Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 07, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'HALLMARK FINANCIAL SERVICES INC | ' |
Entity Central Index Key | '0000819913 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Trading Symbol | 'hall | ' |
Entity Common Stock, Shares Outstanding | ' | 19,263,457 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
ASSETS | ' | ' |
Debt securities, available-for-sale, at fair value (cost: $395,860 in 2013 and $397,800 in 2012) | $396,647 | $401,435 |
Equity securities, available-for-sale, at fair value (cost: $24,033 in 2013 and $31,502 in 2012) | 45,940 | 43,925 |
Total investments | 442,587 | 445,360 |
Cash and cash equivalents | 151,698 | 85,145 |
Restricted cash | 8,700 | 8,707 |
Ceded unearned premiums | 31,731 | 22,411 |
Premiums receivable | 77,749 | 66,683 |
Accounts receivable | 3,209 | 3,110 |
Receivable for securities | 19 | 3 |
Reinsurance recoverable | 61,193 | 51,970 |
Deferred policy acquisition costs | 26,943 | 24,911 |
Goodwill | 44,695 | 44,695 |
Intangible assets, net | 20,647 | 23,068 |
Deferred federal income taxes, net | ' | 1,940 |
Prepaid expenses | 1,611 | 1,480 |
Other assets | 8,935 | 10,985 |
Total assets | 879,717 | 790,468 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' |
Revolving credit facility payable | 1,473 | 1,473 |
Subordinated debt securities | 56,702 | 56,702 |
Reserves for unpaid losses and loss adjustment expenses | 360,248 | 313,416 |
Unearned premiums | 191,367 | 162,502 |
Reinsurance balances payable | 11,862 | 7,330 |
Pension liability | 3,334 | 3,685 |
Payable for securities | 6,380 | ' |
Deferred federal income taxes, net | 319 | ' |
Federal income tax payable | 1,075 | 1,518 |
Accounts payable and other accrued expenses | 16,879 | 23,305 |
Total liabilities | 649,639 | 569,931 |
Commitments and contingencies (Note 17) | ' | ' |
Stockholders' equity: | ' | ' |
Common stock, $.18 par value, authorized 33,333,333; issued 20,872,831 shares in 2013 and 2012 | 3,757 | 3,757 |
Additional paid-in capital | 122,720 | 122,475 |
Retained earnings | 102,781 | 97,964 |
Accumulated other comprehensive income | 12,378 | 7,899 |
Treasury stock (1,609,374 shares in 2013 and 2012), at cost | -11,558 | -11,558 |
Total stockholders' equity | 230,078 | 220,537 |
Liabilities and equity, total | $879,717 | $790,468 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Consolidated Balance Sheets Parenthetical [Abstract] | ' | ' |
Debt securities, available-for-sale, cost (in dollars) | $395,860 | $397,800 |
Equity securities, available for sale, cost (in dollars) | $24,033 | $31,502 |
Common stock, par value (in dollars per share) | $0.18 | $0.18 |
Common stock, authorized shares | 33,333,333 | 33,333,333 |
Common stock, issued shares | 20,872,831 | 20,872,831 |
Treasury stock, shares | 1,609,374 | 1,609,374 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Consolidated Statements of Operations [Abstract] | ' | ' | ' | ' |
Gross premiums written | $123,664 | $99,448 | $351,278 | $297,658 |
Ceded premiums written | -20,775 | -14,443 | -54,948 | -42,554 |
Net premiums written | 102,889 | 85,005 | 296,330 | 255,104 |
Change in unearned premiums | -5,437 | -4,524 | -19,546 | -19,166 |
Net premiums earned | 97,452 | 80,481 | 276,784 | 235,938 |
Investment income, net of expenses | 2,965 | 3,795 | 9,871 | 11,573 |
Net realized gains | 6,950 | 982 | 9,723 | 1,854 |
Finance charges | 1,484 | 1,374 | 4,396 | 4,538 |
Commission and fees | -251 | -1,029 | 169 | -1,033 |
Other income | 13 | 17 | 110 | 307 |
Total revenues | 108,613 | 85,620 | 301,053 | 253,177 |
Losses and loss adjustment expenses | 68,158 | 52,839 | 204,955 | 168,859 |
Other operating expenses | 29,139 | 25,726 | 83,911 | 77,077 |
Interest expense | 1,150 | 1,137 | 3,449 | 3,464 |
Amortization of intangible assets | 694 | 897 | 2,420 | 2,690 |
Total expenses | 99,141 | 80,599 | 294,735 | 252,090 |
Income before tax | 9,472 | 5,021 | 6,318 | 1,087 |
Income tax expense (benefit) | 3,198 | 1,350 | 1,501 | -978 |
Net income | 6,274 | 3,671 | 4,817 | 2,065 |
Less: Net income attributable to non-controlling interest | ' | 258 | ' | 324 |
Net income attributable to Hallmark Financial Services, Inc. | $6,274 | $3,413 | $4,817 | $1,741 |
Net income per share attributable to Hallmark Financial Services, Inc. common stockholders: | ' | ' | ' | ' |
Basic | $0.33 | $0.18 | $0.25 | $0.09 |
Diluted | $0.32 | $0.18 | $0.25 | $0.09 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Consolidated Statements of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income | $6,274 | $3,671 | $4,817 | $2,065 |
Other comprehensive (loss) income: | ' | ' | ' | ' |
Change in net actuarial gain | 123 | 120 | 371 | 362 |
Tax effect on change in net actuarial gain | -43 | -42 | -130 | -127 |
Unrealized holding gains arising during the period | 4,721 | 4,541 | 16,243 | 4,560 |
Tax effect on unrealized holding gains arising during the period | -1,652 | -1,589 | -5,685 | -1,596 |
Reclassification adjustment for (gains) losses included in net income | -6,950 | -926 | -9,723 | -2,044 |
Tax effect on reclassification adjustment for gains included in net income | 2,433 | 324 | 3,403 | 715 |
Other comprehensive (loss) income, net of tax | -1,368 | 2,428 | 4,479 | 1,870 |
Comprehensive income | 4,906 | 6,099 | 9,296 | 3,935 |
Less: comprehensive income attributable to non-controlling interest | ' | 258 | ' | 324 |
Comprehensive income attributable to Hallmark Financial Services, Inc. | $4,906 | $5,841 | $9,296 | $3,611 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Treasury Stock [Member] | Total |
In Thousands | ||||||
Balance at Jun. 30, 2012 | $3,757 | $122,669 | $92,768 | $5,888 | ($11,558) | ' |
Accretion of redeemable noncontrolling interest | ' | -321 | ' | ' | ' | ' |
Equity based compensation | ' | 64 | ' | ' | ' | ' |
Net income attributable to Hallmark Financial Services, Inc. | ' | ' | 3,413 | ' | ' | 3,413 |
Additional minimum pension liability, net of tax | ' | ' | ' | 78 | ' | ' |
Net unrealized holding gains arising during period, net of tax | ' | ' | ' | 2,952 | ' | ' |
Reclassification adjustment for gains included in net income, net of tax | ' | ' | ' | -602 | ' | ' |
Balance at Sep. 30, 2012 | 3,757 | 122,412 | 96,181 | 8,316 | -11,558 | 219,108 |
Balance at Dec. 31, 2011 | 3,757 | 122,487 | 94,440 | 6,446 | -11,558 | ' |
Accretion of redeemable noncontrolling interest | ' | -392 | ' | ' | ' | ' |
Equity based compensation | ' | 317 | ' | ' | ' | ' |
Net income attributable to Hallmark Financial Services, Inc. | ' | ' | 1,741 | ' | ' | 1,741 |
Additional minimum pension liability, net of tax | ' | ' | ' | 235 | ' | ' |
Net unrealized holding gains arising during period, net of tax | ' | ' | ' | 2,964 | ' | ' |
Reclassification adjustment for gains included in net income, net of tax | ' | ' | ' | -1,329 | ' | ' |
Balance at Sep. 30, 2012 | 3,757 | 122,412 | 96,181 | 8,316 | -11,558 | 219,108 |
Balance at Dec. 31, 2012 | 3,757 | 122,475 | 97,964 | 7,899 | -11,558 | 220,537 |
Equity based compensation | ' | 245 | ' | ' | ' | ' |
Net income attributable to Hallmark Financial Services, Inc. | ' | ' | 4,817 | ' | ' | 4,817 |
Additional minimum pension liability, net of tax | ' | ' | ' | 241 | ' | ' |
Net unrealized holding gains arising during period, net of tax | ' | ' | ' | 10,558 | ' | ' |
Reclassification adjustment for gains included in net income, net of tax | ' | ' | ' | -6,320 | ' | ' |
Balance at Sep. 30, 2013 | 3,757 | 122,720 | 102,781 | 12,378 | -11,558 | 230,078 |
Balance at Jun. 30, 2013 | 3,757 | 122,611 | 96,507 | 13,746 | -11,558 | ' |
Equity based compensation | ' | 109 | ' | ' | ' | ' |
Net income attributable to Hallmark Financial Services, Inc. | ' | ' | 6,274 | ' | ' | 6,274 |
Additional minimum pension liability, net of tax | ' | ' | ' | 80 | ' | ' |
Net unrealized holding gains arising during period, net of tax | ' | ' | ' | 3,069 | ' | ' |
Reclassification adjustment for gains included in net income, net of tax | ' | ' | ' | -4,517 | ' | ' |
Balance at Sep. 30, 2013 | $3,757 | $122,720 | $102,781 | $12,378 | ($11,558) | $230,078 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Net income | $4,817 | $2,065 |
Adjustments to reconcile net income to cash provided by operating activities: | ' | ' |
Depreciation and amortization expense | 3,691 | 3,603 |
Deferred federal income taxes | -268 | -2,241 |
Net realized gains | -9,723 | -1,854 |
Share-based payments expense | 245 | 317 |
Change in ceded unearned premiums | -9,320 | -2,524 |
Change in premiums receivable | -11,066 | -15,669 |
Change in accounts receivable | -99 | 586 |
Change in deferred policy acquisition costs | -2,032 | -3,854 |
Change in unpaid losses and loss adjustment expenses | 46,832 | 18,662 |
Change in unearned premiums | 28,865 | 21,690 |
Change in reinsurance recoverable | -9,223 | -7,375 |
Change in reinsurance balances payable | 4,532 | 2,837 |
Change in current federal income tax (payable) recoverable | -443 | 6,915 |
Change in all other liabilities | -6,777 | -1,180 |
Change in all other assets | 13,489 | 6,209 |
Net cash provided by operating activities | 53,520 | 28,187 |
Cash flows from investing activities: | ' | ' |
Purchases of property and equipment | -920 | -366 |
Net transfers from restricted cash | 7 | 1,126 |
Purchases of investment securities | -139,791 | -103,434 |
Maturities, sales and redemptions of investment securities | 153,737 | 110,772 |
Net cash provided by investing activities | 13,033 | 8,098 |
Cash flows from financing activities: | ' | ' |
Activity under revolving credit facility, net | ' | -2,577 |
Payment of contingent consideration | ' | -350 |
Distribution to non-controlling interest | ' | -147 |
Net cash used in financing activities | ' | -3,074 |
Increase in cash and cash equivalents | 66,553 | 33,211 |
Cash and cash equivalents at beginning of period | 85,145 | 74,471 |
Cash and cash equivalents at end of period | 151,698 | 107,682 |
Supplemental cash flow information: | ' | ' |
Interest paid | 3,439 | 3,464 |
Income taxes paid (recovered) | 2,212 | -5,951 |
Supplemental schedule of non-cash investing activities: | ' | ' |
Change in receivable for securities related to investment disposals that settled after the balance sheet date | 16 | -1,566 |
Change in payable for securities related to investment purchases that settled after the balance sheet date | $6,380 | $6,546 |
General
General | 9 Months Ended |
Sep. 30, 2013 | |
General [Abstract] | ' |
General | ' |
1. General | |
Hallmark Financial Services, Inc. (“Hallmark” and, together with subsidiaries, “we,” “us” or “our”) is an insurance holding company engaged in the sale of property/casualty insurance products to businesses and individuals. Our business involves marketing, distributing, underwriting and servicing our insurance products, as well as providing other insurance related services. | |
We pursue our business activities through subsidiaries whose operations are organized into five business units that are supported by our insurance company subsidiaries. Our Standard Commercial P&C business unit handles commercial insurance products and services in the standard market. Our Workers Compensation business unit specializes in small and middle market workers compensation business. Our E&S Commercial business unit handles primarily commercial insurance products and services in the excess and surplus lines market. Our Hallmark Select business unit offers (i) general aviation insurance products and services, (ii) low and middle market commercial umbrella and excess liability insurance, on both an admitted and non-admitted basis, focusing primarily on trucking, specialty automobile and non-fleet automobile coverage, and (iii) medical professional liability insurance products and services. Our Hallmark Select business unit is the combination of our operations previously known as our General Aviation business unit, our Excess & Umbrella business unit and the medical professional liability business handled by our E&S Commercial business unit. Our Personal Lines business unit handles personal insurance products and services. Our insurance company subsidiaries supporting these operating units are American Hallmark Insurance Company of Texas (“AHIC”), Hallmark Insurance Company (“HIC”), Hallmark Specialty Insurance Company (“HSIC”), Hallmark County Mutual Insurance Company (“HCM”), Hallmark National Insurance Company (“HNIC”) and Texas Builders Insurance Company (“TBIC”). | |
These five business units are segregated into three reportable industry segments for financial accounting purposes. The Standard Commercial Segment includes the Standard Commercial P&C business unit and the Workers Compensation business unit. The Specialty Commercial Segment includes the E&S Commercial business unit and the Hallmark Select business unit, as well as certain specialty risk programs (“Specialty Programs”) which are managed by Hallmark. The Personal Segment consists solely of the Personal Lines business unit. | |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Basis of Presentation [Abstract] | ' |
Basis of Presentation | ' |
2. Basis of Presentation | |
Our unaudited consolidated financial statements included herein have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include our accounts and the accounts of our subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain information and 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 consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2012 included in our Annual Report on Form 10-K filed with the SEC. | |
The interim financial data as of September 30, 2013 and 2012 is unaudited. However, in the opinion of management, the interim data includes all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The results of operations for the period ended September 30, 2013 are not necessarily indicative of the operating results to be expected for the full year. | |
Business Combinations | |
We account for business combinations using the acquisition method of accounting pursuant to Accounting Standards Codification (“ASC”) 805, “Business Combinations.” The base cash purchase price plus the estimated fair value of any non-cash or contingent consideration given for an acquired business is allocated to the assets acquired (including identified intangible assets) and liabilities assumed based on the estimated fair values of such assets and liabilities. The excess of the fair value of the total consideration given for an acquired business over the aggregate net fair values assigned to the assets acquired and liabilities assumed is recorded as goodwill. Contingent consideration is recognized as a liability at fair value as of the acquisition date with subsequent fair value adjustments recorded in the consolidated statements of operations. The valuation of contingent consideration requires assumptions regarding anticipated cash flows, probabilities of cash flows, discount rates and other factors. Significant judgment is employed in determining the propriety of these assumptions as of the acquisition date and for each subsequent period. Accordingly, future business and economic conditions, as well as changes in any of the assumptions, can materially impact the amount of contingent consideration expense we record in any given period. Indirect and general expenses related to business combinations are expensed as incurred. | |
Income Taxes | |
We file a consolidated federal income tax return. Deferred federal income taxes reflect the future tax consequences of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year end. Deferred taxes are recognized using the liability method, whereby tax rates are applied to cumulative temporary differences based on when and how they are expected to affect the tax return. Deferred tax assets and liabilities are adjusted for tax rate changes in effect for the year in which these temporary differences are expected to be recovered or settled. | |
Use of Estimates in the Preparation of the Financial Statements | |
Our preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect our reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the date of our consolidated financial statements, as well as our reported amounts of revenues and expenses during the reporting period. Refer to “Critical Accounting Estimates and Judgments” under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2012 for information on accounting policies that we consider critical in preparing our consolidated financial statements. Actual results could differ materially from those estimates. | |
Fair Value of Financial Instruments | |
Fair value estimates are made at a point in time, based on relevant market data as well as the best information available about the financial instruments. Fair value estimates for financial instruments for which no or limited observable market data is available are based on judgments regarding current economic conditions, credit and interest rate risk. These estimates involve significant uncertainties and judgments and cannot be determined with precision. As a result, such calculated fair value estimates may not be realizable in a current sale or immediate settlement of the instrument. In addition, changes in the underlying assumptions used in the fair value measurement technique, including discount rate and estimates of future cash flows, could significantly affect these fair value estimates. | |
