State National Companies 10-Q 10 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 10, 2017
Document and Entity Information
Entity Registrant Name	State National Companies, Inc.
Entity Central Index Key	1,610,793
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		42,173,561
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Investments:
Fixed-maturity securities – available-for-sale, at fair value (amortized cost – $373,431, $329,994, respectively)	$ 376,834	$ 332,107
Equity securities – available-for-sale, at fair value (cost – $2,282, $3,271, respectively)	2,394	3,224
Total investments	379,228	335,331
Cash and cash equivalents	49,133	91,698
Restricted cash and investments	4,003	2,958
Accounts receivable from agents, net	75,377	35,964
Reinsurance recoverable on paid losses	1,636	1,430
Deferred acquisition costs	1,161	1,194
Reinsurance recoverables	2,397,488	2,342,864
Property and equipment, net (includes land held for sale – $1,034, $1,034, respectively)	16,441	16,163
Interest receivable	2,129	2,112
Income taxes receivable		329
Deferred income taxes, net	27,709	28,858
Goodwill and intangible assets, net	14,714	12,588
Other assets	6,938	5,248
Total assets	2,975,957	2,876,737
Liabilities
Unpaid losses and loss adjustment expenses	1,746,399	1,703,706
Unearned premiums	691,233	680,691
Allowance for policy cancellations	58,502	66,418
Deferred ceding fees	33,806	32,226
Accounts payable to agents	1,762	2,639
Accounts payable to insurance companies	53,793	14,871
Debt, net	43,794	43,783
Income taxes payable	5,210
Other liabilities	34,208	36,023
Total liabilities	2,668,707	2,580,357
Shareholders' equity
Common stock, $.001 par value (150,000,000 shares authorized; 42,173,561 and 41,924,440 shares issued at March 31, 2017 and December 31, 2016, respectively)	42	42
Preferred stock, $.001 par value (10,000,000 shares authorized; no shares issued and outstanding at March 31, 2017 and December 31, 2016)
Additional paid-in capital	230,388	229,297
Retained earnings	75,205	66,230
Accumulated other comprehensive income	1,615	811
Total shareholders' equity	307,250	296,380
Total liabilities and shareholders' equity	$ 2,975,957	$ 2,876,737

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Consolidated Balance Sheets
Fixed-maturity securities - available-for-sale, amortized cost	$ 373,431	$ 329,994
Equity securities - available-for-sale, cost	2,282	3,271
Property and equipment, net - land held for sale	$ 1,034	$ 1,034
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	42,173,561	41,924,440
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues:
Premiums earned	$ 36,508	$ 31,677
Commission income	276	321
Ceding fees	17,645	16,244
Net investment income	2,151	2,040
Realized net investment gains (losses)	1,876	(638)
Other income	531	456
Total revenues	58,987	50,100
Expenses:
Losses and loss adjustment expenses	18,831	15,089
Commissions	1,574	1,697
Taxes, licenses, and fees	952	702
General and administrative	19,128	16,994
Interest expense	588	537
Total expenses	41,073	35,019
Income (loss) before income taxes	17,914	15,081
Income taxes:
Current tax expense (benefit)	5,709	4,354
Deferred tax expense (benefit)	715	1,057
Total income tax expense (benefit)	6,424	5,411
Net income (loss)	$ 11,490	$ 9,670
Net income (loss) per share attributable to common shareholders:
Basic earnings per share (in dollars per share)	$ 0.28	$ 0.23
Diluted earnings per share (in dollars per share)	0.27	0.23
Dividends, per share	$ 0.06	$ 0.06

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Consolidated Statements of Comprehensive Income
Net income (loss)	$ 11,490	$ 9,670
Unrealized gains (losses) on securities:
Unrealized holding gains (losses)	1,508	4,572
Tax effect on unrealized holding gains (losses)	(528)	(1,600)
Less: reclassification adjustments for realized gains included in net income	(271)	149
Tax effect on reclassification adjustments for realized gains included in net income	95	(52)
Other comprehensive income (loss)	804	3,069
Total comprehensive income (loss)	$ 12,294	$ 12,739

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Common stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Total
Balance at Dec. 31, 2015	$ 43	$ 224,719	$ 37,322	$ 1,373	$ 263,457
Increase (decrease) in shareholder's equity
Stock-based compensation expense		4,578			4,578
Dividends declared			(10,139)		(10,139)
Repurchase of common stock	(1)		(10,030)		(10,031)
Net income (loss)			49,077		49,077
Other comprehensive income (loss), net of tax				(562)	(562)
Balance at Dec. 31, 2016	42	229,297	66,230	811	296,380
Increase (decrease) in shareholder's equity
Stock-based compensation expense		1,091			1,091
Dividends declared			(2,515)		(2,515)
Net income (loss)			11,490		11,490
Other comprehensive income (loss), net of tax				804	804
Balance at Mar. 31, 2017	$ 42	$ 230,388	$ 75,205	$ 1,615	$ 307,250

Condensed Consolidated Statemen

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating activities
Net cash provided by (used in) operating activities	$ 1,634	$ (1,600)
Investing activities
Purchase of investments	(47,355)	(27,558)
Proceeds from sale of investments	26,271	14,117
Proceeds from maturities and principal receipts	9,538	6,079
Proceeds from dispositions of property and equipment	11	20
Purchase of property and equipment	(684)	(111)
Acquisition of consolidated subsidiaries, net of cash obtained	(31,980)
Net cash provided by (used in) investing activities	(44,199)	(7,453)
Financing activities
Dividends paid		(11)
Repurchase of common stock		(4,462)
Net cash provided by (used in) financing activities		(4,473)
Net change in cash and cash equivalents	(42,565)	(13,526)
Cash and cash equivalents at beginning of period	91,698	51,770
Cash and cash equivalents at end of period	$ 49,133	$ 38,244

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
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 conducts insurance-related activities along two major segments. The Company’s Program Services segment generates fee income, in the form of ceding fees, by offering issuing carrier capacity to both specialty general agents and other producers (“GAs”), who sell, control, and administer books of insurance business that are supported by third parties that assume reinsurance risk. Substantially all of the underwriting risk associated with the Program Services segment is ceded to unaffiliated, highly rated reinsurance companies or other reinsurers that provide collateral. The Company’s Lender Services segment generates premiums primarily from the sale of collateral protection insurance (“CPI”), which insures automobiles or other vehicles held as collateral for loans made by credit unions, banks and specialty finance companies. 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. The Company includes the results of operations of an acquired business in its consolidated financial statements from the date of the acquisition. Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and all subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the years ended December 31, 2016 and 2015. The interim financial data as of March 31, 2017 and 2016 is unaudited. However, in the opinion of the Company’s management (“Management”), the interim data includes all adjustments, consisting of normal recurring adjustments, necessary to fairly state the results for the interim period. The results of operations for the period ended March 31, 2017 and 2016 are not necessarily indicative of the operating results to be expected for the full year. Refer to “Summary of Significant Accounting Policies” in the consolidated financial statements for the three years in the period ended December 31, 2016 for information on accounting policies that we consider critical in preparing consolidated financial statements. 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. 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). Income Taxes 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 March 31, 2017 and December 31, 2016. 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 restricted stock grants and stock option awards that contain a service condition are recognized on a straight line pro rata basis over the vesting period. For restricted stock awards that contain a performance condition, the expense is recognized based on the awards expected to vest and the cumulative expense is adjusted whenever the estimate of the number of awards to vest changes. An estimation of future forfeitures of stock-based awards is incorporated into the determination of compensation expense. See Note 8 — “Stock-based Payments” for related disclosures. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” which replaces most existing GAAP revenue recognition guidance to a five-step revenue recognition model. The FASB has updated the guidance to include the following ASU’s: · ASU 2015-14—“Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”; · ASU 2016-08—“Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”; · ASU 2016-10—“Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”; · ASU 2016-11—“Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Recession of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at March 3, 2016 EITF Meeting (SEC Update)”; · ASU 2016-12—“Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”; and · ASU 2016-20—“Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” The new guidance excludes insurance contracts that are recognized under Topic 944 “Financial Services—Insurance”; however, income related to our agency operations will be recognized under the new guidance. The model provides for an analysis of transactions to determine when or 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. The Company has the option to choose to apply the guidance using either the full retrospective or a modified retrospective approach. The standards are effective for annual periods beginning after December 15, 2017, including interim reporting periods within that period. The Company has assessed its revenue streams to identify those contracts that are clearly excluded from the scope of the new standard and those that may be subject to the new standard. The Company will continue to evaluate the impact these ASUs will have on our financial results and disclosures and which adoption option to apply, but does not anticipate such impact to be material to the Company’s financial position or cash flows. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (Sub-Topic 825-10). The amendments in this update supersede the guidance to classify equity securities with readily determinable fair values into different categories (either trading or available-for-sale) and require equity securities to be measured at fair value with changes in the fair value recognized through net income. The amendments are expected to improve financial reporting by providing relevant information about an entity’s equity investments and reducing the number of items that are recognized in other comprehensive income. This ASU is effective for annual and interim periods beginning after December 15, 2017. The Company is currently evaluating what impact this ASU will have on financial results and disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842) that requires lessees to recognize the assets and liabilities related to leases on the balance sheet. The FASB is issuing this update to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company does not plan to early adopt and is currently evaluating what impact this ASU will have on financial results and disclosures. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The standard will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost and require entities to record allowances for available-for-sale (AFS) debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment (OTTI) model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This ASU is effective for annual and interim periods beginning after December 15, 2019. The Company will be evaluating what impact this ASU will have on financial results and disclosures. In August 2016, the FASB issued ASU 2016-14, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This ASU amends guidance related to debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and corporate-owned life insurance, distributions received from equity method investees and beneficial interests in securitization transactions. The guidance will generally be applied retrospectively and is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those years. The Company does not expect financial results and disclosures to be significantly impacted by this ASU. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” The amendments require entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. This ASU is effective for annual and interim periods beginning after December 15, 2017. The Company will be evaluating what impact this ASU will have on disclosures. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” Under the new guidance, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, then the transferred assets and activities do not constitute a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606. The ASU is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those years. The ASU will be applied prospectively to any transactions occurring within the period of adoption. Early adoption is permitted, including for interim or annual periods in which the financial statements have not been issued or made available for issuance. The Company does not plan to early adopt and will be evaluating what impact this ASU will have on financial results and disclosures. In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new guidance eliminates the requirement to calculate the implied fair value of goodwill under step two of the current goodwill impairment test, to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value based on step one of the current goodwill impairment test. The standard will be applied prospectively and is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019, for public business entities. The Company will be evaluating what impact this ASU will have on disclosures.

