Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 23, 2015 | Jun. 30, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | State National Companies, Inc. | ||
Entity Central Index Key | 1610793 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $0 | ||
Entity Common Stock, Shares Outstanding | 44,247,102 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investments: | ||
Fixed-maturity securities - available-for-sale, at fair value (amortized cost - $305,019, $178,901, respectively) | $309,911 | $180,954 |
Equity securities - available-for-sale, at fair value (cost - $1,419, $1,340, respectively) | 2,642 | 2,301 |
Total investments | 312,553 | 183,255 |
Cash and cash equivalents | 38,348 | 69,431 |
Restricted cash and investments | 6,597 | 6,800 |
Accounts receivable from agents, net | 18,528 | 17,306 |
Reinsurance recoverable on paid losses | 1,200 | 880 |
Deferred acquisition costs | 1,036 | 1,095 |
Reinsurance recoverables | 1,656,534 | 1,372,225 |
Property and equipment, net (includes land held for sale -$1,034, $1,034, respectively) | 18,397 | 19,265 |
Interest receivable | 1,795 | 1,333 |
Income taxes receivable | 1,451 | |
Deferred income taxes, net | 23,864 | 3,728 |
Goodwill and intangible assets, net | 6,683 | 7,906 |
Other assets | 6,229 | 6,276 |
Total assets | 2,091,764 | 1,690,951 |
Liabilities | ||
Unpaid losses and loss adjustment expenses | 1,209,905 | 1,016,641 |
Unearned premiums | 480,124 | 386,279 |
Allowance for policy cancellations | 55,500 | 39,623 |
Deferred ceding fees | 23,612 | 18,735 |
Accounts payable to agents | 2,448 | 2,564 |
Accounts payable to insurance companies | 4,399 | 5,285 |
Subordinated debentures | 44,500 | 52,000 |
Income taxes payable | 1,762 | |
Other Liabilities | 28,642 | 24,370 |
Other payables, affiliate | 100 | |
Total liabilities | 1,850,892 | 1,545,597 |
Shareholders' equity | ||
Common stock, $.001 par value (150,000,000 shares authorized; 44,247,102 and 40,627,200 shares issued at December 31, 2014 and December 31, 2013, respectively) | 44 | 41 |
Additional paid-in capital | 220,577 | 24,367 |
Retained earnings | 16,108 | 128,830 |
Treasury stock (zero and 6,450,304 shares at cost at December 31, 2014 and December 31, 2013, respectively) | -10,000 | |
Accumulated other comprehensive income | 4,143 | 2,116 |
Total shareholders' equity | 240,872 | 145,354 |
Total liabilities and shareholders' equity | $2,091,764 | $1,690,951 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Consolidated Balance Sheets | ||
Fixed-maturity securities - available-for-sale, amortized cost | $305,019 | $178,901 |
Equity securities - available-for-sale, cost | 1,419 | 1,340 |
Land held for sale | $1,034 | $1,034 |
Common stock, par value (in dollars per share) | $0.00 | |
Common stock, shares authorized | 150,000,000 | |
Common stock, shares issued | 44,247,102 | 40,627,200 |
Preferred stock, par value (in dollars per share) | $0.00 | |
Preferred stock, shares authorized | 10,000,000 | 0 |
Preferred stock, shares issued | 0 | |
Preferred stock, shares outstanding | 0 | |
Treasury stock, shares | 0 | 6,450,304 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues: | |||
Premiums earned | $96,650 | $84,378 | $78,096 |
Commission income | 1,533 | 2,031 | 2,406 |
Ceding fees | 45,732 | 32,898 | 32,379 |
Net investment income | 4,841 | 4,901 | 5,525 |
Realized net investment gains | 1,311 | 1,764 | 1,309 |
Other income | 4,460 | 2,531 | 2,408 |
Total revenues | 154,527 | 128,503 | 122,123 |
Expenses: | |||
Losses and loss adjustment expenses | 40,821 | 32,090 | 28,989 |
Commissions | 3,882 | 2,378 | 2,922 |
Taxes, licenses, and fees | 2,832 | 2,594 | 2,394 |
General and administrative | 58,891 | 53,418 | 54,114 |
Founder special compensation | 17,914 | 10,202 | 10,740 |
Offering-related expenses | 8,833 | ||
Contract modification expense | 17,800 | ||
Interest Expense, Long-term Debt | 2,237 | 2,323 | 2,427 |
Total expenses | 153,210 | 103,005 | 101,586 |
Income (loss) before income taxes | 1,317 | 25,498 | 20,537 |
Income taxes: | |||
Current tax expense | 11,514 | 4,845 | 3,860 |
Deferred tax expense (benefit) | -21,210 | -2,058 | 795 |
Income taxes | -9,696 | 2,787 | 4,655 |
Net income | 11,013 | 22,711 | 15,882 |
Net income per share attributable to common shareholders: | |||
Basic earnings per share (in dollars per share) | $0.28 | $0.66 | $0.46 |
Diluted earnings per share (in dollars per share) | $0.28 | $0.66 | $0.46 |
Pro Forma: | |||
Basic earnings per share (in dollars per share) | $0.02 | $0.46 | $0.38 |
Diluted earnings per share (in dollars per share) | $0.02 | $0.46 | $0.38 |
Pro Forma | |||
Income taxes: | |||
Income taxes | 493 | 9,725 | 7,635 |
Net income | $824 | $15,773 | $12,902 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Statements of Comprehensive Income | |||
Net income | $11,013 | $22,711 | $15,882 |
Unrealized gains (losses) on securities: | |||
Unrealized holding gains (losses) during the period | 3,998 | -5,215 | 1,646 |
Tax effect on unrealized holding gains (losses) during the period | -1,387 | 1,773 | -541 |
Less: reclassification adjustments for realized gains included in net income | -898 | -1,273 | -1,003 |
Tax effect on reclassification adjustments for realized gains included in net income | 314 | 430 | 328 |
Other comprehensive income (loss) | 2,027 | -4,285 | 430 |
Total comprehensive income | $13,040 | $18,426 | $16,312 |
Consolidated_Statements_of_Sha
Consolidated Statements of Shareholders' Equity (USD $) | Common stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income | Total |
In Thousands, unless otherwise specified | ||||||
Balance at Dec. 31, 2012 | $41 | $24,367 | $121,414 | ($10,000) | $6,401 | $142,223 |
Increase (decrease) in shareholder's equity | ||||||
Dividends paid | -15,295 | -15,295 | ||||
Net income | 22,711 | 22,711 | ||||
Other comprehensive loss, net of tax | -4,285 | -4,285 | ||||
Balance at Dec. 31, 2013 | 41 | 24,367 | 128,830 | -10,000 | 2,116 | 145,354 |
Increase (decrease) in shareholder's equity | ||||||
Dividends paid | -16,683 | -16,683 | ||||
Net income | 11,013 | 11,013 | ||||
Other comprehensive loss, net of tax | 2,027 | 2,027 | ||||
Retirement of treasury stock | -7 | -9,993 | 10,000 | |||
Issuance of common stock | 31 | 289,291 | 289,322 | |||
Costs directly attributable to issuance of common stock | -1,578 | -1,578 | ||||
Redemption of existing common stock | -21 | -190,574 | -190,595 | |||
Stock-based compensation expense | 2,012 | 2,012 | ||||
Conversion from S corporation to C corporation tax status | 107,052 | -107,052 | ||||
Balance at Dec. 31, 2014 | $44 | $220,577 | $16,108 | $4,143 | $240,872 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities | |||
Net income | $11,013 | $22,711 | $15,882 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, Amortization and Accretion, Net | 4,993 | 4,717 | 4,746 |
Share-based Compensation | 2,012 | ||
Bad debt expense | -14 | 132 | |
Deferred income taxes | -21,210 | -2,058 | 795 |
Realized net investment gains | -1,311 | -1,764 | -1,309 |
Realized gains on property and equipment | 47 | -30 | -121 |
Realized gain on subordinated debenture repurchase | 610 | ||
Changes in: | |||
Restricted cash and investments | -203 | -1,271 | 1,791 |
Accounts receivable from agents | 1,222 | 8,373 | -3,533 |
Reinsurance recoverable on paid losses | 320 | -41 | -58 |
Deferred acquisition costs | -59 | -81 | -2,934 |
Reinsurance recoverables | 284,309 | 171,172 | 126,648 |
Income taxes receivable | -3,213 | 1,740 | -357 |
Interest receivable | 462 | 69 | -117 |
Other assets | -47 | 859 | -217 |
Unpaid losses and loss adjustment expenses | -193,264 | -40,933 | -169,583 |
Unearned premiums | 93,845 | 132,641 | -40,286 |
Allowance for policy cancellations | 15,877 | 6,848 | 5,264 |
Deferred ceding fees | 4,877 | 6,773 | -1,907 |
Accounts payable to agents | 116 | -500 | 5,351 |
Accounts payable to insurance companies | -886 | 1,209 | 1,550 |
Other liabilities | 4,272 | 2,247 | -598 |
Other liabilities, affiliate | -100 | -37 | -97 |
Net cash provided by operating activities | 23,176 | 33,856 | 27,060 |
Investing activities | |||
Purchase of investments | -170,250 | -46,836 | -53,256 |
Proceeds from sale of investments | 14,782 | 16,032 | 24,703 |
Proceeds from maturities and principal receipts | 28,494 | 28,237 | 30,454 |
Purchase of short-term investments | -18,985 | ||
Proceeds from sale of short-term investments | 12,490 | 6,999 | |
Proceeds from maturities of short-term investments | 6,495 | ||
Proceeds from dispositions of property and equipment | 981 | 46 | 507 |
Purchase of property and equipment | -1,982 | -673 | -1,886 |
Net cash provided by (used in) investing activities | -127,975 | 15,791 | -11,464 |
Financing activities | |||
Dividends paid | -16,683 | -15,295 | -14,176 |
Proceeds from issuances of common stock | 289,322 | ||
Costs directly attributable to issuance of common stock | -1,578 | ||
Redemption of existing common stock | -190,595 | ||
Repurchase of subordinated debentures | -6,750 | ||
Net cash provided by (used in) financing activities | 73,716 | -15,295 | -14,176 |
Net change in cash and cash equivalents | -31,083 | 34,352 | 1,420 |
Cash and cash equivalents at beginning of period | 69,431 | 35,079 | 33,659 |
Cash and cash equivalents at end of period | 38,348 | 69,431 | 35,079 |
Supplemental Cash Flow Information [Abstract] | |||
Interest Paid | 2,269 | 2,277 | 2,382 |
Income Taxes Paid | $8,301 | $6,584 | $3,503 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies |
Description of Business | |
State National Companies, Inc. (the Company) refers to a group of companies that conduct insurance-related activities along two major segments. One segment (the Company’s program services segment) involves the writing of “program business,” which includes books of business produced by general agents, for which the Company receives ceding fees. Substantially all of the risk associated with the program business is ceded to unaffiliated, highly rated reinsurance companies or other reinsurers that provide substantial collateral. A second segment (the Company’s lender services segment) involves the writing and insuring of lines of insurance marketed to lending institutions, primarily collateral protection insurance (CPI) policies. | |
Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. | |
Basis of Presentation | |
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), which, as to our insurance company subsidiaries, differ from statutory accounting practices prescribed or permitted for insurance companies by insurance regulatory authorities. | |
Estimates | |
The preparation of financial statements in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from these estimates. | |
Fair Value of Financial Instruments | |
Cash and Cash Equivalents: The carrying amounts reported in the consolidated balance sheets approximate fair value. | |
Restricted Cash and Investments: The carrying amounts reported in the consolidated balance sheets approximate fair value. | |
Short-term Investments: The carrying amounts reported in the consolidated balance sheets approximate fair value. | |
Investments: See Note 9 – “Fair Value Measurements” | |
Land held for sale: The land held for sale is carried at fair value less expected selling costs. | |
Payables and Receivables: Reinsurance recoverable on paid losses, reinsurance recoverables, agents’ balances receivable and payable, and payable to insurance companies are carried at cost, which approximates fair value. | |
Subordinated Debentures: The amounts reported in the consolidated balance sheets are carried at par, which approximates their estimated fair value due to the floating interest rate provisions of the debt instruments. | |
Income taxes receivable/payable: The carrying amounts reported in the consolidated balance sheets approximate fair value. | |
Other assets/liabilities: The carrying amounts reported in the consolidated balance sheets approximate fair value. | |
Cash and Cash Equivalents | |
All highly liquid investments with an original maturity of three months or less are considered cash equivalents. | |
Short-Term Investments | |
Short-term investments represent investments with original maturities of more than three months but less than one year. | |
Restricted Cash and Investments | |
Restricted cash and investments are primarily comprised of deposits made by a reinsurer that cover losses for a program up to the contractual threshold. These fiduciary cash and investment balances are invested at the direction of the reinsurer for this program; accordingly, income earned on these balances inures to the benefit of the reinsurer. | |
Investments | |
Investments are considered available-for-sale and are carried at fair value. The Company measures the fair value of the investments based upon quoted market prices from an independent pricing service and its third-party investment managers, using observable market information. The cost of securities sold is based on the specific identification method. Unrealized gains and losses associated with the available-for-sale portfolio, as a result of temporary changes in fair value during the period such investments are held, are reflected net of income taxes and reported in other comprehensive income as a separate component of shareholders’ equity. Unrealized losses associated with the available-for-sale portfolio that are deemed to be other-than-temporary are charged to income in the period in which the other-than-temporary impairment is determined. Debt security premiums and discounts are amortized into earnings using the effective-interest method. | |
The Company evaluates its investment portfolio for impairments of individual securities that are deemed to be other-than-temporary. Fixed maturity securities that are determined to have other-than-temporary impairment and it is more likely than not the Company will sell before recovery of their amortized cost, are written down to fair value and the entire amount of the write-down is included in net income, net of realized investment gains. For all other impaired fixed-maturity securities, the impairment loss is separated into the amount representing the credit loss and the amount representing all other factors. The amount of impairment loss that represents the credit loss is included in net income, net of realized investment gains. The amount of the impairment loss that relates to all other factors is included in other comprehensive income. Equity securities that are determined to have other-than-temporary impairment are recognized in net income, net of realized investment gains. | |
The process for identifying other-than-temporary declines in fair value involves the consideration of several factors, including, but not limited to, whether the issuer has been downgraded to below investment-grade, the length of time in which there has been a significant decline in value, the liquidity and overall financial condition of the issuer, the nature and performance of the collateral or other credit support backing the security, the significance of the decline in value, and whether the Company has the intent to sell the security or may be required to sell the security prior to its anticipated recovery. The Company reviews securities for other-than-temporary impairment internally and with its investment advisors. | |
Deferred Acquisition Costs | |
Effective January 1, 2012, the Company adopted Accounting Standards Update (ASU) No. 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts. The guidance identifies those costs relating to the successful acquisition of new or renewal insurance contracts that should be capitalized. The Company elected prospective application of this guidance (see Note 3 – Deferred Acquisition Costs). | |
Certain costs, primarily premium taxes, commissions, and general expenses that are directly related to the successful acquisition of new or renewal business are deferred to the extent recoverable from future premiums earned. Deferred acquisition costs are amortized in proportion to the related unearned premium reserve over the terms of the related policies. Investment income is not included in the Company’s recoverability analysis of deferred acquisition costs. | |
Deferred Ceding Fees | |
Ceding fees that are associated with unearned premiums are established as a liability and amortized into income pro rata over the life of the underlying business. | |
Property, Equipment, and Depreciation | |
Property and equipment are recorded at cost and depreciated. Depreciation is computed using the straight-line method over the estimated useful lives of the assets (ranging from three to twenty years). The Company changed its capitalization threshold as of January 1, 2014 from $1 thousand to $5 thousand per item. Gains and losses on the disposition of fixed assets are determined on a specific asset identification basis and are included in net income. Land held for sale is carried at fair value less expected selling costs. | |
Goodwill and Intangible Assets | |
Goodwill is the difference between the purchase price in a business combination and the fair value of assets acquired and liabilities assumed, and is not amortized. Intangible assets include assets with a finite life, primarily customer relationships/lists, and are amortized over the estimated useful life of the asset in proportion to the expected benefit. | |
Goodwill is tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. The impairment test is performed using a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the second step of the impairment test is performed for purposes of measuring the impairment. | |
In the second step, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit to determine an implied goodwill value. If the carrying amount of the reporting unit goodwill exceeds the implied goodwill value, an impairment loss is recognized in an amount equal to that excess. | |
As of December 31, 2014, the Company performed the first step of its annual goodwill assessment for the individual reporting units to which goodwill is allocated and determined there is no impairment of goodwill. | |
The Company periodically evaluates the recoverability of intangible assets and takes into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. No impairments were recognized in 2014, 2013 or 2012. | |
Unpaid Losses and Loss Adjustment Expenses | |
The liability for unpaid losses and loss adjustment expenses includes an estimate for claims reported and an additional liability for claims incurred but not reported, based on the Company’s historical loss experience. While Management believes the amounts included in the consolidated financial statements are adequate, such estimates may be more or less than the amount ultimately paid when the claims are settled. These estimates are continually reviewed and adjusted, as necessary, as experience develops or as new information becomes known; such adjustments are included in current operations. | |
Allowance for Policy Cancellations | |
An allowance for policy cancellations is provided for the estimated amount of return premiums and policy fees, net of commission expense and premium taxes that will be incurred on expected future policy cancellations associated with the Company’s CPI business. The allowance is based on the Company’s historical cancellation experience. | |
While Management believes the amounts included in the consolidated financial statements are adequate, such estimates may be more or less than the amounts ultimately refunded. The estimates are continually reviewed by Management, and any changes are reflected in current operations. | |
Reinsurance | |
Reinsurance premiums, losses, and loss adjustment expenses are accounted for on bases consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. | |
Earnings Per Share | |
The computation of earnings per share is based upon the weighted average number of common shares outstanding during the period plus the effect of common shares potentially issuable (in periods in which they have a dilutive effect). Earnings per share have been adjusted to reflect a 736 for 1 stock split in the form of a stock dividend on June 23, 2014. | |
Income Taxes | |
Historically, the Company had elected for its parent company to be taxed for federal income tax purposes as a “Subchapter S corporation” under the Internal Revenue Code. On June 25, 2014, the Company completed a private placement of common stock, which resulted in the termination of its Subchapter S corporation status. Prior to this change in tax status, deferred income taxes were recorded only on the Company’s insurance subsidiaries (and their immediate parent) to reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end. All other entities included in the consolidated group filed under Subchapter S Corporation status; therefore, no provision for income taxes had been recorded for these entities. The Company recorded a net deferred income tax benefit related to this change in tax status to reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their financial reporting amounts. | |
For any uncertain tax positions not meeting the “more likely than not” recognition threshold, accounting standards require recognition, measurement, and disclosure in the financial statements. There were no uncertain tax positions at December 31, 2014 and December 31, 2013. | |
Income Recognition | |
Premiums on CPI business are earned on a pro rata basis over the terms of the policies after taking into consideration the allowance for policy cancellations. Premiums on program business are earned on a pro rata basis over the terms of the policies. Ceding fees are earned on the same basis as the underlying premiums. | |
Program Business | |
In connection with writing program business, the Company enters into contractual agreements with both the producing general agents and the reinsurers, whereby the general agents and reinsurers are obligated to each other for payment of insurance amounts, including premiums, commissions, and losses. These funds do not flow through the Company, but are settled directly between the general agent and the reinsurer; accordingly, no receivables or payables are recorded for these amounts. All obligations of SNIC, NSIC, and USIC owed to or on behalf of their policyholders are recorded by the Company and, to the extent appropriate, offsetting reinsurance recoverables are recorded. | |
Pro Forma Financial Information (Unaudited) | |
On June 25, 2014, the Company completed a private placement of common stock, which resulted in the termination of its Subchapter S corporation status. All of the Company’s entities are now considered C corporations. Pro forma amounts for income tax expense (benefit) and basic and diluted earnings per share have been presented assuming the Company’s effective tax rate of 37.5%, 38.1% and 37.2% for the periods ending December 31, 2014, 2013, and 2012, respectively. | |
Stock-based Compensation | |
Compensation expense for stock-based payments is recognized based on the measurement-date fair value for awards that will settle in shares. Compensation expense for awards that are settled in equity are recognized on a straight line pro rata basis over the vesting period. See Note 15 — “Stock-based Payments” for related disclosures. | |
Recent Accounting Pronouncements | |
In June 2014, the FASB issued an accounting standards update (ASU 2014-12), “Compensation – Stock Compensation” (Topic 718). The main provision of this ASU requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. This ASU is effective for annual reporting periods beginning after December 15, 2015 and interim periods within those annual periods. This ASU does not impact the Company’s financial statements as the Company has not awarded any performance based stock compensation. | |
In May 2014, the FASB issued an accounting standards update (ASU 2014-09), “Revenue from Contracts with Customers” (Topic 606). The core guidance of the ASU presents a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The ASU provides a five-step analysis of transactions to determine when and how revenue is recognized and requires additional disclosures sufficient to describe the nature, amount, timing and uncertainty of revenue and cash flows for these transactions. This ASU is effective for annual periods beginning after December 15, 2016, including interim periods within that period. Early adoption is not permitted under GAAP. As insurance contracts are excluded from this ASU, the Company is currently evaluating what impact, if any, this ASU will have on our financial results and disclosures and which adoption method to apply. | |
