Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Mar. 12, 2014 | Jun. 30, 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-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Entity Well-Known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Public Float | ' | ' | $129.90 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
ASSETS | ' | ' |
Debt securities, available-for-sale, at fair value (cost; $408,627 in 2013 and $397,800 in 2012) | $410,095 | $401,435 |
Equity securities, available-for-sale, at fair value (cost; $24,902 in 2013 and $31,502 in 2012) | 51,230 | 43,925 |
Total investments | 461,325 | 445,360 |
Cash and cash equivalents | 141,666 | 85,145 |
Restricted cash | 12,190 | 8,707 |
Ceded unearned premiums | 44,988 | 22,411 |
Premiums receivable | 71,157 | 66,683 |
Accounts receivable | 2,382 | 3,110 |
Receivable for securities | 1,320 | 3 |
Reinsurance recoverable | 76,818 | 51,970 |
Deferred policy acquisition costs | 22,586 | 24,911 |
Goodwill | 44,695 | 44,695 |
Intangible assets, net | 19,953 | 23,068 |
Deferred federal income taxes, net | ' | 1,940 |
Prepaid expenses | 1,531 | 1,480 |
Other assets | 8,412 | 10,985 |
Total assets | 909,023 | 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 | 382,640 | 313,416 |
Unearned premiums | 185,303 | 162,502 |
Reinsurance balances payable | 20,598 | 7,330 |
Pension liability | 1,433 | 3,685 |
Payable for securities | 206 | ' |
Federal income tax payable | 719 | 1,518 |
Deferred federal income taxes, net | 2,825 | ' |
Accounts payable and other accrued expenses | 19,006 | 23,305 |
Total liabilities | 670,905 | 569,931 |
Stockholders' equity: | ' | ' |
Common stock, $.18 par value, authorized 33,333,333 shares; issued 20,872,831 shares in 2013 and 2012 | 3,757 | 3,757 |
Additional paid-in capital | 122,827 | 122,475 |
Retained earnings | 106,209 | 97,964 |
Accumulated other comprehensive income | 16,883 | 7,899 |
Treasury stock (1,609,374 shares in 2013 and 2012), at cost | -11,558 | -11,558 |
Total stockholders equity | 238,118 | 220,537 |
Liabilities and Equity, Total | $909,023 | $790,468 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 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) | $408,627 | $397,800 |
Equity securities, available for sale, cost (in dollars) | $24,902 | $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 $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Consolidated Statements of Operations [Abstract] | ' | ' | ' |
Gross premiums written | $460,027 | $389,842 | $354,881 |
Ceded premiums written | -99,262 | -57,353 | -51,005 |
Net premiums written | 360,765 | 332,489 | 303,876 |
Change in unearned premiums | -224 | -13,053 | -10,835 |
Net premiums earned | 360,541 | 319,436 | 293,041 |
Investment income, net of expenses | 12,884 | 15,293 | 15,880 |
Net realized gains | 10,540 | 1,943 | 3,633 |
Finance charges | 5,830 | 5,957 | 6,826 |
Commission and fees | -487 | -1,145 | 3,175 |
Other income | 120 | 316 | 216 |
Total revenues | 389,428 | 341,800 | 322,771 |
Losses and loss adjustment expenses | 261,345 | 226,414 | 239,235 |
Operating expenses | 109,289 | 103,792 | 95,106 |
Interest expense | 4,599 | 4,634 | 4,631 |
Amortization of intangible assets | 3,115 | 3,586 | 3,586 |
Total expenses | 378,348 | 338,426 | 342,558 |
Income (loss) before tax | 11,080 | 3,374 | -19,787 |
Income tax expense (benefit) | 2,835 | -474 | -8,954 |
Net income (loss) | 8,245 | 3,848 | -10,833 |
Less: Net income attributable to non-controlling interest | ' | 324 | 58 |
Net income (loss) attributable to Hallmark Financial Services, Inc. | $8,245 | $3,524 | ($10,891) |
Net income (loss) per share attributable to Hallmark Financial Services, Inc. common stockholders: | ' | ' | ' |
Basic (in dollars per share) | $0.43 | $0.18 | ($0.55) |
Diluted (in dollars per share) | $0.43 | $0.18 | ($0.55) |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Consolidated Statements of Comprehensive Income (Loss) [Abstract] | ' | ' | ' |
Net income (loss) | $8,245 | $3,848 | ($10,833) |
Other comprehensive income (loss): | ' | ' | ' |
Change in net actuarial gain (loss) | 2,268 | 37 | -1,468 |
Tax effect on change in net actuarial gain (loss) | -794 | -13 | 514 |
Unrealized holding gains arising during the period | 22,094 | 4,388 | 191 |
Tax effect on unrealized holding gains arising during the period | -7,733 | -1,536 | -67 |
Reclassification adjustment for gains included in net income (loss) | -10,540 | -2,189 | -3,633 |
Tax effect on reclassification adjustment for gains included in net income (loss) | 3,689 | 766 | 1,272 |
Other comprehensive income (loss), net of tax | 8,984 | 1,453 | -3,191 |
Comprehensive income (loss) | 17,229 | 5,301 | -14,024 |
Less: comprehensive income attributable to non-controlling interest | ' | 324 | 58 |
Comprehensive income (loss) attributable to Hallmark Financial Services, Inc. | $17,229 | $4,977 | ($14,082) |
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 (Loss) [Member] | Treasury Stock [Member] | Total |
In Thousands | ||||||
Beginning balance at Dec. 31, 2010 | $20,873 | $121,815 | $105,331 | $9,637 | ($5,262) | $235,278 |
Beginning balance (in shares) at Dec. 31, 2010 | 3,757 | ' | ' | ' | 749 | ' |
Acquisition of treasury shares | ' | ' | ' | ' | -6,401 | -6,401 |
Acquisition of treasury shares (in shares) | ' | ' | ' | ' | 875 | ' |
Equity incentive plan activity | ' | 709 | ' | ' | ' | 709 |
Stock options exercised | ' | -6 | ' | ' | 105 | 99 |
Stock options, exercised (in shares) | ' | ' | ' | ' | -15 | ' |
Accretion of redeemable non-controlling interest | ' | -31 | ' | ' | ' | -31 |
Net income (loss) | ' | ' | -10,891 | ' | ' | -10,891 |
Other comprehensive income (loss), net of tax | ' | ' | ' | -3,191 | ' | -3,191 |
Ending balance at Dec. 31, 2011 | 3,757 | 122,487 | 94,440 | 6,446 | -11,558 | 215,572 |
Ending balance (in shares) at Dec. 31, 2011 | 20,873 | ' | ' | ' | 1,609 | ' |
Equity incentive plan activity | ' | 380 | ' | ' | ' | 380 |
Accretion of redeemable non-controlling interest | ' | -392 | ' | ' | ' | -392 |
Net income (loss) | ' | ' | 3,524 | ' | ' | 3,524 |
Other comprehensive income (loss), net of tax | ' | ' | ' | 1,453 | ' | 1,453 |
Ending balance at Dec. 31, 2012 | 3,757 | 122,475 | 97,964 | 7,899 | -11,558 | 220,537 |
Ending balance (in shares) at Dec. 31, 2012 | 20,873 | ' | ' | ' | 1,609 | ' |
Equity incentive plan activity | ' | 352 | ' | ' | ' | 352 |
Stock options, exercised (in shares) | ' | ' | ' | ' | ' | ' |
Net income (loss) | ' | ' | 8,245 | ' | ' | 8,245 |
Other comprehensive income (loss), net of tax | ' | ' | ' | 8,984 | ' | 8,984 |
Ending balance at Dec. 31, 2013 | $3,757 | $122,827 | $106,209 | $16,883 | ($11,558) | $238,118 |
Ending balance (in shares) at Dec. 31, 2013 | 20,873 | ' | ' | ' | 1,609 | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net income (loss) | $8,245 | $3,848 | ($10,833) |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization expense | 4,300 | 4,421 | 5,064 |
Deferred federal income taxes | -257 | -2,851 | -2,895 |
Net realized gains | -10,540 | -1,943 | -3,633 |
Share-based payments expense | 352 | 380 | 709 |
Change in ceded unearned premiums | -22,577 | -2,941 | 6,034 |
Change in premiums receivable | -4,474 | -13,170 | -3,842 |
Change in accounts receivable | 728 | 836 | 2,347 |
Change in deferred policy acquisition costs | 2,325 | -2,357 | -1,621 |
Change in unpaid losses and loss adjustment expenses | 69,224 | 16,471 | 33,088 |
Change in unearned premiums | 22,801 | 16,398 | 4,801 |
Change in reinsurance recoverable | -24,848 | -9,236 | 227 |
Change in reinsurance balances payable | 13,268 | 4,191 | -246 |
Change in current federal income tax (recoverable) payable | -799 | 8,256 | -2,470 |
Change in all other liabilities | -6,551 | 5,396 | -5,707 |
Change in all other assets | 17,141 | 5,983 | 3,587 |
Net cash provided by operating activities | 68,338 | 33,682 | 24,610 |
Cash flows from investing activities: | ' | ' | ' |
Purchases of property and equipment, net | -673 | -107 | -1,586 |
Acquisitions of subsidiaries, net of cash received | ' | ' | -13,334 |
Net transfers (into) from restricted cash | -3,483 | 665 | -4,095 |
Purchases of investment securities | -222,399 | -167,626 | -265,684 |
Maturities, sales and redemptions of investment securities | 214,738 | 148,968 | 280,918 |
Net cash used in investing activities | -11,817 | -18,100 | -3,781 |
Cash flows from financing activities: | ' | ' | ' |
Activity under revolving credit facility, net | ' | -2,577 | 1,250 |
Repayment of notes payable of acquired subsidiary | ' | ' | -1,660 |
Redemption of non-controlling interest | ' | -1,700 | ' |
Distribution to non-controlling interest | ' | -281 | -165 |
Payment of contingent consideration | ' | -350 | ' |
Proceeds from exercise of employee stock options | ' | ' | 99 |
Purchase of treasury shares | ' | ' | -6,401 |
Net cash used in financing activities | ' | -4,908 | -6,877 |
Increase in cash and cash equivalents | 56,521 | 10,674 | 13,952 |
Cash and cash equivalents at beginning of year | 85,145 | 74,471 | 60,519 |
Cash and cash equivalents at end of year | 141,666 | 85,145 | 74,471 |
Supplemental cash flow information: | ' | ' | ' |
Interest paid | -4,599 | -4,656 | -4,620 |
Income taxes (paid) recovered | -3,891 | 5,879 | 3,589 |
Supplemental schedule of non-cash activities: | ' | ' | ' |
Change in receivable for securities related to investment disposals that settled after the balance sheet date | -1,317 | 2,614 | -402 |
Change in payable for securities related to investment purchases that settled after the balance sheet date | $206 | ($203) | ($2,290) |
Accounting_Policies
Accounting Policies | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Accounting Policies | ' | |||||||||||||
1 | Accounting Policies: | |||||||||||||
General | ||||||||||||||
Hallmark Financial Services, Inc. (“Hallmark” and, together with subsidiaries, the “Company”, “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 primarily 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 and is comprised of American Hallmark Insurance Services, Inc. (“American Hallmark Insurance Services”) and Effective Claims Management, Inc. (“ECM”). Our Workers Compensation business unit specializes in small and middle market workers compensation business and is comprised of TBIC Holding Corporation, Inc. (“TBIC Holding”), Texas Builders Insurance Company (“TBIC”) and TBIC Risk Management (“TBICRM”). The subsidiaries comprising our Workers Compensation business unit were acquired July 1, 2011. Our E&S Commercial business unit handles primarily commercial insurance products and services and is comprised of Hallmark Specialty Underwriters, Inc. (“HSU”), Pan American Acceptance Corporation (“PAAC”) and TGA Special Risk, Inc. (“TGASRI”). Our Hallmark Select business unit offers (i) general aviation insurance products and services, (ii) low and middle market commercial umbrella and excess liability insurance, (iii) medical professional liability insurance products and services, and (iv) satellite launch insurance products. Our Hallmark Select business unit is the combination of our operations previously known as our General Aviation business unit, our Excess & Umbrella business unit, the medical professional liability business previously handled by our E&S Commercial business unit and the satellite launch insurance products previously managed at the parent level. Our Hallmark Select business unit is comprised of Aerospace Insurance Managers, Inc. (“Aerospace Insurance Managers”), Aerospace Special Risk, Inc. (“ASRI”), Aerospace Claims Management Group, Inc. (“ACMG”), Heath XS, LLC (“HXS”) and Hardscrabble Data Solutions, LLC (“HDS”). Our Personal Lines business unit handles personal insurance products and services and is comprised of American Hallmark General Agency, Inc. and Hallmark Claims Services, Inc. (both of which do business as Hallmark Insurance Company). Our insurance company subsidiaries supporting these business 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 TBIC. | ||||||||||||||
These five business units are segregated into three reportable industry segments for financial accounting purposes. The Standard Commercial Segment includes our Standard Commercial P&C business unit and our Workers Compensation business unit. The Specialty Commercial Segment includes our E&S Commercial business unit and our Hallmark Select business unit, as well as certain specialty risk programs (“Specialty Programs”) which are managed by Hallmark. The Personal Segment presently consists solely of our Personal Lines business unit. | ||||||||||||||
Basis of Presentation | ||||||||||||||
The accompanying consolidated financial statements include the accounts and operations of Hallmark and its subsidiaries. Intercompany accounts and transactions have been eliminated. The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) which, as to our insurance company subsidiaries, differ from statutory accounting practices prescribed or permitted for insurance companies by insurance regulatory authorities. | ||||||||||||||
Use of Estimates in the Preparation of Financial Statements | ||||||||||||||
Our preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect our reported amounts of assets and liabilities at the dates of the financial statements and our reported amounts of revenues and expenses during the reporting periods. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. Since future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment may be reflected in the financial statements in future periods. | ||||||||||||||
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 approximates the fair value based on the current interest rate. | ||||||||||||||
Subordinated debt securities: Our trust preferred securities are reported at carry value of $56.7 million and $56.7 million, and have a fair value of $53.2 million and $48.2 million, as of December 31, 2013 and 2012, respectively. The fair value of our trust preferred securities is based on discounted cash flows using current yields to maturity of 8.0% and 8.0% as of December 31, 2013 and 2012, respectively, which are based on similar issues to discount future cash flows and 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. | ||||||||||||||
Investments | ||||||||||||||
Debt and equity securities available for sale are reported at fair value. Unrealized gains and losses are recorded as a component of stockholders’ equity, net of related tax effects. Equity securities that are determined to have other-than-temporary impairment are recognized as a loss on investments in the consolidated statements of operations. Debt securities that are determined to have other-than-temporary impairment are recognized as a loss on investments in the consolidated statements of operations for the portion that is related to credit deterioration with the remaining portion recognized in other comprehensive income. Debt security premiums and discounts are amortized into earnings using the effective interest method. Maturities of debt securities and sales of equity securities are recorded in receivable for securities until the cash is settled. Purchases of debt and equity securities are recorded in payable for securities until the cash is settled. | ||||||||||||||
Realized investment gains and losses are recognized in operations on the specific identification method. | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||
We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. | ||||||||||||||
Restricted Cash | ||||||||||||||
We collect premiums from customers and, after deducting authorized commissions, remit these premiums to the Company’s consolidated insurance subsidiaries. Unremitted insurance premiums are held in a fiduciary capacity until disbursed to the Company’s consolidated insurance subsidiaries. | ||||||||||||||
Premiums Receivable | ||||||||||||||
Premiums receivable represent amounts due from policyholders or independent agents for premiums written and uncollected. These balances are carried at net realizable value. | ||||||||||||||
Reinsurance | ||||||||||||||
We are routinely involved in reinsurance transactions with other companies. Reinsurance premiums, losses and loss adjustment expenses (“LAE”) are accounted for on bases consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. (See Note 7.) | ||||||||||||||
Deferred Policy Acquisition Costs | ||||||||||||||
Policy acquisition costs (mainly commission, underwriting and marketing expenses) that are directly related to the successful acquisition of new and renewal insurance contracts are deferred and charged to operations over periods in which the related premiums are earned. The method followed in computing deferred policy acquisition costs limits the amount of such deferred costs to their estimated realizable value. In determining estimated realizable value, the computation gives effect to the premium to be earned, expected investment income, losses and LAE and certain other costs expected to be incurred as the premiums are earned. If the computation results in an estimated net realizable value less than zero, a liability will be accrued for the premium deficiency. During 2013, 2012 and 2011, we deferred $55.0 million, $62.2 million and $49.4 million of policy acquisition costs and amortized $57.3 million, $59.8 million and $47.8 million of deferred policy acquisition costs, respectively. Therefore, the net (amortization) deferrals of policy acquisition costs were ($2.3) million, $2.4 million and $1.6 million for 2013, 2012 and 2011, respectively. | ||||||||||||||
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. | ||||||||||||||
Goodwill and Intangible Assets, net | ||||||||||||||
We account for our goodwill and intangible assets according to ASC 350, “Intangibles – Goodwill and Other.” ASC 350 (1) prohibits the amortization of goodwill and indefinite-lived intangible assets, (2) requires testing of goodwill and indefinite-lived intangible assets on an annual basis for impairment (and more frequently if the occurrence of an event or circumstance indicates an impairment), (3) requires testing of definite-lived intangible assets if the occurrence of an event or circumstances indicates an impairment, (4) requires that reporting units be identified for the purpose of assessing potential future impairments of goodwill, and (5) removes the forty-year limitation on the amortization period of intangible assets that have finite lives. We have elected to perform our goodwill impairment test on the first day of the fourth quarter, October 1, of each year. | ||||||||||||||
Leases | ||||||||||||||
We have several leases, primarily for office facilities and computer equipment, which expire in various years through 2022. Some of these leases include rent escalation provisions throughout the term of the lease. We expense the average annual cost of the lease with the difference to the actual rent invoices recorded as deferred rent which is classified in accounts payable and other accrued expenses on our consolidated balance sheets. | ||||||||||||||
Property and Equipment | ||||||||||||||
Property and equipment (including leasehold improvements), aggregating $14.7 million and $13.6 million, at December 31, 2013 and 2012, respectively, which is included in other assets, is recorded at cost and is depreciated using the straight-line method over the estimated useful lives of the assets (three to ten years). Depreciation expense for 2013, 2012 and 2011 was $1.2 million, $1.2 million and $1.5 million, respectively. Accumulated depreciation was $12.6 million and $11.4 million at December 31, 2013 and 2012, respectively. | ||||||||||||||
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 Trust II (collectively, (the “Trusts”)) and we do not have variable interests in the Trusts. Therefore, the Trusts are not consolidated in our consolidated financial statements. | ||||||||||||||
We are also involved in the normal course of business with variable interest entities primarily as a passive investor in mortgage-backed securities and certain collateralized corporate bank loans issued by third party variable interest entities. The maximum exposure to loss with respect to these investments is limited to the investment carrying values included in the consolidated balance sheets. | ||||||||||||||
Losses and Loss Adjustment Expenses | ||||||||||||||
Losses and LAE represent the estimated ultimate net cost of all reported and unreported losses incurred through December 31, 2013, 2012 and 2011. The reserves for unpaid losses and LAE are estimated using individual case-basis valuations and statistical analyses. These estimates are subject to the effects of trends in loss severity and frequency. Although considerable variability is inherent in such estimates, we believe that the reserves for unpaid losses and LAE are adequate. The estimates are continually reviewed and adjusted as experience develops or new information becomes known. Such adjustments are included in current operations. | ||||||||||||||
Redeemable Non-Controlling Interest | ||||||||||||||
We accreted the redeemable non-controlling interest to its redemption value from the date of issuance to the redemption date using the interest method. Changes in redemption value were considered a change in accounting estimate. We followed the two class method of computing earnings per share. We treated only the portion of the periodic adjustment to the redeemable non-controlling interest carrying amount that reflects a redemption in excess of fair value as being akin to an actual dividend. Effective September 30, 2012, we exercised our call option and acquired the remaining 20% membership interests in the subsidiaries for $1.7 million. | ||||||||||||||
Activity related to non-controlling interest for the years ended December 31, 2013 and 2012 is as follows (in thousands): | ||||||||||||||
2013 | 2012 | |||||||||||||
Beginning balance | $ | - | $ | 1,284 | ||||||||||
Accretion of redeemable non-controlling interest | - | 392 | ||||||||||||
Net income attributable to non-controlling interest | - | 324 | ||||||||||||
Distribution to non-controlling interest | - | (281 | ) | |||||||||||
Redemption of non-controlling interest | - | (1,700 | ) | |||||||||||
Other | - | (19 | ) | |||||||||||
Ending balance | $ | - | $ | - | ||||||||||
Recognition of Premium Revenues | ||||||||||||||
Insurance premiums are earned pro rata over the terms of the policies. Insurance policy fees are earned as of the effective date of the policy. Upon cancellation, any unearned premium is refunded to the insured. Insurance premiums written include gross policy fees of $13.2 million, $11.8 million and $13.5 million for the years ended December 31, 2013, 2012, and 2011, respectively. Insurance premiums on monthly reporting workers’ compensation policies are earned on the conclusion of the monthly coverage period. Deposit premiums for workers’ compensation policies are earned upon the expiration of the policy. | ||||||||||||||
Finance Charges | ||||||||||||||
We receive premium installment fees for each direct bill payment from policyholders. Installment fee income is classified as finance charges on the consolidated statement of operations and is recognized as the fee is invoiced. | ||||||||||||||
Relationship with Third Party Insurers | ||||||||||||||
Through December 31, 2005, our Standard Commercial P&C business unit marketed policies on behalf of Clarendon National Insurance Company (“Clarendon”), a third-party insurer. Through December 31, 2008, all business of our E&S Commercial business unit was produced under a fronting agreement with member companies of the Republic Group (“Republic”), a third-party insurer. These insurance contracts on third party paper are accounted for under agency accounting. Ceding commissions and other fees received under these arrangements were classified as unearned commission revenue until earned pro rata over the terms of the policies. | ||||||||||||||
Profit sharing commission is calculated and recognized when the loss ratio, as determined by a qualified actuary, deviates from contractual targets. We received a provisional commission as policies were produced as an advance against the later determination of the profit sharing commission actually earned. The profit sharing commission is an estimate that varies with the estimated loss ratio and is sensitive to changes in that estimate. Profit share commission is classified as commissions and fees on the consolidated statement of operations | ||||||||||||||
The following table details the profit sharing commission provisional loss ratio compared to the estimated ultimate loss ratio for each effective quota share treaty between the Standard Commercial P&C business unit and Clarendon. | ||||||||||||||
Treaty Effective Dates | ||||||||||||||
7/1/01 | 7/1/02 | 7/1/03 | 7/1/04 | |||||||||||
Provisional loss ratio | 60.0 | % | 59.0 | % | 59.0 | % | 64.2 | % | ||||||
Estimated ultimate loss ratio recorded to at December 31, 2013 | 63.5 | % | 64.5 | % | 60.9 | % | 63.7 | % | ||||||
As of December 31, 2013, we had a net receivable of $0.1 million on these profit share treaties. The payable or receivable is the difference between the cash received to date and the recognized commission revenue based on the estimated ultimate loss ratio. | ||||||||||||||
The following table details the profit sharing commission revenue provisional loss ratio compared to the estimated ultimate loss ratio for the effective quota share treaty between the E&S Commercial business unit and Republic. | ||||||||||||||
Treaty Effective Dates | ||||||||||||||
1/1/06 | 1/1/07 | 1/1/08 | ||||||||||||
Provisional loss ratio | 65.0 | % | 65.0 | % | 65.0 | % | ||||||||
Estimated ultimate loss ratio recorded to at December 31, 2013 | 58.6 | % | 63.2 | % | 59.0 | % | ||||||||
As of December 31, 2013, we had a net payable of $1.2 million on these profit share treaties. The payable or receivable is the difference between the cash received to date and the recognized commission revenue based on the estimated ultimate loss ratio. | ||||||||||||||
Agent Commissions | ||||||||||||||
We pay monthly commissions to agents based on written premium produced, but generally recognize the expense pro rata over the term of the policy. If the policy is cancelled prior to its expiration, the unearned portion of the agent commission is refundable to us. The unearned portion of commissions paid to agents is included in deferred policy acquisition costs. Commission expenses related to the insurance policies issued by our Hallmark Select business unit for third party insurance carriers and not assumed by our insurance company subsidiaries are recognized as of the effective date of the policy. | ||||||||||||||
We annually pay a profit sharing commission to our independent agency force based upon the results of the business produced by each agent. We estimate and accrue this liability to commission expense in the year the business is produced. | ||||||||||||||
Commission expense is classified as other operating expenses in the consolidated statement of operations. | ||||||||||||||
Income Taxes | ||||||||||||||
We file a consolidated federal income tax return. Deferred federal income taxes reflect the future tax consequences of differences between the tax basis 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. | ||||||||||||||
Earnings Per Share | ||||||||||||||
The computation of earnings per share is based upon the weighted average number of common shares outstanding during the period plus the effect of common shares potentially issuable (in periods in which they have a dilutive effect), primarily from stock options. (See Notes 11 and 13.) | ||||||||||||||
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. | ||||||||||||||
Investments
Investments | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Investments [Abstract] | ' | ||||||||||||||||||||||||
Investments | ' | ||||||||||||||||||||||||
2 | 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 December 31, 2013 | Cost | Gains | Losses | Value | |||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government | $ | 78,894 | $ | 24 | $ | (165 | ) | $ | 78,753 | ||||||||||||||||
Corporate bonds | 42,946 | 1,379 | (450 | ) | 43,875 | ||||||||||||||||||||
Collateralized corporate bank loans | 102,053 | 614 | (489 | ) | 102,178 | ||||||||||||||||||||
Municipal bonds | 156,950 | 2,577 | (1,975 | ) | 157,552 | ||||||||||||||||||||
Mortgage-backed | 27,784 | 460 | (507 | ) | 27,737 | ||||||||||||||||||||
Total debt securities | 408,627 | 5,054 | (3,586 | ) | 410,095 | ||||||||||||||||||||
Total equity securities | 24,902 | 26,642 | (314 | ) | 51,230 | ||||||||||||||||||||
Total debt and equity securities | $ | 433,529 | $ | 31,696 | $ | (3,900 | ) | $ | 461,325 | ||||||||||||||||
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 | ||||||||||||||||||||