Investments

Investments	3 Months Ended
	Mar. 31, 2017
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: As of March 31, 2017 Cost or Gross Gross Amortized Unrealized Unrealized Fair ($ in thousands) Cost Gains Losses Value Fixed-maturity securities Government $ 31,526 $ 80 $ (85) $ 31,521 Government agency 1,262 17 (2) 1,277 State and municipality 57,710 951 (69) 58,592 Industrial and miscellaneous 177,801 4,323 (1,995) 180,129 Residential mortgage-backed 56,230 557 (659) 56,128 Commercial mortgage-backed 45,978 295 (387) 45,886 Redeemable preferred stock 2,924 448 (71) 3,301 Total fixed-maturity securities 373,431 6,671 (3,268) 376,834 Equity securities Non-redeemable preferred stock 2,200 277 (164) 2,313 Common stock 82 2 (3) 81 Total equity securities 2,282 279 (167) 2,394 Total investments $ 375,713 $ 6,950 $ (3,435) $ 379,228 As of December 31, 2016 Cost or Gross Gross Amortized Unrealized Unrealized Fair ($ in thousands) Cost Gains Losses Value Fixed-maturity securities Government $ 28,020 $ 87 $ (102) $ 28,005 Government agency 1,522 18 (2) 1,538 State and municipality 57,885 508 (183) 58,210 Industrial and miscellaneous 147,761 3,765 (2,111) 149,415 Residential mortgage-backed 51,237 536 (697) 51,076 Commercial mortgage-backed 40,410 300 (327) 40,383 Redeemable preferred stock 3,159 503 (182) 3,480 Total fixed-maturity securities 329,994 5,717 (3,604) 332,107 Equity securities Non-redeemable preferred stock 3,267 304 (350) 3,221 Common stock 4 — (1) 3 Total equity securities 3,271 304 (351) 3,224 Total investments $ 333,265 $ 6,021 $ (3,955) $ 335,331 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: As of March 31, 2017 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized ($ in thousands) Value Losses Value Losses Value Losses Fixed-maturity securities Government $ 16,438 $ (85) $ — $ — $ 16,438 $ (85) Government agency 533 (2) — — 533 (2) State and municipality 4,115 (69) — — 4,115 (69) Industrial and miscellaneous 56,560 (977) 4,530 (1,018) 61,090 (1,995) Residential mortgage-backed 33,019 (522) 3,165 (137) 36,184 (659) Commercial mortgage-backed 26,197 (341) 752 (46) 26,949 (387) Redeemable preferred stock 2,093 (52) 40 (19) 2,133 (71) Total fixed-maturity securities 138,955 (2,048) 8,487 (1,220) 147,442 (3,268) Equity securities Non-redeemable preferred stock 36 — 213 (164) 249 (164) Common stock 76 (3) — — 76 (3) Total equity securities 112 (3) 213 (164) 325 (167) $ 139,067 $ (2,051) $ 8,700 $ (1,384) $ 147,767 $ (3,435) As of December 31, 2016 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized ($ in thousands) Value Losses Value Losses Value Losses Fixed-maturity securities Government $ 19,371 $ (102) $ — $ — $ 19,371 $ (102) Government agency 538 (2) — — 538 (2) State and municipality 21,523 (183) — — 21,523 (183) Industrial and miscellaneous 52,995 (1,485) 2,784 (626) 55,779 (2,111) Residential mortgage-backed 29,776 (535) 3,338 (162) 33,114 (697) Commercial mortgage-backed 18,673 (293) 773 (34) 19,446 (327) Redeemable preferred stock 2,207 (171) (11) 2,342 (182) Total fixed-maturity securities 145,083 (2,771) 7,030 (833) 152,113 (3,604) Equity securities Non-redeemable preferred stock 570 (312) 42 (38) 612 (350) Common stock 3 (1) — — 3 (1) Total equity securities 573 (313) 42 (38) 615 (351) $ 145,656 $ (3,084) $ 7,072 $ (871) $ 152,728 $ (3,955) 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 regular review of the Company’s 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” in the consolidated financial statements for each of the three years in the period ended December 31, 2016. Management believes that the temporary impairments are primarily the result of a combination of widening credit spreads, and higher underlying Treasury rates, and that despite the wider credit spreads and higher rates, the securities are only temporarily impaired due to the strength of the issuing companies’ balance sheets, as well as their available liquidity options. For structured securities, future cash flow projections were used to determine potential impairment. For those securities where cash flow projections showed less than 100% principal recovery, a net present value test was done to determine any credit related losses. There were 275 securities in an unrealized loss position at March 31, 2017. Over 95% of these investments are investment-grade at March 31, 2017. We do not intend to sell or believe we will be required to sell any of our temporarily-impaired fixed maturities before recovery of their amortized cost basis. 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 March 31, 2017. Proceeds from sales of investments in fixed-maturity, equity and short-term securities for the three months ended March 31, 2017 and 2016 were $26.3 million and $14.1 million, respectively. The Company holds convertible securities with embedded derivatives. The embedded derivative is bifurcated from the host contract if all of the following criteria are met: the combined instrument is not accounted for in its entirety at fair value with changes in fair value recorded in earnings; the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract; and a separate instrument with the same terms as the embedded derivative would qualify as a derivative instrument. These embedded derivatives are presented together with the host contract and carried at estimated fair value. Changes in the estimated fair value of the embedded derivatives are reflected in “Realized net investment gains (losses)” in the condensed consolidated statements of income, while changes in the estimated fair value of the underlying fixed maturity securities are reflected in “Unrealized holding gains (losses)” in the condensed consolidated statements of comprehensive income. The following table presents the Company’s gross realized gains (losses) for the periods ended: Three Months Ended March 31, March 31, ($ in thousands) 2017 2016 Realized gains: Fixed-maturity securities $ 1,802 $ 494 Equity securities 5 77 Gross realized gains 1,807 571 Realized losses: Fixed-maturity securities (141) (253) Equity securities (1) (98) Other-than-temporary impairment losses on fixed-maturity securities — (90) Gross realized losses (142) (441) Change in fair value of embedded derivatives 211 (768) Net realized investment gains (losses) $ 1,876 $ (638) The Company had three non-cash exchanges of investment securities for the three months ended March 31, 2017. The Company received non-cash consideration of $511 thousand and recognized gains of $33 thousand on these exchanges. Gains are reflected in the “Realized net investment gains (losses)” on the condensed consolidated statements of income. The following schedule details the maturities of the Company’s available-for-sale fixed-maturity securities: As of March 31, 2017 ($ in thousands) Amortized Cost Fair Value Due in one year or less $ 12,279 $ 12,415 Due after one year through five years 138,448 140,842 Due after five years through ten years 105,852 106,104 Due after ten years 14,644 15,459 Residential mortgage-backed securities 56,230 56,128 Commercial mortgage-backed securities 45,978 45,886 $ 373,431 $ 376,834 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 approximately $0.8 million of mortgage-backed securities collateralized by subprime residential loans, which represent approximately 0.21% of the Company’s total investments as of March 31, 2017. The Company does not own mortgage derivatives. Net investment income for the periods ended, consists of the following: Three Months Ended March 31, March 31, ($ in thousands) 2017 2016 Interest on investments $ 2,285 $ 2,149 Dividends 103 116 Gross investment income 2,388 2,265 Investment expenses (237) (225) Net investment income $ 2,151 $ 2,040 The Company’s insurance subsidiaries are required to maintain deposits in various states where they are licensed to operate. These deposits consist of fixed-maturity securities at fair values totaling $83.3 million and $77.0 million at March 31, 2017 and December 31, 2016, respectively.