Cash and Cash Equivalents: The carrying amounts reported in the balance sheet for these instruments approximate their fair values. | |
Restricted Cash: The carrying amount for restricted cash reported in the balance sheet approximates the fair value. | |
Revolving Credit Facility Payable: The carrying value of our bank revolving credit facility of $1.5 million approximates the fair value based on the current interest rate. | |
Subordinated Debt Securities: Our trust preferred securities have a carried value of $56.7 million and a fair value of $51.9 million as of September 30, 2013. The fair value of our trust preferred securities is based on discounted cash flows using a current yield to maturity of 8.0%, which is based on similar issues to discount future cash flows. Our trust preferred securities would be included in Level 3 of the fair value hierarchy if they were reported at fair value. | |
For reinsurance balances, premiums receivable, federal income tax payable, other assets and other liabilities, the carrying amounts approximate fair value because of the short maturity of such financial instruments. | |
Variable Interest Entities | |
On June 21, 2005, we formed Hallmark Statutory Trust I (“Trust I”), an unconsolidated trust subsidiary, for the sole purpose of issuing $30.0 million in trust preferred securities. Trust I used the proceeds from the sale of these securities and our initial capital contribution to purchase $30.9 million of subordinated debt securities from Hallmark. The debt securities are the sole assets of Trust I, and the payments under the debt securities are the sole revenues of Trust I. | |
On August 23, 2007, we formed Hallmark Statutory Trust II (“Trust II”), an unconsolidated trust subsidiary, for the sole purpose of issuing $25.0 million in trust preferred securities. Trust II used the proceeds from the sale of these securities and our initial capital contribution to purchase $25.8 million of subordinated debt securities from Hallmark. The debt securities are the sole assets of Trust II, and the payments under the debt securities are the sole revenues of Trust II. | |
We evaluate on an ongoing basis our investments in Trust I and II (collectively the “Trusts”) and we do not have a variable interest in the Trusts. Therefore, the Trusts are not included in our consolidated financial statements. | |
We are also involved in the normal course of business with variable interest entities (“VIE’s”) primarily as a passive investor in mortgage-backed securities and certain collateralized corporate bank loans issued by third party VIE’s. The maximum exposure to loss with respect to these investments is the investment carrying values included in the consolidated balance sheets. | |
Adoption of New Accounting Pronouncements | |
In January 2013, we adopted new guidance issued by the Financial Accounting Standards Board (“FASB”) related to reporting and disclosure requirements about changes in accumulated other comprehensive income balances and reclassifications out of accumulated other comprehensive income. The new guidance is effective prospectively for fiscal and interim periods beginning after December 15, 2012. The adoption of this guidance did not have a material impact on our financial position or results of operations but did require additional disclosures. | |
Business_Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2013 | |
Business Combinations [Abstract] | ' |
Business Combinations | ' |
3. Business Combinations | |
Effective August 29, 2008, we acquired 80% of the issued and outstanding membership interests in Heath XS, LLC and Hardscrabble Data Solutions, LLC for consideration of $15.0 million. In connection with the acquisition, we executed an operating agreement for each company. The operating agreements granted us the right to purchase the remaining 20% membership interests in the companies and granted an affiliate of the seller the right to require us to purchase such remaining membership interests. We exercised our call option effective September 30, 2012 and acquired the remaining 20% membership interests in the companies for $1.7 million. | |
Effective December 31, 2010, we acquired all of the issued and outstanding capital stock of HNIC for initial consideration of $14.0 million paid in cash on January 3, 2011 to State Auto Financial Corporation, Inc. In addition, an earnout of up to $2.0 million is payable to the seller quarterly in an amount equal to 2% of gross collected premiums on new or renewal personal lines insurance policies written by HNIC agents during the three years following closing. HNIC is an Ohio domiciled insurance company that writes non-standard personal automobile policies through independent agents in 21 states. | |
Effective July 1, 2011, we acquired all of the issued and outstanding capital stock of TBIC Holding Corporation (“TBIC Holding”) for initial consideration of $1.6 million paid in cash on July 1, 2011. In addition, a holdback purchase price of $350 thousand was paid during the third quarter of 2012. A contingent purchase price of up to $3.0 million may become payable following 16 full calendar quarters after closing based upon a formula contained in the acquisition agreement. | |
Fair_Value
Fair Value | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Fair Value [Abstract] | ' | |||||||||||
Fair Value | ' | |||||||||||
4. Fair Value | ||||||||||||
ASC 820 defines fair value, establishes a consistent framework for measuring fair value and expands disclosure requirements about fair value measurements. ASC 820, among other things, requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. In addition, ASC 820 precludes the use of block discounts when measuring the fair value of instruments traded in an active market, which were previously applied to large holdings of publicly traded equity securities. | ||||||||||||
We determine the fair value of our financial instruments based on the fair value hierarchy established in ASC 820. In accordance with ASC 820, we utilize the following fair value hierarchy: | ||||||||||||
· | Level 1: quoted prices in active markets for identical assets; | |||||||||||
· | Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, inputs of identical assets for less active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument; and | |||||||||||
· | Level 3: inputs to the valuation methodology that are unobservable for the asset or liability. | |||||||||||
This hierarchy requires the use of observable market data when available. | ||||||||||||
Under ASC 820, we determine fair value based on the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy described above. Fair value measurements for assets and liabilities where there exists limited or no observable market data are calculated based upon our pricing policy, the economic and competitive environment, the characteristics of the asset or liability and other factors as appropriate. These estimated fair values may not be realized upon actual sale or immediate settlement of the asset or liability. | ||||||||||||
Where quoted prices are available on active exchanges for identical instruments, investment securities are classified within Level 1 of the valuation hierarchy. Level 1 investment securities include common and preferred stock. | ||||||||||||
Level 2 investment securities include corporate bonds, collateralized corporate bank loans, municipal bonds, and U.S. Treasury securities for which quoted prices are not available on active exchanges for identical instruments. We use third party pricing services to determine fair values for each Level 2 investment security in all asset classes. Since quoted prices in active markets for identical assets are not available, these prices are determined using observable market information such as quotes from less active markets and/or quoted prices of securities with similar characteristics, among other things. We have reviewed the processes used by the pricing services and have determined that they result in fair values consistent with the requirements of ASC 820 for Level 2 investment securities. In addition, using the prices received for the securities from the third party pricing services, we compare a sample of the prices against additional sources. We have not adjusted any prices received from the third party pricing services. | ||||||||||||
In cases where there is limited activity or less transparency around inputs to the valuation, investment securities are classified within Level 3 of the valuation hierarchy. Level 3 investments are valued based on the best available data in order to approximate fair value. This data may be internally developed and consider risk premiums that a market participant would require. Investment securities classified within Level 3 include other less liquid investment securities. | ||||||||||||
There were no transfers between Level 1 and Level 2 securities during the periods presented. | ||||||||||||
The following table presents for each of the fair value hierarchy levels, our assets that are measured at fair value on a recurring basis at September 30, 2013 and December 31, 2012 (in thousands): | ||||||||||||
As of September 30, 2013 | ||||||||||||
Quoted Prices in | Other | |||||||||||
Active Markets for | Observable | Unobservable | ||||||||||
Identical Assets | Inputs | Inputs | ||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||
U.S. Treasury securities and | ||||||||||||
obligations of U.S. Government | $ - | $ | $ - | $ | ||||||||
34,114 | 34,114 | |||||||||||
Corporate bonds | - | 59,393 | - | 59,393 | ||||||||
Collateralized corporate bank loans | - | 118,852 | 700 | 119,552 | ||||||||
Municipal bonds | - | 134,906 | 19,590 | 154,496 | ||||||||
Mortgage-backed | - | 29,092 | - | 29,092 | ||||||||
Total debt securities | - | 376,357 | 20,290 | 396,647 | ||||||||
Financial services | 7,690 | - | - | 7,690 | ||||||||
All other | 38,250 | - | - | 38,250 | ||||||||
Total equity securities | 45,940 | - | - | 45,940 | ||||||||
Total debt and equity securities | $ | $ | $ | $ | ||||||||
45,940 | 376,357 | 20,290 | 442,587 | |||||||||
As of December 31, 2012 | ||||||||||||
Quoted Prices in | Other | |||||||||||
Active Markets for | Observable | Unobservable | ||||||||||
Identical Assets | Inputs | Inputs | ||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||
U.S. Treasury securities and | ||||||||||||
obligations of U.S. Government | $ - | $ | $ - | $ | ||||||||
40,061 | 40,061 | |||||||||||
Corporate bonds | - | 81,547 | - | 81,547 | ||||||||
Collateralized corporate bank loans | - | 105,463 | 908 | 106,371 | ||||||||
Municipal bonds | - | 144,972 | 18,760 | 163,732 | ||||||||
Mortgage-backed | - | 9,724 | - | 9,724 | ||||||||
Total debt securities | - | 381,767 | 19,668 | 401,435 | ||||||||
Financial services | 14,887 | - | - | 14,887 | ||||||||
All other | 29,038 | - | - | 29,038 | ||||||||
Total equity securities | 43,925 | - | - | 43,925 | ||||||||
Total debt and equity securities | $ | $ 381,767 | $ | $ | ||||||||
43,925 | 19,668 | 445,360 | ||||||||||
Due to significant unobservable inputs into the valuation model for certain municipal bonds and a collateralized corporate bank loan in illiquid markets, we classified these investments as Level 3 in the fair value hierarchy. We used an income approach in order to derive an estimated fair value of the municipal bonds classified as Level 3, which included inputs such as expected holding period, benchmark swap rate, benchmark discount rate and a discount rate premium for illiquidity. The fair value of the collateralized corporate bank loan classified as Level 3 is based on discounted cash flows using current yield to maturity of 9.8%, which is based on the relevant spread over LIBOR for this particular loan to discount future cash flows. Significant changes in the unobservable inputs in the fair value measurement of our municipal bonds and collateralized corporate bank loan could result in a significant change in the fair value measurement. | ||||||||||||
The following table summarizes the changes in fair value for all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the nine months ended September 30, 2013 and 2012 (in thousands): | ||||||||||||
Beginning balance as of January 1, 2013 | $ | |||||||||||
19,668 | ||||||||||||
Sales | - | |||||||||||
Settlements | -302 | |||||||||||
Purchases | - | |||||||||||
Issuances | - | |||||||||||
Total realized/unrealized gains included in net income | - | |||||||||||
Net gains included in other comprehensive income | 924 | |||||||||||
Transfers into Level 3 | - | |||||||||||
Transfers out of Level 3 | - | |||||||||||
Ending balance as of September 30, 2013 | $ | |||||||||||
20,290 | ||||||||||||
Beginning balance as of January 1, 2012 | $ | |||||||||||
20,608 | ||||||||||||
Sales | - | |||||||||||
Settlements | -307 | |||||||||||
Purchases | - | |||||||||||
Issuances | - | |||||||||||
Total realized/unrealized gains included in net income | - | |||||||||||
Net losses included in other comprehensive income | -530 | |||||||||||
Transfers into Level 3 | - | |||||||||||
Transfers out of Level 3 | - | |||||||||||
Ending balance as of September 30, 2012 | $ | |||||||||||
19,771 | ||||||||||||
Investments
Investments | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Investments [Abstract] | ' | |||||||||||
Investments | ' | |||||||||||
5. Investments | ||||||||||||
The amortized cost and estimated fair value of investments in debt and equity securities by category is as follows (in thousands): | ||||||||||||
Gross | Gross | |||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||
As of September 30, 2013 | Cost | Gains | Losses | Value | ||||||||
U.S. Treasury securities and | ||||||||||||
obligations of U.S. Government | $ | $ | $ - | $ | ||||||||
34,083 | 31 | 34,114 | ||||||||||
Corporate bonds | 58,633 | 1,285 | -525 | 59,393 | ||||||||
Collateralized corporate bank loans | 119,626 | 475 | -549 | 119,552 | ||||||||
Municipal bonds | 153,974 | 2,701 | -2,179 | 154,496 | ||||||||
Mortgage-backed | 29,544 | 339 | -791 | 29,092 | ||||||||
Total debt securities | 395,860 | 4,831 | -4,044 | 396,647 | ||||||||
Financial services | 4,705 | 2,985 | - | 7,690 | ||||||||
All other | 19,328 | 19,644 | -722 | 38,250 | ||||||||
Total equity securities | 24,033 | 22,629 | -722 | 45,940 | ||||||||
Total debt and equity securities | $ | $ | $ | $ | ||||||||
419,893 | 27,460 | -4,766 | 442,587 | |||||||||
As of December 31, 2012 | ||||||||||||
U.S. Treasury securities and | ||||||||||||
obligations of U.S. Government | $ | $ | $ | $ | ||||||||
40,050 | 14 | -3 | 40,061 | |||||||||
Corporate bonds | 79,516 | 2,794 | -763 | 81,547 | ||||||||
Collateralized corporate bank loans | 106,093 | 1,021 | -743 | 106,371 | ||||||||
Municipal bonds | 162,479 | 4,023 | -2,770 | 163,732 | ||||||||
Mortgage-backed | 9,662 | 97 | -35 | 9,724 | ||||||||
Total debt securities | 397,800 | 7,949 | -4,314 | 401,435 | ||||||||
Financial services | 11,008 | 3,880 | -1 | 14,887 | ||||||||
All other | 20,494 | 9,058 | -514 | 29,038 | ||||||||
Total equity securities | 31,502 | 12,938 | -515 | 43,925 | ||||||||
Total debt and equity securities | $ | $ | $ | $ | ||||||||
429,302 | 20,887 | -4,829 | 445,360 | |||||||||
Major categories of net realized gains (losses) on investments are summarized as follows (in thousands): | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
30-Sep | 30-Sep | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
U.S. Treasury securities and | ||||||||||||
obligations of U.S. Government | $ - | $ - | $ - | $ - | ||||||||
Corporate bonds | 21 | 159 | 846 | 9 | ||||||||
Collateralized corporate bank loans | 44 | 93 | 316 | 229 | ||||||||
Municipal bonds | -50 | -50 | -11 | -294 | ||||||||
Equity securities-financial services | 6,935 | 8 | 7,579 | 78 | ||||||||
Equity securities-all other | - | 772 | 993 | 2,078 | ||||||||
Gain on investments | 6,950 | 982 | 9,723 | 2,100 | ||||||||
Other-than-temporary impairments | - | - | - | -246 | ||||||||
Net realized gains | $ | $ 982 | $ | $ 1,854 | ||||||||
6,950 | 9,723 | |||||||||||
We realized gross gains on investments of $7.1 million and $1.1 million during the three months ended September 30, 2013 and 2012, respectively and $9.9 million and $2.6 million for the nine months ended September 30, 2013 and 2012, respectively. We realized gross losses on investments of $0.1 million and $0.1 million for the three months ended September 30, 2013 and 2012. We realized gross losses on investments of $0.2 million and $0.5 million for the nine months ended September 30, 2013 and 2012. We recorded proceeds from the sale of investment securities of $12.5 million and $3.5 million during the three months ended September 30, 2013 and 2012, respectively, and $30.2 million and $9.7 million for the nine months ended September 30, 2013 and 2012, respectively. Realized investment gains and losses are recognized in operations on the specific identification method. | ||||||||||||
