Company released into income $0.6 million and zero, respectively, of its valuation allowance associated with business interest expense carryforwards with an indefinite life. The Company carries net deferred income tax liabilities of $27.0 million and $27.6 million at March 31, 2021 and December 31, 2020, respectively, that consists of: • $7.6 million and $7.6 million of deferred income tax liabilities that are scheduled to reverse in periods after the expiration of the KFSI Tax Group's consolidated U.S. net operating loss carryforwards; • $21.9 million and $21.9 million of deferred income tax liabilities related to land and indefinite lived intangible assets; • $1.9 million and $1.3 million of deferred income tax assets associated with business interest expense carryforwards with an indefinite life; and • $0.6 million and $0.6 million of deferred state income tax assets. |
(LOSS) EARNINGS PER SHARE
(LOSS) EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
(LOSS) EARNINGS PER SHARE | LOSS) PER SHARE The following table sets forth the reconciliation of numerators and denominators for the basic and diluted earnings (loss) per share computation for the three months ended March 31, 2021 and March 31, 2020: (in thousands, except per share data) Three months ended March 31, 2021 2020 Numerator: Net income (loss) $ 899 $ (393) Less: net income attributable to noncontrolling interests (259) (721) Less: dividends on preferred stock (238) (377) Net income (loss) attributable to common shareholders used in calculating basic earnings (loss) per share $ 402 $ (1,491) Adjustment for proportionate interest in PWSC's earnings attributable to common stock (30) — Net income (loss) attributable to common shareholders used in calculating diluted earnings (loss) per share $ 372 $ (1,491) Denominator: Weighted average basic shares Weighted average common shares outstanding 22,218 22,069 Weighted average diluted shares Weighted average common shares outstanding 22,218 22,069 Effect of potentially dilutive securities (a) — — Stock options — — Unvested restricted stock awards 1 — Warrants — — Convertible preferred stock — — Total weighted average diluted shares 22,219 22,069 Basic earnings (loss) per share $ 0.02 $ (0.07) Diluted earnings (loss) per share $ 0.02 $ (0.07) (a) Potentially dilutive securities consist of stock options, unvested restricted stock awards, warrants and convertible preferred stock. Because the Company is reporting a net loss attributable to common shareholders for the three months ended March 31, 2020, all potentially dilutive securities outstanding were excluded from the calculation of diluted loss per share since their inclusion would have been anti-dilutive. Basic earnings (loss) per share is calculated using weighted-average common shares outstanding. Diluted earnings (loss) per share is calculated using weighted-average diluted shares. Weighted-average diluted shares is calculated by adding the effect of potentially dilutive securities to weighted-average common shares outstanding. The following weighted-average potentially dilutive securities are not included in the diluted earnings (loss) per share calculations above because they would have had an antidilutive effect on the earnings (loss) per share: Three months ended March 31, 2021 2020 Stock options — 40,000 Unvested restricted stock awards 1,338,425 500,000 Warrants 4,923,765 4,923,765 Convertible preferred stock 1,142,975 1,142,975 Total $ 7,405,165 $ 6,606,740 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION (a) Restricted Stock Awards Under the 2013 Equity Incentive Plan, the Company made grants of restricted common stock awards to certain officers of the Company on March 28, 2014 (the "2014 Restricted Stock Awards"). There are no 2014 Restricted Stock Awards outstanding at March 31, 2021. On February 28, 2020, the Company executed an Employment Separation Agreement and Release ("2020 Separation Agreement") with a former officer. Under the terms of the 2020 Separation Agreement, the former officer forfeited 93,713 shares of the 2014 Restricted Stock Awards. The Company’s accounting policy is to account for forfeitures when they occur. As a result, the Company reversed during the first quarter of 2020 $0.2 million of compensation expense previously recognized from March 28, 2014 through February 28, 2020. The former officer's remaining 135,787 shares of the original 2014 Restricted Stock Awards became partially vested on February 28, 2020. On September 5, 2018, the Company granted 500,000 restricted common stock awards to an officer (the "2018 Restricted Stock Award"). The 2018 Restricted Stock Award shall become fully vested and the restriction period shall lapse as of March 28, 2024 subject to the officer's continued employment through the vesting date. The 2018 Restricted Stock Award is amortized on a straight-line basis over the requisite service period. The grant-date fair value of the 2018 Restricted Stock Award was determined using the closing price of Kingsway common stock on the date of grant. Total unamortized compensation expense related to unvested 2018 Restricted Stock Award at March 31, 2021 was $1.1 million. Under the 2020 Equity Incentive Plan, the Company granted 1,060,000 restricted common stock awards to certain officers of the Company during the first quarter of 2021 (the "2021 Restricted Stock Awards"). The 2021 Restricted Stock Awards vest according to a graded vesting schedule and shall become fully vested subject to the officers' continued employment through the applicable vesting dates. The 2021 Restricted Stock Awards are amortized on a straight-line basis over the requisite service periods. The grant-date fair values of the 2021 Restricted Stock Awards were determined using the closing price of Kingsway common stock on the date of grant. Total unamortized compensation expense related to unvested 2021 Restricted Stock Awards at March 31, 2021 was $3.9 million. The following table summarizes the activity related to unvested 2021 Restricted Stock Awards and 2018 Restricted Stock Award (collectively "Restricted Stock Awards") for the three months ended March 31, 2021: Number of Restricted Stock Awards Weighted-Average Grant Date Fair Value (per Share) Unvested at December 31, 2020 500,000 $ 5.73 Granted 1,060,000 4.64 Vested (154,562) 4.64 Cancelled for Tax Withholding (65,438) 4.64 Unvested at March 31, 2021 1,340,000 $ 5.05 The unvested balance at March 31, 2021 in the table above is comprised of 840,000 shares of the 2021 Restricted Stock Awards and 500,000 shares of the 2018 Restricted Stock Award. (b) Restricted Stock Awards of PWSC The Company's subsidiary, Professional Warranty Service Corporation ("PWSC"), granted 1,000 restricted Class B common stock awards ("2018 PWSC RSA") to an officer of PWSC pursuant to an agreement dated September 7, 2018. The 2018 PWSC RSA contains both a service and a performance condition that affects vesting. On December 18, 2020, the 2018 PWSC RSA was amended to modify the vesting terms related to the service and performance condition ("Modified PWSC RSA"). PWSC granted 250 restricted Class B common stock awards to an officer of PWSC pursuant to an agreement dated December 18, 2020 ("2020 PWSC RSA"). The 2020 PWSC RSA contains both a service and a performance condition that affects vesting. The service condition for the Modified PWSC RSA and the 2020 PWSC RSA vest according to a graded vesting schedule and shall become fully vested on February 20, 2022 subject to the officer's continued employment through the applicable vesting dates. The performance condition vests on February 20, 2022 and is based on the internal rate of return of PWSC. The grant-date fair value of the Modified PWSC RSA and the 2020 PWSC RSA were estimated using an internal valuation model. See Note 18, "Fair Value of Financial Instruments," for further discussion related to the valuation of the Modified PWSC RSA and the 2020 PWSC RSA. The Modified PWSC RSA and the 2020 PWSC RSA include a noncontingent put option that is exercisable between February 20, 2022 and February 20, 2023. Since the put option is exercisable less than six months after the vesting of certain shares, the compensation expense related to these shares is classified as a liability and included in accrued expenses and other liabilities in the consolidated balance sheets. The fair value of the liability classified portion of the Modified PWSC RSA and the 2020 PWSC RSA is re-evaluated each reporting period. At March 31, 2021, both the service condition and performance condition of the Modified PWSC RSA were probable of vesting. At March 31, 2021, there were 437.5 unvested shares of the Modified PWSC RSA with a weighted-average grant date fair value of $1,672 per share. Total unamortized compensation expense related to unvested equity-classified portion of the Modified PWSC RSA at March 31, 2021 was $0.1 million. At March 31, 2021, both the service condition and performance condition of the 2020 PWSC RSA were probable of vesting. At March 31, 2021, there were 109.38 unvested shares of the 2020 PWSC RSA with a weighted-average grant date fair value of $1,672 per share. Total unamortized compensation expense related to unvested equity-classified portion of the 2020 PWSC RSA at March 31, 2021 was zero. Total stock-based compensation, inclusive of Restricted Stock Awards and Restricted Stock Awards of PWSC described above, net of forfeitures, was an expense of $1.7 million and a benefit of less than $0.1 million for the three months ended March 31, 2021 and March 31, 2020, respectively. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME The tables below detail the change in the balance of each component of accumulated other comprehensive income, net of tax, for the three months ended March 31, 2021 and March 31, 2020 as relates to shareholders' equity attributable to common shareholders on the consolidated balance sheets. (in thousands) Three months ended March 31, 2021 Unrealized Gains (Losses) on Available-for-Sale Investments Foreign Currency Translation Adjustments Change in Fair Value of Debt Attributable to Instrument-Specific Credit Risk Total Accumulated Other Comprehensive Income Balance at January 1, 2021 $ 216 $ (3,286) $ 41,129 $ 38,059 Other comprehensive loss arising during the period (71) — (1,721) (1,792) Amounts reclassified from accumulated other comprehensive income 12 — — 12 Net current-period other comprehensive loss (59) — (1,721) (1,780) Balance at March 31, 2021 $ 157 $ (3,286) $ 39,408 $ 36,279 (in thousands) Three months ended March 31, 2020 Unrealized Gains (Losses) on Available-for-Sale Investments Foreign Currency Translation Adjustments Change in Fair Value of Debt Attributable to Instrument-Specific Credit Risk Total Accumulated Other Comprehensive Income Balance at January 1, 2020 $ 59 $ (3,286) $ 38,574 $ 35,347 Other comprehensive income arising during the period 47 — 11,623 11,670 Amounts reclassified from accumulated other comprehensive income 61 — — 61 Net current-period other comprehensive income 108 — 11,623 11,731 Balance at March 31, 2020 $ 167 $ (3,286) $ 50,197 $ 47,078 It should be noted that the unaudited consolidated statements of comprehensive (loss) income present the components of other comprehensive (loss) income, net of tax, only for the three months ended March 31, 2021 and March 31, 2020 and inclusive of the components attributable to noncontrolling interests in consolidated subsidiaries. Components of accumulated other comprehensive income were reclassified to the following lines of the unaudited consolidated statements of operations for the three months ended March 31, 2021 and March 31, 2020: (in thousands) Three months ended March 31, 2021 2020 Reclassification of accumulated other comprehensive income from unrealized gains (losses) on available-for-sale investments to: Net realized gains $ (12) $ (61) Other-than-temporary impairment loss — — Income (loss) before income tax (benefit) expense (12) (61) Income tax (benefit) expense — — Net income (loss) $ (12) $ (61) |
SEGMENTED INFORMATION
SEGMENTED INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENTED INFORMATION | SEGMENTED INFORMATION The Company conducts its business through the following two reportable segments: Extended Warranty and Leased Real Estate. Extended Warranty Segment Extended Warranty includes the following subsidiaries of the Company: IWS, Geminus, PWI, PWSC and Trinity (collectively, "Extended Warranty"). IWS is a licensed motor vehicle service agreement company and is a provider of after-market vehicle protection services distributed by credit unions in 26 states and the District of Columbia to their members. Geminus primarily sells vehicle service agreements to used car buyers across the United States, through its subsidiaries, Penn and Prime. Penn and Prime distribute these products in 32 and 40 states, respectively, via independent used car dealerships and franchised car dealerships. PWI markets, sells and administers vehicle service agreements to used car buyers in all fifty states via independent used car and franchise network of approved automobile and motorcycle dealer partners. PWI’s business model is supported by an internal sales and operations team and partners with American Auto Shield in three states with a "white label" agreement. PWSC sells new home warranty products and provides administration services to home builders and homeowners across the United States. PWSC distributes its products and services through an in house sales team and through insurance brokers and insurance carriers throughout all states except Alaska and Louisiana. Trinity sells HVAC, standby generator, commercial LED lighting and refrigeration warranty products and provides equipment breakdown and maintenance support services to companies across the United States. As a seller of warranty products, Trinity markets and administers product warranty contracts for certain new and used products in the HVAC, standby generator, commercial LED lighting and refrigeration industries throughout the United States. Trinity acts as an agent on behalf of the third-party insurance companies that underwrite and guaranty these warranty contracts. Trinity does not guaranty the performance underlying the warranty contracts it sells. As a provider of equipment breakdown and