Income Tax Provision

Income Tax Provision	3 Months Ended
	Mar. 31, 2017
Income Taxes
Income Tax Provision	3. Income Tax Provision The Company computes its provision for income taxes in interim periods by applying its estimated annual effective tax rate against income (loss) before income taxes for the period. In addition, non-recurring or discrete items are recorded during the period in which they occur. The magnitude of the impact that discrete items have on the Company’s quarterly effective tax rate is dependent on the level of income in the period. A reconciliation of federal income tax expense computed by applying the federal statutory tax rate to income (loss) before income taxes for the periods ended is as follows: Three Months Ended March 31, 2017 March 31, 2016 Effective Effective ($ in thousands) Amount Tax Rate Amount Tax Rate Expected tax expense (benefit) $ 6,270 35.0 % $ 5,278 35.0 % Tax-exempt income (106) (0.6) (96) (0.6) State income taxes 310 1.7 268 1.8 Other (50) (0.2) (39) (0.3) Total income tax expense (benefit) $ 6,424 35.9 % $ 5,411 35.9 %

Reinsurance

Reinsurance	3 Months Ended
	Mar. 31, 2017
Reinsurance
Reinsurance	4. Reinsurance Through unaffiliated general agents, the Company’s insurance subsidiaries write property and casualty lines of business in the Program Services segment. This business is written and reinsured pursuant to quota share and excess of loss reinsurance contracts and general agency agreements that are typically tripartite agreements executed by the Company’s insurance subsidiaries, the reinsurer, and the general agent. Substantially all of the underwriting risk associated with this business is borne by the reinsurer. As compensation for writing this business, the Company’s insurance subsidiaries receive ceding fees from the producers and, accordingly, the related ceding fees receivable are reflected as accounts receivable from agents. In most instances, 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. Through our Lender Services segment, the Company is party to a reinsurance agreement in which it cedes 30% of certain CPI policies to CUMIS Insurance Society, Inc. (“CUNA Mutual”) and receives a ceding commission related to these policies. The Company’s insurance subsidiaries 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: March 31, December 31, ($ in thousands) 2017 2016 Ceded unearned premiums $ 665,151 $ 651,938 Ceded loss and loss adjustment expense reserves 1,732,337 1,690,926 Total reinsurance recoverables 2,397,488 2,342,864 Secured reinsurance recoverables (1,677,340) (1,678,243) Unsecured reinsurance recoverables $ 720,148 $ 664,621 The fair value of all collateral held by the Company’s insurance subsidiaries for reinsurers for whom we require collateral is approximately 136% of the related reinsurance recoverables as of March 31, 2017, with the lowest ratio for any such reinsurer being 100%.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2017
Fair Value Measurements
Fair Value Measurements	5. Fair Value Measurements Assets and liabilities reported in the condensed 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. Securities are recorded at estimated fair value with changes in estimated fair value reported in the consolidated statements of comprehensive income. · 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. 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. Securities are recorded at estimated fair value with changes in estimated fair value reported in the consolidated statements of comprehensive income. · Embedded derivatives: The Company invests in convertible securities that have embedded derivatives. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in the consolidated statements of net income. The estimated fair value of the embedded derivatives is calculated by the Company’s third-party investment managers using observable inputs. Management has reviewed the processes used by the pricing services and has determined that they result in fair values consistent with requirements for Level 1 and Level 2 investment securities. Based on an analysis of the inputs, the Company’s investments measured at fair value on a recurring basis have been categorized as follows: As of March 31, 2017 ($ in thousands) Level 1 Level 2 Level 3 Total Fixed-maturity securities Government $ — $ 31,521 $ — $ 31,521 Government agency — 1,277 — 1,277 State and municipality — 58,592 — 58,592 Industrial and miscellaneous — 180,129 — 180,129 Residential mortgage-backed — 56,128 — 56,128 Commercial mortgage-backed — 45,886 — 45,886 Redeemable preferred stock — 3,301 — 3,301 Total fixed-maturity securities — 376,834 — 376,834 Equity securities Non-redeemable preferred stock — 2,313 — 2,313 Common stock 75 6 — 81 Total equity securities 75 2,319 — 2,394 Total investments $ 75 $ 379,153 $ — $ 379,228 As of December 31, 2016 ($ in thousands) Level 1 Level 2 Level 3 Total Fixed-maturity securities Government $ — $ 28,005 $ — $ 28,005 Government agency — 1,538 — 1,538 State and municipality — 58,210 — 58,210 Industrial and miscellaneous — 149,415 — 149,415 Residential mortgage-backed — 51,076 — 51,076 Commercial mortgage-backed — 40,383 — 40,383 Redeemable preferred stock — 3,480 — 3,480 Total fixed-maturity securities — 332,107 — 332,107 Equity securities Non-redeemable preferred stock — 3,221 — 3,221 Common stock — 3 — 3 Total equity securities — 3,224 — 3,224 Total investments $ — $ 335,331 $ — $ 335,331 The fair value of embedded derivatives included in Level 2 securities was $9.6 million at March 31, 2017 and $9.5 million at December 31, 2016, respectively. There was no Level 3 activity including gains or losses recognized, purchases, or sales transaction during the periods ending March 31, 2017 and December 31, 2016. 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 March 31, 2017 and December 31, 2016.

Losses and Loss Adjustment Expe

Losses and Loss Adjustment Expenses	3 Months Ended
	Mar. 31, 2017
Investments
Losses and Loss Adjustment Expenses	6. Losses and Loss Adjustment Expenses The following table shows the activity in the liability for unpaid losses and loss adjustment expenses. ($ in thousands) 2017 2016 Balance at January 1, $ 1,703,706 $ 1,364,774 Reinsurance recoverables (1,690,926) (1,352,022) Net balance at January 1, 12,780 12,752 Incurred related to: Current year 17,444 14,369 Prior year 1,387 720 Total incurred 18,831 15,089 Paid related to: Current year 7,601 7,186 Prior year 9,948 8,037 Total paid 17,549 15,223 Net balance at March 31, 14,062 12,618 Reinsurance recoverables 1,732,337 1,399,510 Balance at March 31, $ 1,746,399 $ 1,412,128

401(k) Profit-Sharing Plan and

401(k) Profit-Sharing Plan and Trust	3 Months Ended
	Mar. 31, 2017
401(k) Profit-Sharing Plan and Trust
401(k) Profit-Sharing Plan and Trust	7. 401(k) Profit-Sharing Plan and Trust The Company has a 401(k) profit-sharing plan for employees that covers all officers and employees who are at least 18 years of age. The Company is required to make a matching contribution of 100% of the first 1% and 50% of the next 5% of employees’ contributions. 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 for the three months ended March 31, 2017 and 2016 was $533 thousand and $409 thousand, respectively.

Stock-based Payments

Stock-based Payments	3 Months Ended
	Mar. 31, 2017
Stock-based Payments
Stock-based Payments	8. 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. The fair value of the restricted shares granted is determined based on the most recent trading price of the stock as of the grant date. The fair value of each stock option grant is established on the grant date using the Black-Scholes option pricing model. A summary of the Company’s restricted shares and stock options activity is shown below: Weighted-Average Weighted-Average Restricted Grant Date Fair Value Stock Grant Date Fair Value 2017 Shares per Restricted Share Options per Stock Option Nonvested at January 1, 2017 278,050 $ 11.52 1,502,963 $ 2.73 Granted 249,121 14.36 — — Vested (21,757) 12.14 (166,666) 1.91 Nonvested at March 31, 2017 505,414 12.89 1,336,297 2.83 Weighted-Average Weighted-Average Restricted Grant Date Fair Value Stock Grant Date Fair Value 2016 Shares per Restricted Share Options per Stock Option Nonvested at January 1, 2016 144,362 $ 10.05 1,855,918 $ 3.22 Granted 195,835 12.14 500,000 1.91 Nonvested at March 31, 2016 340,197 11.25 2,355,918 2.94 Compensation expense for all share-based compensation was $1.1 million for the three months ended March 31, 2017 and $952 thousand for the three months ended March 31, 2016.