The following schedules summarize the gross unrealized losses showing the length of time that investments have been continuously in an unrealized loss position as of September 30, 2013 and December 31, 2012 (in thousands): | ||||||||||||
As of September 30, 2013 | ||||||||||||
12 months or less | Longer than 12 months | Total | ||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||
Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | |||||||
U.S. Treasury securities and obligations | ||||||||||||
of U.S. Government | $ - | $ - | $ - | $ - | $ - | $ - | ||||||
Corporate bonds | 12,694 | -156 | 3,048 | -369 | 15,742 | -525 | ||||||
Collateralized corporate bank loans | 48,926 | -368 | 6,915 | -181 | 55,841 | -549 | ||||||
Municipal bonds | 28,861 | -488 | 38,953 | -1,691 | 67,814 | -2,179 | ||||||
Mortgage-backed | 14,328 | -788 | 107 | -3 | 14,435 | -791 | ||||||
Total debt securities | 104,809 | -1,800 | 49,023 | -2,244 | 153,832 | -4,044 | ||||||
Financial services | - | - | - | - | - | - | ||||||
All other | 2,348 | -722 | - | - | 2,348 | -722 | ||||||
Total equity securities | 2,348 | -722 | - | - | 2,348 | -722 | ||||||
Total debt and equity securities | $ | $ | $ | $ | $ | $ | ||||||
107,157 | -2,522 | 49,023 | -2,244 | 156,180 | -4,766 | |||||||
As of December 31, 2012 | ||||||||||||
12 months or less | Longer than 12 months | Total | ||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||
Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | |||||||
U.S. Treasury securities and obligations | ||||||||||||
of U.S. Government | $ | $ | $ - | $ - | $ | $ | ||||||
23,998 | -3 | 23,998 | -3 | |||||||||
Corporate bonds | 10,802 | -38 | 6,910 | -725 | 17,712 | -763 | ||||||
Collateralized corporate bank loans | 6,273 | -97 | 14,236 | -646 | 20,509 | -743 | ||||||
Municipal bonds | 30,073 | -362 | 28,809 | -2,408 | 58,882 | -2,770 | ||||||
Mortgage-backed | 7,367 | -32 | 84 | -3 | 7,451 | -35 | ||||||
Total debt securities | 78,513 | -532 | 50,039 | -3,782 | 128,552 | -4,314 | ||||||
Financial services | 92 | -1 | - | - | 92 | -1 | ||||||
All other | 3,271 | -514 | - | - | 3,271 | -514 | ||||||
Total equity securities | 3,363 | -515 | - | - | 3,363 | -515 | ||||||
Total debt and equity securities | $ | $ | $ | $ | $ | $ | ||||||
81,876 | -1,047 | 50,039 | -3,782 | 131,915 | -4,829 | |||||||
At September 30, 2013, the gross unrealized losses more than twelve months old were attributable to 75 debt security positions. At December 31, 2012, the gross unrealized losses more than twelve months old were attributable to 56 debt security positions. We consider these losses as a temporary decline in value as they are predominately on bonds that we do not intend to sell and do not believe we will be required to sell prior to recovery of our amortized cost basis. We see no other indications that the decline in values of these securities is other-than-temporary. | ||||||||||||
Based on evidence gathered through our normal credit evaluation process, we presently expect that all debt securities held in our investment portfolio will be paid in accordance with their contractual terms. Nonetheless, it is at least reasonably possible that the performance of certain issuers of these debt securities will be worse than currently expected resulting in additional future write-downs within our portfolio of debt securities. | ||||||||||||
Also, as a result of the challenging market conditions, we expect the volatility in the valuation of our equity securities to continue in the foreseeable future. This volatility may lead to additional impairments on our equity securities portfolio or changes regarding retention strategies for certain equity securities. | ||||||||||||
We complete a detailed analysis each quarter to assess whether any decline in the fair value of any investment below cost is deemed other-than-temporary. All securities with an unrealized loss are reviewed. We recognize an impairment loss when an investment's value declines below cost, adjusted for accretion, amortization and previous other-than-temporary impairments and it is determined that the decline is other-than-temporary. | ||||||||||||
Debt Investments: We assess whether we intend to sell, or it is more likely than not that we will be required to sell, a fixed maturity investment before recovery of its amortized cost basis less any current period credit losses. For fixed maturity investments that are considered other-than-temporarily impaired and that we do not intend to sell and will not be required to sell, we separate the amount of the impairment into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings and is the difference between the investment’s amortized cost basis and the present value of its expected future cash flows. The remaining difference between the investment’s fair value and the present value of future expected cash flows is recognized in other comprehensive income. | ||||||||||||
Equity Investments: Some of the factors considered in evaluating whether a decline in fair value for an equity investment is other-than-temporary include: (1) our ability and intent to retain the investment for a period of time sufficient to allow for an anticipated recovery in value; (2) the recoverability of cost; (3) the length of time and extent to which the fair value has been less than cost; and (4) the financial condition and near-term and long-term prospects for the issuer, including the relevant industry conditions and trends, and implications of rating agency actions and offering prices. When it is determined that an equity investment is other-than-temporarily impaired, the security is written down to fair value, and the amount of the impairment is included in earnings as a realized investment loss. The fair value then becomes the new cost basis of the investment, and any subsequent recoveries in fair value are recognized at disposition. We recognize a realized loss when impairment is deemed to be other-than-temporary even if a decision to sell an equity investment has not been made. When we decide to sell a temporarily impaired available-for-sale equity investment and we do not expect the fair value of the equity investment to fully recover prior to the expected time of sale, the investment is deemed to be other-than-temporarily impaired in the period in which the decision to sell is made. | ||||||||||||
The amortized cost and estimated fair value of debt securities at September 30, 2013 by contractual maturity are as follows. Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without penalties. | ||||||||||||
Amortized | Fair | |||||||||||
Cost | Value | |||||||||||
(in thousands) | ||||||||||||
Due in one year or less | $ | $ | ||||||||||
63,230 | 63,768 | |||||||||||
Due after one year through five years | 153,969 | 154,311 | ||||||||||
Due after five years through ten years | 96,692 | 97,585 | ||||||||||
Due after ten years | 52,424 | 51,891 | ||||||||||
Mortgage-backed | 29,545 | 29,092 | ||||||||||
$ | $ | |||||||||||
395,860 | 396,647 | |||||||||||
Pledged_Investments
Pledged Investments | 9 Months Ended |
Sep. 30, 2013 | |
Pledged Investments [Abstract] | ' |
Pledged Investments | ' |
6. Pledged Investments | |
We have pledged certain of our securities for the benefit of various state insurance departments and reinsurers. These securities are included with our available-for-sale debt securities because we have the ability to trade these securities. We retain the interest earned on these securities. These securities had a carrying value of $23.2 million and $24.3 million at September 30, 2013 and December 31, 2012, respectively. | |
Reserves_for_Unpaid_Losses_and
Reserves for Unpaid Losses and Loss Adjustment Expenses | 9 Months Ended |
Sep. 30, 2013 | |
Reserves for Unpaid Losses and Loss Adjustment Expenses [Abstract] | ' |
Reserve for Losses and Loss Adjustment Expenses | ' |
7. Reserves for Unpaid Losses and Loss Adjustment Expenses | |
Unpaid losses and loss adjustment expenses (“LAE”) represent the estimated ultimate net cost of all reported and unreported losses incurred through each balance sheet date. The reserves for unpaid losses and LAE are estimated using individual case-basis valuations and statistical analyses. These reserves are revised periodically and are subject to the effects of trends in loss severity and frequency. Due to the inherent uncertainty in estimating unpaid losses and LAE, the actual ultimate amounts may differ from the recorded amounts. The estimates are periodically reviewed and adjusted as experience develops or new information becomes known. Such adjustments are included in current operations. | |
We recorded $0.5 million and $8.0 million of unfavorable prior years’ loss development during the three and nine months ended September 30, 2013, respectively. For the year to date, the $8.0 million unfavorable development was attributable to $5.0 million unfavorable development on claims incurred in the 2012 accident year, $2.4 million unfavorable development on claims incurred in the 2011 accident year and $1.6 million on claims incurred in the 2010 accident year, partially offset by $1.0 million favorable development on claims incurred in the 2009 and prior accident years. Our E&S Commercial business unit accounted for $11.7 million of the unfavorable development during the nine months ended September 30, 2013 primarily in our commercial auto liability line of business. Our Personal Lines business unit accounted for $1.5 million of the unfavorable development. These unfavorable developments were partially offset by favorable development of $1.6 million in our Hallmark Select business unit, $2.4 million in our Standard Commercial P&C business unit and $1.2 million in our Workers Compensation business unit. | |
The unfavorable development for our E&S Commercial business unit of $11.7 million was driven by unfavorable claims development primarily in our commercial auto liability line of business in the 2012, 2011, and 2010 accident years. The unfavorable loss development for our Personal Lines business unit of $1.5 million was primarily attributable to the 2012 accident year. The favorable development for our Hallmark Select business unit of $1.6 million was driven by favorable claims development in the 2011 and prior accident years related to our aircraft liability lines of business, partially offset by unfavorable claims development in the 2012 accident year related to our aircraft hull coverage. The favorable loss development for our Standard Commercial P&C business unit of $2.4 million was primarily related to commercial auto liability in the 2010 and prior accident years, partially offset by unfavorable loss development related to commercial property in the 2012 accident year. The favorable loss development in our Workers Compensation business unit of $1.2 million was related to the 2012 and 2011 accident years. | |
We recorded $2.2 million and $3.6 million of favorable prior years’ loss development during the three months and nine months ended September 30, 2012, respectively. For the first nine months of 2012, our Hallmark Select business unit experienced $2.6 million of favorable prior years’ loss development related to our liability and aircraft lines of business. Our Standard Commercial P&C business unit experienced $2.0 million of favorable prior years’ loss development primarily related to commercial property and auto liability partially offset by the late development of a general liability claim. Our Workers Compensation business unit experienced $0.8 million of favorable prior year loss reserve development. Our E&S Commercial business unit experienced $1.1 million of favorable prior year loss reserve development primarily related to general liability and commercial auto physical damage. These favorable developments were partially offset by unfavorable prior year loss development of $2.9 million in our Personal Lines business unit for the nine months ended September 30, 2012, of which $2.2 million was the result of unfavorable development in auto liability claims spread throughout various states. The remaining unfavorable prior years’ loss development for our Personal Lines business unit was the result of $0.7 million of unfavorable prior years’ loss development in our low value dwelling/homeowners line of business. | |
ShareBased_Payment_Arrangement
Share-Based Payment Arrangements | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Share-Based Payment Arrangements [Abstract] | ' | |||||||
Share-Based Payment Arrangements | ' | |||||||
8. Share-Based Payment Arrangements | ||||||||
Our 2005 Long Term Incentive Plan (“2005 LTIP”) is a stock compensation plan for key employees and non-employee directors that was initially approved by the shareholders on May 26, 2005. There are 2,000,000 shares authorized for issuance under the 2005 LTIP. As of September 30, 2013, there were outstanding incentive stock options to purchase 1,087,618 shares of our common stock, non-qualified stock options to purchase 304,157 shares of our common stock and restricted stock units representing the right to receive up to 355,277 shares of our common stock. There are 237,115 shares reserved for future issuance under the 2005 LTIP. The exercise price of all such outstanding stock options is equal to the fair market value of our common stock on the date of grant. | ||||||||
Stock Options: | ||||||||
Incentive stock options granted under the 2005 LTIP prior to 2009 vest 10%, 20%, 30% and 40% on the first, second, third and fourth anniversary dates of the grant, respectively, and terminate five to ten years from the date of grant. Incentive stock options granted in 2009 and one grant of 5,000 incentive stock options in 2011 vest in equal annual increments on each of the first seven anniversary dates and terminate ten years from the date of grant. One grant of 25,000 incentive stock options in 2010 and one grant of 10,000 incentive stock options in 2011 vest in equal annual increments on each of the first three anniversary dates and terminate ten years from the date of grant. Non-qualified stock options granted under the 2005 LTIP generally vest 100% six months after the date of grant and terminate ten years from the date of grant. One grant of 200,000 non-qualified stock options in 2009 vests in equal annual increments on each of the first seven anniversary dates and terminates ten years from the date of grant. | ||||||||
A summary of the status of our stock options as of and changes during the nine months ended September 30, 2013 is presented below: | ||||||||
Average | ||||||||
Weighted | Remaining | Aggregate | ||||||
Average | Contractual | Intrinsic | ||||||
Number of | Exercise | Term | Value | |||||
Shares | Price | (Years) | $0 | |||||
Outstanding at January 1, 2013 | 1,404,989 | $ 9.63 | ||||||
Granted | - | |||||||
Exercised | - | |||||||
Forfeited or expired | (13,214) | $ 7.90 | ||||||
Outstanding at September 30, 2013 | 1,391,775 | $ 9.65 | 4.5 | $ 1,327 | ||||
Exercisable at September 30, 2013 | 1,189,036 | $ 10.17 | 4.3 | $ 870 | ||||
The following table details the intrinsic value of options exercised, total cost of share-based payments charged against income before income tax benefit and the amount of related income tax benefit recognized in income for the periods indicated (in thousands): | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
Intrinsic value of options exercised | $ - | $ - | $ - | $ - | ||||
Cost of share-based payments (non-cash) | $ 52 | $ 64 | $ 156 | $ 317 | ||||
Income tax benefit of share-based | ||||||||
payments recognized in income | $ 8 | $ 7 | $ 23 | $ 30 | ||||
As of September 30, 2013, there was $0.5 million of total unrecognized compensation cost related to non-vested stock options granted under our plans, of which $52 thousand is expected to be recognized for the remainder of 2013 and $0.2 million is expected to be recognized each year in 2014 and 2015, $54 thousand is expected to be recognized in 2016 and $3 thousand is expected to be recognized in 2017. | ||||||||
The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option pricing model. Expected volatilities are based on the historical volatility of Hallmark’s and similar companies’ common stock for a period equal to the expected term. The risk-free interest rates for periods within the contractual term of the options are based on rates for U.S. Treasury Notes with maturity dates corresponding to the options’ expected lives on the dates of grant. Expected term is determined based on the simplified method as we do not have sufficient historical exercise data to provide a basis for estimating the expected term. There have been no options granted during 2012 or 2013. | ||||||||
Restricted Stock Units: | ||||||||
The 2005 LTIP was amended by the shareholders on May 30, 2013 to authorize the grant of restricted stock units, in addition to the other types of awards available thereunder. Restricted stock units represent the right to receive shares of common stock upon the satisfaction of vesting requirements, performance criteria and other terms and conditions. On July 27, 2012 and April 10, 2013, an aggregate of 129,463 and 122,823 restricted stock units, respectively, were conditionally granted to certain employees of the Company subject to shareholder approval of the amendments to the 2005 LTIP at the May 30, 2013 shareholder meeting. One conditional grant of 9,280 restricted stock units was forfeited prior to approval at the shareholder meeting. | ||||||||