In February 2013, the FASB issued an accounting standards update (ASU 2013-02), “Comprehensive Income” (Topic 220) that requires additional disclosures for amounts reclassified out of accumulated other comprehensive income by component. Additionally, significant amounts reclassified out of accumulated other comprehensive income must be disclosed by the respective line items of net income either on the face of the statement where income is presented or in the notes to the financial statements only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. Amounts that are not required to be reclassified in their entirety to net income should be cross-referenced to other disclosures required under GAAP that provide additional detail about the amounts. The impact of this disclosure on the Company’s financial statements is minimal. | |
Investments
Investments | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Investments | 2. Investments | |||||||||||||||||||
The following table summarizes information on the amortized cost, gross unrealized gains and losses, and the fair value of investment securities by class: | ||||||||||||||||||||
Cost or | Gross | Gross | ||||||||||||||||||
December 31, 2014 | Amortized | Unrealized | Unrealized | Fair | ||||||||||||||||
($ in thousands) | Cost | Gains | Losses | Value | ||||||||||||||||
Fixed-maturity securities | ||||||||||||||||||||
Government | $ | 13,896 | $ | 195 | $ | -49 | $ | 14,042 | ||||||||||||
Government agency | 2,325 | 57 | -9 | 2,373 | ||||||||||||||||
State and municipality | 61,179 | 1,200 | -27 | 62,352 | ||||||||||||||||
Industrial and miscellaneous | 108,125 | 2,582 | -460 | 110,247 | ||||||||||||||||
Residential mortgage-backed | 96,610 | 1,825 | -764 | 97,671 | ||||||||||||||||
Commercial mortgage-backed | 22,483 | 339 | -27 | 22,795 | ||||||||||||||||
Redeemable preferred stock | 401 | 30 | — | 431 | ||||||||||||||||
Total fixed-maturity securities | 305,019 | 6,228 | -1,336 | 309,911 | ||||||||||||||||
Equity securities | ||||||||||||||||||||
Non-redeemable preferred stock | 1,407 | 806 | — | 2,213 | ||||||||||||||||
Common stock | 12 | 417 | — | 429 | ||||||||||||||||
Total equity securities | 1,419 | 1,223 | — | 2,642 | ||||||||||||||||
Total investments | $ | 306,438 | $ | 7,451 | $ | -1,336 | $ | 312,553 | ||||||||||||
Cost or | Gross | Gross | ||||||||||||||||||
December 31, 2013 | Amortized | Unrealized | Unrealized | Fair | ||||||||||||||||
($ in thousands) | Cost | Gains | Losses | Value | ||||||||||||||||
Fixed-maturity securities | ||||||||||||||||||||
Government | $ | 9,785 | $ | 216 | $ | -146 | $ | 9,855 | ||||||||||||
Government agency | 2,803 | 66 | -29 | 2,840 | ||||||||||||||||
State and municipality | 40,823 | 919 | -557 | 41,185 | ||||||||||||||||
Industrial and miscellaneous | 51,005 | 2,113 | -460 | 52,658 | ||||||||||||||||
Residential mortgage-backed | 65,622 | 1,397 | -1,685 | 65,334 | ||||||||||||||||
Commercial mortgage-backed | 8,462 | 276 | -67 | 8,671 | ||||||||||||||||
Redeemable preferred stock | 401 | 10 | — | 411 | ||||||||||||||||
Total fixed-maturity securities | 178,901 | 4,997 | -2,944 | 180,954 | ||||||||||||||||
Equity securities | ||||||||||||||||||||
Non-redeemable preferred stock | 1,191 | 614 | -3 | 1,802 | ||||||||||||||||
Common stock | 149 | 350 | — | 499 | ||||||||||||||||
Total equity securities | 1,340 | 964 | -3 | 2,301 | ||||||||||||||||
Total investments | $ | 180,241 | $ | 5,961 | $ | -2,947 | $ | 183,255 | ||||||||||||
Investment securities are exposed to various risks such as interest rate, market, and credit risk. Fair values of securities fluctuate based on the magnitude of changing market conditions; significant changes in market conditions could materially affect the portfolio fair value in the near term. | ||||||||||||||||||||
The following tables show the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: | ||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||
December 31, 2014 | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||
($ in thousands) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||
Fixed-maturity securities | ||||||||||||||||||||
Government | $ | 522 | $ | -2 | $ | 3,094 | $ | -47 | $ | 3,616 | $ | -49 | ||||||||
Government agency | — | — | 685 | -9 | 685 | -9 | ||||||||||||||
State and municipality | 4,164 | -10 | 2,001 | -17 | 6,165 | -27 | ||||||||||||||
Industrial and miscellaneous | 34,433 | -418 | 2,637 | -42 | 37,070 | -460 | ||||||||||||||
Residential mortgage-backed | 15,491 | -94 | 19,428 | -670 | 34,919 | -764 | ||||||||||||||
Commercial mortgage-backed | 2,528 | -14 | 694 | -13 | 3,222 | -27 | ||||||||||||||
Total fixed-maturity securities | $ | 57,138 | $ | -538 | $ | 28,539 | $ | -798 | $ | 85,677 | $ | -1,336 | ||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||
December 31, 2013 | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||
($ in thousands) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||
Fixed-maturity securities | ||||||||||||||||||||
Government | $ | 4,313 | $ | -146 | $ | — | $ | — | $ | 4,313 | $ | -146 | ||||||||
Government agency | 686 | -29 | — | — | 686 | -29 | ||||||||||||||
State and municipality | 17,046 | -557 | — | — | 17,046 | -557 | ||||||||||||||
Industrial and miscellaneous | 12,896 | -424 | 1,424 | -36 | 14,320 | -460 | ||||||||||||||
Residential mortgage-backed | 28,564 | -934 | 9,392 | -751 | 37,956 | -1,685 | ||||||||||||||
Commercial mortgage-backed | 1,945 | -67 | — | — | 1,945 | -67 | ||||||||||||||
Total fixed-maturity securities | 65,450 | -2,157 | 10,816 | -787 | 76,266 | -2,944 | ||||||||||||||
Equity securities | ||||||||||||||||||||
Non-redeemable preferred stock | — | — | 168 | -3 | 168 | -3 | ||||||||||||||
Total equity securities | — | — | 168 | -3 | 168 | -3 | ||||||||||||||
$ | 65,450 | $ | -2,157 | $ | 10,984 | $ | -790 | $ | 76,434 | $ | -2,947 | |||||||||
The determination that a security has incurred an other-than-temporary decline in fair value and the associated amount of any loss recognition requires the judgment of Management and a continual review of its investments. Management reviewed all securities with unrealized losses in accordance with the Company’s impairment policy described in Note 1 — “Summary of Significant Accounting Policies”. Management believes that the temporary impairments are primarily the result of interest rate fluctuations, current conditions in the capital markets, and the impact of those conditions on market liquidity and prices. There are 143 securities in an unrealized loss position at December 31, 2014. Over 95% of these investments are investment-grade at December 31, 2014. The Company does not intend to sell the securities, and it is not more likely than not that the Company will be required to sell these securities before recovery of their amortized cost. Management has the intent and ability to hold the equity securities in an unrealized loss position until the recovery of their fair value. Therefore, Management does not consider these investments to be other-than-temporarily impaired at December 31, 2014. | ||||||||||||||||||||
Proceeds from sales of investments in fixed-maturity, equity and short-term securities during 2014, 2013, and 2012 were $14.8 million, $16.0 million, and $31.7 million respectively. | ||||||||||||||||||||
The following table presents the Company’s gross realized gains (losses) for the periods ended December 31: | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||
($ in thousands) | 2014 | 2013 | 2012 | |||||||||||||||||
Realized gains: | ||||||||||||||||||||
Fixed-maturity securities | $ | 1,388 | $ | 1,861 | $ | 1,588 | ||||||||||||||
Equity securities | 34 | 171 | 38 | |||||||||||||||||
Gross realized gains | 1,422 | 2,032 | 1,626 | |||||||||||||||||
Realized losses: | ||||||||||||||||||||
Fixed-maturity securities | -92 | -149 | -99 | |||||||||||||||||
Equity securities | -19 | — | — | |||||||||||||||||
Other-than-temporary impairment losses on fixed-maturity securities | — | -119 | -218 | |||||||||||||||||
Gross realized losses | -111 | -268 | -317 | |||||||||||||||||
Net realized investment gains | $ | 1,311 | $ | 1,764 | $ | 1,309 | ||||||||||||||
The Company had ten non-cash exchanges of investment securities for each of the periods ending December 31, 2014 and December 31, 2013. Non-cash consideration received for these exchanges was $2.8 million and $2.0 million in 2014 and 2013, respectively. Gains of $320 thousand and $139 thousand were recognized on these exchanges and are reflected in the “Realized net investment gains” balance shown on the consolidated statements of income. | ||||||||||||||||||||
The following schedule details the maturities of the Company’s fixed-maturity securities, available-for-sale, as of December 31, 2014: | ||||||||||||||||||||
Fair | ||||||||||||||||||||
($ in thousands) | Amortized Cost | Value | ||||||||||||||||||
Due in one year or less | $ | 12,874 | $ | 13,171 | ||||||||||||||||
Due after one year through five years | 73,499 | 74,507 | ||||||||||||||||||
Due after five years through ten years | 90,534 | 92,012 | ||||||||||||||||||
Due after ten years | 9,019 | 9,755 | ||||||||||||||||||
Residential mortgage-backed securities | 96,610 | 97,671 | ||||||||||||||||||
Commercial mortgage-backed securities | 22,483 | 22,795 | ||||||||||||||||||
$ | 305,019 | $ | 309,911 | |||||||||||||||||
Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. | ||||||||||||||||||||
The Company’s investment portfolio includes $1.2 million of mortgage-backed securities collateralized by subprime residential loans, which represent approximately 0.40% of the Company’s total investments as of December 31, 2014. The Company does not hold own mortgage derivatives. | ||||||||||||||||||||
Net investment income for the periods ended December 31, consists of the following: | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||
($ in thousands) | 2014 | 2013 | 2012 | |||||||||||||||||
Interest on investments | $ | 5,254 | $ | 5,202 | $ | 5,849 | ||||||||||||||
Dividends | 135 | 107 | 85 | |||||||||||||||||
Gross investment income | 5,389 | 5,309 | 5,934 | |||||||||||||||||
Investment expenses | -548 | -408 | -409 | |||||||||||||||||
Net investment income | $ | 4,841 | $ | 4,901 | $ | 5,525 | ||||||||||||||
The Company’s insurance subsidiaries, State National Insurance Company, Inc. (SNIC), National Specialty Insurance Company (NSIC) and United Specialty Insurance Company (USIC) are required to maintain deposits in various states where they are licensed to operate. These deposits are comprised of fixed-maturity securities at fair values totaling $36.9 million and $28.8 million at December 31, 2014 and December 31, 2013, respectively. | ||||||||||||||||||||
Deferred_Acquisition_Costs
Deferred Acquisition Costs | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Investments | |||||||||||
Deferred Acquisition Costs | 3. Deferred Acquisition Costs | ||||||||||
Effective January 1, 2012, the Company prospectively adopted ASU No. 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts. As a result of the adoption of this guidance, certain general and administrative costs that are not directly related to the successful acquisition of new or renewal business that were previously capitalized are no longer deferred. However, the Company continues to defer premium taxes, commissions and general expenses that are directly related to the successful acquisition of new or renewal business. | |||||||||||
Deferred acquisition costs are as follows for the years ended December 31: | |||||||||||
($ in thousands) | 2014 | 2013 | 2012 | ||||||||
Balance, beginning of year | $ | 1,095 | $ | 1,176 | $ | 4,111 | |||||
Capitalized costs | 4,907 | 4,818 | 5,072 | ||||||||
Amortization | -4,966 | -4,899 | -8,007 | ||||||||
Balance, end of year | $ | 1,036 | $ | 1,095 | $ | 1,176 | |||||
Property_Equipment_and_Depreci
Property, Equipment, and Depreciation | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Investments | ||||||||
Property, Equipment, and Depreciation | 4. Property, Equipment, and Depreciation | |||||||
The following is a summary of property, equipment, and depreciation at December 31: | ||||||||
($ in thousands) | 2014 | 2013 | ||||||
Land held for use | $ | 3,443 | $ | 3,473 | ||||
Land held for sale | 1,034 | 1,034 | ||||||
Building and improvements | 15,127 | 15,371 | ||||||
Transportation equipment | 1,578 | 2,399 | ||||||
Furniture and fixtures | 3,208 | 3,243 | ||||||
Computer equipment and software | 6,849 | 5,441 | ||||||
31,239 | 30,961 | |||||||
Accumulated depreciation and amortization | -12,842 | -11,696 | ||||||
Property and equipment, net | $ | 18,397 | $ | 19,265 | ||||
Depreciation and amortization expense for 2014, 2013 and 2012 was $1.8 million, $1.9 million and $2.0 million, respectively. | ||||||||
On November 28, 2007, the Company purchased a tract of land with a plan to build a new home office building for its own use. During 2009, the Company classified this land as held for sale, since it had abandoned its plan to build a new home office and purchased an existing building for its own use. Gains of $454 thousand, $30 thousand and $121 thousand were recognized at December 31, 2014, 2013 and 2012, respectively, from the sale of property and equipment. | ||||||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Goodwill and Intangible Assets | |||||||||||
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets | ||||||||||
($ in thousands) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||
December 31, 2014 | |||||||||||
Goodwill | $ | 2,565 | $ | — | $ | 2,565 | |||||
Customer relationships/lists | 20,450 | -16,332 | 4,118 | ||||||||
Non-compete agreement | 3,339 | -3,339 | — | ||||||||
$ | 26,354 | $ | -19,671 | $ | 6,683 | ||||||
December 31, 2013 | |||||||||||
Goodwill | $ | 2,565 | $ | — | $ | 2,565 | |||||
Customer relationships/lists | 20,450 | -15,567 | 4,883 | ||||||||
Non-compete agreement | 3,339 | -2,881 | 458 | ||||||||
$ | 26,354 | $ | -18,448 | $ | 7,906 | ||||||
As of December 31, 2014 and 2013, goodwill of $2.1 million is attributable to our Program segment and $450 thousand is attributable to the Lender segment. Definite-lived intangible assets total $4.1 million and $4.9 million, net of amortization, as of December 31, 2014 and 2013, respectively, and are fully attributable to our Lender segment. | |||||||||||
Customer relationships/lists are amortized based on discounted cash flow estimates over their expected useful lives of 15 years. Amortization expense related to the customer relationships/lists was $765 thousand, $854 thousand, and $903 thousand for the years ended December 31, 2014, 2013, and 2012, respectively. The non-compete agreements are amortized based on the discounted cash flow estimates over their expected useful lives of five to nine years. Amortization expense related to the non-compete agreements was $458 thousand, $481 thousand, and $505 thousand for the years ended December 31, 2014, 2013, and 2012, respectively. | |||||||||||
Expected amortization expense over the next five years for the Company’s definite-lived intangible assets is as follows: 2015 – $725 thousand; 2016 –$697 thousand; 2017 – $670 thousand; 2018 – $636 thousand; and 2019 – $253 thousand. | |||||||||||
Subordinated_Debentures
Subordinated Debentures | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Investments | ||||||||
Subordinated Debentures | 6. Subordinated Debentures | |||||||
Between 2002 and 2004, the Company formed four business trusts (the Trusts) for the sole purpose of issuing, in private placement transactions, $52 million of trust preferred securities (TPS). In turn, the Trusts then used the proceeds thereof, together with the equity proceeds received from the Company upon their initial formation, to purchase $53.6 million of variable-rate subordinated debentures (TPS Debentures) issued by the Company. All voting securities of the Trusts are owned by the Company, and the TPS Debentures are the sole assets of the Trusts. The Trusts meet the obligations of the TPS with the interest and principal paid on the TPS Debentures. The Company does not have a variable interest in the Trusts and therefore does not consolidate the Trusts. | ||||||||
Subordinated debentures with a carrying value of $7.5 million were repurchased for $6.75 million (plus accrued interest of approximately $49 thousand) on October 8, 2014. The debentures were issued on May 15, 2003 with an original maturity of May 15, 2033 and currently accrued interest at LIBOR plus 4.10%. This transaction resulted in a gain of approximately $610 thousand after deducting the unamortized portion of the initial issuance costs from the difference in the par value and the purchase price. | ||||||||
The following is a summary of the TPS Debentures at December 31: | ||||||||
($ in thousands) | 2014 | 2013 | ||||||
Floating Rate Capital Securities at LIBOR plus 4.00%, issued December 4, 2002, maturing on December 4, 2032 | $ | 17,500 | $ | 17,500 | ||||
Floating Rate Capital Securities at LIBOR plus 4.10%, issued May 15, 2003, repurchased October 8, 2014 | — | 7,500 | ||||||
Floating Rate Capital Securities at LIBOR plus 4.10%, issued December 16, 2003, maturing on January 8, 2034 | 12,000 | 12,000 | ||||||
Floating Rate Capital Securities at LIBOR plus 3.80%, issued May 26, 2004, maturing on May 24, 2034 | 15,000 | 15,000 | ||||||
$ | 44,500 | $ | 52,000 | |||||
The TPS Debentures and the TPS are uncollateralized, do not require maintenance of minimum financial covenants, and carry nearly identical terms. The TPS mature based on the schedule above, but early redemption is allowed beginning five years after issue date. If the Company chooses to redeem before the stated maturity date, it must redeem on a normal quarterly interest payment date and in multiples of $1 thousand (and include accrued interest). | ||||||||
Interest is payable quarterly (see rates above) and set and paid quarterly. The three-month LIBOR rate at December 31, 2014, was 0.26%. Payment of interest may be deferred for up to 20 consecutive quarters; however, the Company may not declare or pay any dividends or distributions, nor make any guarantee payments or payments on fixed-maturity securities, unless senior in interest to the TPS Debentures. These same limitations apply during an event of default. | ||||||||
Debt issuance costs paid to placement agents with an initial cost of $1.3 million and $1.5 million are included in the consolidated financial statements in other assets, net of accumulated amortization of $486 thousand and $523 thousand at December 31, 2014 and 2013, respectively. The debt issuance costs are being amortized over 30 years using the straight-line method, which approximates the effective interest method. | ||||||||
The Company has guaranteed that amounts paid to the Trusts under the TPS Debentures will be remitted to the holders of the TPS. These guarantees, when taken together with the obligations of the Company under the TPS Debentures, the indentures pursuant to which those debentures were issued, and the related trust agreements (including obligations to pay related trust costs, fees, expenses, debt, and other obligations for the Trusts other than with respect to the common and trust preferred securities of the Trusts), provide a full and unconditional guarantee of amounts due on the TPS. | ||||||||
Income_Tax_Provision
Income Tax Provision | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Income Tax Provision | |||||||||||||||||
Income Tax Provision | 7. Income Tax Provision | ||||||||||||||||
The shareholders previously consented to elections for certain entities in the Company to be treated as S Corporations under Internal Revenue Code Section 1362(a). As a result of these elections, 2013 and 2012 federal income taxes are recorded only for State National Intermediate Holdings, Inc. (SNIH), SNIC, NSIC and USIC, as they remained C Corporations and filed a consolidated federal income tax return. On June 25, 2014, the Company completed a private offering of common stock which resulted in termination of its S Corporation status. As a result, the Company is taxed as a C Corporation and will file a consolidated short period federal income tax return with its subsidiaries for the period June 26 through December 31, 2014. Income for the Company’s pass-through entities was taxed (for federal purposes) to the individual owners during 2012, 2013 and the short period January 1 through June 25, 2014. The Company recorded a net deferred income tax benefit of $19.3 million related to this change in tax status. | |||||||||||||||||
The components of income tax expense for the years ended December 31 are as follows ($ in thousands): | |||||||||||||||||
2014 | |||||||||||||||||
($ in thousands) | Federal | State | Total | ||||||||||||||
Federal and state income tax expense (benefit) | |||||||||||||||||
Current | $ | 10,827 | $ | 687 | $ | 11,514 | |||||||||||
Deferred | -21,156 | -54 | -21,210 | ||||||||||||||
Total income tax expense (benefit) | $ | -10,329 | $ | 633 | $ | -9,696 | |||||||||||
2013 | |||||||||||||||||
($ in thousands) | Federal | State | Total | ||||||||||||||
Federal and state income tax expense (benefit) | |||||||||||||||||
Current | $ | 6,014 | $ | -1,169 | $ | 4,845 | |||||||||||
Deferred | -2,058 | — | -2,058 | ||||||||||||||
Total income tax expense (benefit) | $ | 3,956 | $ | -1,169 | $ | 2,787 | |||||||||||
2012 | |||||||||||||||||
($ in thousands) | Federal | State | Total | ||||||||||||||
Federal and state income tax expense | |||||||||||||||||
Current | $ | 3,194 | $ | 666 | $ | 3,860 | |||||||||||
Deferred | 795 | — | 795 | ||||||||||||||
Total income tax expense | $ | 3,989 | $ | 666 | $ | 4,655 | |||||||||||
Deferred income taxes reflect the effect of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. The components of the net deferred income tax asset are as follows at December 31: | |||||||||||||||||
($ in thousands) | 2014 | 2013 | |||||||||||||||
Deferred income tax assets: | |||||||||||||||||
Allowance for policy cancellations | $ | 19,425 | $ | 5,789 | |||||||||||||
Unpaid losses and loss adjustment expenses | 172 | 223 | |||||||||||||||
Deferred ceding fees | 8,264 | 6,426 | |||||||||||||||
Management fee | 3,702 | 4,746 | |||||||||||||||
Compensation | 2,034 | 63 | |||||||||||||||
Intangible assets | 273 | — | |||||||||||||||
Unrealized losses on fixed maturities and other investment securities | 471 | 1,009 | |||||||||||||||
Write-down of other-than-temporarily impaired investment securities | 254 | 253 | |||||||||||||||
Other | 34 | — | |||||||||||||||
Total deferred income tax assets | 34,629 | 18,509 | |||||||||||||||
Deferred income tax liabilities: | |||||||||||||||||
Unearned premiums | 7,136 | 4,465 | |||||||||||||||
Unrealized gains on equity securities | 428 | 214 | |||||||||||||||
Unrealized gains on fixed maturities and other investment securities | 2,183 | 1,694 | |||||||||||||||
Deferred acquisition costs | 363 | 4,539 | |||||||||||||||
Fixed assets | 525 | 98 | |||||||||||||||
Contingent commissions | — | 3,632 | |||||||||||||||
Other | 130 | 139 | |||||||||||||||
Total deferred income tax liabilities | 10,765 | 14,781 | |||||||||||||||
Net deferred income tax asset | $ | 23,864 | $ | 3,728 | |||||||||||||
No valuation allowance was recorded at December 31, 2014 and 2013, as the temporary differences disclosed above relate to deferred income tax assets that are more-likely-than-not to be realized in future years. | |||||||||||||||||
In the second quarter of 2014, the Company revised its provision for income taxes to reflect a change in the federal statutory rate from 34.3% to 35.0%, effective January 1, 2014. During 2013 and 2012, the Company computed its income tax provision using a 34.3% federal statutory tax rate as its taxable income was within the graduated rates of 34.0% to 35.0%. A reconciliation of federal income tax expense computed by applying the federal statutory tax rate to income before federal income tax expense for the periods ended December 31 follows: | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Effective | Effective | Effective | |||||||||||||||
($ in thousands) | Amount | Tax Rate | Amount | Tax Rate | Amount | Tax Rate | |||||||||||
Expected tax expense (benefit) | $ | 461 | 35.0 | % | $ | 8,746 | 34.3 | % | $ | 7,044 | 34.3 | % | |||||
Exclusion of Subchapter S income | 8,465 | 643.0 | -4,478 | -17.6 | -2,800 | -13.6 | |||||||||||
Change in tax status | -19,316 | -1,467.20 | — | — | — | — | |||||||||||
Change in federal statutory rate | -75 | -5.7 | — | — | — | — | |||||||||||
Accrual/adjustment prior year | 174 | 13.2 | -39 | -0.2 | 2 | — | |||||||||||
Tax-exempt income | -304 | -23.1 | -275 | -1.1 | -247 | -1.2 | |||||||||||
State income taxes | 826 | 62.8 | -1,205 | -4.7 | 620 | 3.0 | |||||||||||
Meals and entertainment | 61 | 4.6 | 36 | 0.1 | 34 | 0.2 | |||||||||||
Other | 12 | 0.8 | 2 | — | 2 | — | |||||||||||
Total income tax expense (benefit) | $ | -9,696 | -736.6 | % | $ | 2,787 | 10.8 | % | $ | 4,655 | 22.7 | % | |||||
The Company’s policy is to recognize interest and penalties related to uncertain tax positions in general and administrative expenses. There were no penalties or interest recognized during 2014, 2013 and 2012. | |||||||||||||||||
The Company had no net operating loss or capital loss carry-forwards at December 31, 2014. | |||||||||||||||||