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 investment income are summarized as follows (in thousands): | |||||||||||||||||||||||||
Twelve Months Ended | |||||||||||||||||||||||||
31-Dec | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government | $ | 143 | $ | 53 | $ | 115 | |||||||||||||||||||
Corporate bonds | 2,341 | 4,218 | 3,851 | ||||||||||||||||||||||
Collateralized corporate bank loans | 4,653 | 5,261 | 5,284 | ||||||||||||||||||||||
Municipal bonds | 5,245 | 5,616 | 6,632 | ||||||||||||||||||||||
Mortgage-backed | 737 | 106 | 86 | ||||||||||||||||||||||
Equity securities | 484 | 534 | 484 | ||||||||||||||||||||||
Cash and cash equivalents | 157 | 246 | 163 | ||||||||||||||||||||||
13,760 | 16,034 | 16,615 | |||||||||||||||||||||||
Investment expenses | (876 | ) | (741 | ) | (735 | ) | |||||||||||||||||||
Investment income, net of expenses | $ | 12,884 | $ | 15,293 | $ | 15,880 | |||||||||||||||||||
No investments in any entity or its affiliates exceeded 10% of stockholders’ equity at December 31, 2013 or 2012. | |||||||||||||||||||||||||
Major categories of net realized gains on investments are summarized as follows (in thousands): | |||||||||||||||||||||||||
Twelve Months Ended | |||||||||||||||||||||||||
31-Dec | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government | $ | - | $ | - | $ | 35 | |||||||||||||||||||
Corporate bonds | 853 | 13 | 300 | ||||||||||||||||||||||
Collateralized corporate bank loans | 373 | 391 | 699 | ||||||||||||||||||||||
Municipal bonds | (156 | ) | (441 | ) | (500 | ) | |||||||||||||||||||
Equity securities | 9,470 | 2,226 | 3,099 | ||||||||||||||||||||||
Net realized gain | 10,540 | 2,189 | 3,633 | ||||||||||||||||||||||
Other-than-temporary impairments | - | (246 | ) | - | |||||||||||||||||||||
Gain on investments | $ | 10,540 | $ | 1,943 | $ | 3,633 | |||||||||||||||||||
We realized gross gains on investments of $10.9 million, $2.9 million, and $4.6 million during the years ended December 31, 2013, 2012 and 2011, respectively. We realized gross losses on investments of $0.4 million, $0.7 million and $1.0 million during the years ended December 31, 2013, 2012 and 2011, respectively. We recorded proceeds from the sale of investment securities of $33.4 million, $12.4 million and $62.7 million during the years ended December 31, 2013, 2012 and 2011, 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 December 31, 2013 and December 31, 2012 (in thousands): | |||||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||
12 months or less | Longer than 12 months | Total | |||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||
U.S. Treasury securities and | |||||||||||||||||||||||||
obligations of U.S. Government | $ | 47,162 | $ | (165 | ) | $ | - | $ | - | $ | 47,162 | $ | (165 | ) | |||||||||||
Corporate bonds | 5,649 | (56 | ) | 4,421 | (394 | ) | 10,070 | (450 | ) | ||||||||||||||||
Collateralized corporate bank loans | 23,026 | (422 | ) | 6,968 | (67 | ) | 29,994 | (489 | ) | ||||||||||||||||
Municipal bonds | 35,719 | (413 | ) | 34,684 | (1,562 | ) | 70,403 | (1,975 | ) | ||||||||||||||||
Mortgage-backed | 1,383 | (229 | ) | 4,840 | (278 | ) | 6,223 | (507 | ) | ||||||||||||||||
Total debt securities | 112,939 | (1,285 | ) | 50,913 | (2,301 | ) | 163,852 | (3,586 | ) | ||||||||||||||||
Total equity securities | 316 | (2 | ) | 2,721 | (312 | ) | 3,037 | (314 | ) | ||||||||||||||||
Total debt and equity securities | $ | 113,255 | $ | (1,287 | ) | $ | 53,634 | $ | (2,613 | ) | $ | 166,889 | $ | (3,900 | ) | ||||||||||
As of December 31, 2012 | |||||||||||||||||||||||||
12 months or less | Longer than 12 months | Total | |||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized 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 | ) | ||||||||||||||||
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 December 31, 2013, the gross unrealized losses more than twelve months old were attributable to 84 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 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 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. We did not recognized other-than-temporary losses on our debt securities portfolio during 2013. | |||||||||||||||||||||||||
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 December 31, 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 | $ | 71,490 | $ | 71,969 | |||||||||||||||||||||
Due after one year through five years | 162,203 | 163,006 | |||||||||||||||||||||||
Due after five years through ten years | 107,915 | 108,761 | |||||||||||||||||||||||
Due after ten years | 39,235 | 38,622 | |||||||||||||||||||||||
Mortgage-backed | 27,784 | 27,737 | |||||||||||||||||||||||
$ | 408,627 | $ | 410,095 | ||||||||||||||||||||||
We have certain of our securities pledged 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 $29.1 million at December 31, 2013 and a carrying value of $24.3 million at December 31, 2012. | |||||||||||||||||||||||||
Fair_Value
Fair Value | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value [Abstract] | ' | ||||||||||||||||
Fair Value | ' | ||||||||||||||||
3. 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, U.S. Treasury securities, other obligations of the U.S. Government and mortgage-backed 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 third party pricing services. There were no transfers between Level 1 and Level 2 securities. | |||||||||||||||||
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. | |||||||||||||||||
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 December 31, 2013 and December 31, 2012 (in thousands). | |||||||||||||||||
As of December 31, 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 | $ | - | $ | 78,753 | $ | - | $ | 78,753 | |||||||||
Corporate bonds | - | 43,875 | - | 43,875 | |||||||||||||
Collateralized corporate bank loans | - | 101,585 | 593 | 102,178 | |||||||||||||
Municipal bonds | - | 140,628 | 16,924 | 157,552 | |||||||||||||
Mortgage-backed | - | 27,737 | - | 27,737 | |||||||||||||
Total debt securities | - | 392,578 | 17,517 | 410,095 | |||||||||||||
Total equity securities | 51,230 | - | - | 51,230 | |||||||||||||
Total debt and equity securities | $ | 51,230 | $ | 392,578 | $ | 17,517 | $ | 461,325 | |||||||||
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 | |||||||||||||
Total equity securities | 43,925 | - | - | 43,925 | |||||||||||||
Total debt and equity securities | $ | 43,925 | $ | 381,767 | $ | 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 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 9.3%, 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 year ended December 31, 2013 and 2012 (in thousands). | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Beginning balance as of January 1 | $ | 19,668 | $ | 20,608 | |||||||||||||
Sales | (3,157 | ) | (429 | ) | |||||||||||||
Settlements | - | - | |||||||||||||||
Purchases | - | - | |||||||||||||||
Issuances | - | - | |||||||||||||||
Total realized/unrealized gains included in net income | - | - | |||||||||||||||
Net gains (losses) included in other comprehensive income | 1,006 | (511 | ) | ||||||||||||||
Transfers into Level 3 | - | - | |||||||||||||||
Transfers out of Level 3 | - | - | |||||||||||||||
Ending balance as of December 31 | $ | 17,517 | $ | 19,668 | |||||||||||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Goodwill and Intangible Assets [Abstract] | ' | ||||||||||||
Goodwill and Intangible Assets | ' | ||||||||||||
4 | Goodwill and Intangible Assets: | ||||||||||||
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 subsidiary. The operating agreements granted us the right to purchase the remaining 20% membership interests in the subsidiaries and granted an affiliate of the seller the right to require us to purchase such remaining membership interests. Effective September 30, 2012, we exercised our call option and acquired the remaining 20% membership interests in the subsidiaries for $1.7 million. | |||||||||||||
Effective July 1, 2011, we acquired all of the issued and outstanding capital stock of 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. We recorded a bargain purchase gain of $165 thousand on the acquisition which is reported in other income. The gain resulted from the difference in the estimated purchase price and the fair value of the net assets acquired and liabilities assumed as of July 1, 2011. TBIC is a Texas domiciled insurance company that writes workers compensation insurance through independent agents in Texas only. | |||||||||||||
Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis (October 1) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. For purposes of evaluating goodwill for impairment, we have determined that our reporting units are the same as our business units except for the Hallmark Select business unit for which reporting units are at the component level (“one level below”). Our consolidated balance sheet as of December 31, 2013 includes goodwill of acquired businesses of $44.7 million that is assigned to our business units as follows: Standard Commercial P&C business unit - $2.1 million; E&S Commercial business unit - $19.9 million; Hallmark Select business unit- $17.4 million (comprised of $7.7 million for the excess & umbrella component and $9.7 million for the general aviation and satellite component); and Personal Lines business unit - $5.3 million. This amount has been recorded as a result of prior business acquisitions accounted for under the acquisition method of accounting. Under ASC 350, “Intangibles- Goodwill and Other,” goodwill is tested for impairment annually. We completed our last annual test for impairment on the first day of the fourth quarter of 2013 and determined that there was no impairment. | |||||||||||||
The income approach to determining fair value computed the projections of the cash flows that the reporting unit was expected to generate converted into a present value equivalent through discounting. Significant assumptions in the income approach model included income projections, discount rates and terminal growth values. The income projections reflected an improved premium pricing environment across most of our lines of business that began in 2012 and continued throughout 2013. The income projections also included loss and LAE assumptions which reflected recent historical claim trends and the movement towards a more favorable pricing environment. The income projections also included assumptions for expense growth and investment yields which were based on business plans for each of our business units. The discount rate was based on a risk free rate plus a beta adjusted equity risk premium and specific company risk premium. The assumptions were based on historical experience, expectations of future performance, expected market conditions and other factors requiring judgment and estimates. While we believe the assumptions used in these models were reasonable, the inherent uncertainty in predicting future performance and market conditions may change over time and influence the outcome of future testing. | |||||||||||||
During 2013, 2012, and 2011, we completed the first step prescribed by ASC 350 for testing for impairment and determined that there was no impairment. | |||||||||||||
We have obtained various intangible assets from several acquisitions since 2002. The table below details the gross and net carrying amounts of these assets by major category (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Gross Carrying Amount: | |||||||||||||
Customer/agent relationships | $ | 32,177 | $ | 32,177 | |||||||||
Tradename | 3,440 | 3,440 | |||||||||||
Management agreement | 3,232 | 3,232 | |||||||||||
Non-compete & employment agreements | 4,235 | 4,235 | |||||||||||
Insurance licenses | 1,300 | 1,300 | |||||||||||
Total gross carrying amount | 44,384 | 44,384 | |||||||||||
Accumulated Amortization: | |||||||||||||
Customer/agent relationships | (15,322 | ) | (13,084 | ) | |||||||||
Tradename | (1,700 | ) | (1,471 | ) | |||||||||
Management agreement | (3,232 | ) | (2,895 | ) | |||||||||
Non-compete & employment agreements | (4,177 | ) | (3,866 | ) | |||||||||
Total accumulated amortization | (24,431 | ) | (21,316 | ) | |||||||||
Total net carrying amount | $ | 19,953 | $ | 23,068 | |||||||||
Insurance licenses are not amortized because they have an indefinite life. We amortize definite-lived intangible assets straight line over their respective lives. The estimated aggregate amortization expense for definite-lived intangible assets for the next five years is as follows (in thousands): | |||||||||||||
2014 | $ | 2,526 | |||||||||||
2015 | $ | 2,468 | |||||||||||
2016 | $ | 2,468 | |||||||||||
2017 | $ | 2,468 | |||||||||||
2018 | $ | 2,468 | |||||||||||
The weighted average amortization period for definite-lived intangible assets by major class is as follows: | |||||||||||||
Years | |||||||||||||
Tradename | 15 | ||||||||||||
Customer relationships | 15 | ||||||||||||
Management agreement | 4 | ||||||||||||
Non-compete agreements | 5 | ||||||||||||
The aggregate weighted average period to amortize these assets is approximately 13 years. | |||||||||||||
Other_Assets
Other Assets | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Assets [Abstract] | ' | ||||||||
Other Assets | ' | ||||||||
5 | Other Assets: | ||||||||
The following table details our other assets as of December 31, 2013 and 2012 (in thousands): | |||||||||
2013 | 2012 | ||||||||
Profit sharing commission receivable | $ | 641 | $ | 2,083 | |||||
Accrued investment income | 3,030 | 3,568 | |||||||
Debt issuance costs | 1,156 | 1,207 | |||||||
Investment in unconsolidated trust subsidiaries | 1,702 | 1,702 | |||||||
Fixed assets | 1,773 | 2,284 | |||||||
Other assets | 110 | 141 | |||||||
$ | 8,412 | $ | 10,985 | ||||||
Reserves_for_Unpaid_Losses_and
Reserves for Unpaid Losses and Loss Adjustment Expenses | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Insurance Loss Reserves [Abstract] | ' | ||||||||||||
Reserves for Unpaid Losses and Loss Adjustment Expenses | ' | ||||||||||||
6 | Reserves for Unpaid Losses and Loss Adjustment Expenses: | ||||||||||||
Activity in the reserves for unpaid losses and LAE is summarized as follows (in thousands): | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance at January 1 | $ | 313,416 | $ | 296,945 | $ | 251,677 | |||||||
Less reinsurance recoverable | 49,584 | 42,044 | 37,954 | ||||||||||
Net Balance at January 1 | 263,832 | 254,901 | 213,723 | ||||||||||
Acquisition of subsidiaries effective July 1 | - | - | 8,816 | ||||||||||
Incurred related to: | |||||||||||||
Current year | 251,391 | 230,089 | 222,869 | ||||||||||
Prior years | 9,954 | (3,675 | ) | 16,366 | |||||||||
Total incurred | 261,345 | 226,414 | 239,235 | ||||||||||
Paid related to: | |||||||||||||
Current year | 101,897 | 107,945 | 101,025 | ||||||||||
Prior years | 110,812 | 109,538 | 105,848 | ||||||||||
Total paid | 212,709 | 217,483 | 206,873 | ||||||||||
Net Balance at December 31 | 312,468 | 263,832 | 254,901 | ||||||||||
Plus reinsurance recoverable | 70,172 | 49,584 | 42,044 | ||||||||||
Balance at December 31 | $ | 382,640 | $ | 313,416 | $ | 296,945 | |||||||
The $10.0 million unfavorable development, $3.7 million favorable development and $16.4 million unfavorable development in prior accident years recognized in 2013, 2012 and 2011, respectively, represent normal changes in our loss reserve estimates. In 2013 and 2011, the aggregate loss reserve estimates for prior years were increased to reflect unfavorable loss development when the available information indicated a reasonable likelihood that the ultimate losses would be more than the previous estimates. In 2012, the aggregate loss reserve estimates for prior years were decreased to reflect favorable loss development when the available information indicated a reasonable likelihood that the ultimate losses would be less than the previous estimates. Generally, changes in reserves are caused by variations between actual experience and previous expectations and by reduced emphasis on the Bornhuetter-Ferguson method due to the aging of the accident years. | |||||||||||||
The $10.0 million increase in reserves for unpaid losses and LAE recognized in 2013 was attributable to $5.0 million unfavorable development on claims incurred in the 2012 accident year, $1.7 million unfavorable development on claims incurred in the 2011 accident year and $3.3 million unfavorable development on claims incurred in the 2010 and prior accident years. Our E&S Commercial business unit and Personal Lines business unit accounted for $16.0 million and $1.8 million of the increase in reserves recognized during 2013. The increase in reserves for our E&S Commercial business unit was primarily related to commercial auto liability line of business. The increase in reserves for our Personal Lines business unit was primarily related to personal auto in the 2012 accident year. These unfavorable developments were partially offset by favorable prior years’ loss development of $3.7 million in our Standard Commercial P&C business unit, $2.6 million in our Hallmark Select business unit and $1.5 million in our Workers Compensation business unit. The decrease in reserves for our Standard Commercial P&C business unit was primarily related to commercial auto and general liability line of business. The decrease in reserves for our Hallmark Select business unit was driven by $2.3 million of favorable claims development in the 2011 and prior accident years related to our aircraft liability lines of business, partially offset by $0.1 million unfavorable claims development in the 2012 accident year related to our aircraft hull coverage. Further contributing to the decrease in reserves for our Hallmark Select business unit was $0.4 million of favorable claims development in our excess & umbrella lines of business. The decrease in reserves for our Workers Compensation business unit was related to the 2012 and 2011 accident years. | |||||||||||||
The $3.7 million decrease in reserves for unpaid losses and LAE recognized in 2012 was attributable to $0.4 million favorable development on claims incurred in the 2011 accident year, $0.8 million favorable development on claims incurred in the 2010 accident year and $2.5 million favorable development on claims incurred in the 2009 and prior accident years. Our Standard Commercial P&C business unit, Hallmark Select business unit and E&S Commercial business unit accounted for $3.7 million, $3.3 million and $0.3 million, respectively, of the decrease in reserves recognized during 2012. The decrease in reserves for our Standard Commercial P&C business unit was primarily related to commercial auto, commercial property and general liability lines of business. The decrease in reserves for our Hallmark Select business unit was primarily related to our aircraft liability lines of business. The decrease in reserves for our E&S Commercial business unit was primarily related to general liability. These favorable developments were partially offset by unfavorable prior years’ loss development of $3.6 million in our Personal Lines business unit related to auto liability claims spread throughout various states and our low value dwelling/homeowners line of business. | |||||||||||||
The $16.4 million increase in reserves for unpaid losses and LAE recognized in 2011 was attributable to $15.0 million unfavorable development on claims incurred in the 2010 accident year, $3.6 million unfavorable development on claims incurred in the 2009 accident year and $2.2 million favorable development on claims incurred in the 2008 and prior accident years. Our Personal Lines business unit and E&S Commercial business unit accounted for $19.6 million and $3.7 million, respectively, of the increase in reserves recognized during 2011. The $19.6 million increase in reserves during 2011 for our Personal Lines business unit includes $10.3 million, which was attributable to Florida developing much worse than expected due primarily to rapid growth in the claim volume from Florida, the complexity related to Florida personal injury protection coverage claims and the high incidence of fraudulent claims in that market. The remaining unfavorable prior years’ loss development for our Personal Lines business unit was primarily due to rapid geographic expansion. The increase in reserves for our E&S Commercial business unit was primarily related to commercial auto and physical damage and general liability lines of business. These unfavorable developments were partially offset by favorable prior years’ loss development of $6.1 million in our Hallmark Select business unit related to our aircraft liability lines of business and $0.8 million in our Standard Commercial P&C business unit primarily related to our commercial property lines of business. | |||||||||||||
Reinsurance
Reinsurance | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Reinsurance [Abstract] | ' | ||||||||||||
Reinsurance | ' | ||||||||||||
7 | 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 December 31, 2013 was with reinsurers that had an A.M. Best rating of “A-” or better. We also mitigate our credit risk for the remaining reinsurance recoverable by obtaining letters of credit. | |||||||||||||
The following table presents our gross and net premiums written and earned and reinsurance recoveries for each of the last three years (in thousands): | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Premium Written : | |||||||||||||
Direct | $ | 458,020 | $ | 385,624 | $ | 350,089 | |||||||
Assumed | 2,007 | 4,218 | 4,792 | ||||||||||
Ceded | (99,262 | ) | (57,353 | ) | (51,005 | ) | |||||||
$ | 360,765 | $ | 332,489 | $ | 303,876 | ||||||||
Premium Earned: | |||||||||||||
Direct | $ | 434,022 | $ | 369,735 | $ | 344,642 | |||||||
Assumed | 3,204 | 4,114 | 5,438 | ||||||||||
Ceded | (76,685 | ) | (54,413 | ) | (57,039 | ) | |||||||
$ | 360,541 | $ | 319,436 | $ | 293,041 | ||||||||
Reinsurance recoveries | $ | 45,456 | $ | 29,014 | $ | 32,941 | |||||||
Included in reinsurance recoverable on the consolidated balance sheets are paid loss recoverables of $6.1 million and $1.0 million as of December 31, 2013 and 2012, respectively. | |||||||||||||
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: | ||||||||||||
and | |||||||||||||
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. Effective July 1, 2013 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. Effective July 1, 2013 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 purchased 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. | ||||||||||||
| Occupational Accident. We purchase excess-of-loss reinsurance coverage for the occupational accident insurance product produced by our Standard Commercial P&C business unit. The terms of occupational accident reinsurance are: | ||||||||||||
o | We retain the first $1.0 million of any occupational accident risk; and | ||||||||||||
o | Our reinsurers reimburse us for the next $5.0 million for each occupational accident risk up to $10.0 million for each occurrence. | ||||||||||||
| 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. Effective February 1, 2013 we purchased 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. | ||||||||||||
| Personal Auto. Effective October 1, 2013 we purchased proportional reinsurance where we cede 90% of the risks to reinsurers on the nonstandard automobile risks produced in certain 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 purchased 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_and_
Revolving Credit Facility and Notes Payable | 12 Months Ended | ||
Dec. 31, 2013 | |||
Revolving Credit Facility Payable And Notes Payable [Abstract] | ' | ||
Revolving Credit Facility and Notes Payable | ' | ||
8 | Revolving Credit Facility and Notes 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. As of December 31, 2013, we were in compliance with all of our covenants. As of December 31, 2013 and 2012, the balance on the revolving note was $1.5 million and $1.5 million, respectively. The revolving note currently bears interest at 2.75% per annum. | |||
Subordinated_Debt_Securities
Subordinated Debt Securities | 12 Months Ended | ||
Dec. 31, 2013 | |||
Subordinated Debt Securities [Abstract] | ' | ||
Subordinated Debt Securities | ' | ||
9 | 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 December 31, 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 December 31, 2013, the balance of our Trust II subordinated debt was $25.8 million. | |||
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Segment Information [Abstract] | ' | ||||||||||||
Segment Information | ' | ||||||||||||
10 | Segment Information: | ||||||||||||
We pursue our business activities primarily through subsidiaries whose operations are organized into producing units and are supported by our insurance carrier subsidiaries. Our non-carrier insurance activities are organized by business units into the following reportable segments: | |||||||||||||
| Standard Commercial Segment. The Standard Commercial Segment includes the standard lines commercial property/casualty and occupational accident insurance products and services handled by our Standard Commercial P&C business unit and the workers compensation insurance products handled by our Workers Compensation business unit. Our Standard Commercial P&C business unit is comprised of our American Hallmark Insurance Services and ECM subsidiaries. Our Workers Compensation business unit is comprised of our TBIC Holdings, TBIC and TBICRM subsidiaries. The Workers Compensation business unit was acquired July 1, 2011. | ||||||||||||
| Specialty Commercial Segment. The Specialty Commercial Segment includes the excess and surplus lines commercial property/casualty insurance products and services handled by our E&S Commercial business unit and the general aviation, commercial umbrella and excess liability, medical professional liability and satellite launch insurance products and services handled by our Hallmark Select business unit, as well as certain Specialty Programs which are managed at the parent level. Our E&S Commercial business unit is comprised of our HSU, PAAC and TGASRI subsidiaries. Our Hallmark Select business unit is comprised of our Aerospace Insurance Managers, ASRI, ACMG, HXS and HDS subsidiaries. | ||||||||||||
| Personal Segment. The Personal Segment includes the non-standard personal automobile, low value dwelling/homeowners, renters and motorcycle insurance products and services handled by our Personal Lines business unit which is comprised of American Hallmark General Agency, Inc. and Hallmark Claims Services, Inc., both of which do business as Hallmark Insurance Company. | ||||||||||||
The retained premium produced by these reportable segments is supported by our AHIC, HSIC, HIC, HNIC and TBIC insurance company subsidiaries. In addition, control and management of HCM is maintained through our wholly owned subsidiary, CYR Insurance Management Company (“CYR”). CYR has as its primary asset a management agreement with HCM which provides for CYR to have management and control of HCM. HCM is used to front certain lines of business in our Specialty Commercial and Personal Segments in Texas. HCM does not retain any business. | |||||||||||||
AHIC, HIC, HSIC and HNIC have entered into a pooling arrangement, pursuant to which AHIC retains 30% of the net premiums written by any of them, HIC retains 27% of the net premiums written by any of them, HSIC retains 30% of the net premiums written by any of them and HNIC retains 13% of the net premiums written by any of them. Neither HCM nor TBIC is a party to the intercompany pooling arrangement. | |||||||||||||
The following is additional business segment information for the twelve months ended December 31, 2013, 2012 and 2011 (in thousands): | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Revenues | |||||||||||||
Standard Commercial Segment | $ | 83,306 | $ | 73,119 | $ | 72,830 | |||||||
Specialty Commercial Segment | 229,734 | 178,917 | 142,838 | ||||||||||
Personal Segment | 71,081 | 89,149 | 101,351 | ||||||||||
Corporate | 5,307 | 615 | 5,752 | ||||||||||
Consolidated | $ | 389,428 | $ | 341,800 | $ | 322,771 | |||||||
Depreciation and Amortization Expense | |||||||||||||
Standard Commercial Segment | $ | 201 | $ | 186 | $ | 174 | |||||||
Specialty Commercial Segment | 2,896 | 2,892 | 3,293 | ||||||||||
Personal Segment | 1,111 | 1,230 | 1,431 | ||||||||||
Corporate | 92 | 113 | 166 | ||||||||||
Consolidated | $ | 4,300 | $ | 4,421 | $ | 5,064 | |||||||
Interest Expense | |||||||||||||
Standard Commercial Segment | $ | - | $ | - | $ | - | |||||||
Specialty Commercial Segment | - | - | - | ||||||||||
Personal Segment | - | - | - | ||||||||||
Corporate | 4,599 | 4,634 | 4,631 | ||||||||||
Consolidated | $ | 4,599 | $ | 4,634 | $ | 4,631 | |||||||
Tax Expense (Benefit) | |||||||||||||