The performance criteria for all restricted stock units require that the Company achieve certain compound average annual growth rates in book value per share over the vesting period in order to receive shares of common stock in amounts ranging from 50% to 150% of the number of restricted stock units granted. In addition, certain restricted stock units contain an additional performance criteria related to the attainment of an average combined ratio percentage over the vesting period. If and to the extent specified performance criteria have been achieved, the restricted stock units granted on July 27, 2012 will vest on March 31, 2015, and the restricted stock units granted on April 10, 2013 will vest on March 31, 2016. | ||||||||
Compensation cost is measured as an amount equal to the fair value of the restricted stock units and is expensed over the vesting period if achievement of the performance criteria is deemed probable, with the amount of the expense recognized based on the Company’s best estimate of the ultimate achievement level. The grant date fair value of the restricted stock units is $9.20 per unit. The Company incurred $58 thousand and $90 thousand of compensation expense related to the restricted stock units during the three and nine months ended September 30, 2013, respectively. | ||||||||
A summary of the status of our restricted stock units as of September 30, 2013 and changes during the nine months then ended is presented below: | ||||||||
Number of | ||||||||
Restricted | ||||||||
Stock Units | ||||||||
Nonvested at January 1, 2013 | - | |||||||
Granted | 243,006 | |||||||
Vested | - | |||||||
Forfeited | -6,155 | |||||||
Nonvested at September 30, 2013 | 236,851 | |||||||
As of September 30, 2013, there was $0.6 million of total unrecognized compensation cost related to non-vested restricted stock units granted under our 2005 LTIP, of which $67 thousand is expected to be recognized for the remainder of 2013, $0.3 million is expected to be recognized in 2014, $0.2 million is expected to be recognized in 2015 and $53 thousand is expected to be recognized in 2016. | ||||||||
Segment_Information
Segment Information | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Segment Information [Abstract] | ' | |||||||
Segment Information | ' | |||||||
9. Segment Information | ||||||||
The following is business segment information for the three and nine months ended September 30, 2013 and 2012 (in thousands): | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
Revenues: | ||||||||
Standard Commercial Segment | $ | $ | $ | $ | ||||
21,163 | 17,761 | 62,160 | 53,791 | |||||
Specialty Commercial Segment | 60,787 | 46,373 | 168,127 | 129,812 | ||||
Personal Segment | 21,256 | 21,172 | 64,621 | 68,508 | ||||
Corporate | 5,407 | 314 | 6,145 | 1,066 | ||||
Consolidated | $ | $ | $ | $ | ||||
108,613 | 85,620 | 301,053 | 253,177 | |||||
Pre-tax income (loss) , net of non-controlling interest: | ||||||||
Standard Commercial Segment | $ | $ | $ | $ | ||||
1,163 | -529 | 641 | -2,601 | |||||
Specialty Commercial Segment | 7,564 | 8,287 | 11,828 | 17,193 | ||||
Personal Segment | -1,613 | -345 | -3,331 | -5,747 | ||||
Corporate | 2,358 | -2,650 | -2,820 | -8,082 | ||||
Consolidated | $ | $ | $ | $ | ||||
9,472 | 4,763 | 6,318 | 763 | |||||
The following is additional business segment information as of the dates indicated (in thousands): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Assets | ||||||||
Standard Commercial Segment | $ 144,231 | $ 145,162 | ||||||
Specialty Commercial Segment | 526,160 | 432,208 | ||||||
Personal Segment | 192,588 | 200,356 | ||||||
Corporate | 16,738 | 12,742 | ||||||
$ 879,717 | $ 790,468 | |||||||
Reinsurance
Reinsurance | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Reinsurance [Abstract] | ' | |||||||||
Reinsurance | ' | |||||||||
10. Reinsurance | ||||||||||
We reinsure a portion of the risk we underwrite in order to control the exposure to losses and to protect capital resources. We cede to reinsurers a portion of these risks and pay premiums based upon the risk and exposure of the policies subject to such reinsurance. Ceded reinsurance involves credit risk and is generally subject to aggregate loss limits. Although the reinsurer is liable to us to the extent of the reinsurance ceded, we are ultimately liable as the direct insurer on all risks reinsured. Reinsurance recoverables are reported after allowances for uncollectible amounts. We monitor the financial condition of reinsurers on an ongoing basis and review our reinsurance arrangements periodically. Reinsurers are selected based on their financial condition, business practices and the price of their product offerings. In order to mitigate credit risk to reinsurance companies, most of our reinsurance recoverable balance as of September 30, 2013 was with reinsurers that had an A.M. Best rating of “A–” or better. | ||||||||||
The following table shows earned premiums ceded and reinsurance loss recoveries by period (in thousands): | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||
September 30, | September 30, | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Ceded earned premiums | $ 16,488 | $ 14,141 | $ 45,629 | $40,031 | ||||||
Reinsurance recoveries | $ 9,197 | $ 8,582 | $ 24,770 | $22,633 | ||||||
We currently reinsure the following exposures on business generated by our business units: | ||||||||||
· | Property catastrophe. Our property catastrophe reinsurance reduces the financial impact a catastrophe could have on our commercial and personal property insurance lines. Catastrophes might include multiple claims and policyholders. Catastrophes include hurricanes, windstorms, earthquakes, hailstorms, explosions, severe winter weather and fires. Our property catastrophe reinsurance is excess-of-loss reinsurance, which provides us reinsurance coverage for losses in excess of an agreed-upon amount. We utilize catastrophe models to assist in determining appropriate retention and limits to purchase. Effective July 1, 2013, the terms of our property catastrophe reinsurance are: | |||||||||
o | We retain the first $6.0 million of property catastrophe losses; and | |||||||||
o | Our reinsurers reimburse us 100% for any loss occurrence in excess of our $6.0 million retention up to $29.0 million for each catastrophic occurrence, subject to an aggregate limit of $58.0 million. | |||||||||
· | Commercial property. Our commercial property reinsurance is excess-of-loss coverage intended to reduce the financial impact a single-event or catastrophic loss may have on our results. The terms of our commercial property reinsurance are: | |||||||||
o | We retain the first $1.0 million of loss for each commercial property risk; | |||||||||
o | Our reinsurers reimburse us for the next $5.0 million for each commercial property risk, and $10.0 million for all commercial property risk involved in any one occurrence, in all cases subject to an aggregate limit of $30.0 million for all commercial property losses occurring during the treaty period; and | |||||||||
o | Individual risk facultative reinsurance is purchased on any commercial property with limits above $6.0 million. | |||||||||
· | Commercial casualty. Our commercial casualty reinsurance is excess-of-loss coverage intended to reduce the financial impact a single-event loss may have on our results. The terms of our commercial casualty reinsurance are: | |||||||||
o | We retain the first $1.0 million of any commercial liability risk; and | |||||||||
o | Our reinsurers reimburse us for the next $5.0 million for each commercial liability risk. | |||||||||
· | Aviation. Effective July 1, 2013 we purchase proportional reinsurance where we cede 80% of the risk to reinsurers on the aviation risks produced in all states by our Hallmark Select business unit. | |||||||||
· | Workers Compensation. We purchase excess of loss reinsurance specific to the workers compensation risks underwritten by our Workers Compensation business unit. The terms of our workers compensation reinsurance are: | |||||||||
o | We retain the first $1.0 million of each workers compensation loss; and | |||||||||
o | Our reinsurers reimburse us 100% for the next $14.0 million for each workers compensation loss, subject to a maximum limit of $10.0 million for any one person and an aggregate limit of $28.0 million for all workers compensation losses. | |||||||||
· | Personal Property. We purchase proportional reinsurance where we cede 60% of the risks to reinsurers on the low value dwelling/homeowners, renters and manufactured homes coverages produced in all states by our Personal Lines business unit. | |||||||||
· | Standard Commercial P&C. We purchase proportional reinsurance where we cede 100% of the risks to reinsurers on the equipment breakdown coverage on our commercial multi-peril property and business owners risks and on the employment practices liability coverage on certain commercial multi-peril, general liability and business owners risks. | |||||||||
· | Excess & Umbrella. We purchase proportional reinsurance where we retain 20% of each risk and cede the remaining 80% to reinsurers on the commercial umbrella and excess liability insurance produced by our Hallmark Select business unit. In states where we are not yet licensed to offer a non-admitted product, we utilize a fronting arrangement pursuant to which we assume all of the risk and then retrocede a portion of that risk under the same proportional reinsurance treaty. | |||||||||
· | Professional Liability. Effective June 1, 2013, we purchase proportional reinsurance on our medical professional liability risks produced by our Hallmark Select business unit where we retain 60% of each risk and cede the remaining 40% to reinsurers. In states where we are not yet licensed to offer a non-admitted product, we utilize a fronting arrangement pursuant to which we assume all of the risk and then retrocede a portion of that risk under the same proportional reinsurance treaty. | |||||||||
· | E&S Commercial. We purchase facultative reinsurance on our commercial umbrella and excess liability risks produced by our E&S Commercial business unit where we retain 10% of the first $1.0 million of risk and cede the remaining 90% to reinsurers. We cede 100% of our commercial umbrella and excess liability risks in excess of $1.0 million. | |||||||||
· | Hallmark County Mutual. HCM is used to front certain lines of business in our Specialty Commercial and Personal Segments in Texas where we previously produced policies for third party county mutual insurance companies and reinsured 100% for a fronting fee. In addition, HCM is used to front business produced by unaffiliated third parties. HCM does not retain any business. | |||||||||
· | Hallmark National Insurance Company. Simultaneous with the December 31, 2010 closing of our acquisition of HNIC, HNIC entered into reinsurance contracts with an affiliate of the seller pursuant to which such affiliate of the seller handles all claims and assumes all liabilities arising under policies issued by HNIC prior to closing or during a transition period following the closing. | |||||||||
Revolving_Credit_Facility_Paya
Revolving Credit Facility Payable | 9 Months Ended |
Sep. 30, 2013 | |
Revolving Credit Facility Payable [Abstract] | ' |
Revolving Credit Facility Payable | ' |
11. Revolving Credit Facility Payable | |
Our First Restated Credit Agreement with The Frost National Bank dated January 27, 2006, as amended to date, provides a revolving credit facility of $15.0 million. We pay interest on the outstanding balance at our election at a rate of the prime rate or LIBOR plus 2.5%. We pay an annual fee of 0.25% of the average daily unused balance of the credit facility. We pay letter of credit fees at the rate of 1.00% per annum. Our obligations under the revolving credit facility are secured by a security interest in the capital stock of all of our subsidiaries, guarantees of all of our subsidiaries and the pledge of all of our non-insurance company assets. The revolving credit facility contains covenants that, among other things, require us to maintain certain financial and operating ratios and restrict certain distributions, transactions and organizational changes. We are in compliance with all of our covenants. As of September 30, 2013, the balance on the revolving note was $1.5 million. The revolving note currently bears interest at 2.75% per annum. | |
Subordinated_Debt_Securities
Subordinated Debt Securities | 9 Months Ended |
Sep. 30, 2013 | |
Subordinated Debt Securities [Abstract] | ' |
Subordinated Debt Securities | ' |
12. Subordinated Debt Securities | |
On June 21, 2005, we entered into a trust preferred securities transaction pursuant to which we issued $30.9 million aggregate principal amount of subordinated debt securities due in 2035. To effect the transaction, we formed Trust I as a Delaware statutory trust. Trust I issued $30.0 million of preferred securities to investors and $0.9 million of common securities to us. Trust I used the proceeds from these issuances to purchase the subordinated debt securities. Our Trust I subordinated debt securities bear an initial interest rate of 7.725% until June 15, 2015, at which time interest will adjust quarterly to the three-month LIBOR rate plus 3.25 percentage points. Trust I pays dividends on its preferred securities at the same rate. Under the terms of our Trust I subordinated debt securities, we pay interest only each quarter and the principal of the note at maturity. The subordinated debt securities are uncollaterized and do not require maintenance of minimum financial covenants. As of September 30, 2013, the balance of our Trust I subordinated debt was $30.9 million. | |
On August 23, 2007, we entered into a trust preferred securities transaction pursuant to which we issued $25.8 million aggregate principal amount of subordinated debt securities due in 2037. To effect the transaction, we formed Trust II as a Delaware statutory trust. Trust II issued $25.0 million of preferred securities to investors and $0.8 million of common securities to us. Trust II used the proceeds from these issuances to purchase the subordinated debt securities. Our Trust II subordinated debt securities bear an initial interest rate of 8.28% until September 15, 2017, at which time interest will adjust quarterly to the three-month LIBOR rate plus 2.90 percentage points. Trust II pays dividends on its preferred securities at the same rate. Under the terms of our Trust II subordinated debt securities, we pay interest only each quarter and the principal of the note at maturity. The subordinated debt securities are uncollaterized and do not require maintenance of minimum financial covenants. As of September 30, 2013, the balance of our Trust II subordinated debt was $25.8 million. | |
Deferred_Policy_Acquisition_Co
Deferred Policy Acquisition Costs | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Deferred Policy Acquisition Costs [Abstract] | ' | |||||||
Deferred Policy Acquisition Costs | ' | |||||||
13. Deferred Policy Acquisition Costs | ||||||||
The following table shows total deferred and amortized policy acquisition cost activity by period (in thousands): | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
Deferred | $ (34,995) | $ (12,011) | $ (53,243) | $ (45,281) | ||||
Amortized | 34,715 | 11,084 | 51,211 | 41,427 | ||||
Net | $ (280) | $ (927) | $ (2,032) | $ (3,854) | ||||
Earnings_per_Share
Earnings per Share | 9 Months Ended | |||||
Sep. 30, 2013 | ||||||
Earnings per Share [Abstract] | ' | |||||
Earnings per Share | ' | |||||
14. Earnings per Share | ||||||
The following table sets forth basic and diluted weighted average shares outstanding for the periods indicated (in thousands): | ||||||
Three Months Ended | Nine Months Ended | |||||
September 30, | September 30, | |||||
2013 | 2012 | 2013 | 2012 | |||
Weighted average shares - basic | 19,263 | 19,263 | 19,263 | 19,263 | ||
Effect of dilutive securities | 107 | 14 | 97 | 4 | ||
Weighted average shares - assuming dilution | 19,370 | 19,277 | 19,360 | 19,267 | ||
For the three months and nine months ended September 30, 2013, 779,999 shares of common stock potentially issuable upon the exercise of employee stock options were excluded from the weighted average number of shares outstanding on a diluted basis because the effect of such options would be anti-dilutive. For the three months and nine months ended September 30, 2012, 809,999 shares of common stock potentially issuable upon the exercise of employee stock options were excluded from the weighted average number of shares outstanding on a diluted basis because the effect of such options would be anti-dilutive. | ||||||
Net_Periodic_Pension_Cost
Net Periodic Pension Cost | 9 Months Ended | |||||
Sep. 30, 2013 | ||||||