maintenance support services, Trinity acts as a single point of contact to its clients for both certain equipment breakdowns and scheduled maintenance of equipment. Trinity will provide such repair and breakdown services by contracting with certain HVAC providers. Leased Real Estate Segment Leased Real Estate includes the Company's subsidiary, CMC. CMC owns the Real Property that is leased to a third party pursuant to a long-term triple net lease. The Real Property is also subject to the Mortgage. When assessing and measuring the operational and financial performance of the Leased Real Estate segment, interest expense related to the Mortgage is included in Leased Real Estate's segment operating income. Revenues and Operating Income by Reportable Segment Results for the Company's reportable segments are based on the Company's internal financial reporting systems and are consistent with those followed in the preparation of the unaudited consolidated interim financial statements. The following tables provide financial data used by management. Segment assets are not allocated for management use and, therefore, are not included in the segment disclosures below. Revenues by reportable segment reconciled to consolidated revenues for the three months ended March 31, 2021 and March 31, 2020 were: (in thousands) Three months ended March 31, 2021 2020 Revenues: Extended Warranty: Service fee and commission revenue $ 18,574 $ 11,186 Other revenue 67 74 Total Extended Warranty 18,641 11,260 Leased Real Estate: Rental revenue 3,341 3,341 Other revenue 38 68 Total Leased Real Estate 3,379 3,409 Total revenues $ 22,020 $ 14,669 The operating income by reportable segment in the following table is before income taxes and includes revenues and direct segment costs. Total segment operating income reconciled to the consolidated net income (loss) for the three months ended March 31, 2021 and March 31, 2020 were: (in thousands) Three months ended March 31, 2021 2020 Segment operating income: Extended Warranty (a) $ 5,310 $ 850 Leased Real Estate 1,293 597 Total segment operating income 6,603 1,447 Net investment income 421 719 Net realized gains 51 208 Loss on change in fair value of equity investments (151) (597) (Loss) gain on change in fair value of limited liability investments, at fair value (202) 1,899 Net change in unrealized loss on private company investments — (670) Other-than-temporary impairment loss — (117) Interest expense not allocated to segments (1,552) (2,153) Other revenue and expenses not allocated to segments, net (3,491) (3,030) Amortization of intangible assets (497) (574) (Loss) gain on change in fair value of debt (1,019) 2,645 Gain on extinguishment of debt not allocated to segments 311 — Income (loss) before income tax (benefit) expense 474 (223) Income tax (benefit) expense (425) 170 Net income (loss) $ 899 $ (393) |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best evidenced by quoted bid or ask price, as appropriate, in an active market. Where bid or ask prices are not available, such as in an illiquid or inactive market, the closing price of the most recent transaction of that instrument subject to appropriate adjustments as required is used. Where quoted market prices are not available, the quoted prices of similar financial instruments or valuation models with observable market-based inputs are used to estimate the fair value. These valuation models may use multiple observable market inputs, including observable interest rates, foreign exchange rates, index levels, credit spreads, equity prices, counterparty credit quality, corresponding market volatility levels and option volatilities. Minimal management judgment is required for fair values calculated using quoted market prices or observable market inputs for models. Greater subjectivity is required when making valuation adjustments for financial instruments in inactive markets or when using models where observable parameters do not exist. Also, the calculation of estimated fair value is based on market conditions at a specific point in time and may not be reflective of future fair values. For the Company's financial instruments carried at cost or amortized cost, the book value is not adjusted to reflect increases or decreases in fair value due to market fluctuations, including those due to interest rate changes, as it is the Company's intention to hold them until there is a recovery of fair value, which may be to maturity. The Company employs a fair value hierarchy to categorize the inputs it uses in valuation techniques to measure the fair value. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1: • Level 1 – Quoted prices for identical instruments in active markets. • Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. • Level 3 – Valuations derived from valuation techniques in which one or more significant inputs are not observable. The Company classifies its investments in fixed maturities as available-for-sale and reports these investments at fair value. The Company's equity investments, limited liability investments, at fair value, real estate investments, subordinated debt, warrant liability and stock-based compensation liabilities are measured and reported at fair value. Fixed maturities - Fair values of fixed maturities for which no active market exists are derived from quoted market prices of similar instruments or other third party evidence. All classes of the Company’s fixed maturities, primarily consisting of investments in US. Treasury bills and government bonds; obligations of states, municipalities and political subdivisions; mortgage-backed securities; and corporate securities, are classified as Level 2. Level 2 is applied to valuations based upon quoted prices for similar assets in active markets; quoted prices for identical or similar assets in markets that are inactive; or valuations based on models where the significant inputs are observable or can be corroborated by observable market data. The Company engages a third-party vendor who utilizes third-party pricing sources and primarily employs a market approach to determine the fair values of our fixed maturities. The market approach includes primarily obtaining prices from independent third-party pricing services as well as, to a lesser extent, quotes from broker-dealers. Our third-party vendor also monitors market indicators, as well as industry and economic events, to ensure pricing is appropriate. All classes of our fixed maturities are valued using this technique. The Company has obtained an understanding of our third-party vendor’s valuation methodologies and inputs. Fair values obtained from our third-party vendor are not adjusted by the Company. The following is a description of the significant inputs, by asset class, used by the third-party pricing services to determine the fair values of our fixed maturities included in Level 2: • U.S. government, government agencies and authorities are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets and maturity. • States, municipalities and political subdivisions are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, new issuances and credit spreads. • Mortgage-backed securities are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, expected prepayments, expected credit default rates, delinquencies and issue specific information including, but not limited to, collateral type, seniority and vintage. • Corporate securities are generally priced using the market approach using pricing vendors. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity and credit spreads. Equity investments - Fair values of equity investments, including warrants, reflect quoted market values based on latest bid prices, where active markets exist, or models based on significant market observable inputs, where no active markets exist. Limited liability investments, at fair value - Limited liability investments, at fair value include the underlying investments of Net Lease and Argo Holdings. Net Lease owns investments in limited liability companies that hold investment properties. Argo Holdings makes investments in limited liability companies and limited partnerships that hold investments in search funds and private operating companies. • The fair value of Net Lease's investments in limited liability companies is based upon the net asset values of the underlying investments in companies as a practical expedient to estimate fair value. The Company applies the net asset value practical expedient to Net Lease's limited liability investments on an investment-by-investment basis unless it is probable that the Company will sell a portion of an investment at an amount different from the net asset value of the investment. Investments that are measured at fair value using the net asset value practical expedient are not required to be classified using the fair value hierarchy. • The fair value of Argo Holdings' limited liability investments that hold investments in search funds is based on the initial investment in the search funds. The fair value of Argo Holdings' limited liability investments that hold investments in private operating companies is valued using a market approach including valuation multiples applied to corresponding performance metrics, such as earnings before interest, tax, depreciation and amortization; revenue; or net earnings. The selected valuation multiples were estimated using multiples provided by the investees and review of those multiples in light of investor updates, performance reports, financial statements and other relevant information. These investments are categorized in Level 3 of the fair value hierarchy. Real estate investments - The fair value of real estate investments involves a combination of the market and income valuation techniques. Under this approach, a market-based capitalization rate is derived from comparable transactions, adjusted for any unique characteristics of each asset, and applied to the asset under consideration. The cap rates used during underwriting and subsequent valuation incorporate the consideration of risks of vacancy and collection loss, administrative costs of owning net leased assets and possible capital expenditures that could be determined a landlord expense. These investments are categorized in Level 3 of the fair value hierarchy. Subordinated debt - The fair value of the subordinated debt is calculated using a model based on significant market observable inputs and inputs developed by a third party. These inputs include credit spread assumptions developed by a third party and market observable swap rates. The subordinated debt is categorized in Level 2 of the fair value hierarchy. Warrant liability - The Company issued the KWH Warrants on March 1, 2019. On December 1, 2020, the Company repurchased the KWH Warrants. The KWH Warrants were measured and reported at fair value. The fair value of the warrant liability was estimated using an internal model without relevant observable market inputs. The significant inputs used in the model include an enterprise value multiple applied to earnings before interest, tax, depreciation and amortization. The implied enterprise value was reduced by the remaining debt associated with the 2019 KWH Loan to determine an implied equity value. The liability classified warrants are categorized in Level 3 of the fair value hierarchy. Stock-based compensation liabilities - As described in Note 15, "Stock-Based Compensation," certain of the restricted stock awards granted by PWSC are classified as a liability. Liability-classified awards are measured and reported at fair value and are included in accrued expenses and other liabilities in the consolidated balance sheets. The fair value of the restricted stock awards granted by PWSC are estimated using an internal valuation model without relevant observable market inputs. The significant inputs used in the model include a valuation multiple applied to trailing twelve month earnings before interest, tax, depreciation and amortization. Liability-classified restricted stock awards are categorized in Level 3 of the fair value hierarchy. Assets and Liabilities Measured at Fair Value on a Recurring Basis The balances of the Company's financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of March 31, 2021 and December 31, 2020 are as follows. Certain investments in limited liability companies that are measured at fair value using the net asset value practical expedient are not required to be classified using the fair value hierarchy, but are presented in the following tables to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets: (in thousands) March 31, 2021 Fair Value Measurements at the End of the Reporting Period Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Measured at Net Asset Value Recurring fair value measurements: Assets: Fixed maturities: U.S. government, government agencies and authorities $ 10,624 $ — $ 10,624 $ — $ — States, municipalities and political subdivisions 1,302 — 1,302 — — Mortgage-backed 4,753 — 4,753 — — Corporate 3,185 — 3,185 — — Total fixed maturities 19,864 — 19,864 — — Equity investments: Common stock 186 186 — — — Warrants 84 — 84 — — Total equity investments 270 186 84 — — Limited liability investments, at fair value 19,654 — — 3,374 16,280 Real estate investments 10,662 — — 10,662 — Other investments 299 — 299 — — Short-term investments 157 — 157 — — Total assets $ 50,906 $ 186 $ 20,404 $ 14,036 $ 16,280 Liabilities: Subordinated debt $ 53,668 $ — $ 53,668 $ — $ — Stock-based compensation liabilities 844 — — 844 — Total liabilities $ 54,512 $ — $ 53,668 $ 844 $ — (in thousands) December 31, 2020 Fair Value Measurements at the End of the Reporting Period Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Measured at Net Asset Value Recurring fair value measurements: Assets: Fixed maturities: U.S. government, government agencies and authorities $ 10,104 $ — $ 10,104 $ — $ — States municipalities and political subdivisions 1,454 — 1,454 — — Mortgage-backed 5,394 — 5,394 — — Corporate 3,764 — 3,764 — — Total fixed maturities 20,716 — 20,716 — — Equity investments: Common stock 155 155 — — — Warrants 289 17 272 — — Total equity investments 444 172 272 — — Limited liability investments, at fair value 32,811 — — 3,263 29,548 Real estate investments 10,662 — — 10,662 — Other investments 294 — 294 — — Short-term investments 157 — 157 — — Total assets $ 65,084 $ 172 $ 21,439 $ 13,925 $ 29,548 Liabilities: Subordinated debt $ 50,928 $ — $ 50,928 $ — $ — Stock-based compensation liabilities 443 — — 443 — Total liabilities $ 51,371 $ — $ 50,928 $ 443 $ — The following table provides a reconciliation of the fair value of recurring Level 3 fair value measurements for the three months ended March 31, 2021 and March 31, 2020: (in thousands) Three months ended March 31, 2021 2020 Assets: Limited liability investments, at fair value: Beginning balance $ 3,263 $ 4,392 Distributions received (22) (77) Realized gains included in net income (loss) 22 86 Change in fair value of limited liability investments, at fair value included in net income (loss) 111 12 Ending balance $ 3,374 $ 4,413 Unrealized gains on limited liability investments, at fair value held at end of period: Included in net income (loss) $ 111 $ 12 Included in other comprehensive (loss) income $ — $ — Real estate investments: Beginning balance $ 10,662 $ 10,662 Change in fair value of real estate investments included in net income (loss) — — Ending balance $ 10,662 $ 10,662 Unrealized gains recognized on real estate investments held at end of period: Included in net income (loss) — — Included in other comprehensive (loss) income — — Ending balance - assets $ 14,036 $ 15,075 Liabilities: Warrant liability: Beginning balance $ — $ 249 Change in fair value of warrant liability included in net income (loss) — (33) Ending balance $ — $ 216 Unrealized gains recognized on warrant liability held at end of period: Included in net income (loss) $ — $ (33) Included in other comprehensive (loss) income $ — $ — Stock-based compensation liabilities: Beginning balance $ 443 $ — Change in fair value of stock-based compensation liabilities included in net income (loss) 401 — Ending balance $ 844 $ — Ending balance - liabilities $ 844 $ 216 The following table summarizes the valuation techniques and significant unobservable inputs utilized in determining fair values for the Company's investments that are categorized as Level 3 at March 31, 2021: Categories Fair Value Valuation Techniques Unobservable Inputs Input Value(s) Limited liability investments, at fair value $ 3,374 Market approach Valuation multiples 3.1x-8.0x Real estate investments $ 10,662 Market and income approach Cap rates 7.5 % Stock-based compensation liabilities $ 844 Market approach Valuation multiple 6.0x The following table summarizes the valuation techniques and significant unobservable inputs utilized in determining fair values for the Company's investments that are categorized as Level 3 at December 31, 2020: Categories Fair Value Valuation Techniques Unobservable Inputs Input Value(s) Limited liability investments, at fair value $ 3,263 Market approach Valuation multiples 3.1x-8.0x Real estate investments $ 10,662 Market and income approach Cap rates 7.5 % Stock-based compensation liabilities $ 443 Market approach Valuation multiple 6.0x Investments Measured Using the Net Asset Value per Share Practical Expedient The following table summarizes investments for which fair value is measured using the net asset value per share practical expedient at March 31, 2021: Category Fair Value (in thousands) Unfunded Commitments Redemption Frequency Redemption Notice Period Limited liability investments, at fair value $ 16,280 n/a n/a n/a The following table summarizes investments for which fair value is measured using the net asset value per share practical expedient at December 31, 2020: Category Fair Value (in thousands) Unfunded Commitments Redemption Frequency Redemption Notice Period Limited liability investments, at fair value $ 29,548 n/a n/a n/a Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis |
RELATED PARTIES
RELATED PARTIES | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | RELATED PARTIES Related party transactions, including services provided to or received by the Company's subsidiaries, are measured in part by the amount of consideration paid or received as established and agreed by the parties. Except where disclosed elsewhere in these unaudited consolidated interim financial statements, the following is a summary of related party relationships and transactions. Argo Management Group, LLC The Company acquired Argo Management Group, LLC ("Argo Management") in April 2016. Argo Management's primary business is to act as Managing Member of Argo Holdings. At March 31, 2021 and December 31, 2020, each of the Company, John T. Fitzgerald ("Fitzgerald"), the Company's Chief Executive Officer and President, and certain of Fitzgerald’s immediate family members owns equity interests in Argo Holdings, all of which interests were acquired prior to the Company’s acquisition of Argo Management. Subject to certain limitations, Argo Holdings' governing documents require all individuals and entities owning an equity interest in Argo Holdings to fund upon request his/her/its pro rata share of any funding requirements of Argo Holdings up to an aggregate maximum amount equal to his/her/its total capital commitment (each request |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES (a) Legal proceedings: In April 2018, TRT LeaseCo, LLC ("TRT LeaseCo"), an indirect subsidiary of Kingsway, was named as a defendant in a lawsuit filed in the United States District Court for the Southern District of New York relating to CMC and its subsidiaries. Kingsway indirectly, through its indirect, wholly-owned subsidiary, CMC Acquisition, LLC ("CMCA"), owns 81% of CMC. TRT LeaseCo (an indirect, wholly-owned subsidiary of CMC) entered into a Management Services Agreement (the "MSA") with DGI-BNSF Corp. ("DGI") (an affiliate of CRIC TRT Acquisition, LLC ("CRIC"), the entity that owns the remaining 19% of CMC) in July 2016 pursuant to which, among other things, DGI agreed to provide services to TRT LeaseCo in exchange for the fees specified in the MSA. The complaint filed by DGI alleged that DGI was owed certain fees under the MSA that had not been paid. In March 2021, DGI, TRT LeaseCo and various other entities affiliated with each of them entered into a settlement agreement with respect to such litigation and certain other matters ("CMC Settlement Agreement"). Pursuant to the CMC Settlement Agreement, the parties agreed that proceeds from increased rental payments due to an earlier amendment to the lease of the Real Property (or any borrowings against such increased rental payments) would be split 80% to DGI as a management fee under the MSA and 20% to CMCA as a priority distribution on its ownership of CMC, after CMCA received a priority payment of $1.5 million. The parties also agreed that net proceeds from an eventual sale or renewal of the lease of the Real Property (after repayment of outstanding indebtedness and various other fees and expenses) would be split as follows: (a) if such net proceeds are equal to or greater than $72 million, (i) CMCA would receive the first $40 million as a distribution of a preferred return on its ownership of CMC, (ii) CRIC would receive the next $9.4 million as a distribution on its ownership of CMC, (iii) DGI would receive the next $30.6 million as a management fee under the MSA, and (iv) the remainder of such net proceeds (if any) would be split 48.6% to CMCA as a distribution in respect of its ownership of CMC, 40% to DGI in the form of a management fee under the MSA, and 11.4% to CRIC s a distributions in respect of its ownership of CMC; or (b) if such net proceeds are less than $72 million, (i) 55% to CMCA as a distribution of a preferred return on its ownership of CMC, (ii) 12.9% to CRIC as a distribution on its ownership of CMC, and (iii) 32.1% to DGI in the form of a management fee to DGI under the MSA. In May 2016, Aegis Security Insurance Company ("Aegis") filed a complaint for breach of contract and declaratory relief against the Company in the Eastern District of Pennsylvania alleging, among other things, that the Company breached a contractual obligation to indemnify Aegis for certain customs bond losses incurred by Aegis under the indemnity and hold harmless agreements provided by the Company to Aegis for certain customs bonds reinsured by Lincoln General Insurance Company ("Lincoln General") during the period of time that Lincoln General was a subsidiary of the Company. Lincoln General was placed into liquidation in November 2015 and Aegis subsequently invoked its rights to indemnity under the indemnity and hold harmless agreements. Effective January 20, 2020, Aegis and the Company entered into a Settlement Agreement with respect to such litigation pursuant to which the Company agreed to pay Aegis a one-time settlement amount of $0.9 million, which the Company reported in its consolidated statement of operations during the first quarter of 2020, and to reimburse Aegis for 60% of future losses that Aegis may sustain in connection with such customs bonds, up to a maximum reimbursement amount of $4.8 million. During the third and fourth quarters of 2020, the Company made reimbursement payments to Aegis of $0.5 million in connection with the Settlement Agreement. The Company reported the payments to Aegis in general and administrative expenses in its consolidated statement of operations for the year ended December 31, 2020. No payments were made under the Settlement Agreement during the three months ended March 31, 2021. The Company’s potential exposure under these agreements was not reasonably determinable at March 31, 2021, and no liability has been recorded in the unaudited consolidated interim financial statements at March 31, 2021. (b) Guarantee: As part of the October 18, 2018 transaction to sell Mendota Insurance Company, Mendakota Insurance Company and Mendakota Casualty Company (collectively "Mendota"), the Company will indemnify the buyer for any loss and loss adjustment expenses with respect to open claims in excess of Mendota's carried unpaid loss and loss adjustment expenses at June 30, 2018 related to the open claims. The maximum obligation to the Company with respect to the open claims is $2.5 million. A security interest on the Company’s equity interest in its consolidated subsidiary, Net Lease Investment Grade Portfolio LLC ("Net Lease"), as well as any distributions to the Company from Net Lease, is collateral for the Company’s payment of obligations with respect to the open claims. There were no payments made related to the open claims during the three months ended March 31, 2021 and March 31, 2020. The Company's potential exposure under these agreements was not reasonably determinable at March 31, 2021, and no liability has been recorded in the unaudited consolidated interim financial statements at March 31, 2021. (c) Collateral pledged and restricted cash: |
RECENTLY ISSUED ACCOUNTING ST_2
RECENTLY ISSUED ACCOUNTING STANDARDS RECENTLY ISSUED ACCOUNTING STANDARDS (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Accounting Standards | Adoption of New Accounting Standards: Effective January 1, 2021, the Company adopted Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 is intended to simplify accounting for income taxes by eliminating certain exceptions to the guidance in ASC Topic 740, Income Taxes , related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. Further, ASU 2019-12 clarifies that single-member limited liability companies and similar disregarded entities that are not subject to income tax are not required to recognize an allocation of consolidated income tax expense in their separate financial statements, but they could elect to do so. The adoption of ASU 2019-12 did not have a material effect on the Company’s consolidated financial statements. Effective January 1, 2021, the Company adopted ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 . ASU 2020-01 clarifies the interaction between accounting standards related to equity securities (ASC 321), equity method investments (ASC 323), and certain derivatives (ASC815). The adoption of ASU 2020-01 did not have an impact on the Company's consolidated financial statements. (b) Accounting Standards Not Yet Adopted: In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 replaces the current incurred loss model used to measure impairment losses with an expected loss model for trade, reinsurance, and other receivables as well as financial instruments measured at amortized cost. ASU 2016-13 will require a financial asset measured at amortized cost, including reinsurance balances recoverable, to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income (loss). Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses. However, the amendments would limit the amount of the allowance to the amount by which fair value is below amortized cost. The measurement of credit losses on available-for-sale investments is similar under current GAAP, but the update requires the use of the allowance account through which amounts can be reversed, rather than through irreversible write-downs. On November 15, 2019, the FASB issued ASU 2019-10, which (1) provides a framework to stagger effective dates for future major accounting standards and (2) amends the effective dates for certain major new accounting standards to give implementation relief to certain types of entities. Specifically, per ASU 2019-10 the Company would adopt ASU 2016-13 beginning January 1, 2023, as the Company is a |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the estimated allocation of the PWI assets acquired and liabilities assumed at the date of acquisition: (in thousands) December 1, 2020 Cash and cash equivalents $ 90 Restricted cash 21,578 Service fee receivable 1,459 Other receivables 2,748 Income taxes recoverable 60 Property and equipment, net 175 Right-of-use asset 254 Goodwill 39,182 Other assets 1,321 Total assets $ 66,867 Accrued expenses and other liabilities $ 8,162 Lease liability 255 Deferred service fees 34,026 Total liabilities $ 42,443 Purchase price $ 24,424 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Investments [Abstract] | |