Standard Commercial Segment | $ | 312 | $ | 372 | $ | (376 | ) | ||||||
Specialty Commercial Segment | 3,613 | 1,875 | 4,454 | ||||||||||
Personal Segment | (398 | ) | (968 | ) | (13,991 | ) | |||||||
Corporate | (692 | ) | (1,753 | ) | 959 | ||||||||
Consolidated | $ | 2,835 | $ | (474 | ) | $ | (8,954 | ) | |||||
Pre-tax Income (Loss), net of non-controlling interest | |||||||||||||
Standard Commercial Segment | $ | 1,980 | $ | (2,486 | ) | $ | 1,335 | ||||||
Specialty Commercial Segment | 19,527 | 25,932 | 14,348 | ||||||||||
Personal Segment | (3,416 | ) | (8,535 | ) | (29,647 | ) | |||||||
Corporate | (7,011 | ) | (11,861 | ) | (5,881 | ) | |||||||
Consolidated | $ | 11,080 | $ | 3,050 | $ | (19,845 | ) | ||||||
The following is additional business segment information as of the following dates (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Assets | |||||||||||||
Standard Commercial Segment | $ | 142,143 | $ | 145,162 | |||||||||
Specialty Commercial Segment | 536,894 | 432,208 | |||||||||||
Personal Segment | 210,825 | 200,356 | |||||||||||
Corporate | 19,161 | 12,742 | |||||||||||
Consolidated | $ | 909,023 | $ | 790,468 | |||||||||
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||||||
Earnings Per Share | ' | |||||||||||||||||||
11 | Earnings Per Share: | |||||||||||||||||||
We have adopted the provisions of ASC 260, “Earnings Per Share,” requiring presentation of both basic and diluted earnings per share. A reconciliation of the numerators and denominators of the basic and diluted per share calculations is presented below (in thousands, except per share amounts): | ||||||||||||||||||||
) | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Numerator for both basic and diluted earnings per share: | ||||||||||||||||||||
Net income (loss) attributable to Hallmark Financial Services, Inc. | $ | 8,245 | $ | 3,524 | $ | (10,891 | ) | |||||||||||||
Denominator, basic shares | 19,263 | 19,263 | 19,673 | |||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||
Stock-based compensation awards | 98 | 6 | - | |||||||||||||||||
Denominator, diluted shares | 19,361 | 19,269 | 19,673 | |||||||||||||||||
Basic earnings per share: | $ | 0.43 | $ | 0.18 | $ | (0.55 | ) | |||||||||||||
Diluted earnings per share: | $ | 0.43 | $ | 0.18 | $ | (0.55 | ) | |||||||||||||
We had 779,999 shares, 794,999 shares and 809,999 shares of common stock potentially issuable upon exercise of employee stock options for years ended December 31, 2013, 2012 and 2011, respectively, that were excluded from the weighted average number of shares outstanding on a diluted basis because the effect of such options would be anti-dilutive. These instruments expire at varying times from 2016 to 2021. | ||||||||||||||||||||
Regulatory_Capital_Restriction
Regulatory Capital Restrictions | 12 Months Ended | ||
Dec. 31, 2013 | |||
Regulatory Capital Restrictions [Abstract] | ' | ||
Regulatory Capital Restrictions | ' | ||
Regulatory Capital Restrictions: | |||
12 | |||
Hallmark, as a holding company, is dependent on dividend payments and management fees from its subsidiaries to fund its operating expenses, debt obligations and capital needs, including the ability to pay dividends to its stockholders. Hallmark has never paid dividends on its common stock. Hallmark intends to continue this policy for the foreseeable future in order to retain earnings for development of its business. There are no regulatory or contractual restrictions on the ability of Hallmark to pay dividends other than customary default provisions and the impact of any dividend payment on financial ratio covenants in certain credit agreements. However there are restrictions on the ability of Hallmark’s insurance carrier subsidiaries to transfer funds to the holding company. The amount of retained earnings that is unrestricted for the payment of dividends by Hallmark to its shareholders was $29.8 million as of December 31, 2013. | |||
AHIC and TBIC, domiciled in Texas, are limited in the payment of dividends to their stockholders in any 12-month period, without the prior written consent of the Texas Department of Insurance, to the greater of statutory net income for the prior calendar year or 10% of statutory policyholders’ surplus as of the prior year end. HIC, domiciled in Arizona, is limited in the payment of dividends to the lesser of 10% of prior year policyholders’ surplus or prior year’s net investment income, without prior written approval from the Arizona Department of Insurance. HSIC, domiciled in Oklahoma, is limited in the payment of dividends to the greater of 10% of prior year policyholders’ surplus or prior year’s statutory net income, not including realized capital gains, without prior written approval from the Oklahoma Insurance Department. HNIC, domiciled in Ohio, is limited in the payment of dividends to the greater of 10% of statutory policyholders’ surplus as of the prior December 31 or statutory net income as of the prior December 31 without prior written approval from the Ohio Insurance Department. For all our insurance companies, dividends may only be paid from unassigned surplus funds. During 2014, the aggregate ordinary dividend capacity of these subsidiaries is $22.5 million, of which $15.6 million is available to Hallmark. As a county mutual, dividends from HCM are payable to policyholders. None of our insurance company subsidiaries paid a dividend during the years ended December 31, 2013 or 2012. The total restricted net assets of our insurance company subsidiaries as of December 31, 2013, was approximately $208.3 million. | |||
The state insurance departments also regulate financial transactions between our insurance subsidiaries and their affiliated companies. Applicable regulations require approval of management fees, expense sharing contracts and similar transactions. The net amount paid in management fees by our insurance subsidiaries to Hallmark and our non-insurance company subsidiaries was $8.2 million, $9.0 million and $6.0 million during each of 2013, 2012 and 2011, respectively. | |||
Statutory capital and surplus is calculated as statutory assets less statutory liabilities. The various state insurance departments that regulate our insurance company subsidiaries require us to maintain a minimum statutory capital and surplus. As of December 31, 2013 and 2012, our insurance company subsidiaries reported statutory capital and surplus of $196.3 million and $176.5 million, respectively, substantially greater than the minimum requirements for each state. For the years ended December 31, 2013, 2012, 2011, respectively, our insurance company subsidiaries reported statutory net income of $6.1 million, statutory net income of $3.1 million and statutory net loss of $17.2 million, respectively. | |||
The National Association of Insurance Commissioners requires property/casualty insurers to file a risk-based capital calculation according to a specified formula. The purpose of the formula is twofold: (1) to assess the adequacy of an insurer’s statutory capital and surplus based upon a variety of factors such as potential risks related to investment portfolio, ceded reinsurance and product mix; and (2) to assist state regulators under the RBC for Insurers Model Act by providing thresholds at which a state commissioner is authorized and expected to take regulatory action. As of December 31, 2013, the adjusted capital under the risk-based capital calculation of each of our insurance company subsidiaries substantially exceeded the minimum requirements. | |||
Sharebased_Payment_Arrangement
Share-based Payment Arrangements | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Share-based Payment Arrangements [Abstract] | ' | ||||||||||||||||
Share-based Payment Arrangements | ' | ||||||||||||||||
Share-based Payment Arrangements: | |||||||||||||||||
13 | |||||||||||||||||
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 December 31, 2013, there were outstanding incentive stock options to purchase 1,083,332 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 241,401 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 December 31, 2013 and changes during the year then ended is presented below: | |||||||||||||||||
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 | (17,500 | ) | $ | 7.58 | |||||||||||||
Outstanding at December 31, 2013 | 1,387,489 | $ | 9.66 | 4.2 | $ | 1,329 | |||||||||||
Exercisable at December 31, 2013 | 1,181,417 | $ | 10.19 | 4 | $ | 866 | |||||||||||
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): | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Intrinsic value of options exercised | $ | - | $ | - | $ | 4 | |||||||||||
Cost of share-based payments (non-cash) | $ | 207 | $ | 380 | $ | 709 | |||||||||||
Income tax benefit of share-based payments recognized in income | $ | 30 | $ | 38 | $ | 30 | |||||||||||
As of December 31, 2013, there was $0.5 million of total unrecognized compensation cost related to non-vested stock options granted under our plans, of which $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 were no stock options granted in 2013 or 2012. Stock options granted in 2011 had a weighted average grant date fair value of $2.52, expected term of 5.8 years, expected volatility of 30.9% and risk free interest rate of 1.4%. | |||||||||||||||||
Restricted Stock Units: | |||||||||||||||||
The 2005 LTIP was amended by the stockholders 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 $145 thousand of compensation expense related to the restricted stock units during the year ended December 31, 2013. | |||||||||||||||||
A summary of the status of our restricted stock units as of December 31, 2013 and changes during the year then ended is presented below: | |||||||||||||||||
Number of | |||||||||||||||||
Restricted | |||||||||||||||||
Stock Units | |||||||||||||||||
Nonvested at January 1, 2013 | - | ||||||||||||||||
Granted | 243,006 | ||||||||||||||||
Vested | - | ||||||||||||||||
Forfeited | -6,155 | ||||||||||||||||
Nonvested at December 31, 2013 | 236,851 | ||||||||||||||||
As of December 31, 2013, there was $0.5 million of total unrecognized compensation cost related to non-vested restricted stock units granted under our 2005 LTIP, of which $0.2 million is expected to be recognized in 2014, $0.2 million is expected to be recognized in 2015 and $49 thousand is expected to be recognized in 2016. | |||||||||||||||||
Retirement_Plans
Retirement Plans | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Retirement Plans [Abstract] | ' | ||||||||||||||||
Retirement Plans | ' | ||||||||||||||||
Retirement Plans: | |||||||||||||||||
14 | |||||||||||||||||
Certain employees of the Standard Commercial Segment were participants in a defined cash balance plan covering all full-time employees who had completed at least 1,000 hours of service. This plan was frozen in March 2001 in anticipation of distribution of plan assets to members upon plan termination. All participants were vested when the plan was frozen. | |||||||||||||||||
The following tables provide detail of the changes in benefit obligations, components of benefit costs, weighted-average assumptions, and plan assets for the retirement plan as of and for the twelve months ending December 31, 2013, 2012 and 2011 (in thousands) using a measurement date of December 31. | |||||||||||||||||
4 | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Assumptions (end of period): | |||||||||||||||||
Discount rate used in determining benefit obligation | 4.49 | % | 3.89 | % | 4.5 | % | |||||||||||
Rate of compensation increase | N/A | N/A | N/A | ||||||||||||||
Reconciliation of funded status (end of period): | |||||||||||||||||
Accumulated benefit obligation | $ | (12,284 | ) | $ | (13,439 | ) | $ | (12,990 | ) | ||||||||
Projected benefit obligation | $ | (12,284 | ) | $ | (13,439 | ) | $ | (12,990 | ) | ||||||||
Fair value of plan assets | 10,851 | 9,754 | 9,019 | ||||||||||||||
Funded status | $ | (1,433 | ) | $ | (3,685 | ) | $ | (3,971 | ) | ||||||||
Net actuarial loss | (2,277 | ) | (4,545 | ) | (4,582 | ) | |||||||||||
Accumulated other comprehensive loss | (2,277 | ) | (4,545 | ) | (4,582 | ) | |||||||||||
Prepaid pension cost | 844 | 860 | 611 | ||||||||||||||
Net amount recognized as of December 31 | $ | (1,433 | ) | $ | (3,685 | ) | $ | (3,971 | ) | ||||||||
Changes in projected benefit obligation: | |||||||||||||||||
Benefit obligation as of beginning of period | $ | 13,439 | $ | 12,990 | $ | 12,050 | |||||||||||
Interest cost | 505 | 564 | 609 | ||||||||||||||
Actuarial liability (gain)/loss | (824 | ) | 700 | 1,160 | |||||||||||||
Benefits paid | (836 | ) | (815 | ) | (829 | ) | |||||||||||
Benefit obligation as of end of period | $ | 12,284 | $ | 13,439 | $ | 12,990 | |||||||||||
Change in plan assets: | |||||||||||||||||
Fair value of plan assets as of beginning of period | $ | 9,754 | $ | 9,019 | $ | 9,217 | |||||||||||
Actual return on plan assets (net of expenses) | 1,565 | 839 | (4 | ) | |||||||||||||
Employer contributions | 368 | 711 | 635 | ||||||||||||||
Benefits paid | (836 | ) | (815 | ) | (829 | ) | |||||||||||
Fair value of plan assets as of end of period | $ | 10,851 | $ | 9,754 | $ | 9,019 | |||||||||||
Net periodic pension cost: | |||||||||||||||||
Service cost - benefits earned during the period | $ | - | $ | - | $ | - | |||||||||||
Interest cost on projected benefit obligation | 505 | 564 | 609 | ||||||||||||||
Expected return on plan assets | (615 | ) | (584 | ) | (590 | ) | |||||||||||
Recognized actuarial loss | 495 | 482 | 287 | ||||||||||||||
Net periodic pension cost | $ | 385 | $ | 462 | $ | 306 | |||||||||||
Discount rate | 3.89 | % | 4.5 | % | 5.25 | % | |||||||||||
Expected return on plan assets | 6.5 | % | 6.5 | % | 6.5 | % | |||||||||||
Rate of compensation increase | N/A | N/A | N/A | ||||||||||||||
Estimated future benefit payments by fiscal year (in thousands): | |||||||||||||||||
4 | |||||||||||||||||
2014 | $ | 889 | |||||||||||||||
2015 | $ | 897 | |||||||||||||||
2016 | $ | 885 | |||||||||||||||
2017 | $ | 884 | |||||||||||||||
2018 | $ | 878 | |||||||||||||||
2019-2023 | $ | 4,170 | |||||||||||||||
As of December 31, 2013, the fair value of the plan assets was composed of cash and cash equivalents of $0.3 million, bonds and notes of $3.5 million and equity securities of $7.1 million. | |||||||||||||||||
Our investment objectives are to preserve capital and to achieve long-term growth through a favorable rate of return equal to or greater than 5% over the long-term (60 year) average inflation rate as measured by the consumer price index. The objective of the equity portion of the portfolio is to achieve a return in excess of the Standard & Poor’s 500 index. The objective of the fixed income portion of the portfolio is to add stability, consistency, safety and total return to the total fund portfolio. | |||||||||||||||||
We prohibit investments in options, futures, precious metals, short sales and purchase on margin. We also restrict the investment in fixed income securities to “A” rated or better by Moody’s or Standard & Poor’s rating services and restrict investments in common stocks to only those that are listed and actively traded on one or more of the major United States stock exchanges, including NASDAQ. We manage to an asset allocation of 45% to 75% in equity securities. An investment in any single stock issue is restricted to 5% of the total portfolio value and 90% of the securities held in mutual or commingled funds must meet the criteria for common stocks. | |||||||||||||||||
To develop the expected long-term rate of return on assets assumption, we consider the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This resulted in the selection of the 6.5% long-term rate of return on assets assumption. To develop the discount rate used in determining the benefit obligation we used the Mercer Yield Curve at the measurement date to match the timing and amounts of projected future benefits. | |||||||||||||||||
We estimate contributing $0.7 million to the defined benefit cash balance plan during 2014. We expect our 2014 periodic pension cost to be $(4) thousand, the components of which are interest cost of $0.5 million, expected return on plan assets of ($0.7) million and amortization of actuarial loss of $0.2 million. | |||||||||||||||||
The following table shows the weighted-average asset allocation for the defined benefit cash balance plan held as of December 31, 2013 and 2012. | |||||||||||||||||
12/31/13 | 12/31/12 | ||||||||||||||||
Asset Category: | |||||||||||||||||
Fixed income securities | 32 | % | 33 | % | |||||||||||||
Equity securities | 65 | % | 63 | % | |||||||||||||
Other | 3 | % | 4 | % | |||||||||||||
Total | 100 | % | 100 | % | |||||||||||||
Effective January 1, 2008, we determine the fair value of our financial instruments based on the fair value hierarchy established in ASC 820. (See Note 3.) | |||||||||||||||||
The following table presents, for each of the fair value hierarchy levels, our plan assets that are measured at fair value on a recurring basis at December 31, 2013 and December 31, 2012 (in thousands). | |||||||||||||||||
As of December 31, 2013 | |||||||||||||||||
Quoted Prices in | Other | ||||||||||||||||
Active Markets for | Observable | Unobservable | |||||||||||||||
Identical Assets | Inputs | Inputs | |||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||||
Debt securities | $ | - | $ | 3,448 | $ | - | $ | 3,448 | |||||||||
Equity securities | 7,080 | - | - | 7,080 | |||||||||||||
Total | $ | 7,080 | $ | 3,448 | $ | - | $ | 10,528 | |||||||||
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 | ||||||||||||||
Debt securities | $ | - | $ | 3,188 | $ | - | $ | 3,188 | |||||||||
Equity securities | 6,153 | - | - | 6,153 | |||||||||||||
Total | $ | 6,153 | $ | 3,188 | $ | - | $ | 9,341 | |||||||||
Our plan assets also include cash and cash equivalents of $0.3 million and $0.4 million at December 31, 2013 and 2012, respectively, and are carried at cost which approximates fair value. | |||||||||||||||||
We sponsor two defined contribution plans. Under these plans, employees may contribute a portion of their compensation on a tax-deferred basis, and we may contribute a discretionary amount each year. We contributed $0.3 million, $0.1 million and $0.2 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes [Abstract] | ' | ||||||||||||
Income Taxes | ' | ||||||||||||
Income Taxes: | |||||||||||||
15 | |||||||||||||
The composition of deferred tax assets and liabilities and the related tax effects as of December 31, 2013 and 2012, are as follows (in thousands): | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax liabilities: | |||||||||||||
Deferred policy acquisition costs | $ | (7,905 | ) | $ | (8,719 | ) | |||||||
Net unrealized holding gain on investments | (9,730 | ) | (5,622 | ) | |||||||||
Agency relationship | (85 | ) | (94 | ) | |||||||||
Intangible assets | (6,129 | ) | (6,852 | ) | |||||||||
Goodwill | (325 | ) | (116 | ) | |||||||||
Fixed assets | (499 | ) | (685 | ) | |||||||||
Other | (263 | ) | (275 | ) | |||||||||
Total deferred tax liabilities | (24,936 | ) | (22,363 | ) | |||||||||
Deferred tax assets: | |||||||||||||
Unearned premiums | 9,822 | 9,806 | |||||||||||
Alternative minimum tax | 442 | 1,651 | |||||||||||
Amortization of non-compete agreements | 417 | 476 | |||||||||||
Pension liability | 797 | 1,591 | |||||||||||
Net operating loss carry-forward | 611 | 702 | |||||||||||
Unpaid loss and loss adjustment expense | 8,173 | 7,549 | |||||||||||
Rent reserve | 366 | 363 | |||||||||||
Investment impairments | 660 | 1,256 | |||||||||||
Other | 823 | 909 | |||||||||||
Total deferred tax assets | 22,111 | 24,303 | |||||||||||
Deferred federal income taxes, net | $ | (2,825 | ) | $ | 1,940 | ||||||||
A reconciliation of the income tax provisions based on the statutory tax rate to the provision reflected in the consolidated financial statements for the years ended December 31, 2013, 2012 and 2011, is as follows (in thousands): | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Computed expected income tax expense (benefit) at statutory regulatory tax rate | $ | 3,878 | $ | 1,181 | $ | (6,926 | ) | ||||||
Meals and entertainment | 25 | 28 | 44 | ||||||||||
Tax exempt interest | (1,314 | ) | (1,631 | ) | (1,835 | ) | |||||||
Dividends received deduction | (101 | ) | (111 | ) | (99 | ) | |||||||
State taxes (net of federal benefit) | 276 | 298 | 84 | ||||||||||
Other | 71 | (239 | ) | (222 | ) | ||||||||
Income tax expense (benefit) | $ | 2,835 | $ | (474 | ) | $ | (8,954 | ) | |||||
Current income tax expense (benefit) | $ | 3,092 | $ | 2,377 | $ | (6,059 | ) | ||||||
Deferred tax benefit | (257 | ) | (2,851 | ) | (2,895 | ) | |||||||
Income tax expense (benefit) | $ | 2,835 | $ | (474 | ) | $ | (8,954 | ) | |||||
We have available, for federal income tax purposes, unused net operating loss of approximately $1.7 million at December 31, 2013. The losses were acquired as part of the HIC and HCM acquisitions and may be used to offset future taxable income. Utilization of the losses is limited under Internal Revenue Code Section 382. The Internal Revenue Code provides that effective with tax years beginning September 1997, the carry-back and carry-forward periods are 2 years and 20 years, respectively, with respect to newly generated operating losses. The net operating losses will expire if unused, as follows (in thousands): | |||||||||||||
Year | |||||||||||||
2021 | $ | 650 | |||||||||||
2022 | 878 | ||||||||||||
2028 | 2 | ||||||||||||
2030 | 25 | ||||||||||||
2031 | 45 | ||||||||||||
2032 | 77 | ||||||||||||
2033 | 70 | ||||||||||||
$ | 1,747 | ||||||||||||
We are no longer subject to U.S. federal, state, local or non-U.S. income tax examinations by tax authorities for years prior to 2010. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. There were no uncertain tax positions at December 31, 2013. | |||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies [Abstract] | ' | ||||
Commitments and Contingencies | ' | ||||
Commitments and Contingencies: | |||||
16 | |||||
We have several leases, primarily for office facilities and computer equipment, which expire in various years through 2022. Certain of these leases contain renewal options. Rental expense amounted to $2.2 million, $2.3 million and $2.0 million for the years ended December 31, 2013, 2012, and 2011, respectively. | |||||
Future minimum lease payments under non-cancelable operating leases as of December 31, 2013 are as follows (in thousands): | |||||
4 | |||||
Year | |||||
2014 | $ | 1,987 | |||
2015 | 1,969 | ||||
2016 | 1,641 | ||||
2017 | 1,484 | ||||
2018 | 1,193 | ||||
2019 and thereafter | 3,166 | ||||
Total minimum lease payments | $ | 11,440 | |||
From time to time, assessments are levied on us by the guaranty association of the states where we offer our insurance products. Such assessments are made primarily to cover the losses of policyholders of insolvent or rehabilitated insurers. Since these assessments can generally be recovered through a reduction in future premium taxes paid, we capitalize the assessments that can be recovered as they are paid and amortize the capitalized balance against our premium tax expense. We paid an assessment of $29 thousand in 2013. We paid an assessment of $0.1 million in 2012 that was expensed. There were no assessments during 2011. | |||||
In December 2010, HSU 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. 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 therefore 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. During the past year we have been engaged in conversations with the Comptroller’s counsel. We are currently in negotiations with the Comptroller to settle the matter. However, 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 December 31, 2013 related to this matter. | |||||
We are engaged in 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 | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Changes in Accumulated Other Comprehensive Income Balances [Abstract] | ' | ||||||||||||
Changes in Accumulated Other Comprehensive Income Balances | ' | ||||||||||||
Changes in Accumulated Other Comprehensive Income Balances: | |||||||||||||
17 | |||||||||||||
The changes in accumulated other comprehensive income balances as of December 31, 2013, 2012, and 2011 were as follows (in thousands): | |||||||||||||
Accumulated Other | |||||||||||||
Pension | Unrealized | Comprehensive | |||||||||||
Liability | Gains (Loss) | Income (Loss) | |||||||||||
Balance at January 1, 2011 | $ | (2,024 | ) | $ | 11,661 | $ | 9,637 | ||||||
Other comprehensive loss: | |||||||||||||
Change in net actuarial loss | (1,468 | ) | - | (1,468 | ) | ||||||||
Tax effect on change in net actuarial loss | 514 | - | 514 | ||||||||||
Unrealized holding gains arising during the period | - | 191 | 191 | ||||||||||
Tax effect on unrealized gains arising during the period | - | (67 | ) | (67 | ) | ||||||||
Reclassification adjustment for gains included in net realized gains | - | (3,633 | ) | (3,633 | ) | ||||||||
Tax effect on reclassification adjustment for gains included in income tax expense | - | 1,272 | 1,272 | ||||||||||
Other comprehensive loss, net of tax | (954 | ) | (2,237 | ) | (3,191 | ) | |||||||
Balance at December 31, 2011 | $ | (2,978 | ) | $ | 9,424 | $ | 6,446 | ||||||
Other comprehensive income: | |||||||||||||
Change in net actuarial gain | 37 | - | 37 | ||||||||||
Tax effect on change in net actuarial gain | (13 | ) | - | (13 | ) | ||||||||
Unrealized holding gains arising during the period | - | 4,388 | 4,388 | ||||||||||
Tax effect on unrealized gains arising during the period | - | (1,536 | ) | (1,536 | ) | ||||||||
Reclassification adjustment for gains included in net realized gains | - | (2,189 | ) | (2,189 | ) | ||||||||
Tax effect on reclassification adjustment for gains included in income tax expense | - | 766 | 766 | ||||||||||
Other comprehensive income, net of tax | 24 | 1,429 | 1,453 | ||||||||||
Balance at December 31, 2012 | $ | (2,954 | ) | $ | 10,853 | $ | 7,899 | ||||||
Other comprehensive income: | |||||||||||||
Change in net actuarial gain | 2,268 | - | 2,268 | ||||||||||
Tax effect on change in net actuarial gain | (794 | ) | - | (794 | ) | ||||||||
Unrealized holding gains arising during the period | - | 22,094 | 22,094 | ||||||||||
Tax effect on unrealized gains arising during the period | - | (7,733 | ) | (7,733 | ) | ||||||||
Reclassification adjustment for gains included in net realized gains | - | (10,540 | ) | (10,540 | ) | ||||||||
Tax effect on reclassification adjustment for gains included in income tax expense | - | 3,689 | 3,689 | ||||||||||
Other comprehensive income, net of tax | 1,474 | 7,510 | 8,984 | ||||||||||
Balance at December 31, 2013 | $ | (1,480 | ) | $ | 18,363 | $ | 16,883 | ||||||
Concentrations_of_Credit_Risk
Concentrations of Credit Risk | 12 Months Ended | ||
Dec. 31, 2013 | |||
Concentrations of Credit Risk [Abstract] | ' | ||
Concentrations of Credit Risk | ' | ||
18 | Concentrations of Credit Risk: | ||
We maintain cash and cash equivalents in accounts with seven financial institutions in excess of the amount insured by the Federal Deposit Insurance Corporation. We monitor the financial stability of the depository institutions regularly and do not believe excessive risk of depository institution failure existed at December 31, 2013. | |||
We are also subject to credit risk with respect to reinsurers to whom we have ceded underwriting risk. Although a reinsurer is liable for losses to the extent of the coverage it assumes, we remain obligated to our policyholders in the event that the reinsurers do not meet their obligations under the reinsurance agreements. In order to mitigate credit risk to reinsurance companies, we monitor the financial condition of reinsurers on an ongoing basis and review our reinsurance arrangements periodically. Most of our reinsurance recoverable balances as of December 31, 2013 were with reinsurers that had an A.M. Best rating of “A-” or better. We also mitigate our credit risk for the remaining reinsurance recoverable by obtaining letters of credit. | |||
Unaudited_Selected_Quarterly_F
Unaudited Selected Quarterly Financial Information | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Unaudited Selected Quarterly Financial Information [Abstract] | ' | ||||||||||||||||||||||||||||||||
Unaudited Selected Quarterly Financial Information | ' | ||||||||||||||||||||||||||||||||
Unaudited Selected Quarterly Financial Information: | |||||||||||||||||||||||||||||||||
19 | |||||||||||||||||||||||||||||||||
Following is a summary of the unaudited interim results of operations for the years ended December 31, 2013 and 2012 (in thousands, except per share data). In the opinion of management, all adjustments necessary to present fairly the results of operations for such periods have been made. | |||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | ||||||||||||||||||||||||||