Concentration of Risk

Concentration of Risk	3 Months Ended
	Mar. 31, 2017
Concentration of Risk
Concentration of Risk	9. 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. The Company’s writings in California, Texas, Florida and New York comprised 55% and 56% of gross premiums written for the periods ending March 31, 2017 and 2016, respectively. The top five general agents comprised 55% and 63% of gross premiums written in the Program Services segment for the periods ending ended March 31, 2017 and 2016, respectively. The four largest reinsurers with unsecured reinsurance recoverables, all of which are rated A or higher by A.M. Best, accounted for approximately 16%, 13%, 7%, and 6% of the Company’s unsecured reinsurance recoverables at March 31, 2017.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies
Commitments and Contingencies	10 . 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. The Company’s insurance subsidiaries 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. The Company has a Collateral Protection Alliance (the “Alliance”) with CUMIS Insurance Society, Inc., a subsidiary of CUNA Mutual, to administer and write CPI business for CUNA Mutual’s customers. The Alliance includes an agency agreement and a reinsurance agreement whereby the Company cedes a portion of the business back to CUNA Mutual. 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 at a specified price in the event of termination of the Alliance.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2017
Earnings Per Share
Earnings Per Share	11. Earnings Per Share A reconciliation of the numerators and denominators of the basic and diluted per share calculations is presented below: Three Months Ended March 31, March 31, ($ in thousands, except for per share amounts) 2017 2016 Numerator for both basic and diluted earnings per share: Net income (loss) $ 11,490 $ 9,670 Denominator for both basic and diluted earnings per share: Weighted-average common shares outstanding 41,613,267 42,343,357 Dilutive effect of outstanding securities (determined using the treasury stock method) 881,971 53,356 Weighted-average common shares outstanding and potential common shares outstanding 42,495,238 42,396,713

Segment Information

Segment Information	3 Months Ended
	Mar. 31, 2017
Segment Information
Segment Information	12. Segment Information The following is business segment information for the periods indicated: Three Months Ended March 31, March 31, ($ in thousands) 2017 2016 Revenues: Program $ 17,645 $ 16,244 Lender 37,323 32,446 Corporate 4,019 1,410 Consolidated revenues $ 58,987 $ 50,100 Income (loss) before income taxes: Program $ 13,544 $ 12,618 Lender 4,009 4,869 Corporate 361 (2,406) Consolidated income (loss) before income taxes $ 17,914 $ 15,081 The following table summarizes the financial assets of the Company’s segments as of the periods indicated: March 31, December 31, ($ in thousands) 2017 2016 Assets: Program $ 2,479,853 $ 2,382,466 Lender 17,461 17,824 Corporate 478,643 476,447 $ 2,975,957 $ 2,876,737

Common Stock

Common Stock	3 Months Ended
	Mar. 31, 2017
Common Stock.
Common Stock	13. Common Stock On October 12, 2015, the Company announced a share repurchase program authorizing the repurchase of up to $50 million in shares of the Company's common stock through December 31, 2016. On November 22, 2016, the Company’s Board of Directors extended the repurchase program through December 31, 2017. Repurchases are made in accordance with the guidelines specified under Rule 10b-18 and may be made pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934. There were no repurchases during the three months ended March 31, 2017. During the three months ended March 31, 2016, the Company purchased 173,521 shares of its common stock at an aggregate purchase price including commissions of $1.6 million. The excess cost of the repurchased shares over par value was charged to retained earnings.

Debt

Debt	3 Months Ended
	Mar. 31, 2017
Debt
Debt	14. Debt Between 2002 and 2004, the Company formed three business trusts (the “Trusts”) for the sole purpose of issuing, in private placement transactions, $44.5 million of trust preferred securities (“TPS”). In turn, the Trusts used the proceeds thereof, together with the equity proceeds received from the Company upon their initial formation, to purchase 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. These debentures’ interest rates range from 3.80% to 4.10% plus the three-month LIBOR. All of the debentures mature between 2032 and 2034 and are reflected net of debt issuance costs in the condensed consolidated balance sheets. On March 31, 2016, the Company, through its subsidiary T.B.A. Insurance Group, Ltd. (“TBA”), entered into a loan agreement (“credit agreement”), which provides for a secured revolving credit facility in an aggregate principal amount of $15 million. The credit agreement matures on April 30, 2018. Under the credit agreement, TBA may request advances up to the aggregate amount of the unused commitment under the credit facility, on a revolving basis, prior to the maturity of the credit agreement. Borrowings under the credit agreement will bear interest at a variable rate equal to LIBOR plus 1.85% per annum; provided, however, that LIBOR shall be subject to a floor of 0.15%. TBA shall also pay a commitment fee on the daily average unused commitment amount for the period running from the closing date to the maturity date at a rate of 0.125% per annum. The credit agreement contains customary representations, warranties, covenants, and events of default, as well as a financial covenant requiring TBA and the Company to maintain a consolidated tangible net worth of at least $150 million. TBA’s obligations under the credit agreement are guaranteed by the Company and are secured by a securities account in the name of TBA and maintained with the creditor, in which TBA must maintain assets with a market value of at least $25 million.

Business Combinations

Business Combinations	3 Months Ended
	Mar. 31, 2017
Business Combinations
Business Combinations	15. Business Combinations Effective January 1, 2017, (“the acquisition date”), the Company acquired 100% of the outstanding common shares of Fireman’s Fund Insurance Company of Ohio, which was subsequently renamed Independent Specialty Insurance Company (“ISIC”). ISIC is an excess and surplus lines, or non-admitted, shell company. The purpose of the acquisition is to provide a dedicated insurance carrier for one of our programs. The acquisition date fair value of the consideration transferred totaled $49.4 million in cash. The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the acquisition date. ($ in thousands) Cash and cash equivalents $ 17,400 Fixed-maturity securities 29,611 Reinsurance recoverables 45,127 Interest receivable 142 Goodwill and intangible assets, net 2,300 Other receivables 107 Total identifiable assets acquired $ 94,687 Unpaid losses and loss adjustment expenses $ 45,127 Other liabilities 180 Total liabilities assumed 45,307 Net assets acquired $ 49,380 ISIC was acquired as a shell company with a 100% quota share reinsurance agreement. There was no income statement impact resulting from the acquisition. There is no goodwill to assign to reporting segments. The indefinite lived intangible asset is assigned to the Program Services segment. The Company recognized $25 thousand of acquisition related costs that were expensed in the current period. These costs are included in the condensed consolidated statements of income as “General and administrative” expenses.