As of December 31, 2014, the Company’s U.S. federal income tax returns for tax years that ended December 31, 2011 through December 31, 2013, remain open under the normal three year statute of limitations and, therefore, are subject to examination by the Internal Revenue Service. | |||||||||||||||||
Reinsurance
Reinsurance | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Reinsurance | ||||||||
Reinsurance | 8. Reinsurance | |||||||
Through unaffiliated general agents, SNIC, NSIC, and USIC write primarily commercial lines of business. This business is written pursuant to quota share and excess of loss reinsurance contracts and general agency agreements that are tripartite agreements executed by SNIC, NSIC, or USIC, the reinsurer, and the general agent. Substantially all of the risk associated with this business is borne by the reinsurer. As compensation for writing this business, SNIC, NSIC, and USIC receive ceding fees from the producers and, accordingly, the related ceding fees receivable are reflected as accounts receivable from agents. If the producer defaults on its obligation to pay these fees (or any other amount due), the reinsurer is obligated to make the payment under the guarantee contained in the contracts. | ||||||||
As compensation for writing this business, SNIC, NSIC, and USIC receive ceding fees from the general agents and, accordingly, the related ceding fees receivable are reflected as accounts receivable from agents. If the general agent defaults on its obligation to pay these commissions (or any other amount due), the reinsurer is obligated to make the payment under the guarantee contained in the contracts. | ||||||||
In addition, the Company is party to a reinsurance agreement in which it cedes a percentage of certain CPI policies to CUMIS Insurance Society, Inc. (CUNA Mutual) and receives a ceding commission related to these policies. On May 19, 2014, the company signed an amendment to alter certain provisions of the July 24, 2009 Alliance with CUNA Mutual. The amendment, effective July 1, 2014, reduces CUNA Mutual’s quota share under the reinsurance agreement from 50% to 30% for all policies written on or after July 1, 2014 (see Note 18 – Commitments and Contingencies). | ||||||||
SNIC, NSIC, and USIC remain liable for unearned premiums and unpaid losses and loss adjustment expenses with respect to reinsurance ceded should the reinsurer be unable to meet its obligations. Management considers the possibility of a reinsurer becoming unable to meet its obligations as remote due to the reinsurers’ financial stability, A.M. Best Company rating, size, security funds available, and other factors as appropriate. Following is a summary of these balances: | ||||||||
December 31, | December 31, | |||||||
($ in thousands) | 2014 | 2013 | ||||||
Ceded unearned premiums | $ | 456,754 | $ | 365,333 | ||||
Ceded loss and loss adjustment expense reserves | 1,199,780 | 1,006,892 | ||||||
Total reinsurance recoverables | 1,656,534 | 1,372,225 | ||||||
Secured reinsurance recoverables | -1,209,032 | -1,014,947 | ||||||
Unsecured reinsurance recoverables | $ | 447,502 | $ | 357,278 | ||||
The fair value of the collateral held by SNIC, NISC and USIC is approximately 163% of the secured reinsurance recoverables as of December 31, 2014. | ||||||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Fair Value Measurements | 9. Fair Value Measurements | |||||||||||||
Assets and liabilities reported in the consolidated financial statements at fair value are required to be classified according to a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into three levels. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities. | ||||||||||||||
(Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or liability’s classification is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Level 1 and 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows: | ||||||||||||||
· | Level 1: Inputs are quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date. | |||||||||||||
· | Level 2: Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the instrument. These inputs include market interest rates and volatilities, spreads, and yield curves. | |||||||||||||
· | Level 3: Inputs are unobservable. Unobservable inputs reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. | |||||||||||||
A description of the Company’s valuation techniques used to measure its assets at fair value is as follows: | ||||||||||||||
· | Available-for-sale, fixed-maturity securities: All fixed-maturity investments are currently reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from either an independent pricing service using quoted prices or from its third-party investment managers. These Level 2 inputs are valued by either the pricing service or the investment managers utilizing observable data that may include dealer quotes, market spreads, cash flows, yield curves, live trading levels, trade execution data, market consensus, prepayment speeds, credit information, and the security’s terms and conditions, among other things. Management has reviewed the processes used by the pricing services and has determined that they result in fair values consistent with requirements of ASC 820 for Level 2 investment securities. | |||||||||||||
· | Available-for-sale equity securities: Equity securities are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service using quoted prices or from its third-party investment managers. | |||||||||||||
Based on an analysis of the inputs, the Company’s investments measured at fair value on a recurring basis have been categorized as follows: | ||||||||||||||
December 31, 2014 | ||||||||||||||
($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Fixed-maturity securities | ||||||||||||||
Government | $ | — | $ | 14,042 | $ | — | $ | 14,042 | ||||||
Government agency | — | 2,373 | — | 2,373 | ||||||||||
State and municipality | — | 62,352 | — | 62,352 | ||||||||||
Industrial and miscellaneous | — | 110,247 | — | 110,247 | ||||||||||
Residential mortgage-backed | — | 97,671 | — | 97,671 | ||||||||||
Commercial mortgage-backed | — | 22,795 | — | 22,795 | ||||||||||
Redeemable preferred stock | — | 431 | — | 431 | ||||||||||
Total fixed-maturity securities | — | 309,911 | — | 309,911 | ||||||||||
Equity securities | ||||||||||||||
Non-redeemable preferred stock | — | 2,213 | — | 2,213 | ||||||||||
Common stock | — | 429 | — | 429 | ||||||||||
Total equity securities | — | 2,642 | — | 2,642 | ||||||||||
$ | — | $ | 312,553 | $ | — | $ | 312,553 | |||||||
December 31, 2013 | ||||||||||||||
($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Fixed-maturity securities | ||||||||||||||
Government | $ | — | $ | 9,855 | $ | — | $ | 9,855 | ||||||
Government agency | — | 2,840 | — | 2,840 | ||||||||||
State and municipality | — | 41,185 | — | 41,185 | ||||||||||
Industrial and miscellaneous | — | 52,658 | — | 52,658 | ||||||||||
Residential mortgage-backed | — | 65,334 | — | 65,334 | ||||||||||
Commercial mortgage-backed | — | 8,671 | — | 8,671 | ||||||||||
Redeemable preferred stock | — | 411 | — | 411 | ||||||||||
Total fixed-maturity securities | — | 180,954 | — | 180,954 | ||||||||||
Equity securities | ||||||||||||||
Non-redeemable preferred stock | — | 1,802 | — | 1,802 | ||||||||||
Common stock | — | 499 | — | 499 | ||||||||||
Total equity securities | — | 2,301 | — | 2,301 | ||||||||||
$ | — | $ | 183,255 | $ | — | $ | 183,255 | |||||||
There was no Level 3 activity including gains or losses recognized purchases, or sales transaction during the periods ending December 31, 2014 and December 31, 2013. | ||||||||||||||
Transfers between levels are recognized at the end of the reporting period. There were no transfers between Level 1, Level 2, and Level 3 at December 31, 2014 and December 31, 2013. | ||||||||||||||
Premiums_Earned
Premiums Earned | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Investments | |||||||||||
Premiums Earned | 10. Premiums Earned | ||||||||||
Premiums earned consist of the following for the years ended December 31: | |||||||||||
($ in thousands) | 2014 | 2013 | 2012 | ||||||||
Premiums written | $ | 1,032,608 | $ | 806,732 | $ | 633,109 | |||||
Premiums assumed | 1,517 | 3,233 | 1,712 | ||||||||
Premiums ceded | -935,051 | -723,192 | -555,656 | ||||||||
Net premiums retained | 99,074 | 86,773 | 79,165 | ||||||||
Change in net unearned premiums | -2,424 | -2,395 | -1,069 | ||||||||
Total premiums earned | $ | 96,650 | $ | 84,378 | $ | 78,096 | |||||
Premiums assumed as a % of net premiums retained | 1.5 | % | 3.7 | % | 2.2 | % | |||||
Premiums written for CPI include an allowance for return premiums and policy fees related to expected future policy cancellations. Original estimates are adjusted as the policies develop and additional information becomes known regarding actual cancellation rates. | |||||||||||
Losses_and_Loss_Adjustment_Exp
Losses and Loss Adjustment Expenses | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Investments | |||||||||||
Losses and Loss Adjustment Expenses | 11. Losses and Loss Adjustment Expenses | ||||||||||
Losses and loss adjustment expenses consist of the following for the years ended December 31: | |||||||||||
($ in thousands) | 2014 | 2013 | 2012 | ||||||||
Direct losses and loss adjustment expenses | $ | 714,708 | $ | 561,347 | $ | 729,138 | |||||
Assumed losses and loss adjustment expenses | 2,469 | 193 | 6,521 | ||||||||
Ceded losses and loss adjustment expenses | -676,356 | -529,450 | -706,670 | ||||||||
Total net losses and loss adjustment expenses | $ | 40,821 | $ | 32,090 | $ | 28,989 | |||||
Activity in the liability for unpaid losses and loss adjustment expenses at December 31, is summarized as follows: | |||||||||||
($ in thousands) | 2014 | 2013 | 2012 | ||||||||
Balance at January 1 | $ | 1,016,641 | $ | 975,708 | $ | 806,125 | |||||
Reinsurance recoverables | -1,006,892 | -965,965 | -797,961 | ||||||||
Net balance at January 1 | 9,749 | 9,743 | 8,164 | ||||||||
Incurred related to: | |||||||||||
Current year | 41,314 | 33,163 | 28,894 | ||||||||
Prior year | -493 | -1,073 | 95 | ||||||||
Total incurred | 40,821 | 32,090 | 28,989 | ||||||||
Paid related to: | |||||||||||
Current year | 34,251 | 27,388 | 23,392 | ||||||||
Prior year | 6,194 | 4,696 | 4,018 | ||||||||
Total paid | 40,445 | 32,084 | 27,410 | ||||||||
Net balance at December 31 | 10,125 | 9,749 | 9,743 | ||||||||
Reinsurance recoverables | 1,199,780 | 1,006,892 | 965,965 | ||||||||
Balance at December 31 | $ | 1,209,905 | $ | 1,016,641 | $ | 975,708 | |||||
The estimate for ultimate losses incurred on a net basis related to prior years decreased by $0.5 million in 2014, decreased by $1.1 million in 2013, and increased by $0.1 million in 2012. The favorable development in 2014 is primarily due to $706 thousand favorable development in our Lender Services segment. The favorable development in 2013 is primarily due to $1.5 million favorable development in our Lender Services segment, partially offset by unfavorable development of $0.4 million for our Program Services segment. The small unfavorable development in 2012 is the result of unfavorable development of $2.1 million for our Program Services segment, largely offset by favorable development of $2.0 million for our Lender Services segment. All of these changes were the result of the re-estimation of unpaid losses and loss adjustment expenses due to ongoing analyses of recent loss development trends as new data becomes available. We had no significant changes in reserving assumptions or methodologies. The net changes in 2014, 2013 and 2012, are the result of ongoing analysis of recent loss development trends. Original estimates are adjusted as additional information becomes known regarding individual claims. | |||||||||||
Statutory_Accounting
Statutory Accounting | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Investments | |||||||||||
Statutory Accounting | 12. Statutory Accounting | ||||||||||
A reconciliation of the Company’s insurance subsidiaries’ (SNIC, NSIC, and USIC) shareholders’ equity and net income as of and for the years ended December 31 from Statutory Accounting Principles (SAP) to GAAP is as follows: | |||||||||||
($ in thousands) | 2014 | 2013 | |||||||||
Per statutory basis | $ | 215,842 | $ | 155,566 | |||||||
Adjustments for: | |||||||||||
Allowance for return commissions | 28,846 | 21,275 | |||||||||
Allowance for policy cancellations | -23,672 | -16,644 | |||||||||
Commissions payable | 14,105 | 10,597 | |||||||||
Deferred acquisition costs | 13,149 | 13,233 | |||||||||
Deferred income taxes | -7,430 | -5,909 | |||||||||
Unrealized gain on investments available-for-sale | 5,586 | 2,445 | |||||||||
Management fees | -16,813 | -13,838 | |||||||||
Intangible assets | 1,947 | 1,947 | |||||||||
Nonadmitted assets | 13 | 15 | |||||||||
Other | 16 | 145 | |||||||||
Shareholders’ equity in accordance with GAAP | $ | 231,589 | $ | 168,832 | |||||||
($ in thousands) | 2014 | 2013 | 2012 | ||||||||
Net income (insurance subsidiaries only): | |||||||||||
Per statutory basis | $ | 6,780 | $ | 5,047 | $ | 7,290 | |||||
Adjustments for: | |||||||||||
Allowance for return commissions | 7,571 | 3,987 | 3,874 | ||||||||
Allowance for policy cancellations | -7,028 | -2,551 | -927 | ||||||||
Commission expense | 3,508 | 1,874 | 935 | ||||||||
Deferred acquisition costs | -84 | 1,952 | 3,259 | ||||||||
Deferred income taxes | 195 | 2,058 | -795 | ||||||||
Management fees | -2,975 | -3,947 | -5,356 | ||||||||
Other | -129 | -38 | -30 | ||||||||
Net income in accordance with GAAP | $ | 7,838 | $ | 8,382 | $ | 8,250 | |||||
At December 31, 2014 and 2013, the amount of statutory capital and surplus for the consolidated insurance subsidiaries was $215.8 million and $155.6 million, respectively. At December 31, 2014 and 2013, minimum statutory capital and surplus required for SNIC, NSIC, and USIC was $5.0 million, $5.0 million and $750 thousand, respectively. The Texas Department of Insurance (the Department) requires approval for dividends from insurance subsidiaries that exceed statutory guidelines. The maximum dividend that may be paid without prior approval of the Commissioner of Insurance is limited to the greater of 10% of statutory surplus at the end of the preceding calendar year or the statutory net income of the preceding calendar year. At December 31, 2014, unrestricted net assets available for dividends were $21.6 million. | |||||||||||
The Company is required to comply with the NAIC’s Risk-Based Capital (RBC) requirements. Under the RBC standards, risks specific to the Company in such areas as asset risk, insurance risk, interest rate risk, and business risk are evaluated and compared to the Company’s capital and surplus to determine solvency margins. In its calculation of risk-based capital for SNIC and NSIC, the Company has deducted amounts for which it holds collateral (either trust funds in the name of the Company or irrevocable letters of credit) for amounts recoverable from reinsurance companies. The Company believes this practice to be appropriate because the credit risk for the related reinsurance balances is virtually eliminated due to the protection provided by the collateral. This practice differs from NAIC annual statement instructions. There is no monetary effect on net income or statutory surplus from the use of this practice. If the Company had not used this practice, the RBC calculations would not have resulted in a regulatory event in 2014 or 2013. | |||||||||||
At periodic intervals, the Department routinely examines the insurance subsidiaries’ statutory financial statements as part of its legally prescribed oversight of the insurance industry. Based on these examinations, regulators can direct that the statutory-basis financial statements be adjusted in accordance with their findings. The Texas Department of Insurance completed its examination of the December 31, 2006 through December 31, 2010, statutory-basis financial statements of NSIC and SNIC in 2012, with no significant findings reported. The Delaware Insurance Department also completed its examination of the December 31, 2006 through December 31, 2010, statutory-basis financial statements of USIC in 2012, with no significant findings reported. | |||||||||||
RelatedParty_Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions | |
Related-Party Transactions | 13. Related-Party Transactions |
The accompanying consolidated financial statements include other payables to an affiliate, Trace Air, Inc., in the amount of $100 thousand as of December 31, 2013. The Company was party to an aircraft lease with Trace Air, Inc. with a term expiring in 2020. Pursuant to the lease agreement, the Company leased the aircraft at a rate of $1,800 per hour of use, subject to a minimum monthly lease rate of $36 thousand. In addition, the Company was responsible for operating and maintenance costs associated with the aircraft. Under this agreement, we made aggregate payments to Trace Air, Inc. of $359 thousand, $692 thousand, and $687 thousand in 2014, 2013, and 2012, respectively. This lease agreement was terminated following the completion of the private placement of company stock (See Note 20 — “Common Stock”). | |
In 2014, prior to the completion of the private placement, the Company transferred real estate and certain vehicles valued at $513 thousand, equally to Trace Ledbetter and Luke Ledbetter, which amounts were included in founder special compensation in the 2014 consolidated statement of income. | |
401k_ProfitSharing_Plan_and_Tr
401(k) Profit-Sharing Plan and Trust | 12 Months Ended |
Dec. 31, 2014 | |
401(k) Profit-Sharing Plan and Trust | |
401(k) Profit-Sharing Plan and Trust | 14. 401(k) Profit-Sharing Plan and Trust |
The Company has a 401(k) profit-sharing plan for employees that covers substantially all officers and employees who are at least 18 years of age. The Company is required to make a matching contribution of 50% of employees’ contributions, limited to 6% of eligible employees’ compensation. Also, the Company may make additional matching and profit-sharing contributions that are discretionary and are determined at the end of each plan year. The employer contribution expense included in general and administrative expenses is $1.1 million, $1.0 million and $937 thousand as of December 31, 2014, 2013, and 2012, respectively. | |
Stockbased_Payments
Stock-based Payments | 12 Months Ended |
Dec. 31, 2014 | |
Stock-based Payments | |
Stock-based Payments | 15. Stock-based Payments |
On May 29, 2014, the Company’s shareholders approved the 2014 Long-Term Incentive Plan (2014 Plan), which provides for an aggregate of 4.4 million shares of our common stock that may be issued to employees and non-employee directors. Awards under the 2014 Plan may be in the form of stock options (including incentive stock options that meet the requirements of Section 422 of the Internal Revenue Code and non-statutory stock options), restricted stock, restricted stock units, stock appreciation rights and performance units. Upon completion of the private placement, the Company made grants of non-qualified stock options to our executive officers and certain employees to purchase an aggregate of 2,783,873 shares of our common stock. In addition to the grants of non-qualified stock options, the Company made grants of 12,000 shares of restricted stock to our non-employee directors. These non-qualified stock options and restricted stock grants are classified as equity based awards and will be recognized on a straight-line basis over the vesting period of 3 years and 1 year, respectively. | |
The fair value of each stock option grant is established on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions. The expected volatility is 32.96%, based on historical volatility of similar entities that are publicly traded for a period equal to the expected term. The estimated term of the options, all of which expire ten years after the grant date, is 5.5 years based on expected behavior of the group of option holders. The assumed risk-free interest rate is 1.85%, based on rates for U.S. Treasury Notes with maturity dates corresponding to the estimated term of the options on the date of grant. The assumed dividend yield was 0.40% and no forfeitures are expected. | |
The weighted average exercise price of non-vested options at December 31, 2014 was $10. The Company does not have any stock options exercisable in the financial statement periods presented. The Company did not recognize cash flows upon exercise or vesting of stock-based awards in the financial statement periods presented. | |
On July 9, 2014 the company granted 38,500 shares of common stock to employees under the 2014 Plan. The fair value of the shares was determined based on the most recent trading price of the stock. | |
The Company measures compensation cost for stock awards at fair value and recognizes it over the service period for awards expected to vest. Total stock-based compensation expense related to stock options and stock grants for the year ended December 31, 2014 was $2.0 million. There was no stock-based compensation expense for the years ending December 31, 2013 and 2012. Total recognized tax benefit related to the stock options and stock grants was $688 thousand the year ended December 31, 2014. There was no recognized tax benefit related to stock options and stock grants for the years ended December 31, 2013 and 2012. | |
As of December 31, 2014, there was $7.5 million of total unrecognized compensation cost related to non-vested share-based compensation grants. This unrecognized compensation is expected to be recognized over a weighted-average period of two years. The Company does not use multiple share-based payment arrangements. | |
Concentration_of_Risk
Concentration of Risk | 12 Months Ended |
Dec. 31, 2014 | |
Concentration of Risk | |
Concentration of Risk | 16. Concentration of Risk |
The Company maintains cash and cash equivalents in accounts with financial institutions in excess of the amount insured by the Federal Deposit Insurance Corporation. The Company monitors the financial stability of these institutions regularly, and Management does not believe there is significant credit risk associated with deposits in excess of federally insured amounts. | |
A significant portion of the Company’s writings occurs in California, New York, Texas, Florida and New Jersey. Two customers comprised approximately 5% of the Company’s CPI writings at December 31, 2014. Three reinsurers represent approximately 56% of the Company’s unsecured reinsurance recoverables at December 31, 2014. | |
Leases
Leases | 12 Months Ended |
Dec. 31, 2014 | |
Investments | |
Leases | 17. Leases |
The Company previously leased a portion of its home office building to an unaffiliated third party under the terms of an operating lease. Rental income for the years ended December 31, 2014, 2013 and 2012 is $2.1 million, $1.4 million and $1.3 million, respectively. | |
In November 2013, the Company received an early termination notice from the unaffiliated third party relating to the operating lease between the parties. The early termination notice was in compliance with the terms of the lease. The Company recognized $1.5 million in lease termination fees in 2014 due to the early termination of the lease. The lease was considered an operating lease through the early termination date of November 30, 2014. | |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies | |
Commitments and Contingencies | 18. Commitments and Contingencies |
The Company is involved in various legal proceedings incidental to its normal business activities. Management of the Company does not anticipate that the outcome of such legal actions will have a material effect on the Company’s consolidated financial position or results of operations. | |
SNIC, NSIC, and USIC are subject to assessments from various insurance regulatory agencies related to insurance company insolvencies. Management is not aware of any material assessments for which notice has not yet been received. However, to the extent that such assessments are made, the Company has the contractual right to recover these amounts from the underlying reinsurers. | |
In July 2009, the Company formed a Collateral Protection Alliance (the Alliance) with CUMIS Insurance Society, Inc., a subsidiary of CUNA Mutual, to administer and write CPI business for their customers. The Alliance includes an agency agreement and a reinsurance agreement whereby the Company ceded 50% of the business back to CUNA Mutual. The Company did not account for the Alliance as a business combination because it did not result in a change of control. In connection with the Alliance, the Company has a purchase option and CUNA Mutual has a put option, whereby the Company is obligated to purchase CUNA Mutual’s right to participate in future program business in the event of termination of the Alliance at a specified price. | |