Total revenue | $ | 93,141 | $ | 99,299 | $ | 108,613 | $ | 88,375 | $ | 82,986 | $ | 84,571 | $ | 85,620 | $ | 88,623 | |||||||||||||||||
Total expense | 90,978 | 104,616 | 99,141 | 83,613 | 82,769 | 88,722 | 80,599 | 86,336 | |||||||||||||||||||||||||
Income (loss) before tax | 2,163 | (5,317 | ) | 9,472 | 4,762 | 217 | (4,151 | ) | 5,021 | 2,287 | |||||||||||||||||||||||
Income tax expense (benefit) | 469 | (2,166 | ) | 3,198 | 1,334 | 23 | (2,351 | ) | 1,350 | 504 | |||||||||||||||||||||||
Net income (loss) | 1,694 | (3,151 | ) | 6,274 | 3,428 | 194 | (1,800 | ) | 3,671 | 1,783 | |||||||||||||||||||||||
Net income attributable to non-controlling interest | - | - | - | - | 23 | 43 | 258 | - | |||||||||||||||||||||||||
Net income (loss) attributable to Hallmark Financial Services, Inc. | $ | 1,694 | (3,151 | ) | $ | 6,274 | $ | 3,428 | $ | 171 | $ | (1,843 | ) | $ | 3,413 | $ | 1,783 | ||||||||||||||||
Basic earnings (loss) per share: | $ | 0.09 | $ | (0.16 | ) | $ | 0.33 | $ | 0.18 | $ | 0.01 | $ | (0.10 | ) | $ | 0.18 | $ | 0.09 | |||||||||||||||
Diluted earnings (loss) per share: | $ | 0.09 | $ | (0.16 | ) | $ | 0.32 | $ | 0.18 | $ | 0.01 | $ | (0.10 | ) | $ | 0.18 | $ | 0.09 | |||||||||||||||
Schedule_II_Condensed_Financia
Schedule II - Condensed Financial Information of Registrant (Parent Company Only) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | ' | |||||||||||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure | ' | |||||||||||||||||||||||||
Schedule II – Condensed Financial Information of Registrant (Parent Company Only) | ||||||||||||||||||||||||||
HALLMARK FINANCIAL SERVICES, INC. | ||||||||||||||||||||||||||
BALANCE SHEETS | ||||||||||||||||||||||||||
December 31, 2013 and 2012 | ||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | 8,063 | $ | 1,112 | ||||||||||||||||||||||
Investment in subsidiaries | 316,295 | 296,258 | ||||||||||||||||||||||||
Deferred federal income taxes | 930 | 2,112 | ||||||||||||||||||||||||
Other assets | 3,729 | 3,416 | ||||||||||||||||||||||||
$ | 329,017 | $ | 302,898 | |||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Revolving credit facility payable | $ | 1,473 | $ | 1,473 | ||||||||||||||||||||||
Subordinated debt securities | 56,702 | 56,702 | ||||||||||||||||||||||||
Current federal income tax payable | 3,353 | 7,047 | ||||||||||||||||||||||||
Accounts payable and other accrued expenses | 29,371 | 17,139 | ||||||||||||||||||||||||
90,899 | 82,361 | |||||||||||||||||||||||||
Stockholders’ equity: | ||||||||||||||||||||||||||
Common stock, $.18 par value, authorized 33,333,333 shares; issued 20,872,831 shares in 2013 and in 2012 | 3,757 | 3,757 | ||||||||||||||||||||||||
Capital in excess of par value | 122,827 | 122,475 | ||||||||||||||||||||||||
Retained earnings | 106,209 | 97,964 | ||||||||||||||||||||||||
Accumulated other comprehensive income | 16,883 | 7,899 | ||||||||||||||||||||||||
Treasury stock (1,609,374 shares in 2013 and 2012), at cost | (11,558 | ) | (11,558 | ) | ||||||||||||||||||||||
Total stockholders’ equity | 238,118 | 220,537 | ||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 329,017 | $ | 302,898 | ||||||||||||||||||||||
See accompanying report of independent registered public accounting firm. | ||||||||||||||||||||||||||
HALLMARK FINANCIAL SERVICES, INC. | ||||||||||||||||||||||||||
STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||||
For the years ended December 31, 2013, 2012 and 2011 | ||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||
Investment loss, net of expenses | $ | (190 | ) | $ | (181 | ) | $ | (194 | ) | |||||||||||||||||
Management fee income | 8,518 | 8,485 | 7,288 | |||||||||||||||||||||||
8,328 | 8,304 | 7,094 | ||||||||||||||||||||||||
Operating expenses | 7,764 | 8,079 | 7,851 | |||||||||||||||||||||||
Interest expense | 4,599 | 4,634 | 4,631 | |||||||||||||||||||||||
Amortization of intangible assets | - | 17 | 42 | |||||||||||||||||||||||
12,363 | 12,730 | 12,524 | ||||||||||||||||||||||||
Loss before equity in undistributed earnings (loss) of subsidiaries and income tax benefit | (4,035 | ) | (4,426 | ) | (5,430 | ) | ||||||||||||||||||||
Income tax benefit | (1,227 | ) | (1,627 | ) | (1,669 | ) | ||||||||||||||||||||
Loss before equity in undistributed earnings (loss) of subsidiaries | (2,808 | ) | (2,799 | ) | (3,761 | ) | ||||||||||||||||||||
Equity in undistributed share of earnings (loss) in subsidiaries | 11,053 | 6,323 | (7,130 | ) | ||||||||||||||||||||||
Net income (loss) | $ | 8,245 | $ | 3,524 | $ | (10,891 | ) | |||||||||||||||||||
Comprehensive income (loss) | $ | 17,229 | $ | 4,977 | $ | (14,082 | ) | |||||||||||||||||||
See accompanying report of independent registered public accounting firm. | ||||||||||||||||||||||||||
FINANCIAL STATEMENT SCHEDULES | ||||||||||||||||||||||||||
HALLMARK FINANCIAL SERVICES, INC. | ||||||||||||||||||||||||||
STATEMENTS OF CASH FLOWS | ||||||||||||||||||||||||||
For the years ended December 31, 2013, 2012 and 2011 | ||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||||
Net income (loss) | $ | 8,245 | $ | 3,524 | $ | (10,891 | ) | |||||||||||||||||||
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||||||||||||||||||||||||||
Depreciation and amortization expense | 92 | 113 | 168 | |||||||||||||||||||||||
Deferred income tax expense (benefit) | 1,182 | (1,725 | ) | (215 | ) ) | ) | ||||||||||||||||||||
Undistributed share of (earnings) loss of subsidiaries | (11,053 | ) | (6,323 | ) | 7,130 | ) | ||||||||||||||||||||
Change in current federal income tax (recoverable)payable | (3,694 | ) | 4,030 | (4,838 | ) ) | ) | ||||||||||||||||||||
Change in all other liabilities | 12,232 | 357 | 5,155 | ) | ||||||||||||||||||||||
Change in all other assets | 63 | 450 | 1,074 | |||||||||||||||||||||||
Net cash provided by (used in) operating activities | 7,067 | 426 | (2,417 | ) ) | ||||||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||||
Purchases of property and equipment, net | (116 | ) | (46 | ) | (205 | ) ) | ) | |||||||||||||||||||
Net cash used in investing activities | (116 | ) | (46 | ) | (205 | ) ) | ||||||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||||
Proceeds from exercise of employee stock options | - | - | 99 | |||||||||||||||||||||||
Purchase of treasury shares | - | - | (6,401 | ) ) | ||||||||||||||||||||||
Activity under revolving credit facility, net | - | (2,577 | ) | 1,250 | ||||||||||||||||||||||
Net cash used in financing activities | - | (2,577 | ) | (5,052 | ) ) | |||||||||||||||||||||
Increase (decrease) in cash and cash equivalents | 6,951 | (2,197 | ) | (7,674 | ) ) | |||||||||||||||||||||
Cash and cash equivalents at beginning of year | 1,112 | 3,309 | 10,983 | |||||||||||||||||||||||
Cash and cash equivalents at end of year | $ | 8,063 | $ | 1,112 | $ | 3,309 | ||||||||||||||||||||
Supplemental cash flow information: | ||||||||||||||||||||||||||
Interest paid | $ | (4,599 | ) | $ | (4,656 | ) | $ | (4,620 | ) ) | ) | ||||||||||||||||
Income taxes (paid) recovered | $ | (1,285 | ) | $ | 3,932 | $ | (3,383 | ) ) | ||||||||||||||||||
See accompanying report of independent registered public accounting firm. | ||||||||||||||||||||||||||
Schedule_III_Supplementary_Ins
Schedule III -Supplementary Insurance Information | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||||||
Supplementary Insurance Information [Abstract] | ' | ||||||||||||||||||||||||||||||||||||||||
Supplementary Insurance Information | ' | ||||||||||||||||||||||||||||||||||||||||
Schedule III - Supplementary Insurance Information | |||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | Column G | Column H | Column I | Column J | Column K | |||||||||||||||||||||||||||||||
Segment | Deferred | Future | Unearned | Other | Premium | Net | Benefits, | Amortization | Other | Net | |||||||||||||||||||||||||||||||
Policy | Policy | Premiums | Policy | Revenue | Investment | Claims, Losses | of Deferred | Operating | Premiums | ||||||||||||||||||||||||||||||||
Acquisition | Benefits, | Claims | Income | and Settlement | Policy | Expenses | Written | ||||||||||||||||||||||||||||||||||
Costs | Losses, | and Benefits | Expenses | Acquisition | |||||||||||||||||||||||||||||||||||||
Claims and | Payable | Costs | |||||||||||||||||||||||||||||||||||||||
Loss | |||||||||||||||||||||||||||||||||||||||||
Adjustment | |||||||||||||||||||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||||||||||
2013 | |||||||||||||||||||||||||||||||||||||||||
Personal Segment | $ | 660 | $ | 38,294 | $ | 17,989 | $ | - | $ | 63,800 | $ | 2,065 | $ | 52,656 | $ | 17,759 | $ | 16,957 | $ | 45,644 | |||||||||||||||||||||
Standard Commercial Segment | 6,124 | 111,473 | 36,309 | - | 78,176 | 5,031 | 56,143 | 8,254 | 25,313 | 79,466 | |||||||||||||||||||||||||||||||
Specialty Commercial Segment | 15,802 | 232,873 | 131,005 | - | 218,565 | 11,021 | 152,546 | 31,264 | 56,974 | 235,655 | |||||||||||||||||||||||||||||||
Corporate | - | - | - | - | - | (5,233 | ) | - | - | 7,720 | - | ||||||||||||||||||||||||||||||
Consolidated | $ | 22,586 | $ | 382,640 | $ | 185,303 | $ | - | $ | 360,541 | $ | 12,884 | $ | 261,345 | $ | 57,277 | $ | 106,964 | $ | 360,765 | |||||||||||||||||||||
2012 | |||||||||||||||||||||||||||||||||||||||||
Personal Segment | $ | 4,952 | $ | 40,387 | $ | 21,125 | $ | - | $ | 81,451 | $ | 2,449 | $ | 69,606 | $ | 17,250 | $ | 26,413 | $ | 76,345 | |||||||||||||||||||||
Standard Commercial Segment | 5,968 | 103,610 | 35,073 | - | 69,155 | 4,925 | 52,828 | 10,825 | 22,742 | 70,091 | |||||||||||||||||||||||||||||||
Specialty Commercial Segment | 13,991 | 169,419 | 106,304 | - | 168,830 | 9,435 | 103,980 | 31,730 | 49,170 | 186,053 | |||||||||||||||||||||||||||||||
Corporate | - | - | - | - | - | (1,516 | ) | - | - | 7,825 | - | ||||||||||||||||||||||||||||||
Consolidated | $ | 24,911 | $ | 313,416 | $ | 162,502 | $ | - | $ | 319,436 | $ | 15,293 | $ | 226,414 | $ | 59,805 | $ | 106,150 | $ | 332,489 | |||||||||||||||||||||
2011 | |||||||||||||||||||||||||||||||||||||||||
Personal Segment | $ | 6,020 | $ | 53,280 | $ | 26,307 | $ | - | $ | 92,962 | $ | 2,470 | $ | 101,030 | $ | 13,865 | $ | 29,706 | $ | 95,655 | |||||||||||||||||||||
Standard Commercial Segment | 5,976 | 100,487 | 32,854 | - | 64,586 | 4,061 | 50,940 | 12,721 | 20,589 | 63,944 | |||||||||||||||||||||||||||||||
Specialty Commercial Segment | 10,558 | 143,178 | 86,943 | - | 135,493 | 7,416 | 87,265 | 21,189 | 39,471 | 144,277 | |||||||||||||||||||||||||||||||
Corporate | - | - | - | - | - | 1,933 | - | - | 6,962 | - | |||||||||||||||||||||||||||||||
Consolidated | $ | 22,554 | $ | 296,945 | $ | 146,104 | $ | - | $ | 293,041 | $ | 15,880 | $ | 239,235 | $ | 47,775 | $ | 96,728 | $ | 303,876 | |||||||||||||||||||||
See accompanying report of independent registered public accounting firm. | |||||||||||||||||||||||||||||||||||||||||
Schedule_IV_Reinsurance
Schedule IV -Reinsurance | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Supplemental Schedule of Reinsurance Premiums For Insurance Companies [Abstract] | ' | ||||||||||||||||||||||||||||||||
Reinsurance | ' | ||||||||||||||||||||||||||||||||
Schedule IV – Reinsurance | |||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | ||||||||||||||||||||||||||||
Gross | Ceded to | Assumed | Net | Percentage | |||||||||||||||||||||||||||||
Amount | Other | From Other | Amount | of Amount | |||||||||||||||||||||||||||||
Year Ended December 31, 2013 | Companies | Companies | Assumed to Net | ||||||||||||||||||||||||||||||
Life insurance in force | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||
Premiums | |||||||||||||||||||||||||||||||||
Life insurance | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||
Accident and health insurance | - | - | - | - | |||||||||||||||||||||||||||||
Property and liability insurance | 434,022 | 76,685 | 3,204 | 360,541 | 0.89 | % | |||||||||||||||||||||||||||
Title Insurance | - | - | - | - | |||||||||||||||||||||||||||||
Total premiums | $ | 434,022 | $ | 76,685 | $ | 3,204 | $ | 360,541 | 0.89 | % | |||||||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||||||||
Life insurance in force | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||
Premiums | |||||||||||||||||||||||||||||||||
Life insurance | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||
Accident and health insurance | - | - | - | - | |||||||||||||||||||||||||||||
Property and liability insurance | 369,735 | 54,413 | 4,114 | 319,436 | 1.29 | % | |||||||||||||||||||||||||||
Title Insurance | - | - | - | - | |||||||||||||||||||||||||||||
Total premiums | $ | 369,735 | $ | 54,413 | $ | 4,114 | $ | 319,436 | 1.29 | % | |||||||||||||||||||||||
Year Ended December 31, 2011 | |||||||||||||||||||||||||||||||||
Life insurance in force | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||
Premiums | |||||||||||||||||||||||||||||||||
Life insurance | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||
Accident and health insurance | - | - | - | - | |||||||||||||||||||||||||||||
Property and liability insurance | 344,642 | 57,039 | 5,438 | 293,041 | 1.86 | % | |||||||||||||||||||||||||||
Title Insurance | - | - | - | - | |||||||||||||||||||||||||||||
Total premiums | $ | 344,642 | $ | 57,039 | $ | 5,438 | $ | 293,041 | 1.86 | % | |||||||||||||||||||||||
See accompanying report of independent registered public accounting firm. | |||||||||||||||||||||||||||||||||
Schedule_VI_Supplemental_Infor
Schedule VI -Supplemental Information Concerning Property-Casualty Insurance Operations | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||
Supplemental Information For Property, Casualty Insurance Underwriters [Abstract] | ' | |||||||||||||||||||||||||||||||||||||||||||
Supplemental Information Concerning Property-Casualty Insurance Operations | ' | |||||||||||||||||||||||||||||||||||||||||||
FINANCIAL STATEMENT SCHEDULES | ||||||||||||||||||||||||||||||||||||||||||||
Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations | ||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | Column G | Column H | Column I | Column J | Column K | ||||||||||||||||||||||||||||||||||
Affiliation | Deferred | Reserves | Discount | Unearned | Earned | Net | Claims and Claim | Amortization | Paid | Net Premiums | ||||||||||||||||||||||||||||||||||
Adjustment | ||||||||||||||||||||||||||||||||||||||||||||
With | Policy | for Unpaid | if any, | Premiums | Premiums | Investment | Expenses Incurred Related to | of Deferred | Claims and | Written | ||||||||||||||||||||||||||||||||||
Registrant | Acquisition | Claims and | Deducted | Income | -1 | -2 | Policy | Claims | ||||||||||||||||||||||||||||||||||||
Costs | Claim Adjustment | In Column C | Current | Prior | Acquisition | Adjustment | ||||||||||||||||||||||||||||||||||||||
Expenses | Year | Years | Costs | Expenses | ||||||||||||||||||||||||||||||||||||||||
(a) Consolidated | ||||||||||||||||||||||||||||||||||||||||||||
property-casualty | ||||||||||||||||||||||||||||||||||||||||||||
Entities | ||||||||||||||||||||||||||||||||||||||||||||
2013 | $ | 22,586 | $ | 382,640 | $ | - | $ | 185,303 | $ | 360,541 | $ | 12,884 | $ | 251,391 | $ | 9,954 | $ | 57,277 | $ | 212,709 | $ | 360,765 | ||||||||||||||||||||||
2012 | $ | 24,911 | $ | 313,416 | $ | - | $ | 162,502 | $ | 319,436 | $ | 15,293 | $ | 230,089 | $ | (3,675 | ) | $ | 59,805 | $ | 217,483 | $ | 332,489 | |||||||||||||||||||||
2011 | $ | 22,554 | $ | 296,945 | $ | - | $ | 146,104 | $ | 293,041 | $ | 15,880 | $ | 222,869 | $ | 16,366 | $ | 47,775 | $ | 206,873 | $ | 303,876 | ||||||||||||||||||||||
See accompanying report of independent registered public accounting firm. | ||||||||||||||||||||||||||||||||||||||||||||
Accounting_Policies_Policies
Accounting Policies (Policies) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
General | ' | |||||||||||||
General | ||||||||||||||
Hallmark Financial Services, Inc. (“Hallmark” and, together with subsidiaries, the “Company”, “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 primarily 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 and is comprised of American Hallmark Insurance Services, Inc. (“American Hallmark Insurance Services”) and Effective Claims Management, Inc. (“ECM”). Our Workers Compensation business unit specializes in small and middle market workers compensation business and is comprised of TBIC Holding Corporation, Inc. (“TBIC Holding”), Texas Builders Insurance Company (“TBIC”) and TBIC Risk Management (“TBICRM”). The subsidiaries comprising our Workers Compensation business unit were acquired July 1, 2011. Our E&S Commercial business unit handles primarily commercial insurance products and services and is comprised of Hallmark Specialty Underwriters, Inc. (“HSU”), Pan American Acceptance Corporation (“PAAC”) and TGA Special Risk, Inc. (“TGASRI”). Our Hallmark Select business unit offers (i) general aviation insurance products and services, (ii) low and middle market commercial umbrella and excess liability insurance, (iii) medical professional liability insurance products and services, and (iv) satellite launch insurance products. Our Hallmark Select business unit is the combination of our operations previously known as our General Aviation business unit, our Excess & Umbrella business unit, the medical professional liability business previously handled by our E&S Commercial business unit and the satellite launch insurance products previously managed at the parent level. Our Hallmark Select business unit is comprised of Aerospace Insurance Managers, Inc. (“Aerospace Insurance Managers”), Aerospace Special Risk, Inc. (“ASRI”), Aerospace Claims Management Group, Inc. (“ACMG”), Heath XS, LLC (“HXS”) and Hardscrabble Data Solutions, LLC (“HDS”). Our Personal Lines business unit handles personal insurance products and services and is comprised of American Hallmark General Agency, Inc. and Hallmark Claims Services, Inc. (both of which do business as Hallmark Insurance Company). Our insurance company subsidiaries supporting these business 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 TBIC. | ||||||||||||||
These five business units are segregated into three reportable industry segments for financial accounting purposes. The Standard Commercial Segment includes our Standard Commercial P&C business unit and our Workers Compensation business unit. The Specialty Commercial Segment includes our E&S Commercial business unit and our Hallmark Select business unit, as well as certain specialty risk programs (“Specialty Programs”) which are managed by Hallmark. The Personal Segment presently consists solely of our Personal Lines business unit. | ||||||||||||||
Basis of Presentation | ' | |||||||||||||
Basis of Presentation | ||||||||||||||
The accompanying consolidated financial statements include the accounts and operations of Hallmark and its subsidiaries. Intercompany accounts and transactions have been eliminated. The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) which, as to our insurance company subsidiaries, differ from statutory accounting practices prescribed or permitted for insurance companies by insurance regulatory authorities. | ||||||||||||||
Use of Estimates in the Preparation of Financial Statements | ' | |||||||||||||
Use of Estimates in the Preparation of Financial Statements | ||||||||||||||
Our preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect our reported amounts of assets and liabilities at the dates of the financial statements and our reported amounts of revenues and expenses during the reporting periods. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. Since future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment may be reflected in the financial statements in future periods. | ||||||||||||||
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 approximates the fair value based on the current interest rate. | ||||||||||||||
Subordinated debt securities: Our trust preferred securities are reported at carry value of $56.7 million and $56.7 million, and have a fair value of $53.2 million and $48.2 million, as of December 31, 2013 and 2012, respectively. The fair value of our trust preferred securities is based on discounted cash flows using current yields to maturity of 8.0% and 8.0% as of December 31, 2013 and 2012, respectively, which are based on similar issues to discount future cash flows and 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. | ||||||||||||||
Investments | ' | |||||||||||||
Investments | ||||||||||||||
Debt and equity securities available for sale are reported at fair value. Unrealized gains and losses are recorded as a component of stockholders’ equity, net of related tax effects. Equity securities that are determined to have other-than-temporary impairment are recognized as a loss on investments in the consolidated statements of operations. Debt securities that are determined to have other-than-temporary impairment are recognized as a loss on investments in the consolidated statements of operations for the portion that is related to credit deterioration with the remaining portion recognized in other comprehensive income. Debt security premiums and discounts are amortized into earnings using the effective interest method. Maturities of debt securities and sales of equity securities are recorded in receivable for securities until the cash is settled. Purchases of debt and equity securities are recorded in payable for securities until the cash is settled. | ||||||||||||||
Realized investment gains and losses are recognized in operations on the specific identification method. | ||||||||||||||
Cash and Cash Equivalents | ' | |||||||||||||
Cash and Cash Equivalents | ||||||||||||||
We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. | ||||||||||||||
Restricted Cash | ' | |||||||||||||
Restricted Cash | ||||||||||||||
We collect premiums from customers and, after deducting authorized commissions, remit these premiums to the Company’s consolidated insurance subsidiaries. Unremitted insurance premiums are held in a fiduciary capacity until disbursed to the Company’s consolidated insurance subsidiaries. | ||||||||||||||
Premiums Receivable | ' | |||||||||||||
Premiums Receivable | ||||||||||||||
Premiums receivable represent amounts due from policyholders or independent agents for premiums written and uncollected. These balances are carried at net realizable value. | ||||||||||||||
Reinsurance | ' | |||||||||||||
Reinsurance | ||||||||||||||
We are routinely involved in reinsurance transactions with other companies. Reinsurance premiums, losses and loss adjustment expenses (“LAE”) are accounted for on bases consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. (See Note 7.) | ||||||||||||||
Deferred Policy Acquisition Costs | ' | |||||||||||||
Deferred Policy Acquisition Costs | ||||||||||||||
Policy acquisition costs (mainly commission, underwriting and marketing expenses) that are directly related to the successful acquisition of new and renewal insurance contracts are deferred and charged to operations over periods in which the related premiums are earned. The method followed in computing deferred policy acquisition costs limits the amount of such deferred costs to their estimated realizable value. In determining estimated realizable value, the computation gives effect to the premium to be earned, expected investment income, losses and LAE and certain other costs expected to be incurred as the premiums are earned. If the computation results in an estimated net realizable value less than zero, a liability will be accrued for the premium deficiency. During 2013, 2012 and 2011, we deferred $55.0 million, $62.2 million and $49.4 million of policy acquisition costs and amortized $57.3 million, $59.8 million and $47.8 million of deferred policy acquisition costs, respectively. Therefore, the net (amortization) deferrals of policy acquisition costs were ($2.3) million, $2.4 million and $1.6 million for 2013, 2012 and 2011, respectively. | ||||||||||||||
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. | ||||||||||||||
Goodwill and Intangible Assets, net | ' | |||||||||||||
Goodwill and Intangible Assets, net | ||||||||||||||
We account for our goodwill and intangible assets according to ASC 350, “Intangibles – Goodwill and Other.” ASC 350 (1) prohibits the amortization of goodwill and indefinite-lived intangible assets, (2) requires testing of goodwill and indefinite-lived intangible assets on an annual basis for impairment (and more frequently if the occurrence of an event or circumstance indicates an impairment), (3) requires testing of definite-lived intangible assets if the occurrence of an event or circumstances indicates an impairment, (4) requires that reporting units be identified for the purpose of assessing potential future impairments of goodwill, and (5) removes the forty-year limitation on the amortization period of intangible assets that have finite lives. We have elected to perform our goodwill impairment test on the first day of the fourth quarter, October 1, of each year. | ||||||||||||||
Leases | ' | |||||||||||||
Leases | ||||||||||||||
We have several leases, primarily for office facilities and computer equipment, which expire in various years through 2022. Some of these leases include rent escalation provisions throughout the term of the lease. We expense the average annual cost of the lease with the difference to the actual rent invoices recorded as deferred rent which is classified in accounts payable and other accrued expenses on our consolidated balance sheets. | ||||||||||||||
Property and Equipment | ' | |||||||||||||
Property and Equipment | ||||||||||||||
Property and equipment (including leasehold improvements), aggregating $14.7 million and $13.6 million, at December 31, 2013 and 2012, respectively, which is included in other assets, is recorded at cost and is depreciated using the straight-line method over the estimated useful lives of the assets (three to ten years). Depreciation expense for 2013, 2012 and 2011 was $1.2 million, $1.2 million and $1.5 million, respectively. Accumulated depreciation was $12.6 million and $11.4 million at December 31, 2013 and 2012, respectively. | ||||||||||||||
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 Trust II (collectively, (the “Trusts”)) and we do not have variable interests in the Trusts. Therefore, the Trusts are not consolidated in our consolidated financial statements. | ||||||||||||||
We are also involved in the normal course of business with variable interest entities primarily as a passive investor in mortgage-backed securities and certain collateralized corporate bank loans issued by third party variable interest entities. The maximum exposure to loss with respect to these investments is limited to the investment carrying values included in the consolidated balance sheets. | ||||||||||||||
Losses and Loss Adjustment Expenses | ' | |||||||||||||
Losses and Loss Adjustment Expenses | ||||||||||||||
Losses and LAE represent the estimated ultimate net cost of all reported and unreported losses incurred through December 31, 2013, 2012 and 2011. The reserves for unpaid losses and LAE are estimated using individual case-basis valuations and statistical analyses. These estimates are subject to the effects of trends in loss severity and frequency. Although considerable variability is inherent in such estimates, we believe that the reserves for unpaid losses and LAE are adequate. The estimates are continually reviewed and adjusted as experience develops or new information becomes known. Such adjustments are included in current operations. | ||||||||||||||
Redeemable Non-Controlling Interest | ' | |||||||||||||
Redeemable Non-Controlling Interest | ||||||||||||||
We accreted the redeemable non-controlling interest to its redemption value from the date of issuance to the redemption date using the interest method. Changes in redemption value were considered a change in accounting estimate. We followed the two class method of computing earnings per share. We treated only the portion of the periodic adjustment to the redeemable non-controlling interest carrying amount that reflects a redemption in excess of fair value as being akin to an actual dividend. Effective September 30, 2012, we exercised our call option and acquired the remaining 20% membership interests in the subsidiaries for $1.7 million. | ||||||||||||||
Activity related to non-controlling interest for the years ended December 31, 2013 and 2012 is as follows (in thousands): | ||||||||||||||
2013 | 2012 | |||||||||||||
Beginning balance | $ | - | $ | 1,284 | ||||||||||
Accretion of redeemable non-controlling interest | - | 392 | ||||||||||||
Net income attributable to non-controlling interest | - | 324 | ||||||||||||
Distribution to non-controlling interest | - | (281 | ) | |||||||||||
Redemption of non-controlling interest | - | (1,700 | ) | |||||||||||
Other | - | (19 | ) | |||||||||||
