Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 05, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | HALLMARK FINANCIAL SERVICES INC | |
Entity Central Index Key | 819,913 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | hall | |
Entity Common Stock, Shares Outstanding | 19,144,294 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
ASSETS | ||
Debt securities, available-for-sale, at fair value (cost: $524,908 in 2015 and $450,770 in 2014) | $ 519,163 | $ 450,785 |
Equity securities, available-for-sale, at fair value (cost: $24,957 in 2015 and $25,360 in 2014) | 48,229 | 56,444 |
Total investments | 567,392 | 507,229 |
Cash and cash equivalents | 93,049 | 130,985 |
Restricted cash | 18,525 | 11,914 |
Ceded unearned premiums | 64,115 | 53,376 |
Premiums receivable | 86,877 | 71,003 |
Accounts receivable | 2,241 | 3,141 |
Receivable for securities | 2,354 | 932 |
Reinsurance recoverable | 116,342 | 109,719 |
Deferred policy acquisition costs | 21,110 | 20,746 |
Goodwill | 44,695 | 44,695 |
Intangible assets, net | 15,576 | 17,427 |
Deferred federal income taxes, net | 2,832 | |
Prepaid expenses | 2,920 | 1,823 |
Other assets | 10,632 | 7,879 |
Total assets | 1,048,660 | 980,869 |
LIABILITIES | ||
Subordinated debt securities | 56,702 | 56,702 |
Reserves for unpaid losses and loss adjustment expenses | 451,383 | 415,135 |
Unearned premiums | 218,590 | 196,826 |
Reinsurance balances payable | 32,832 | 26,403 |
Pension liability | 2,481 | 2,619 |
Payable for securities | 4,269 | 1,321 |
Federal income tax payable | 522 | 968 |
Deferred federal income taxes, net | 3,092 | |
Accounts payable and other accrued expenses | 21,089 | 25,766 |
Total liabilities | $ 787,868 | $ 728,832 |
Commitments and Contingencies (Note 17) | ||
Stockholders' equity: | ||
Common stock, $.18 par value, authorized 33,333,333; issued 20,872,831 shares in 2015 and 2014 | $ 3,757 | $ 3,757 |
Additional paid-in capital | 123,606 | 123,194 |
Retained earnings | 138,055 | 119,638 |
Accumulated other comprehensive income | 8,921 | 17,801 |
Treasury stock (1,728,537 shares in 2015 and 1,655,306 in 2014), at cost | (13,547) | (12,353) |
Total stockholders' equity | 260,792 | 252,037 |
Liabilities and equity, total | $ 1,048,660 | $ 980,869 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets [Abstract] | ||
Debt securities, available-for-sale, cost (in dollars) | $ 524,908 | $ 450,770 |
Equity securities, available for sale, cost (in dollars) | $ 24,957 | $ 25,360 |
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 | 1,728,537 | 1,655,306 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated Statements of Operations [Abstract] | ||||
Gross premiums written | $ 132,141 | $ 122,723 | $ 390,708 | $ 363,245 |
Ceded premiums written | (42,217) | (38,698) | (116,105) | (122,596) |
Net premiums written | 89,924 | 84,025 | 274,603 | 240,649 |
Change in unearned premiums | (1,518) | (6,878) | (11,025) | (2,879) |
Net premiums earned | 88,406 | 77,147 | 263,578 | 237,770 |
Investment income, net of expenses | 3,495 | 2,912 | 10,051 | 9,139 |
Net realized gains (losses) | (335) | (23) | 3,688 | (122) |
Finance charges | 1,619 | 1,300 | 4,400 | 4,067 |
Commission and fees | 60 | 71 | ||
Commisions and fees, expense | (41) | (1,528) | ||
Other income | 439 | 10 | 655 | 36 |
Total revenues | 93,684 | 81,417 | 282,331 | 249,362 |
Losses and loss adjustment expenses | 56,005 | 50,509 | 171,820 | 155,781 |
Other operating expenses | 26,458 | 24,409 | 78,818 | 75,055 |
Interest expense | 769 | 1,140 | 3,043 | 3,435 |