Schedule of Unrealized Loss on Investments | The amortized cost, gross unrealized gains and losses, and estimated fair value of the Company's available-for-sale investments at March 31, 2021 and December 31, 2020 are summarized in the tables shown below: (in thousands) March 31, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Fixed maturities: U.S. government, government agencies and authorities $ 10,547 $ 84 $ 7 $ 10,624 States, municipalities and political subdivisions 1,296 6 — 1,302 Mortgage-backed 4,709 50 6 4,753 Corporate 3,147 38 — 3,185 Total fixed maturities $ 19,699 $ 178 $ 13 $ 19,864 (in thousands) December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Fixed maturities: U.S. government, government agencies and authorities $ 9,999 $ 105 $ — $ 10,104 States, municipalities and political subdivisions 1,447 7 — 1,454 Mortgage-backed 5,334 66 6 5,394 Corporate 3,708 56 — 3,764 Total fixed maturities $ 20,488 $ 234 $ 6 $ 20,716 |
Investments Classified by Contractual Maturity Date | The table below summarizes the Company's fixed maturities at March 31, 2021 by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturity of these obligations. (in thousands) March 31, 2021 Amortized Cost Estimated Fair Value Due in one year or less $ 4,260 $ 4,287 Due after one year through five years 14,022 14,153 Due after five years through ten years 319 328 Due after ten years 1,098 1,096 Total $ 19,699 $ 19,864 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | The following tables highlight the aggregate unrealized loss position, by security type, of available-for-sale investments in unrealized loss positions as of March 31, 2021 and December 31, 2020. The tables segregate the holdings based on the period of time the investments have been continuously held in unrealized loss positions. (in thousands) March 31, 2021 Less than 12 Months Greater than 12 Months Total Estimated Fair Value Unrealized Loss Estimated Fair Value Unrealized Loss Estimated Fair Value Unrealized Loss Fixed maturities: U.S. government, government agencies and authorities $ 4,542 $ 7 $ — $ — $ 4,542 $ 7 States, municipalities and political subdivisions 200 — — — 200 — Mortgage-backed 809 6 — — 809 6 Corporate 208 — — — 208 — Total fixed maturities $ 5,759 $ 13 $ — $ — $ 5,759 $ 13 (in thousands) December 31, 2020 Less than 12 Months Greater than 12 Months Total Estimated Fair Value Unrealized Loss Estimated Fair Value Unrealized Loss Estimated Fair Value Unrealized Loss Fixed maturities: U.S. government, government agencies and authorities $ 511 $ — $ — $ — $ 511 $ — Mortgage-backed 834 6 — — 834 6 Total fixed maturities $ 1,345 $ 6 $ — $ — $ 1,345 $ 6 |
Investment Income | Net investment income for the three months ended March 31, 2021 and March 31, 2020 is comprised as follows: (in thousands) Three months ended March 31, 2021 2020 Investment income: Interest from fixed maturities $ 51 $ 102 Dividends 32 45 (Loss) income from limited liability investments (9) 23 Income from limited liability investments, at fair value 81 234 Income from real estate investments 200 200 Other 90 127 Gross investment income 445 731 Investment expenses (24) (12) Net investment income $ 421 $ 719 |
Schedule of Realized Gain (Loss) | Gross realized gains and losses on available-for-sale investments, limited liability investments, at fair value and investments in private companies for the three months ended March 31, 2021 and March 31, 2020 are comprised as follows: (in thousands) Three months ended March 31, 2021 2020 Gross realized gains $ 51 $ 208 Gross realized losses — — Net realized gains $ 51 $ 208 |
Schedule of Gain on Change in Fair Value of Equity Investments | oss on change in fair value of equity investments for the three months ended March 31, 2021 and March 31, 2020 is comprised as follows: (in thousands) Three months ended March 31, 2021 2020 Net gains recognized on equity investments sold during the period $ 13 $ — Change in unrealized losses on equity investments held at end of the period (164) (597) Loss on change in fair value of equity investments $ (151) $ (597) |
DEFERRED ACQUISITION COSTS (Tab
DEFERRED ACQUISITION COSTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Components of Deferred Acquisition Costs and Amortization Expense | The components of deferred acquisition costs and the related amortization expense for the three months ended March 31, 2021 and March 31, 2020 are comprised as follows: (in thousands) Three months ended March 31, 2021 2020 Beginning balance, net $ 8,835 $ 8,604 Additions 1,351 1,096 Amortization (1,343) (956) Balance at March 31, net $ 8,843 $ 8,744 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets at March 31, 2021 and December 31, 2020 are comprised as follows: (in thousands) March 31, 2021 Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets subject to amortization: Database $ 4,918 $ 4,120 $ 798 Vehicle service agreements in-force 3,680 3,680 — Customer relationships 12,646 7,650 4,996 In-place lease 1,125 297 828 Non-compete 266 183 83 Intangible assets not subject to amortization: Tenant relationship 73,667 — 73,667 Trade names 3,264 — 3,264 Total $ 99,566 $ 15,930 $ 83,636 (in thousands) December 31, 2020 Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets subject to amortization: Database $ 4,918 $ 3,997 $ 921 Vehicle service agreements in-force 3,680 3,680 — Customer relationships 12,646 7,305 5,341 In-place lease 1,125 281 844 Non-compete 266 170 96 Intangible assets not subject to amortization: Tenant relationship 73,667 — 73,667 Trade names 3,264 — 3,264 Total $ 99,566 $ 15,433 $ 84,133 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment at March 31, 2021 and December 31, 2020 are comprised as follows: (in thousands) March 31, 2021 Cost Accumulated Depreciation Carrying Value Land $ 21,120 $ — $ 21,120 Site improvements 91,308 19,461 71,847 Buildings 580 68 512 Leasehold improvements 296 138 158 Furniture and equipment 1,149 1,003 146 Computer hardware 5,231 4,822 409 Total $ 119,684 $ 25,492 $ 94,192 (in thousands) December 31, 2020 Cost Accumulated Depreciation Carrying Value Land $ 21,120 $ — $ 21,120 Site improvements 91,308 18,428 72,880 Buildings 580 65 515 Leasehold improvements 296 125 171 Furniture and equipment 1,223 1,074 149 Computer hardware 4,929 4,749 180 Total $ 119,456 $ 24,441 $ 95,015 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | Debt consists of the following instruments at March 31, 2021 and December 31, 2020: (in thousands) March 31, 2021 December 31, 2020 Principal Carrying Value Fair Value Principal Carrying Value Fair Value Bank loan: 2020 KWH Loan $ 24,465 $ 24,089 $ 24,707 $ 25,700 $ 25,303 $ 25,893 Total bank loan 24,465 24,089 24,707 25,700 25,303 25,893 Notes payable: Mortgage 165,130 172,502 180,767 166,106 173,696 194,158 Flower Note 6,769 6,769 7,368 6,885 6,885 7,863 Net Lease Note — — — 9,000 9,000 9,054 PPP — — — 2,476 2,476 2,476 Total notes payable 171,899 179,271 188,135 184,467 192,057 213,551 Subordinated debt 90,500 53,668 53,668 90,500 50,928 50,928 Total $ 286,864 $ 257,028 $ 266,510 $ 300,667 $ 268,288 $ 290,372 |
Schedule of Subordinated Debt | Subordinated debt mentioned above consists of the following trust preferred debt instruments: Issuer Principal (in thousands) Issue date Interest Redemption date Kingsway CT Statutory Trust I $ 15,000 12/4/2002 annual interest rate equal to LIBOR, plus 4.00% payable quarterly 12/4/2032 Kingsway CT Statutory Trust II $ 17,500 5/15/2003 annual interest rate equal to LIBOR, plus 4.10% payable quarterly 5/15/2033 Kingsway CT Statutory Trust III $ 20,000 10/29/2003 annual interest rate equal to LIBOR, plus 3.95% payable quarterly 10/29/2033 Kingsway DE Statutory Trust III $ 15,000 5/22/2003 annual interest rate equal to LIBOR, plus 4.20% payable quarterly 5/22/2033 Kingsway DE Statutory Trust IV $ 10,000 9/30/2003 annual interest rate equal to LIBOR, plus 3.85% payable quarterly 9/30/2033 Kingsway DE Statutory Trust VI $ 13,000 12/16/2003 annual interest rate equal to LIBOR, plus 4.00% payable quarterly 1/8/2034 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Annual Maturities of Lease Liabilities | The annual maturities of lease liabilities as of March 31, 2021 were as follows: (in thousands) Lease Commitments 2021 $ 737 2022 899 2023 624 2024 550 2025 381 2026 and thereafter 165 Total undiscounted lease payments 3,356 Imputed interest 348 Total lease liabilities $ 3,008 |
Schedule of Net Book Value of Operating Lease Property | The following table provides the net book value of operating lease property included in property and equipment in the consolidated balance sheets at March 31, 2021 and December 31, 2020: (in thousands) March 31, 2021 December 31, 2020 Land $ 21,120 $21,120 Site improvements 91,308 91,308 Buildings 580 580 Gross property and equipment leased 113,008 113,008 Accumulation depreciation (19,529) (18,493) Net property and equipment leased $ 93,479 $ 94,515 |
Future Undiscounted Cash Flows to be Received | As of March 31, 2021, future undiscounted cash flows to be received in each of the next five years and thereafter, on non-cancelable operating leases are as follows: (in thousands) 2021 $ 9,113 2022 12,371 2023 12,649 2024 12,934 2025 13,225 Thereafter 123,738 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates revenues from contracts with customers by revenue type: (in thousands) Three months ended March 31, 2021 2020 Vehicle service agreement fees and GAP commissions - IWS, Geminus and PWI $ 14,674 $ 7,976 Maintenance support service fees - Trinity 1,050 554 Warranty product commissions - Trinity 929 861 Homebuilder warranty service fees - PWSC 1,725 1,437 Homebuilder warranty commissions - PWSC 196 358 Service fee and commission revenue $ 18,574 $ 11,186 |
Income Taxes (table) (Tables)
Income Taxes (table) (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Tax (Benefit) Expense | The following table summarizes the differences: (in thousands) Three months ended March 31, 2021 2020 Income tax (benefit) expense at United States statutory income tax rate $ 100 $ (47) Valuation allowance (299) 241 Non-deductible compensation 138 (43) Non-taxable income (524) — Investment income 17 (128) State income tax 53 38 Change in unrecognized tax benefits (1) 38 68 Indefinite life intangibles 54 54 Other (2) (13) Income tax (benefit) expense $ (425) $ 170 (1) Includes interest and penalty expense related to unrecognized tax benefits. |
(LOSS) EARNINGS PER SHARE (Tabl
(LOSS) EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table sets forth the reconciliation of numerators and denominators for the basic and diluted earnings (loss) per share computation for the three months ended March 31, 2021 and March 31, 2020: (in thousands, except per share data) Three months ended March 31, 2021 2020 Numerator: Net income (loss) $ 899 $ (393) Less: net income attributable to noncontrolling interests (259) (721) Less: dividends on preferred stock (238) (377) Net income (loss) attributable to common shareholders used in calculating basic earnings (loss) per share $ 402 $ (1,491) Adjustment for proportionate interest in PWSC's earnings attributable to common stock (30) — Net income (loss) attributable to common shareholders used in calculating diluted earnings (loss) per share $ 372 $ (1,491) Denominator: Weighted average basic shares Weighted average common shares outstanding 22,218 22,069 Weighted average diluted shares Weighted average common shares outstanding 22,218 22,069 Effect of potentially dilutive securities (a) — — Stock options — — Unvested restricted stock awards 1 — Warrants — — Convertible preferred stock — — Total weighted average diluted shares 22,219 22,069 Basic earnings (loss) per share $ 0.02 $ (0.07) Diluted earnings (loss) per share $ 0.02 $ (0.07) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following weighted-average potentially dilutive securities are not included in the diluted earnings (loss) per share calculations above because they would have had an antidilutive effect on the earnings (loss) per share: Three months ended March 31, 2021 2020 Stock options — 40,000 Unvested restricted stock awards 1,338,425 500,000 Warrants 4,923,765 4,923,765 Convertible preferred stock 1,142,975 1,142,975 Total $ 7,405,165 $ 6,606,740 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of Unvested Restricted Stock Award Activity | The following table summarizes the activity related to unvested 2021 Restricted Stock Awards and 2018 Restricted Stock Award (collectively "Restricted Stock Awards") for the three months ended March 31, 2021: Number of Restricted Stock Awards Weighted-Average Grant Date Fair Value (per Share) Unvested at December 31, 2020 500,000 $ 5.73 Granted 1,060,000 4.64 Vested (154,562) 4.64 Cancelled for Tax Withholding (65,438) 4.64 Unvested at March 31, 2021 1,340,000 $ 5.05 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | (in thousands) Three months ended March 31, 2021 Unrealized Gains (Losses) on Available-for-Sale Investments Foreign Currency Translation Adjustments Change in Fair Value of Debt Attributable to Instrument-Specific Credit Risk Total Accumulated Other Comprehensive Income Balance at January 1, 2021 $ 216 $ (3,286) $ 41,129 $ 38,059 Other comprehensive loss arising during the period (71) — (1,721) (1,792) Amounts reclassified from accumulated other comprehensive income 12 — — 12 Net current-period other comprehensive loss (59) — (1,721) (1,780) Balance at March 31, 2021 $ 157 $ (3,286) $ 39,408 $ 36,279 (in thousands) Three months ended March 31, 2020 Unrealized Gains (Losses) on Available-for-Sale Investments Foreign Currency Translation Adjustments Change in Fair Value of Debt Attributable to Instrument-Specific Credit Risk Total Accumulated Other Comprehensive Income Balance at January 1, 2020 $ 59 $ (3,286) $ 38,574 $ 35,347 Other comprehensive income arising during the period 47 — 11,623 11,670 Amounts reclassified from accumulated other comprehensive income 61 — — 61 Net current-period other comprehensive income 108 — 11,623 11,731 Balance at March 31, 2020 $ 167 $ (3,286) $ 50,197 $ 47,078 |
Reclassification out of Accumulated Other Comprehensive Income | Components of accumulated other comprehensive income were reclassified to the following lines of the unaudited consolidated statements of operations for the three months ended March 31, 2021 and March 31, 2020: (in thousands) Three months ended March 31, 2021 2020 Reclassification of accumulated other comprehensive income from unrealized gains (losses) on available-for-sale investments to: Net realized gains $ (12) $ (61) Other-than-temporary impairment loss — — Income (loss) before income tax (benefit) expense (12) (61) Income tax (benefit) expense — — Net income (loss) $ (12) $ (61) |