Ending balance | $ | - | $ | - | ||||||||||
Recognition of Premium Revenues | ' | |||||||||||||
Recognition of Premium Revenues | ||||||||||||||
Insurance premiums are earned pro rata over the terms of the policies. Insurance policy fees are earned as of the effective date of the policy. Upon cancellation, any unearned premium is refunded to the insured. Insurance premiums written include gross policy fees of $13.2 million, $11.8 million and $13.5 million for the years ended December 31, 2013, 2012, and 2011, respectively. Insurance premiums on monthly reporting workers’ compensation policies are earned on the conclusion of the monthly coverage period. Deposit premiums for workers’ compensation policies are earned upon the expiration of the policy. | ||||||||||||||
Finance Charges | ' | |||||||||||||
Finance Charges | ||||||||||||||
We receive premium installment fees for each direct bill payment from policyholders. Installment fee income is classified as finance charges on the consolidated statement of operations and is recognized as the fee is invoiced. | ||||||||||||||
Relationship with Third Party Insurers | ' | |||||||||||||
Relationship with Third Party Insurers | ||||||||||||||
Through December 31, 2005, our Standard Commercial P&C business unit marketed policies on behalf of Clarendon National Insurance Company (“Clarendon”), a third-party insurer. Through December 31, 2008, all business of our E&S Commercial business unit was produced under a fronting agreement with member companies of the Republic Group (“Republic”), a third-party insurer. These insurance contracts on third party paper are accounted for under agency accounting. Ceding commissions and other fees received under these arrangements were classified as unearned commission revenue until earned pro rata over the terms of the policies. | ||||||||||||||
Recognition of Commission Revenues of Our Standard and Specialty Commercial Segments | ' | |||||||||||||
Profit sharing commission is calculated and recognized when the loss ratio, as determined by a qualified actuary, deviates from contractual targets. We received a provisional commission as policies were produced as an advance against the later determination of the profit sharing commission actually earned. The profit sharing commission is an estimate that varies with the estimated loss ratio and is sensitive to changes in that estimate. Profit share commission is classified as commissions and fees on the consolidated statement of operations | ||||||||||||||
The following table details the profit sharing commission provisional loss ratio compared to the estimated ultimate loss ratio for each effective quota share treaty between the Standard Commercial P&C business unit and Clarendon. | ||||||||||||||
Treaty Effective Dates | ||||||||||||||
7/1/01 | 7/1/02 | 7/1/03 | 7/1/04 | |||||||||||
Provisional loss ratio | 60.0 | % | 59.0 | % | 59.0 | % | 64.2 | % | ||||||
Estimated ultimate loss ratio recorded to at December 31, 2013 | 63.5 | % | 64.5 | % | 60.9 | % | 63.7 | % | ||||||
As of December 31, 2013, we had a net receivable of $0.1 million on these profit share treaties. The payable or receivable is the difference between the cash received to date and the recognized commission revenue based on the estimated ultimate loss ratio. | ||||||||||||||
The following table details the profit sharing commission revenue provisional loss ratio compared to the estimated ultimate loss ratio for the effective quota share treaty between the E&S Commercial business unit and Republic. | ||||||||||||||
Treaty Effective Dates | ||||||||||||||
1/1/06 | 1/1/07 | 1/1/08 | ||||||||||||
Provisional loss ratio | 65.0 | % | 65.0 | % | 65.0 | % | ||||||||
Estimated ultimate loss ratio recorded to at December 31, 2013 | 58.6 | % | 63.2 | % | 59.0 | % | ||||||||
As of December 31, 2013, we had a net payable of $1.2 million on these profit share treaties. The payable or receivable is the difference between the cash received to date and the recognized commission revenue based on the estimated ultimate loss ratio. | ||||||||||||||
Agent Commissions | ' | |||||||||||||
Agent Commissions | ||||||||||||||
We pay monthly commissions to agents based on written premium produced, but generally recognize the expense pro rata over the term of the policy. If the policy is cancelled prior to its expiration, the unearned portion of the agent commission is refundable to us. The unearned portion of commissions paid to agents is included in deferred policy acquisition costs. Commission expenses related to the insurance policies issued by our Hallmark Select business unit for third party insurance carriers and not assumed by our insurance company subsidiaries are recognized as of the effective date of the policy. | ||||||||||||||
We annually pay a profit sharing commission to our independent agency force based upon the results of the business produced by each agent. We estimate and accrue this liability to commission expense in the year the business is produced. | ||||||||||||||
Commission expense is classified as other operating expenses in the consolidated statement of operations. | ||||||||||||||
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 basis 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. | ||||||||||||||
Earnings Per Share | ' | |||||||||||||
Earnings Per Share | ||||||||||||||
The computation of earnings per share is based upon the weighted average number of common shares outstanding during the period plus the effect of common shares potentially issuable (in periods in which they have a dilutive effect), primarily from stock options. (See Notes 11 and 13.) | ||||||||||||||
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. | ||||||||||||||
Accounting_Policies_Tables
Accounting Policies (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Activity Related to Non-Controlling Interest | ' | |||||||||||||
Activity related to non-controlling interest for the years ended December 31, 2013 and 2012 is as follows (in thousands): | ||||||||||||||
2013 | 2012 | |||||||||||||
Beginning balance | $ | - | $ | 1,284 | ||||||||||
Accretion of redeemable non-controlling interest | - | 392 | ||||||||||||
Net income attributable to non-controlling interest | - | 324 | ||||||||||||
Distribution to non-controlling interest | - | (281 | ) | |||||||||||
Redemption of non-controlling interest | - | (1,700 | ) | |||||||||||
Other | - | (19 | ) | |||||||||||
Ending balance | $ | - | $ | - | ||||||||||
Schedule of Profit Sharing Commission | ' | |||||||||||||
The following table details the profit sharing commission provisional loss ratio compared to the estimated ultimate loss ratio for each effective quota share treaty between the Standard Commercial P&C business unit and Clarendon. | ||||||||||||||
Treaty Effective Dates | ||||||||||||||
7/1/01 | 7/1/02 | 7/1/03 | 7/1/04 | |||||||||||
Provisional loss ratio | 60.0 | % | 59.0 | % | 59.0 | % | 64.2 | % | ||||||
Estimated ultimate loss ratio recorded to at December 31, 2013 | 63.5 | % | 64.5 | % | 60.9 | % | 63.7 | % | ||||||
The following table details the profit sharing commission revenue provisional loss ratio compared to the estimated ultimate loss ratio for the effective quota share treaty between the E&S Commercial business unit and Republic. | ||||||||||||||
Treaty Effective Dates | ||||||||||||||
1/1/06 | 1/1/07 | 1/1/08 | ||||||||||||
Provisional loss ratio | 65.0 | % | 65.0 | % | 65.0 | % | ||||||||
Estimated ultimate loss ratio recorded to at December 31, 2013 | 58.6 | % | 63.2 | % | 59.0 | % | ||||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Investments [Abstract] | ' | ||||||||||||||||||||||||
Amortized Cost and Estimated Fair Value of Investments in Debt and Equity Securities | ' | ||||||||||||||||||||||||
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 December 31, 2013 | Cost | Gains | Losses | Value | |||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government | $ | 78,894 | $ | 24 | $ | (165 | ) | $ | 78,753 | ||||||||||||||||
Corporate bonds | 42,946 | 1,379 | (450 | ) | 43,875 | ||||||||||||||||||||
Collateralized corporate bank loans | 102,053 | 614 | (489 | ) | 102,178 | ||||||||||||||||||||
Municipal bonds | 156,950 | 2,577 | (1,975 | ) | 157,552 | ||||||||||||||||||||
Mortgage-backed | 27,784 | 460 | (507 | ) | 27,737 | ||||||||||||||||||||
Total debt securities | 408,627 | 5,054 | (3,586 | ) | 410,095 | ||||||||||||||||||||
Total equity securities | 24,902 | 26,642 | (314 | ) | 51,230 | ||||||||||||||||||||
Total debt and equity securities | $ | 433,529 | $ | 31,696 | $ | (3,900 | ) | $ | 461,325 | ||||||||||||||||
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 | ||||||||||||||||||||
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 Investment Income | ' | ||||||||||||||||||||||||
Major categories of net investment income are summarized as follows (in thousands): | |||||||||||||||||||||||||
Twelve Months Ended | |||||||||||||||||||||||||
31-Dec | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government | $ | 143 | $ | 53 | $ | 115 | |||||||||||||||||||
Corporate bonds | 2,341 | 4,218 | 3,851 | ||||||||||||||||||||||
Collateralized corporate bank loans | 4,653 | 5,261 | 5,284 | ||||||||||||||||||||||
Municipal bonds | 5,245 | 5,616 | 6,632 | ||||||||||||||||||||||
Mortgage-backed | 737 | 106 | 86 | ||||||||||||||||||||||
Equity securities | 484 | 534 | 484 | ||||||||||||||||||||||
Cash and cash equivalents | 157 | 246 | 163 | ||||||||||||||||||||||
13,760 | 16,034 | 16,615 | |||||||||||||||||||||||
Investment expenses | (876 | ) | (741 | ) | (735 | ) | |||||||||||||||||||
Investment income, net of expenses | $ | 12,884 | $ | 15,293 | $ | 15,880 | |||||||||||||||||||
Major Categories of Net Realized Gains on Investments | ' | ||||||||||||||||||||||||
Major categories of net realized gains on investments are summarized as follows (in thousands): | |||||||||||||||||||||||||
Twelve Months Ended | |||||||||||||||||||||||||
31-Dec | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government | $ | - | $ | - | $ | 35 | |||||||||||||||||||
Corporate bonds | 853 | 13 | 300 | ||||||||||||||||||||||
Collateralized corporate bank loans | 373 | 391 | 699 | ||||||||||||||||||||||
Municipal bonds | (156 | ) | (441 | ) | (500 | ) | |||||||||||||||||||
Equity securities | 9,470 | 2,226 | 3,099 | ||||||||||||||||||||||
Net realized gain | 10,540 | 2,189 | 3,633 | ||||||||||||||||||||||
Other-than-temporary impairments | - | (246 | ) | - | |||||||||||||||||||||
Gain on investments | $ | 10,540 | $ | 1,943 | $ | 3,633 | |||||||||||||||||||
Summary of Gross 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 December 31, 2013 and December 31, 2012 (in thousands): | |||||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||
12 months or less | Longer than 12 months | Total | |||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||
U.S. Treasury securities and | |||||||||||||||||||||||||
obligations of U.S. Government | $ | 47,162 | $ | (165 | ) | $ | - | $ | - | $ | 47,162 | $ | (165 | ) | |||||||||||
Corporate bonds | 5,649 | (56 | ) | 4,421 | (394 | ) | 10,070 | (450 | ) | ||||||||||||||||
Collateralized corporate bank loans | 23,026 | (422 | ) | 6,968 | (67 | ) | 29,994 | (489 | ) | ||||||||||||||||
Municipal bonds | 35,719 | (413 | ) | 34,684 | (1,562 | ) | 70,403 | (1,975 | ) | ||||||||||||||||
Mortgage-backed | 1,383 | (229 | ) | 4,840 | (278 | ) | 6,223 | (507 | ) | ||||||||||||||||
Total debt securities | 112,939 | (1,285 | ) | 50,913 | (2,301 | ) | 163,852 | (3,586 | ) | ||||||||||||||||
Total equity securities | 316 | (2 | ) | 2,721 | (312 | ) | 3,037 | (314 | ) | ||||||||||||||||
Total debt and equity securities | $ | 113,255 | $ | (1,287 | ) | $ | 53,634 | $ | (2,613 | ) | $ | 166,889 | $ | (3,900 | ) | ||||||||||
As of December 31, 2012 | |||||||||||||||||||||||||
12 months or less | Longer than 12 months | Total | |||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized 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 | ) | ||||||||||||||||
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 | ' | ||||||||||||||||||||||||
The amortized cost and estimated fair value of debt securities at December 31, 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 | $ | 71,490 | $ | 71,969 | |||||||||||||||||||||
Due after one year through five years | 162,203 | 163,006 | |||||||||||||||||||||||
Due after five years through ten years | 107,915 | 108,761 | |||||||||||||||||||||||
Due after ten years | 39,235 | 38,622 | |||||||||||||||||||||||
Mortgage-backed | 27,784 | 27,737 | |||||||||||||||||||||||
$ | 408,627 | $ | 410,095 | ||||||||||||||||||||||
Fair_Value_Tables
Fair Value (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value [Abstract] | ' | ||||||||||||||||
Fair Value of Assets Measured on a 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 December 31, 2013 and December 31, 2012 (in thousands). | |||||||||||||||||
As of December 31, 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 | $ | - | $ | 78,753 | $ | - | $ | 78,753 | |||||||||
Corporate bonds | - | 43,875 | - | 43,875 | |||||||||||||
Collateralized corporate bank loans | - | 101,585 | 593 | 102,178 | |||||||||||||
Municipal bonds | - | 140,628 | 16,924 | 157,552 | |||||||||||||
Mortgage-backed | - | 27,737 | - | 27,737 | |||||||||||||
Total debt securities | - | 392,578 | 17,517 | 410,095 | |||||||||||||
Total equity securities | 51,230 | - | - | 51,230 | |||||||||||||
Total debt and equity securities | $ | 51,230 | $ | 392,578 | $ | 17,517 | $ | 461,325 | |||||||||
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 | |||||||||||||
Total equity securities | 43,925 | - | - | 43,925 | |||||||||||||
Total debt and equity securities | $ | 43,925 | $ | 381,767 | $ | 19,668 | $ | 445,360 | |||||||||
Fair Value, Assets Measured on Recurring Basis Using Significant Unobservable Inputs (Level 3) | ' | ||||||||||||||||
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 year ended December 31, 2013 and 2012 (in thousands). | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Beginning balance as of January 1 | $ | 19,668 | $ | 20,608 | |||||||||||||
Sales | (3,157 | ) | (429 | ) | |||||||||||||
Settlements | - | - | |||||||||||||||
Purchases | - | - | |||||||||||||||
Issuances | - | - | |||||||||||||||
Total realized/unrealized gains included in net income | - | - | |||||||||||||||
Net gains (losses) included in other comprehensive income | 1,006 | (511 | ) | ||||||||||||||
Transfers into Level 3 | - | - | |||||||||||||||
Transfers out of Level 3 | - | - | |||||||||||||||
Ending balance as of December 31 | $ | 17,517 | $ | 19,668 | |||||||||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Goodwill and Intangible Assets [Abstract] | ' | ||||||||||||
Schedule of Acquired Intangible Assets by Major Category | ' | ||||||||||||
We have obtained various intangible assets from several acquisitions since 2002. The table below details the gross and net carrying amounts of these assets by major category (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Gross Carrying Amount: | |||||||||||||
Customer/agent relationships | $ | 32,177 | $ | 32,177 | |||||||||
Tradename | 3,440 | 3,440 | |||||||||||
Management agreement | 3,232 | 3,232 | |||||||||||
Non-compete & employment agreements | 4,235 | 4,235 | |||||||||||
Insurance licenses | 1,300 | 1,300 | |||||||||||
Total gross carrying amount | 44,384 | 44,384 | |||||||||||
Accumulated Amortization: | |||||||||||||
Customer/agent relationships | (15,322 | ) | (13,084 | ) | |||||||||
Tradename | (1,700 | ) | (1,471 | ) | |||||||||
Management agreement | (3,232 | ) | (2,895 | ) | |||||||||
Non-compete & employment agreements | (4,177 | ) | (3,866 | ) | |||||||||
Total accumulated amortization | (24,431 | ) | (21,316 | ) | |||||||||
Total net carrying amount | $ | 19,953 | $ | 23,068 | |||||||||
Schedule of Estimated Aggregate Amortization Expense for Definite-Lived Intangible Assets | ' | ||||||||||||
The estimated aggregate amortization expense for definite-lived intangible assets for the next five years is as follows (in thousands): | |||||||||||||
2014 | $ | 2,526 | |||||||||||
2015 | $ | 2,468 | |||||||||||
2016 | $ | 2,468 | |||||||||||
2017 | $ | 2,468 | |||||||||||
2018 | $ | 2,468 | |||||||||||
Schedule of Weighted Average Amortization Period for Definite Lived Intangible Assets by Major Cass | ' | ||||||||||||
The weighted average amortization period for definite-lived intangible assets by major class is as follows: | |||||||||||||
Years | |||||||||||||
Tradename | 15 | ||||||||||||
Customer relationships | 15 | ||||||||||||
Management agreement | 4 | ||||||||||||
Non-compete agreements | 5 | ||||||||||||
Other_Assets_Tables
Other Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Assets [Abstract] | ' | ||||||||
Schedule of Other Assets | ' | ||||||||
The following table details our other assets as of December 31, 2013 and 2012 (in thousands): | |||||||||
2013 | 2012 | ||||||||
Profit sharing commission receivable | $ | 641 | $ | 2,083 | |||||
Accrued investment income | 3,030 | 3,568 | |||||||
Debt issuance costs | 1,156 | 1,207 | |||||||
Investment in unconsolidated trust subsidiaries | 1,702 | 1,702 | |||||||
Fixed assets | 1,773 | 2,284 | |||||||
Other assets | 110 | 141 | |||||||
$ | 8,412 | $ | 10,985 | ||||||
Reserves_for_Unpaid_Losses_and1
Reserves for Unpaid Losses and Loss Adjustment Expenses (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Reserves for Unpaid Losses and Loss Adjustment Expenses [Abstract] | ' | ||||||||||||
Activity in the Reserves for Unpaid Losses and Loss Adjustment Expense | ' | ||||||||||||
Activity in the reserves for unpaid losses and LAE is summarized as follows (in thousands): | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance at January 1 | $ | 313,416 | $ | 296,945 | $ | 251,677 | |||||||
Less reinsurance recoverable | 49,584 | 42,044 | 37,954 | ||||||||||
Net Balance at January 1 | 263,832 | 254,901 | 213,723 | ||||||||||
Acquisition of subsidiaries effective July 1 | - | - | 8,816 | ||||||||||
Incurred related to: | |||||||||||||
Current year | 251,391 | 230,089 | 222,869 | ||||||||||
Prior years | 9,954 | (3,675 | ) | 16,366 | |||||||||
Total incurred | 261,345 | 226,414 | 239,235 | ||||||||||
Paid related to: | |||||||||||||
Current year | 101,897 | 107,945 | 101,025 | ||||||||||
Prior years | 110,812 | 109,538 | 105,848 | ||||||||||
Total paid | 212,709 | 217,483 | 206,873 | ||||||||||
Net Balance at December 31 | 312,468 | 263,832 | 254,901 | ||||||||||
Plus reinsurance recoverable | 70,172 | 49,584 | 42,044 | ||||||||||
Balance at December 31 | $ | 382,640 | $ | 313,416 | $ | 296,945 | |||||||
Reinsurance_Tables
Reinsurance (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Reinsurance [Abstract] | ' | ||||||||||||
Schedule of Reinsurance Ceded and Recoveries | ' | ||||||||||||
The following table presents our gross and net premiums written and earned and reinsurance recoveries for each of the last three years (in thousands): | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Premium Written : | |||||||||||||
Direct | $ | 458,020 | $ | 385,624 | $ | 350,089 | |||||||
Assumed | 2,007 | 4,218 | 4,792 | ||||||||||
Ceded | (99,262 | ) | (57,353 | ) | (51,005 | ) | |||||||
$ | 360,765 | $ | 332,489 | $ | 303,876 | ||||||||
Premium Earned: | |||||||||||||
Direct | $ | 434,022 | $ | 369,735 | $ | 344,642 | |||||||
Assumed | 3,204 | 4,114 | 5,438 | ||||||||||
Ceded | (76,685 | ) | (54,413 | ) | (57,039 | ) | |||||||
$ | 360,541 | $ | 319,436 | $ | 293,041 | ||||||||
Reinsurance recoveries | $ | 45,456 | $ | 29,014 | $ | 32,941 | |||||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Segment Information [Abstract] | ' | ||||||||||||
Schedule of Segment Reporting, by Segment | ' | ||||||||||||
The following is additional business segment information for the twelve months ended December 31, 2013, 2012 and 2011 (in thousands): | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Revenues | |||||||||||||
Standard Commercial Segment | $ | 83,306 | $ | 73,119 | $ | 72,830 | |||||||
Specialty Commercial Segment | 229,734 | 178,917 | 142,838 | ||||||||||
Personal Segment | 71,081 | 89,149 | 101,351 | ||||||||||
Corporate | 5,307 | 615 | 5,752 | ||||||||||
Consolidated | $ | 389,428 | $ | 341,800 | $ | 322,771 | |||||||
Depreciation and Amortization Expense | |||||||||||||
Standard Commercial Segment | $ | 201 | $ | 186 | $ | 174 | |||||||
Specialty Commercial Segment | 2,896 | 2,892 | 3,293 | ||||||||||
Personal Segment | 1,111 | 1,230 | 1,431 | ||||||||||
Corporate | 92 | 113 | 166 | ||||||||||
Consolidated | $ | 4,300 | $ | 4,421 | $ | 5,064 | |||||||
Interest Expense | |||||||||||||
Standard Commercial Segment | $ | - | $ | - | $ | - | |||||||
Specialty Commercial Segment | - | - | - | ||||||||||
Personal Segment | - | - | - | ||||||||||
Corporate | 4,599 | 4,634 | 4,631 | ||||||||||
Consolidated | $ | 4,599 | $ | 4,634 | $ | 4,631 | |||||||
Tax Expense (Benefit) | |||||||||||||
Standard Commercial Segment | $ | 312 | $ | 372 | $ | (376 | ) | ||||||
Specialty Commercial Segment | 3,613 | 1,875 | 4,454 | ||||||||||
Personal Segment | (398 | ) | (968 | ) | (13,991 | ) | |||||||
Corporate | (692 | ) | (1,753 | ) | 959 | ||||||||
Consolidated | $ | 2,835 | $ | (474 | ) | $ | (8,954 | ) | |||||
Pre-tax Income (Loss), net of non-controlling interest | |||||||||||||
Standard Commercial Segment | $ | 1,980 | $ | (2,486 | ) | $ | 1,335 | ||||||
Specialty Commercial Segment | 19,527 | 25,932 | 14,348 | ||||||||||
Personal Segment | (3,416 | ) | (8,535 | ) | (29,647 | ) | |||||||
Corporate | (7,011 | ) | (11,861 | ) | (5,881 | ) | |||||||
Consolidated | $ | 11,080 | $ | 3,050 | $ | (19,845 | ) | ||||||
Schedule of Segment Reporting Additional Information by Segment | ' | ||||||||||||
The following is additional business segment information as of the following dates (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Assets | |||||||||||||
Standard Commercial Segment | $ | 142,143 | $ | 145,162 | |||||||||
Specialty Commercial Segment | 536,894 | 432,208 | |||||||||||
Personal Segment | 210,825 | 200,356 | |||||||||||
Corporate | 19,161 | 12,742 | |||||||||||
Consolidated | $ | 909,023 | $ | 790,468 | |||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | ' | |||||||||||||||||||
A reconciliation of the numerators and denominators of the basic and diluted per share calculations is presented below (in thousands, except per share amounts): | ||||||||||||||||||||
) | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Numerator for both basic and diluted earnings per share: | ||||||||||||||||||||
Net income (loss) attributable to Hallmark Financial Services, Inc. | $ | 8,245 | $ | 3,524 | $ | (10,891 | ) | |||||||||||||
Denominator, basic shares | 19,263 | 19,263 | 19,673 | |||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||
Stock-based compensation awards | 98 | 6 | - | |||||||||||||||||
Denominator, diluted shares | 19,361 | 19,269 | 19,673 | |||||||||||||||||
Basic earnings per share: | $ | 0.43 | $ | 0.18 | $ | (0.55 | ) | |||||||||||||
Diluted earnings per share: | $ | 0.43 | $ | 0.18 | $ | (0.55 | ) | |||||||||||||
Sharebased_Payment_Arrangement1
Share-based Payment Arrangements (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Share-based Payment Arrangements [Abstract] | ' | ||||||||||||||||
Summary of the Status of Stock Options | ' | ||||||||||||||||
A summary of the status of our stock options as of December 31, 2013 and changes during the year then ended is presented below: | |||||||||||||||||
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 | (17,500 | ) | $ | 7.58 | |||||||||||||
Outstanding at December 31, 2013 | 1,387,489 | $ | 9.66 | 4.2 | $ | 1,329 | |||||||||||
Exercisable at December 31, 2013 | 1,181,417 | $ | 10.19 | 4 | $ | 866 | |||||||||||
Schedule of Options, Grants in Period, 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): | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Intrinsic value of options exercised | $ | - | $ | - | $ | 4 | |||||||||||
Cost of share-based payments (non-cash) | $ | 207 | $ | 380 | $ | 709 | |||||||||||
Income tax benefit of share-based payments recognized in income | $ | 30 | $ | 38 | $ | 30 | |||||||||||
Schedule of Nonvested Restricted Stock Units Activity | ' | ||||||||||||||||
A summary of the status of our restricted stock units as of December 31, 2013 and changes during the year then ended is presented below: | |||||||||||||||||
Number of | |||||||||||||||||
Restricted | |||||||||||||||||
Stock Units | |||||||||||||||||
Nonvested at January 1, 2013 | - | ||||||||||||||||
Granted | 243,006 | ||||||||||||||||
Vested | - | ||||||||||||||||
Forfeited | -6,155 | ||||||||||||||||
Nonvested at December 31, 2013 | 236,851 | ||||||||||||||||
Retirement_Plans_Tables
Retirement Plans (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Retirement Plans [Abstract] | ' | ||||||||||||||||
Changes in Benefit Obligations, Components of Benefit Costs, Weighted-Average Assumptions, and Plan Assets | ' | ||||||||||||||||
The following tables provide detail of the changes in benefit obligations, components of benefit costs, weighted-average assumptions, and plan assets for the retirement plan as of and for the twelve months ending December 31, 2013, 2012 and 2011 (in thousands) using a measurement date of December 31. | |||||||||||||||||
4 | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Assumptions (end of period): | |||||||||||||||||
Discount rate used in determining benefit obligation | 4.49 | % | 3.89 | % | 4.5 | % | |||||||||||
Rate of compensation increase | N/A | N/A | N/A | ||||||||||||||
Reconciliation of funded status (end of period): | |||||||||||||||||
Accumulated benefit obligation | $ | (12,284 | ) | $ | (13,439 | ) | $ | (12,990 | ) | ||||||||
Projected benefit obligation | $ | (12,284 | ) | $ | (13,439 | ) | $ | (12,990 | ) | ||||||||
Fair value of plan assets | 10,851 | 9,754 | 9,019 | ||||||||||||||
Funded status | $ | (1,433 | ) | $ | (3,685 | ) | $ | (3,971 | ) | ||||||||
Net actuarial loss | (2,277 | ) | (4,545 | ) | (4,582 | ) | |||||||||||
Accumulated other comprehensive loss | (2,277 | ) | (4,545 | ) | (4,582 | ) | |||||||||||
Prepaid pension cost | 844 | 860 | 611 | ||||||||||||||
Net amount recognized as of December 31 | $ | (1,433 | ) | $ | (3,685 | ) | $ | (3,971 | ) | ||||||||
Changes in projected benefit obligation: | |||||||||||||||||
Benefit obligation as of beginning of period | $ | 13,439 | $ | 12,990 | $ | 12,050 | |||||||||||
Interest cost | 505 | 564 | 609 | ||||||||||||||
Actuarial liability (gain)/loss | (824 | ) | 700 | 1,160 | |||||||||||||
Benefits paid | (836 | ) | (815 | ) | (829 | ) | |||||||||||
Benefit obligation as of end of period | $ | 12,284 | $ | 13,439 | $ | 12,990 | |||||||||||
Change in plan assets: | |||||||||||||||||
Fair value of plan assets as of beginning of period | $ | 9,754 | $ | 9,019 | $ | 9,217 | |||||||||||
Actual return on plan assets (net of expenses) | 1,565 | 839 | (4 | ) | |||||||||||||
Employer contributions | 368 | 711 | 635 | ||||||||||||||
Benefits paid | (836 | ) | (815 | ) | (829 | ) | |||||||||||
Fair value of plan assets as of end of period | $ | 10,851 | $ | 9,754 | $ | 9,019 | |||||||||||
Net periodic pension cost: | |||||||||||||||||
Service cost - benefits earned during the period | $ | - | $ | - | $ | - | |||||||||||
Interest cost on projected benefit obligation | 505 | 564 | 609 | ||||||||||||||
Expected return on plan assets | (615 | ) | (584 | ) | (590 | ) | |||||||||||
Recognized actuarial loss | 495 | 482 | 287 | ||||||||||||||
Net periodic pension cost | $ | 385 | $ | 462 | $ | 306 | |||||||||||
Discount rate | 3.89 | % | 4.5 | % | 5.25 | % | |||||||||||
Expected return on plan assets | 6.5 | % | 6.5 | % | 6.5 | % | |||||||||||
Rate of compensation increase | N/A | N/A | N/A | ||||||||||||||
Estimated Future Benefit Payments | ' | ||||||||||||||||
Estimated future benefit payments by fiscal year (in thousands): | |||||||||||||||||
4 | |||||||||||||||||
2014 | $ | 889 | |||||||||||||||
2015 | $ | 897 | |||||||||||||||
2016 | $ | 885 | |||||||||||||||
2017 | $ | 884 | |||||||||||||||
2018 | $ | 878 | |||||||||||||||
2019-2023 | $ | 4,170 | |||||||||||||||
Weighted-Average Asset Allocation for the Defined Benefit Cash Balance Plan | ' | ||||||||||||||||
The following table shows the weighted-average asset allocation for the defined benefit cash balance plan held as of December 31, 2013 and 2012. | |||||||||||||||||
12/31/13 | 12/31/12 | ||||||||||||||||
Asset Category: | |||||||||||||||||
Fixed income securities | 32 | % | 33 | % | |||||||||||||
Equity securities | 65 | % | 63 | % | |||||||||||||
Other | 3 | % | 4 | % | |||||||||||||
Total | 100 | % | 100 | % | |||||||||||||
Schedule of Fair Value, Assets Measured on Recurring Basis | ' | ||||||||||||||||