On May 19, 2014, the company signed an amendment to alter certain provisions of the July 24, 2009 Alliance with CUNA Mutual related to the Company’s collateral protection business. The amendment, effective July 1, 2014, reduced CUNA Mutual’s quota share percentage under the reinsurance agreement from 50% to 30% for all policies written on or after July 1, 2014. In addition, the term of the Alliance was extended through July 31, 2018, with an automatic three-year renewal (subject to the right of either party to give notice of nonrenewal); the termination rights for each party were modified, and the purchase price calculation was modified. | |
In consideration of these changes, State National accrued the expense of $17.8 million as of June 30, 2014 and made two payments to CUNA Mutual on July 8, 2014. The first payment of $14.8 million is not subject to any future adjustments. The second payment of $3.0 million is subject to potential future adjustment based upon the net premium and loss ratio for the 12-month period ending June 30, 2015, with any payment adjustment due on August 7, 2015. | |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Earnings Per Share | ||||||||||
Earnings Per Share | 19. Earnings Per Share | |||||||||
We have adopted the provisions of ASC 260, “Earnings Per Share,” requiring presentation of both basic and diluted earnings per share. Earnings per share have been adjusted to reflect a 736 for one stock split in the form of a stock dividend on June 23, 2014. A reconciliation of the numerators and denominators of the basic and diluted per share calculations is presented below: | ||||||||||
Year Ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||
($ in thousands, except for per share amounts) | 2014 | 2013 | 2012 | |||||||
Numerator for both basic and diluted earnings per share: | ||||||||||
Net income | $ | 11,013 | $ | 22,711 | $ | 15,882 | ||||
Denominator for both basic and diluted earnings per share: | ||||||||||
Weighted-average common shares outstanding | 39,383,641 | 34,176,896 | 34,176,896 | |||||||
Dilutive effect of outstanding securities (determined using the treasury stock method) | 6,214 | — | — | |||||||
Weighted-average common shares outstanding and potential common shares outstanding | 39,389,855 | 34,176,896 | 34,176,896 | |||||||
Common_Stock
Common Stock | 12 Months Ended |
Dec. 31, 2014 | |
Common Stock. | |
Common Stock | 20. Common Stock |
On June 25, 2014, the Company completed the sale of an aggregate of 31,050,000 shares of our common stock in a private placement exempt from registration under the Securities Act and received net proceeds of approximately $280.6 million. Of the net proceeds from the private placement, the Company used approximately (i) $190.6 million to purchase 21,030,294 shares of common stock from certain of our shareholders pursuant to a stock redemption agreement entered into prior to the private placement, (ii) $17.8 million to make pre-tax payments to CUNA Mutual pursuant to a recent amendment of the alliance agreement (See Note 18 — “Commitments and Contingencies”) and (iii) $50 million to contribute to the capital of our insurance subsidiaries. | |
On July 15, 2014, the Company filed a registration statement with the United States Securities and Exchange Commission. On September 12, 2014, October 3, 2014 and October 22, 2014, the Company filed amendments to the registration statement for the resale of up to an aggregate of 30,728,500 shares of the Company’s common stock. On October 30, 2014, the Company’s registration statement with the United States Securities and Exchange Commission became effective. | |
Segment_Information
Segment Information | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Segment Information | ||||||||||||||
Segment Information | 21. Segment Information | |||||||||||||
The Company’s reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different technology and business strategies. The Company operates through three business segments of which two operating segments are program services and lender services. In the program services segment, the Company operates an issuing carrier business that leverages our “A” (Excellent) A.M. Best rating, expansive licenses and reputation to provide insurance capacity access to U.S. property and casualty insurance markets. In the lender services segment, the Company specializes in providing collateral protection insurance, or CPI, which insures automobiles held as collateral for loans made by financial institutions. The other segment is the Corporate segment. This segment consists of the investment portfolio, subordinated debentures, and includes rental income, investment income, interest expense, and corporate expenses. | ||||||||||||||
The Company’s Corporate segment includes an asset for Property and equipment, net. The depreciation of this asset is allocated to all segments based on estimated usage. The depreciation allocated to the Lender segment was $1.4 million, $1.3 million and $1.4 million for the years ended December 31, 2014, 2013 and 2012, respectively. The depreciation allocated to the Program segment was $397 thousand, $286 thousand and $292 thousand for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||
The following is business segment information for the twelve months ended December 31, 2014, 2013 and 2012: | ||||||||||||||
December 31, 2014 | ||||||||||||||
($ in thousands) | Program | Lender | Corporate | Total | ||||||||||
Revenues: | ||||||||||||||
Premiums earned | $ | -4 | $ | 96,654 | $ | — | $ | 96,650 | ||||||
Commission income | — | 1,533 | — | 1,533 | ||||||||||
Ceding fees | 45,732 | — | — | 45,732 | ||||||||||
Net investment income | — | — | 4,841 | 4,841 | ||||||||||
Realized net investment gains | — | — | 1,311 | 1,311 | ||||||||||
Other income | — | 1,266 | 3,194 | 4,460 | ||||||||||
Total revenues | 45,728 | 99,453 | 9,346 | 154,527 | ||||||||||
Expenses: | ||||||||||||||
Losses and loss adjustment expenses | 217 | 40,604 | — | 40,821 | ||||||||||
Commissions | 2 | 3,880 | — | 3,882 | ||||||||||
Taxes, licenses, and fees | 8 | 2,824 | — | 2,832 | ||||||||||
General and administrative | 10,855 | 38,995 | 9,041 | 58,891 | ||||||||||
Founder special compensation | — | — | 17,914 | 17,914 | ||||||||||
Offering-related expenses | — | — | 8,833 | 8,833 | ||||||||||
Contract modification expense | — | 17,800 | — | 17,800 | ||||||||||
Interest expense | — | — | 2,237 | 2,237 | ||||||||||
Total expenses | 11,082 | 104,103 | 38,025 | 153,210 | ||||||||||
Income (loss) before income taxes | 34,646 | -4,650 | -28,679 | 1,317 | ||||||||||
Income tax expense/(benefit) | — | — | -9,696 | -9,696 | ||||||||||
Net income (loss) | $ | 34,646 | $ | -4,650 | $ | -18,983 | $ | 11,013 | ||||||
Supplemental Information: | ||||||||||||||
Gross premiums written | $ | 909,501 | $ | 124,624 | $ | — | $ | 1,034,125 | ||||||
Net premiums written | $ | -5 | $ | 99,079 | $ | — | $ | 99,074 | ||||||
December 31, 2013 | ||||||||||||||
($ in thousands) | Program | Lender | Corporate | Total | ||||||||||
Revenues: | ||||||||||||||
Premiums earned | $ | -501 | $ | 84,879 | $ | — | $ | 84,378 | ||||||
Commission income | — | 2,031 | — | 2,031 | ||||||||||
Ceding fees | 32,898 | — | — | 32,898 | ||||||||||
Net investment income | — | — | 4,901 | 4,901 | ||||||||||
Realized net investment gains | — | — | 1,764 | 1,764 | ||||||||||
Other income | 3 | 1,101 | 1,427 | 2,531 | ||||||||||
Total revenues | 32,400 | 88,011 | 8,092 | 128,503 | ||||||||||
Expenses: | ||||||||||||||
Losses and loss adjustment expenses | 465 | 31,625 | — | 32,090 | ||||||||||
Commissions | 389 | 1,989 | — | 2,378 | ||||||||||
Taxes, licenses, and fees | 10 | 2,584 | — | 2,594 | ||||||||||
General and administrative | 11,010 | 36,020 | 6,388 | 53,418 | ||||||||||
Founder special compensation | — | — | 10,202 | 10,202 | ||||||||||
Interest expense | — | — | 2,323 | 2,323 | ||||||||||
Total expenses | 11,874 | 72,218 | 18,913 | 103,005 | ||||||||||
Income (loss) before income taxes | 20,526 | 15,793 | -10,821 | 25,498 | ||||||||||
Income tax expense/(benefit) | — | — | 2,787 | 2,787 | ||||||||||
Net income (loss) | $ | 20,526 | $ | 15,793 | $ | -13,608 | $ | 22,711 | ||||||
Supplemental Information: | ||||||||||||||
Gross premiums written | $ | 691,067 | $ | 118,898 | $ | — | $ | 809,965 | ||||||
Net premiums written | $ | -1,018 | $ | 87,791 | $ | — | $ | 86,773 | ||||||
December 31, 2012 | ||||||||||||||
($ in thousands) | Program | Lender | Corporate | Total | ||||||||||
Revenues: | ||||||||||||||
Premiums earned | $ | 1,600 | $ | 76,496 | $ | — | $ | 78,096 | ||||||
Commission income | — | 2,406 | — | 2,406 | ||||||||||
Ceding fees | 32,379 | — | — | 32,379 | ||||||||||
Net investment income | — | — | 5,525 | 5,525 | ||||||||||
Realized net investment gains | — | — | 1,309 | 1,309 | ||||||||||
Other income | 2 | 945 | 1,461 | 2,408 | ||||||||||
Total revenues | 33,981 | 79,847 | 8,295 | 122,123 | ||||||||||
Expenses: | ||||||||||||||
Losses and loss adjustment expenses | 3,062 | 25,927 | — | 28,989 | ||||||||||
Commissions | 482 | 2,440 | — | 2,922 | ||||||||||
Taxes, licenses, and fees | 31 | 2,363 | — | 2,394 | ||||||||||
General and administrative | 9,316 | 39,193 | 5,605 | 54,114 | ||||||||||
Founder special compensation | — | — | 10,740 | 10,740 | ||||||||||
Interest expense | — | — | 2,427 | 2,427 | ||||||||||
Total expenses | 12,891 | 69,923 | 18,772 | 101,586 | ||||||||||
Income (loss) before income taxes | 21,090 | 9,924 | -10,477 | 20,537 | ||||||||||
Income tax expense/(benefit) | — | — | 4,655 | 4,655 | ||||||||||
Net income (loss) | $ | 21,090 | $ | 9,924 | $ | -15,132 | $ | 15,882 | ||||||
Supplemental Information: | ||||||||||||||
Gross premiums written | $ | 530,621 | $ | 104,200 | $ | — | $ | 634,821 | ||||||
Net premiums written | $ | 1,141 | $ | 78,024 | $ | — | $ | 79,165 | ||||||
The following tables summarize the financial position of the Company’s segments as of December 31, 2014 and 2013. | ||||||||||||||
December 31, 2014 | ||||||||||||||
($ in thousands) | Program | Lender | Corporate | Total | ||||||||||
Assets: | ||||||||||||||
Accounts receivable from agents, net | $ | 18,349 | $ | 179 | $ | — | $ | 18,528 | ||||||
Reinsurance recoverable on paid losses | 57 | 1,143 | — | 1,200 | ||||||||||
Reinsurance recoverables | 1,650,205 | 6,329 | — | 1,656,534 | ||||||||||
Deferred income taxes, net | — | — | 23,864 | 23,864 | ||||||||||
Goodwill and intangible assets, net | 2,115 | 4,568 | — | 6,683 | ||||||||||
Other assets | 7,245 | 4,051 | 373,659 | 384,955 | ||||||||||
Total assets | $ | 1,677,971 | $ | 16,270 | $ | 397,523 | $ | 2,091,764 | ||||||
Liabilities: | ||||||||||||||
Unpaid losses and loss adjustment expenses | $ | 1,201,279 | $ | 8,626 | $ | — | $ | 1,209,905 | ||||||
Unearned premiums | 451,993 | 28,131 | — | 480,124 | ||||||||||
Allowance for policy cancellations | — | 55,500 | — | 55,500 | ||||||||||
Deferred ceding fees | 23,612 | — | — | 23,612 | ||||||||||
Other liabilities | 19,990 | 6,603 | 55,158 | 81,751 | ||||||||||
Total liabilities | $ | 1,696,874 | $ | 98,860 | $ | 55,158 | $ | 1,850,892 | ||||||
December 31, 2013 | ||||||||||||||
($ in thousands) | Program | Lender | Corporate | Total | ||||||||||
Assets: | ||||||||||||||
Accounts receivable from agents, net | $ | 17,261 | $ | 45 | $ | — | $ | 17,306 | ||||||
Reinsurance recoverable on paid losses | 5 | 875 | — | 880 | ||||||||||
Reinsurance recoverables | 1,362,719 | 9,506 | — | 1,372,225 | ||||||||||
Deferred income taxes, net | — | — | 3,728 | 3,728 | ||||||||||
Goodwill and intangible assets, net | 2,115 | 5,791 | — | 7,906 | ||||||||||
Other assets | 7,495 | 3,441 | 277,970 | 288,906 | ||||||||||
Total assets | $ | 1,389,595 | $ | 19,658 | $ | 281,698 | $ | 1,690,951 | ||||||
Liabilities: | ||||||||||||||
Unpaid losses and loss adjustment expenses | $ | 1,009,068 | $ | 7,573 | $ | — | $ | 1,016,641 | ||||||
Unearned premiums | 357,681 | 28,598 | — | 386,279 | ||||||||||
Allowance for policy cancellations | — | 39,623 | — | 39,623 | ||||||||||
Deferred ceding fees | 18,735 | — | — | 18,735 | ||||||||||
Other liabilities | 19,415 | 5,386 | 59,518 | 84,319 | ||||||||||
Total liabilities | $ | 1,404,899 | $ | 81,180 | $ | 59,518 | $ | 1,545,597 | ||||||
Condensed_Quarterly_Financial_
Condensed Quarterly Financial Data - Unaudited | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Investments | ||||||||||||||
Condensed Quarterly Financial Data - Unaudited | 22. Condensed Quarterly Financial Data - Unaudited | |||||||||||||
The following tables summarize our quarterly financial data: | ||||||||||||||
2014 Quarters Ended | ||||||||||||||
($ in thousands) | Mar 31 | Jun 30 | Sep 30 | Dec 31 | ||||||||||
Total revenues | $ | 35,527 | $ | 35,403 | $ | 40,571 | $ | 43,026 | ||||||
Total expenses | 37,791 | 54,481 | 29,221 | 31,717 | ||||||||||
Income (loss) before income taxes | -2,264 | -19,078 | 11,350 | 11,309 | ||||||||||
Income tax expense (benefit) | 1,136 | -19,685 | 4,391 | 4,462 | ||||||||||
Net income (loss) | -3,400 | 607 | 6,959 | 6,847 | ||||||||||
Basic earnings per share | $ | -0.1 | $ | 0.02 | $ | 0.16 | $ | 0.15 | ||||||
Diluted earnings per share | -0.1 | 0.02 | 0.16 | 0.15 | ||||||||||
2013 Quarters Ended | ||||||||||||||
($ in thousands) | Mar 31 | Jun 30 | Sep 30 | Dec 31 | ||||||||||
Total revenues | $ | 29,822 | $ | 28,901 | $ | 32,502 | $ | 37,278 | ||||||
Total expenses | 32,823 | 22,057 | 24,324 | 23,801 | ||||||||||
Income (loss) before income taxes | -3,001 | 6,844 | 8,178 | 13,477 | ||||||||||
Income tax expense (benefit) | 906 | 1,149 | 1,181 | -449 | ||||||||||
Net income (loss) | -3,907 | 5,695 | 6,997 | 13,926 | ||||||||||
Basic earnings per share | $ | -0.11 | $ | 0.17 | $ | 0.20 | $ | 0.41 | ||||||
Diluted earnings per share | -0.11 | 0.17 | 0.20 | 0.41 | ||||||||||
For the year ended December 31, 2014, the Company’s non-recurring, unusual or infrequently occurring items recognized in total expenses included offering related expenses in connection with the private placement of its stock, founder special compensation expenses and contract modification expense related to the amendment to the Company’s alliance agreement with CUNA Mutual. The effect of offering related expenses was $7.1 million, $1.1 million, and $603 thousand for the quarters ended June 30, 2014, September 30, 2014 and December 31, 2014, respectively. The effect of founder special compensation expenses was $11.2 million and $6.7 million for the quarters ended March 31, 2014 and June 30, 2014, respectively. The Company recognized contract modification expenses of $17.8 million for the quarter ended June 30, 2014. | ||||||||||||||
For the year ended December 31, 2013, the Company’s non-recurring, unusual or infrequently occurring items included in total expenses was founder special compensation expenses. The effect of these expenses was $10.0 million and $202 thousand for the quarters ended March 31, 2013 and June 30, 2013, respectively. | ||||||||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events | |
Subsequent Events | 23. Subsequent Events |
No items were identified in the period subsequent to the financial statement date that required adjustment or disclosure. | |
Annual_Schedules_Condensed_Fin
Annual Schedules - Condensed Financial Information of the Registrant | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Text Block] | Annual Schedules | ||||||||||
State National Companies, Inc. | |||||||||||
Parent Company Only | |||||||||||
Consolidated Balance Sheets | |||||||||||
($ in thousands, except for per share information) | |||||||||||
December 31 | |||||||||||
2014 | 2013 | ||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 57 | $ | — | |||||||
Investment in subsidiaries | 241,167 | 155,360 | |||||||||
Income taxes receivable | 57 | — | |||||||||
Deferred income taxes, net | 552 | — | |||||||||
Other assets | 717 | — | |||||||||
Total assets | $ | 242,550 | $ | 155,360 | |||||||
Liabilities | |||||||||||
Other payables, affiliate | $ | 1,678 | $ | 10,006 | |||||||
Total liabilities | 1,678 | 10,006 | |||||||||
Shareholders’ equity | |||||||||||
Common stock, $.001 par value (150,000,000 shares authorized; 44,247,102 and 40,627,200 shares issued at December 31, 2014 and December 31, 2013, respectively) | 44 | 41 | |||||||||
Preferred stock, $.001 par value (10,000,000 and zero shares authorized at December 31, 2014 and December 31, 2013, respectively; no shares issued and outstanding at December 31, 2014 and December 31, 2013) | — | — | |||||||||
Additional paid-in capital | 220,577 | 24,367 | |||||||||
Retained earnings | 16,108 | 128,830 | |||||||||
Treasury stock (zero and 6,450,304 shares at cost at December 31, 2014 and December 31, 2013, respectively) | — | -10,000 | |||||||||
Accumulated other comprehensive income | 4,143 | 2,116 | |||||||||
Total shareholders’ equity | 240,872 | 145,354 | |||||||||
Total liabilities and shareholders’ equity | $ | 242,550 | $ | 155,360 | |||||||
State National Companies, Inc. | |||||||||||
Parent Company Only | |||||||||||
Consolidated Statements of Income | |||||||||||
($ in thousands) | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenues: | |||||||||||
Equity in earnings of subsidiaries | $ | 13,019 | $ | 22,711 | $ | 15,883 | |||||
Total revenues | 13,019 | 22,711 | 15,883 | ||||||||
Expenses: | |||||||||||
General and administrative | 3,086 | — | 1 | ||||||||
Total expenses | 3,086 | — | 1 | ||||||||
Income before income taxes | 9,933 | 22,711 | 15,882 | ||||||||
Income taxes: | |||||||||||
Current | -528 | — | — | ||||||||
Deferred | -552 | — | — | ||||||||
Net income | $ | 11,013 | $ | 22,711 | $ | 15,882 | |||||
State National Companies, Inc. | |||||||||||
Parent Company Only | |||||||||||
Consolidated Statements of Cash Flows | |||||||||||
($ in thousands) | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Operating activities: | |||||||||||
Net income | $ | 11,013 | $ | 22,711 | $ | 15,882 | |||||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
Equity in earnings of subsidiaries | -13,019 | -22,711 | -15,883 | ||||||||
Deferred income taxes, net | -552 | — | — | ||||||||
Share-based compensation | 2,012 | — | — | ||||||||
Change in: | |||||||||||
Income taxes receivable | -57 | — | — | ||||||||
Other assets | -717 | — | — | ||||||||
Other payables, affiliate | -8,328 | — | 1 | ||||||||
Net cash used in operating activities | -9,648 | — | — | ||||||||
Investing activities: | |||||||||||
Capital contribution to subsidiary | -87,000 | — | — | ||||||||
Net cash used in investing activities | -87,000 | — | — | ||||||||
Financing activities: | |||||||||||
Distributions received | 16,239 | 15,295 | 14,176 | ||||||||
Dividends paid | -16,683 | -15,295 | -14,176 | ||||||||
Proceeds from issuances of common stock | 289,322 | — | — | ||||||||
Costs directly attributable to issuance of common stock | -1,578 | — | — | ||||||||
Redemption of existing common stock | -190,595 | — | — | ||||||||
Net cash provided by financing activities | 96,705 | — | — | ||||||||
Net change in cash and cash equivalents | 57 | — | — | ||||||||
Cash and cash equivalents at beginning of year | — | — | — | ||||||||
Cash and cash equivalents at end of year | $ | 57 | $ | — | $ | — | |||||
Supplementary_Insurance_Inform
Supplementary Insurance Information | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Supplementary Insurance Information | |||||||||||||||||||||||||||||
Supplementary Insurance Information | State National Companies, Inc. | ||||||||||||||||||||||||||||
Supplementary Insurance Information | |||||||||||||||||||||||||||||
December 31, 2014 | Loss and LAE | Earned | Net Investment | Loss and LAE | DAC | General and | Net Written | ||||||||||||||||||||||
($ in thousands) | DAC | Reserves | UPR | Premium | Income | Incurred | Amortization | Administrative Expenses | Premium | ||||||||||||||||||||
Program | $ | — | $ | 1,201,279 | $ | 451,993 | $ | -4 | $ | — | $ | 217 | $ | — | $ | 10,855 | $ | -5 | |||||||||||
Lender | 1,036 | 8,626 | 28,131 | 96,654 | — | 40,604 | 4,966 | 38,995 | 99,079 | ||||||||||||||||||||
Corporate | — | — | — | — | 4,841 | — | — | 26,955 | |||||||||||||||||||||
Total | $ | 1,036 | $ | 1,209,905 | $ | 480,124 | $ | 96,650 | $ | 4,841 | $ | 40,821 | $ | 4,966 | $ | 76,805 | $ | 99,074 | |||||||||||
December 31, 2013 | Loss and LAE | Earned | Net Investment | Loss and LAE | DAC | General and | Net Written | ||||||||||||||||||||||
($ in thousands) | DAC | Reserves | UPR | Premium | Income | Incurred | Amortization | Administrative Expenses | Premium | ||||||||||||||||||||
Program | $ | 1 | $ | 1,009,068 | $ | 357,681 | $ | -501 | $ | — | $ | 465 | $ | 163 | $ | 11,010 | $ | -1,018 | |||||||||||
Lender | 1,094 | 7,573 | 28,598 | 84,879 | — | 31,625 | 4,736 | 36,020 | 87,791 | ||||||||||||||||||||
Corporate | — | — | — | — | 4,901 | — | — | 16,590 | — | ||||||||||||||||||||
Total | $ | 1,095 | $ | 1,016,641 | $ | 386,279 | $ | 84,378 | $ | 4,901 | $ | 32,090 | $ | 4,899 | $ | 63,620 | $ | 86,773 | |||||||||||
December 31, 2012 | Loss and LAE | Earned | Net Investment | Loss and LAE | DAC | General and | Net Written | ||||||||||||||||||||||
($ in thousands) | DAC | Reserves | UPR | Premium | Income | Incurred | Amortization | Administrative Expenses | Premium | ||||||||||||||||||||
Program | $ | 157 | $ | 969,642 | $ | 229,579 | $ | 1,600 | $ | — | $ | 3,062 | $ | 478 | $ | 9,316 | $ | 1,141 | |||||||||||
Lender | 1,019 | 6,066 | 24,059 | 76,496 | — | 25,927 | 7,529 | 39,193 | 78,024 | ||||||||||||||||||||
Corporate | — | — | — | — | 5,525 | — | — | 16,345 | — | ||||||||||||||||||||
Total | $ | 1,176 | $ | 975,708 | $ | 253,638 | $ | 78,096 | $ | 5,525 | $ | 28,989 | $ | 8,007 | $ | 64,854 | $ | 79,165 | |||||||||||
Supplementary_Schedule_of_Allo
Supplementary Schedule of Allowance For Policy Cancellations | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Supplementary Schedule of Allowance for Policy Cancellations | |||||||||||
Schedule Of Supplementary Policy Cancellations | State National Companies, Inc. | ||||||||||
Supplementary Schedule of Allowance for Policy Cancellations | |||||||||||
Year Ended December 31, | |||||||||||
($ in thousands) | 2014 | 2013 | 2012 | ||||||||
Beginning balance | $ | 39,623 | $ | 32,775 | $ | 27,511 | |||||
Additions | 209,335 | 165,030 | 132,408 | ||||||||
Deductions | -197,678 | -160,940 | -128,881 | ||||||||
Prior year development | 4,220 | 2,758 | 1,737 | ||||||||
Ending balance | $ | 55,500 | $ | 39,623 | $ | 32,775 | |||||
Allowance for policy cancellations is established based on estimates of expected future policy cancellations associated with new business written. Deductions are made as policy cancellations occur and return premiums are paid in subsequent months. The allowance for policy cancellations in 2014, 2013, and 2012 included upward revisions to prior year estimates of $4.2 million, $2.8 million, and $1.8 million, respectively. Because of the interplay between the allowance for policy cancellations and the related unearned premium reserve, changes in the allowance for policy cancellations are partially offset by related changes in the unearned premium reserve and amounts ceded to reinsurers. After taking into account the associated changes in unearned premium and amounts ceded to reinsurers, the net negative impact to the balance sheet and the corresponding reduction in net income from the revised estimates in each of the years ending December 31, 2014, 2013, and 2012 was approximately $2.2 million, $1.6 million, and $1.3 million, respectively. | |||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policy ) | 12 Months Ended |
Dec. 31, 2014 | |
Summary of Significant Accounting Policies | |
Description of Business | Description of Business |
State National Companies, Inc. (the Company) refers to a group of companies that conduct insurance-related activities along two major segments. One segment (the Company’s program services segment) involves the writing of “program business,” which includes books of business produced by general agents, for which the Company receives ceding fees. Substantially all of the risk associated with the program business is ceded to unaffiliated, highly rated reinsurance companies or other reinsurers that provide substantial collateral. A second segment (the Company’s lender services segment) involves the writing and insuring of lines of insurance marketed to lending institutions, primarily collateral protection insurance (CPI) policies. | |
Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation |
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. | |
Basis of Presentation | Basis of Presentation |
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), which, as to our insurance company subsidiaries, differ from statutory accounting practices prescribed or permitted for insurance companies by insurance regulatory authorities. | |
Estimates | Estimates |
The preparation of financial statements in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from these estimates. | |
Fair Value of Financial Instruments | |