Segmented Information (Tables)
Segmented Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | Revenues by reportable segment reconciled to consolidated revenues for the three months ended March 31, 2021 and March 31, 2020 were: (in thousands) Three months ended March 31, 2021 2020 Revenues: Extended Warranty: Service fee and commission revenue $ 18,574 $ 11,186 Other revenue 67 74 Total Extended Warranty 18,641 11,260 Leased Real Estate: Rental revenue 3,341 3,341 Other revenue 38 68 Total Leased Real Estate 3,379 3,409 Total revenues $ 22,020 $ 14,669 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | Total segment operating income reconciled to the consolidated net income (loss) for the three months ended March 31, 2021 and March 31, 2020 were: (in thousands) Three months ended March 31, 2021 2020 Segment operating income: Extended Warranty (a) $ 5,310 $ 850 Leased Real Estate 1,293 597 Total segment operating income 6,603 1,447 Net investment income 421 719 Net realized gains 51 208 Loss on change in fair value of equity investments (151) (597) (Loss) gain on change in fair value of limited liability investments, at fair value (202) 1,899 Net change in unrealized loss on private company investments — (670) Other-than-temporary impairment loss — (117) Interest expense not allocated to segments (1,552) (2,153) Other revenue and expenses not allocated to segments, net (3,491) (3,030) Amortization of intangible assets (497) (574) (Loss) gain on change in fair value of debt (1,019) 2,645 Gain on extinguishment of debt not allocated to segments 311 — Income (loss) before income tax (benefit) expense 474 (223) Income tax (benefit) expense (425) 170 Net income (loss) $ 899 $ (393) |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | Certain investments in limited liability companies that are measured at fair value using the net asset value practical expedient are not required to be classified using the fair value hierarchy, but are presented in the following tables to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets: (in thousands) March 31, 2021 Fair Value Measurements at the End of the Reporting Period Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Measured at Net Asset Value Recurring fair value measurements: Assets: Fixed maturities: U.S. government, government agencies and authorities $ 10,624 $ — $ 10,624 $ — $ — States, municipalities and political subdivisions 1,302 — 1,302 — — Mortgage-backed 4,753 — 4,753 — — Corporate 3,185 — 3,185 — — Total fixed maturities 19,864 — 19,864 — — Equity investments: Common stock 186 186 — — — Warrants 84 — 84 — — Total equity investments 270 186 84 — — Limited liability investments, at fair value 19,654 — — 3,374 16,280 Real estate investments 10,662 — — 10,662 — Other investments 299 — 299 — — Short-term investments 157 — 157 — — Total assets $ 50,906 $ 186 $ 20,404 $ 14,036 $ 16,280 Liabilities: Subordinated debt $ 53,668 $ — $ 53,668 $ — $ — Stock-based compensation liabilities 844 — — 844 — Total liabilities $ 54,512 $ — $ 53,668 $ 844 $ — (in thousands) December 31, 2020 Fair Value Measurements at the End of the Reporting Period Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Measured at Net Asset Value Recurring fair value measurements: Assets: Fixed maturities: U.S. government, government agencies and authorities $ 10,104 $ — $ 10,104 $ — $ — States municipalities and political subdivisions 1,454 — 1,454 — — Mortgage-backed 5,394 — 5,394 — — Corporate 3,764 — 3,764 — — Total fixed maturities 20,716 — 20,716 — — Equity investments: Common stock 155 155 — — — Warrants 289 17 272 — — Total equity investments 444 172 272 — — Limited liability investments, at fair value 32,811 — — 3,263 29,548 Real estate investments 10,662 — — 10,662 — Other investments 294 — 294 — — Short-term investments 157 — 157 — — Total assets $ 65,084 $ 172 $ 21,439 $ 13,925 $ 29,548 Liabilities: Subordinated debt $ 50,928 $ — $ 50,928 $ — $ — Stock-based compensation liabilities 443 — — 443 — Total liabilities $ 51,371 $ — $ 50,928 $ 443 $ — |
Schedule of Reconciliation of Fair Value of Recurring Level 3 Measurements | The following table provides a reconciliation of the fair value of recurring Level 3 fair value measurements for the three months ended March 31, 2021 and March 31, 2020: (in thousands) Three months ended March 31, 2021 2020 Assets: Limited liability investments, at fair value: Beginning balance $ 3,263 $ 4,392 Distributions received (22) (77) Realized gains included in net income (loss) 22 86 Change in fair value of limited liability investments, at fair value included in net income (loss) 111 12 Ending balance $ 3,374 $ 4,413 Unrealized gains on limited liability investments, at fair value held at end of period: Included in net income (loss) $ 111 $ 12 Included in other comprehensive (loss) income $ — $ — Real estate investments: Beginning balance $ 10,662 $ 10,662 Change in fair value of real estate investments included in net income (loss) — — Ending balance $ 10,662 $ 10,662 Unrealized gains recognized on real estate investments held at end of period: Included in net income (loss) — — Included in other comprehensive (loss) income — — Ending balance - assets $ 14,036 $ 15,075 Liabilities: Warrant liability: Beginning balance $ — $ 249 Change in fair value of warrant liability included in net income (loss) — (33) Ending balance $ — $ 216 Unrealized gains recognized on warrant liability held at end of period: Included in net income (loss) $ — $ (33) Included in other comprehensive (loss) income $ — $ — Stock-based compensation liabilities: Beginning balance $ 443 $ — Change in fair value of stock-based compensation liabilities included in net income (loss) 401 — Ending balance $ 844 $ — Ending balance - liabilities $ 844 $ 216 |
Schedule of Fair Value Valuation Techniques Used to Measure Investments | The following table summarizes the valuation techniques and significant unobservable inputs utilized in determining fair values for the Company's investments that are categorized as Level 3 at March 31, 2021: Categories Fair Value Valuation Techniques Unobservable Inputs Input Value(s) Limited liability investments, at fair value $ 3,374 Market approach Valuation multiples 3.1x-8.0x Real estate investments $ 10,662 Market and income approach Cap rates 7.5 % Stock-based compensation liabilities $ 844 Market approach Valuation multiple 6.0x The following table summarizes the valuation techniques and significant unobservable inputs utilized in determining fair values for the Company's investments that are categorized as Level 3 at December 31, 2020: Categories Fair Value Valuation Techniques Unobservable Inputs Input Value(s) Limited liability investments, at fair value $ 3,263 Market approach Valuation multiples 3.1x-8.0x Real estate investments $ 10,662 Market and income approach Cap rates 7.5 % Stock-based compensation liabilities $ 443 Market approach Valuation multiple 6.0x |
Schedule of Investments at Fair Value Using Net Asset Value Per Share as Practical Expedient | The following table summarizes investments for which fair value is measured using the net asset value per share practical expedient at March 31, 2021: Category Fair Value (in thousands) Unfunded Commitments Redemption Frequency Redemption Notice Period Limited liability investments, at fair value $ 16,280 n/a n/a n/a The following table summarizes investments for which fair value is measured using the net asset value per share practical expedient at December 31, 2020: Category Fair Value (in thousands) Unfunded Commitments Redemption Frequency Redemption Notice Period Limited liability investments, at fair value $ 29,548 n/a n/a n/a |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2021USD ($)subsidiary_trustshares | Dec. 16, 2003subsidiary_trust | Apr. 01, 2021USD ($) | Dec. 31, 2020USD ($)shares | Dec. 01, 2020USD ($) | |
Temporary Equity [Line Items] | |||||
Interest payment deferral period | 5 years | ||||
Number of subsidiary trusts | subsidiary_trust | 6 | 6 | |||
Cash | $ 3,800 | $ 1,100 | |||
Cash and cash equivalents | $ 15,489 | $ 14,374 | $ 90 | ||
Preferred stock outstanding (in shares) | shares | 182,876 | 182,876 | |||
Redemption amount | $ 6,742 | $ 6,658 | |||
Subsequent Event | |||||
Temporary Equity [Line Items] | |||||
Redemption amount | $ 6,700 | ||||
Subordinated debt | |||||
Temporary Equity [Line Items] | |||||
Interest Payable | $ 15,200 | $ 14,100 |
RECENTLY ISSUED ACCOUNTING ST_3
RECENTLY ISSUED ACCOUNTING STANDARDS RECENTLY ISSUED ACCOUNTING STANDARDS (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 01, 2020 |
Accounting Policies [Abstract] | |||
Right-of-use asset | $ 2,760 | $ 2,960 | $ 254 |
Lease liability | 3,008 | 3,213 | 255 |
Other Liabilities | $ 42,716 | $ 42,502 | $ 8,162 |
Acquisition Narrative (Details)
Acquisition Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Dec. 01, 2020 | |
Business Combinations [Abstract] | ||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |
Payments to Acquire Businesses, Gross | $ 24,424 |
PWI assets acquired and liabili
PWI assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 01, 2020 | |
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 15,489 | $ 14,374 | $ 90 |
Restricted cash | 29,542 | 30,571 | 21,578 |
Service fee receivable, net of allowance for doubtful accounts of $289 and $478, respectively | 4,963 | 3,928 | 1,459 |
Other receivables, net of allowance for doubtful accounts of $201 and $201, respectively | 18,187 | 16,323 | 2,748 |
Deferred Income Tax Assets, Net | 60 | ||
Property and equipment, net of accumulated depreciation of $25,492 and $24,441, respectively | 94,192 | 95,015 | 175 |
Right-of-use asset | 2,760 | 2,960 | 254 |
Goodwill | 121,286 | 121,130 | 39,182 |
Other assets | 4,744 | 4,882 | 1,321 |
Assets | 439,821 | 452,474 | 66,867 |
Other Liabilities | 42,716 | 42,502 | 8,162 |
Lease liability | 3,008 | 3,213 | 255 |
Deferred service fees | 86,871 | 87,945 | 34,026 |
Liabilities | 421,217 | $ 433,811 | $ 42,443 |
Payments to Acquire Businesses, Gross | $ 24,424 |
INVESTMENTS - Amortized Cost, G
INVESTMENTS - Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 19,699 | $ 20,488 |
Gross Unrealized Gains | 178 | 234 |
Gross Unrealized Losses | 13 | 6 |
Estimated Fair Value | 19,864 | 20,716 |
U.S. government, government agencies and authorities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10,547 | 9,999 |
Gross Unrealized Gains | 84 | 105 |
Gross Unrealized Losses | 7 | 0 |
Estimated Fair Value | 10,624 | 10,104 |
States, municipalities and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,296 | 1,447 |
Gross Unrealized Gains | 6 | 7 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 1,302 | 1,454 |
Mortgage-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 4,709 | 5,334 |
Gross Unrealized Gains | 50 | 66 |
Gross Unrealized Losses | 6 | 6 |
Estimated Fair Value | 4,753 | 5,394 |
Corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 3,147 | 3,708 |
Gross Unrealized Gains | 38 | 56 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 3,185 | $ 3,764 |
INVESTMENTS - Fixed Maturities
INVESTMENTS - Fixed Maturities by Contractual Maturity Periods (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Amortized Cost | ||
Due in one year or less | $ 4,260 | |
Due after one year through five years | 14,022 | |
Due after five years through ten years | 319 | |
Due after ten years | 1,098 | |
Amortized Cost | 19,699 | $ 20,488 |
Estimated Fair Value | ||
Due in one year or less | 4,287 | |
Due after one year through five years | 14,153 | |
Due after five years through ten years | 328 | |
Due after ten years | 1,096 | |
Estimated Fair Value, Fixed Maturities | $ 19,864 | $ 20,716 |
INVESTMENTS - Unrealized Loss P
INVESTMENTS - Unrealized Loss Position (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Fixed Maturities | |||
Estimated Fair Value | |||
Less than 12 Months | $ 5,759 | $ 1,345 | |
Greater than 12 Months | 0 | 0 | |
Total | 5,759 | 1,345 | |
Unrealized Loss | |||
Less than 12 Months | 13 | 6 | |
Greater than 12 Months | 0 | 0 | |
Total | 13 | 6 | |
U.S. government, government agencies and authorities | |||
Estimated Fair Value | |||
Less than 12 Months | 4,542 | 511 | |
Greater than 12 Months | 0 | 0 | |
Total | 4,542 | 511 | |
Unrealized Loss | |||
Less than 12 Months | 7 | 0 | |
Greater than 12 Months | 0 | 0 | |
Total | 7 | 0 | |
States, municipalities and political subdivisions | |||
Estimated Fair Value | |||
Less than 12 Months | $ 200 | ||
Greater than 12 Months | 0 | ||
Total | 200 | ||
Unrealized Loss | |||
Less than 12 Months | 0 | ||
Greater than 12 Months | 0 | ||
Total | $ 0 | ||
Mortgage-backed | |||
Estimated Fair Value | |||
Less than 12 Months | 809 | 834 | |
Greater than 12 Months | 0 | 0 | |
Total | 809 | 834 | |
Unrealized Loss | |||
Less than 12 Months | 6 | 6 | |
Greater than 12 Months | 0 | 0 | |
Total | 6 | $ 6 | |
Corporate | |||
Estimated Fair Value | |||
Less than 12 Months | 208 | ||
Greater than 12 Months | 0 | ||
Total | 208 | ||
Unrealized Loss | |||
Less than 12 Months | 0 | ||
Greater than 12 Months | 0 | ||
Total | $ 0 |
INVESTMENTS - Additional Inform
INVESTMENTS - Additional Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021USD ($)security | Dec. 31, 2020USD ($)security | Mar. 31, 2020USD ($) | |
Debt Securities, Available-for-sale [Line Items] | |||
Securities in unrealized loss positions | security | 16 | 5 | |
Other-than-temporary Impairment Loss, Debt Securities, Portion Recognized in Earnings | $ 0 | $ 117 | |
Limited liability investments | 3,683 | $ 3,692 | |
Limited liability investments, at fair value | 19,654 | 32,811 | |
Investments in private companies, at adjusted cost | 790 | 790 | |
Principal | 286,864 | 300,667 | |
Other-than-temporary impairment loss | 0 | (117) | |
Net realized gains | 51 | 208 | |
Notes payable | |||
Debt Securities, Available-for-sale [Line Items] | |||
Principal | 171,899 | 184,467 | |
Net Lease Note | Notes payable | |||
Debt Securities, Available-for-sale [Line Items] | |||
Principal | 0 | 9,000 | |
Net realized gains | 1,200 | ||
Unrealized Gain on Securities | 1,200 | ||
Variable Interest Entity, Primary Beneficiary | |||
Debt Securities, Available-for-sale [Line Items] | |||