Summary of Significant Accoun23

Summary of Significant Accounting Policies (Policy )	3 Months Ended
	Mar. 31, 2017
Summary of Significant Accounting Policies
Description of Business	Description of Business State National Companies, Inc. (the “Company”) refers to a group of companies that conducts insurance-related activities along two major segments. The Company’s Program Services segment generates fee income, in the form of ceding fees, by offering issuing carrier capacity to both specialty general agents and other producers (“GAs”), who sell, control, and administer books of insurance business that are supported by third parties that assume reinsurance risk. Substantially all of the underwriting risk associated with the Program Services segment is ceded to unaffiliated, highly rated reinsurance companies or other reinsurers that provide collateral. The Company’s Lender Services segment generates premiums primarily from the sale of collateral protection insurance (“CPI”), which insures automobiles or other vehicles held as collateral for loans made by credit unions, banks and specialty finance companies.
Principles of Consolidation	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. The Company includes the results of operations of an acquired business in its consolidated financial statements from the date of the acquisition.
Basis of Presentation	Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and all subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the years ended December 31, 2016 and 2015. The interim financial data as of March 31, 2017 and 2016 is unaudited. However, in the opinion of the Company’s management (“Management”), the interim data includes all adjustments, consisting of normal recurring adjustments, necessary to fairly state the results for the interim period. The results of operations for the period ended March 31, 2017 and 2016 are not necessarily indicative of the operating results to be expected for the full year. Refer to “Summary of Significant Accounting Policies” in the consolidated financial statements for the three years in the period ended December 31, 2016 for information on accounting policies that we consider critical in preparing consolidated financial statements.
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.
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).
Income Taxes	Income Taxes 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 March 31, 2017 and December 31, 2016.
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 restricted stock grants and stock option awards that contain a service condition are recognized on a straight line pro rata basis over the vesting period. For restricted stock awards that contain a performance condition, the expense is recognized based on the awards expected to vest and the cumulative expense is adjusted whenever the estimate of the number of awards to vest changes. An estimation of future forfeitures of stock-based awards is incorporated into the determination of compensation expense. See Note 8 — “Stock-based Payments” for related disclosures.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” which replaces most existing GAAP revenue recognition guidance to a five-step revenue recognition model. The FASB has updated the guidance to include the following ASU’s: · ASU 2015-14—“Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”; · ASU 2016-08—“Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”; · ASU 2016-10—“Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”; · ASU 2016-11—“Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Recession of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at March 3, 2016 EITF Meeting (SEC Update)”; · ASU 2016-12—“Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”; and · ASU 2016-20—“Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” The new guidance excludes insurance contracts that are recognized under Topic 944 “Financial Services—Insurance”; however, income related to our agency operations will be recognized under the new guidance. The model provides for an analysis of transactions to determine when or 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. The Company has the option to choose to apply the guidance using either the full retrospective or a modified retrospective approach. The standards are effective for annual periods beginning after December 15, 2017, including interim reporting periods within that period. The Company has assessed its revenue streams to identify those contracts that are clearly excluded from the scope of the new standard and those that may be subject to the new standard. The Company will continue to evaluate the impact these ASUs will have on our financial results and disclosures and which adoption option to apply, but does not anticipate such impact to be material to the Company’s financial position or cash flows. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (Sub-Topic 825-10). The amendments in this update supersede the guidance to classify equity securities with readily determinable fair values into different categories (either trading or available-for-sale) and require equity securities to be measured at fair value with changes in the fair value recognized through net income. The amendments are expected to improve financial reporting by providing relevant information about an entity’s equity investments and reducing the number of items that are recognized in other comprehensive income. This ASU is effective for annual and interim periods beginning after December 15, 2017. The Company is currently evaluating what impact this ASU will have on financial results and disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842) that requires lessees to recognize the assets and liabilities related to leases on the balance sheet. The FASB is issuing this update to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company does not plan to early adopt and is currently evaluating what impact this ASU will have on financial results and disclosures. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The standard will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost and require entities to record allowances for available-for-sale (AFS) debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment (OTTI) model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This ASU is effective for annual and interim periods beginning after December 15, 2019. The Company will be evaluating what impact this ASU will have on financial results and disclosures. In August 2016, the FASB issued ASU 2016-14, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This ASU amends guidance related to debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and corporate-owned life insurance, distributions received from equity method investees and beneficial interests in securitization transactions. The guidance will generally be applied retrospectively and is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those years. The Company does not expect financial results and disclosures to be significantly impacted by this ASU. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” The amendments require entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. This ASU is effective for annual and interim periods beginning after December 15, 2017. The Company will be evaluating what impact this ASU will have on disclosures. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” Under the new guidance, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, then the transferred assets and activities do not constitute a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606. The ASU is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those years. The ASU will be applied prospectively to any transactions occurring within the period of adoption. Early adoption is permitted, including for interim or annual periods in which the financial statements have not been issued or made available for issuance. The Company does not plan to early adopt and will be evaluating what impact this ASU will have on financial results and disclosures. In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new guidance eliminates the requirement to calculate the implied fair value of goodwill under step two of the current goodwill impairment test, to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value based on step one of the current goodwill impairment test. The standard will be applied prospectively and is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019, for public business entities. The Company will be evaluating what impact this ASU will have on disclosures.

Investments (Tables)

Investments (Tables)	3 Months Ended
	Mar. 31, 2017
Investments
Summary of amortized cost, gross unrealized gains and losses, and the fair value of investment securities by class	As of March 31, 2017 Cost or Gross Gross Amortized Unrealized Unrealized Fair ($ in thousands) Cost Gains Losses Value Fixed-maturity securities Government $ 31,526 $ 80 $ (85) $ 31,521 Government agency 1,262 17 (2) 1,277 State and municipality 57,710 951 (69) 58,592 Industrial and miscellaneous 177,801 4,323 (1,995) 180,129 Residential mortgage-backed 56,230 557 (659) 56,128 Commercial mortgage-backed 45,978 295 (387) 45,886 Redeemable preferred stock 2,924 448 (71) 3,301 Total fixed-maturity securities 373,431 6,671 (3,268) 376,834 Equity securities Non-redeemable preferred stock 2,200 277 (164) 2,313 Common stock 82 2 (3) 81 Total equity securities 2,282 279 (167) 2,394 Total investments $ 375,713 $ 6,950 $ (3,435) $ 379,228 As of December 31, 2016 Cost or Gross Gross Amortized Unrealized Unrealized Fair ($ in thousands) Cost Gains Losses Value Fixed-maturity securities Government $ 28,020 $ 87 $ (102) $ 28,005 Government agency 1,522 18 (2) 1,538 State and municipality 57,885 508 (183) 58,210 Industrial and miscellaneous 147,761 3,765 (2,111) 149,415 Residential mortgage-backed 51,237 536 (697) 51,076 Commercial mortgage-backed 40,410 300 (327) 40,383 Redeemable preferred stock 3,159 503 (182) 3,480 Total fixed-maturity securities 329,994 5,717 (3,604) 332,107 Equity securities Non-redeemable preferred stock 3,267 304 (350) 3,221 Common stock 4 — (1) 3 Total equity securities 3,271 304 (351) 3,224 Total investments $ 333,265 $ 6,021 $ (3,955) $ 335,331
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	As of March 31, 2017 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized ($ in thousands) Value Losses Value Losses Value Losses Fixed-maturity securities Government $ 16,438 $ (85) $ — $ — $ 16,438 $ (85) Government agency 533 (2) — — 533 (2) State and municipality 4,115 (69) — — 4,115 (69) Industrial and miscellaneous 56,560 (977) 4,530 (1,018) 61,090 (1,995) Residential mortgage-backed 33,019 (522) 3,165 (137) 36,184 (659) Commercial mortgage-backed 26,197 (341) 752 (46) 26,949 (387) Redeemable preferred stock 2,093 (52) 40 (19) 2,133 (71) Total fixed-maturity securities 138,955 (2,048) 8,487 (1,220) 147,442 (3,268) Equity securities Non-redeemable preferred stock 36 — 213 (164) 249 (164) Common stock 76 (3) — — 76 (3) Total equity securities 112 (3) 213 (164) 325 (167) $ 139,067 $ (2,051) $ 8,700 $ (1,384) $ 147,767 $ (3,435) As of December 31, 2016 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized ($ in thousands) Value Losses Value Losses Value Losses Fixed-maturity securities Government $ 19,371 $ (102) $ — $ — $ 19,371 $ (102) Government agency 538 (2) — — 538 (2) State and municipality 21,523 (183) — — 21,523 (183) Industrial and miscellaneous 52,995 (1,485) 2,784 (626) 55,779 (2,111) Residential mortgage-backed 29,776 (535) 3,338 (162) 33,114 (697) Commercial mortgage-backed 18,673 (293) 773 (34) 19,446 (327) Redeemable preferred stock 2,207 (171) (11) 2,342 (182) Total fixed-maturity securities 145,083 (2,771) 7,030 (833) 152,113 (3,604) Equity securities Non-redeemable preferred stock 570 (312) 42 (38) 612 (350) Common stock 3 (1) — — 3 (1) Total equity securities 573 (313) 42 (38) 615 (351) $ 145,656 $ (3,084) $ 7,072 $ (871) $ 152,728 $ (3,955)
Schedule of gross realized gains (losses)	Three Months Ended March 31, March 31, ($ in thousands) 2017 2016 Realized gains: Fixed-maturity securities $ 1,802 $ 494 Equity securities 5 77 Gross realized gains 1,807 571 Realized losses: Fixed-maturity securities (141) (253) Equity securities (1) (98) Other-than-temporary impairment losses on fixed-maturity securities — (90) Gross realized losses (142) (441) Change in fair value of embedded derivatives 211 (768) Net realized investment gains (losses) $ 1,876 $ (638)
Schedule detailing the maturities of the Company's fixed-maturity securities, available-for-sale	As of March 31, 2017 ($ in thousands) Amortized Cost Fair Value Due in one year or less $ 12,279 $ 12,415 Due after one year through five years 138,448 140,842 Due after five years through ten years 105,852 106,104 Due after ten years 14,644 15,459 Residential mortgage-backed securities 56,230 56,128 Commercial mortgage-backed securities 45,978 45,886 $ 373,431 $ 376,834
Schedule of net investment income	Three Months Ended March 31, March 31, ($ in thousands) 2017 2016 Interest on investments $ 2,285 $ 2,149 Dividends 103 116 Gross investment income 2,388 2,265 Investment expenses (237) (225) Net investment income $ 2,151 $ 2,040

Income Tax Provision (Tables)

Income Tax Provision (Tables)	3 Months Ended
	Mar. 31, 2017
Income Taxes
Schedule of reconciliation of federal income tax expense computed by applying the federal statutory tax rate to income (loss) before federal income tax	Three Months Ended March 31, 2017 March 31, 2016 Effective Effective ($ in thousands) Amount Tax Rate Amount Tax Rate Expected tax expense (benefit) $ 6,270 35.0 % $ 5,278 35.0 % Tax-exempt income (106) (0.6) (96) (0.6) State income taxes 310 1.7 268 1.8 Other (50) (0.2) (39) (0.3) Total income tax expense (benefit) $ 6,424 35.9 % $ 5,411 35.9 %

Reinsurance (Tables)