The following table presents, for each of the fair value hierarchy levels, our plan assets that are measured at fair value on a recurring basis at December 31, 2013 and December 31, 2012 (in thousands). | |||||||||||||||||
As of December 31, 2013 | |||||||||||||||||
Quoted Prices in | Other | ||||||||||||||||
Active Markets for | Observable | Unobservable | |||||||||||||||
Identical Assets | Inputs | Inputs | |||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||||
Debt securities | $ | - | $ | 3,448 | $ | - | $ | 3,448 | |||||||||
Equity securities | 7,080 | - | - | 7,080 | |||||||||||||
Total | $ | 7,080 | $ | 3,448 | $ | - | $ | 10,528 | |||||||||
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 | ||||||||||||||
Debt securities | $ | - | $ | 3,188 | $ | - | $ | 3,188 | |||||||||
Equity securities | 6,153 | - | - | 6,153 | |||||||||||||
Total | $ | 6,153 | $ | 3,188 | $ | - | $ | 9,341 | |||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes [Abstract] | ' | ||||||||||||
Schedule of Deferred Tax Assets and Liabilities | ' | ||||||||||||
The composition of deferred tax assets and liabilities and the related tax effects as of December 31, 2013 and 2012, are as follows (in thousands): | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax liabilities: | |||||||||||||
Deferred policy acquisition costs | $ | (7,905 | ) | $ | (8,719 | ) | |||||||
Net unrealized holding gain on investments | (9,730 | ) | (5,622 | ) | |||||||||
Agency relationship | (85 | ) | (94 | ) | |||||||||
Intangible assets | (6,129 | ) | (6,852 | ) | |||||||||
Goodwill | (325 | ) | (116 | ) | |||||||||
Fixed assets | (499 | ) | (685 | ) | |||||||||
Other | (263 | ) | (275 | ) | |||||||||
Total deferred tax liabilities | (24,936 | ) | (22,363 | ) | |||||||||
Deferred tax assets: | |||||||||||||
Unearned premiums | 9,822 | 9,806 | |||||||||||
Alternative minimum tax | 442 | 1,651 | |||||||||||
Amortization of non-compete agreements | 417 | 476 | |||||||||||
Pension liability | 797 | 1,591 | |||||||||||
Net operating loss carry-forward | 611 | 702 | |||||||||||
Unpaid loss and loss adjustment expense | 8,173 | 7,549 | |||||||||||
Rent reserve | 366 | 363 | |||||||||||
Investment impairments | 660 | 1,256 | |||||||||||
Other | 823 | 909 | |||||||||||
Total deferred tax assets | 22,111 | 24,303 | |||||||||||
Deferred federal income taxes, net | $ | (2,825 | ) | $ | 1,940 | ||||||||
Schedule of Effective Income Tax Rate Reconciliation | ' | ||||||||||||
A reconciliation of the income tax provisions based on the statutory tax rate to the provision reflected in the consolidated financial statements for the years ended December 31, 2013, 2012 and 2011, is as follows (in thousands): | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Computed expected income tax expense (benefit) at statutory regulatory tax rate | $ | 3,878 | $ | 1,181 | $ | (6,926 | ) | ||||||
Meals and entertainment | 25 | 28 | 44 | ||||||||||
Tax exempt interest | (1,314 | ) | (1,631 | ) | (1,835 | ) | |||||||
Dividends received deduction | (101 | ) | (111 | ) | (99 | ) | |||||||
State taxes (net of federal benefit) | 276 | 298 | 84 | ||||||||||
Other | 71 | (239 | ) | (222 | ) | ||||||||
Income tax expense (benefit) | $ | 2,835 | $ | (474 | ) | $ | (8,954 | ) | |||||
Current income tax expense (benefit) | $ | 3,092 | $ | 2,377 | $ | (6,059 | ) | ||||||
Deferred tax benefit | (257 | ) | (2,851 | ) | (2,895 | ) | |||||||
Income tax expense (benefit) | $ | 2,835 | $ | (474 | ) | $ | (8,954 | ) | |||||
Summary of Operating Loss Carryforwards | ' | ||||||||||||
The net operating losses will expire if unused, as follows (in thousands): | |||||||||||||
Year | |||||||||||||
2021 | $ | 650 | |||||||||||
2022 | 878 | ||||||||||||
2028 | 2 | ||||||||||||
2030 | 25 | ||||||||||||
2031 | 45 | ||||||||||||
2032 | 77 | ||||||||||||
2033 | 70 | ||||||||||||
$ | 1,747 | ||||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies [Abstract] | ' | ||||
Schedule of Future Minimum Rental Payments for Operating Leases | ' | ||||
Future minimum lease payments under non-cancelable operating leases as of December 31, 2013 are as follows (in thousands): | |||||
4 | |||||
Year | |||||
2014 | $ | 1,987 | |||
2015 | 1,969 | ||||
2016 | 1,641 | ||||
2017 | 1,484 | ||||
2018 | 1,193 | ||||
2019 and thereafter | 3,166 | ||||
Total minimum lease payments | $ | 11,440 | |||
Changes_in_Accumulated_Other_C1
Changes in Accumulated Other Comprehensive Income Balances (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Comprehensive Income (Loss) Note [Abstract] | ' | ||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||||
The changes in accumulated other comprehensive income balances as of December 31, 2013, 2012, and 2011 were as follows (in thousands): | |||||||||||||
Accumulated Other | |||||||||||||
Pension | Unrealized | Comprehensive | |||||||||||
Liability | Gains (Loss) | Income (Loss) | |||||||||||
Balance at January 1, 2011 | $ | (2,024 | ) | $ | 11,661 | $ | 9,637 | ||||||
Other comprehensive loss: | |||||||||||||
Change in net actuarial loss | (1,468 | ) | - | (1,468 | ) | ||||||||
Tax effect on change in net actuarial loss | 514 | - | 514 | ||||||||||
Unrealized holding gains arising during the period | - | 191 | 191 | ||||||||||
Tax effect on unrealized gains arising during the period | - | (67 | ) | (67 | ) | ||||||||
Reclassification adjustment for gains included in net realized gains | - | (3,633 | ) | (3,633 | ) | ||||||||
Tax effect on reclassification adjustment for gains included in income tax expense | - | 1,272 | 1,272 | ||||||||||
Other comprehensive loss, net of tax | (954 | ) | (2,237 | ) | (3,191 | ) | |||||||
Balance at December 31, 2011 | $ | (2,978 | ) | $ | 9,424 | $ | 6,446 | ||||||
Other comprehensive income: | |||||||||||||
Change in net actuarial gain | 37 | - | 37 | ||||||||||
Tax effect on change in net actuarial gain | (13 | ) | - | (13 | ) | ||||||||
Unrealized holding gains arising during the period | - | 4,388 | 4,388 | ||||||||||
Tax effect on unrealized gains arising during the period | - | (1,536 | ) | (1,536 | ) | ||||||||
Reclassification adjustment for gains included in net realized gains | - | (2,189 | ) | (2,189 | ) | ||||||||
Tax effect on reclassification adjustment for gains included in income tax expense | - | 766 | 766 | ||||||||||
Other comprehensive income, net of tax | 24 | 1,429 | 1,453 | ||||||||||
Balance at December 31, 2012 | $ | (2,954 | ) | $ | 10,853 | $ | 7,899 | ||||||
Other comprehensive income: | |||||||||||||
Change in net actuarial gain | 2,268 | - | 2,268 | ||||||||||
Tax effect on change in net actuarial gain | (794 | ) | - | (794 | ) | ||||||||
Unrealized holding gains arising during the period | - | 22,094 | 22,094 | ||||||||||
Tax effect on unrealized gains arising during the period | - | (7,733 | ) | (7,733 | ) | ||||||||
Reclassification adjustment for gains included in net realized gains | - | (10,540 | ) | (10,540 | ) | ||||||||
Tax effect on reclassification adjustment for gains included in income tax expense | - | 3,689 | 3,689 | ||||||||||
Other comprehensive income, net of tax | 1,474 | 7,510 | 8,984 | ||||||||||
Balance at December 31, 2013 | $ | (1,480 | ) | $ | 18,363 | $ | 16,883 | ||||||
Unaudited_Selected_Quarterly_F1
Unaudited Selected Quarterly Financial Information (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Unaudited Selected Quarterly Financial Information [Abstract] | ' | ||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | ' | ||||||||||||||||||||||||||||||||
Following is a summary of the unaudited interim results of operations for the years ended December 31, 2013 and 2012 (in thousands, except per share data). In the opinion of management, all adjustments necessary to present fairly the results of operations for such periods have been made. | |||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | ||||||||||||||||||||||||||
Total revenue | $ | 93,141 | $ | 99,299 | $ | 108,613 | $ | 88,375 | $ | 82,986 | $ | 84,571 | $ | 85,620 | $ | 88,623 | |||||||||||||||||
Total expense | 90,978 | 104,616 | 99,141 | 83,613 | 82,769 | 88,722 | 80,599 | 86,336 | |||||||||||||||||||||||||
Income (loss) before tax | 2,163 | (5,317 | ) | 9,472 | 4,762 | 217 | (4,151 | ) | 5,021 | 2,287 | |||||||||||||||||||||||
Income tax expense (benefit) | 469 | (2,166 | ) | 3,198 | 1,334 | 23 | (2,351 | ) | 1,350 | 504 | |||||||||||||||||||||||
Net income (loss) | 1,694 | (3,151 | ) | 6,274 | 3,428 | 194 | (1,800 | ) | 3,671 | 1,783 | |||||||||||||||||||||||
Net income attributable to non-controlling interest | - | - | - | - | 23 | 43 | 258 | - | |||||||||||||||||||||||||
Net income (loss) attributable to Hallmark Financial Services, Inc. | $ | 1,694 | (3,151 | ) | $ | 6,274 | $ | 3,428 | $ | 171 | $ | (1,843 | ) | $ | 3,413 | $ | 1,783 | ||||||||||||||||
Basic earnings (loss) per share: | $ | 0.09 | $ | (0.16 | ) | $ | 0.33 | $ | 0.18 | $ | 0.01 | $ | (0.10 | ) | $ | 0.18 | $ | 0.09 | |||||||||||||||
Diluted earnings (loss) per share: | $ | 0.09 | $ | (0.16 | ) | $ | 0.32 | $ | 0.18 | $ | 0.01 | $ | (0.10 | ) | $ | 0.18 | $ | 0.09 | |||||||||||||||
Accounting_Policies_Narrative_
Accounting Policies (Narrative) (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 21, 2005 | Dec. 31, 2013 | Aug. 23, 2007 | Dec. 31, 2013 | Dec. 31, 2013 | Jul. 01, 2004 | Jul. 01, 2003 | Jul. 01, 2002 | Jul. 01, 2001 | Jan. 01, 2008 | Jan. 01, 2007 | Jan. 01, 2006 | Aug. 29, 2008 | |
segment | Minimum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | Remaining Interest [Member] | Subordinated Debt [Member] | Subordinated Debt [Member] | Subordinated Debt [Member] | Subordinated Debt [Member] | Subordinated Debt [Member] | Subordinated Debt [Member] | Quota Share Treaty Effective January 1, 2006 [Member] | Standard Commercial P & C Business Unit [Member] | Standard Commercial P & C Business Unit [Member] | Standard Commercial P & C Business Unit [Member] | Standard Commercial P & C Business Unit [Member] | E & S Commercial Business Unit [Member] | E & S Commercial Business Unit [Member] | E & S Commercial Business Unit [Member] | Excess and Umbrella Business Unit [Member] | ||||
Hallmark Statutory Trust I [Member] | Hallmark Statutory Trust I [Member] | Hallmark Statutory Trust I I [Member] | Hallmark Statutory Trust I I [Member] | |||||||||||||||||||||
Number of reportable segments | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt, gross | ' | ' | ' | ' | ' | ' | ' | ' | ' | $56,700,000 | $56,700,000 | $30,900,000 | $30,900,000 | $25,800,000 | $25,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of trust preferred securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,000,000 | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Trust Preferred Securities, fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | 53,200,000 | 48,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current yield to maturity, percentage | 9.30% | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred policy acquisition costs, additions | 55,000,000 | 62,200,000 | 49,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred policy acquisition costs, amortized | -57,300,000 | -59,800,000 | -47,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred policy acquisition cost, amortization expense | -2,300,000 | 2,400,000 | 1,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, gross | 14,700,000 | 13,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, estimated useful lives | ' | ' | ' | ' | '3 years | '3 years | '10 years | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, depreciation method | 'straight-line method | 'straight-line method | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation | 1,200,000 | 1,200,000 | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, accumulated depreciation | 12,600,000 | 11,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, percentage of voting interests acquired | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80.00% |
Business acquisition, purchase price of voting interests acquired | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Premiums earned, net, other insurance | 13,200,000 | 11,800,000 | 13,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Profit sharing payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Profit sharing receivable | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Provisional loss ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 64.20% | 59.00% | 59.00% | 60.00% | 65.00% | 65.00% | 65.00% | ' |
Estimated ultimate loss ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 63.70% | 60.90% | 64.50% | 63.50% | 59.00% | 63.20% | 58.60% | ' |
Retained earnings | 106,209,000 | 97,964,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Decrease in deferred policy acquisition costs | ($2,325,000) | $2,357,000 | $1,621,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounting_Policies_Activity_R
Accounting Policies (Activity Related to Non-Controlling Interest) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | ' | ' |
Beginning balance | ' | $1,284 |
Accretion of redeemable non-controlling interest | ' | 392 |
Net income attributable to non-controlling interest | ' | 324 |
Distribution to non-controlling interest | ' | -281 |
Redemption of non-controlling interest | ' | -1,700 |
Other | ' | -19 |
Ending balance | ' | ' |
Accounting_Policies_Schedule_o
Accounting Policies (Schedule of Profit Sharing Commission) (Details) | Jul. 01, 2004 | Jul. 01, 2003 | Jul. 01, 2002 | Jul. 01, 2001 | Jan. 01, 2008 | Jan. 01, 2007 | Jan. 01, 2006 |
Standard Commercial P & C Business Unit [Member] | Standard Commercial P & C Business Unit [Member] | Standard Commercial P & C Business Unit [Member] | Standard Commercial P & C Business Unit [Member] | E & S Commercial Business Unit [Member] | E & S Commercial Business Unit [Member] | E & S Commercial Business Unit [Member] | |
Provisional loss ratio | 64.20% | 59.00% | 59.00% | 60.00% | 65.00% | 65.00% | 65.00% |
Estimated ultimate loss ratio recorded to at December 31, 2013 | 63.70% | 60.90% | 64.50% | 63.50% | 59.00% | 63.20% | 58.60% |
Investments_Narrative_Details
Investments (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
security | security | ||
Investments [Abstract] | ' | ' | ' |
Maximum restricted level of investment upon stockholders equity | 10.00% | 10.00% | ' |
Gross realized gains on investments | $10.90 | $2.90 | $4.60 |
Gross realized losses on investments | 0.4 | 0.7 | 1 |
Proceeds from sale of available-for-sale securities | 33.4 | 12.4 | 62.7 |
Number of debt security positions | 84 | 56 | ' |
Securities pledged for the benefit of various state insurance departments and reinsurers | $29.10 | $24.30 | ' |
Investments_Amortized_Cost_and
Investments (Amortized Cost and Estimated Fair Value of Investments in Debt and Equity Securities) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Investments, Amortized Cost | $433,529 | $429,302 |
Investments, Gross Unrealized Gains | 31,696 | 20,887 |
Investments, Gross Unrealized Losses | -3,900 | -4,829 |
Total investments | 461,325 | 445,360 |
Equity Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Investments, Amortized Cost | 24,902 | 31,502 |
Investments, Gross Unrealized Gains | 26,642 | 12,938 |
Investments, Gross Unrealized Losses | -314 | -515 |
Total investments | 51,230 | 43,925 |
Debt Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Investments, Amortized Cost | 408,627 | 397,800 |
Investments, Gross Unrealized Gains | 5,054 | 7,949 |
Investments, Gross Unrealized Losses | -3,586 | -4,314 |
Total investments | 410,095 | 401,435 |
U.S. Treasury securities and obligations of U.S. Government [Member] | Debt Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Investments, Amortized Cost | 78,894 | 40,050 |
Investments, Gross Unrealized Gains | 24 | 14 |
Investments, Gross Unrealized Losses | -165 | -3 |
Total investments | 78,753 | 40,061 |
Corporate Bonds [Member] | Debt Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Investments, Amortized Cost | 42,946 | 79,516 |
Investments, Gross Unrealized Gains | 1,379 | 2,794 |
Investments, Gross Unrealized Losses | -450 | -763 |
Total investments | 43,875 | 81,547 |
Collateralized Corporate Bank Loans [Member] | Debt Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Investments, Amortized Cost | 102,053 | 106,093 |
Investments, Gross Unrealized Gains | 614 | 1,021 |
Investments, Gross Unrealized Losses | -489 | -743 |
Total investments | 102,178 | 106,371 |
Municipal Bonds [Member] | Debt Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Investments, Amortized Cost | 156,950 | 162,479 |
Investments, Gross Unrealized Gains | 2,577 | 4,023 |
Investments, Gross Unrealized Losses | -1,975 | -2,770 |
Total investments | 157,552 | 163,732 |
Collateralized Mortgage Backed Securities [Member] | Debt Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Investments, Amortized Cost | 27,784 | 9,662 |
Investments, Gross Unrealized Gains | 460 | 97 |
Investments, Gross Unrealized Losses | -507 | -35 |
Total investments | $27,737 | $9,724 |
Investments_Major_Categories_o
Investments (Major Categories of Investment Income) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Investment income | $13,760 | $16,034 | $16,615 |
Investment expenses | -876 | -741 | -735 |
Investment income, net of expenses | 12,884 | 15,293 | 15,880 |
U.S. Treasury securities and obligations of U.S. Government [Member] | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Investment income | 143 | 53 | 115 |
Corporate Bonds [Member] | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Investment income | 2,341 | 4,218 | 3,851 |
Collateralized Corporate Bank Loans [Member] | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Investment income | 4,653 | 5,261 | 5,284 |
Municipal Bonds [Member] | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Investment income | 5,245 | 5,616 | 6,632 |
Collateralized Mortgage Backed Securities [Member] | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Investment income | 737 | 106 | 86 |
Cash and Cash Equivalents [Member] | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Investment income | 157 | 246 | 163 |
Parent Company [Member] | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Investment income, net of expenses | -190 | -181 | -194 |
Equity Securities [Member] | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Investment income | $484 | $534 | $484 |
Investments_Major_Categories_o1
Investments (Major Categories of Net Realized Gains on Investments) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Net realized gain | $10,540 | $2,189 | $3,633 |
Other-than-temporary impairments | ' | -246 | ' |
Gain on investments | 10,540 | 1,943 | 3,633 |
U.S. Treasury securities and obligations of U.S. Government [Member] | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Net realized gain | ' | ' | 35 |
Corporate Bonds [Member] | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Net realized gain | 853 | 13 | 300 |
Collateralized Corporate Bank Loans [Member] | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Net realized gain | 373 | 391 | 699 |
Municipal Bonds [Member] | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Net realized gain | -156 | -441 | -500 |
Equity Securities [Member] | ' | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' |
Net realized gain | $9,470 | $2,226 | $3,099 |
Investments_Summary_of_Gross_U
Investments (Summary of Gross Unrealized Loss Position) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Value 12 months or less | $113,255 | $81,876 |
Unrealized Losses 12 months or less | -1,287 | -1,047 |
Fair Value Longer than 12 months | 53,634 | 50,039 |
Unrealized Losses Longer than 12 months | -2,613 | -3,782 |
Fair Value Total | 166,889 | 131,915 |
Unrealized Losses Total | -3,900 | -4,829 |
Debt Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Value 12 months or less | 112,939 | 78,513 |
Unrealized Losses 12 months or less | -1,285 | -532 |
Fair Value Longer than 12 months | 50,913 | 50,039 |
Unrealized Losses Longer than 12 months | -2,301 | -3,782 |
Fair Value Total | 163,852 | 128,552 |
Unrealized Losses Total | -3,586 | -4,314 |
Equity Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Value 12 months or less | 316 | 3,363 |
Unrealized Losses 12 months or less | -2 | -515 |
Fair Value Longer than 12 months | 2,721 | ' |
Unrealized Losses Longer than 12 months | -312 | ' |
Fair Value Total | 3,037 | 3,363 |
Unrealized Losses Total | -314 | -515 |
U.S. Treasury securities and obligations of U.S. Government [Member] | Debt Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Value 12 months or less | 47,162 | 23,998 |
Unrealized Losses 12 months or less | -165 | -3 |
Fair Value Total | 47,162 | 23,998 |
Unrealized Losses Total | -165 | -3 |
Corporate Bonds [Member] | Debt Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Value 12 months or less | 5,649 | 10,802 |
Unrealized Losses 12 months or less | -56 | -38 |
Fair Value Longer than 12 months | 4,421 | 6,910 |
Unrealized Losses Longer than 12 months | -394 | -725 |
Fair Value Total | 10,070 | 17,712 |
Unrealized Losses Total | -450 | -763 |
Collateralized Corporate Bank Loans [Member] | Debt Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Value 12 months or less | 23,026 | 6,273 |
Unrealized Losses 12 months or less | -422 | -97 |
Fair Value Longer than 12 months | 6,968 | 14,236 |
Unrealized Losses Longer than 12 months | -67 | -646 |
Fair Value Total | 29,994 | 20,509 |
Unrealized Losses Total | -489 | -743 |
Municipal Bonds [Member] | Debt Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Value 12 months or less | 35,719 | 30,073 |
Unrealized Losses 12 months or less | -413 | -362 |
Fair Value Longer than 12 months | 34,684 | 28,809 |
Unrealized Losses Longer than 12 months | -1,562 | -2,408 |
Fair Value Total | 70,403 | 58,882 |
Unrealized Losses Total | -1,975 | -2,770 |
Collateralized Mortgage Backed Securities [Member] | Debt Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Fair Value 12 months or less | 1,383 | 7,367 |
Unrealized Losses 12 months or less | -229 | -32 |
Fair Value Longer than 12 months | 4,840 | 84 |
Unrealized Losses Longer than 12 months | -278 | -3 |
Fair Value Total | 6,223 | 7,451 |
Unrealized Losses Total | ($507) | ($35) |
Investments_Schedule_of_Amorti
Investments (Schedule of Amortized Cost and Estimated Fair Value of Debt Securities) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost, Due in one year or less | $71,490 | ' |
Amortized Cost, Due after one year through five years | 162,203 | ' |
Amortized Cost, Due after five years through ten years | 107,915 | ' |
Amortized Cost, Amortized Cost Due after ten years | 39,235 | ' |
Debt Maturities, Amortized Cost | 408,627 | ' |
Fair Value, Due in one year or less | 71,969 | ' |
Fair Value, Due after one year through five years | 163,006 | ' |
Fair Value, Due after five years through ten years | 108,761 | ' |
Fair Value, Due after ten years | 38,622 | ' |
Debt securities | 410,095 | 401,435 |
Collateralized Mortgage Backed Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Debt Maturities, Amortized Cost | 27,784 | ' |
Debt securities | $27,737 | $9,724 |
Fair_Value_Narrative_Details
Fair Value (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Fair Value [Abstract] | ' |
Current yield to maturity, percentage | 9.30% |
Fair_Value_Fair_Value_of_Asset
Fair Value (Fair Value of Assets Measured on a Recurring Basis) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | $410,095 | $401,435 |
Equity securities | 51,230 | 43,925 |
Debt and equity securities | 461,325 | 445,360 |
U.S. Treasury securities and obligations of U.S. Government [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | 78,753 | 40,061 |
Corporate Bonds [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | 43,875 | 81,547 |
Collateralized Corporate Bank Loans [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | 102,178 | 106,371 |
Municipal Bonds [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | 157,552 | 163,732 |
Collateralized Mortgage Backed Securities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | 27,737 | 9,724 |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Equity securities | 51,230 | 43,925 |
Debt and equity securities | 51,230 | 43,925 |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | 392,578 | 381,767 |
Debt and equity securities | 392,578 | 381,767 |
Fair Value, Inputs, Level 2 [Member] | U.S. Treasury securities and obligations of U.S. Government [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | 78,753 | 40,061 |
Fair Value, Inputs, Level 2 [Member] | Corporate Bonds [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | 43,875 | 81,547 |
Fair Value, Inputs, Level 2 [Member] | Collateralized Corporate Bank Loans [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | 101,585 | 105,463 |
Fair Value, Inputs, Level 2 [Member] | Municipal Bonds [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | 140,628 | 144,972 |
Fair Value, Inputs, Level 2 [Member] | Collateralized Mortgage Backed Securities [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | 27,737 | 9,724 |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | 17,517 | 19,668 |
Debt and equity securities | 17,517 | 19,668 |
Fair Value, Inputs, Level 3 [Member] | Collateralized Corporate Bank Loans [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | 593 | 908 |
Fair Value, Inputs, Level 3 [Member] | Municipal Bonds [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt securities | $16,924 | $18,760 |
Fair_Value_Fair_Value_Assets_M
Fair Value (Fair Value, Assets Measured on Recurring Basis Using Significant Unobservable Inputs (Level 3)) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Fair Value [Abstract] | ' | ' |
Beginning balance as of January 1 | $19,668 | $20,608 |
Sales | -3,157 | -429 |
Net losses included in other comprehensive income | 1,006 | -511 |
Ending balance as of December 31 | $17,517 | $19,668 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Jul. 01, 2011 | Sep. 30, 2012 | Jul. 01, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Aug. 29, 2008 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | |
Standard Commercial P & C Business Unit [Member] | TBIC Holding Corporation Inc [Member] | TBIC Holding Corporation Inc [Member] | TBIC Holding Corporation Inc [Member] | E & S Commercial Business Unit [Member] | Hallmark Select Business Unit [Member] | Excess and Umbrella Business Unit [Member] | Excess and Umbrella Business Unit [Member] | Excess and Umbrella Business Unit [Member] | General Aviation and Satellite Component [Member] | Personal Lines Business Unit [Member] | ||||
Maximum [Member] | Put or Call Option [Member] | |||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, percentage of voting interests acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80.00% | 20.00% | ' | ' |
Business acquisition, total consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $15,000,000 | $1,700,000 | ' | ' |
Business acquisition, cash paid | ' | ' | ' | ' | 1,600,000 | 350,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Potential cash payment following 16 full calendar quarters | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, bargain purchase gain recorded | ' | ' | ' | ' | 165,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | 44,695,000 | 44,695,000 | ' | 2,100,000 | ' | ' | ' | 19,900,000 | 17,400,000 | 7,700,000 | ' | ' | 9,700,000 | 5,300,000 |
Impairment of goodwill | $0 | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average period to amortize acquired intangible assets | '13 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Schedule of Acquired Intangible Assets by Major Category) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Total gross carrying amount | $44,384 | $44,384 |
Total accumulated amortization | -24,431 | -21,316 |
Total net carrying amount | 19,953 | 23,068 |
Customer Relationships [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Total gross carrying amount | 32,177 | 32,177 |
Total accumulated amortization | -15,322 | -13,084 |
Trade Names [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Total gross carrying amount | 3,440 | 3,440 |
Total accumulated amortization | -1,700 | -1,471 |
Management Agreement [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Total gross carrying amount | 3,232 | 3,232 |
Total accumulated amortization | -3,232 | -2,895 |
Non-compete & Employment Agreements [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Total gross carrying amount | 4,235 | 4,235 |
Total accumulated amortization | -4,177 | -3,866 |
Insurance Licenses [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Total gross carrying amount | $1,300 | $1,300 |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets (Schedule of Estimated Aggregate Amortization Expense for Finite-Lived Intangible Assets) (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Goodwill and Intangible Assets [Abstract] | ' |
2014 | $2,526 |
2015 | 2,468 |
2016 | 2,468 |
2017 | 2,468 |