Net Periodic Pension Cost [Abstract] | ' | |||||
Net Periodic Pension Cost | ' | |||||
15. Net Periodic Pension Cost | ||||||
The following table details the net periodic pension cost incurred by period (in thousands): | ||||||
Three Months Ended | Nine Months Ended | |||||
September 30, | September 30, | |||||
2013 | 2012 | 2013 | 2012 | |||
Interest cost | $ | $ | $ | $ | ||
127 | 141 | 379 | 422 | |||
Amortization of net loss | 123 | 120 | 371 | 362 | ||
Expected return on plan assets | -154 | -146 | -462 | -438 | ||
Net periodic pension cost | $ | $ | $ | $ | ||
96 | 115 | 288 | 346 | |||
Contributed amount | $ | $ | $ | $ | ||
157 | 410 | 268 | 711 | |||
Refer to Note 14 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2012 for more discussion of our retirement plans. | ||||||
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Taxes [Abstract] | ' |
Income Taxes | ' |
16. Income Taxes | |
Our effective income tax rate for the first nine months ended September 30, 2013 and 2012 was 23.8% and -90.0%, respectively, which varied from the statutory tax rate due in large part to significant tax exempt income. | |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies [Abstract] | ' |
Commitments and Contingencies | ' |
17. Commitments and Contingencies | |
In December 2010, our E&S Commercial business unit was informed by the Texas Comptroller of Public Accounts that a surplus lines tax audit covering the period January 1, 2007 through December 31, 2009 was complete. A subsidiary within our E&S Commercial business unit (“HSU”) frequently acts as a managing general underwriter (“MGU”) authorized to underwrite policies on behalf of Republic Vanguard Insurance Company and HSIC, both Texas eligible surplus lines insurance carriers. In its role as the MGU, HSU underwrites policies on behalf of these carriers while other agencies located in Texas, generally referred to as “producing agents,” deliver the policies to the insureds and collect all premiums due from the insureds. During the period under audit, the producing agents also collected the surplus lines premium taxes due on the policies from the insureds, held them in trust, and timely remitted those taxes to the Comptroller. We believe this system for collecting and paying the required surplus lines premium taxes complies in all respects with the Texas Insurance Code and other regulations, which clearly require that the same party who delivers the policies and collects the premiums will also collect premium taxes, hold premium taxes in trust, and pay premium taxes to the Comptroller. It also complies with long standing industry practice. The Comptroller asserts that HSU is liable for the surplus lines premium taxes related to policy transactions and premiums collected from surplus lines insureds during the audit period and that HSU owes $4.5 million in premium taxes, as well as $0.9 million in penalties and interest for the audit period. | |
We disagree with the Comptroller and intend to vigorously fight their assertion that HSU is liable for the surplus lines premium taxes. We have engaged in conversations with the Comptroller’s counsel and are waiting on the Comptroller’s position paper. At this stage, we cannot predict the course of any proceedings, the timing of any rulings or other significant events relating to such surplus lines tax audit. Given these limitations and the inherent difficulty of projecting the outcome of regulatory disputes, we are presently unable to reasonably estimate the possible loss or legal costs that are likely to arise out of the surplus lines tax audit or any future proceedings relating to this matter. Therefore we have not accrued any amount as of September 30, 2013 related to this matter. | |
We are engaged in other legal proceedings in the ordinary course of business, none of which, either individually or in the aggregate, are believed likely to have a material adverse effect on our consolidated financial position or results of operations, in the opinion of management. The various legal proceedings to which we are a party are routine in nature and incidental to our business. | |
Changes_in_Accumulated_Other_C
Changes in Accumulated Other Comprehensive Income Balances | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Changes in Accumulated Other Comprehensive Income Balances [Abstract] | ' | ||||||
Changes in Accumulated Other Comprehensive Income Balances | ' | ||||||
18. Changes in Accumulated Other Comprehensive Income Balances | |||||||
The changes in accumulated other comprehensive income balances as of September 30, 2013 and 2012 were as follows (in thousands): | |||||||
Minimum | Accumulated Other | ||||||
Pension | Unrealized | Comprehensive | |||||
Liability | Gains (Loss) | Income | |||||
Balance at December 31, 2011 | $ | $ | $ | ||||
-2,978 | 9,424 | 6,446 | |||||
Other comprehensive income (loss): | |||||||
Change in net actuarial loss (see Note 15) | 362 | - | 362 | ||||
Tax effect on change in net actuarial loss | -127 | - | -127 | ||||
Net unrealized holding gains arising during the period | - | 4,560 | 4,560 | ||||
Tax effect on unrealized gains arising during the period | - | -1,596 | -1,596 | ||||
Reclassification adjustment for gains included in net realized gains | - | -2,044 | -2,044 | ||||
Tax effect on reclassification adjustment for gains included | |||||||
in income tax expense | - | 715 | 715 | ||||
Other comprehensive income , net of tax | 235 | 1,635 | 1,870 | ||||
Balance at September 30, 2012 | $ | $ | $ | ||||
-2,743 | 11,059 | 8,316 | |||||
Balance at December 31, 2012 | $ | $ | $ | ||||
-2,954 | 10,853 | 7,899 | |||||
Other comprehensive income (loss): | |||||||
Change in net actuarial loss (see Note 15) | 371 | - | 371 | ||||
Tax effect on change in net actuarial loss | -130 | - | -130 | ||||
Net unrealized holding gains arising during the period | - | 16,243 | 16,243 | ||||
Tax effect on unrealized gains arising during the period | - | -5,685 | -5,685 | ||||
Reclassification adjustment for gains included in net realized gains | - | -9,723 | -9,723 | ||||
Tax effect on reclassification adjustment for gains included in income | |||||||
tax expense | - | 3,403 | 3,403 | ||||
Other comprehensive income, net of tax | 241 | 4,238 | 4,479 | ||||
Balance at September 30, 2013 | $ | $ | $ | ||||
-2,713 | 15,091 | 12,378 | |||||
Basis_of_Presentation_Policy
Basis of Presentation (Policy) | 9 Months Ended |
Sep. 30, 2013 | |
Basis of Presentation [Abstract] | ' |
Business Combinations | ' |
Business Combinations | |
We account for business combinations using the acquisition method of accounting pursuant to Accounting Standards Codification (“ASC”) 805, “Business Combinations.” The base cash purchase price plus the estimated fair value of any non-cash or contingent consideration given for an acquired business is allocated to the assets acquired (including identified intangible assets) and liabilities assumed based on the estimated fair values of such assets and liabilities. The excess of the fair value of the total consideration given for an acquired business over the aggregate net fair values assigned to the assets acquired and liabilities assumed is recorded as goodwill. Contingent consideration is recognized as a liability at fair value as of the acquisition date with subsequent fair value adjustments recorded in the consolidated statements of operations. The valuation of contingent consideration requires assumptions regarding anticipated cash flows, probabilities of cash flows, discount rates and other factors. Significant judgment is employed in determining the propriety of these assumptions as of the acquisition date and for each subsequent period. Accordingly, future business and economic conditions, as well as changes in any of the assumptions, can materially impact the amount of contingent consideration expense we record in any given period. Indirect and general expenses related to business combinations are expensed as incurred. | |
Income Taxes | ' |
Income Taxes | |
We file a consolidated federal income tax return. Deferred federal income taxes reflect the future tax consequences of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year end. Deferred taxes are recognized using the liability method, whereby tax rates are applied to cumulative temporary differences based on when and how they are expected to affect the tax return. Deferred tax assets and liabilities are adjusted for tax rate changes in effect for the year in which these temporary differences are expected to be recovered or settled. | |
Use of Estimates in the Preparation of the Financial Statements | ' |
Use of Estimates in the Preparation of the Financial Statements | |
Our preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect our reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the date of our consolidated financial statements, as well as our reported amounts of revenues and expenses during the reporting period. Refer to “Critical Accounting Estimates and Judgments” under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2012 for information on accounting policies that we consider critical in preparing our consolidated financial statements. Actual results could differ materially from those estimates. | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | |
Fair value estimates are made at a point in time, based on relevant market data as well as the best information available about the financial instruments. Fair value estimates for financial instruments for which no or limited observable market data is available are based on judgments regarding current economic conditions, credit and interest rate risk. These estimates involve significant uncertainties and judgments and cannot be determined with precision. As a result, such calculated fair value estimates may not be realizable in a current sale or immediate settlement of the instrument. In addition, changes in the underlying assumptions used in the fair value measurement technique, including discount rate and estimates of future cash flows, could significantly affect these fair value estimates. | |
Cash and Cash Equivalents: The carrying amounts reported in the balance sheet for these instruments approximate their fair values. | |
Restricted Cash: The carrying amount for restricted cash reported in the balance sheet approximates the fair value. | |
Revolving Credit Facility Payable: The carrying value of our bank revolving credit facility of $1.5 million approximates the fair value based on the current interest rate. | |
Subordinated Debt Securities: Our trust preferred securities have a carried value of $56.7 million and a fair value of $51.9 million as of September 30, 2013. The fair value of our trust preferred securities is based on discounted cash flows using a current yield to maturity of 8.0%, which is based on similar issues to discount future cash flows. Our trust preferred securities would be included in Level 3 of the fair value hierarchy if they were reported at fair value. | |
For reinsurance balances, premiums receivable, federal income tax payable, other assets and other liabilities, the carrying amounts approximate fair value because of the short maturity of such financial instruments. | |
Variable Interest Entities | ' |
Variable Interest Entities | |
On June 21, 2005, we formed Hallmark Statutory Trust I (“Trust I”), an unconsolidated trust subsidiary, for the sole purpose of issuing $30.0 million in trust preferred securities. Trust I used the proceeds from the sale of these securities and our initial capital contribution to purchase $30.9 million of subordinated debt securities from Hallmark. The debt securities are the sole assets of Trust I, and the payments under the debt securities are the sole revenues of Trust I. | |
On August 23, 2007, we formed Hallmark Statutory Trust II (“Trust II”), an unconsolidated trust subsidiary, for the sole purpose of issuing $25.0 million in trust preferred securities. Trust II used the proceeds from the sale of these securities and our initial capital contribution to purchase $25.8 million of subordinated debt securities from Hallmark. The debt securities are the sole assets of Trust II, and the payments under the debt securities are the sole revenues of Trust II. | |
We evaluate on an ongoing basis our investments in Trust I and II (collectively the “Trusts”) and we do not have a variable interest in the Trusts. Therefore, the Trusts are not included in our consolidated financial statements. | |
We are also involved in the normal course of business with variable interest entities (“VIE’s”) primarily as a passive investor in mortgage-backed securities and certain collateralized corporate bank loans issued by third party VIE’s. The maximum exposure to loss with respect to these investments is the investment carrying values included in the consolidated balance sheets. | |
Adoption of New Accounting Pronouncements | ' |
Adoption of New Accounting Pronouncements | |
In January 2013, we adopted new guidance issued by the Financial Accounting Standards Board (“FASB”) related to reporting and disclosure requirements about changes in accumulated other comprehensive income balances and reclassifications out of accumulated other comprehensive income. The new guidance is effective prospectively for fiscal and interim periods beginning after December 15, 2012. The adoption of this guidance did not have a material impact on our financial position or results of operations but did require additional disclosures. | |
Fair_Value_Tables
Fair Value (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Fair Value [Abstract] | ' | |||||||||||
Fair Value, Assets Measured on Recurring Basis | ' | |||||||||||
The following table presents for each of the fair value hierarchy levels, our assets that are measured at fair value on a recurring basis at September 30, 2013 and December 31, 2012 (in thousands): | ||||||||||||
As of September 30, 2013 | ||||||||||||
Quoted Prices in | Other | |||||||||||
Active Markets for | Observable | Unobservable | ||||||||||
Identical Assets | Inputs | Inputs | ||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||
U.S. Treasury securities and | ||||||||||||
obligations of U.S. Government | $ - | $ | $ - | $ | ||||||||
34,114 | 34,114 | |||||||||||
Corporate bonds | - | 59,393 | - | 59,393 | ||||||||
Collateralized corporate bank loans | - | 118,852 | 700 | 119,552 | ||||||||
Municipal bonds | - | 134,906 | 19,590 | 154,496 | ||||||||
Mortgage-backed | - | 29,092 | - | 29,092 | ||||||||
Total debt securities | - | 376,357 | 20,290 | 396,647 | ||||||||
Financial services | 7,690 | - | - | 7,690 | ||||||||
All other | 38,250 | - | - | 38,250 | ||||||||
Total equity securities | 45,940 | - | - | 45,940 | ||||||||
Total debt and equity securities | $ | $ | $ | $ | ||||||||
45,940 | 376,357 | 20,290 | 442,587 | |||||||||
As of December 31, 2012 | ||||||||||||
Quoted Prices in | Other | |||||||||||
Active Markets for | Observable | Unobservable | ||||||||||
Identical Assets | Inputs | Inputs | ||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||
U.S. Treasury securities and | ||||||||||||
obligations of U.S. Government | $ - | $ | $ - | $ | ||||||||
40,061 | 40,061 | |||||||||||
Corporate bonds | - | 81,547 | - | 81,547 | ||||||||
Collateralized corporate bank loans | - | 105,463 | 908 | 106,371 | ||||||||
Municipal bonds | - | 144,972 | 18,760 | 163,732 | ||||||||
Mortgage-backed | - | 9,724 | - | 9,724 | ||||||||
Total debt securities | - | 381,767 | 19,668 | 401,435 | ||||||||
Financial services | 14,887 | - | - | 14,887 | ||||||||
All other | 29,038 | - | - | 29,038 | ||||||||
Total equity securities | 43,925 | - | - | 43,925 | ||||||||
Total debt and equity securities | $ | $ 381,767 | $ | $ | ||||||||
43,925 | 19,668 | 445,360 | ||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ' | |||||||||||
The following table summarizes the changes in fair value for all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the nine months ended September 30, 2013 and 2012 (in thousands): | ||||||||||||
Beginning balance as of January 1, 2013 | $ | |||||||||||
19,668 | ||||||||||||
Sales | - | |||||||||||
Settlements | -302 | |||||||||||
Purchases | - | |||||||||||
Issuances | - | |||||||||||
Total realized/unrealized gains included in net income | - | |||||||||||
Net gains included in other comprehensive income | 924 | |||||||||||
Transfers into Level 3 | - | |||||||||||
Transfers out of Level 3 | - | |||||||||||
Ending balance as of September 30, 2013 | $ | |||||||||||
20,290 | ||||||||||||
Beginning balance as of January 1, 2012 | $ | |||||||||||
20,608 | ||||||||||||
Sales | - | |||||||||||
Settlements | -307 | |||||||||||
Purchases | - | |||||||||||
Issuances | - | |||||||||||
Total realized/unrealized gains included in net income | - | |||||||||||
Net losses included in other comprehensive income | -530 | |||||||||||
Transfers into Level 3 | - | |||||||||||
Transfers out of Level 3 | - | |||||||||||
Ending balance as of September 30, 2012 | $ | |||||||||||
19,771 | ||||||||||||
Investments_Tables
Investments (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Investments [Abstract] | ' | |||||||||||