Unfunded commitments | 0 | ||
Private Company Investments | |||
Debt Securities, Available-for-sale [Line Items] | |||
Other-than-temporary impairment loss | 0 | (700) | |
Limited Liability Investments | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investment impairment losses | (100) | $ 0 | |
Atlas Financial Holdings, Inc. [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Loss on Sale of Investments | $ 200 | ||
Other Investment Companies | |||
Debt Securities, Available-for-sale [Line Items] | |||
Other-than-temporary Impairment Loss, Debt Securities, Portion Recognized in Earnings | $ (100) |
INVESTMENTS - Net Investment In
INVESTMENTS - Net Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Investment income: | ||
Interest from fixed maturities | $ 51 | $ 102 |
Dividends | 32 | 45 |
(Loss) income from limited liability investments | (9) | 23 |
Income from limited liability investments, at fair value | 81 | 234 |
Income from real estate investments | 200 | 200 |
Other | 90 | 127 |
Gross investment income | 445 | 731 |
Investment expenses | (24) | (12) |
Net investment income | $ 421 | $ 719 |
INVESTMENTS - Gross Realized Ga
INVESTMENTS - Gross Realized Gains and Losses on Fixed Maturities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Investments [Abstract] | ||
Gross realized gains | $ 51 | $ 208 |
Gross realized losses | 0 | 0 |
Net realized gains | $ 51 | $ 208 |
INVESTMENTS - Gain in change fa
INVESTMENTS - Gain in change fair value of equity investments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Investments [Abstract] | ||
Net gains recognized on equity investments sold during the period | $ 13 | $ 0 |
Change in unrealized losses on equity investments held at end of the period | (164) | (597) |
Loss on change in fair value of equity investments | $ (151) | $ (597) |
DEFERRED ACQUISITION COSTS (Det
DEFERRED ACQUISITION COSTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred Acquisition Costs | ||||
Deferred acquisition costs, net | $ 8,843 | $ 8,744 | $ 8,835 | $ 8,604 |
Additions | 1,351 | 1,096 | ||
Amortization | (1,343) | (956) | ||
Balance at March 31, net | $ 8,843 | $ 8,744 |
INTANGIBLE ASSETS Schedule of I
INTANGIBLE ASSETS Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Gross Carrying Value | ||
Total | $ 99,566 | $ 99,566 |
Accumulated Amortization | ||
Intangible assets accumulated amortization | 15,930 | 15,433 |
Net Carrying Value | ||
Total | 83,636 | 84,133 |
Tenant relationship | ||
Gross Carrying Value | ||
Intangible assets not subject to amortization | 73,667 | 73,667 |
Net Carrying Value | ||
Intangible assets not subject to amortization | 73,667 | 73,667 |
Trade names | ||
Gross Carrying Value | ||
Intangible assets not subject to amortization | 3,264 | 3,264 |
Net Carrying Value | ||
Intangible assets not subject to amortization | 3,264 | 3,264 |
Database | ||
Gross Carrying Value | ||
Intangible assets subject to amortization | 4,918 | 4,918 |
Accumulated Amortization | ||
Intangible assets accumulated amortization | 4,120 | 3,997 |
Net Carrying Value | ||
Intangible assets subject to amortization | 798 | 921 |
Vehicle service agreements in-force | ||
Gross Carrying Value | ||
Intangible assets subject to amortization | 3,680 | 3,680 |
Accumulated Amortization | ||
Intangible assets accumulated amortization | 3,680 | 3,680 |
Net Carrying Value | ||
Intangible assets subject to amortization | 0 | 0 |
Customer relationships | ||
Gross Carrying Value | ||
Intangible assets subject to amortization | 12,646 | 12,646 |
Accumulated Amortization | ||
Intangible assets accumulated amortization | 7,650 | 7,305 |
Net Carrying Value | ||
Intangible assets subject to amortization | 4,996 | 5,341 |
In-place lease | ||
Gross Carrying Value | ||
Intangible assets subject to amortization | 1,125 | 1,125 |
Accumulated Amortization | ||
Intangible assets accumulated amortization | 297 | 281 |
Net Carrying Value | ||
Intangible assets subject to amortization | 828 | 844 |
Non-compete | ||
Gross Carrying Value | ||
Intangible assets subject to amortization | 266 | 266 |
Accumulated Amortization | ||
Intangible assets accumulated amortization | 183 | 170 |
Net Carrying Value | ||
Intangible assets subject to amortization | $ 83 | $ 96 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ (497,000) | $ (574,000) |
Impairment charges | $ 0 | |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life | 5 years | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life | 18 years |
PROPERTY AND EQUIPMENT - Fixed
PROPERTY AND EQUIPMENT - Fixed Assets Roll forward (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 01, 2020 |
Total Property and Equipment | |||
Cost | $ 119,684 | $ 119,456 | |
Accumulated Depreciation | 25,492 | 24,441 | |
Carrying Value | 94,192 | 95,015 | $ 175 |
Land | |||
Total Property and Equipment | |||
Cost | 21,120 | 21,120 | |
Accumulated Depreciation | 0 | 0 | |
Carrying Value | 21,120 | 21,120 | |
Site improvements | |||
Total Property and Equipment | |||
Cost | 91,308 | 91,308 | |
Accumulated Depreciation | 19,461 | 18,428 | |
Carrying Value | 71,847 | 72,880 | |
Buildings | |||
Total Property and Equipment | |||
Cost | 580 | 580 | |
Accumulated Depreciation | 68 | 65 | |
Carrying Value | 512 | 515 | |
Leasehold improvements | |||
Total Property and Equipment | |||
Cost | 296 | 296 | |
Accumulated Depreciation | 138 | 125 | |
Carrying Value | 158 | 171 | |
Furniture and equipment | |||
Total Property and Equipment | |||
Cost | 1,149 | 1,223 | |
Accumulated Depreciation | 1,003 | 1,074 | |
Carrying Value | 146 | 149 | |
Computer hardware | |||
Total Property and Equipment | |||
Cost | 5,231 | 4,929 | |
Accumulated Depreciation | 4,822 | 4,749 | |
Carrying Value | $ 409 | $ 180 |
DEBT - Carrying Value of Debt I
DEBT - Carrying Value of Debt Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 01, 2020 | Sep. 30, 2020 | Jul. 31, 2016 |
Debt Instrument [Line Items] | |||||
Principal | $ 286,864 | $ 300,667 | |||
Carrying Value | 257,028 | 268,288 | |||
Fair Value | 266,510 | 290,372 | |||
Bank loan | 24,089 | 25,303 | |||
Bank loans | |||||
Debt Instrument [Line Items] | |||||
Principal | 24,465 | 25,700 | |||
Carrying Value | 24,089 | 25,303 | |||
Fair Value | 24,707 | 25,893 | |||
Notes payable | |||||
Debt Instrument [Line Items] | |||||
Principal | 171,899 | 184,467 | |||
Carrying Value | 179,271 | 192,057 | |||
Fair Value | 188,135 | 213,551 | |||
Notes payable | Flower Note | |||||
Debt Instrument [Line Items] | |||||
Principal | 6,769 | 6,885 | |||
Carrying Value | 6,769 | 6,885 | |||
Fair Value | 7,368 | 7,863 | |||
Notes payable | Net Lease Note | |||||
Debt Instrument [Line Items] | |||||
Principal | 0 | 9,000 | |||
Carrying Value | 0 | 9,000 | |||
Fair Value | 0 | 9,054 | |||
Notes payable | Payment Protection Program [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal | 0 | ||||
Carrying Value | 0 | ||||
Fair Value | 0 | ||||
Mortgage | |||||
Debt Instrument [Line Items] | |||||
Principal | 165,130 | 166,106 | |||
Carrying Value | 172,502 | 173,696 | |||
Fair Value | 180,767 | 194,158 | $ 191,700 | ||
Subordinated debt | |||||
Debt Instrument [Line Items] | |||||
Principal | 90,500 | 90,500 | |||
Carrying Value | 53,668 | 50,928 | |||
Fair Value | 53,668 | 50,928 | |||
KWH Bank Loan | |||||
Debt Instrument [Line Items] | |||||
Principal | 24,465 | 25,700 | $ 25,700 | ||
Bank loan | 24,089 | 25,303 | |||
Debt Instrument, Principal Value | $ 24,707 | 25,893 | |||
Paycheck Protection Program | |||||
Debt Instrument [Line Items] | |||||
Fair Value | 2,476 | $ 2,900 | |||
Notes Payable | $ 2,476 |
DEBT - Additional Details (Deta
DEBT - Additional Details (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020USD ($) | Dec. 31, 2021USD ($) | Mar. 31, 2021USD ($)asubsidiary_trust | Mar. 31, 2020USD ($) | Dec. 31, 2021USD ($) | Dec. 16, 2003USD ($)subsidiary_trust | Dec. 01, 2020USD ($) | Sep. 30, 2020USD ($) | Jul. 31, 2016USD ($) | Oct. 15, 2015USD ($) | Jan. 05, 2015USD ($) | |
Debt Instrument [Line Items] | |||||||||||
Number of subsidiary trusts | subsidiary_trust | 6 | 6 | |||||||||
Interest rate | 0.75% | ||||||||||
Long-term debt, fair value | $ 290,372,000 | $ 266,510,000 | |||||||||
Carrying value | 268,288,000 | 257,028,000 | |||||||||
Long-term Debt, Gross | $ 300,667,000 | 286,864,000 | |||||||||
Gain (loss) included in earnings | 2,700,000 | ||||||||||
(Loss) gain on change in fair value of debt | (1,019,000) | $ 2,645,000 | |||||||||
Change in fair value of debt attributable to instrument-specific credit risk | $ (1,721,000) | $ 11,623,000 | |||||||||
Area of Land | a | 192 | ||||||||||
Loans Payable to Bank | $ 24,700,000 | ||||||||||
Long-term Line of Credit | 1,000,000 | ||||||||||
Debt Instrument, Interest Rate, Increase (Decrease) | 3.00% | ||||||||||
Debt Instrument, Interest Rate During Period | 3.75% | ||||||||||
Bank loans | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term debt, fair value | $ 25,893,000 | $ 24,707,000 | |||||||||
Carrying value | 25,303,000 | 24,089,000 | |||||||||
Long-term Debt, Gross | 25,700,000 | 24,465,000 | |||||||||
Notes payable | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term debt, fair value | 213,551,000 | 188,135,000 | |||||||||
Carrying value | 192,057,000 | 179,271,000 | |||||||||
Long-term Debt, Gross | 184,467,000 | 171,899,000 | |||||||||
Mortgage | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt face amount | $ 180,000,000 | ||||||||||
Interest rate | 4.07% | ||||||||||
Long-term debt, fair value | 194,158,000 | 180,767,000 | $ 191,700,000 | ||||||||
Unamortized premium | $ 11,700,000 | ||||||||||
Carrying value | 173,696,000 | 172,502,000 | |||||||||
Long-term Debt, Gross | 166,106,000 | 165,130,000 | |||||||||
Paycheck Protection Program | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate | 1.00% | ||||||||||
Long-term debt, fair value | 2,476,000 | $ 2,900,000 | |||||||||
Debt Instrument, Decrease, Forgiveness | $ 400,000 | 2,500,000 | $ 2,500,000 | ||||||||
KWH Bank Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term Debt, Gross | 25,700,000 | 24,465,000 | $ 25,700,000 | ||||||||
Debt Instrument, Principal Value | 25,893,000 | 24,707,000 | |||||||||
Debt Issuance Costs, Net | 400,000 | 400,000 | |||||||||
Subordinated debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term debt, fair value | 50,928,000 | 53,668,000 | |||||||||
Carrying value | 50,928,000 | 53,668,000 | |||||||||
Long-term Debt, Gross | 90,500,000 | 90,500,000 | |||||||||
Interest Payable | 14,100,000 | 15,200,000 | |||||||||
Flower Note | Notes payable | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt face amount | $ 9,200,000 | ||||||||||
Interest rate | 4.81% | ||||||||||
Long-term debt, fair value | 7,863,000 | 7,368,000 | |||||||||
Carrying value | 6,885,000 | 6,769,000 | |||||||||
Long-term Debt, Gross | 6,885,000 | 6,769,000 | |||||||||
Net Lease Note | Notes payable | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt face amount | $ 9,000,000 | ||||||||||
Interest rate | 10.25% | ||||||||||
Long-term debt, fair value | 9,054,000 | 0 | |||||||||
Carrying value | 9,000,000 | 0 | |||||||||
Long-term Debt, Gross | $ 9,000,000 | 0 | |||||||||
Payment Protection Program [Member] | Notes payable | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term debt, fair value | 0 | ||||||||||
Carrying value | 0 | ||||||||||
Long-term Debt, Gross | $ 0 | ||||||||||
30-Year Capital Securities | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt face amount | $ 90,500,000 | ||||||||||
Minimum | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Annual interest rate | 3.85% | ||||||||||
Maximum | Paycheck Protection Program | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, Principal Value | $ 2,000,000 | $ 2,000,000 | |||||||||
Maximum | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Annual interest rate | 4.20% |
DEBT - Subordinated Borrowing (
DEBT - Subordinated Borrowing (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Kingsway CT Statutory Trust I | |
Debt Instrument [Line Items] | |
Principal | $ 15,000 |
Kingsway CT Statutory Trust I | LIBOR | |
Debt Instrument [Line Items] | |
Annual interest rate | 4.00% |
Kingsway CT Statutory Trust II | |
Debt Instrument [Line Items] | |
Principal | $ 17,500 |
Kingsway CT Statutory Trust II | LIBOR | |
Debt Instrument [Line Items] | |
Annual interest rate | 4.10% |
Kingsway CT Statutory Trust III | |
Debt Instrument [Line Items] | |
Principal | $ 20,000 |
Kingsway CT Statutory Trust III | LIBOR | |
Debt Instrument [Line Items] | |
Annual interest rate | 3.95% |
Kingsway DE Statutory Trust III | |
Debt Instrument [Line Items] | |
Principal | $ 15,000 |
Kingsway DE Statutory Trust III | LIBOR | |
Debt Instrument [Line Items] | |
Annual interest rate | 4.20% |
Kingsway DE Statutory Trust IV | |
Debt Instrument [Line Items] | |
Principal | $ 10,000 |
Kingsway DE Statutory Trust IV | LIBOR | |
Debt Instrument [Line Items] | |
Annual interest rate | 3.85% |
Kingsway DE Statutory Trust VI | |
Debt Instrument [Line Items] | |
Principal | $ 13,000 |
Kingsway DE Statutory Trust VI | LIBOR | |
Debt Instrument [Line Items] | |
Annual interest rate | 4.00% |
LEASES - Adoption of ASU 2016-0
LEASES - Adoption of ASU 2016-02 (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 01, 2020 |
Leases [Abstract] | |||
Lease liabilities | $ 3,008 | $ 3,213 | $ 255 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 300 | |
Variable Lease, Cost | $ 100 | |
Weighted average discount rate | 5.28% | |
Cash paid for amounts included in measurement of lease liabilities | $ 200 | $ 200 |
Below market lease, amortization 2019 | 100 | |
Below market lease, amortization 2020 | 100 | |
Below market lease, amortization 2021 | 100 | |
Below market lease, amortization 2022 | 100 | |
Below market Lease, amortization 2023 | 100 | |
Lease income | $ 3,341 | $ 3,341 |
LEASES - Annual Maturities of L
LEASES - Annual Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 01, 2020 |
Leases [Abstract] | |||
2020 | $ 899 | ||
2021 | 624 | ||
2022 | 550 | ||
2023 | 381 | ||
2026 and thereafter | 165 | ||
Total undiscounted lease payments | 3,356 | ||
Imputed interest | 348 | ||
Total lease liabilities | 3,008 | $ 3,213 | $ 255 |
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months | $ 737 |
LEASES - Net Book Value of Oper