2018 | $2,468 |
Goodwill_and_Intangible_Assets5
Goodwill and Intangible Assets (Schedule of Weighted Average Amortization Period for Definite Lived Intangible Assets by Major Cass) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | ' |
Weighted average period to amortize acquired intangible assets | '13 years |
Trade Names [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Weighted average period to amortize acquired intangible assets | '15 years |
Customer Relationships [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Weighted average period to amortize acquired intangible assets | '15 years |
Management Agreement [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Weighted average period to amortize acquired intangible assets | '4 years |
Non-compete & Employment Agreements [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Weighted average period to amortize acquired intangible assets | '5 years |
Other_Assets_Schedule_of_Other
Other Assets (Schedule of Other Assets) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other Assets [Abstract] | ' | ' |
Profit sharing commission receivable | $641 | $2,083 |
Accrued investment income | 3,030 | 3,568 |
Debt issuance costs | 1,156 | 1,207 |
Investment in unconsolidated trust subsidiaries | 1,702 | 1,702 |
Fixed assets | 1,773 | 2,284 |
Other assets | 110 | 141 |
Other Assets, Total | $8,412 | $10,985 |
Reserves_for_Unpaid_Losses_and2
Reserves for Unpaid Losses and Loss Adjustment Expenses (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
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 | ' | $3.70 | ' |
Unfavorable adjustment to prior years liability for unpaid claims and claims adjustment expense | 10 | ' | 16.4 |
Loss Adjustment Expenses Recognized In 2008 [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 | ' | ' | 2.2 |
Loss Adjustment Expenses Recognized In 2009 [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 | ' | 2.5 | ' |
Unfavorable adjustment to prior years liability for unpaid claims and claims adjustment expense | ' | ' | 3.6 |
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 | ' | 0.8 | ' |
Unfavorable adjustment to prior years liability for unpaid claims and claims adjustment expense | 3.3 | ' | 15 |
Loss Adjustment Expenses Recognized In 2011 [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 | ' | 0.4 | ' |
Unfavorable adjustment to prior years liability for unpaid claims and claims adjustment expense | 1.7 | ' | ' |
Causes of increase (decrease) in liability for unpaid claims and claims adjustment expense, amount | ' | ' | 16.4 |
Loss Adjustment Expenses Recognized In 2012 [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 | ' | ' |
Causes of increase (decrease) in liability for unpaid claims and claims adjustment expense, amount | ' | -3.7 | ' |
Loss Adjustment Expenses Recognized In 2013 [Member] | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' |
Causes of increase (decrease) in liability for unpaid claims and claims adjustment expense, amount | 10 | ' | ' |
Florida Personal Lines Claims [Member] | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' |
Causes of increase (decrease) in liability for unpaid claims and claims adjustment expense, amount | ' | ' | 10.3 |
Standard Commercial P & C 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 | 3.7 | ' | 0.8 |
Causes of increase (decrease) in liability for unpaid claims and claims adjustment expense, amount | ' | -3.7 | ' |
Workers Compensation 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 | 1.5 | ' | ' |
E & S Commercial Business Unit [Member] | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' |
Causes of increase (decrease) in liability for unpaid claims and claims adjustment expense, amount | ' | -0.3 | 3.7 |
E & S Commercial Business Unit [Member] | Loss Adjustment Expenses Recognized In 2013 [Member] | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' |
Causes of increase (decrease) in liability for unpaid claims and claims adjustment expense, amount | 16 | ' | ' |
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 | 2.6 | ' | ' |
Causes of increase (decrease) in liability for unpaid claims and claims adjustment expense, amount | ' | -3.3 | ' |
Hallmark Select Business Unit [Member] | Loss Adjustment Expenses Recognized In 2011 [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 | 2.3 | ' | ' |
Aerospace Insurance Managers Inc [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 | ' | ' | 6.1 |
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 | ' | 3.6 | ' |
Causes of increase (decrease) in liability for unpaid claims and claims adjustment expense, amount | ' | ' | 19.6 |
Personal Lines Business Unit [Member] | Loss Adjustment Expenses Recognized In 2011 [Member] | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' |
Causes of increase (decrease) in liability for unpaid claims and claims adjustment expense, amount | ' | ' | 19.6 |
Personal Lines Business Unit [Member] | Loss Adjustment Expenses Recognized In 2013 [Member] | ' | ' | ' |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ' | ' | ' |
Causes of increase (decrease) in liability for unpaid claims and claims adjustment expense, amount | 1.8 | ' | ' |
Excess and Umbrella 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 | 0.4 | ' | ' |
Aircraft Hull [Member] | Loss Adjustment Expenses Recognized In 2012 [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 | $0.10 | ' | ' |
Reserves_for_Unpaid_Losses_and3
Reserves for Unpaid Losses and Loss Adjustment Expenses (Activity in the Reserves for Unpaid Losses and Loss Adjustment Expense) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reserves for Unpaid Losses and Loss Adjustment Expenses [Abstract] | ' | ' | ' |
Balance at January 1 | $313,416 | $296,945 | $251,677 |
Less reinsurance recoverable | 49,584 | 42,044 | 37,954 |
Net Balance at January 1 | 263,832 | 254,901 | 213,723 |
Acquisition of subsidiaries effective July 1 | ' | ' | 8,816 |
Incurred related to: | ' | ' | ' |
Current year | 251,391 | 230,089 | 222,869 |
Prior years | 9,954 | -3,675 | 16,366 |
Total incurred | 261,345 | 226,414 | 239,235 |
Paid related to: | ' | ' | ' |
Current year | 101,897 | 107,945 | 101,025 |
Prior years | 110,812 | 109,538 | 105,848 |
Total paid | 212,709 | 217,483 | 206,873 |
Net Balance at December 31 | 312,468 | 263,832 | 254,901 |
Plus reinsurance recoverable | 70,172 | 49,584 | 42,044 |
Balance at December 31 | $382,640 | $313,416 | $296,945 |
Reinsurance_Narrative_Details
Reinsurance (Narrative) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 01, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Millions, unless otherwise specified | Hallmark County Mutual Insurance Company [Member] | Catastrophe [Member] | Commercial Property Risk [Member] | Professional Liability [Member] | Personal Property [Member] | Workers Compensation Loss [Member] | Commercial Liability Risk [Member] | Occupational Accident [Member] | Personal Auto [Member] | Standard Commercial P & C Business Unit [Member] | Excess and Umbrella [Member] | E & S Commercial Business Unit [Member] | E & S Commercial Business Unit [Member] | Hallmark Select Business Unit [Member] | ||
Commercial Umbrella and Excess Liability Risks [Member] | ||||||||||||||||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reinsurance receivables | $6.10 | $1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Retention for reinsurance losses | ' | ' | ' | 6 | 1 | ' | ' | 1 | 1 | 1 | ' | ' | ' | 1 | 1 | ' |
Reinsurers reimbursement percentage | ' | ' | ' | 100.00% | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Reinsurers reimbursement retention maximum limit | ' | ' | ' | 29 | ' | ' | ' | 10 | 5 | 5 | ' | ' | ' | ' | ' | ' |
Commerical property risk retention | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reinsurers reimbursement retention aggregate limit | ' | ' | ' | 58 | 30 | ' | ' | 28 | ' | ' | ' | ' | ' | ' | ' | ' |
Reinsurers reimbursement retention for each disaster occurrence | ' | ' | ' | ' | 5 | ' | ' | 14 | ' | ' | ' | ' | ' | ' | ' | ' |
Reinsurers reimbursement retention for any one disaster occurrence | ' | ' | ' | ' | $10 | ' | ' | ' | ' | $10 | ' | ' | ' | ' | ' | ' |
Proportional reinsurance cede risk percentage | ' | ' | ' | ' | ' | 40.00% | 60.00% | ' | ' | ' | 90.00% | 100.00% | 80.00% | ' | ' | ' |
Proportional reinsurance retention percentage | ' | ' | 100.00% | ' | ' | 60.00% | ' | ' | ' | ' | ' | ' | 20.00% | 10.00% | ' | ' |
Concentration of ceded credit risk percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 90.00% | 100.00% | 80.00% |
Reinsurance_Schedule_of_Reinsu
Reinsurance (Schedule of Reinsurance Ceded and Recoveries) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Premium Written : | ' | ' | ' |
Direct | $458,020 | $385,624 | $350,089 |
Assumed | 2,007 | 4,218 | 4,792 |
Ceded | -99,262 | -57,353 | -51,005 |
Premiums Written, Net, Property and Casualty | 360,765 | 332,489 | 303,876 |
Premium Earned: | ' | ' | ' |
Direct | 434,022 | 369,735 | 344,642 |
Assumed | 3,204 | 4,114 | 5,438 |
Ceded | -76,685 | -54,413 | -57,039 |
Premiums Earned, Net, Property and Casualty | 360,541 | 319,436 | 293,041 |
Reinsurance recoveries | $45,456 | $29,014 | $32,941 |
Revolving_Credit_Facility_and_1
Revolving Credit Facility and Notes Payable (Narrative) (Details) (USD $) | 0 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Jan. 27, 2006 | Dec. 31, 2013 | Dec. 31, 2012 |
Revolving Credit Facility [Member] | ' | ' | ' |
Line of Credit Facility [Line Items] | ' | ' | ' |
Line of credit facility, maximum borrowing capacity | $15 | ' | ' |
Debt instrument, description of variable rate basis | 'prime rate or LIBOR plus 2.5% | ' | ' |
Line of credit facility, unused capacity, commitment fee percentage | 0.25% | ' | ' |
Line of credit facility, amount outstanding | ' | $1.50 | $1.50 |
Line of credit facility, interest rate during period | ' | 2.75% | ' |
Letters of Credit [Member] | ' | ' | ' |
Line of Credit Facility [Line Items] | ' | ' | ' |
Line of credit facility, commitment fee percentage | 1.00% | ' | ' |
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member] | ' | ' | ' |
Line of Credit Facility [Line Items] | ' | ' | ' |
Debt instrument, basis spread on variable rate | 2.50% | ' | ' |
Subordinated_Debt_Securities_N
Subordinated Debt Securities (Narrative) (Details) (Subordinated Debt [Member], USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 21, 2005 | Dec. 31, 2013 | Aug. 23, 2007 | Dec. 31, 2013 | Jun. 21, 2005 | Aug. 23, 2007 |
In Millions, unless otherwise specified | Hallmark Statutory Trust I [Member] | Hallmark Statutory Trust I [Member] | Hallmark Statutory Trust I I [Member] | Hallmark Statutory Trust I I [Member] | London Interbank Offered Rate (LIBOR) [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Hallmark Statutory Trust I [Member] | Hallmark Statutory Trust I I [Member] | |||||||
Subordinated Borrowing [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt, gross | $56.70 | $56.70 | $30.90 | $30.90 | $25.80 | $25.80 | ' | ' |
Debt instrument, maturity date | ' | ' | 15-Jun-35 | ' | 15-Sep-37 | ' | ' | ' |
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, description of variable rate basis | ' | ' | 'interest will adjust quarterly to the three-month LIBOR rate plus 3.25 percentage points | ' | 'three-month LIBOR rate plus 2.90 percentage points | ' | ' | ' |
Debt instrument, basis spread on variable rate | ' | ' | ' | ' | ' | ' | 3.25% | 2.90% |
Segment_Information_Narrative_
Segment Information (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
American Hallmark Insurance Company [Member] | ' |
Net premiums written, percentage | 30.00% |
Hallmark Insurance Company (Payer) [Member] | ' |
Net premiums written, percentage | 27.00% |
Hallmark Specialty Insurance Company [Member] | ' |
Net premiums written, percentage | 30.00% |
Hallmark National Insurance Company [Member] | ' |
Net premiums written, percentage | 13.00% |
Segment_Information_Schedule_o
Segment Information (Schedule of Segment Reporting, by Segment) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | $88,375 | $108,613 | $99,299 | $93,141 | $88,623 | $85,620 | $84,571 | $82,986 | $389,428 | $341,800 | $322,771 |
Depreciation and Amortization Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and Amortization Expense | ' | ' | ' | ' | ' | ' | ' | ' | 4,300 | 4,421 | 5,064 |
Interest Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Expense | ' | ' | ' | ' | ' | ' | ' | ' | 4,599 | 4,634 | 4,631 |
Tax Expense (Benefit) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax expense (benefit) | 1,334 | 3,198 | -2,166 | 469 | 504 | 1,350 | -2,351 | 23 | 2,835 | -474 | -8,954 |
Pre-tax income (loss), net of non-controlling interest: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidated pre-tax income (loss), net of non-controlling interest | ' | ' | ' | ' | ' | ' | ' | ' | 11,080 | 3,050 | -19,845 |
Standard Commercial Segment [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 83,306 | 73,119 | 72,830 |
Depreciation and Amortization Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and Amortization Expense | ' | ' | ' | ' | ' | ' | ' | ' | 201 | 186 | 174 |
Tax Expense (Benefit) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax expense (benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 312 | 372 | -376 |
Pre-tax income (loss), net of non-controlling interest: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidated pre-tax income (loss), net of non-controlling interest | ' | ' | ' | ' | ' | ' | ' | ' | 1,980 | -2,486 | 1,335 |
Specialty Commercial Segment [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 229,734 | 178,917 | 142,838 |
Depreciation and Amortization Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and Amortization Expense | ' | ' | ' | ' | ' | ' | ' | ' | 2,896 | 2,892 | 3,293 |
Tax Expense (Benefit) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax expense (benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 3,613 | 1,875 | 4,454 |
Pre-tax income (loss), net of non-controlling interest: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidated pre-tax income (loss), net of non-controlling interest | ' | ' | ' | ' | ' | ' | ' | ' | 19,527 | 25,932 | 14,348 |
Personal Segment [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 71,081 | 89,149 | 101,351 |
Depreciation and Amortization Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and Amortization Expense | ' | ' | ' | ' | ' | ' | ' | ' | 1,111 | 1,230 | 1,431 |
Tax Expense (Benefit) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax expense (benefit) | ' | ' | ' | ' | ' | ' | ' | ' | -398 | -968 | -13,991 |
Pre-tax income (loss), net of non-controlling interest: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidated pre-tax income (loss), net of non-controlling interest | ' | ' | ' | ' | ' | ' | ' | ' | -3,416 | -8,535 | -29,647 |
Corporate [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 5,307 | 615 | 5,752 |
Depreciation and Amortization Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and Amortization Expense | ' | ' | ' | ' | ' | ' | ' | ' | 92 | 113 | 166 |
Interest Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Expense | ' | ' | ' | ' | ' | ' | ' | ' | 4,599 | 4,634 | 4,631 |
Tax Expense (Benefit) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax expense (benefit) | ' | ' | ' | ' | ' | ' | ' | ' | -692 | -1,753 | 959 |
Pre-tax income (loss), net of non-controlling interest: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidated pre-tax income (loss), net of non-controlling interest | ' | ' | ' | ' | ' | ' | ' | ' | ($7,011) | ($11,861) | ($5,881) |
Segment_Information_Schedule_o1
Segment Information (Schedule of Segment Reporting Additional Information by Segment) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets | $909,023 | $790,468 |
Standard Commercial Segment [Member] | ' | ' |
Assets | 142,143 | 145,162 |
Specialty Commercial Segment [Member] | ' | ' |
Assets | 536,894 | 432,208 |
Personal Segment [Member] | ' | ' |
Assets | 210,825 | 200,356 |
Corporate [Member] | ' | ' |
Assets | $19,161 | $12,742 |
Earnings_Per_Share_NarrativeDe
Earnings Per Share (Narrative)(Details) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Earnings Per Share [Abstract] | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 779,999 | 794,999 | 809,999 |
Earnings_Per_Share_Schedule_of
Earnings Per Share (Schedule of Earnings Per Share, Basic and Diluted) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Numerator for both basic and diluted earnings per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) attributable to Hallmark Financial Services, Inc. | $3,428 | $6,274 | ($3,151) | $1,694 | $1,783 | $3,413 | ($1,843) | $171 | $8,245 | $3,524 | ($10,891) |
Denominator, basic shares | ' | ' | ' | ' | ' | ' | ' | ' | 19,263 | 19,263 | 19,673 |
Effect of dilutive securities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation awards | ' | ' | ' | ' | ' | ' | ' | ' | 98 | 6 | ' |
Denominator, diluted shares | ' | ' | ' | ' | ' | ' | ' | ' | 19,361 | 19,269 | 19,673 |
Basic earnings per share: (in dollars per share) | $0.18 | $0.33 | ($0.16) | $0.09 | $0.09 | $0.18 | ($0.10) | $0.01 | $0.43 | $0.18 | ($0.55) |
Diluted earnings per share: (in dollars per share) | $0.18 | $0.32 | ($0.16) | $0.09 | $0.09 | $0.18 | ($0.10) | $0.01 | $0.43 | $0.18 | ($0.55) |
Regulatory_Capital_Restriction1
Regulatory Capital Restrictions (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Regulatory Capital Restrictions [Line Items] | ' | ' | ' |
Retained earnings, unappropriated | $29.80 | ' | ' |
Aggregate amount of shareholder dividends, maximum available next current fiscal year | 15.6 | ' | ' |
Hallmark Insurance Company (Payer) [Member] | Hallmark (Payee) [Member] | ' | ' | ' |
Regulatory Capital Restrictions [Line Items] | ' | ' | ' |
Insurance agency management fee | 8.2 | 9 | 6 |
Subsidiaries [Member] | ' | ' | ' |
Regulatory Capital Restrictions [Line Items] | ' | ' | ' |
Statutory Accounting Practices, Future Dividend Payments Restrictions | 'lesser of 10% of prior year policyholders' surplus or prior year's net investment income | ' | ' |
Aggregate amount of shareholder dividends, maximum available next current fiscal year | 22.5 | ' | ' |
American Hallmark Insurance Company and Texas Builders Insurance Company [Member] | ' | ' | ' |
Regulatory Capital Restrictions [Line Items] | ' | ' | ' |
Statutory Accounting Practices, Future Dividend Payments Restrictions | 'greater of statutory net income for the prior calendar year or 10% of statutory policyholders' surplus as of the prior year end | ' | ' |
Hallmark National Insurance Company [Member] | ' | ' | ' |
Regulatory Capital Restrictions [Line Items] | ' | ' | ' |
Statutory Accounting Practices, Future Dividend Payments Restrictions | 'greater of 10% of statutory policyholders' surplus as of the prior December 31 or statutory net income as of the prior December 31 | ' | ' |
Hallmark Specialty Insurance Com [Member] | ' | ' | ' |
Regulatory Capital Restrictions [Line Items] | ' | ' | ' |
Statutory Accounting Practices, Future Dividend Payments Restrictions | 'greater of 10% of prior year policyholders' surplus or prior year's statutory net income, not including realized capital gains | ' | ' |
Hallmark Insurance Company Subsidiaries [Member] | ' | ' | ' |
Regulatory Capital Restrictions [Line Items] | ' | ' | ' |
Amount of restricted net assets for consolidated and unconsolidated subsidiaries | 208.3 | ' | ' |
Statutory accounting practices, statutory capital and surplus, balance | 196.3 | 176.5 | ' |
Statutory accounting practices, statutory net income amount | 6.1 | 3.1 | ' |
Statutory accounting practices statutory net loss amount | ' | ' | $17.20 |
Sharebased_Payment_Arrangement2
Share-based Payment Arrangements (Narrative) (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | 26-May-05 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | 30-May-13 | Apr. 10, 2013 | Jul. 27, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
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] | 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] | Vesting Percentage First Anniversary [Member] | Vesting Percentage Second Anniversary [Member] | Vesting Percentage Third Anniversary [Member] | Vesting Percentage Fourth Anniversary [Member] | Vesting Equal Increments on Each Anniversary First Through the Seventh [Member] | Vesting Equal Increments on Each Anniversary First Through the Seventh [Member] | ||||
Minimum [Member] | Maximum [Member] | Option Issued Prior To 2009 [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] | 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 2011 [Member] | Non Qualified Stock Options [Member] | |||||||||
Option Issued Prior To 2009 [Member] | 5,000 Grant [Member] | 10,000 Grant [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] | Long Term Incentive Plan 2005 [Member] | Long Term Incentive Plan 2005 [Member] | ||||||||||||||||
5,000 Grant [Member] | ||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation arrangement by share-based payment award, number of shares authorized | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation arrangement by share-based payment award, incentive stock options to purchase number of shares | ' | ' | ' | ' | ' | 1,083,332 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation arrangement by share-based payment award, non-qualified stock options to purchase number of shares | ' | ' | ' | ' | ' | 304,157 | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation arrangement by share-based payment award, restricted stock options to purchase number of shares | ' | ' | ' | ' | ' | 355,277 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation by share-based payment award, remaining available shares for issuance | ' | ' | ' | ' | ' | 241,401 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | 10.00% | 20.00% | 30.00% | 40.00% | ' | ' |
Stock-based compensation incentive stock options grant under incentive plan termination period | ' | ' | ' | ' | ' | ' | ' | '5 years | '10 years | ' | ' | '10 years | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' |
Share-based compensation arrangement by share based payment award options vested and expected to vest number | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000 | 25,000 | 10,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation arrangement by share-based payment award, award vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | '6 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | '7 years |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $500,000 | ' | ' | ' | ' | ' | ' |
Employee Service Share-based Compensation Nonvested Awards, Total Compensation Cost Expected to Recognize During Remainder of Year Two | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' |
Employee Service Share-based Compensation Nonvested Awards, Total Compensation Cost Expected to Recognize During Remainder of Year Three | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' |
Employee Service Share-based Compensation Nonvested Awards, Total Compensation Cost Expected to Recognize During Remainder of Year Four | 54,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 49,000 | ' | ' | ' | ' | ' | ' |
Employee Service Share-based Compensation Nonvested Awards, Total Compensation Cost Expected to Recognize During Remainder of Year Five | 3,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options, Granted | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options granted, weighted average grant date fair value | ' | ' | $2.52 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options contractual term | '4 years 2 months 12 days | ' | '5 years 9 months 18 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected volatility | ' | ' | 30.90% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk free interest rate | ' | ' | 1.40% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other than options, granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 122,823 | 129,463 | 243,006 | ' | ' | ' | ' | ' | ' |
Other than options granted, weighted average grant date fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $9.20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other than options, forfeited | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,280 | ' | ' | 6,155 | ' | ' | ' | ' | ' | ' |
Percentage of restricted stock units granted as result of meeting growth rates | ' | ' | ' | 50.00% | 150.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allocated share-based compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $145,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sharebased_Payment_Arrangement3
Share-based Payment Arrangements (Summary of the Status of Stock Options) (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based Payment Arrangements [Abstract] | ' | ' | ' |
Stock options, Outstanding at January 1, 2013 | 1,404,989 | ' | ' |
Stock options, Granted | 0 | 0 | ' |
Stock options, exercised (in shares) | ' | ' | ' |
Stock options, forfeited or expired | -17,500 | ' | ' |
Stock options, Outstanding at December 31, 2013 | 1,387,489 | 1,404,989 | ' |
Stock options, Exercisable at December 31, 2013 | 1,181,417 | ' | ' |
Weighted Average Exercise Price, Outstanding at January 1, 2013 | $9.63 | ' | ' |
Weighted Average Exercise Price, Forfeited or expired | $7.58 | ' | ' |
Weighted Average Exercise Price, Outstanding at December 31, 2013 | $9.66 | $9.63 | ' |
Weighted Average Exercise Price, Exercisable at December 31, 2013 | $10.19 | ' | ' |
Average Remaining Contractual Term, Outstanding at December 31, 2013 (in years) | '4 years 2 months 12 days | ' | '5 years 9 months 18 days |
Average Remaining Contractual Term, Exercisable at December 31, 2013 (in years) | '4 years | ' | ' |
Aggregate Intrinsic Value, Outstanding at December 31, 2013 | $1,329 | ' | ' |
Aggregate Intrinsic Value, Exercisable at December 31, 2013 | $866 | ' | ' |
Sharebased_Payment_Arrangement4
Share-based Payment Arrangements (Schedule of Options, Grants in Period, Grant Date Intrinsic Value) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Cost of share-based payments (non-cash) | $352 | $380 | $709 |
Employee Stock Option [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Intrinsic value of options exercised | ' | ' | 4 |
Cost of share-based payments (non-cash) | 207 | 380 | 709 |
Income tax benefit of share-based payments recognized in income | $30 | $38 | $30 |
Sharebased_Payment_Arrangement5
Share-based Payment Arrangements (Schedule of Nonvested Restricted Stock Units Activity) (Details) (Long Term Incentive Plan 2005 [Member], Restricted Stock Units (RSUs) [Member]) | 0 Months Ended | 12 Months Ended | ||
30-May-13 | Apr. 10, 2013 | Jul. 27, 2012 | Dec. 31, 2013 | |
Long Term Incentive Plan 2005 [Member] | Restricted Stock Units (RSUs) [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Nonvested at January 1, 2013 | ' | ' | ' | ' |
Granted | ' | 122,823 | 129,463 | 243,006 |
Forfeited | -9,280 | ' | ' | -6,155 |
Nonvested at December 31, 2013 | ' | ' | ' | 236,851 |
Retirement_Plans_Narrative_Det
Retirement Plans (Narrative) (Details) (USD $) | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2010 | |
item | |||||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' | ' |
Defined benefit plan, fair value of plan assets | $10,851,000 | $9,754,000 | $9,019,000 | ' | $9,217,000 |
Defined benefit plan, fair value of plan assets, excluding cash and cash equivalents | 10,528,000 | 9,341,000 | ' | ' | ' |
Favorable rate of return equal to or greater than average inflation rate | 5.00% | ' | ' | ' | ' |
Investment objective achievement period | '60 years | ' | ' | ' | ' |
Single stock issue restricted among total portfolio value | 5.00% | ' | ' | ' | ' |
Securities held in mutual or commingled funds | 90.00% | ' | ' | ' | ' |
Expected return on plan assets | 6.50% | 6.50% | 6.50% | ' | ' |
Defined benefit plan, estimated future employer contributions in next fiscal year | ' | ' | ' | 700,000 | ' |
Net periodic pension cost | 385,000 | 462,000 | 306,000 | ' | ' |
Interest cost on projected benefit obligation | 505,000 | 564,000 | 609,000 | ' | ' |
Defined benefit plan, expected return on plan assets | -615,000 | -584,000 | -590,000 | ' | ' |
Defined contribution plan, number of separate plans | 2 | ' | ' | ' | ' |
Defined contribution plan, employer discretionary contribution amount | 300,000 | 100,000 | 200,000 | ' | ' |
Scenario, Forecast for 2014 [Member] | ' | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' | ' |
Net periodic pension cost | -4,000 | ' | ' | ' | ' |
Interest cost on projected benefit obligation | 500,000 | ' | ' | ' | ' |
Defined benefit plan, expected return on plan assets | -700,000 | ' | ' | ' | ' |
Defined benefit plan, amortization of gains (losses) | 200,000 | ' | ' | ' | ' |