Amortized Cost and Estimated Fair Value of Investments in Debt and Equity Securities by Category | ' | |||||||||||
The amortized cost and estimated fair value of investments in debt and equity securities by category is as follows (in thousands): | ||||||||||||
Gross | Gross | |||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||
As of September 30, 2013 | Cost | Gains | Losses | Value | ||||||||
U.S. Treasury securities and | ||||||||||||
obligations of U.S. Government | $ | $ | $ - | $ | ||||||||
34,083 | 31 | 34,114 | ||||||||||
Corporate bonds | 58,633 | 1,285 | -525 | 59,393 | ||||||||
Collateralized corporate bank loans | 119,626 | 475 | -549 | 119,552 | ||||||||
Municipal bonds | 153,974 | 2,701 | -2,179 | 154,496 | ||||||||
Mortgage-backed | 29,544 | 339 | -791 | 29,092 | ||||||||
Total debt securities | 395,860 | 4,831 | -4,044 | 396,647 | ||||||||
Financial services | 4,705 | 2,985 | - | 7,690 | ||||||||
All other | 19,328 | 19,644 | -722 | 38,250 | ||||||||
Total equity securities | 24,033 | 22,629 | -722 | 45,940 | ||||||||
Total debt and equity securities | $ | $ | $ | $ | ||||||||
419,893 | 27,460 | -4,766 | 442,587 | |||||||||
As of December 31, 2012 | ||||||||||||
U.S. Treasury securities and | ||||||||||||
obligations of U.S. Government | $ | $ | $ | $ | ||||||||
40,050 | 14 | -3 | 40,061 | |||||||||
Corporate bonds | 79,516 | 2,794 | -763 | 81,547 | ||||||||
Collateralized corporate bank loans | 106,093 | 1,021 | -743 | 106,371 | ||||||||
Municipal bonds | 162,479 | 4,023 | -2,770 | 163,732 | ||||||||
Mortgage-backed | 9,662 | 97 | -35 | 9,724 | ||||||||
Total debt securities | 397,800 | 7,949 | -4,314 | 401,435 | ||||||||
Financial services | 11,008 | 3,880 | -1 | 14,887 | ||||||||
All other | 20,494 | 9,058 | -514 | 29,038 | ||||||||
Total equity securities | 31,502 | 12,938 | -515 | 43,925 | ||||||||
Total debt and equity securities | $ | $ | $ | $ | ||||||||
429,302 | 20,887 | -4,829 | 445,360 | |||||||||
Summary of Realized Gain (Loss) on Investments | ' | |||||||||||
Major categories of net realized gains (losses) on investments are summarized as follows (in thousands): | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
30-Sep | 30-Sep | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
U.S. Treasury securities and | ||||||||||||
obligations of U.S. Government | $ - | $ - | $ - | $ - | ||||||||
Corporate bonds | 21 | 159 | 846 | 9 | ||||||||
Collateralized corporate bank loans | 44 | 93 | 316 | 229 | ||||||||
Municipal bonds | -50 | -50 | -11 | -294 | ||||||||
Equity securities-financial services | 6,935 | 8 | 7,579 | 78 | ||||||||
Equity securities-all other | - | 772 | 993 | 2,078 | ||||||||
Gain on investments | 6,950 | 982 | 9,723 | 2,100 | ||||||||
Other-than-temporary impairments | - | - | - | -246 | ||||||||
Net realized gains | $ | $ 982 | $ | $ 1,854 | ||||||||
6,950 | 9,723 | |||||||||||
Summary of Gross Unrealized Losses for Investments that have been Continuously in Unrealized Loss Position | ' | |||||||||||
The following schedules summarize the gross unrealized losses showing the length of time that investments have been continuously in an unrealized loss position as of September 30, 2013 and December 31, 2012 (in thousands): | ||||||||||||
As of September 30, 2013 | ||||||||||||
12 months or less | Longer than 12 months | Total | ||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||
Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | |||||||
U.S. Treasury securities and obligations | ||||||||||||
of U.S. Government | $ - | $ - | $ - | $ - | $ - | $ - | ||||||
Corporate bonds | 12,694 | -156 | 3,048 | -369 | 15,742 | -525 | ||||||
Collateralized corporate bank loans | 48,926 | -368 | 6,915 | -181 | 55,841 | -549 | ||||||
Municipal bonds | 28,861 | -488 | 38,953 | -1,691 | 67,814 | -2,179 | ||||||
Mortgage-backed | 14,328 | -788 | 107 | -3 | 14,435 | -791 | ||||||
Total debt securities | 104,809 | -1,800 | 49,023 | -2,244 | 153,832 | -4,044 | ||||||
Financial services | - | - | - | - | - | - | ||||||
All other | 2,348 | -722 | - | - | 2,348 | -722 | ||||||
Total equity securities | 2,348 | -722 | - | - | 2,348 | -722 | ||||||
Total debt and equity securities | $ | $ | $ | $ | $ | $ | ||||||
107,157 | -2,522 | 49,023 | -2,244 | 156,180 | -4,766 | |||||||
As of December 31, 2012 | ||||||||||||
12 months or less | Longer than 12 months | Total | ||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||
Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | |||||||
U.S. Treasury securities and obligations | ||||||||||||
of U.S. Government | $ | $ | $ - | $ - | $ | $ | ||||||
23,998 | -3 | 23,998 | -3 | |||||||||
Corporate bonds | 10,802 | -38 | 6,910 | -725 | 17,712 | -763 | ||||||
Collateralized corporate bank loans | 6,273 | -97 | 14,236 | -646 | 20,509 | -743 | ||||||
Municipal bonds | 30,073 | -362 | 28,809 | -2,408 | 58,882 | -2,770 | ||||||
Mortgage-backed | 7,367 | -32 | 84 | -3 | 7,451 | -35 | ||||||
Total debt securities | 78,513 | -532 | 50,039 | -3,782 | 128,552 | -4,314 | ||||||
Financial services | 92 | -1 | - | - | 92 | -1 | ||||||
All other | 3,271 | -514 | - | - | 3,271 | -514 | ||||||
Total equity securities | 3,363 | -515 | - | - | 3,363 | -515 | ||||||
Total debt and equity securities | $ | $ | $ | $ | $ | $ | ||||||
81,876 | -1,047 | 50,039 | -3,782 | 131,915 | -4,829 | |||||||
Schedule of Amortized Cost and Estimated Fair Value of Debt Securities by Contractual Maturities | ' | |||||||||||
Amortized | Fair | |||||||||||
Cost | Value | |||||||||||
(in thousands) | ||||||||||||
Due in one year or less | $ | $ | ||||||||||
63,230 | 63,768 | |||||||||||
Due after one year through five years | 153,969 | 154,311 | ||||||||||
Due after five years through ten years | 96,692 | 97,585 | ||||||||||
Due after ten years | 52,424 | 51,891 | ||||||||||
Mortgage-backed | 29,545 | 29,092 | ||||||||||
$ | $ | |||||||||||
395,860 | 396,647 | |||||||||||
ShareBased_Payment_Arrangement1
Share-Based Payment Arrangements (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Share-Based Payment Arrangements [Abstract] | ' | |||||||
Summary of the Status of Stock Options | ' | |||||||
A summary of the status of our stock options as of and changes during the nine months ended September 30, 2013 is presented below: | ||||||||
Average | ||||||||
Weighted | Remaining | Aggregate | ||||||
Average | Contractual | Intrinsic | ||||||
Number of | Exercise | Term | Value | |||||
Shares | Price | (Years) | $0 | |||||
Outstanding at January 1, 2013 | 1,404,989 | $ 9.63 | ||||||
Granted | - | |||||||
Exercised | - | |||||||
Forfeited or expired | (13,214) | $ 7.90 | ||||||
Outstanding at September 30, 2013 | 1,391,775 | $ 9.65 | 4.5 | $ 1,327 | ||||
Exercisable at September 30, 2013 | 1,189,036 | $ 10.17 | 4.3 | $ 870 | ||||
Schedule of Options, Grants in Period and Grant Date Intrinsic Value | ' | |||||||
The following table details the intrinsic value of options exercised, total cost of share-based payments charged against income before income tax benefit and the amount of related income tax benefit recognized in income for the periods indicated (in thousands): | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
Intrinsic value of options exercised | $ - | $ - | $ - | $ - | ||||
Cost of share-based payments (non-cash) | $ 52 | $ 64 | $ 156 | $ 317 | ||||
Income tax benefit of share-based | ||||||||
payments recognized in income | $ 8 | $ 7 | $ 23 | $ 30 | ||||
Summary of the Status of Restricted Stock Units | ' | |||||||
A summary of the status of our restricted stock units as of September 30, 2013 and changes during the nine months then ended is presented below: | ||||||||
Number of | ||||||||
Restricted | ||||||||
Stock Units | ||||||||
Nonvested at January 1, 2013 | - | |||||||
Granted | 243,006 | |||||||
Vested | - | |||||||
Forfeited | -6,155 | |||||||
Nonvested at September 30, 2013 | 236,851 | |||||||
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Segment Information [Abstract] | ' | |||||||
Schedule of Business Segment Information | ' | |||||||
The following is business segment information for the three and nine months ended September 30, 2013 and 2012 (in thousands): | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
Revenues: | ||||||||
Standard Commercial Segment | $ | $ | $ | $ | ||||
21,163 | 17,761 | 62,160 | 53,791 | |||||
Specialty Commercial Segment | 60,787 | 46,373 | 168,127 | 129,812 | ||||
Personal Segment | 21,256 | 21,172 | 64,621 | 68,508 | ||||
Corporate | 5,407 | 314 | 6,145 | 1,066 | ||||
Consolidated | $ | $ | $ | $ | ||||
108,613 | 85,620 | 301,053 | 253,177 | |||||
Pre-tax income (loss) , net of non-controlling interest: | ||||||||
Standard Commercial Segment | $ | $ | $ | $ | ||||
1,163 | -529 | 641 | -2,601 | |||||
Specialty Commercial Segment | 7,564 | 8,287 | 11,828 | 17,193 | ||||
Personal Segment | -1,613 | -345 | -3,331 | -5,747 | ||||
Corporate | 2,358 | -2,650 | -2,820 | -8,082 | ||||
Consolidated | $ | $ | $ | $ | ||||
9,472 | 4,763 | 6,318 | 763 | |||||
Schedule of Additional Business Segment Information | ' | |||||||
The following is additional business segment information as of the dates indicated (in thousands): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Assets | ||||||||
Standard Commercial Segment | $ 144,231 | $ 145,162 | ||||||
Specialty Commercial Segment | 526,160 | 432,208 | ||||||
Personal Segment | 192,588 | 200,356 | ||||||
Corporate | 16,738 | 12,742 | ||||||
$ 879,717 | $ 790,468 | |||||||
Reinsurance_Tables
Reinsurance (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Reinsurance [Abstract] | ' | |||||||||
Schedule of Reinsurance Ceded and Recoveries | ' | |||||||||
The following table shows earned premiums ceded and reinsurance loss recoveries by period (in thousands): | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||
September 30, | September 30, | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Ceded earned premiums | $ 16,488 | $ 14,141 | $ 45,629 | $40,031 | ||||||
Reinsurance recoveries | $ 9,197 | $ 8,582 | $ 24,770 | $22,633 | ||||||
Deferred_Policy_Acquisition_Co1
Deferred Policy Acquisition Costs (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Deferred Policy Acquisition Costs [Abstract] | ' | |||||||
Deferred Amortized Policy Acquisition Costs | ' | |||||||
The following table shows total deferred and amortized policy acquisition cost activity by period (in thousands): | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
Deferred | $ (34,995) | $ (12,011) | $ (53,243) | $ (45,281) | ||||
Amortized | 34,715 | 11,084 | 51,211 | 41,427 | ||||
Net | $ (280) | $ (927) | $ (2,032) | $ (3,854) | ||||
Earnings_per_Share_Tables
Earnings per Share (Tables) | 9 Months Ended | |||||
Sep. 30, 2013 | ||||||
Earnings per Share [Abstract] | ' | |||||
Schedule of Weighted Average Number of Shares Outstanding | ' | |||||
The following table sets forth basic and diluted weighted average shares outstanding for the periods indicated (in thousands): | ||||||
Three Months Ended | Nine Months Ended | |||||
September 30, | September 30, | |||||
2013 | 2012 | 2013 | 2012 | |||
Weighted average shares - basic | 19,263 | 19,263 | 19,263 | 19,263 | ||
Effect of dilutive securities | 107 | 14 | 97 | 4 | ||
Weighted average shares - assuming dilution | 19,370 | 19,277 | 19,360 | 19,267 | ||
Net_Periodic_Pension_Cost_Tabl
Net Periodic Pension Cost (Tables) | 9 Months Ended | |||||
Sep. 30, 2013 | ||||||
Net Periodic Pension Cost [Abstract] | ' | |||||
Schedule of Net Benefit Costs | ' | |||||
The following table details the net periodic pension cost incurred by period (in thousands): | ||||||
Three Months Ended | Nine Months Ended | |||||
September 30, | September 30, | |||||
2013 | 2012 | 2013 | 2012 | |||
Interest cost | $ | $ | $ | $ | ||
127 | 141 | 379 | 422 | |||
Amortization of net loss | 123 | 120 | 371 | 362 | ||
Expected return on plan assets | -154 | -146 | -462 | -438 | ||
Net periodic pension cost | $ | $ | $ | $ | ||
96 | 115 | 288 | 346 | |||
Contributed amount | $ | $ | $ | $ | ||
157 | 410 | 268 | 711 | |||
Changes_in_Accumulated_Other_C1
Changes in Accumulated Other Comprehensive Income Balances (Tables) | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Changes in Accumulated Other Comprehensive Income Balances [Abstract] | ' | ||||||
Schedule of Changes in Accumulated Other Comprehensive Income | ' | ||||||
The changes in accumulated other comprehensive income balances as of September 30, 2013 and 2012 were as follows (in thousands): | |||||||
Minimum | Accumulated Other | ||||||
Pension | Unrealized | Comprehensive | |||||
Liability | Gains (Loss) | Income | |||||
Balance at December 31, 2011 | $ | $ | $ | ||||
-2,978 | 9,424 | 6,446 | |||||
Other comprehensive income (loss): | |||||||
Change in net actuarial loss (see Note 15) | 362 | - | 362 | ||||
Tax effect on change in net actuarial loss | -127 | - | -127 | ||||
Net unrealized holding gains arising during the period | - | 4,560 | 4,560 | ||||
Tax effect on unrealized gains arising during the period | - | -1,596 | -1,596 | ||||
Reclassification adjustment for gains included in net realized gains | - | -2,044 | -2,044 | ||||
Tax effect on reclassification adjustment for gains included | |||||||
in income tax expense | - | 715 | 715 | ||||
Other comprehensive income , net of tax | 235 | 1,635 | 1,870 | ||||
Balance at September 30, 2012 | $ | $ | $ | ||||
-2,743 | 11,059 | 8,316 | |||||
Balance at December 31, 2012 | $ | $ | $ | ||||
-2,954 | 10,853 | 7,899 | |||||
Other comprehensive income (loss): | |||||||
Change in net actuarial loss (see Note 15) | 371 | - | 371 | ||||
Tax effect on change in net actuarial loss | -130 | - | -130 | ||||
Net unrealized holding gains arising during the period | - | 16,243 | 16,243 | ||||
Tax effect on unrealized gains arising during the period | - | -5,685 | -5,685 | ||||
Reclassification adjustment for gains included in net realized gains | - | -9,723 | -9,723 | ||||
Tax effect on reclassification adjustment for gains included in income | |||||||
tax expense | - | 3,403 | 3,403 | ||||
Other comprehensive income, net of tax | 241 | 4,238 | 4,479 | ||||
Balance at September 30, 2013 | $ | $ | $ | ||||
-2,713 | 15,091 | 12,378 | |||||
General_Narrative_Details
General (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2013 | |
segment | |
General [Abstract] | ' |
Operating business units of subsidiaries | 5 |
Number of reportable segments | 3 |
Basis_of_Presentation_Narrativ
Basis of Presentation (Narrative) (Details) (USD $) | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 21, 2005 | Aug. 23, 2007 | Sep. 30, 2013 | Jun. 21, 2005 | Aug. 23, 2007 |
Revolving Credit Facility Payable [Member] | Hallmark Statutory Trust I [Member] | Hallmark Statutory Trust II [Member] | Subordinated Debt [Member] | Subordinated Debt [Member] | Subordinated Debt [Member] | ||
Hallmark Statutory Trust I [Member] | Hallmark Statutory Trust II [Member] | ||||||
Variable Interest Entity [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, amount outstanding | ' | $1.50 | ' | ' | ' | ' | ' |
Trust preferred securities, carrying value | ' | ' | ' | ' | 56.7 | ' | ' |
Trust preferred securities, fair value | ' | ' | ' | ' | 51.9 | ' | ' |
Current yield to maturity percentage | 9.80% | ' | ' | ' | 8.00% | ' | ' |
Proceeds from issuance of trust preferred securities | ' | ' | 30 | 25 | ' | ' | ' |
Payments to acquire trust preferred investments | ' | ' | ' | ' | ' | $30.90 | $25.80 |
Business_Combinations_Narrativ
Business Combinations (Narrative) (Details) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2012 | Sep. 30, 2012 | Jul. 01, 2011 | Sep. 30, 2012 | Aug. 29, 2008 | Dec. 31, 2010 | Sep. 30, 2013 | Dec. 31, 2010 | Jan. 03, 2011 | |
TBIC Holding Corporation [Member] | TBIC Holding Corporation [Member] | Heath XS LLC and Hardscrabble Data Solutions LLC [Member] | Heath XS LLC and Hardscrabble Data Solutions LLC [Member] | State Auto Financial Corporation [Member] | Hallmark National Insurance Company [Member] | Hallmark National Insurance Company [Member] | Hallmark National Insurance Company [Member] | ||
state | |||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership percentage acquired | ' | ' | ' | ' | 80.00% | ' | ' | ' | ' |
Total consideration for acquisition | ' | ' | $1,600,000 | ' | $15,000,000 | ' | ' | ' | $14,000,000 |
Percentage of ownership interests authorized for purchase | ' | ' | ' | 20.00% | 20.00% | ' | ' | ' | ' |
Redemption value of call and put option | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | ' |
Holdback purchase price estimated to pay | 350,000 | 350,000 | ' | ' | ' | ' | ' | ' | ' |
Gross collected premium, percentage | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' |
Business acquisition, cost of acquired entity, purchase price, additional amount | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' |
Fair value of contingent consideration | ' | ' | $3,000,000 | ' | ' | ' | ' | ' | ' |
Number of states, independent agents operate | ' | ' | ' | ' | ' | ' | 21 | ' | ' |
Fair_Value_Narrative_Details
Fair Value (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2013 | |
Fair Value [Abstract] | ' |
Current yield to maturity percentage | 9.80% |
Fair_Value_Fair_Value_Assets_M