LEASES - Net Book Value of Operating Lease Property Included in Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Operating Leased Assets [Line Items] | ||
Gross property and equipment leased | $ 113,008 | $ 113,008 |
Accumulation depreciation | (19,529) | (18,493) |
Net property and equipment leased | 93,479 | 94,515 |
Land | ||
Operating Leased Assets [Line Items] | ||
Gross property and equipment leased | 21,120 | 21,120 |
Site improvements | ||
Operating Leased Assets [Line Items] | ||
Gross property and equipment leased | 91,308 | 91,308 |
Buildings | ||
Operating Leased Assets [Line Items] | ||
Gross property and equipment leased | $ 580 | $ 580 |
LEASES - Future Undiscounted Ca
LEASES - Future Undiscounted Cash Flows to be Received (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Leases [Abstract] | |
2019 | $ 9,113 |
2020 | 12,371 |
2021 | 12,649 |
2022 | 12,934 |
2023 | 13,225 |
Thereafter | $ 123,738 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of revenues from contracts with customer by revenue type (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Service fee and commission revenue | $ 18,574 | $ 11,186 |
Extended Warranty | IWS | Vehicle service agreement fees | ||
Disaggregation of Revenue [Line Items] | ||
Service fee and commission revenue | 14,674 | 7,976 |
Extended Warranty | Trinity | Maintenance support service fees | ||
Disaggregation of Revenue [Line Items] | ||
Service fee and commission revenue | 1,050 | 554 |
Extended Warranty | Trinity | Warranty product commissions | ||
Disaggregation of Revenue [Line Items] | ||
Service fee and commission revenue | 929 | 861 |
Extended Warranty | PWSC | Homebuilder warranty service fees | ||
Disaggregation of Revenue [Line Items] | ||
Service fee and commission revenue | 1,725 | 1,437 |
Extended Warranty | PWSC | Homebuilder warranty commissions | ||
Disaggregation of Revenue [Line Items] | ||
Service fee and commission revenue | $ 196 | $ 358 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 01, 2020 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Service fee receivable, net of allowance for doubtful accounts of $289 and $478, respectively | $ 4,963 | $ 3,928 | $ 1,459 | |
Deferred service fees | 86,871 | $ 87,945 | $ 34,026 | |
Service fee and commission income recognized during the period | $ 12,200 | $ 5,500 | ||
Minimum | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Performance obligation satisfied | 6.00% | |||
Maximum | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Performance obligation satisfied | 13.00% |
REVENUE FROM CONTRACTS WITH C_5
REVENUE FROM CONTRACTS WITH CUSTOMERS Performance Obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | Mar. 31, 2021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, expected timing of satisfaction, period | 1 year |
Performance obligation satisfied | 49.70% |
INCOME TAXES Shcedule of Income
INCOME TAXES Shcedule of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income tax (benefit) expense at United States statutory income tax rate | $ 100 | $ (47) |
Valuation allowance | (299) | 241 |
Non-deductible compensation | 138 | (43) |
Non-taxable income | (524) | 0 |
State income tax | 53 | 38 |
Change in unrecognized tax benefits | 38 | 68 |
Indefinite life intangibles | 54 | 54 |
Other | (2) | (13) |
Effective Income Tax Rate Reconciliation, Investment Income, Nontaxable | 17 | (128) |
Income tax (benefit) expense | $ (425) | $ 170 |
INCOME TAXES Narrative (Details
INCOME TAXES Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Deferred tax asset, increase (decrease), amount | $ 600 | $ 0 | |
Net deferred income tax liabilities | 27,037 | $ 27,555 | |
Operating loss carryforwards, subject to expiration | 7,600 | 7,600 | |
Goodwill and intangible assets | 21,900 | ||
Tax deferred income | 600 | 600 | |
Deferred tax liabilities, other | 21,900 | ||
Unrecognized tax benefits | 1,400 | ||
Penalties and interest expense | 100 | $ 100 | |
Penalties and interest accrued | 1,600 | 1,600 | |
Deferred Tax Asset, Interest Carryforward | $ 1,900 | $ 1,300 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
(LOSS) EARNINGS PER SHARE (Deta
(LOSS) EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator: | ||
Net income (loss) | $ 899,000 | $ (393,000) |
Less: net income attributable to noncontrolling interests | (259,000) | (721,000) |
Less: dividends on preferred stock | (238,000) | (377,000) |
Net income (loss) attributable to common shareholders used in calculating basic earnings (loss) per share | 402,000 | $ (1,491,000) |
Subsidiary or Equity Method Investee, Noncontrolling Interest in Income of Subsidiary | 30,000 | |
Net Income (Loss) Available to Common Stockholders, Basic | $ 372,000 | |
Denominator: | ||
Weighted average common shares outstanding (in shares) | 22,218 | 22,069 |
Incremental common shares attributable to dilutive effect of call options and warrants (in shares) | 0 | 0 |
Unvested restricted stock awards (in shares) | 1 | 0 |
Convertible preferred stock (in shares) | 0 | 0 |
Total weighted average diluted shares (in shares) | 22,219 | 22,069 |
Basic (loss) earnings per share (in dollars per share) | $ 0.02 | $ (0.07) |
Diluted (loss) earnings per share (in dollars per share) | $ 0.02 | $ (0.07) |
Stock options | ||
Denominator: | ||
Incremental common shares attributable to dilutive effect of call options and warrants (in shares) | 0 | 0 |
(LOSS) EARNINGS PER SHARE - Wei
(LOSS) EARNINGS PER SHARE - Weighted-average Potentially Dilutive Securities (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants | 0 | 0 |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 1,000 | 0 |
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 7,405,165 | 6,606,740 |
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Preferred Stock | 0 | 0 |
Net income (loss) | $ 899,000 | $ (393,000) |
Net Income (Loss) Attributable to Noncontrolling Interest | (259,000) | (721,000) |
Preferred Stock Dividends, Income Statement Impact | (238,000) | (377,000) |
Net Income (Loss) from Continuing Operations Available to Common Shareholders, Basic | 402,000 | $ (1,491,000) |
Subsidiary or Equity Method Investee, Noncontrolling Interest in Income of Subsidiary | (30,000) | |
Net Income (Loss) Available to Common Stockholders, Basic | $ 372,000 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants | 0 | 0 |
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | 40,000 |
Unvested restricted stock awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 1,338,425 | 500,000 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 4,923,765 | 4,923,765 |
Convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 1,142,975 | 1,142,975 |
2021 Restricted Stock Awards an
2021 Restricted Stock Awards and 2018 Restricted Stock Award (Details) - Restricted Stock - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | ||
Shares unvested (in shares) | 1,340,000 | 500,000 |
Weighted-average grant date fair value (in dollars per share) | $ 5.05 | $ 5.73 |
Granted (in shares) | 1,060,000 | |
Cancelled for Tax Withholding (in dollars per share) | $ 4.64 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (154,562) | |
Vested (in dollars per share) | $ 4.64 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (65,438) |
Restricted Stock Awards (Detail
Restricted Stock Awards (Details) - USD ($) $ in Thousands | Feb. 28, 2020 | Sep. 05, 2018 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||||
Stock-based compensation (benefit) expense, net of forfeitures | $ (1,699) | $ 38 | |||
Restricted Stock | |||||
Class of Stock [Line Items] | |||||
Vesting of restricted stock awards, net of share settlements for tax withholdings (in shares) | 154,562 | ||||
Shares unvested (in shares) | 1,340,000 | 500,000 | |||
Restricted Stock | 2018 Restricted Stock Awards | |||||
Class of Stock [Line Items] | |||||
Shares unvested (in shares) | 500,000 | ||||
Restricted Stock | Two Thousand Twenty-One Restricted Stock Awards | |||||
Class of Stock [Line Items] | |||||
Unamortized compensation expense | $ 3,900 | ||||
Former Officer | Restricted Stock | 2014 Restricted Stock Awards | |||||
Class of Stock [Line Items] | |||||
Vesting of restricted stock awards, net of share settlements for tax withholdings (in shares) | 93,713 | ||||
Former Officer | Restricted Stock | 2014 Restricted Stock Awards | Partially Vested | |||||
Class of Stock [Line Items] | |||||
Vesting of restricted stock awards, net of share settlements for tax withholdings (in shares) | 135,787 | ||||
Officer | |||||
Class of Stock [Line Items] | |||||
Stock-based compensation (benefit) expense, net of forfeitures | (200) | ||||
Officer | Unvested restricted stock awards | 2018 Restricted Stock Awards | |||||
Class of Stock [Line Items] | |||||
Shares granted (in shares) | 500,000 | ||||
Unamortized compensation expense | $ 1,100 | ||||
Officer | Unvested restricted stock awards | Two Thousand Twenty-One Restricted Stock Awards | |||||
Class of Stock [Line Items] | |||||
Shares granted (in shares) | 1,060,000 | ||||
Shares unvested (in shares) | 840,000 |
Restricted Stock Awards - PWSC
Restricted Stock Awards - PWSC (Details) - Restricted Stock - USD ($) | Sep. 07, 2018 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 |
Class of Stock [Line Items] | ||||
Shares unvested (in shares) | 1,340,000 | 500,000 | ||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ 1,672 | |||
Officer | PWSC Restricted Stock Award | ||||
Class of Stock [Line Items] | ||||
Shares granted (in shares) | 1,000 | |||
Shares unvested (in shares) | 437.5 | |||
Unamortized compensation expense | $ 100,000 | |||
Compensation expense (reversal of expense) | $ 1,700,000 | $ 100,000 | ||
Officer | 2020 PWSC Restricted Stock Award | ||||
Class of Stock [Line Items] | ||||
Shares granted (in shares) | 250 | |||
Shares unvested (in shares) | 109.38 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - AOCI Rollforward with Reclassification (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Balance, beginning of period | $ 12,159 | $ 13,954 |
Other comprehensive (loss) income | (1,784) | 11,739 |
Balance, end of period | 11,862 | 26,223 |
Total Accumulated Other Comprehensive Income | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Balance, beginning of period | 38,059 | 35,347 |
Other comprehensive income (loss) arising during the period | (1,792) | 11,670 |
Amounts reclassified from accumulated other comprehensive income | 12 | 61 |
Other comprehensive (loss) income | (1,780) | 11,731 |
Balance, end of period | 36,279 | 47,078 |
Unrealized Gains (Losses) on Available-for-Sale Investments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Balance, beginning of period | 216 | 59 |
Other comprehensive income (loss) arising during the period | (71) | 47 |
Amounts reclassified from accumulated other comprehensive income | 12 | 61 |
Other comprehensive (loss) income | (59) | 108 |
Balance, end of period | 157 | 167 |
Foreign Currency Translation Adjustments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Balance, beginning of period | (3,286) | (3,286) |
Other comprehensive income (loss) arising during the period | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 |
Other comprehensive (loss) income | 0 | 0 |
Balance, end of period | (3,286) | (3,286) |
Change in Fair Value of Debt Attributable to Instrument-Specific Credit Risk | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Balance, beginning of period | 41,129 | 38,574 |
Other comprehensive income (loss) arising during the period | (1,721) | 11,623 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 |
Other comprehensive (loss) income | (1,721) | 11,623 |
Balance, end of period | $ 39,408 | $ 50,197 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Reclassification out of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net realized gains | $ 51 | $ 208 |
Other-than-temporary impairment loss | 0 | (117) |
Income (loss) before income tax (benefit) expense | 474 | (223) |
Income tax (benefit) expense | (425) | 170 |
Net income (loss) | 899 | (393) |
Unrealized Gains (Losses) on Available-for-Sale Investments | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net realized gains | (12) | (61) |
Other-than-temporary impairment loss | 0 | 0 |
Income (loss) before income tax (benefit) expense | (12) | (61) |
Income tax (benefit) expense | 0 | 0 |
Net income (loss) | $ (12) | $ (61) |
Segmented Information - Additio
Segmented Information - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2021statesegment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | segment | 2 |
Number of states in which entity operates | 26 |
Penn | |
Segment Reporting Information [Line Items] | |
Number of states in which entity operates | 32 |
Prime | |
Segment Reporting Information [Line Items] | |
Number of states in which entity operates | 40 |
Segmented Information - Revenue
Segmented Information - Revenue by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Service fee and commission revenue | $ 18,574 | $ 11,186 |
Other revenue | 105 | 142 |
Rental revenue | 3,341 | 3,341 |
Total revenues | 22,020 | 14,669 |
Extended Warranty | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Service fee and commission revenue | 18,574 | 11,186 |
Other revenue | 67 | 74 |
Total revenues | 18,641 | 11,260 |
Leased Real Estate | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Other revenue | 38 | 68 |
Rental revenue | 3,341 | 3,341 |
Total revenues | $ 3,379 | $ 3,409 |
Segmented Information - Segment
Segmented Information - Segment (loss) income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Total segment operating income | $ 927 | $ (1,622) |
Net investment income | 421 | 719 |
Net realized gains | 51 | 208 |
Loss on change in fair value of equity investments | (151) | (597) |
(Loss) gain on change in fair value of limited liability investments, at fair value | (202) | 1,899 |
Net change in unrealized loss on private company investments | 0 | (670) |
Other-than-temporary impairment loss | 0 | (117) |
Interest expense not allocated to segments | (1,552) | (2,153) |
Other revenue and expenses not allocated to segments, net | (3,491) | (3,030) |
Amortization of intangible assets | (497) | (574) |
(Loss) gain on change in fair value of debt | (1,019) | 2,645 |
Gain on extinguishment of debt | 2,494 | 0 |
Income (loss) before income tax (benefit) expense | 474 | (223) |