Cash and Cash Equivalents [Member] | ' | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' | ' |
Defined benefit plan, fair value of plan assets | 300,000 | 400,000 | ' | ' | ' |
Bonds and Notes [Member] | ' | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' | ' |
Defined benefit plan, fair value of plan assets | 3,500,000 | ' | ' | ' | ' |
Equity Securities [Member] | ' | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' | ' |
Defined benefit plan, fair value of plan assets | 7,100,000 | ' | ' | ' | ' |
Defined benefit plan, fair value of plan assets, excluding cash and cash equivalents | $7,080,000 | $6,153,000 | ' | ' | ' |
Defined benefit plan, target plan asset allocations range, minimum | 45.00% | ' | ' | ' | ' |
Defined benefit plan, target plan asset allocations range, maximum | 75.00% | ' | ' | ' | ' |
Standard Commercial P & C Business Unit [Member] | ' | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' | ' |
Minimum hours of service to participate within defined benefit plan | '1000 hours | ' | ' | ' | ' |
Retirement_Plans_Changes_in_Be
Retirement Plans (Changes in Benefit Obligations, Components of Benefit Costs, Weighted-Average Assumptions, and Plan Assets) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Assumptions (end of period): | ' | ' | ' |
Discount rate used in determining benefit obligation | 4.49% | 3.89% | 4.50% |
Rate of compensation increase | 0.00% | 0.00% | 0.00% |
Reconciliation of funded status (end of period): | ' | ' | ' |
Accumulated benefit obligation | ($12,284) | ($13,439) | ($12,990) |
Projected benefit obligation | -12,284 | -13,439 | -12,990 |
Fair value of plan assets | 10,851 | 9,754 | 9,019 |
Defined Benefit Plan, Funded Status of Plan, Total | -1,433 | -3,685 | -3,971 |
Net actuarial loss | -2,277 | -4,545 | -4,582 |
Accumulated other comprehensive loss | -2,277 | -4,545 | -4,582 |
Prepaid pension cost | 844 | 860 | 611 |
Net amount recognized as of December 31 | -1,433 | -3,685 | -3,971 |
Changes in projected benefit obligation: | ' | ' | ' |
Benefit obligation as of beginning of period | 13,439 | 12,990 | 12,050 |
Interest cost | 505 | 564 | 609 |
Actuarial liability loss | -824 | 700 | 1,160 |
Benefits paid | -836 | -815 | -829 |
Benefit obligation as of end of period | 12,284 | 13,439 | 12,990 |
Change in plan assets: | ' | ' | ' |
Fair value of plan assets as of beginning of period | 9,754 | 9,019 | 9,217 |
Actual return on plan assets (net of expenses) | 1,565 | 839 | -4 |
Employer contributions | 368 | 711 | 635 |
Benefits paid | 836 | 815 | 829 |
Fair value of plan assets as of end of period | 10,851 | 9,754 | 9,019 |
Net periodic pension cost: | ' | ' | ' |
Interest cost on projected benefit obligation | 505 | 564 | 609 |
Expected return on plan assets | -615 | -584 | -590 |
Recognized actuarial loss | 495 | 482 | 287 |
Net periodic pension cost | $385 | $462 | $306 |
Discount rate | 3.89% | 4.50% | 5.25% |
Expected return on plan assets | 6.50% | 6.50% | 6.50% |
Rate of compensation increase | 0.00% | 0.00% | 0.00% |
Retirement_Plans_Estimated_Fut
Retirement Plans (Estimated Future Benefit Payments) (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Retirement Plans [Abstract] | ' |
2014 | $889 |
2015 | 897 |
2016 | 885 |
2017 | 884 |
2018 | 878 |
2019-2023 | $4,170 |
Retirement_Plans_WeightedAvera
Retirement Plans (Weighted-Average Asset Allocation for the Defined Benefit Cash Balance Plan) (Details) | Dec. 31, 2013 | Dec. 31, 2012 |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined benefit plan, actual plan asset allocations | 100.00% | 100.00% |
Fixed Income Securities [Member] | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined benefit plan, actual plan asset allocations | 32.00% | 33.00% |
Equity Securities [Member] | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined benefit plan, actual plan asset allocations | 65.00% | 63.00% |
Other Liabilities [Member] | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined benefit plan, actual plan asset allocations | 3.00% | 4.00% |
Retirement_Plans_Schedule_of_F
Retirement Plans (Schedule of Fair Value, Assets Measured on Recurring Basis) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined benefit plan, fair value of plan assets, excluding cash and cash equivalents | $10,528 | $9,341 |
Debt Securities [Member] | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined benefit plan, fair value of plan assets, excluding cash and cash equivalents | 3,448 | 3,188 |
Equity Securities [Member] | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined benefit plan, fair value of plan assets, excluding cash and cash equivalents | 7,080 | 6,153 |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined benefit plan, fair value of plan assets, excluding cash and cash equivalents | 7,080 | 6,153 |
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member] | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined benefit plan, fair value of plan assets, excluding cash and cash equivalents | 7,080 | 6,153 |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined benefit plan, fair value of plan assets, excluding cash and cash equivalents | 3,448 | 3,188 |
Fair Value, Inputs, Level 2 [Member] | Debt Securities [Member] | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined benefit plan, fair value of plan assets, excluding cash and cash equivalents | 3,448 | 3,188 |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined benefit plan, fair value of plan assets, excluding cash and cash equivalents | ' | ' |
Fair Value, Inputs, Level 3 [Member] | Debt Securities [Member] | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined benefit plan, fair value of plan assets, excluding cash and cash equivalents | ' | ' |
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Defined benefit plan, fair value of plan assets, excluding cash and cash equivalents | ' | ' |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Income Taxes [Abstract] | ' |
Operating loss carryforwards | $1.70 |
Income tax carryback period | '2 years |
Income tax carryforward period | '20 years |
Uncertain tax positions | $0 |
Income_Taxes_Schedule_of_Defer
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax liabilities: | ' | ' |
Deferred policy acquisition costs | ($7,905) | ($8,719) |
Net unrealized holding gain on investments | -9,730 | -5,622 |
Agency relationship | -85 | -94 |
Intangible assets | -6,129 | -6,852 |
Goodwill | -325 | -116 |
Fixed assets | -499 | -685 |
Other | -263 | -275 |
Total deferred tax liabilities | -24,936 | -22,363 |
Deferred tax assets: | ' | ' |
Unearned premiums | 9,822 | 9,806 |
Alternative minimum tax | 442 | 1,651 |
Amortization of non-compete agreements | 417 | 476 |
Pension liability | 797 | 1,591 |
Net operating loss carry-forward | 611 | 702 |
Unpaid loss and loss adjustment expense | 8,173 | 7,549 |
Rent reserve | 366 | 363 |
Investment impairments | 660 | 1,256 |
Other | 823 | 909 |
Total deferred tax assets | 22,111 | 24,303 |
Deferred federal income taxes, net | ($2,825) | $1,940 |
Income_Taxes_Schedule_of_Effec
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Taxes [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Computed expected income tax expense (benefit) at statutory regulatory tax rate | ' | ' | ' | ' | ' | ' | ' | ' | $3,878 | $1,181 | ($6,926) |
Meals and entertainment | ' | ' | ' | ' | ' | ' | ' | ' | 25 | 28 | 44 |
Tax exempt interest | ' | ' | ' | ' | ' | ' | ' | ' | -1,314 | -1,631 | -1,835 |
Dividends received deduction | ' | ' | ' | ' | ' | ' | ' | ' | -101 | -111 | -99 |
State taxes (net of federal benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 276 | 298 | 84 |
Other | ' | ' | ' | ' | ' | ' | ' | ' | 71 | -239 | -222 |
Income tax expense (benefit) | 1,334 | 3,198 | -2,166 | 469 | 504 | 1,350 | -2,351 | 23 | 2,835 | -474 | -8,954 |
Current income tax (benefit) expense | ' | ' | ' | ' | ' | ' | ' | ' | 3,092 | 2,377 | -6,059 |
Deferred income tax expense (benefit) | ' | ' | ' | ' | ' | ' | ' | ' | -257 | -2,851 | -2,895 |
Income tax (benefit) expense | $1,334 | $3,198 | ($2,166) | $469 | $504 | $1,350 | ($2,351) | $23 | $2,835 | ($474) | ($8,954) |
Income_Taxes_Summary_of_Operat
Income Taxes (Summary of Operating Loss Carryforwards) (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Unrecognized Tax Benefits Resulting in Net Operating Loss Carryforward | $1,747 |
Operating Loss Expires In 2021 [Member] | ' |
Unrecognized Tax Benefits Resulting in Net Operating Loss Carryforward | 650 |
Operating Loss Expires In 2022 [Member] | ' |
Unrecognized Tax Benefits Resulting in Net Operating Loss Carryforward | 878 |
Operating Loss Expires In 2028 [Member] | ' |
Unrecognized Tax Benefits Resulting in Net Operating Loss Carryforward | 2 |
Operating Loss Expires In 2030 [Member] | ' |
Unrecognized Tax Benefits Resulting in Net Operating Loss Carryforward | 25 |
Operating Loss Expires In 2031 [Member] | ' |
Unrecognized Tax Benefits Resulting in Net Operating Loss Carryforward | 45 |
Operating Loss Expires In 2032 [Member] | ' |
Unrecognized Tax Benefits Resulting in Net Operating Loss Carryforward | $70 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Narrative) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Commitments and Contingencies [Abstract] | ' | ' | ' |
Operating leases, rent expense, net | $2,200,000 | $2,300,000 | $2,000,000 |
Payments of assessment | 29,000 | 100,000 | 0 |
Contingent liability premium taxes | 4,500,000 | ' | ' |
Contingent liability penalties and interest | $900,000 | ' | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies (Schedule of Future Minimum Rental Payments for Operating Leases) (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies [Abstract] | ' |
2014 | $1,987 |
2015 | 1,969 |
2016 | 1,641 |
2017 | 1,484 |
2018 | 1,193 |
2019 and thereafter | 3,166 |
Total minimum lease payments | $11,440 |
Changes_in_Accumulated_Other_C2
Changes in Accumulated Other Comprehensive Income Balances (Schedule of Accumulated Other Comprehensive Income (Loss)) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' |
Beginning Balance | $7,899 | ' | ' |
Other comprehensive income (loss): | ' | ' | ' |
Change in net actuarial loss | 2,268 | 37 | -1,468 |
Tax effect on change in net actuarial loss | -794 | -13 | 514 |
Unrealized holding gains arising during the period | 22,094 | 4,388 | 191 |
Tax effect on unrealized gains arising during the period | -7,733 | -1,536 | -67 |
Reclassification adjustment for gains included in net income (loss) | -10,540 | -2,189 | -3,633 |
Tax effect on reclassification adjustment for gains included in net income (loss) | 3,689 | 766 | 1,272 |
Other comprehensive income (loss), net of tax | 8,984 | 1,453 | -3,191 |
Ending Balance | 16,883 | 7,899 | ' |
Pension Liability [Member] | ' | ' | ' |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' |
Beginning Balance | -2,954 | -2,978 | -2,024 |
Other comprehensive income (loss): | ' | ' | ' |
Change in net actuarial loss | 2,268 | 37 | -1,468 |
Tax effect on change in net actuarial loss | -794 | -13 | 514 |
Other comprehensive income (loss), net of tax | 1,474 | 24 | -954 |
Ending Balance | -1,480 | -2,954 | -2,978 |
Unrealized Gains (Loss) [Member] | ' | ' | ' |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' |
Beginning Balance | 10,853 | 9,424 | 11,661 |
Other comprehensive income (loss): | ' | ' | ' |
Unrealized holding gains arising during the period | 22,094 | 4,388 | 191 |
Tax effect on unrealized gains arising during the period | -7,733 | -1,536 | -67 |
Reclassification adjustment for gains included in net income (loss) | -10,540 | -2,189 | -3,633 |
Tax effect on reclassification adjustment for gains included in net income (loss) | 3,689 | 766 | 1,272 |
Other comprehensive income (loss), net of tax | 7,510 | 1,429 | -2,237 |
Ending Balance | 18,363 | 10,853 | 9,424 |
Accumulated Other Comprehensive Income (Loss) [Member] | ' | ' | ' |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' |
Beginning Balance | 7,899 | 6,446 | 9,637 |
Other comprehensive income (loss): | ' | ' | ' |
Change in net actuarial loss | 2,268 | 37 | -1,468 |
Tax effect on change in net actuarial loss | -794 | -13 | 514 |
Unrealized holding gains arising during the period | 22,094 | 4,388 | 191 |
Tax effect on unrealized gains arising during the period | -7,733 | -1,536 | -67 |
Reclassification adjustment for gains included in net income (loss) | -10,540 | -2,189 | -3,633 |
Tax effect on reclassification adjustment for gains included in net income (loss) | 3,689 | 766 | 1,272 |
Other comprehensive income (loss), net of tax | 8,984 | 1,453 | -3,191 |
Ending Balance | 16,883 | 7,899 | 6,446 |
Parent Company [Member] | ' | ' | ' |
Other comprehensive income (loss): | ' | ' | ' |
Ending Balance | $16,883 | $7,899 | ' |
Unaudited_Selected_Quarterly_F2
Unaudited Selected Quarterly Financial Information (Schedule of Quarterly Financial Information) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Unaudited Selected Quarterly Financial Information [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total revenue | $88,375 | $108,613 | $99,299 | $93,141 | $88,623 | $85,620 | $84,571 | $82,986 | $389,428 | $341,800 | $322,771 |
Total expense | 83,613 | 99,141 | 104,616 | 90,978 | 86,336 | 80,599 | 88,722 | 82,769 | 378,348 | 338,426 | 342,558 |
Income (loss) before tax | 4,762 | 9,472 | -5,317 | 2,163 | 2,287 | 5,021 | -4,151 | 217 | 11,080 | 3,374 | -19,787 |
Income tax expense (benefit) | 1,334 | 3,198 | -2,166 | 469 | 504 | 1,350 | -2,351 | 23 | 2,835 | -474 | -8,954 |
Net income (loss) | 3,428 | 6,274 | -3,151 | 1,694 | 1,783 | 3,671 | -1,800 | 194 | 8,245 | 3,848 | -10,833 |
Net income attributable to non-controlling interest | ' | ' | ' | ' | ' | 258 | 43 | 23 | ' | 324 | 58 |
Net income (loss) attributable to Hallmark Financial Services, Inc. | $3,428 | $6,274 | ($3,151) | $1,694 | $1,783 | $3,413 | ($1,843) | $171 | $8,245 | $3,524 | ($10,891) |
Basic earnings (loss) per share: | $0.18 | $0.33 | ($0.16) | $0.09 | $0.09 | $0.18 | ($0.10) | $0.01 | $0.43 | $0.18 | ($0.55) |
Diluted earnings (loss) per share: | $0.18 | $0.32 | ($0.16) | $0.09 | $0.09 | $0.18 | ($0.10) | $0.01 | $0.43 | $0.18 | ($0.55) |
Schedule_II_Condensed_Financia1
Schedule II - Condensed Financial Information of Registrant (Parent Company Only) (Balance Sheet) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||
ASSETS | ' | ' | ' | ' |
Cash and cash equivalents | $141,666 | $85,145 | $74,471 | $60,519 |
Investment in subsidiaries | 1,702 | 1,702 | ' | ' |
Other assets | 8,412 | 10,985 | ' | ' |
Total assets | 909,023 | 790,468 | ' | ' |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' | ' | ' |
Revolving credit facility payable | 1,473 | 1,473 | ' | ' |
Subordinated debt securities | 56,702 | 56,702 | ' | ' |
Accrued Income Taxes | 719 | 1,518 | ' | ' |
Accounts payable and other accrued expenses | 19,006 | 23,305 | ' | ' |
Total liabilities | 670,905 | 569,931 | ' | ' |
Stockholders' equity: | ' | ' | ' | ' |
Common stock, $.18 par value, authorized 33,333,333 shares; issued 20,872,831 shares in 2013 and in 2012 | 3,757 | 3,757 | ' | ' |
Capital in excess of par value | 122,827 | 122,475 | ' | ' |
Retained earnings | 106,209 | 97,964 | ' | ' |
Accumulated other comprehensive income | 16,883 | 7,899 | ' | ' |
Treasury stock (1,609,374 shares in 2013 and 2012), at cost | -11,558 | -11,558 | ' | ' |
Total stockholders equity | 238,118 | 220,537 | 215,572 | 235,278 |
Total liabilities and stockholders' equity | 909,023 | 790,468 | ' | ' |
Parent Company [Member] | ' | ' | ' | ' |
ASSETS | ' | ' | ' | ' |
Cash and cash equivalents | 8,063 | 1,112 | 3,309 | 10,983 |
Investment in subsidiaries | 316,295 | 296,258 | ' | ' |
Deferred federal income taxes | 930 | 2,112 | ' | ' |
Other assets | 3,729 | 3,416 | ' | ' |
Total assets | 329,017 | 302,898 | ' | ' |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' | ' | ' |
Revolving credit facility payable | 1,473 | 1,473 | ' | ' |
Subordinated debt securities | 56,702 | 56,702 | ' | ' |
Accrued Income Taxes | 3,353 | 7,047 | ' | ' |
Accounts payable and other accrued expenses | 29,371 | 17,139 | ' | ' |
Total liabilities | 90,899 | 82,361 | ' | ' |
Stockholders' equity: | ' | ' | ' | ' |
Common stock, $.18 par value, authorized 33,333,333 shares; issued 20,872,831 shares in 2013 and in 2012 | 3,757 | 3,757 | ' | ' |
Capital in excess of par value | 122,827 | 122,475 | ' | ' |
Retained earnings | 106,209 | 97,964 | ' | ' |
Accumulated other comprehensive income | 16,883 | 7,899 | ' | ' |
Treasury stock (1,609,374 shares in 2013 and 2012), at cost | -11,558 | -11,558 | ' | ' |
Total stockholders equity | 238,118 | 220,537 | ' | ' |
Total liabilities and stockholders' equity | $329,017 | $302,898 | ' | ' |
Schedule_II_Condensed_Financia2
Schedule II - Condensed Financial Information of Registrant (Parent Company Only) (Balance Sheet Extra) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
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 |
Parent Company [Member] | ' | ' |
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 |
Schedule_II_Condensed_Financia3
Schedule II - Condensed Financial Information of Registrant (Parent Company Only) (Comprehensive (loss) Income) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Investment loss, net of expenses | ' | ' | ' | ' | ' | ' | ' | ' | $12,884 | $15,293 | $15,880 |
Management fee income | ' | ' | ' | ' | ' | ' | ' | ' | 5,830 | 5,957 | 6,826 |
Total revenues | 88,375 | 108,613 | 99,299 | 93,141 | 88,623 | 85,620 | 84,571 | 82,986 | 389,428 | 341,800 | 322,771 |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 4,599 | 4,634 | 4,631 |
Amortization of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | 3,115 | 3,586 | 3,586 |
Loss before equity in undistributed earnings (loss) of subsidiaries and income tax benefit | 4,762 | 9,472 | -5,317 | 2,163 | 2,287 | 5,021 | -4,151 | 217 | 11,080 | 3,374 | -19,787 |
Income tax benefit | 1,334 | 3,198 | -2,166 | 469 | 504 | 1,350 | -2,351 | 23 | 2,835 | -474 | -8,954 |
Net income (loss) attributable to Hallmark Financial Services, Inc. | 3,428 | 6,274 | -3,151 | 1,694 | 1,783 | 3,413 | -1,843 | 171 | 8,245 | 3,524 | -10,891 |
Comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 17,229 | 4,977 | -14,082 |
Parent Company [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment loss, net of expenses | ' | ' | ' | ' | ' | ' | ' | ' | -190 | -181 | -194 |
Management fee income | ' | ' | ' | ' | ' | ' | ' | ' | 8,518 | 8,485 | 7,288 |
Total revenues | ' | ' | ' | ' | ' | ' | ' | ' | 8,328 | 8,304 | 7,094 |
Operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | 7,764 | 8,079 | 7,851 |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 4,599 | 4,634 | 4,631 |
Amortization of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17 | 42 |
Operating Costs and Expenses | ' | ' | ' | ' | ' | ' | ' | ' | 12,363 | 12,730 | 12,524 |
Loss before equity in undistributed earnings (loss) of subsidiaries and income tax benefit | ' | ' | ' | ' | ' | ' | ' | ' | -4,035 | -4,426 | -5,430 |
Income tax benefit | ' | ' | ' | ' | ' | ' | ' | ' | -1,227 | -1,627 | -1,669 |
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest, Total | ' | ' | ' | ' | ' | ' | ' | ' | -2,808 | -2,799 | -3,761 |
Equity in undistributed share of earnings (loss) in subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | 11,053 | 6,323 | -7,130 |
Net income (loss) attributable to Hallmark Financial Services, Inc. | ' | ' | ' | ' | ' | ' | ' | ' | 8,245 | 3,524 | -10,891 |
Comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | $17,229 | $4,977 | ($14,082) |
Schedule_II_Condensed_Financia4
Schedule II - Condensed Financial Information of Registrant (Parent Company Only) (Cash Flows) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | $3,428 | $6,274 | ($3,151) | $1,694 | $1,783 | $3,671 | ($1,800) | $194 | $8,245 | $3,848 | ($10,833) |
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization expense | ' | ' | ' | ' | ' | ' | ' | ' | 4,300 | 4,421 | 5,064 |
Deferred income tax expense (benefit) | ' | ' | ' | ' | ' | ' | ' | ' | -257 | -2,851 | -2,895 |
Realized loss | ' | ' | ' | ' | ' | ' | ' | ' | -10,540 | -1,943 | -3,633 |
Change in current federal income tax (recoverable) payable | ' | ' | ' | ' | ' | ' | ' | ' | -799 | 8,256 | -2,470 |
Change in all other liabilities | ' | ' | ' | ' | ' | ' | ' | ' | -6,551 | 5,396 | -5,707 |
Change in all other assets | ' | ' | ' | ' | ' | ' | ' | ' | 17,141 | 5,983 | 3,587 |
Net cash provided by operating activities | ' | ' | ' | ' | ' | ' | ' | ' | 68,338 | 33,682 | 24,610 |
Cash flows from investing activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchases of property and equipment, net | ' | ' | ' | ' | ' | ' | ' | ' | -673 | -107 | -1,586 |
Purchase of fixed maturity and equity securities | ' | ' | ' | ' | ' | ' | ' | ' | -222,399 | -167,626 | -265,684 |
Maturities and redemptions of investment securities | ' | ' | ' | ' | ' | ' | ' | ' | 214,738 | 148,968 | 280,918 |
Net cash used in investing activities | ' | ' | ' | ' | ' | ' | ' | ' | -11,817 | -18,100 | -3,781 |
Cash flows from financing activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from exercise of employee stock options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 99 |
Purchase of treasury shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -6,401 |
Activity under revolving credit facility, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2,577 | 1,250 |
Net cash used in financing activities | ' | ' | ' | ' | ' | ' | ' | ' | ' | -4,908 | -6,877 |
Increase in cash and cash equivalents | ' | ' | ' | ' | ' | ' | ' | ' | 56,521 | 10,674 | 13,952 |
Cash and cash equivalents at beginning of year | ' | ' | ' | 85,145 | ' | ' | ' | 74,471 | 85,145 | 74,471 | 60,519 |
Cash and cash equivalents at end of year | 141,666 | ' | ' | ' | 85,145 | ' | ' | ' | 141,666 | 85,145 | 74,471 |
Supplemental cash flow information: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest paid | ' | ' | ' | ' | ' | ' | ' | ' | -4,599 | -4,656 | -4,620 |
Income taxes (paid) recovered | ' | ' | ' | ' | ' | ' | ' | ' | -3,891 | 5,879 | 3,589 |
Parent Company [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash flows from operating activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 8,245 | 3,524 | -10,891 |
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization expense | ' | ' | ' | ' | ' | ' | ' | ' | 92 | 113 | 168 |
Deferred income tax expense (benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 1,182 | -1,725 | -215 |
Undistributed share of (earnings) loss of subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | -11,053 | -6,323 | 7,130 |
Change in current federal income tax (recoverable) payable | ' | ' | ' | ' | ' | ' | ' | ' | -3,694 | 4,030 | -4,838 |
Change in all other liabilities | ' | ' | ' | ' | ' | ' | ' | ' | 12,232 | 357 | 5,155 |
Change in all other assets | ' | ' | ' | ' | ' | ' | ' | ' | 63 | 450 | 1,074 |
Net cash provided by operating activities | ' | ' | ' | ' | ' | ' | ' | ' | 7,067 | 426 | -2,417 |
Cash flows from investing activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchases of property and equipment, net | ' | ' | ' | ' | ' | ' | ' | ' | -116 | -46 | -205 |
Net cash used in investing activities | ' | ' | ' | ' | ' | ' | ' | ' | -116 | -46 | -205 |
Cash flows from financing activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from exercise of employee stock options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 99 |
Purchase of treasury shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -6,401 |
Activity under revolving credit facility, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2,577 | 1,250 |
Net cash used in financing activities | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2,577 | -5,052 |
Increase in cash and cash equivalents | ' | ' | ' | ' | ' | ' | ' | ' | 6,951 | -2,197 | -7,674 |
Cash and cash equivalents at beginning of year | ' | ' | ' | 1,112 | ' | ' | ' | 3,309 | 1,112 | 3,309 | 10,983 |
Cash and cash equivalents at end of year | 8,063 | ' | ' | ' | 1,112 | ' | ' | ' | 8,063 | 1,112 | 3,309 |
Supplemental cash flow information: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest paid | ' | ' | ' | ' | ' | ' | ' | ' | -4,599 | -4,656 | -4,620 |
Income taxes (paid) recovered | ' | ' | ' | ' | ' | ' | ' | ' | ($1,285) | $3,932 | ($3,383) |
Schedule_III_Supplementary_Ins1
Schedule III - Supplementary Insurance Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' |
Deferred Policy Acquisition Costs | $22,586 | $24,911 | $22,554 |
Future Policy Benefits, Losses, Claims and Loss Adjustment Expenses | 382,640 | 313,416 | 296,945 |
Unearned Premiums | 185,303 | 162,502 | 146,104 |
Premium Revenue | 360,541 | 319,436 | 293,041 |
Net Investment Income | 12,884 | 15,293 | 15,880 |
Benefits Claims, Losses and Settlement Expenses | 261,345 | 226,414 | 239,235 |
Amortization of Deferred Policy Acquisition Costs | 57,277 | 59,805 | 47,775 |
Other Operating Expenses | 106,964 | 106,150 | 96,728 |
Net Premiums Written | 360,765 | 332,489 | 303,876 |
Personal Segment [Member] | ' | ' | ' |
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' |
Deferred Policy Acquisition Costs | 660 | 4,952 | 6,020 |
Future Policy Benefits, Losses, Claims and Loss Adjustment Expenses | 38,294 | 40,387 | 53,280 |
Unearned Premiums | 17,989 | 21,125 | 26,307 |
Premium Revenue | 63,800 | 81,451 | 92,962 |
Net Investment Income | 2,065 | 2,449 | 2,470 |
Benefits Claims, Losses and Settlement Expenses | 52,656 | 69,606 | 101,030 |
Amortization of Deferred Policy Acquisition Costs | 17,759 | 17,250 | 13,865 |
Other Operating Expenses | 16,957 | 26,413 | 29,706 |
Net Premiums Written | 45,644 | 76,345 | 95,655 |
Standard Commercial Segment [Member] | ' | ' | ' |
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' |
Deferred Policy Acquisition Costs | 6,124 | 5,968 | 5,976 |
Future Policy Benefits, Losses, Claims and Loss Adjustment Expenses | 111,473 | 103,610 | 100,487 |
Unearned Premiums | 36,309 | 35,073 | 32,854 |
Premium Revenue | 78,176 | 69,155 | 64,586 |
Net Investment Income | 5,031 | 4,925 | 4,061 |
Benefits Claims, Losses and Settlement Expenses | 56,143 | 52,828 | 50,940 |
Amortization of Deferred Policy Acquisition Costs | 8,254 | 10,825 | 12,721 |
Other Operating Expenses | 25,313 | 22,742 | 20,589 |
Net Premiums Written | 79,466 | 70,091 | 63,944 |
Specialty Commercial Segment [Member] | ' | ' | ' |
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' |
Deferred Policy Acquisition Costs | 15,802 | 13,991 | 10,558 |
Future Policy Benefits, Losses, Claims and Loss Adjustment Expenses | 232,873 | 169,419 | 143,178 |
Unearned Premiums | 131,005 | 106,304 | 86,943 |
Premium Revenue | 218,565 | 168,830 | 135,493 |
Net Investment Income | 11,021 | 9,435 | 7,416 |
Benefits Claims, Losses and Settlement Expenses | 152,546 | 103,980 | 87,265 |
Amortization of Deferred Policy Acquisition Costs | 31,264 | 31,730 | 21,189 |
Other Operating Expenses | 56,974 | 49,170 | 39,471 |
Net Premiums Written | 235,655 | 186,053 | 144,277 |
Corporate [Member] | ' | ' | ' |
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' |
Net Investment Income | -5,233 | -1,516 | 1,933 |
Other Operating Expenses | $7,720 | $7,825 | $6,962 |
Schedule_IV_Reinsurance_Detail
Schedule IV - Reinsurance (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' |
Gross Amount | $434,022 | $369,735 | $344,642 |
Ceded to Other Companies | 76,685 | 54,413 | 57,039 |
Assumed From Other Companies | 3,204 | 4,114 | 5,438 |
Net Amount | 360,541 | 319,436 | 293,041 |
Percentage of Amount Assumed to Net | 0.89% | 1.29% | 1.86% |
Property, Liability and Casualty Insurance Segment [Member] | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ' | ' | ' |
Gross Amount | 434,022 | 369,735 | 344,642 |
Ceded to Other Companies | 76,685 | 54,413 | 57,039 |
Assumed From Other Companies | 3,204 | 4,114 | 5,438 |
Net Amount | $360,541 | $319,436 | $293,041 |
Percentage of Amount Assumed to Net | 0.89% | 1.29% | 1.86% |
Schedule_VI_Supplemental_Infor1
Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Supplemental Information For Property, Casualty Insurance Underwriters [Abstract] | ' | ' | ' |
Deferred Policy Acquisition Costs | $22,586 | $24,911 | $22,554 |
Reserves for Unpaid Claims and Claim Adjustment Expenses | 382,640 | 313,416 | 296,945 |
Unearned Premiums | 185,303 | 162,502 | 146,104 |
Earned Premiums | 360,541 | 319,436 | 293,041 |
Net Investment Income | 12,884 | 15,293 | 15,880 |
Claims and Claim Adjustment Expenses Incurred Related to Current Year | 251,391 | 230,089 | 222,869 |
Claims and Claim Adjustment Expenses Incurred Related to Prior Years | 9,954 | -3,675 | 16,366 |
Amortization of Deferred Policy Acquisition Costs | 57,277 | 59,805 | 47,775 |
Paid Claims and Claims Adjustment Expenses | 212,709 | 217,483 | 206,873 |
Premiums Written | $360,765 | $332,489 | $303,876 |