Cash and Cash Equivalents: The carrying amounts reported in the consolidated balance sheets approximate fair value. | |
Restricted Cash and Investments: The carrying amounts reported in the consolidated balance sheets approximate fair value. | |
Short-term Investments: The carrying amounts reported in the consolidated balance sheets approximate fair value. | |
Investments: See Note 9 – “Fair Value Measurements” | |
Land held for sale: The land held for sale is carried at fair value less expected selling costs. | |
Payables and Receivables: Reinsurance recoverable on paid losses, reinsurance recoverables, agents’ balances receivable and payable, and payable to insurance companies are carried at cost, which approximates fair value. | |
Subordinated Debentures: The amounts reported in the consolidated balance sheets are carried at par, which approximates their estimated fair value due to the floating interest rate provisions of the debt instruments. | |
Income taxes receivable/payable: The carrying amounts reported in the consolidated balance sheets approximate fair value. | |
Other assets/liabilities: The carrying amounts reported in the consolidated balance sheets approximate fair value. | |
Cash and Cash Equivalents | |
All highly liquid investments with an original maturity of three months or less are considered cash equivalents. | |
Short-Term Investments | |
Short-term investments represent investments with original maturities of more than three months but less than one year. | |
Restricted Cash and Investments | |
Restricted cash and investments are primarily comprised of deposits made by a reinsurer that cover losses for a program up to the contractual threshold. These fiduciary cash and investment balances are invested at the direction of the reinsurer for this program; accordingly, income earned on these balances inures to the benefit of the reinsurer. | |
Investments | |
Investments are considered available-for-sale and are carried at fair value. The Company measures the fair value of the investments based upon quoted market prices from an independent pricing service and its third-party investment managers, using observable market information. The cost of securities sold is based on the specific identification method. Unrealized gains and losses associated with the available-for-sale portfolio, as a result of temporary changes in fair value during the period such investments are held, are reflected net of income taxes and reported in other comprehensive income as a separate component of shareholders’ equity. Unrealized losses associated with the available-for-sale portfolio that are deemed to be other-than-temporary are charged to income in the period in which the other-than-temporary impairment is determined. Debt security premiums and discounts are amortized into earnings using the effective-interest method. | |
The Company evaluates its investment portfolio for impairments of individual securities that are deemed to be other-than-temporary. Fixed maturity securities that are determined to have other-than-temporary impairment and it is more likely than not the Company will sell before recovery of their amortized cost, are written down to fair value and the entire amount of the write-down is included in net income, net of realized investment gains. For all other impaired fixed-maturity securities, the impairment loss is separated into the amount representing the credit loss and the amount representing all other factors. The amount of impairment loss that represents the credit loss is included in net income, net of realized investment gains. The amount of the impairment loss that relates to all other factors is included in other comprehensive income. Equity securities that are determined to have other-than-temporary impairment are recognized in net income, net of realized investment gains. | |
The process for identifying other-than-temporary declines in fair value involves the consideration of several factors, including, but not limited to, whether the issuer has been downgraded to below investment-grade, the length of time in which there has been a significant decline in value, the liquidity and overall financial condition of the issuer, the nature and performance of the collateral or other credit support backing the security, the significance of the decline in value, and whether the Company has the intent to sell the security or may be required to sell the security prior to its anticipated recovery. The Company reviews securities for other-than-temporary impairment internally and with its investment advisors. | |
Deferred Acquisition Costs | |
Effective January 1, 2012, the Company adopted Accounting Standards Update (ASU) No. 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts. The guidance identifies those costs relating to the successful acquisition of new or renewal insurance contracts that should be capitalized. The Company elected prospective application of this guidance (see Note 3 – Deferred Acquisition Costs). | |
Certain costs, primarily premium taxes, commissions, and general expenses that are directly related to the successful acquisition of new or renewal business are deferred to the extent recoverable from future premiums earned. Deferred acquisition costs are amortized in proportion to the related unearned premium reserve over the terms of the related policies. Investment income is not included in the Company’s recoverability analysis of deferred acquisition costs. | |
Deferred Ceding Fees | |
Ceding fees that are associated with unearned premiums are established as a liability and amortized into income pro rata over the life of the underlying business. | |
Property, Equipment, and Depreciation | Property, Equipment, and Depreciation |
Property and equipment are recorded at cost and depreciated. Depreciation is computed using the straight-line method over the estimated useful lives of the assets (ranging from three to twenty years). The Company changed its capitalization threshold as of January 1, 2014 from $1 thousand to $5 thousand per item. Gains and losses on the disposition of fixed assets are determined on a specific asset identification basis and are included in net income. Land held for sale is carried at fair value less expected selling costs. | |
Goodwill and Intangible Assets | |
Goodwill is the difference between the purchase price in a business combination and the fair value of assets acquired and liabilities assumed, and is not amortized. Intangible assets include assets with a finite life, primarily customer relationships/lists, and are amortized over the estimated useful life of the asset in proportion to the expected benefit. | |
Goodwill is tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. The impairment test is performed using a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the second step of the impairment test is performed for purposes of measuring the impairment. | |
In the second step, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit to determine an implied goodwill value. If the carrying amount of the reporting unit goodwill exceeds the implied goodwill value, an impairment loss is recognized in an amount equal to that excess. | |
As of December 31, 2014, the Company performed the first step of its annual goodwill assessment for the individual reporting units to which goodwill is allocated and determined there is no impairment of goodwill. | |
The Company periodically evaluates the recoverability of intangible assets and takes into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. No impairments were recognized in 2014, 2013 or 2012. | |
Unpaid Losses and Loss Adjustment Expenses | |
The liability for unpaid losses and loss adjustment expenses includes an estimate for claims reported and an additional liability for claims incurred but not reported, based on the Company’s historical loss experience. While Management believes the amounts included in the consolidated financial statements are adequate, such estimates may be more or less than the amount ultimately paid when the claims are settled. These estimates are continually reviewed and adjusted, as necessary, as experience develops or as new information becomes known; such adjustments are included in current operations. | |
Allowance for Policy Cancellations | |
An allowance for policy cancellations is provided for the estimated amount of return premiums and policy fees, net of commission expense and premium taxes that will be incurred on expected future policy cancellations associated with the Company’s CPI business. The allowance is based on the Company’s historical cancellation experience. | |
While Management believes the amounts included in the consolidated financial statements are adequate, such estimates may be more or less than the amounts ultimately refunded. The estimates are continually reviewed by Management, and any changes are reflected in current operations. | |
Reinsurance | |
Reinsurance premiums, losses, and loss adjustment expenses are accounted for on bases consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. | |
Earnings Per Share | Earnings Per Share |
The computation of earnings per share is based upon the weighted average number of common shares outstanding during the period plus the effect of common shares potentially issuable (in periods in which they have a dilutive effect). Earnings per share have been adjusted to reflect a 736 for 1 stock split in the form of a stock dividend on June 23, 2014. | |
Income Taxes | Income Taxes |
Historically, the Company had elected for its parent company to be taxed for federal income tax purposes as a “Subchapter S corporation” under the Internal Revenue Code. On June 25, 2014, the Company completed a private placement of common stock, which resulted in the termination of its Subchapter S corporation status. Prior to this change in tax status, deferred income taxes were recorded only on the Company’s insurance subsidiaries (and their immediate parent) to reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end. All other entities included in the consolidated group filed under Subchapter S Corporation status; therefore, no provision for income taxes had been recorded for these entities. The Company recorded a net deferred income tax benefit related to this change in tax status to reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their financial reporting amounts. | |
For any uncertain tax positions not meeting the “more likely than not” recognition threshold, accounting standards require recognition, measurement, and disclosure in the financial statements. There were no uncertain tax positions at December 31, 2014 and December 31, 2013. | |
Income Recognition | |
Premiums on CPI business are earned on a pro rata basis over the terms of the policies after taking into consideration the allowance for policy cancellations. Premiums on program business are earned on a pro rata basis over the terms of the policies. Ceding fees are earned on the same basis as the underlying premiums. | |
Program Business | |
In connection with writing program business, the Company enters into contractual agreements with both the producing general agents and the reinsurers, whereby the general agents and reinsurers are obligated to each other for payment of insurance amounts, including premiums, commissions, and losses. These funds do not flow through the Company, but are settled directly between the general agent and the reinsurer; accordingly, no receivables or payables are recorded for these amounts. All obligations of SNIC, NSIC, and USIC owed to or on behalf of their policyholders are recorded by the Company and, to the extent appropriate, offsetting reinsurance recoverables are recorded. | |
Pro Forma Financial Information | Pro Forma Financial Information (Unaudited) |
On June 25, 2014, the Company completed a private placement of common stock, which resulted in the termination of its Subchapter S corporation status. All of the Company’s entities are now considered C corporations. Pro forma amounts for income tax expense (benefit) and basic and diluted earnings per share have been presented assuming the Company’s effective tax rate of 37.5%, 38.1% and 37.2% for the periods ending December 31, 2014, 2013, and 2012, respectively. | |
Stock-based Compensation | Stock-based Compensation |
Compensation expense for stock-based payments is recognized based on the measurement-date fair value for awards that will settle in shares. Compensation expense for awards that are settled in equity are recognized on a straight line pro rata basis over the vesting period. See Note 15 — “Stock-based Payments” for related disclosures. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In June 2014, the FASB issued an accounting standards update (ASU 2014-12), “Compensation – Stock Compensation” (Topic 718). The main provision of this ASU requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. This ASU is effective for annual reporting periods beginning after December 15, 2015 and interim periods within those annual periods. This ASU does not impact the Company’s financial statements as the Company has not awarded any performance based stock compensation. | |
In May 2014, the FASB issued an accounting standards update (ASU 2014-09), “Revenue from Contracts with Customers” (Topic 606). The core guidance of the ASU presents a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The ASU provides a five-step analysis of transactions to determine when and how revenue is recognized and requires additional disclosures sufficient to describe the nature, amount, timing and uncertainty of revenue and cash flows for these transactions. This ASU is effective for annual periods beginning after December 15, 2016, including interim periods within that period. Early adoption is not permitted under GAAP. As insurance contracts are excluded from this ASU, the Company is currently evaluating what impact, if any, this ASU will have on our financial results and disclosures and which adoption method to apply. | |
In February 2013, the FASB issued an accounting standards update (ASU 2013-02), “Comprehensive Income” (Topic 220) that requires additional disclosures for amounts reclassified out of accumulated other comprehensive income by component. Additionally, significant amounts reclassified out of accumulated other comprehensive income must be disclosed by the respective line items of net income either on the face of the statement where income is presented or in the notes to the financial statements only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. Amounts that are not required to be reclassified in their entirety to net income should be cross-referenced to other disclosures required under GAAP that provide additional detail about the amounts. The impact of this disclosure on the Company’s financial statements is minimal. | |
Investments_Tables
Investments (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Summary of amortized cost, gross unrealized gains and losses, and the fair value of investment securities by class | ||||||||||||||||||||
Cost or | Gross | Gross | ||||||||||||||||||
December 31, 2014 | Amortized | Unrealized | Unrealized | Fair | ||||||||||||||||
($ in thousands) | Cost | Gains | Losses | Value | ||||||||||||||||
Fixed-maturity securities | ||||||||||||||||||||
Government | $ | 13,896 | $ | 195 | $ | -49 | $ | 14,042 | ||||||||||||
Government agency | 2,325 | 57 | -9 | 2,373 | ||||||||||||||||
State and municipality | 61,179 | 1,200 | -27 | 62,352 | ||||||||||||||||
Industrial and miscellaneous | 108,125 | 2,582 | -460 | 110,247 | ||||||||||||||||
Residential mortgage-backed | 96,610 | 1,825 | -764 | 97,671 | ||||||||||||||||
Commercial mortgage-backed | 22,483 | 339 | -27 | 22,795 | ||||||||||||||||
Redeemable preferred stock | 401 | 30 | — | 431 | ||||||||||||||||
Total fixed-maturity securities | 305,019 | 6,228 | -1,336 | 309,911 | ||||||||||||||||
Equity securities | ||||||||||||||||||||
Non-redeemable preferred stock | 1,407 | 806 | — | 2,213 | ||||||||||||||||
Common stock | 12 | 417 | — | 429 | ||||||||||||||||
Total equity securities | 1,419 | 1,223 | — | 2,642 | ||||||||||||||||
Total investments | $ | 306,438 | $ | 7,451 | $ | -1,336 | $ | 312,553 | ||||||||||||
Cost or | Gross | Gross | ||||||||||||||||||
December 31, 2013 | Amortized | Unrealized | Unrealized | Fair | ||||||||||||||||
($ in thousands) | Cost | Gains | Losses | Value | ||||||||||||||||
Fixed-maturity securities | ||||||||||||||||||||
Government | $ | 9,785 | $ | 216 | $ | -146 | $ | 9,855 | ||||||||||||
Government agency | 2,803 | 66 | -29 | 2,840 | ||||||||||||||||
State and municipality | 40,823 | 919 | -557 | 41,185 | ||||||||||||||||
Industrial and miscellaneous | 51,005 | 2,113 | -460 | 52,658 | ||||||||||||||||
Residential mortgage-backed | 65,622 | 1,397 | -1,685 | 65,334 | ||||||||||||||||
Commercial mortgage-backed | 8,462 | 276 | -67 | 8,671 | ||||||||||||||||
Redeemable preferred stock | 401 | 10 | — | 411 | ||||||||||||||||
Total fixed-maturity securities | 178,901 | 4,997 | -2,944 | 180,954 | ||||||||||||||||
Equity securities | ||||||||||||||||||||
Non-redeemable preferred stock | 1,191 | 614 | -3 | 1,802 | ||||||||||||||||
Common stock | 149 | 350 | — | 499 | ||||||||||||||||
Total equity securities | 1,340 | 964 | -3 | 2,301 | ||||||||||||||||
Total investments | $ | 180,241 | $ | 5,961 | $ | -2,947 | $ | 183,255 | ||||||||||||
Schedule of gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | ||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||
December 31, 2014 | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||
($ in thousands) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||
Fixed-maturity securities | ||||||||||||||||||||
Government | $ | 522 | $ | -2 | $ | 3,094 | $ | -47 | $ | 3,616 | $ | -49 | ||||||||
Government agency | — | — | 685 | -9 | 685 | -9 | ||||||||||||||
State and municipality | 4,164 | -10 | 2,001 | -17 | 6,165 | -27 | ||||||||||||||
Industrial and miscellaneous | 34,433 | -418 | 2,637 | -42 | 37,070 | -460 | ||||||||||||||
Residential mortgage-backed | 15,491 | -94 | 19,428 | -670 | 34,919 | -764 | ||||||||||||||
Commercial mortgage-backed | 2,528 | -14 | 694 | -13 | 3,222 | -27 | ||||||||||||||
Total fixed-maturity securities | $ | 57,138 | $ | -538 | $ | 28,539 | $ | -798 | $ | 85,677 | $ | -1,336 | ||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||
December 31, 2013 | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||
($ in thousands) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||
Fixed-maturity securities | ||||||||||||||||||||
Government | $ | 4,313 | $ | -146 | $ | — | $ | — | $ | 4,313 | $ | -146 | ||||||||
Government agency | 686 | -29 | — | — | 686 | -29 | ||||||||||||||
State and municipality | 17,046 | -557 | — | — | 17,046 | -557 | ||||||||||||||
Industrial and miscellaneous | 12,896 | -424 | 1,424 | -36 | 14,320 | -460 | ||||||||||||||
Residential mortgage-backed | 28,564 | -934 | 9,392 | -751 | 37,956 | -1,685 | ||||||||||||||
Commercial mortgage-backed | 1,945 | -67 | — | — | 1,945 | -67 | ||||||||||||||
Total fixed-maturity securities | 65,450 | -2,157 | 10,816 | -787 | 76,266 | -2,944 | ||||||||||||||
Equity securities | ||||||||||||||||||||
Non-redeemable preferred stock | — | — | 168 | -3 | 168 | -3 | ||||||||||||||
Total equity securities | — | — | 168 | -3 | 168 | -3 | ||||||||||||||
$ | 65,450 | $ | -2,157 | $ | 10,984 | $ | -790 | $ | 76,434 | $ | -2,947 | |||||||||
Schedule of gross realized gains (losses) | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||
($ in thousands) | 2014 | 2013 | 2012 | |||||||||||||||||
Realized gains: | ||||||||||||||||||||
Fixed-maturity securities | $ | 1,388 | $ | 1,861 | $ | 1,588 | ||||||||||||||
Equity securities | 34 | 171 | 38 | |||||||||||||||||
Gross realized gains | 1,422 | 2,032 | 1,626 | |||||||||||||||||
Realized losses: | ||||||||||||||||||||
Fixed-maturity securities | -92 | -149 | -99 | |||||||||||||||||
Equity securities | -19 | — | — | |||||||||||||||||
Other-than-temporary impairment losses on fixed-maturity securities | — | -119 | -218 | |||||||||||||||||
Gross realized losses | -111 | -268 | -317 | |||||||||||||||||
Net realized investment gains | $ | 1,311 | $ | 1,764 | $ | 1,309 | ||||||||||||||
Schedule detailing the maturities of the Company's fixed-maturity securities, available-for-sale | ||||||||||||||||||||
Fair | ||||||||||||||||||||
($ in thousands) | Amortized Cost | Value | ||||||||||||||||||
Due in one year or less | $ | 12,874 | $ | 13,171 | ||||||||||||||||
Due after one year through five years | 73,499 | 74,507 | ||||||||||||||||||
Due after five years through ten years | 90,534 | 92,012 | ||||||||||||||||||
Due after ten years | 9,019 | 9,755 | ||||||||||||||||||
Residential mortgage-backed securities | 96,610 | 97,671 | ||||||||||||||||||
Commercial mortgage-backed securities | 22,483 | 22,795 | ||||||||||||||||||
$ | 305,019 | $ | 309,911 | |||||||||||||||||
Schedule of net investment income | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||
($ in thousands) | 2014 | 2013 | 2012 | |||||||||||||||||
Interest on investments | $ | 5,254 | $ | 5,202 | $ | 5,849 | ||||||||||||||
Dividends | 135 | 107 | 85 | |||||||||||||||||
Gross investment income | 5,389 | 5,309 | 5,934 | |||||||||||||||||
Investment expenses | -548 | -408 | -409 | |||||||||||||||||
Net investment income | $ | 4,841 | $ | 4,901 | $ | 5,525 | ||||||||||||||
Deferred_Acquisition_Costs_Tab
Deferred Acquisition Costs (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Tax Provision | |||||||||||
Schedule of deferred acquisition costs | |||||||||||
($ in thousands) | 2014 | 2013 | 2012 | ||||||||
Balance, beginning of year | $ | 1,095 | $ | 1,176 | $ | 4,111 | |||||
Capitalized costs | 4,907 | 4,818 | 5,072 | ||||||||
Amortization | -4,966 | -4,899 | -8,007 | ||||||||
Balance, end of year | $ | 1,036 | $ | 1,095 | $ | 1,176 | |||||
Property_Equipment_and_Depreci1
Property, Equipment, and Depreciation (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Income Tax Provision | ||||||||
Summary of property, equipment, and depreciation | ||||||||
($ in thousands) | 2014 | 2013 | ||||||
Land held for use | $ | 3,443 | $ | 3,473 | ||||
Land held for sale | 1,034 | 1,034 | ||||||
Building and improvements | 15,127 | 15,371 | ||||||
Transportation equipment | 1,578 | 2,399 | ||||||
Furniture and fixtures | 3,208 | 3,243 | ||||||
Computer equipment and software | 6,849 | 5,441 | ||||||
31,239 | 30,961 | |||||||
Accumulated depreciation and amortization | -12,842 | -11,696 | ||||||
Property and equipment, net | $ | 18,397 | $ | 19,265 | ||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Goodwill and Intangible Assets | |||||||||||
Schedule of net carrying amount of intangible assets and goodwill | |||||||||||
($ in thousands) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||
December 31, 2014 | |||||||||||
Goodwill | $ | 2,565 | $ | — | $ | 2,565 | |||||
Customer relationships/lists | 20,450 | -16,332 | 4,118 | ||||||||
Non-compete agreement | 3,339 | -3,339 | — | ||||||||
$ | 26,354 | $ | -19,671 | $ | 6,683 | ||||||
December 31, 2013 | |||||||||||
Goodwill | $ | 2,565 | $ | — | $ | 2,565 | |||||
Customer relationships/lists | 20,450 | -15,567 | 4,883 | ||||||||
Non-compete agreement | 3,339 | -2,881 | 458 | ||||||||
$ | 26,354 | $ | -18,448 | $ | 7,906 | ||||||
Subordinated_Debentures_Tables
Subordinated Debentures (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Income Tax Provision | ||||||||
Summary of TPS Debentures | ||||||||
($ in thousands) | 2014 | 2013 | ||||||
Floating Rate Capital Securities at LIBOR plus 4.00%, issued December 4, 2002, maturing on December 4, 2032 | $ | 17,500 | $ | 17,500 | ||||
Floating Rate Capital Securities at LIBOR plus 4.10%, issued May 15, 2003, repurchased October 8, 2014 | — | 7,500 | ||||||
Floating Rate Capital Securities at LIBOR plus 4.10%, issued December 16, 2003, maturing on January 8, 2034 | 12,000 | 12,000 | ||||||
Floating Rate Capital Securities at LIBOR plus 3.80%, issued May 26, 2004, maturing on May 24, 2034 | 15,000 | 15,000 | ||||||
$ | 44,500 | $ | 52,000 | |||||
Income_Tax_Provision_Tables
Income Tax Provision (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Income Tax Provision | |||||||||||||||||
Components of income tax expense | The components of income tax expense for the years ended December 31 are as follows ($ in thousands): | ||||||||||||||||
2014 | |||||||||||||||||
($ in thousands) | Federal | State | Total | ||||||||||||||
Federal and state income tax expense (benefit) | |||||||||||||||||
Current | $ | 10,827 | $ | 687 | $ | 11,514 | |||||||||||
Deferred | -21,156 | -54 | -21,210 | ||||||||||||||
Total income tax expense (benefit) | $ | -10,329 | $ | 633 | $ | -9,696 | |||||||||||
2013 | |||||||||||||||||
($ in thousands) | Federal | State | Total | ||||||||||||||
Federal and state income tax expense (benefit) | |||||||||||||||||
Current | $ | 6,014 | $ | -1,169 | $ | 4,845 | |||||||||||