Income tax (benefit) expense | (425) | 170 |
Income from continuing operations | 899 | (393) |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total segment operating income | 6,603 | 1,447 |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Gain on extinguishment of debt | 311 | 0 |
Extended Warranty | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total segment operating income | 5,310 | 850 |
Leased Real Estate | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total segment operating income | $ 1,293 | $ 597 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | $ 19,864 | $ 20,716 | |||
Total equity investments | 270 | 444 | |||
Limited liability investments, at fair value | 19,654 | 32,811 | |||
Real estate investments | 10,662 | 10,662 | |||
Other investments | 299 | 294 | |||
Short-term investments | 157 | 157 | |||
Total assets | 50,906 | 65,084 | |||
Subordinated debt, at fair value | 53,668 | 50,928 | |||
Total liabilities | 54,512 | 51,371 | |||
Deferred Compensation Share-based Arrangements, Liability, Current and Noncurrent | 844 | 443 | |||
U.S. government, government agencies and authorities | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 10,624 | 10,104 | |||
States, municipalities and political subdivisions | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 1,302 | 1,454 | |||
Mortgage-backed | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 4,753 | 5,394 | |||
Corporate | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 3,185 | 3,764 | |||
Common Stock | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total equity investments | 186 | 155 | |||
Warrants | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total equity investments | 84 | 289 | |||
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Total equity investments | 186 | 172 | |||
Limited liability investments, at fair value | 0 | 0 | |||
Real estate investments | 0 | 0 | |||
Other investments | 0 | 0 | |||
Short-term investments | 0 | 0 | |||
Total assets | 186 | 172 | |||
Subordinated debt, at fair value | 0 | 0 | |||
Total liabilities | 0 | 0 | |||
Deferred Compensation Share-based Arrangements, Liability, Current and Noncurrent | 0 | ||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. government, government agencies and authorities | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Quoted Prices in Active Markets for Identical Assets (Level 1) | States, municipalities and political subdivisions | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Mortgage-backed | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Common Stock | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total equity investments | 186 | 155 | |||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Warrants | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total equity investments | 0 | 17 | |||
Significant Other Observable Inputs (Level 2) | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 19,864 | 20,716 | |||
Total equity investments | 84 | 272 | |||
Limited liability investments, at fair value | 0 | 0 | |||
Real estate investments | 0 | 0 | |||
Other investments | 299 | 294 | |||
Short-term investments | 157 | 157 | |||
Total assets | 20,404 | 21,439 | |||
Subordinated debt, at fair value | 53,668 | 50,928 | |||
Total liabilities | 53,668 | 50,928 | |||
Deferred Compensation Share-based Arrangements, Liability, Current and Noncurrent | 0 | ||||
Significant Other Observable Inputs (Level 2) | U.S. government, government agencies and authorities | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 10,624 | 10,104 | |||
Significant Other Observable Inputs (Level 2) | States, municipalities and political subdivisions | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 1,302 | 1,454 | |||
Significant Other Observable Inputs (Level 2) | Mortgage-backed | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 4,753 | 5,394 | |||
Significant Other Observable Inputs (Level 2) | Corporate | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 3,185 | 3,764 | |||
Significant Other Observable Inputs (Level 2) | Common Stock | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total equity investments | 0 | 0 | |||
Significant Other Observable Inputs (Level 2) | Warrants | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total equity investments | 84 | 272 | |||
Significant Unobservable Inputs (Level 3) | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Total equity investments | 0 | 0 | |||
Limited liability investments, at fair value | 3,374 | 3,263 | $ 4,413 | $ 4,392 | |
Real estate investments | 10,662 | 10,662 | 10,662 | $ 10,662 | |
Other investments | 0 | 0 | |||
Short-term investments | 0 | 0 | |||
Total assets | 14,036 | 13,925 | $ 15,075 | ||
Subordinated debt, at fair value | 0 | 0 | |||
Total liabilities | 844 | 443 | |||
Deferred Compensation Share-based Arrangements, Liability, Current and Noncurrent | 844 | 443 | |||
Significant Unobservable Inputs (Level 3) | U.S. government, government agencies and authorities | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Significant Unobservable Inputs (Level 3) | States, municipalities and political subdivisions | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Significant Unobservable Inputs (Level 3) | Mortgage-backed | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Significant Unobservable Inputs (Level 3) | Corporate | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Significant Unobservable Inputs (Level 3) | Common Stock | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total equity investments | 0 | 0 | |||
Significant Unobservable Inputs (Level 3) | Warrants | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total equity investments | 0 | 0 | |||
Measured at Net Asset Value | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Total equity investments | 0 | 0 | |||
Limited liability investments, at fair value | 16,280 | 29,548 | |||
Real estate investments | 0 | 0 | |||
Other investments | 0 | 0 | |||
Short-term investments | 0 | 0 | |||
Total assets | 16,280 | 29,548 | |||
Subordinated debt, at fair value | 0 | 0 | |||
Total liabilities | 0 | 0 | |||
Deferred Compensation Share-based Arrangements, Liability, Current and Noncurrent | 0 | ||||
Measured at Net Asset Value | U.S. government, government agencies and authorities | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Measured at Net Asset Value | States, municipalities and political subdivisions | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Measured at Net Asset Value | Mortgage-backed | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Measured at Net Asset Value | Corporate | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total fixed maturities | 0 | 0 | |||
Measured at Net Asset Value | Common Stock | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total equity investments | 0 | 0 | |||
Measured at Net Asset Value | Warrants | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total equity investments | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Reconciliation of Fair Value of Recurring Level 3 Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Limited liability investments, at fair value: | ||||
Beginning balance | $ 32,811 | |||
Net realized gains | 51 | $ 208 | ||
Ending balance | 19,654 | |||
Real estate investments: | ||||
Beginning balance | 10,662 | |||
Ending balance | 10,662 | |||
Total assets | 50,906 | $ 65,084 | ||
Warrant liability: | ||||
Included in other comprehensive (loss) income | 0 | 0 | ||
Deferred Compensation Share-based Arrangements, Liability, Current and Noncurrent | 844 | 443 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | 401 | |||
Other Liabilities, Fair Value Disclosure | 844 | 216 | ||
Significant Unobservable Inputs (Level 3) | ||||
Limited liability investments, at fair value: | ||||
Beginning balance | 3,263 | 4,392 | ||
Distributions received | (22) | (77) | ||
Net realized gains | 22 | 86 | ||
Change in fair value of limited liability investments, at fair value included in net income (loss) | 111 | 12 | ||
Ending balance | 3,374 | 4,413 | ||
Included in other comprehensive (loss) income | 111 | 12 | ||
Fair Value, Asset (Liability), Recurring Basis, Still Held, Unrealized Gain (Loss), OCI | 0 | 0 | ||
Real estate investments: | ||||
Beginning balance | 10,662 | 10,662 | ||
Change in fair value of real estate investments included in net income (loss) | 0 | 0 | ||
Ending balance | 10,662 | 10,662 | ||
Unrealized gains recognized on real estate investments held at end of period: | 0 | 0 | ||
Total assets | 14,036 | 15,075 | 13,925 | |
Warrant liability: | ||||
Beginning balance | 0 | 249 | ||
Change in fair value of warrant liability included in net income (loss) | 0 | (33) | ||
Ending balance | 0 | 216 | ||
Included in net income (loss) | 0 | $ (33) | ||
Deferred Compensation Share-based Arrangements, Liability, Current and Noncurrent | $ 844 | $ 443 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Valuation Techniques Used to Measure Investments (Details) $ in Thousands | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Limited liability investments, at fair value | $ 19,654 | $ 32,811 | ||
Real estate investments | 10,662 | 10,662 | ||
Significant Unobservable Inputs (Level 3) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Limited liability investments, at fair value | 3,374 | 3,263 | $ 4,413 | $ 4,392 |
Real estate investments | 10,662 | 10,662 | 10,662 | 10,662 |
Stock-based compensation liabilities | $ 0 | $ 0 | $ 216 | $ 249 |
Significant Unobservable Inputs (Level 3) | Minimum | Valuation multiples | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Limited liability investments, measurement input | 3.1 | 3.1 | ||
Warrant liability, measurement input | 6 | 6 | ||
Significant Unobservable Inputs (Level 3) | Minimum | Royalty rate | Relief from royalty | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Input Value(s) | 0.0025 | |||
Significant Unobservable Inputs (Level 3) | Maximum | Valuation multiples | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Limited liability investments, measurement input | 7 | 7 | ||
Significant Unobservable Inputs (Level 3) | Maximum | Royalty rate | Relief from royalty | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Input Value(s) | 0.020 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Investments at Fair Value Using Net Asset Value Per Share As Practical Expedient (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Limited liability investments, at fair value | $ 19,654 | $ 32,811 |
Measured at Net Asset Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Limited liability investments, at fair value | $ 16,280 | $ 29,548 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other-than-temporary impairment loss | $ 0 | $ (117) |
Private Company Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other-than-temporary impairment loss | $ 0 | $ (700) |
Fair Value of Financial Instr_8
Fair Value of Financial Instruments - Valuation Techniques and Significant Unobservable Inputs (Details) $ in Thousands | Dec. 31, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Limited liability investments, at fair value | $ 19,654 | $ 32,811 | |||
Real estate investments, at fair value (cost of $10,225 and $10,225, respectively) | 10,662 | 10,662 | |||
Deferred Compensation Share-based Arrangements, Liability, Current and Noncurrent | 844 | 443 | |||
Significant Unobservable Inputs (Level 3) | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Limited liability investments, at fair value | 3,374 | 3,263 | $ 4,413 | $ 4,392 | |
Real estate investments, at fair value (cost of $10,225 and $10,225, respectively) | 10,662 | 10,662 | $ 10,662 | $ 10,662 | |
Deferred Compensation Share-based Arrangements, Liability, Current and Noncurrent | $ 844 | $ 443 | |||
Significant Unobservable Inputs (Level 3) | Cap rates | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Real estate investments, measurement input | 0.075 | 0.075 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 01, 2020 |
Loss Contingencies [Line Items] | ||||
Estimate of possible loss | $ 72,000 | |||
Restricted cash | $ 29,542 | $ 30,571 | $ 21,578 | |
State and Provincial Regulatory Authorities | ||||
Loss Contingencies [Line Items] | ||||
Restricted cash equivalents | 200 | |||
Restricted cash | 1,900 | |||
IWS | ||||
Loss Contingencies [Line Items] | ||||
Restricted cash | 26,900 | 27,700 | ||
Third Parties | ||||
Loss Contingencies [Line Items] | ||||
Restricted cash | $ 700 | $ 1,000 | ||
CMC | ||||
Loss Contingencies [Line Items] | ||||
Indirect ownership percentage owned by parent | 81.00% | |||
Remaining ownership percentage owned by noncontrolling interest | 19.00% |
Legal Proceedings (Details)
Legal Proceedings (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2021 | |
Loss Contingencies [Line Items] | ||
Estimate of possible loss | $ 72,000 | |
Payments for Legal Settlements | $ 500 | |
CMC Acquisition, LLC | ||
Loss Contingencies [Line Items] | ||
Indirect ownership percentage owned by parent | 20.00% | |
Litigation Settlement, Amount Awarded from Other Party | 1,500 | |
CMC Acquisition, LLC | Maximum | ||
Loss Contingencies [Line Items] | ||
Indirect ownership percentage owned by parent | 48.60% | |
Proceeds from Legal Settlements | 40,000 | |
CMC Acquisition, LLC | Minimum | ||
Loss Contingencies [Line Items] | ||
Indirect ownership percentage owned by parent | 55.00% | |
DGI-BNSF Corp. | ||
Loss Contingencies [Line Items] | ||
Remaining ownership percentage owned by noncontrolling interest | 80.00% | |
DGI-BNSF Corp. | Maximum | ||
Loss Contingencies [Line Items] | ||
Remaining ownership percentage owned by noncontrolling interest | 40.00% | |
Maximum litigation reimbursement amount | $ 30,600 | |
DGI-BNSF Corp. | Minimum | ||
Loss Contingencies [Line Items] | ||
Remaining ownership percentage owned by noncontrolling interest | 32.10% | |
CMC | ||
Loss Contingencies [Line Items] | ||
Indirect ownership percentage owned by parent | 81.00% | |
Remaining ownership percentage owned by noncontrolling interest | 19.00% | |
CMC | Maximum | ||
Loss Contingencies [Line Items] | ||
Remaining ownership percentage owned by noncontrolling interest | 11.40% | |
CRIC TRT Acquisition, LLC | Maximum | ||
Loss Contingencies [Line Items] | ||
Indirect ownership percentage owned by parent | 12.90% |