Reinsurance (Tables)	3 Months Ended
	Mar. 31, 2017
Reinsurance
Summary of balances	March 31, December 31, ($ in thousands) 2017 2016 Ceded unearned premiums $ 665,151 $ 651,938 Ceded loss and loss adjustment expense reserves 1,732,337 1,690,926 Total reinsurance recoverables 2,397,488 2,342,864 Secured reinsurance recoverables (1,677,340) (1,678,243) Unsecured reinsurance recoverables $ 720,148 $ 664,621

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Measurements
Schedule of investments measured at fair value on recurring basis	As of March 31, 2017 ($ in thousands) Level 1 Level 2 Level 3 Total Fixed-maturity securities Government $ — $ 31,521 $ — $ 31,521 Government agency — 1,277 — 1,277 State and municipality — 58,592 — 58,592 Industrial and miscellaneous — 180,129 — 180,129 Residential mortgage-backed — 56,128 — 56,128 Commercial mortgage-backed — 45,886 — 45,886 Redeemable preferred stock — 3,301 — 3,301 Total fixed-maturity securities — 376,834 — 376,834 Equity securities Non-redeemable preferred stock — 2,313 — 2,313 Common stock 75 6 — 81 Total equity securities 75 2,319 — 2,394 Total investments $ 75 $ 379,153 $ — $ 379,228 As of December 31, 2016 ($ in thousands) Level 1 Level 2 Level 3 Total Fixed-maturity securities Government $ — $ 28,005 $ — $ 28,005 Government agency — 1,538 — 1,538 State and municipality — 58,210 — 58,210 Industrial and miscellaneous — 149,415 — 149,415 Residential mortgage-backed — 51,076 — 51,076 Commercial mortgage-backed — 40,383 — 40,383 Redeemable preferred stock — 3,480 — 3,480 Total fixed-maturity securities — 332,107 — 332,107 Equity securities Non-redeemable preferred stock — 3,221 — 3,221 Common stock — 3 — 3 Total equity securities — 3,224 — 3,224 Total investments $ — $ 335,331 $ — $ 335,331

Losses and Loss Adjustment Ex28

Losses and Loss Adjustment Expenses (Tables)	3 Months Ended
	Mar. 31, 2017
Income Taxes
Schedule in the liability for unpaid losses and loss adjustment expenses	($ in thousands) 2017 2016 Balance at January 1, $ 1,703,706 $ 1,364,774 Reinsurance recoverables (1,690,926) (1,352,022) Net balance at January 1, 12,780 12,752 Incurred related to: Current year 17,444 14,369 Prior year 1,387 720 Total incurred 18,831 15,089 Paid related to: Current year 7,601 7,186 Prior year 9,948 8,037 Total paid 17,549 15,223 Net balance at March 31, 14,062 12,618 Reinsurance recoverables 1,732,337 1,399,510 Balance at March 31, $ 1,746,399 $ 1,412,128

Stock-based Payments (Tables)

Stock-based Payments (Tables)	3 Months Ended
	Mar. 31, 2017
Stock-based Payments
Schedule of nonvested stock activity	Weighted-Average Weighted-Average Restricted Grant Date Fair Value Stock Grant Date Fair Value 2017 Shares per Restricted Share Options per Stock Option Nonvested at January 1, 2017 278,050 $ 11.52 1,502,963 $ 2.73 Granted 249,121 14.36 — — Vested (21,757) 12.14 (166,666) 1.91 Nonvested at March 31, 2017 505,414 12.89 1,336,297 2.83 Weighted-Average Weighted-Average Restricted Grant Date Fair Value Stock Grant Date Fair Value 2016 Shares per Restricted Share Options per Stock Option Nonvested at January 1, 2016 144,362 $ 10.05 1,855,918 $ 3.22 Granted 195,835 12.14 500,000 1.91 Nonvested at March 31, 2016 340,197 11.25 2,355,918 2.94

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2017
Earnings Per Share
Schedule of reconciliation of the numerators and denominators of the basic and diluted per share calculations	Three Months Ended March 31, March 31, ($ in thousands, except for per share amounts) 2017 2016 Numerator for both basic and diluted earnings per share: Net income (loss) $ 11,490 $ 9,670 Denominator for both basic and diluted earnings per share: Weighted-average common shares outstanding 41,613,267 42,343,357 Dilutive effect of outstanding securities (determined using the treasury stock method) 881,971 53,356 Weighted-average common shares outstanding and potential common shares outstanding 42,495,238 42,396,713

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Mar. 31, 2017
Segment Information
Schedule of business segment information	Three Months Ended March 31, March 31, ($ in thousands) 2017 2016 Revenues: Program $ 17,645 $ 16,244 Lender 37,323 32,446 Corporate 4,019 1,410 Consolidated revenues $ 58,987 $ 50,100 Income (loss) before income taxes: Program $ 13,544 $ 12,618 Lender 4,009 4,869 Corporate 361 (2,406) Consolidated income (loss) before income taxes $ 17,914 $ 15,081
Schedule of the financial assets of the Entity's segments	March 31, December 31, ($ in thousands) 2017 2016 Assets: Program $ 2,479,853 $ 2,382,466 Lender 17,461 17,824 Corporate 478,643 476,447 $ 2,975,957 $ 2,876,737

Business Combinations (Tables)

Business Combinations (Tables)	3 Months Ended
	Mar. 31, 2017
Business Combinations
Schedule summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date	($ in thousands) Cash and cash equivalents $ 17,400 Fixed-maturity securities 29,611 Reinsurance recoverables 45,127 Interest receivable 142 Goodwill and intangible assets, net 2,300 Other receivables 107 Total identifiable assets acquired $ 94,687 Unpaid losses and loss adjustment expenses $ 45,127 Other liabilities 180 Total liabilities assumed 45,307 Net assets acquired $ 49,380

Summary of Significant Accoun33

Summary of Significant Accounting Policies (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)item	Mar. 31, 2016USD ($)	Dec. 31, 2016USD ($)
Income Taxes
Uncertain tax positions	$ 0		$ 0
Income tax expense (benefit)	$ 6,424	$ 5,411
Number of major segments | item	2

Investments - Amortized Cost, G

Investments - Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Investments
Cost or Amortized Cos	$ 375,713	$ 333,265
Gross Unrealized Gains	6,950	6,021
Gross Unrealized Losses	(3,435)	(3,955)
Total investments	379,228	335,331
Fixed-maturity securities
Investments
Cost or Amortized Cos	373,431	329,994
Gross Unrealized Gains	6,671	5,717
Gross Unrealized Losses	(3,268)	(3,604)
Total investments	376,834	332,107
Government
Investments
Cost or Amortized Cos	31,526	28,020
Gross Unrealized Gains	80	87
Gross Unrealized Losses	(85)	(102)
Total investments	31,521	28,005
Government agency
Investments
Cost or Amortized Cos	1,262	1,522
Gross Unrealized Gains	17	18
Gross Unrealized Losses	(2)	(2)
Total investments	1,277	1,538
State and municipality
Investments
Cost or Amortized Cos	57,710	57,885
Gross Unrealized Gains	951	508
Gross Unrealized Losses	(69)	(183)
Total investments	58,592	58,210
Industrial and miscellaneous
Investments
Cost or Amortized Cos	177,801	147,761
Gross Unrealized Gains	4,323	3,765
Gross Unrealized Losses	(1,995)	(2,111)
Total investments	180,129	149,415
Residential mortgage-backed
Investments
Cost or Amortized Cos	56,230	51,237
Gross Unrealized Gains	557	536
Gross Unrealized Losses	(659)	(697)
Total investments	56,128	51,076
Commercial mortgage-backed
Investments
Cost or Amortized Cos	45,978	40,410
Gross Unrealized Gains	295	300
Gross Unrealized Losses	(387)	(327)
Total investments	45,886	40,383
Redeemable preferred stock
Investments
Cost or Amortized Cos	2,924	3,159
Gross Unrealized Gains	448	503
Gross Unrealized Losses	(71)	(182)
Total investments	3,301	3,480
Equity securities
Investments
Cost or Amortized Cos	2,282	3,271
Gross Unrealized Gains	279	304
Gross Unrealized Losses	(167)	(351)
Total investments	2,394	3,224
Non-redeemable preferred stock
Investments
Cost or Amortized Cos	2,200	3,267
Gross Unrealized Gains	277	304
Gross Unrealized Losses	(164)	(350)
Total investments	2,313	3,221
Common stock
Investments
Cost or Amortized Cos	82	4
Gross Unrealized Gains	2
Gross Unrealized Losses	(3)	(1)
Total investments	$ 81	$ 3