Deferred | -2,058 | — | -2,058 | ||||||||||||||
Total income tax expense (benefit) | $ | 3,956 | $ | -1,169 | $ | 2,787 | |||||||||||
2012 | |||||||||||||||||
($ in thousands) | Federal | State | Total | ||||||||||||||
Federal and state income tax expense | |||||||||||||||||
Current | $ | 3,194 | $ | 666 | $ | 3,860 | |||||||||||
Deferred | 795 | — | 795 | ||||||||||||||
Total income tax expense | $ | 3,989 | $ | 666 | $ | 4,655 | |||||||||||
Schedule of components of net deferred income tax asset | |||||||||||||||||
($ in thousands) | 2014 | 2013 | |||||||||||||||
Deferred income tax assets: | |||||||||||||||||
Allowance for policy cancellations | $ | 19,425 | $ | 5,789 | |||||||||||||
Unpaid losses and loss adjustment expenses | 172 | 223 | |||||||||||||||
Deferred ceding fees | 8,264 | 6,426 | |||||||||||||||
Management fee | 3,702 | 4,746 | |||||||||||||||
Compensation | 2,034 | 63 | |||||||||||||||
Intangible assets | 273 | — | |||||||||||||||
Unrealized losses on fixed maturities and other investment securities | 471 | 1,009 | |||||||||||||||
Write-down of other-than-temporarily impaired investment securities | 254 | 253 | |||||||||||||||
Other | 34 | — | |||||||||||||||
Total deferred income tax assets | 34,629 | 18,509 | |||||||||||||||
Deferred income tax liabilities: | |||||||||||||||||
Unearned premiums | 7,136 | 4,465 | |||||||||||||||
Unrealized gains on equity securities | 428 | 214 | |||||||||||||||
Unrealized gains on fixed maturities and other investment securities | 2,183 | 1,694 | |||||||||||||||
Deferred acquisition costs | 363 | 4,539 | |||||||||||||||
Fixed assets | 525 | 98 | |||||||||||||||
Contingent commissions | — | 3,632 | |||||||||||||||
Other | 130 | 139 | |||||||||||||||
Total deferred income tax liabilities | 10,765 | 14,781 | |||||||||||||||
Net deferred income tax asset | $ | 23,864 | $ | 3,728 | |||||||||||||
Schedule of reconciliation of federal income tax expense computed by applying the federal statutory tax rate to income (loss) before federal income tax expense (benefit) | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Effective | Effective | Effective | |||||||||||||||
($ in thousands) | Amount | Tax Rate | Amount | Tax Rate | Amount | Tax Rate | |||||||||||
Expected tax expense (benefit) | $ | 461 | 35.0 | % | $ | 8,746 | 34.3 | % | $ | 7,044 | 34.3 | % | |||||
Exclusion of Subchapter S income | 8,465 | 643.0 | -4,478 | -17.6 | -2,800 | -13.6 | |||||||||||
Change in tax status | -19,316 | -1,467.20 | — | — | — | — | |||||||||||
Change in federal statutory rate | -75 | -5.7 | — | — | — | — | |||||||||||
Accrual/adjustment prior year | 174 | 13.2 | -39 | -0.2 | 2 | — | |||||||||||
Tax-exempt income | -304 | -23.1 | -275 | -1.1 | -247 | -1.2 | |||||||||||
State income taxes | 826 | 62.8 | -1,205 | -4.7 | 620 | 3.0 | |||||||||||
Meals and entertainment | 61 | 4.6 | 36 | 0.1 | 34 | 0.2 | |||||||||||
Other | 12 | 0.8 | 2 | — | 2 | — | |||||||||||
Total income tax expense (benefit) | $ | -9,696 | -736.6 | % | $ | 2,787 | 10.8 | % | $ | 4,655 | 22.7 | % | |||||
Reinsurance_Tables
Reinsurance (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Reinsurance | ||||||||
Summary of balances | ||||||||
December 31, | December 31, | |||||||
($ in thousands) | 2014 | 2013 | ||||||
Ceded unearned premiums | $ | 456,754 | $ | 365,333 | ||||
Ceded loss and loss adjustment expense reserves | 1,199,780 | 1,006,892 | ||||||
Total reinsurance recoverables | 1,656,534 | 1,372,225 | ||||||
Secured reinsurance recoverables | -1,209,032 | -1,014,947 | ||||||
Unsecured reinsurance recoverables | $ | 447,502 | $ | 357,278 | ||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Schedule of investments measured at fair value on recurring basis | ||||||||||||||
December 31, 2014 | ||||||||||||||
($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Fixed-maturity securities | ||||||||||||||
Government | $ | — | $ | 14,042 | $ | — | $ | 14,042 | ||||||
Government agency | — | 2,373 | — | 2,373 | ||||||||||
State and municipality | — | 62,352 | — | 62,352 | ||||||||||
Industrial and miscellaneous | — | 110,247 | — | 110,247 | ||||||||||
Residential mortgage-backed | — | 97,671 | — | 97,671 | ||||||||||
Commercial mortgage-backed | — | 22,795 | — | 22,795 | ||||||||||
Redeemable preferred stock | — | 431 | — | 431 | ||||||||||
Total fixed-maturity securities | — | 309,911 | — | 309,911 | ||||||||||
Equity securities | ||||||||||||||
Non-redeemable preferred stock | — | 2,213 | — | 2,213 | ||||||||||
Common stock | — | 429 | — | 429 | ||||||||||
Total equity securities | — | 2,642 | — | 2,642 | ||||||||||
$ | — | $ | 312,553 | $ | — | $ | 312,553 | |||||||
December 31, 2013 | ||||||||||||||
($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Fixed-maturity securities | ||||||||||||||
Government | $ | — | $ | 9,855 | $ | — | $ | 9,855 | ||||||
Government agency | — | 2,840 | — | 2,840 | ||||||||||
State and municipality | — | 41,185 | — | 41,185 | ||||||||||
Industrial and miscellaneous | — | 52,658 | — | 52,658 | ||||||||||
Residential mortgage-backed | — | 65,334 | — | 65,334 | ||||||||||
Commercial mortgage-backed | — | 8,671 | — | 8,671 | ||||||||||
Redeemable preferred stock | — | 411 | — | 411 | ||||||||||
Total fixed-maturity securities | — | 180,954 | — | 180,954 | ||||||||||
Equity securities | ||||||||||||||
Non-redeemable preferred stock | — | 1,802 | — | 1,802 | ||||||||||
Common stock | — | 499 | — | 499 | ||||||||||
Total equity securities | — | 2,301 | — | 2,301 | ||||||||||
$ | — | $ | 183,255 | $ | — | $ | 183,255 | |||||||
Premiums_Earned_Tables
Premiums Earned (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Tax Provision | |||||||||||
Schedule of premiums earned | |||||||||||
($ in thousands) | 2014 | 2013 | 2012 | ||||||||
Premiums written | $ | 1,032,608 | $ | 806,732 | $ | 633,109 | |||||
Premiums assumed | 1,517 | 3,233 | 1,712 | ||||||||
Premiums ceded | -935,051 | -723,192 | -555,656 | ||||||||
Net premiums retained | 99,074 | 86,773 | 79,165 | ||||||||
Change in net unearned premiums | -2,424 | -2,395 | -1,069 | ||||||||
Total premiums earned | $ | 96,650 | $ | 84,378 | $ | 78,096 | |||||
Premiums assumed as a % of net premiums retained | 1.5 | % | 3.7 | % | 2.2 | % | |||||
Losses_and_Loss_Adjustment_Exp1
Losses and Loss Adjustment Expenses (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Tax Provision | |||||||||||
Schedule of losses and loss adjustment expenses | |||||||||||
($ in thousands) | 2014 | 2013 | 2012 | ||||||||
Direct losses and loss adjustment expenses | $ | 714,708 | $ | 561,347 | $ | 729,138 | |||||
Assumed losses and loss adjustment expenses | 2,469 | 193 | 6,521 | ||||||||
Ceded losses and loss adjustment expenses | -676,356 | -529,450 | -706,670 | ||||||||
Total net losses and loss adjustment expenses | $ | 40,821 | $ | 32,090 | $ | 28,989 | |||||
Schedule in the liability for unpaid losses and loss adjustment expenses | |||||||||||
($ in thousands) | 2014 | 2013 | 2012 | ||||||||
Balance at January 1 | $ | 1,016,641 | $ | 975,708 | $ | 806,125 | |||||
Reinsurance recoverables | -1,006,892 | -965,965 | -797,961 | ||||||||
Net balance at January 1 | 9,749 | 9,743 | 8,164 | ||||||||
Incurred related to: | |||||||||||
Current year | 41,314 | 33,163 | 28,894 | ||||||||
Prior year | -493 | -1,073 | 95 | ||||||||
Total incurred | 40,821 | 32,090 | 28,989 | ||||||||
Paid related to: | |||||||||||
Current year | 34,251 | 27,388 | 23,392 | ||||||||
Prior year | 6,194 | 4,696 | 4,018 | ||||||||
Total paid | 40,445 | 32,084 | 27,410 | ||||||||
Net balance at December 31 | 10,125 | 9,749 | 9,743 | ||||||||
Reinsurance recoverables | 1,199,780 | 1,006,892 | 965,965 | ||||||||
Balance at December 31 | $ | 1,209,905 | $ | 1,016,641 | $ | 975,708 | |||||
Statutory_Accounting_Tables
Statutory Accounting (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Tax Provision | |||||||||||
Reconciliation of (SAP) to GAAP | |||||||||||
($ in thousands) | 2014 | 2013 | |||||||||
Per statutory basis | $ | 215,842 | $ | 155,566 | |||||||
Adjustments for: | |||||||||||
Allowance for return commissions | 28,846 | 21,275 | |||||||||
Allowance for policy cancellations | -23,672 | -16,644 | |||||||||
Commissions payable | 14,105 | 10,597 | |||||||||
Deferred acquisition costs | 13,149 | 13,233 | |||||||||
Deferred income taxes | -7,430 | -5,909 | |||||||||
Unrealized gain on investments available-for-sale | 5,586 | 2,445 | |||||||||
Management fees | -16,813 | -13,838 | |||||||||
Intangible assets | 1,947 | 1,947 | |||||||||
Nonadmitted assets | 13 | 15 | |||||||||
Other | 16 | 145 | |||||||||
Shareholders’ equity in accordance with GAAP | $ | 231,589 | $ | 168,832 | |||||||
($ in thousands) | 2014 | 2013 | 2012 | ||||||||
Net income (insurance subsidiaries only): | |||||||||||
Per statutory basis | $ | 6,780 | $ | 5,047 | $ | 7,290 | |||||
Adjustments for: | |||||||||||
Allowance for return commissions | 7,571 | 3,987 | 3,874 | ||||||||
Allowance for policy cancellations | -7,028 | -2,551 | -927 | ||||||||
Commission expense | 3,508 | 1,874 | 935 | ||||||||
Deferred acquisition costs | -84 | 1,952 | 3,259 | ||||||||
Deferred income taxes | 195 | 2,058 | -795 | ||||||||
Management fees | -2,975 | -3,947 | -5,356 | ||||||||
Other | -129 | -38 | -30 | ||||||||
Net income in accordance with GAAP | $ | 7,838 | $ | 8,382 | $ | 8,250 | |||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Earnings Per Share | ||||||||||
Schedule of reconciliation of the numerators and denominators of the basic and diluted per share calculations | 19. Earnings Per Share | |||||||||
We have adopted the provisions of ASC 260, “Earnings Per Share,” requiring presentation of both basic and diluted earnings per share. Earnings per share have been adjusted to reflect a 736 for one stock split in the form of a stock dividend on June 23, 2014. A reconciliation of the numerators and denominators of the basic and diluted per share calculations is presented below: | ||||||||||
Year Ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||
($ in thousands, except for per share amounts) | 2014 | 2013 | 2012 | |||||||
Numerator for both basic and diluted earnings per share: | ||||||||||
Net income | $ | 11,013 | $ | 22,711 | $ | 15,882 | ||||
Denominator for both basic and diluted earnings per share: | ||||||||||
Weighted-average common shares outstanding | 39,383,641 | 34,176,896 | 34,176,896 | |||||||
Dilutive effect of outstanding securities (determined using the treasury stock method) | 6,214 | — | — | |||||||
Weighted-average common shares outstanding and potential common shares outstanding | 39,389,855 | 34,176,896 | 34,176,896 | |||||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||||||||||||||||
Segment Information | ||||||||||||||||||||||||||||||||||||||||||
Schedule of business segment information | ||||||||||||||||||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Program | Lender | Corporate | Total | ($ in thousands) | Program | Lender | Corporate | Total | ($ in thousands) | Program | Lender | Corporate | Total | ||||||||||||||||||||||||||||
Revenues: | Revenues: | Revenues: | ||||||||||||||||||||||||||||||||||||||||
Premiums earned | $ | -4 | $ | 96,654 | $ | — | $ | 96,650 | Premiums earned | $ | -501 | $ | 84,879 | $ | — | $ | 84,378 | Premiums earned | $ | 1,600 | $ | 76,496 | $ | — | $ | 78,096 | ||||||||||||||||
Commission income | — | 1,533 | — | 1,533 | Commission income | — | 2,031 | — | 2,031 | Commission income | — | 2,406 | — | 2,406 | ||||||||||||||||||||||||||||
Ceding fees | 45,732 | — | — | 45,732 | Ceding fees | 32,898 | — | — | 32,898 | Ceding fees | 32,379 | — | — | 32,379 | ||||||||||||||||||||||||||||
Net investment income | — | — | 4,841 | 4,841 | Net investment income | — | — | 4,901 | 4,901 | Net investment income | — | — | 5,525 | 5,525 | ||||||||||||||||||||||||||||
Realized net investment gains | — | — | 1,311 | 1,311 | Realized net investment gains | — | — | 1,764 | 1,764 | Realized net investment gains | — | — | 1,309 | 1,309 | ||||||||||||||||||||||||||||
Other income | — | 1,266 | 3,194 | 4,460 | Other income | 3 | 1,101 | 1,427 | 2,531 | Other income | 2 | 945 | 1,461 | 2,408 | ||||||||||||||||||||||||||||
Total revenues | 45,728 | 99,453 | 9,346 | 154,527 | Total revenues | 32,400 | 88,011 | 8,092 | 128,503 | Total revenues | 33,981 | 79,847 | 8,295 | 122,123 | ||||||||||||||||||||||||||||
Expenses: | Expenses: | Expenses: | ||||||||||||||||||||||||||||||||||||||||
Losses and loss adjustment expenses | 217 | 40,604 | — | 40,821 | Losses and loss adjustment expenses | 465 | 31,625 | — | 32,090 | Losses and loss adjustment expenses | 3,062 | 25,927 | — | 28,989 | ||||||||||||||||||||||||||||
Commissions | 2 | 3,880 | — | 3,882 | Commissions | 389 | 1,989 | — | 2,378 | Commissions | 482 | 2,440 | — | 2,922 | ||||||||||||||||||||||||||||
Taxes, licenses, and fees | 8 | 2,824 | — | 2,832 | Taxes, licenses, and fees | 10 | 2,584 | — | 2,594 | Taxes, licenses, and fees | 31 | 2,363 | — | 2,394 | ||||||||||||||||||||||||||||
General and administrative | 10,855 | 38,995 | 9,041 | 58,891 | General and administrative | 11,010 | 36,020 | 6,388 | 53,418 | General and administrative | 9,316 | 39,193 | 5,605 | 54,114 | ||||||||||||||||||||||||||||
Founder special compensation | — | — | 17,914 | 17,914 | Founder special compensation | — | — | 10,202 | 10,202 | Founder special compensation | — | — | 10,740 | 10,740 | ||||||||||||||||||||||||||||
Offering-related expenses | — | — | 8,833 | 8,833 | Interest expense | — | — | 2,323 | 2,323 | Interest expense | — | — | 2,427 | 2,427 | ||||||||||||||||||||||||||||
Contract modification expense | — | 17,800 | — | 17,800 | Total expenses | 11,874 | 72,218 | 18,913 | 103,005 | Total expenses | 12,891 | 69,923 | 18,772 | 101,586 | ||||||||||||||||||||||||||||
Interest expense | — | — | 2,237 | 2,237 | ||||||||||||||||||||||||||||||||||||||
Total expenses | 11,082 | 104,103 | 38,025 | 153,210 | Income (loss) before income taxes | 20,526 | 15,793 | -10,821 | 25,498 | Income (loss) before income taxes | 21,090 | 9,924 | -10,477 | 20,537 | ||||||||||||||||||||||||||||
Income tax expense/(benefit) | — | — | 2,787 | 2,787 | Income tax expense/(benefit) | — | — | 4,655 | 4,655 | |||||||||||||||||||||||||||||||||
Income (loss) before income taxes | 34,646 | -4,650 | -28,679 | 1,317 | Net income (loss) | $ | 20,526 | $ | 15,793 | $ | -13,608 | $ | 22,711 | Net income (loss) | $ | 21,090 | $ | 9,924 | $ | -15,132 | $ | 15,882 | ||||||||||||||||||||
Income tax expense/(benefit) | — | — | -9,696 | -9,696 | ||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 34,646 | $ | -4,650 | $ | -18,983 | $ | 11,013 | Supplemental Information: | Supplemental Information: | ||||||||||||||||||||||||||||||||
Gross premiums written | $ | 691,067 | $ | 118,898 | $ | — | $ | 809,965 | Gross premiums written | $ | 530,621 | $ | 104,200 | $ | — | $ | 634,821 | |||||||||||||||||||||||||
Supplemental Information: | Net premiums written | $ | -1,018 | $ | 87,791 | $ | — | $ | 86,773 | Net premiums written | $ | 1,141 | $ | 78,024 | $ | — | $ | 79,165 | ||||||||||||||||||||||||
Gross premiums written | $ | 909,501 | $ | 124,624 | $ | — | $ | 1,034,125 | ||||||||||||||||||||||||||||||||||
Net premiums written | $ | -5 | $ | 99,079 | $ | — | $ | 99,074 | ||||||||||||||||||||||||||||||||||
Schedule of the financial assets of the Entity's segments | ||||||||||||||||||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Program | Lender | Corporate | Total | ($ in thousands) | Program | Lender | Corporate | Total | |||||||||||||||||||||||||||||||||
Assets: | Assets: | |||||||||||||||||||||||||||||||||||||||||
Accounts receivable from agents, net | $ | 18,349 | $ | 179 | $ | — | $ | 18,528 | Accounts receivable from agents, net | $ | 17,261 | $ | 45 | $ | — | $ | 17,306 | |||||||||||||||||||||||||
Reinsurance recoverable on paid losses | 57 | 1,143 | — | 1,200 | Reinsurance recoverable on paid losses | 5 | 875 | — | 880 | |||||||||||||||||||||||||||||||||
Reinsurance recoverables | 1,650,205 | 6,329 | — | 1,656,534 | Reinsurance recoverables | 1,362,719 | 9,506 | — | 1,372,225 | |||||||||||||||||||||||||||||||||
Deferred income taxes, net | — | — | 23,864 | 23,864 | Deferred income taxes, net | — | — | 3,728 | 3,728 | |||||||||||||||||||||||||||||||||
Goodwill and intangible assets, net | 2,115 | 4,568 | — | 6,683 | Goodwill and intangible assets, net | 2,115 | 5,791 | — | 7,906 | |||||||||||||||||||||||||||||||||
Other assets | 7,245 | 4,051 | 373,659 | 384,955 | Other assets | 7,495 | 3,441 | 277,970 | 288,906 | |||||||||||||||||||||||||||||||||
Total assets | $ | 1,677,971 | $ | 16,270 | $ | 397,523 | $ | 2,091,764 | Total assets | $ | 1,389,595 | $ | 19,658 | $ | 281,698 | $ | 1,690,951 | |||||||||||||||||||||||||
Liabilities: | Liabilities: | |||||||||||||||||||||||||||||||||||||||||
Unpaid losses and loss adjustment expenses | $ | 1,201,279 | $ | 8,626 | $ | — | $ | 1,209,905 | Unpaid losses and loss adjustment expenses | $ | 1,009,068 | $ | 7,573 | $ | — | $ | 1,016,641 | |||||||||||||||||||||||||
Unearned premiums | 451,993 | 28,131 | — | 480,124 | Unearned premiums | 357,681 | 28,598 | — | 386,279 | |||||||||||||||||||||||||||||||||
Allowance for policy cancellations | — | 55,500 | — | 55,500 | Allowance for policy cancellations | — | 39,623 | — | 39,623 | |||||||||||||||||||||||||||||||||
Deferred ceding fees | 23,612 | — | — | 23,612 | Deferred ceding fees | 18,735 | — | — | 18,735 | |||||||||||||||||||||||||||||||||
Other liabilities | 19,990 | 6,603 | 55,158 | 81,751 | Other liabilities | 19,415 | 5,386 | 59,518 | 84,319 | |||||||||||||||||||||||||||||||||
Total liabilities | $ | 1,696,874 | $ | 98,860 | $ | 55,158 | $ | 1,850,892 | Total liabilities | $ | 1,404,899 | $ | 81,180 | $ | 59,518 | $ | 1,545,597 | |||||||||||||||||||||||||
Schedule of quarterly financial data | ||||||||||||||||||||||||||||||||||||||||||
2014 Quarters Ended | ||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Mar 31 | Jun 30 | Sep 30 | Dec 31 | ||||||||||||||||||||||||||||||||||||||
Total revenues | $ | 35,527 | $ | 35,403 | $ | 40,571 | $ | 43,026 | ||||||||||||||||||||||||||||||||||
Total expenses | 37,791 | 54,481 | 29,221 | 31,717 | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | -2,264 | -19,078 | 11,350 | 11,309 | ||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) | 1,136 | -19,685 | 4,391 | 4,462 | ||||||||||||||||||||||||||||||||||||||
Net income (loss) | -3,400 | 607 | 6,959 | 6,847 | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share | $ | -0.1 | $ | 0.02 | $ | 0.16 | $ | 0.15 | ||||||||||||||||||||||||||||||||||
Diluted earnings per share | -0.1 | 0.02 | 0.16 | 0.15 | ||||||||||||||||||||||||||||||||||||||
2013 Quarters Ended | ||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Mar 31 | Jun 30 | Sep 30 | Dec 31 | ||||||||||||||||||||||||||||||||||||||
Total revenues | $ | 29,822 | $ | 28,901 | $ | 32,502 | $ | 37,278 | ||||||||||||||||||||||||||||||||||
Total expenses | 32,823 | 22,057 | 24,324 | 23,801 | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | -3,001 | 6,844 | 8,178 | 13,477 | ||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) | 906 | 1,149 | 1,181 | -449 | ||||||||||||||||||||||||||||||||||||||
Net income (loss) | -3,907 | 5,695 | 6,997 | 13,926 | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share | $ | -0.11 | $ | 0.17 | $ | 0.20 | $ | 0.41 | ||||||||||||||||||||||||||||||||||
Diluted earnings per share | -0.11 | 0.17 | 0.20 | 0.41 | ||||||||||||||||||||||||||||||||||||||
Condensed_Quarterly_Financial_1
Condensed Quarterly Financial Data - Unaudited (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Income Tax Provision | ||||||||||||||
Schedule of quarterly financial data | ||||||||||||||
2014 Quarters Ended | ||||||||||||||
($ in thousands) | Mar 31 | Jun 30 | Sep 30 | Dec 31 | ||||||||||
Total revenues | $ | 35,527 | $ | 35,403 | $ | 40,571 | $ | 43,026 | ||||||
Total expenses | 37,791 | 54,481 | 29,221 | 31,717 | ||||||||||
Income (loss) before income taxes | -2,264 | -19,078 | 11,350 | 11,309 | ||||||||||
Income tax expense (benefit) | 1,136 | -19,685 | 4,391 | 4,462 | ||||||||||
Net income (loss) | -3,400 | 607 | 6,959 | 6,847 | ||||||||||
Basic earnings per share | $ | -0.1 | $ | 0.02 | $ | 0.16 | $ | 0.15 | ||||||
Diluted earnings per share | -0.1 | 0.02 | 0.16 | 0.15 | ||||||||||
2013 Quarters Ended | ||||||||||||||
($ in thousands) | Mar 31 | Jun 30 | Sep 30 | Dec 31 | ||||||||||
Total revenues | $ | 29,822 | $ | 28,901 | $ | 32,502 | $ | 37,278 | ||||||
Total expenses | 32,823 | 22,057 | 24,324 | 23,801 | ||||||||||
Income (loss) before income taxes | -3,001 | 6,844 | 8,178 | 13,477 | ||||||||||
Income tax expense (benefit) | 906 | 1,149 | 1,181 | -449 | ||||||||||
Net income (loss) | -3,907 | 5,695 | 6,997 | 13,926 | ||||||||||
Basic earnings per share | $ | -0.11 | $ | 0.17 | $ | 0.20 | $ | 0.41 | ||||||
Diluted earnings per share | -0.11 | 0.17 | 0.20 | 0.41 | ||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 01, 2014 | |
segment | ||||
Summary of Significant Accounting Policies | ||||
Number of major segments | 2 | |||
Property and equipment | ||||
Capitalized threshold amount | $1,000 | |||
Revised capitalized threshold amount | 5,000 | |||
Goodwill and Intangible Assets | ||||
Impairments of goodwill | 0 | |||
Intangible assets impairments | 0 | 0 | 0 | |
Earnings Per Share | ||||
Stock split ratio | 0.0014 | |||
Income Taxes | ||||
Uncertain tax positions | $0 | $0 | ||
Minimum | ||||
Property and equipment | ||||
Estimated useful lives | 3 years | |||
Maximum | ||||
Property and equipment | ||||
Estimated useful lives | 20 years |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details 2) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Pro Forma Financial Information | |||
Effective tax rate (as a percent) | -736.60% | 10.80% | 22.70% |
Pro Forma | |||
Pro Forma Financial Information | |||
Effective tax rate (as a percent) | 37.50% | 38.10% | 37.20% |
Investments_Details
Investments (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investments | ||
Cost or Amortized Cost | $306,438 | $180,241 |
Gross Unrealized Gains | 7,451 | 5,961 |
Gross Unrealized Losses | -1,336 | -2,947 |
Total investments | 312,553 | 183,255 |
Fixed-maturity securities | ||
Investments | ||
Cost or Amortized Cost | 305,019 | 178,901 |
Gross Unrealized Gains | 6,228 | 4,997 |
Gross Unrealized Losses | -1,336 | -2,944 |
Total investments | 309,911 | 180,954 |
Government | ||
Investments | ||
Cost or Amortized Cost | 13,896 | 9,785 |
Gross Unrealized Gains | 195 | 216 |
Gross Unrealized Losses | -49 | -146 |
Total investments | 14,042 | 9,855 |
Government agency | ||
Investments | ||
Cost or Amortized Cost | 2,325 | 2,803 |
Gross Unrealized Gains | 57 | 66 |
Gross Unrealized Losses | -9 | -29 |
Total investments | 2,373 | 2,840 |
State and municipality | ||
Investments | ||
Cost or Amortized Cost | 61,179 | 40,823 |
Gross Unrealized Gains | 1,200 | 919 |
Gross Unrealized Losses | -27 | -557 |
Total investments | 62,352 | 41,185 |
Industrial and miscellaneous | ||
Investments | ||
Cost or Amortized Cost | 108,125 | 51,005 |
Gross Unrealized Gains | 2,582 | 2,113 |
Gross Unrealized Losses | -460 | -460 |
Total investments | 110,247 | 52,658 |
Residential mortgage-backed | ||
Investments | ||
Cost or Amortized Cost | 96,610 | 65,622 |
Gross Unrealized Gains | 1,825 | 1,397 |
Gross Unrealized Losses | -764 | -1,685 |
Total investments | 97,671 | 65,334 |
Commercial mortgage-backed | ||
Investments | ||
Cost or Amortized Cost | 22,483 | 8,462 |
Gross Unrealized Gains | 339 | 276 |
Gross Unrealized Losses | -27 | -67 |
Total investments | 22,795 | 8,671 |
Redeemable preferred stock | ||
Investments | ||
Cost or Amortized Cost | 401 | 401 |
Gross Unrealized Gains | 30 | 10 |
Total investments | 431 | 411 |
Equity securities | ||
Investments | ||
Cost or Amortized Cost | 1,419 | 1,340 |
Gross Unrealized Gains | 1,223 | 964 |
Gross Unrealized Losses | -3 | |
Total investments | 2,642 | 2,301 |
Non-redeemable preferred stock | ||
Investments | ||
Cost or Amortized Cost | 1,407 | 1,191 |
Gross Unrealized Gains | 806 | 614 |
Gross Unrealized Losses | -3 | |
Total investments | 2,213 | 1,802 |
Common stock | ||
Investments | ||
Cost or Amortized Cost | 12 | 149 |
Gross Unrealized Gains | 417 | 350 |
Total investments | $429 | $499 |
Investments_Details_2
Investments (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
item | |||
Fair Value | |||
Less Than 12 Months | $65,450,000 | ||
12 Months or More | 10,984,000 | ||
Total | 76,434,000 | ||
Unrealized Losses | |||
Less Than 12 Months | -2,157,000 | ||
12 Months or More | -790,000 | ||
Total | -2,947,000 | ||
Number of securities in unrealized loss position | 143 | ||
Proceeds from sales of investments in fixed-maturity, equity and short-term securities | 14,800,000 | 16,000,000 | 31,700,000 |
Fixed-maturity securities | |||
Fair Value | |||
Less Than 12 Months | 57,138,000 | 65,450,000 | |
12 Months or More | 28,539,000 | 10,816,000 | |
Total | 85,677,000 | 76,266,000 | |
Unrealized Losses | |||