Fair Value (Fair Value, Assets Measured on Recurring Basis) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | $396,647 | $401,435 |
Total equity securities | 45,940 | 43,925 |
Total debt and equity securities | 442,587 | 445,360 |
Us Treasury Securities and Obligations of U.S. Government [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | 34,114 | 40,061 |
Corporate Bonds [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | 59,393 | 81,547 |
Collateralized Corporate Bank Loans [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | 119,552 | 106,371 |
Municipal Bonds [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | 154,496 | 163,732 |
Mortgage Backed [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | 29,092 | 9,724 |
Financial Services [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total equity securities | 7,690 | 14,887 |
All Other [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total equity securities | 38,250 | 29,038 |
Quoted Prices in Active Markets for Identical Assets, Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total equity securities | 45,940 | 43,925 |
Total debt and equity securities | 45,940 | 43,925 |
Quoted Prices in Active Markets for Identical Assets, Level 1 [Member] | Financial Services [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total equity securities | 7,690 | 14,887 |
Quoted Prices in Active Markets for Identical Assets, Level 1 [Member] | All Other [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total equity securities | 38,250 | 29,038 |
Other Observable Inputs, Level 2 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | 376,357 | 381,767 |
Total debt and equity securities | 376,357 | 381,767 |
Other Observable Inputs, Level 2 [Member] | Us Treasury Securities and Obligations of U.S. Government [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | 34,114 | 40,061 |
Other Observable Inputs, Level 2 [Member] | Corporate Bonds [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | 59,393 | 81,547 |
Other Observable Inputs, Level 2 [Member] | Collateralized Corporate Bank Loans [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | 118,852 | 105,463 |
Other Observable Inputs, Level 2 [Member] | Municipal Bonds [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | 134,906 | 144,972 |
Other Observable Inputs, Level 2 [Member] | Mortgage Backed [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | 29,092 | 9,724 |
Unobservable Inputs, Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | 20,290 | 19,668 |
Total debt and equity securities | 20,290 | 19,668 |
Unobservable Inputs, Level 3 [Member] | Collateralized Corporate Bank Loans [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | 700 | 908 |
Unobservable Inputs, Level 3 [Member] | Municipal Bonds [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total debt securities | $19,590 | $18,760 |
Fair_Value_Fair_Value_Assets_M1
Fair Value (Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation) (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Fair Value [Abstract] | ' | ' |
Beginning balance | $19,668 | $20,608 |
Sales | ' | ' |
Settlements | -302 | -307 |
Purchases | ' | ' |
Issuances | ' | ' |
Total realized/unrealized gains included in net income | ' | ' |
Net gain (losses) included in other comprehensive income | 924 | -530 |
Transfers into Level 3 | ' | ' |
Transfers out of Level 3 | ' | ' |
Ending balance | $20,290 | $19,771 |
Investments_Narrative_Details
Investments (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
security | security | security | |||
Investments [Abstract] | ' | ' | ' | ' | ' |
Gross gains on investments | $7.10 | $1.10 | $9.90 | $2.60 | ' |
Gross losses on investments | 0.1 | 0.1 | 0.2 | 0.5 | ' |
Proceeds from sale of investment securities | $12.50 | $3.50 | $30.20 | $9.70 | ' |
Number of debt security positions | 75 | ' | 75 | ' | 56 |
Investments_Amortized_Cost_and
Investments (Amortized Cost and Estimated Fair Value of Investments in Debt and Equity Securities by Category) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of Investments [Line Items] | ' | ' |
Investments, Amortized Cost | $419,893 | $429,302 |
Investments, Gross Unrealized Gains | 27,460 | 20,887 |
Investments, Gross Unrealized Losses | -4,766 | -4,829 |
Investments, Fair Value | 442,587 | 445,360 |
Equity Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Investments, Amortized Cost | 24,033 | 31,502 |
Investments, Gross Unrealized Gains | 22,629 | 12,938 |
Investments, Gross Unrealized Losses | -722 | -515 |
Investments, Fair Value | 45,940 | 43,925 |
Debt Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Investments, Amortized Cost | 395,860 | 397,800 |
Investments, Gross Unrealized Gains | 4,831 | 7,949 |
Investments, Gross Unrealized Losses | -4,044 | -4,314 |
Investments, Fair Value | 396,647 | 401,435 |
Us Treasury Securities and Obligations of U.S. Government [Member] | Debt Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Investments, Amortized Cost | 34,083 | 40,050 |
Investments, Gross Unrealized Gains | 31 | 14 |
Investments, Gross Unrealized Losses | ' | -3 |
Investments, Fair Value | 34,114 | 40,061 |
Corporate Bonds [Member] | Debt Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Investments, Amortized Cost | 58,633 | 79,516 |
Investments, Gross Unrealized Gains | 1,285 | 2,794 |
Investments, Gross Unrealized Losses | -525 | -763 |
Investments, Fair Value | 59,393 | 81,547 |
Collateralized Corporate Bank Loans [Member] | Debt Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Investments, Amortized Cost | 119,626 | 106,093 |
Investments, Gross Unrealized Gains | 475 | 1,021 |
Investments, Gross Unrealized Losses | -549 | -743 |
Investments, Fair Value | 119,552 | 106,371 |
Municipal Bonds [Member] | Debt Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Investments, Amortized Cost | 153,974 | 162,479 |
Investments, Gross Unrealized Gains | 2,701 | 4,023 |
Investments, Gross Unrealized Losses | -2,179 | -2,770 |
Investments, Fair Value | 154,496 | 163,732 |
Mortgage Backed [Member] | Debt Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Investments, Amortized Cost | 29,544 | 9,662 |
Investments, Gross Unrealized Gains | 339 | 97 |
Investments, Gross Unrealized Losses | -791 | -35 |
Investments, Fair Value | 29,092 | 9,724 |
Financial Services [Member] | Equity Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Investments, Amortized Cost | 4,705 | 11,008 |
Investments, Gross Unrealized Gains | 2,985 | 3,880 |
Investments, Gross Unrealized Losses | ' | -1 |
Investments, Fair Value | 7,690 | 14,887 |
All Other [Member] | Equity Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Investments, Amortized Cost | 19,328 | 20,494 |
Investments, Gross Unrealized Gains | 19,644 | 9,058 |
Investments, Gross Unrealized Losses | -722 | -514 |
Investments, Fair Value | $38,250 | $29,038 |
Investments_Summary_of_Realize
Investments (Summary of Realized Gain (Loss) on Investments) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Gain on investments | $6,950 | $982 | $9,723 | $2,100 |
Other-than-temporary impairments | ' | ' | ' | -246 |
Net realized gains | 6,950 | 982 | 9,723 | 1,854 |
Corporate Bonds [Member] | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Gain on investments | 21 | 159 | 846 | 9 |
Collateralized Corporate Bank Loans [Member] | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Gain on investments | 44 | 93 | 316 | 229 |
Municipal Bonds [Member] | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Gain on investments | -50 | -50 | -11 | -294 |
Financial Services [Member] | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Gain on investments | 6,935 | 8 | 7,579 | 78 |
All Other [Member] | ' | ' | ' | ' |
Schedule of Investments [Line Items] | ' | ' | ' | ' |
Gain on investments | ' | $772 | $993 | $2,078 |
Investments_Summary_of_Gross_U
Investments (Summary of Gross Unrealized Losses for Investments that have been Continuously in Unrealized Loss Position) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of Investments [Line Items] | ' | ' |
Fair Value 12 months or less | $107,157 | $81,876 |
Unrealized Losses 12 months or less | -2,522 | -1,047 |
Fair Value Longer than 12 months | 49,023 | 50,039 |
Unrealized Losses Longer than 12 months | -2,244 | -3,782 |
Total Fair Value | 156,180 | 131,915 |
Total Unrealized Losses | -4,766 | -4,829 |
Equity Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Fair Value 12 months or less | 2,348 | 3,363 |
Unrealized Losses 12 months or less | -722 | -515 |
Total Fair Value | 2,348 | 3,363 |
Total Unrealized Losses | -722 | -515 |
Debt Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Fair Value 12 months or less | 104,809 | 78,513 |
Unrealized Losses 12 months or less | -1,800 | -532 |
Fair Value Longer than 12 months | 49,023 | 50,039 |
Unrealized Losses Longer than 12 months | -2,244 | -3,782 |
Total Fair Value | 153,832 | 128,552 |
Total Unrealized Losses | -4,044 | -4,314 |
Us Treasury Securities and Obligations of U.S. Government [Member] | Debt Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Fair Value 12 months or less | ' | 23,998 |
Unrealized Losses 12 months or less | ' | -3 |
Total Fair Value | ' | 23,998 |
Total Unrealized Losses | ' | -3 |
Corporate Bonds [Member] | Debt Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Fair Value 12 months or less | 12,694 | 10,802 |
Unrealized Losses 12 months or less | -156 | -38 |
Fair Value Longer than 12 months | 3,048 | 6,910 |
Unrealized Losses Longer than 12 months | -369 | -725 |
Total Fair Value | 15,742 | 17,712 |
Total Unrealized Losses | -525 | -763 |
Collateralized Corporate Bank Loans [Member] | Debt Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Fair Value 12 months or less | 48,926 | 6,273 |
Unrealized Losses 12 months or less | -368 | -97 |
Fair Value Longer than 12 months | 6,915 | 14,236 |
Unrealized Losses Longer than 12 months | -181 | -646 |
Total Fair Value | 55,841 | 20,509 |
Total Unrealized Losses | -549 | -743 |
Municipal Bonds [Member] | Debt Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Fair Value 12 months or less | 28,861 | 30,073 |
Unrealized Losses 12 months or less | -488 | -362 |
Fair Value Longer than 12 months | 38,953 | 28,809 |
Unrealized Losses Longer than 12 months | -1,691 | -2,408 |
Total Fair Value | 67,814 | 58,882 |
Total Unrealized Losses | -2,179 | -2,770 |
Mortgage Backed [Member] | Debt Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Fair Value 12 months or less | 14,328 | 7,367 |
Unrealized Losses 12 months or less | -788 | -32 |
Fair Value Longer than 12 months | 107 | 84 |
Unrealized Losses Longer than 12 months | -3 | -3 |
Total Fair Value | 14,435 | 7,451 |
Total Unrealized Losses | -791 | -35 |
Financial Services [Member] | Equity Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Fair Value 12 months or less | ' | 92 |
Unrealized Losses 12 months or less | ' | -1 |
Total Fair Value | ' | 92 |
Total Unrealized Losses | ' | -1 |
All Other [Member] | Equity Securities [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Fair Value 12 months or less | 2,348 | 3,271 |
Unrealized Losses 12 months or less | -722 | -514 |
Total Fair Value | 2,348 | 3,271 |
Total Unrealized Losses | ($722) | ($514) |
Investments_Schedule_of_Amorti
Investments (Schedule of Amortized Cost and Estimated Fair Value of Debt Securities by Contractual Maturities) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of Investments [Line Items] | ' | ' |
Due in one year or less, Amortized Cost | $63,230 | ' |
Due after one year through five years, Amortized Cost | 153,969 | ' |
Due after five years through ten years, Amortized Cost | 96,692 | ' |
Due after ten years, Amortized Cost | 52,424 | ' |
Debt Maturities, Amortized Cost | 395,860 | ' |
Due in one year or less, Fair Value | 63,768 | ' |
Due after one year through five years, Fair Value | 154,311 | ' |
Due after five years through ten years, Fair Value | 97,585 | ' |
Due after ten years, Fair Value | 51,891 | ' |
Debt Securities, Fair Value | 396,647 | 401,435 |
Mortgage Backed [Member] | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Debt Maturities, Amortized Cost | 29,545 | ' |
Debt Securities, Fair Value | $29,092 | $9,724 |
Pledged_Investments_Narrative_
Pledged Investments (Narrative) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Pledged Investments [Abstract] | ' | ' |
Securities Available-for-sale Pledged, Carrying Value | $23.20 | $24.30 |
Reserves_for_Unpaid_Losses_and1
Reserves for Unpaid Losses and Loss Adjustment Expenses (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' | ' |
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | $2.20 | ' | $3.60 |
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 0.5 | ' | 8 | ' |
Loss and Loss Adjustment Expenses Incurred In 2012 Accident Year [Member] | ' | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' | ' |
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | ' | 5 | ' |
Loss and Loss Adjustment Expenses Incurred In 2011 Accident Year [Member] | ' | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' | ' |
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | ' | 2.4 | ' |
Loss and Loss Adjustment Expenses Incurred In 2010 Accident Year [Member] | ' | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' | ' |
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | ' | 1.6 | ' |
Loss and Loss Adjustment Expenses Incurred In 2009 And Prior Accident Year [Member] | ' | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' | ' |
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | ' | 1 | ' |
Personal Lines Business Unit [Member] | ' | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' | ' |
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | ' | 1.5 | 2.9 |
E & S Commercial Business Unit [Member] | ' | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' | ' |
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | ' | ' | 1.1 |
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | ' | 11.7 | ' |
Standard Commercial Business Unit [Member] | ' | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' | ' |
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | ' | 2.4 | ' |
Standard Commercial Business Unit [Member] | Loss Adjustment Expenses Recognized In 2010 [Member] | ' | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' | ' |
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | ' | 2.4 | ' |
Hallmark Select Business Unit [Member] | ' | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' | ' |
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | ' | 1.6 | 2.6 |
Workers Compensation Risks [Member] | ' | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' | ' |
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | ' | 1.2 | 0.8 |
Commercial Auto Liability [Member] | ' | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' | ' |
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | ' | ' | 2 |
Auto [Member] | ' | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' | ' |
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | ' | ' | 2.2 |
Low Value Dwelling/Homeowners [Member] | Personal Lines Business Unit [Member] | ' | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' | ' |
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | ' | ' | ' | $0.70 |
ShareBased_Payment_Arrangement2
Share-Based Payment Arrangements (Narrative) (Details) (USD $) | 9 Months Ended | 12 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | 26-May-05 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | 30-May-13 | Apr. 10, 2013 | Jul. 27, 2012 | Sep. 30, 2013 | |
Long Term Incentive Plan 2005 [Member] | Long Term Incentive Plan 2005 [Member] | Long Term Incentive Plan 2005 [Member] | Long Term Incentive Plan 2005 [Member] | Long Term Incentive Plan 2005 [Member] | Long Term Incentive Plan 2005 [Member] | Long Term Incentive Plan 2005 [Member] | Long Term Incentive Plan 2005 [Member] | Incentive Stock Options 2010 [Member] | Incentive Stock Options 2011 [Member] | Incentive Stock Options 2011 [Member] | Incentive Stock Options 2011 [Member] | Non Qualified Stock Options [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | |||
Minimum [Member] | Maximum [Member] | First Anniversary [Member] | Second Anniversary [Member] | Third Anniversary [Member] | Fourth Anniversary [Member] | Long Term Incentive Plan 2005 [Member] | 5,000 Grant [Member] | Long Term Incentive Plan 2005 [Member] | Long Term Incentive Plan 2005 [Member] | Long Term Incentive Plan 2005 [Member] | Minimum [Member] | Maximum [Member] | Long Term Incentive Plan 2005 [Member] | Long Term Incentive Plan 2005 [Member] | Long Term Incentive Plan 2005 [Member] | Long Term Incentive Plan 2005 [Member] | |||||||
Option Issued Prior to 2009 [Member] | Option Issued Prior to 2009 [Member] | Option Issued Prior to 2009 [Member] | Option Issued Prior to 2009 [Member] | Option Issued Prior to 2009 [Member] | Option Issued Prior to 2009 [Member] | 5,000 Grant [Member] | 10,000 Grant [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock compensation plan, number of shares authorized | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of incentive stock options to purchase shares of common stock outstanding | ' | ' | 1,087,618 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of non-qualified stock options to purchase shares of common stock outstanding | ' | ' | 304,157 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of restricted stock units to receive shares of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 355,277 |