Investments - Gross Unrealized

Investments - Gross Unrealized Losses, Fair Value and Length of Time Securities in Continuous Unrealized Loss Position (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)item	Mar. 31, 2016USD ($)	Dec. 31, 2016USD ($)
Fair Value
Less Than 12 Months	$ 139,067		$ 145,656
12 Months or More	8,700		7,072
Total	147,767		152,728
Unrealized Losses
Less Than 12 Months	(2,051)		(3,084)
12 Months or More	(1,384)		(871)
Total	$ (3,435)		(3,955)
Number of securities in unrealized loss position | item	275
Proceeds from sales of investments in fixed-maturity, equity and short-term securities	$ 26,300	$ 14,100
Fixed-maturity securities
Fair Value
Less Than 12 Months	138,955		145,083
12 Months or More	8,487		7,030
Total	147,442		152,113
Unrealized Losses
Less Than 12 Months	(2,048)		(2,771)
12 Months or More	(1,220)		(833)
Total	(3,268)		(3,604)
Government
Fair Value
Less Than 12 Months	16,438		19,371
Total	16,438		19,371
Unrealized Losses
Less Than 12 Months	(85)		(102)
Total	(85)		(102)
Government agency
Fair Value
Less Than 12 Months	533		538
Total	533		538
Unrealized Losses
Less Than 12 Months	(2)		(2)
Total	(2)		(2)
State and municipality
Fair Value
Less Than 12 Months	4,115		21,523
Total	4,115		21,523
Unrealized Losses
Less Than 12 Months	(69)		(183)
Total	(69)		(183)
Industrial and miscellaneous
Fair Value
Less Than 12 Months	56,560		52,995
12 Months or More	4,530		2,784
Total	61,090		55,779
Unrealized Losses
Less Than 12 Months	(977)		(1,485)
12 Months or More	(1,018)		(626)
Total	(1,995)		(2,111)
Residential mortgage-backed
Fair Value
Less Than 12 Months	33,019		29,776
12 Months or More	3,165		3,338
Total	36,184		33,114
Unrealized Losses
Less Than 12 Months	(522)		(535)
12 Months or More	(137)		(162)
Total	(659)		(697)
Commercial mortgage-backed
Fair Value
Less Than 12 Months	26,197		18,673
12 Months or More	752		773
Total	26,949		19,446
Unrealized Losses
Less Than 12 Months	(341)		(293)
12 Months or More	(46)		(34)
Total	(387)		(327)
Redeemable preferred stock
Fair Value
Less Than 12 Months	2,093		2,207
12 Months or More	40		135
Total	2,133		2,342
Unrealized Losses
Less Than 12 Months	(52)		(171)
12 Months or More	(19)		(11)
Total	(71)		(182)
Equity securities
Fair Value
Less Than 12 Months	112		573
12 Months or More	213		42
Total	325		615
Unrealized Losses
Less Than 12 Months	(3)		(313)
12 Months or More	(164)		(38)
Total	(167)		(351)
Non-redeemable preferred stock
Fair Value
Less Than 12 Months	36		570
12 Months or More	213		42
Total	249		612
Unrealized Losses
Less Than 12 Months			(312)
12 Months or More	(164)		(38)
Total	(164)		(350)
Common stock
Fair Value
Less Than 12 Months	76		3
Total	76		3
Unrealized Losses
Less Than 12 Months	(3)		(1)
Total	$ (3)		$ (1)
Investment-grade
Unrealized Losses
Percentage of investments in unrealized loss position	95.00%

Investments - Gross Realized Ga

Investments - Gross Realized Gains (Losses) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)item	Mar. 31, 2016USD ($)
Realized gains:
Fixed-maturity securities	$ 1,802	$ 494
Equity securities	5	77
Gross realized gains	1,807	571
Realized losses:
Fixed-maturity securities	(141)	(253)
Equity securities	(1)	(98)
Other-than-temporary impairment losses on fixed-maturity securities		(90)
Gross realized losses	(142)	(441)
Change in fair value of embedded derivatives	211	(768)
Net realized investment gains (losses)	$ 1,876	$ (638)
Number of non-cash exchanges of an investment security | item	3
Non-cash consideration received for exchanges	$ 511
Gains recognized on exchanges	$ 33

Investments - Maturities of Fix

Investments - Maturities of Fixed-Maturity Securities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Amortized Cost
Due in one year or less	$ 12,279
Due after one year through five years	138,448
Due after five years through ten years	105,852
Due after ten years	14,644
Total amortized cost for fixed maturity securities	373,431	$ 329,994
Fair value
Due in one year or less	12,415
Due after one year through five years	140,842
Due after five years through ten years	106,104
Due after ten years	15,459
Total fixed maturity securities	376,834	$ 332,107
Mortgage-backed securities
Fair value
Mortgage-backed securities collateralized by subprime residential loans	$ 800
Percentage of total investments which are collateralized by subprime residential loans	0.21%
Residential mortgage-backed
Amortized Cost
Residential mortgage-backed securities and Commercial mortgage-backed securities	$ 56,230
Fair value
Residential mortgage-backed securities and Commercial mortgage-backed securities	56,128
Commercial mortgage-backed
Amortized Cost
Residential mortgage-backed securities and Commercial mortgage-backed securities	45,978
Fair value
Residential mortgage-backed securities and Commercial mortgage-backed securities	$ 45,886

Investments - Net Investment In

Investments - Net Investment Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Net investment income
Interest on investments	$ 2,285	$ 2,149
Dividends	103	116
Gross investment income	2,388	2,265
Investment expenses	(237)	(225)
Net investment income	2,151	$ 2,040
Fair value of fixed-maturity securities on deposit	$ 83,300		$ 77,000

Income Tax Provision (Details)

Income Tax Provision (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Federal And State Income Tax Expense Benefit Abstract
Total income tax expense (benefit)	$ 6,424	$ 5,411
Federal graduated rates	35.00%	35.00%
Amount
Expected tax expense (benefit)	$ 6,270	$ 5,278
Tax-exempt income	(106)	(96)
State income taxes	310	268
Other	(50)	(39)
Total income tax expense (benefit)	$ 6,424	$ 5,411
Effective Tax Rate
Expected tax expense (benefit) (as a percent)	35.00%	35.00%
Tax-exempt income (as a percent)	(0.60%)	(0.60%)
State income taxes (as a percent)	1.70%	1.80%
Other (as a percent)	(0.20%)	(0.30%)
Total income tax expense (benefit) (as a percent)	35.90%	35.90%

Reinsurance (Details)

Reinsurance (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Ceded unearned premiums	$ 665,151	$ 651,938
Ceded loss and loss adjustment expense reserves	1,732,337	1,690,926
Total reinsurance recoverables	2,397,488	2,342,864
Secured reinsurance recoverables	(1,677,340)	(1,678,243)
Unsecured reinsurance recoverables	$ 720,148	$ 664,621
Fair value of the collateral held as a percentage of the secured reinsurance recoverables	136.00%
Minimum
Fair value of the collateral held as a percentage of the secured reinsurance recoverables	100.00%
CUMIS Insurance Society Inc Member
Percentage of certain CPI policies ceded	30.00%

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Fair Value Measurements
Fixed-maturity securities	$ 376,834	$ 332,107
Equity securities	2,394	3,224
Level 3 activity	0	0
Transfers between Level 1, Level 2, and Level 3	0	0
Level 1
Fair Value Measurements
Total	75
Level 1 | Equity securities
Fair Value Measurements
Equity securities	75
Level 1 | Common stock
Fair Value Measurements
Equity securities	75
Level 2
Fair Value Measurements
Fair value of embedded derivatives	9,600	9,500
Recurring basis
Fair Value Measurements
Total	379,228	335,331
Recurring basis | Fixed-maturity securities
Fair Value Measurements
Fixed-maturity securities	376,834	332,107
Recurring basis | Government
Fair Value Measurements
Fixed-maturity securities	31,521	28,005
Recurring basis | Government agency
Fair Value Measurements
Fixed-maturity securities	1,277	1,538
Recurring basis | State and municipality
Fair Value Measurements
Fixed-maturity securities	58,592	58,210
Recurring basis | Industrial and miscellaneous
Fair Value Measurements
Fixed-maturity securities	180,129	149,415
Recurring basis | Residential mortgage-backed
Fair Value Measurements
Fixed-maturity securities	56,128	51,076
Recurring basis | Commercial mortgage-backed
Fair Value Measurements
Fixed-maturity securities	45,886	40,383
Recurring basis | Redeemable preferred stock
Fair Value Measurements
Fixed-maturity securities	3,301	3,480
Recurring basis | Equity securities
Fair Value Measurements
Equity securities	2,394	3,224
Recurring basis | Non-redeemable preferred stock
Fair Value Measurements
Equity securities	2,313	3,221
Recurring basis | Common stock
Fair Value Measurements
Equity securities	81	3
Recurring basis | Level 2
Fair Value Measurements
Total	379,153	335,331
Recurring basis | Level 2 | Fixed-maturity securities
Fair Value Measurements
Fixed-maturity securities	376,834	332,107
Recurring basis | Level 2 | Government
Fair Value Measurements
Fixed-maturity securities	31,521	28,005
Recurring basis | Level 2 | Government agency
Fair Value Measurements
Fixed-maturity securities	1,277	1,538
Recurring basis | Level 2 | State and municipality
Fair Value Measurements
Fixed-maturity securities	58,592	58,210
Recurring basis | Level 2 | Industrial and miscellaneous
Fair Value Measurements
Fixed-maturity securities	180,129	149,415
Recurring basis | Level 2 | Residential mortgage-backed
Fair Value Measurements
Fixed-maturity securities	56,128	51,076
Recurring basis | Level 2 | Commercial mortgage-backed
Fair Value Measurements
Fixed-maturity securities	45,886	40,383
Recurring basis | Level 2 | Redeemable preferred stock
Fair Value Measurements
Fixed-maturity securities	3,301	3,480
Recurring basis | Level 2 | Equity securities
Fair Value Measurements
Equity securities	2,319	3,224
Recurring basis | Level 2 | Non-redeemable preferred stock
Fair Value Measurements
Equity securities	2,313	3,221
Recurring basis | Level 2 | Common stock
Fair Value Measurements
Equity securities	$ 6	$ 3