Less Than 12 Months | -538,000 | -2,157,000 | |
12 Months or More | -798,000 | -787,000 | |
Total | -1,336,000 | -2,944,000 | |
Government | |||
Fair Value | |||
Less Than 12 Months | 522,000 | 4,313,000 | |
12 Months or More | 3,094,000 | ||
Total | 3,616,000 | 4,313,000 | |
Unrealized Losses | |||
Less Than 12 Months | -2,000 | -146,000 | |
12 Months or More | -47,000 | ||
Total | -49,000 | -146,000 | |
Government agency | |||
Fair Value | |||
Less Than 12 Months | 686,000 | ||
12 Months or More | 685,000 | ||
Total | 685,000 | 686,000 | |
Unrealized Losses | |||
Less Than 12 Months | -29,000 | ||
12 Months or More | -9,000 | ||
Total | -9,000 | -29,000 | |
State and municipality | |||
Fair Value | |||
Less Than 12 Months | 4,164,000 | 17,046,000 | |
12 Months or More | 2,001,000 | ||
Total | 6,165,000 | 17,046,000 | |
Unrealized Losses | |||
Less Than 12 Months | -10,000 | -557,000 | |
12 Months or More | -17,000 | ||
Total | -27,000 | -557,000 | |
Industrial and miscellaneous | |||
Fair Value | |||
Less Than 12 Months | 34,433,000 | 12,896,000 | |
12 Months or More | 2,637,000 | 1,424,000 | |
Total | 37,070,000 | 14,320,000 | |
Unrealized Losses | |||
Less Than 12 Months | -418,000 | -424,000 | |
12 Months or More | -42,000 | -36,000 | |
Total | -460,000 | -460,000 | |
Residential mortgage-backed | |||
Fair Value | |||
Less Than 12 Months | 15,491,000 | 28,564,000 | |
12 Months or More | 19,428,000 | 9,392,000 | |
Total | 34,919,000 | 37,956,000 | |
Unrealized Losses | |||
Less Than 12 Months | -94,000 | -934,000 | |
12 Months or More | -670,000 | -751,000 | |
Total | -764,000 | -1,685,000 | |
Commercial mortgage-backed | |||
Fair Value | |||
Less Than 12 Months | 2,528,000 | 1,945,000 | |
12 Months or More | 694,000 | ||
Total | 3,222,000 | 1,945,000 | |
Unrealized Losses | |||
Less Than 12 Months | -14,000 | -67,000 | |
12 Months or More | -13,000 | ||
Total | -27,000 | -67,000 | |
Equity securities | |||
Fair Value | |||
12 Months or More | 168,000 | ||
Total | 168,000 | ||
Unrealized Losses | |||
12 Months or More | -3,000 | ||
Total | -3,000 | ||
Non-redeemable preferred stock | |||
Fair Value | |||
12 Months or More | 168,000 | ||
Total | 168,000 | ||
Unrealized Losses | |||
12 Months or More | -3,000 | ||
Total | ($3,000) | ||
Investment-grade | |||
Unrealized Losses | |||
Percentage of investments in unrealized loss position | 95.00% |
Investments_Details_3
Investments (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
item | item | ||
Realized gains: | |||
Fixed-maturity securities | $1,388,000 | $1,861,000 | $1,588,000 |
Equity securities | 34,000 | 171,000 | 38,000 |
Gross realized gains | 1,422,000 | 2,032,000 | 1,626,000 |
Realized losses: | |||
Fixed-maturity securities | -92,000 | -149,000 | -99,000 |
Equity securities | -19,000 | ||
Other-than-temporary impairment losses on fixed-maturity securities | -119,000 | -218,000 | |
Gross realized losses | -111,000 | -268,000 | -317,000 |
Net realized investment gains | 1,311,000 | 1,764,000 | 1,309,000 |
Number of non-cash exchanges of an investment security | 10 | 10 | |
Non-cash consideration received for exchanges | 2,800,000 | 2,000,000 | |
Gains recognized on exchanges | $320,000 | $139,000 |
Investments_Details_4
Investments (Details 4) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Amortized Cost | ||
Due in one year or less | $12,874,000 | |
Due after one year through five years | 73,499,000 | |
Due after five years through ten years | 90,534,000 | |
Due after ten years | 9,019,000 | |
Total amortized cost for fixed maturity securities | 305,019,000 | 178,901,000 |
Fair value | ||
Due in one year or less | 13,171,000 | |
Due after one year through five years | 74,507,000 | |
Due after five years through ten years | 92,012,000 | |
Due after ten years | 9,755,000 | |
Total fixed maturity securities | 309,911,000 | 180,954,000 |
Mortgage-backed securities | ||
Fair value | ||
Mortgage-backed securities collateralized by subprime residential loans | 1,200,000 | |
Percentage of total investments which are collateralized by subprime residential loans | 0.40% | |
Residential mortgage-backed | ||
Amortized Cost | ||
Residential mortgage-backed securities and Commercial mortgage-backed securities | 96,610,000 | |
Fair value | ||
Residential mortgage-backed securities and Commercial mortgage-backed securities | 97,671,000 | |
Commercial mortgage-backed | ||
Amortized Cost | ||
Residential mortgage-backed securities and Commercial mortgage-backed securities | 22,483,000 | |
Fair value | ||
Residential mortgage-backed securities and Commercial mortgage-backed securities | $22,795,000 |
Investments_Details_5
Investments (Details 5) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Net investment income | |||
Interest on investments | $5,254,000 | $5,202,000 | $5,849,000 |
Dividends | 135,000 | 107,000 | 85,000 |
Gross investment income | 5,389,000 | 5,309,000 | 5,934,000 |
Investment expenses | -548,000 | -408,000 | -409,000 |
Net investment income | 4,841,000 | 4,901,000 | 5,525,000 |
Fair value of fixed-maturity securities on deposit | $36,900,000 | $28,800,000 |
Deferred_Acquisition_Costs_Det
Deferred Acquisition Costs (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred acquisition costs | |||
Balance, beginning of year | $1,095 | $1,176 | $4,111 |
Capitalized costs | 4,907 | 4,818 | 5,072 |
Amortization | -4,966 | -4,899 | -8,007 |
Balance, end of year | $1,036 | $1,095 | $1,176 |
Property_Equipment_and_Depreci2
Property, Equipment, and Depreciation (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment, Gross | $31,239,000 | $30,961,000 | |
Accumulated depreciation and amortization | -12,842,000 | -11,696,000 | |
Property, Plant and Equipment, Net, Total | 18,397,000 | 19,265,000 | |
Depreciation and amortization | 1,800,000 | 1,900,000 | 2,000,000 |
Gains from sale of property and equipment | -47,000 | 30,000 | 121,000 |
Land held for use | |||
Property, Plant and Equipment, Gross | 3,443,000 | 3,473,000 | |
Land held for sale | |||
Property, Plant and Equipment, Gross | 1,034,000 | 1,034,000 | |
Building and Building Improvements [Member] | |||
Property, Plant and Equipment, Gross | 15,127,000 | 15,371,000 | |
Transportation Equipment [Member] | |||
Property, Plant and Equipment, Gross | 1,578,000 | 2,399,000 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment, Gross | 3,208,000 | 3,243,000 | |
ComputerEquipmentAndSoftware[Member] | |||
Property, Plant and Equipment, Gross | 6,849,000 | 5,441,000 | |
Property, Plant and Equipment [Member] | |||
Gains from sale of property and equipment | $454,000 | $30,000 | $121,000 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Goodwill and intangible assets | |||
Goodwill | $2,565,000 | $2,565,000 | |
Accumulated Amortization Excluding Goodwill | -19,671,000 | -18,448,000 | |
Gross carrying amount | 26,354,000 | 26,354,000 | |
Goodwill and intangible assets | 6,683,000 | 7,906,000 | |
Impairments of goodwill | 0 | ||
Expected Amortization Expense | |||
2015 | 725,000 | ||
2016 | 697,000 | ||
2017 | 670,000 | ||
2018 | 636,000 | ||
2019 | 253,000 | ||
Customer relationships/lists | |||
Goodwill and intangible assets | |||
Gross Carrying Amount Excluding Goodwill | 20,450,000 | 20,450,000 | |
Accumulated Amortization Excluding Goodwill | -16,332,000 | -15,567,000 | |
Finite-Lived Intangible Assets, Net, Total | 4,118,000 | 4,883,000 | |
Amortization Expense | 765,000 | 854,000 | 903,000 |
Expected useful lives of definite lived intangible assets | 15 years | ||
Non-compete agreements | |||
Goodwill and intangible assets | |||
Gross Carrying Amount Excluding Goodwill | 3,339,000 | 3,339,000 | |
Accumulated Amortization Excluding Goodwill | -3,339,000 | -2,881,000 | |
Finite-Lived Intangible Assets, Net, Total | 458,000 | ||
Amortization Expense | 458,000 | 481,000 | 505,000 |
Non-compete agreements | Minimum | |||
Goodwill and intangible assets | |||
Expected useful lives of definite lived intangible assets | 5 years | ||
Non-compete agreements | Maximum | |||
Goodwill and intangible assets | |||
Expected useful lives of definite lived intangible assets | 9 years | ||
Program segment | |||
Goodwill and intangible assets | |||
Goodwill and intangible assets | 2,115,000 | 2,115,000 | |
Lender segment | |||
Goodwill and intangible assets | |||
Goodwill | 450,000 | 450,000 | |
Finite-Lived Intangible Assets, Net, Total | 4,100,000 | 4,900,000 | |
Goodwill and intangible assets | $4,568,000 | $5,791,000 |
Subordinated_Debentures_Detail
Subordinated Debentures (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
Oct. 08, 2014 | Dec. 31, 2004 | Dec. 31, 2014 | Dec. 31, 2013 | |
item | item | |||
Debt Instrument [Line Items] | ||||
Number of business trusts | 4 | |||
Subordinated debentures | $44,500,000 | $52,000,000 | ||
Gain (Loss) on Repurchase of Debt Instrument | 610,000 | 610,000 | ||
Number of years after which early redemption is allowed | 5 years | |||
Multiples in which the debt can be redeemed (including accrued interest) | 1,000 | |||
Variable rate (As a percent) | 0.26% | |||
Number of consecutive quarters for which payment of interest is deferred | 20 | |||
Debt issuance costs amortization period | 30 years | |||
Affiliated Entity [Member] | ||||
Debt Instrument [Line Items] | ||||
Proceeds from Issuance of Trust Preferred Securities | 52,000,000 | |||
Other Assets [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | 1,300,000 | 1,500,000 | ||
Accumulated amortization of debt issuance costs | 486,000 | 523,000 | ||
Subordinated debentures | ||||
Debt Instrument [Line Items] | ||||
Proceeds from Issuance of Subordinated Long-term Debt | 53,600,000 | |||
Carrying value | 7,500,000 | |||
Debt Instrument, Repurchase Amount | 6,750,000 | |||
Accrued interest | 49,000 | |||
Floating Rate Capital Securities 2032 Member | ||||
Debt Instrument [Line Items] | ||||
Subordinated debentures | 17,500,000 | 17,500,000 | ||
Floating Rate Capital Securities 2014 Member | ||||
Debt Instrument [Line Items] | ||||
Subordinated debentures | 7,500,000 | |||
Floating Rate Capital Securities January 2034 Member | ||||
Debt Instrument [Line Items] | ||||
Subordinated debentures | 12,000,000 | 12,000,000 | ||
Floating Rate Capital Securities May 2034 Member | ||||
Debt Instrument [Line Items] | ||||
Subordinated debentures | $15,000,000 | $15,000,000 | ||
London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument [Line Items] | ||||
Variable rate basis | LIBOR | |||
Basis spread on variable rate (as a percent) | 4.10% | |||
London Interbank Offered Rate (LIBOR) [Member] | Floating Rate Capital Securities 2032 Member | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 4.00% | |||
London Interbank Offered Rate (LIBOR) [Member] | Floating Rate Capital Securities 2014 Member | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 4.10% | |||
London Interbank Offered Rate (LIBOR) [Member] | Floating Rate Capital Securities January 2034 Member | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 4.10% | |||
London Interbank Offered Rate (LIBOR) [Member] | Floating Rate Capital Securities May 2034 Member | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 3.80% | |||
Three-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Variable rate basis | three-month LIBOR |
Income_Tax_Provision_Details
Income Tax Provision (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 01, 2014 |
Federal And State Income Tax Expense Benefit Abstract | ||||||||||||
Federal current | $10,827 | $6,014 | $3,194 | |||||||||
State current | 687 | -1,169 | 666 | |||||||||
Current tax expense | 11,514 | 4,845 | 3,860 | |||||||||
Federal deferred | -21,156 | -2,058 | 795 | |||||||||
State deferred | -54 | |||||||||||
Deferred tax expense (benefit) | -21,210 | -2,058 | 795 | |||||||||
Federal income tax expense (benefit) | -10,329 | 3,956 | 3,989 | |||||||||
State income tax expense (benefit) | 633 | -1,169 | 666 | |||||||||
Total income tax expense (benefit) | 4,462 | 4,391 | -19,685 | 1,136 | -449 | 1,181 | 1,149 | 906 | -9,696 | 2,787 | 4,655 | |
Deferred Tax Assets, Gross [Abstract] | ||||||||||||
Allowance for policy cancellations | 19,425 | 5,789 | 19,425 | 5,789 | ||||||||
Unpaid losses and loss adjustment expenses | 172 | 223 | 172 | 223 | ||||||||
Deferred ceding fees | 8,264 | 6,426 | 8,264 | 6,426 | ||||||||
Management fee | 3,702 | 4,746 | 3,702 | 4,746 | ||||||||
Compensation | 2,034 | 63 | 2,034 | 63 | ||||||||
Intangible assets | 273 | 273 | ||||||||||
Unrealized losses on fixed maturities and other investment securities | 471 | 1,009 | 471 | 1,009 | ||||||||
Write-down of other-than-temporarily impaired investment securities | 254 | 253 | 254 | 253 | ||||||||
Other | 34 | 34 | ||||||||||
Total deferred income tax assets | 34,629 | 18,509 | 34,629 | 18,509 | ||||||||
Deferred Tax Liabilities, Net [Abstract] | ||||||||||||
Unearned premiums | 7,136 | 4,465 | 7,136 | 4,465 | ||||||||
Unrealized gains on equity securities | 428 | 214 | 428 | 214 | ||||||||
Unrealized gains on fixed maturities and other investment securities | 2,183 | 1,694 | 2,183 | 1,694 | ||||||||
Deferred acquisition costs | 363 | 4,539 | 363 | 4,539 | ||||||||
Fixed assets | 525 | 98 | 525 | 98 | ||||||||
Contingent commissions | 3,632 | 3,632 | ||||||||||
Other | 130 | 139 | 130 | 139 | ||||||||
Total deferred income tax liabilities | 10,765 | 14,781 | 10,765 | 14,781 | ||||||||
Net deferred income tax asset (liability) | 23,864 | 3,728 | 23,864 | 3,728 | ||||||||
Valuation allowance | 0 | 0 | 0 | 0 | ||||||||
Amount | ||||||||||||
Expected tax expense (benefit) | 461 | 8,746 | 7,044 | |||||||||
Exclusion of Subchapter S income | 8,465 | -4,478 | -2,800 | |||||||||
Change in tax status | -19,316 | |||||||||||
Change in federal statutory rate | -75 | |||||||||||
Accrual/adjustment prior year | 174 | -39 | 2 | |||||||||
Tax-exempt income | -304 | -275 | -247 | |||||||||
State income taxes | 826 | -1,205 | 620 | |||||||||
Meals and entertainment | 61 | 36 | 34 | |||||||||
Other | 12 | 2 | 2 | |||||||||
Income taxes | 4,462 | 4,391 | -19,685 | 1,136 | -449 | 1,181 | 1,149 | 906 | -9,696 | 2,787 | 4,655 | |
Effective Tax Rate | ||||||||||||
Expected tax expense (benefit) (as a percent) | 35.00% | 34.30% | 34.30% | |||||||||
Exclusion of Subchapter S income (as a percent) | 643.00% | -17.60% | -13.60% | |||||||||
Change in tax status (as a percent) | -1467.20% | |||||||||||
Change in federal statutory rate (as a percent) | -5.70% | |||||||||||
Accrual/adjustment prior year | 13.20% | -0.20% | ||||||||||
Tax-exempt income (as a percent) | -23.10% | -1.10% | -1.20% | |||||||||
State income taxes (as a percent) | 62.80% | -4.70% | 3.00% | |||||||||
Meals and entertainment | 4.60% | 0.10% | 0.20% | |||||||||
Other (as a percent) | 0.80% | |||||||||||
Total income tax expense (benefit) (as a percent) | -736.60% | 10.80% | 22.70% | |||||||||
Income Tax Examination, Penalties and Interest Accrued [Abstract] | ||||||||||||
Income tax penalties and interest | 0 | 0 | 0 | 0 | 0 | |||||||
Carryforwards | ||||||||||||
Operating loss carryforwards | 0 | 0 | ||||||||||
Capital loss carryforwards | 0 | |||||||||||
Minimum | ||||||||||||
Effective Tax Rate | ||||||||||||
Expected tax expense (benefit) (as a percent) | 34.30% | |||||||||||
Maximum | ||||||||||||
Effective Tax Rate | ||||||||||||
Expected tax expense (benefit) (as a percent) | 35.00% | |||||||||||
Parent Company [Member] | ||||||||||||
Federal And State Income Tax Expense Benefit Abstract | ||||||||||||
Current tax expense | -528 | |||||||||||
Deferred tax expense (benefit) | -552 | |||||||||||
Deferred Tax Liabilities, Net [Abstract] | ||||||||||||
Net deferred income tax asset (liability) | $552 | $552 |
Reinsurance_Details
Reinsurance (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Reinsurance | ||
Ceded unearned premiums | $456,754 | $365,333 |
Ceded loss and loss adjustment expense reserves | 1,199,780 | 1,006,892 |
Total reinsurance recoverables | 1,656,534 | 1,372,225 |
Secured reinsurance recoverables | -1,209,032 | -1,014,947 |
Unsecured reinsurance recoverables | $447,502 | $357,278 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value Measurements | ||
Fixed-maturity securities | $309,911 | $180,954 |
Equity securities | 2,642 | 2,301 |
Level 3 activity | 0 | 0 |
Transfers between Level 1, Level 2, and Level 3 | 0 | 0 |
Recurring basis | Level 2 | ||
Fair Value Measurements | ||
Total | 312,553 | 183,255 |
Recurring basis | Level 2 | Fixed-maturity securities | ||
Fair Value Measurements | ||
Fixed-maturity securities | 309,911 | 180,954 |
Recurring basis | Level 2 | Government | ||
Fair Value Measurements | ||
Fixed-maturity securities | 14,042 | 9,855 |
Recurring basis | Level 2 | Government agency | ||
Fair Value Measurements | ||
Fixed-maturity securities | 2,373 | 2,840 |
Recurring basis | Level 2 | State and municipality | ||
Fair Value Measurements | ||
Fixed-maturity securities | 62,352 | 41,185 |
Recurring basis | Level 2 | Industrial and miscellaneous | ||
Fair Value Measurements | ||
Fixed-maturity securities | 110,247 | 52,658 |
Recurring basis | Level 2 | Residential mortgage-backed | ||
Fair Value Measurements | ||
Fixed-maturity securities | 97,671 | 65,334 |
Recurring basis | Level 2 | Commercial mortgage-backed | ||
Fair Value Measurements | ||
Fixed-maturity securities | 22,795 | 8,671 |
Recurring basis | Level 2 | Redeemable preferred stock | ||
Fair Value Measurements | ||
Fixed-maturity securities | 431 | 411 |
Recurring basis | Level 2 | Equity securities | ||
Fair Value Measurements | ||
Equity securities | 2,642 | 2,301 |
Recurring basis | Level 2 | Non-redeemable preferred stock | ||
Fair Value Measurements | ||
Equity securities | 2,213 | 1,802 |
Recurring basis | Level 2 | Common stock | ||
Fair Value Measurements | ||
Equity securities | 429 | 499 |
Recurring basis | Total | ||
Fair Value Measurements | ||
Total | 312,553 | 183,255 |
Recurring basis | Total | Fixed-maturity securities | ||
Fair Value Measurements | ||
Fixed-maturity securities | 309,911 | 180,954 |
Recurring basis | Total | Government | ||
Fair Value Measurements | ||
Fixed-maturity securities | 14,042 | 9,855 |
Recurring basis | Total | Government agency | ||
Fair Value Measurements | ||
Fixed-maturity securities | 2,373 | 2,840 |
Recurring basis | Total | State and municipality | ||
Fair Value Measurements | ||
Fixed-maturity securities | 62,352 | 41,185 |
Recurring basis | Total | Industrial and miscellaneous | ||
Fair Value Measurements | ||
Fixed-maturity securities | 110,247 | 52,658 |
Recurring basis | Total | Residential mortgage-backed | ||
Fair Value Measurements | ||
Fixed-maturity securities | 97,671 | 65,334 |
Recurring basis | Total | Commercial mortgage-backed | ||
Fair Value Measurements | ||
Fixed-maturity securities | 22,795 | 8,671 |
Recurring basis | Total | Redeemable preferred stock | ||
Fair Value Measurements | ||
Fixed-maturity securities | 431 | 411 |
Recurring basis | Total | Equity securities | ||
Fair Value Measurements | ||
Equity securities | 2,642 | 2,301 |
Recurring basis | Total | Non-redeemable preferred stock | ||
Fair Value Measurements | ||
Equity securities | 2,213 | 1,802 |
Recurring basis | Total | Common stock | ||
Fair Value Measurements | ||
Equity securities | $429 | $499 |
Premiums_Earned_Details
Premiums Earned (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Premiums Earned, Net [Abstract] | |||
Premiums written | $1,032,608 | $806,732 | $633,109 |
Premiums assumed | 1,517 | 3,233 | 1,712 |
Premiums ceded | -935,051 | -723,192 | -555,656 |
Net premiums retained | 99,074 | 86,773 | 79,165 |
Change in net unearned premiums | -2,424 | -2,395 | -1,069 |
Total premiums earned | $96,650 | $84,378 | $78,096 |
Premiums assumed as a % of net premiums retained | 1.50% | 3.70% | 2.20% |
Losses_and_Loss_Adjustment_Exp2
Losses and Loss Adjustment Expenses (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Policyholder Benefits and Claims Incurred, Net [Abstract] | |||
Direct losses and loss adjustment expenses | $714,708 | $561,347 | $729,138 |
Assumed losses and loss adjustment expenses | 2,469 | 193 | 6,521 |
Ceded losses and loss adjustment expenses | -676,356 | -529,450 | -706,670 |
Total net losses and loss adjustment expenses | 40,821 | 32,090 | 28,989 |
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims [Abstract] | |||
Current year | 41,314 | 33,163 | 28,894 |
Prior year | -493 | -1,073 | 95 |
Total incurred | 40,821 | 32,090 | 28,989 |
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid [Abstract] | |||
Balance at January 1 | 1,016,641 | 975,708 | 806,125 |
Reinsurance recoverables | -1,006,892 | -965,965 | -797,961 |
Net balance at January 1 | 9,749 | 9,743 | 8,164 |
Current year | 34,251 | 27,388 | 23,392 |
Prior year | 6,194 | 4,696 | 4,018 |
Total paid | 40,445 | 32,084 | 27,410 |
Net balance at December 31 | 10,125 | 9,749 | 9,743 |
Reinsurance recoverable | 1,199,780 | 1,006,892 | 965,965 |
Balance at December 31 | 1,209,905 | 1,016,641 | 975,708 |
Estimate of ultimate losses incurred | -493 | -1,073 | 95 |
Program segment | |||
Policyholder Benefits and Claims Incurred, Net [Abstract] | |||
Total net losses and loss adjustment expenses | 217 | 465 | 3,062 |
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid [Abstract] | |||
Balance at January 1 | 1,009,068 | ||
Balance at December 31 | 1,201,279 | 1,009,068 | |
Favorable and unfavorable development | -400 | -2,100 | |
Lender segment | |||
Policyholder Benefits and Claims Incurred, Net [Abstract] | |||
Total net losses and loss adjustment expenses | 40,604 | 31,625 | 25,927 |
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid [Abstract] | |||
Balance at January 1 | 7,573 | ||
Balance at December 31 | 8,626 | 7,573 | |
Favorable and unfavorable development | $706 | $1,500 | $2,000 |
Statutory_Accounting_Details
Statutory Accounting (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Reconciliations of stockholder's equity | |||||||||||
Shareholdersb equity in accordance with GAAP | $240,872,000 | $145,354,000 | $240,872,000 | $145,354,000 | $142,223,000 | ||||||
Reconciliations of net income | |||||||||||
Net income | 6,847,000 | 6,959,000 | 607,000 | -3,400,000 | 13,926,000 | 6,997,000 | 5,695,000 | -3,907,000 | 11,013,000 | 22,711,000 | 15,882,000 |
Maximum percentage of statutory surplus | 10.00% | 10.00% | |||||||||
Unrestricted net assets available for dividends | 21,600,000 | 21,600,000 | |||||||||
Subsidiaries [Member] | |||||||||||
Reconciliations of stockholder's equity | |||||||||||
Per statutory basis | 215,842,000 | 155,566,000 | 215,842,000 | 155,566,000 | |||||||
Allowance for return commissions | 28,846,000 | 21,275,000 | 28,846,000 | 21,275,000 | |||||||
Allowance for policy cancellations | -23,672,000 | -16,644,000 | -23,672,000 | -16,644,000 | |||||||
Commissions payable | 14,105,000 | 10,597,000 | 14,105,000 | 10,597,000 | |||||||
Deferred acquisition costs | 13,149,000 | 13,233,000 | 13,149,000 | 13,233,000 | |||||||
Deferred income taxes | -7,430,000 | -5,909,000 | -7,430,000 | -5,909,000 | |||||||
Unrealized gain on investments available-for-sale | 5,586,000 | 2,445,000 | 5,586,000 | 2,445,000 | |||||||
Management fees | -16,813,000 | -13,838,000 | -16,813,000 | -13,838,000 | |||||||
Intangible assets | 1,947,000 | 1,947,000 | 1,947,000 | 1,947,000 | |||||||
Nonadmitted assets | 13,000 | 15,000 | 13,000 | 15,000 | |||||||
Other | 16,000 | 145,000 | 16,000 | 145,000 | |||||||
Shareholdersb equity in accordance with GAAP | 231,589,000 | 168,832,000 | 231,589,000 | 168,832,000 | |||||||
Reconciliations of net income | |||||||||||
Net income - Per Statutory basis | 6,780,000 | 5,047,000 | 7,290,000 | ||||||||
Allowance for return commissions | 7,571,000 | 3,987,000 | 3,874,000 | ||||||||
Allowance for policy cancellations | -7,028,000 | -2,551,000 | -927,000 | ||||||||
Commission expense | 3,508,000 | 1,874,000 | 935,000 | ||||||||
Deferred acquisition costs | -84,000 | 1,952,000 | 3,259,000 | ||||||||
Deferred income taxes | 195,000 | 2,058,000 | -795,000 | ||||||||
Management fees | -2,975,000 | -3,947,000 | -5,356,000 | ||||||||
Other | -129,000 | -38,000 | -30,000 | ||||||||
Net income | 7,838,000 | 8,382,000 | 8,250,000 | ||||||||
Amount of statutory capital and surplus | 215,842,000 | 155,566,000 | 215,842,000 | 155,566,000 | |||||||
SNIC (Member) | |||||||||||
Reconciliations of net income | |||||||||||
Minimum statutory capital and surplus | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | |||||||
NSIC (Member) | |||||||||||
Reconciliations of net income | |||||||||||
Minimum statutory capital and surplus | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | |||||||
USIC (Member) | |||||||||||
Reconciliations of net income | |||||||||||
Minimum statutory capital and surplus | $750,000 | $750,000 | $750,000 | $750,000 |
RelatedParty_Transaction_Detai
Related-Party Transaction (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
Jun. 25, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Related Party Transaction | ||||
Other payables, affiliate | $100,000 | |||