Shares reserved for future issuance | ' | ' | 237,115 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based payment award vesting rights | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | '3 years | '7 years | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of restricted stock units granted as result of meeting growth rates | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | 150.00% | ' | ' | ' | ' |
Number of options vested or expected to vest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000 | 5,000 | ' | 10,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based payment, award vesting period | ' | ' | '6 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Incentive stock options termination period | ' | ' | '10 years | ' | '5 years | '10 years | ' | ' | ' | ' | '10 years | ' | '10 years | '10 years | '10 years | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of options vested or expected to vest | ' | ' | 100.00% | ' | ' | ' | 10.00% | 20.00% | 30.00% | 40.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total unrecognized compensation cost related to non-vested share-based compensation arrangements | $500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $600,000 | $600,000 | ' | ' | ' | ' | ' | ' |
Compensation costs expected to be recognized during remainder of 2013 | 52,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 67,000 |
Compensation costs expected to be recognized during year two | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 |
Compensation costs expected to be recognized during year three | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 |
Compensation costs expected to be recognized during year four | 54,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 53,000 |
Compensation costs expected to be recognized during year five | 3,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Options, Granted | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options granted, weighted average grant date fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $9.20 | $9.20 | ' | ' | ' | ' | ' | ' |
Other than options, granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 122,823 | 129,463 | 243,006 |
Other than options, forfeited | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,280 | ' | ' | 6,155 |
Allocated share-based compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $58,000 | $90,000 | ' | ' | ' | ' | ' | ' |
ShareBased_Payment_Arrangement3
Share-Based Payment Arrangements (Summary of the Status of Stock Options) (Details) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Share-Based Payment Arrangements [Abstract] | ' | ' |
Stock Options, Outstanding at January 1, 2013 | 1,404,989 | ' |
Stock Options, Granted | ' | 0 |
Stock Options, Exercised | ' | ' |
Stock Options, Forfeited or expired | -13,214 | ' |
Stock Options, Outstanding at September 30, 2013 | 1,391,775 | 1,404,989 |
Stock Options, Exercisable at September 30, 2013 | 1,189,036 | ' |
Weighted Average Exercise Price, Outstanding at January 1, 2013 | $9.63 | ' |
Weighted Average Exercise Price, Forfeited or expired | $7.90 | ' |
Weighted Average Exercise Price, Outstanding at September 30, 2013 | $9.65 | $9.63 |
Weighted Average Exercise Price, Exercisable at September 30, 2013 | $10.17 | ' |
Average Remaining Contractual Term, Outstanding at September 30, 2013 | '4 years 6 months | ' |
Average Remaining Contractual Term, Exercisable at September 30, 2013 | '4 years 3 months 18 days | ' |
Aggregate Intrinsic Value, Outstanding at September 30, 2013 | $1,327 | ' |
Aggregate Intrinsic Value, Exercisable at September 30, 2013 | $870 | ' |
ShareBased_Payment_Arrangement4
Share-Based Payment Arrangements (Schedule of Options, Grants in Period and Grant Date Intrinsic Value) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Cost of share-based payments (non-cash) | ' | ' | $245 | $317 |
Employee Stock Option [Member] | ' | ' | ' | ' |
Intrinsic value of options exercised | ' | ' | ' | ' |
Cost of share-based payments (non-cash) | 52 | 64 | 156 | 317 |
Income tax benefit of share-based payments recognized in income | $8 | $7 | $23 | $30 |
ShareBased_Payment_Arrangement5
Share-Based Payment Arrangements (Summary of the Status of Restricted Stock Units) (Details) (Long Term Incentive Plan 2005 [Member], Restricted Stock Units (RSUs) [Member]) | 0 Months Ended | 9 Months Ended | ||
30-May-13 | Apr. 10, 2013 | Jul. 27, 2012 | Sep. 30, 2013 | |
Long Term Incentive Plan 2005 [Member] | Restricted Stock Units (RSUs) [Member] | ' | ' | ' | ' |
Granted | ' | 122,823 | 129,463 | 243,006 |
Forfeited | -9,280 | ' | ' | -6,155 |
Nonvested at September 30, 2013 | ' | ' | ' | 236,851 |
Segment_Information_Schedule_o
Segment Information (Schedule of Business Segment Information) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues: | ' | ' | ' | ' |
Revenues | $108,613 | $85,620 | $301,053 | $253,177 |
Pre-tax income (loss), net of non-controlling interest: | ' | ' | ' | ' |
Pre-tax income, net of non-controlling interest | 9,472 | 4,763 | 6,318 | 763 |
Standard Commercial Segment [Member] | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' |
Revenues | 21,163 | 17,761 | 62,160 | 53,791 |
Pre-tax income (loss), net of non-controlling interest: | ' | ' | ' | ' |
Pre-tax income, net of non-controlling interest | 1,163 | -529 | 641 | -2,601 |
Specialty Commercial Segment [Member] | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' |
Revenues | 60,787 | 46,373 | 168,127 | 129,812 |
Pre-tax income (loss), net of non-controlling interest: | ' | ' | ' | ' |
Pre-tax income, net of non-controlling interest | 7,564 | 8,287 | 11,828 | 17,193 |
Personal Segment [Member] | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' |
Revenues | 21,256 | 21,172 | 64,621 | 68,508 |
Pre-tax income (loss), net of non-controlling interest: | ' | ' | ' | ' |
Pre-tax income, net of non-controlling interest | -1,613 | -345 | -3,331 | -5,747 |
Corporate [Member] | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' |
Revenues | 5,407 | 314 | 6,145 | 1,066 |
Pre-tax income (loss), net of non-controlling interest: | ' | ' | ' | ' |
Pre-tax income, net of non-controlling interest | $2,358 | ($2,650) | ($2,820) | ($8,082) |
Segment_Information_Schedule_o1
Segment Information (Schedule of Additional Business Segment Information) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Segment Reporting Information [Line Items] | ' | ' |
Assets | $879,717 | $790,468 |
Standard Commercial Segment [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Assets | 144,231 | 145,162 |
Specialty Commercial Segment [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Assets | 526,160 | 432,208 |
Personal Segment [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Assets | 192,588 | 200,356 |
Corporate [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Assets | $16,738 | $12,742 |
Reinsurance_Narrative_Details
Reinsurance (Narrative) (Details) (USD $) | Sep. 30, 2013 |
In Millions, unless otherwise specified | |
E&S Commercial [Member] | ' |
Retention for reinsurance losses | $1 |
Proportional reinsurance retention, percentage | 10.00% |
Concentration of ceded credit risk, percentage | 100.00% |
Concentration of ceded credit risk remaining, percentage | 90.00% |
Excess and Umbrella Business Unit [Member] | ' |
Proportional reinsurance retention, percentage | 20.00% |
Concentration of ceded credit risk, percentage | 80.00% |
Standard Commercial Segment [Member] | ' |
Proportional reinsurance cede risk, percentage | 100.00% |
Professional Liability [Member] | Prior to June 1, 2012 [Member] | ' |
Proportional reinsurance cede risk, percentage | 40.00% |
Proportional reinsurance retention, percentage | 60.00% |
Hallmark County Mutual [Member] | ' |
Proportional reinsurance retention, percentage | 100.00% |
Catastrophe [Member] | ' |
Retention for reinsurance losses | 6 |
Catastrophe [Member] | All States [Member] | ' |
Retention for reinsurance losses | 6 |
Reinsurers reimbursement, percentage | 100.00% |
Reinsurers reimbursement retention, maximum limit | 29 |
Reinsurers reimbursement retention, aggregate limit | 58 |
Commercial Property [Member] | ' |
Retention for reinsurance losses | 1 |
Commercial property risk value | 6 |
Reinsurers reimbursement retention for any one disaster occurrence | 10 |
Reinsurers reimbursement retention for each disaster occurrence | 5 |
Reinsurers reimbursement retention, aggregate limit | 30 |
Commercial Liability Risk [Member] | ' |
Retention for reinsurance losses | 1 |
Reinsurers reimbursement retention for each disaster occurrence | 5 |
Workers Compensation Risks [Member] | ' |
Retention for reinsurance losses | 1 |
Reinsurers reimbursement, percentage | 100.00% |
Reinsurers reimbursement retention for each disaster occurrence | 14 |
Reinsurers reimbursement retention, maximum limit | 10 |
Reinsurers reimbursement retention, aggregate limit | 28 |
Liability Loss [Member] | ' |
Proportional reinsurance cede risk, percentage | 80.00% |
Personal Property [Member] | ' |
Proportional reinsurance cede risk, percentage | 60.00% |
Minimum [Member] | E&S Commercial [Member] | ' |
Retention for reinsurance losses | $1 |
Reinsurance_Schedule_of_Reinsu
Reinsurance (Schedule of Reinsurance Ceded and Recoveries) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Reinsurance [Abstract] | ' | ' | ' | ' |
Ceded earned premiums | $16,488 | $14,141 | $45,629 | $40,031 |
Reinsurance recoveries | $9,197 | $8,582 | $24,770 | $22,633 |
Revolving_Credit_Facility_Paya1
Revolving Credit Facility Payable (Narrative) (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Jan. 27, 2006 |
Line of Credit Facility [Line Items] | ' | ' |
Line of credit facility, interest rate during period | 2.75% | ' |
Revolving Credit Facility [Member] | ' | ' |
Line of Credit Facility [Line Items] | ' | ' |
Line of credit facility, maximum borrowing capacity | ' | $15 |
Line of credit facility, amount outstanding | $1.50 | ' |
Debt instrument, description of variable rate basis | 'prime rate or LIBOR plus 2.5% | ' |
Debt instrument, basis spread on variable rate | 2.50% | ' |
Line of credit facility, unused capacity, commitment fee Percentage | 0.25% | ' |
Letter of Credit [Member] | ' | ' |
Line of Credit Facility [Line Items] | ' | ' |
Line of credit facility, commitment fee percentage | 1.00% | ' |
Subordinated_Debt_Securities_N
Subordinated Debt Securities (Narrative) (Details) (USD $) | 0 Months Ended | 0 Months Ended | |||||
In Millions, unless otherwise specified | Jun. 21, 2005 | Jun. 25, 2005 | Jun. 21, 2005 | Sep. 30, 2013 | Aug. 23, 2007 | Aug. 23, 2007 | Sep. 30, 2013 |
Subordinated Debt Due In 2035 [Member] | Subordinated Debt Due In 2035 [Member] | Subordinated Debt Due In 2035 [Member] | Subordinated Debt Due In 2035 [Member] | Subordinated Debt Due In 2037 [Member] | Subordinated Debt Due In 2037 [Member] | Subordinated Debt Due In 2037 [Member] | |
Trust I [Member] | Trust I [Member] | Trust I [Member] | Trust II [Member] | Trust II [Member] | |||
Subordinated Borrowing [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Long-term debt, gross | $30.90 | ' | ' | $30.90 | $25.80 | ' | $25.80 |
Proceeds from issuance of trust preferred securities | ' | ' | 30 | ' | ' | 25 | ' |
Proceeds from issuance of common stock | ' | ' | $0.90 | ' | ' | $0.80 | ' |
Subordinated borrowing, interest rate | ' | ' | 7.73% | ' | ' | 8.28% | ' |
Debt instrument, interest rate fixed to floating date | 15-Jun-15 | ' | ' | ' | ' | 15-Sep-17 | ' |
Debt instrument, maturity date | 15-Jun-35 | ' | ' | ' | 15-Sep-37 | ' | ' |
Debt instrument, description of variable rate basis | ' | 'interest will adjust quarterly to the three-month LIBOR rate plus 3.25 percentage | ' | ' | ' | 'three-month LIBOR rate plus 2.90 percentage | ' |
Debt instrument, basis spread on variable rate | ' | ' | 3.25% | ' | ' | 2.90% | ' |
Deferred_Policy_Acquisition_Co2
Deferred Policy Acquisition Costs (Deferred Amortized Policy Acquisition Costs) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Document and Entity Information [Abstract] | ' | ' | ' | ' |
Deferred | ($34,995) | ($12,011) | ($53,243) | ($45,281) |
Amortized | 34,715 | 11,084 | 51,211 | 41,427 |
Net | ($280) | ($927) | ($2,032) | ($3,854) |
Earnings_per_Share_Narrative_D
Earnings per Share (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Earnings per Share [Abstract] | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share, amount | 779,999 | 809,999 | 779,999 | 809,999 |
Earnings_per_Share_Schedule_of
Earnings per Share (Schedule of Weighted Average Number of Shares Outstanding) (Details) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Earnings per Share [Abstract] | ' | ' | ' | ' |
Weighted average shares - basic | 19,263 | 19,263 | 19,263 | 19,263 |
Effect of dilutive securities | 107 | 14 | 97 | 4 |
Weighted average shares - assuming dilution | 19,370 | 19,277 | 19,360 | 19,267 |
Net_Periodic_Pension_Cost_Sche
Net Periodic Pension Cost (Schedule of Net Benefit Costs) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net Periodic Pension Cost [Abstract] | ' | ' | ' | ' |
Interest cost | $127 | $141 | $379 | $422 |
Amortization of net loss | 123 | 120 | 371 | 362 |
Expected return on plan assets | -154 | -146 | -462 | -438 |
Net periodic pension cost | 96 | 115 | 288 | 346 |
Contributed amount | $157 | $410 | $268 | $711 |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Income Taxes [Abstract] | ' | ' |
Effective income tax rate, continuing operations | 23.80% | -90.00% |
Commitments_and_Contingencies_
Commitments and Contingencies (Narrative) (Details) (USD $) | Sep. 30, 2013 |
In Millions, unless otherwise specified | |
Commitments and Contingencies [Abstract] | ' |
Contingent liability, premium taxes | $4.50 |
Contingent liability, penalties and interest | $0.90 |
Changes_in_Accumulated_Other_C2
Changes in Accumulated Other Comprehensive Income Balances (Schedule of Changes in Accumulated Other Comprehensive Income) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' | ' |
Beginning Balance | ' | ' | $7,899 | ' |
Other comprehensive (loss) income: | ' | ' | ' | ' |
Change in net actuarial loss (see Note 15) | 123 | 120 | 371 | 362 |
Tax effect on change in net actuarial loss | -43 | -42 | -130 | -127 |
Net unrealized holding gains arising during the period | 4,721 | 4,541 | 16,243 | 4,560 |
Tax effect on unrealized gains arising during the period | -1,652 | -1,589 | -5,685 | -1,596 |
Reclassification adjustment for losses included in net realized gains (losses) | -6,950 | -926 | -9,723 | -2,044 |
Tax effect on reclassification adjustment for gains and losses included in income tax expense | 2,433 | 324 | 3,403 | 715 |
Other comprehensive income , net of tax | -1,368 | 2,428 | 4,479 | 1,870 |
Ending Balance | 12,378 | ' | 12,378 | ' |
Minimum Pension Liability [Member] | ' | ' | ' | ' |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' | ' |
Beginning Balance | ' | ' | -2,954 | -2,978 |
Other comprehensive (loss) income: | ' | ' | ' | ' |
Change in net actuarial loss (see Note 15) | ' | ' | 371 | 362 |
Tax effect on change in net actuarial loss | ' | ' | -130 | -127 |
Other comprehensive income , net of tax | ' | ' | 241 | 235 |
Ending Balance | -2,713 | -2,743 | -2,713 | -2,743 |
Accumulated Net Unrealized Investment Gain (Loss) [Member] | ' | ' | ' | ' |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' | ' |
Beginning Balance | ' | ' | 10,853 | 9,424 |
Other comprehensive (loss) income: | ' | ' | ' | ' |
Net unrealized holding gains arising during the period | ' | ' | 16,243 | 4,560 |
Tax effect on unrealized gains arising during the period | ' | ' | -5,685 | -1,596 |
Reclassification adjustment for losses included in net realized gains (losses) | ' | ' | -9,723 | -2,044 |
Tax effect on reclassification adjustment for gains and losses included in income tax expense | ' | ' | 3,403 | 715 |
Other comprehensive income , net of tax | ' | ' | 4,238 | 1,635 |
Ending Balance | 15,091 | 11,059 | 15,091 | 11,059 |
Accumulated Other Comprehensive Income [Member] | ' | ' | ' | ' |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' | ' |
Beginning Balance | ' | ' | 7,899 | 6,446 |
Other comprehensive (loss) income: | ' | ' | ' | ' |
Change in net actuarial loss (see Note 15) | ' | ' | 371 | 362 |
Tax effect on change in net actuarial loss | ' | ' | -130 | -127 |
Net unrealized holding gains arising during the period | ' | ' | 16,243 | 4,560 |
Tax effect on unrealized gains arising during the period | ' | ' | -5,685 | -1,596 |
Reclassification adjustment for losses included in net realized gains (losses) | ' | ' | -9,723 | -2,044 |
Tax effect on reclassification adjustment for gains and losses included in income tax expense | ' | ' | 3,403 | 715 |
Other comprehensive income , net of tax | ' | ' | 4,479 | 1,870 |
Ending Balance | $12,378 | $8,316 | $12,378 | $8,316 |