Losses and Loss Adjustment Ex42

Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Liability for Claims and Claims Adjustment Expenses
Balance at January 1	$ 1,703,706	$ 1,364,774
Reinsurance recoverables	(1,690,926)	(1,352,022)
Net balance at January 1	12,780	12,752
Incurred related to:
Current year	17,444	14,369
Prior year	1,387	720
Total incurred	18,831	15,089
Paid related to:
Current year	7,601	7,186
Prior year	9,948	8,037
Total paid	17,549	15,223
Net balance at March 31	14,062	12,618
Reinsurance recoverable	1,732,337	1,399,510
Balance at March 31	$ 1,746,399	$ 1,412,128

401(k) Profit-Sharing Plan an43

401(k) Profit-Sharing Plan and Trust (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Minimum age of officers and employees covered under plan	18 years
Employer contribution expense	$ 533	$ 409
First One Percent Member
Contribution required to made by employer which match with employees contribution (as a percent)	100.00%
Next Five Percent Member
Contribution required to made by employer which match with employees contribution (as a percent)	50.00%

Stock-based Payments - Assumpti

Stock-based Payments - Assumptions (Details) - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	May 29, 2014
Long-Term Incentive Plan 2014 | Employee and non-employee director
Stock-based Payments
Shares issued					4,400,000
Stock Options
Stock-based Payments
Granted (in shares)	500,000
Weighted average exercise price of non-vested options (in dollars per share)	$ 2.94	$ 2.83	$ 2.73	$ 3.22

Stock-based Payments - Restrict

Stock-based Payments - Restricted Shares and Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Weighted-Average Grant Date Fair Value per Stock Option
Compensation expense for all share-based compensation	$ 1,100	$ 952
Restricted Shares
Restricted Shares
Nonvested (in shares)	278,050	144,362
Granted (in shares)	249,121	195,835
Vested (in shares)	(21,757)
Nonvested (in shares)	505,414	340,197
Weighted-Average Grant Date Fair Value per Restricted Share
Nonvested (in dollars per share)	$ 11.52	$ 10.05
Granted (in dollars per share)	14.36	12.14
Vested (in dollars per share)	12.14
Nonvested (in dollars per share)	$ 12.89	$ 11.25
Stock Options
Stock Options
Nonvested (in shares)	1,502,963	1,855,918
Granted (in shares)		500,000
Vested (in shares)	(166,666)
Nonvested (in shares)	1,336,297	2,355,918
Weighted-Average Grant Date Fair Value per Stock Option
Nonvested (in dollars per share)	$ 2.73	$ 3.22
Granted (in dollars per share)		1.91
Vested (in dollars per share)	1.91
Nonvested (in dollars per share)	$ 2.83	$ 2.94

Concentration of Risk (Details)

Concentration of Risk (Details) - item	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Gross premiums written | California Texas New York and Florida
Concentration of Risk
Concentration of risk (as a percent)	55.00%	56.00%
Reinsurer | Unsecured reinsurance recoverables
Concentration of Risk
Number of reinsurers	4
Reinsurer | Unsecured reinsurance recoverables | One reinsurer
Concentration of Risk
Concentration of risk (as a percent)	16.00%
Reinsurer | Unsecured reinsurance recoverables | Two reinsurer
Concentration of Risk
Concentration of risk (as a percent)	13.00%
Reinsurer | Unsecured reinsurance recoverables | Three reinsurer
Concentration of Risk
Concentration of risk (as a percent)	7.00%
Reinsurer | Unsecured reinsurance recoverables | Four reinsurer
Concentration of Risk
Concentration of risk (as a percent)	6.00%

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Numerator for both basic and diluted earnings per share:
Net income (loss)	$ 11,490	$ 9,670	$ 49,077
Denominator for both basic and diluted earnings per share:
Weighted-average common shares outstanding (in shares)	41,613,267	42,343,357
Dilutive effect of outstanding securities (determined using the treasury stock method) (in shares)	881,971	53,356
Weighted-average common shares outstanding and potential common shares outstanding (in shares)	42,495,238	42,396,713

Segment Information - Revenues

Segment Information - Revenues and Income Loss Before Taxes (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)item	Mar. 31, 2016USD ($)
Business segment information
Number of Operating Segments | item	2
Revenues [Abstract]
Revenues	$ 58,987	$ 50,100
Income (loss) before income taxes:
Income (loss) before income taxes	17,914	15,081
Corporate
Revenues [Abstract]
Revenues	4,019	1,410
Income (loss) before income taxes:
Income (loss) before income taxes	361	(2,406)
Operating segment | Program Services segment
Revenues [Abstract]
Revenues	17,645	16,244
Income (loss) before income taxes:
Income (loss) before income taxes	13,544	12,618
Operating segment | Lender Services segment
Revenues [Abstract]
Revenues	37,323	32,446
Income (loss) before income taxes:
Income (loss) before income taxes	$ 4,009	$ 4,869

Segment Information - Assets (D

Segment Information - Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Assets
Total assets	$ 2,975,957	$ 2,876,737
Program Services segment
Assets
Total assets	2,479,853	2,382,466
Lender Services segment
Assets
Total assets	17,461	17,824
Corporate
Assets
Total assets	$ 478,643	$ 476,447

Common Stock (Details)

Common Stock (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Oct. 12, 2015
Common Stock.
Value of shares authorized for repurchase		$ 50
Share repurchase agreement
Shares repurchased	173,521

Debt (Details)

Debt (Details) $ in Millions	Dec. 31, 2004USD ($)item	Mar. 31, 2017USD ($)
Credit Facility
Number of statutory business trusts | item	3
Trust Preferred Securities
Credit Facility
Proceeds from trust preferred securities	$ 44.5
Trust Preferred Securities | Subordinated debentures | London Interbank Offered Rate (LIBOR) [Member]
Credit Facility
Variable rate basis		three-month LIBOR
Trust Preferred Securities | Subordinated debentures | Minimum | London Interbank Offered Rate (LIBOR) [Member]
Credit Facility
Basis spread on variable rate (as a percent)		3.80%
Trust Preferred Securities | Subordinated debentures | Maximum | London Interbank Offered Rate (LIBOR) [Member]
Credit Facility
Basis spread on variable rate (as a percent)		4.10%
T.B.A. Insurance Group, Ltd Member | Revolving Credit Facility (“credit agreement”)
Credit Facility
Maximum borrowing capacity		$ 15
Unused capacity commitment fee percentage		0.125%
Minimum tangible net worth required by financial covenant		$ 150
Minimum asset market value required by financial covenant		$ 25
T.B.A. Insurance Group, Ltd Member | Revolving Credit Facility (“credit agreement”) | London Interbank Offered Rate (LIBOR) [Member]
Credit Facility
Variable rate basis		LIBOR
Variable rate basis floor		0.15%
Basis spread on variable rate (as a percent)		1.85%

Business Combinations (Details)

Business Combinations (Details) - Fireman’s Fund Insurance Company ("ISIC") - USD ($)	Jan. 01, 2017	Mar. 31, 2017
Business Acquisition [Line Items]
Percentage of common shares outstanding acquired	100.00%
Consideration transferred in cash	$ 49,400,000
Impact to income statement	0
Acquisition related costs		$ 25,000
Net assets acquired
Cash and cash equivalents	17,400,000
Fixed-maturity securities	29,611,000
Reinsurance recoverables	45,127,000
Interest receivable	142,000
Goodwill and intangible assets, net	2,300,000
Other receivables	107,000
Total identifiable assets acquired	94,687,000
Unpaid losses and loss adjustment expenses	45,127,000
Unearned premiums	180,000
Total liabilities assumed	45,307,000
Net assets acquired	$ 49,380,000
Goodwill		$ 0