Founder Special Compensation | 17,914,000 | 10,202,000 | 10,740,000 | |
Trace Air Inc | ||||
Related Party Transaction | ||||
Other payables, affiliate | 100,000 | |||
Aircraft lease payment (per hour) | 1,800 | |||
Minimum monthly lease rate | 36,000 | |||
Operating and maintenance cost | 359,000 | 692,000 | 687,000 | |
Trace and Luke Ledbetter [Member] | Private placement | ||||
Related Party Transaction | ||||
Founder Special Compensation | $513,000 |
401k_ProfitSharing_Plan_and_Tr1
401(k) Profit-Sharing Plan and Trust (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
401(k) Profit-Sharing Plan and Trust | |||
Minimum age of officers and employees covered under plan | 18 years | ||
Contribution required to made by employer which match with employees contribution (as a percent) | 50.00% | ||
Eligible employees compensation (as a percent) | 6.00% | ||
Employer contribution expense | $1,100 | $1,000 | $937 |
Stockbased_Payments_Details
Stock-based Payments (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Jul. 09, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 25, 2014 | 29-May-14 | |
Stock-based Payments | ||||||
Share-based Compensation | $2,012,000 | |||||
Long-Term Incentive Plan 2014 | ||||||
Stock-based Payments | ||||||
Granted (in shares) | 38,500 | |||||
Weighted average exercise price of non-vested options | $10 | |||||
Share-based Compensation | 2,000,000 | 0 | 0 | |||
Tax benefits recognized from stock options and stock grants | 688,000 | 0 | 0 | |||
Total unrecognized compensation | 7,500,000 | |||||
Weighted average period | 2 years | |||||
Long-Term Incentive Plan 2014 | Employee and non-employee director | ||||||
Stock-based Payments | ||||||
Shares issued | 4,400,000 | |||||
Parent Company [Member] | ||||||
Stock-based Payments | ||||||
Share-based Compensation | $2,012,000 | |||||
Non-qualified stock options | Long-Term Incentive Plan 2014 | Executive officers and certain employees | ||||||
Stock-based Payments | ||||||
Granted (in shares) | 2,783,873 | |||||
Vesting period | 3 years | |||||
Average assumptions used to value stock-based payments | ||||||
Volatility (as a percent) | 32.96% | |||||
Expiration term | 10 years | |||||
Expected term | 5 years 6 months | |||||
Risk-free interest rate (as a percent) | 1.85% | |||||
Dividend yield (as a percent) | 0.40% | |||||
Forfeitures expected (in shares) | 0 | |||||
Restricted stock | Long-Term Incentive Plan 2014 | ||||||
Stock-based Payments | ||||||
Granted (in shares) | 12,000 | |||||
Vesting period | 1 year |
Concentration_of_Risk_Details
Concentration of Risk (Details) | 12 Months Ended |
Dec. 31, 2014 | |
item | |
Customer | |
Concentration of Risk | |
Number of customers | 2 |
Concentration of risk (as a percent) | 5.00% |
Reinsurer | |
Concentration of Risk | |
Number of reinsurers | 3 |
Concentration of risk (as a percent) | 56.00% |
Leases_Details
Leases (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Leases | |||
Rental income | $2.10 | $1.40 | $1.30 |
Lease termination fees | $1.50 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (Alliance, CUNA, USD $) | 0 Months Ended | 12 Months Ended | ||||
In Millions, unless otherwise specified | Jul. 08, 2014 | Jul. 01, 2014 | Jun. 30, 2014 | Jul. 24, 2009 | Dec. 31, 2014 | Jun. 30, 2014 |
item | ||||||
Alliance | CUNA | ||||||
Commitments and Contingencies | ||||||
Ceded percentage | 50.00% | |||||
Quota share percentage | 30.00% | 50.00% | ||||
Automatic renewal term | 3 years | |||||
Accrued expenses | $17.80 | $17.80 | ||||
Number of payments made to the counterparty | 2 | |||||
Amount of first payment made which is not subject to any future adjustments | 14.8 | |||||
Amount of second payment made which is subject to potential future adjustments based upon the net premium and loss ratio | $3 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Per Share | |||||||||||
Stock split ratio | 0.0014 | ||||||||||
Numerator for both basic and diluted earnings per share: | |||||||||||
Net income | $6,847 | $6,959 | $607 | ($3,400) | $13,926 | $6,997 | $5,695 | ($3,907) | $11,013 | $22,711 | $15,882 |
Denominator for both basic and diluted earnings per share: | |||||||||||
Weighted-average common shares outstanding (in shares) | 39,383,641 | 34,176,896 | 34,176,896 | ||||||||
Dilutive effect of outstanding securities (determined using the treasury stock method) (in shares) | 6,214 | ||||||||||
Weighted-average common shares outstanding and potential common shares outstanding (in shares) | 39,389,855 | 34,176,896 | 34,176,896 |
Common_Stock_Details
Common Stock (Details) (USD $) | 0 Months Ended | 1 Months Ended |
In Millions, except Share data, unless otherwise specified | Jun. 25, 2014 | Oct. 22, 2014 |
Common Stock | ||
Amount contributed to the capital of entities insurance subsidiaries | $50 | |
Alliance | CUNA | ||
Common Stock | ||
Pre-tax payments | 17.8 | |
Common stock | ||
Common Stock | ||
Value of common stock shares purchased from certain shareholders pursuant to stock redemption agreement | 190.6 | |
Number of common stock shares purchased from certain shareholders pursuant to stock redemption agreement | 21,030,294 | |
Common stock | Maximum | ||
Common Stock | ||
Aggregate number of common stock shares offered under registration statement for resale | 30,728,500 | |
Common stock | Private placement | ||
Common Stock | ||
Aggregate number of common stock shares sold | 31,050,000 | |
Net proceeds received | $280.60 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
item | |||||||||||
Business segment information | |||||||||||
Number of Operating Segments | 2 | ||||||||||
Number of business segments | 3 | ||||||||||
Revenues: | |||||||||||
Premiums earned | 96,650 | $84,378 | $78,096 | ||||||||
Commission income | 1,533 | 2,031 | 2,406 | ||||||||
Ceding fees | 45,732 | 32,898 | 32,379 | ||||||||
Net investment income | 4,841 | 4,901 | 5,525 | ||||||||
Realized net investment gains | 1,311 | 1,764 | 1,309 | ||||||||
Other income | 4,460 | 2,531 | 2,408 | ||||||||
Total revenues | 43,026 | 40,571 | 35,403 | 35,527 | 37,278 | 32,502 | 28,901 | 29,822 | 154,527 | 128,503 | 122,123 |
Expenses: | |||||||||||
Losses and loss adjustment expenses | 40,821 | 32,090 | 28,989 | ||||||||
Commissions | 3,882 | 2,378 | 2,922 | ||||||||
Taxes, licenses, and fees | 2,832 | 2,594 | 2,394 | ||||||||
General and administrative | 58,891 | 53,418 | 54,114 | ||||||||
Founder special compensation | 17,914 | 10,202 | 10,740 | ||||||||
Offering-related expenses | 8,833 | ||||||||||
Contract modification expense | 17,800 | ||||||||||
Interest Expense, Long-term Debt | 2,237 | 2,323 | 2,427 | ||||||||
Total expenses | 31,717 | 29,221 | 54,481 | 37,791 | 23,801 | 24,324 | 22,057 | 32,823 | 153,210 | 103,005 | 101,586 |
Income (loss) before income taxes | 11,309 | 11,350 | -19,078 | -2,264 | 13,477 | 8,178 | 6,844 | -3,001 | 1,317 | 25,498 | 20,537 |
Income taxes | 4,462 | 4,391 | -19,685 | 1,136 | -449 | 1,181 | 1,149 | 906 | -9,696 | 2,787 | 4,655 |
Net income | 6,847 | 6,959 | 607 | -3,400 | 13,926 | 6,997 | 5,695 | -3,907 | 11,013 | 22,711 | 15,882 |
Supplemental Information for Property, Casualty Insurance Underwriters [Abstract] | |||||||||||
Premiums Written, Gross | 1,034,125 | 809,965 | 634,821 | ||||||||
Premiums Written, Net | 99,074 | 86,773 | 79,165 | ||||||||
Program segment | |||||||||||
Business segment information | |||||||||||
Depreciation, Depletion and Amortization | 397 | 286 | 292 | ||||||||
Revenues: | |||||||||||
Premiums earned | -4 | -501 | 1,600 | ||||||||
Ceding fees | 45,732 | 32,898 | 32,379 | ||||||||
Other income | 3 | 2 | |||||||||
Total revenues | 45,728 | 32,400 | 33,981 | ||||||||
Expenses: | |||||||||||
Losses and loss adjustment expenses | 217 | 465 | 3,062 | ||||||||
Commissions | 2 | 389 | 482 | ||||||||
Taxes, licenses, and fees | 8 | 10 | 31 | ||||||||
General and administrative | 10,855 | 11,010 | 9,316 | ||||||||
Total expenses | 11,082 | 11,874 | 12,891 | ||||||||
Income (loss) before income taxes | 34,646 | 20,526 | 21,090 | ||||||||
Net income | 34,646 | 20,526 | 21,090 | ||||||||
Supplemental Information for Property, Casualty Insurance Underwriters [Abstract] | |||||||||||
Premiums Written, Gross | 909,501 | 691,067 | 530,621 | ||||||||
Premiums Written, Net | -5 | -1,018 | 1,141 | ||||||||
Lender segment | |||||||||||
Business segment information | |||||||||||
Depreciation, Depletion and Amortization | 1,400 | 1,300 | 1,400 | ||||||||
Revenues: | |||||||||||
Premiums earned | 96,654 | 84,879 | 76,496 | ||||||||
Commission income | 1,533 | 2,031 | 2,406 | ||||||||
Other income | 1,266 | 1,101 | 945 | ||||||||
Total revenues | 99,453 | 88,011 | 79,847 | ||||||||
Expenses: | |||||||||||
Losses and loss adjustment expenses | 40,604 | 31,625 | 25,927 | ||||||||
Commissions | 3,880 | 1,989 | 2,440 | ||||||||
Taxes, licenses, and fees | 2,824 | 2,584 | 2,363 | ||||||||
General and administrative | 38,995 | 36,020 | 39,193 | ||||||||
Contract modification expense | 17,800 | ||||||||||
Total expenses | 104,103 | 72,218 | 69,923 | ||||||||
Income (loss) before income taxes | -4,650 | 15,793 | 9,924 | ||||||||
Net income | -4,650 | 15,793 | 9,924 | ||||||||
Supplemental Information for Property, Casualty Insurance Underwriters [Abstract] | |||||||||||
Premiums Written, Gross | 124,624 | 118,898 | 104,200 | ||||||||
Premiums Written, Net | 99,079 | 87,791 | 78,024 | ||||||||
Corporate | |||||||||||
Revenues: | |||||||||||
Net investment income | 4,841 | 4,901 | 5,525 | ||||||||
Realized net investment gains | 1,311 | 1,764 | 1,309 | ||||||||
Other income | 3,194 | 1,427 | 1,461 | ||||||||
Total revenues | 9,346 | 8,092 | 8,295 | ||||||||
Expenses: | |||||||||||
General and administrative | 9,041 | 6,388 | 5,605 | ||||||||
Founder special compensation | 17,914 | 10,202 | 10,740 | ||||||||
Offering-related expenses | 8,833 | ||||||||||
Interest Expense, Long-term Debt | 2,237 | 2,323 | 2,427 | ||||||||
Total expenses | 38,025 | 18,913 | 18,772 | ||||||||
Income (loss) before income taxes | -28,679 | -10,821 | -10,477 | ||||||||
Income taxes | -9,696 | 2,787 | 4,655 | ||||||||
Net income | -18,983 | -13,608 | -15,132 | ||||||||
Parent Company [Member] | |||||||||||
Revenues: | |||||||||||
Total revenues | 13,019 | 22,711 | 15,883 | ||||||||
Expenses: | |||||||||||
General and administrative | 3,086 | 1 | |||||||||
Total expenses | 3,086 | 1 | |||||||||
Income (loss) before income taxes | 9,933 | 22,711 | 15,882 | ||||||||
Net income | 11,013 | $22,711 | $15,882 |
Segment_Information_Details_2
Segment Information (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Assets | ||||
Accounts receivable from agents, net | $18,528 | $17,306 | ||
Reinsurance recoverable on paid losses | 1,200 | 880 | ||
Reinsurance recoverables | 1,656,534 | 1,372,225 | ||
Deferred income taxes, net | 23,864 | 3,728 | ||
Goodwill and intangible assets, net | 6,683 | 7,906 | ||
Other assets | 384,955 | 288,906 | ||
Total assets | 2,091,764 | 1,690,951 | ||
Liabilities | ||||
Unpaid losses and loss adjustment expenses | 1,209,905 | 1,016,641 | 975,708 | 806,125 |
Unearned premiums | 480,124 | 386,279 | ||
Allowance for policy cancellations | 55,500 | 39,623 | 32,775 | 27,511 |
Deferred ceding fees | 23,612 | 18,735 | ||
Other liabilities | 81,751 | 84,319 | ||
Total liabilities | 1,850,892 | 1,545,597 | ||
Shareholders' equity | ||||
Common stock, $.001 par value (150,000,000 shares authorized; 44,247,102 and 40,627,200 shares issued at December 31, 2014 and December 31, 2013, respectively) | 44 | 41 | ||
Additional paid-in capital | 220,577 | 24,367 | ||
Retained earnings | 16,108 | 128,830 | ||
Treasury stock (zero and 6,450,304 shares at cost at December 31, 2014 and December 31, 2013, respectively) | -10,000 | |||
Accumulated other comprehensive income | 4,143 | 2,116 | ||
Total shareholders' equity | 240,872 | 145,354 | 142,223 | |
Total liabilities and shareholders' equity | 2,091,764 | 1,690,951 | ||
Program segment | ||||
Assets | ||||
Accounts receivable from agents, net | 18,349 | 17,261 | ||
Reinsurance recoverable on paid losses | 57 | 5 | ||
Reinsurance recoverables | 1,650,205 | 1,362,719 | ||
Goodwill and intangible assets, net | 2,115 | 2,115 | ||
Other assets | 7,245 | 7,495 | ||
Total assets | 1,677,971 | 1,389,595 | ||
Liabilities | ||||
Unpaid losses and loss adjustment expenses | 1,201,279 | 1,009,068 | ||
Unearned premiums | 451,993 | 357,681 | ||
Deferred ceding fees | 23,612 | 18,735 | ||
Other liabilities | 19,990 | 19,415 | ||
Total liabilities | 1,696,874 | 1,404,899 | ||
Lender segment | ||||
Assets | ||||
Accounts receivable from agents, net | 179 | 45 | ||
Reinsurance recoverable on paid losses | 1,143 | 875 | ||
Reinsurance recoverables | 6,329 | 9,506 | ||
Goodwill and intangible assets, net | 4,568 | 5,791 | ||
Other assets | 4,051 | 3,441 | ||
Total assets | 16,270 | 19,658 | ||
Liabilities | ||||
Unpaid losses and loss adjustment expenses | 8,626 | 7,573 | ||
Unearned premiums | 28,131 | 28,598 | ||
Allowance for policy cancellations | 55,500 | 39,623 | ||
Other liabilities | 6,603 | 5,386 | ||
Total liabilities | 98,860 | 81,180 | ||
Corporate | ||||
Assets | ||||
Deferred income taxes, net | 23,864 | 3,728 | ||
Other assets | 373,659 | 277,970 | ||
Total assets | 397,523 | 281,698 | ||
Liabilities | ||||
Other liabilities | 55,158 | 59,518 | ||
Total liabilities | 55,158 | 59,518 | ||
Parent Company [Member] | ||||
Assets | ||||
Deferred income taxes, net | 552 | |||
Total assets | 242,550 | 155,360 | ||
Liabilities | ||||
Total liabilities | 1,678 | 10,006 | ||
Shareholders' equity | ||||
Common stock, $.001 par value (150,000,000 shares authorized; 44,247,102 and 40,627,200 shares issued at December 31, 2014 and December 31, 2013, respectively) | 44 | 41 | ||
Additional paid-in capital | 220,577 | 24,367 | ||
Retained earnings | 16,108 | 128,830 | ||
Treasury stock (zero and 6,450,304 shares at cost at December 31, 2014 and December 31, 2013, respectively) | -10,000 | |||
Accumulated other comprehensive income | 4,143 | 2,116 | ||
Total shareholders' equity | 240,872 | 145,354 | ||
Total liabilities and shareholders' equity | $242,550 | $155,360 |
Condensed_Quarterly_Financial_2
Condensed Quarterly Financial Data - Unaudited (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Total revenues | $43,026,000 | $40,571,000 | $35,403,000 | $35,527,000 | $37,278,000 | $32,502,000 | $28,901,000 | $29,822,000 | $154,527,000 | $128,503,000 | $122,123,000 |
Total expenses | 31,717,000 | 29,221,000 | 54,481,000 | 37,791,000 | 23,801,000 | 24,324,000 | 22,057,000 | 32,823,000 | 153,210,000 | 103,005,000 | 101,586,000 |
Income (loss) before income taxes | 11,309,000 | 11,350,000 | -19,078,000 | -2,264,000 | 13,477,000 | 8,178,000 | 6,844,000 | -3,001,000 | 1,317,000 | 25,498,000 | 20,537,000 |
Income tax expense (benefit) | 4,462,000 | 4,391,000 | -19,685,000 | 1,136,000 | -449,000 | 1,181,000 | 1,149,000 | 906,000 | -9,696,000 | 2,787,000 | 4,655,000 |
Net income | 6,847,000 | 6,959,000 | 607,000 | -3,400,000 | 13,926,000 | 6,997,000 | 5,695,000 | -3,907,000 | 11,013,000 | 22,711,000 | 15,882,000 |
Basic earnings per share (in dollars per share) | $0.15 | $0.16 | $0.02 | ($0.10) | $0.41 | $0.20 | $0.17 | ($0.11) | $0.28 | $0.66 | $0.46 |
Diluted earnings per share (in dollars per share) | $0.15 | $0.16 | $0.02 | ($0.10) | $0.41 | $0.20 | $0.17 | ($0.11) | $0.28 | $0.66 | $0.46 |
Offering expenses | 603,000 | 1,100,000 | 7,100,000 | ||||||||
Founder special compensation expenses | 6,700,000 | 11,200,000 | 202,000 | 10,000,000 | |||||||
Contract modification expenses | 17,800,000 | ||||||||||
Parent Company [Member] | |||||||||||
Total revenues | 13,019,000 | 22,711,000 | 15,883,000 | ||||||||
Total expenses | 3,086,000 | 1,000 | |||||||||
Income (loss) before income taxes | 9,933,000 | 22,711,000 | 15,882,000 | ||||||||
Net income | $11,013,000 | $22,711,000 | $15,882,000 |
Subsequent_Events_Details
Subsequent Events (Details) (Subsequent event) | 12 Months Ended |
Dec. 31, 2014 | |
item | |
Subsequent event | |
Subsequent Events | |
Number of items that required adjustment or disclosure | 0 |
Consolidated_Balance_Sheets_Pa1
Consolidated Balance Sheets (Parent company only) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Assets | ||||
Cash and cash equivalents | $38,348 | $69,431 | $35,079 | $33,659 |
Income taxes receivable | 1,451 | |||
Deferred income taxes, net | 23,864 | 3,728 | ||
Other assets | 6,229 | 6,276 | ||
Total assets | 2,091,764 | 1,690,951 | ||
Liabilities | ||||
Other payables, affiliate | 100 | |||
Total liabilities | 1,850,892 | 1,545,597 | ||
Shareholders' equity | ||||
Common stock, $.001 par value (150,000,000 shares authorized; 44,247,102 and 40,627,200 shares issued at December 31, 2014 and December 31, 2013, respectively) | 44 | 41 | ||
Additional paid-in capital | 220,577 | 24,367 | ||
Retained earnings | 16,108 | 128,830 | ||
Treasury stock (zero and 6,450,304 shares at cost at December 31, 2014 and December 31, 2013, respectively) | -10,000 | |||
Accumulated other comprehensive income | 4,143 | 2,116 | ||
Total shareholders' equity | 240,872 | 145,354 | 142,223 | |
Total liabilities and shareholders' equity | 2,091,764 | 1,690,951 | ||
Parent Company [Member] | ||||
Assets | ||||
Cash and cash equivalents | 57 | |||
Investment in subsidiaries | 241,167 | 155,360 | ||
Income taxes receivable | 57 | |||
Deferred income taxes, net | 552 | |||
Other assets | 717 | |||
Total assets | 242,550 | 155,360 | ||
Liabilities | ||||
Other payables, affiliate | 1,678 | 10,006 | ||
Total liabilities | 1,678 | 10,006 | ||
Shareholders' equity | ||||
Common stock, $.001 par value (150,000,000 shares authorized; 44,247,102 and 40,627,200 shares issued at December 31, 2014 and December 31, 2013, respectively) | 44 | 41 | ||
Additional paid-in capital | 220,577 | 24,367 | ||
Retained earnings | 16,108 | 128,830 | ||
Treasury stock (zero and 6,450,304 shares at cost at December 31, 2014 and December 31, 2013, respectively) | -10,000 | |||
Accumulated other comprehensive income | 4,143 | 2,116 | ||
Total shareholders' equity | 240,872 | 145,354 | ||
Total liabilities and shareholders' equity | $242,550 | $155,360 |
Consolidated_Balance_Sheets_Pa2
Consolidated Balance Sheets - Parenthetical (Parent company only) (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Common stock, par value (in dollars per share) | $0.00 | |
Common stock, shares authorized | 150,000,000 | |
Common stock, shares issued | 44,247,102 | 40,627,200 |
Preferred stock, par value (in dollars per share) | $0.00 | |
Preferred stock, shares authorized | 10,000,000 | 0 |
Preferred stock, shares issued | 0 | |
Preferred stock, shares outstanding | 0 | |
Treasury stock, shares | 0 | 6,450,304 |
Parent Company [Member] | ||
Common stock, par value (in dollars per share) | $0.00 | 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 44,247,102 | 40,627,200 |
Preferred stock, par value (in dollars per share) | $0.00 | 0.001 |
Preferred stock, shares authorized | 10,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury stock, shares | 6,450,304 |
Consolidated_Statements_of_Inc1
Consolidated Statements of Income (Parent company only) (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues: | |||||||||||
Total revenues | $43,026 | $40,571 | $35,403 | $35,527 | $37,278 | $32,502 | $28,901 | $29,822 | $154,527 | $128,503 | $122,123 |
Expenses: | |||||||||||
General and administrative | 58,891 | 53,418 | 54,114 | ||||||||
Total expenses | 31,717 | 29,221 | 54,481 | 37,791 | 23,801 | 24,324 | 22,057 | 32,823 | 153,210 | 103,005 | 101,586 |
Income (loss) before income taxes | 11,309 | 11,350 | -19,078 | -2,264 | 13,477 | 8,178 | 6,844 | -3,001 | 1,317 | 25,498 | 20,537 |
Income taxes: | |||||||||||
Current tax expense | 11,514 | 4,845 | 3,860 | ||||||||
Deferred tax expense (benefit) | -21,210 | -2,058 | 795 | ||||||||
Net income | 6,847 | 6,959 | 607 | -3,400 | 13,926 | 6,997 | 5,695 | -3,907 | 11,013 | 22,711 | 15,882 |
Parent Company [Member] | |||||||||||
Revenues: | |||||||||||
Equity in earnings of subsidiaries | 13,019 | 22,711 | 15,883 | ||||||||
Total revenues | 13,019 | 22,711 | 15,883 | ||||||||
Expenses: | |||||||||||
General and administrative | 3,086 | 1 | |||||||||
Total expenses | 3,086 | 1 | |||||||||
Income (loss) before income taxes | 9,933 | 22,711 | 15,882 | ||||||||
Income taxes: | |||||||||||
Current tax expense | -528 | ||||||||||
Deferred tax expense (benefit) | -552 | ||||||||||
Net income | $11,013 | $22,711 | $15,882 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parent company only) (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities | |||
Net income | $11,013 | $22,711 | $15,882 |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | |||
Deferred income taxes | -21,210 | -2,058 | 795 |
Share-based compensation | 2,012 | ||
Change in | |||
Income taxes receivable | 3,213 | -1,740 | 357 |
Other assets | 47 | -859 | 217 |
Increase (Decrease) in Due to Affiliates | -100 | -37 | -97 |
Net Cash Provided by (Used in) Operating Activities, Continuing Operations, Total | 23,176 | 33,856 | 27,060 |
Investing activities | |||
Net cash provided by (used in) investing activities | -127,975 | 15,791 | -11,464 |
Financing activities | |||
Dividends paid | -16,683 | -15,295 | -14,176 |
Proceeds from issuances of common stock | 289,322 | ||
Costs directly attributable to issuance of common stock | -1,578 | ||
Redemption of existing common stock | -190,595 | ||
Net cash provided by (used in) financing activities | 73,716 | -15,295 | -14,176 |
Net change in cash and cash equivalents | -31,083 | 34,352 | 1,420 |
Cash and cash equivalents at beginning of period | 69,431 | 35,079 | 33,659 |
Cash and cash equivalents at end of period | 38,348 | 69,431 | 35,079 |
Parent Company [Member] | |||
Operating activities | |||
Net income | 11,013 | 22,711 | 15,882 |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | |||
Equity in earnings of subsidiaries | -13,019 | -22,711 | -15,883 |
Deferred income taxes | -552 | ||
Share-based compensation | 2,012 | ||
Change in | |||
Income taxes receivable | -57 | ||
Other assets | -717 | ||
Increase (Decrease) in Due to Affiliates | -8,328 | 1 | |
Net Cash Provided by (Used in) Operating Activities, Continuing Operations, Total | -9,648 | ||
Investing activities | |||
Capital contribution to subsidiary | -87,000 | ||
Net cash provided by (used in) investing activities | -87,000 | ||
Financing activities | |||
Distributions received | 16,239 | 15,295 | 14,176 |
Dividends paid | -16,683 | -15,295 | -14,176 |
Proceeds from issuances of common stock | 289,322 | ||
Costs directly attributable to issuance of common stock | -1,578 | ||
Redemption of existing common stock | -190,595 | ||
Net cash provided by (used in) financing activities | 96,705 | ||
Net change in cash and cash equivalents | 57 | ||
Cash and cash equivalents at end of period | $57 |
Supplementary_Insurance_Inform1
Supplementary Insurance Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplementary Insurance Information, by Segment [Line Items] | |||
DAC | $1,036 | $1,095 | $1,176 |
Loss and LAE Reserves | 1,209,905 | 1,016,641 | 975,708 |
UPR | 480,124 | 386,279 | 253,638 |
Earned Premium | 96,650 | 84,378 | 78,096 |
Net Investment Income | 4,841 | 4,901 | 5,525 |
Loss and LAE Incurred | 40,821 | 32,090 | 28,989 |
DAC Amortization | 4,966 | 4,899 | 8,007 |
General and Administrative Expenses | 76,805 | 63,620 | 64,854 |
Net Written Premium | 99,074 | 86,773 | 79,165 |
Program segment | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
DAC | 1 | 157 | |
Loss and LAE Reserves | 1,201,279 | 1,009,068 | 969,642 |
UPR | 451,993 | 357,681 | 229,579 |
Earned Premium | -4 | -501 | 1,600 |
Loss and LAE Incurred | 217 | 465 | 3,062 |
DAC Amortization | 163 | 478 | |
General and Administrative Expenses | 10,855 | 11,010 | 9,316 |
Net Written Premium | -5 | -1,018 | 1,141 |
Lender segment | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
DAC | 1,036 | 1,094 | 1,019 |
Loss and LAE Reserves | 8,626 | 7,573 | 6,066 |
UPR | 28,131 | 28,598 | 24,059 |
Earned Premium | 96,654 | 84,879 | 76,496 |
Loss and LAE Incurred | 40,604 | 31,625 | 25,927 |
DAC Amortization | 4,966 | 4,736 | 7,529 |
General and Administrative Expenses | 38,995 | 36,020 | 39,193 |
Net Written Premium | 99,079 | 87,791 | 78,024 |
Corporate | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Net Investment Income | 4,841 | 4,901 | 5,525 |
General and Administrative Expenses | $26,955 | $16,590 | $16,345 |
Supplementary_Schedule_of_Allo1
Supplementary Schedule of Allowance For Policy Cancellations (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Allowance for policy cancellations. | |||
Beginning balance | $39,623,000 | $32,775,000 | $27,511,000 |
Additions | 209,335,000 | 165,030,000 | 132,408,000 |
Deductions | -197,678,000 | -160,940,000 | -128,881,000 |
Prior year development | 4,220,000 | 2,758,000 | 1,737,000 |
Ending balance | 55,500,000 | 39,623,000 | 32,775,000 |
Net negative impact to the balance sheet | $2,200,000 | $1,600,000 | $1,300,000 |