Amortization of intangible assets | 617 | 631 | 1,851 | 1,909 |
Total expenses | 83,849 | 76,689 | 255,532 | 236,180 |
Income before tax | 9,835 | 4,728 | 26,799 | 13,182 |
Income tax expense | 3,137 | 1,265 | 8,382 | 3,520 |
Net income | $ 6,698 | $ 3,463 | $ 18,417 | $ 9,662 |
Net income per share: | ||||
Basic | $ 0.35 | $ 0.18 | $ 0.96 | $ 0.50 |
Diluted | $ 0.35 | $ 0.18 | $ 0.95 | $ 0.50 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated Statements of Comprehensive Income [Abstract] | ||||
Net income | $ 6,698 | $ 3,463 | $ 18,417 | $ 9,662 |
Other comprehensive income (loss): | ||||
Change in net actuarial gain | 26 | 40 | 78 | 122 |
Tax effect on change in net actuarial gain | (9) | (14) | (27) | (43) |
Unrealized holding (losses) gains arising during the period | (10,821) | (221) | (7,858) | 1,900 |
Tax effect on unrealized holding (losses) gains arising during the period | 3,787 | 77 | 2,750 | (665) |
Reclassification adjustment for (gains) losses included in net income | (28) | 23 | (5,881) | 122 |
Tax effect on reclassification adjustment for gains (losses) included in net income | 10 | (8) | 2,058 | (43) |
Other comprehensive (loss) income, net of tax | (7,035) | (103) | (8,880) | 1,393 |
Comprehensive (loss) income | $ (337) | $ 3,360 | $ 9,537 | $ 11,055 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2013 | $ 3,757 | $ 122,827 | $ 106,209 | $ 16,883 | $ (11,558) | |
Acquisition of treasury stock | (1,395) | |||||
Stock options exercised | (1) | 16 | ||||
Equity based compensation | 87 | |||||
Net income | 9,662 | $ 9,662 | ||||
Additional minimum pension liability, net of tax | 79 | |||||
Unrealized holding (losses) gains arising during period, net of tax | 1,235 | |||||
Reclassification adjustment for (gains) losses included in net income, net of tax | 79 | |||||
Balance at Sep. 30, 2014 | 3,757 | 122,913 | 115,871 | 18,276 | (12,937) | 247,880 |
Balance at Jun. 30, 2014 | 3,757 | 123,048 | 112,408 | 18,379 | (12,278) | |
Acquisition of treasury stock | (659) | |||||
Equity based compensation | (135) | |||||
Net income | 3,463 | 3,463 | ||||
Additional minimum pension liability, net of tax | 26 | |||||
Unrealized holding (losses) gains arising during period, net of tax | (144) | |||||
Reclassification adjustment for (gains) losses included in net income, net of tax | 15 | |||||
Balance at Sep. 30, 2014 | 3,757 | 122,913 | 115,871 | 18,276 | (12,937) | 247,880 |
Balance at Dec. 31, 2014 | 3,757 | 123,194 | 119,638 | 17,801 | (12,353) | 252,037 |
Acquisition of treasury stock | (1,910) | |||||
Stock options exercised | (114) | 716 | ||||
Equity based compensation | 526 | |||||
Net income | 18,417 | 18,417 | ||||
Additional minimum pension liability, net of tax | 51 | |||||
Unrealized holding (losses) gains arising during period, net of tax | (5,108) | |||||
Reclassification adjustment for (gains) losses included in net income, net of tax | (3,823) | |||||
Balance at Sep. 30, 2015 | 3,757 | 123,606 | 138,055 | 8,921 | (13,547) | 260,792 |
Balance at Jun. 30, 2015 | 3,757 | 123,618 | 131,357 | 15,956 | (12,376) | |
Acquisition of treasury stock | (1,180) | |||||
Stock options exercised | (1) | 9 | ||||
Equity based compensation | (11) | |||||
Net income | 6,698 | 6,698 | ||||
Additional minimum pension liability, net of tax | 17 | |||||
Unrealized holding (losses) gains arising during period, net of tax | (7,034) | |||||
Reclassification adjustment for (gains) losses included in net income, net of tax | (18) | |||||
Balance at Sep. 30, 2015 | $ 3,757 | $ 123,606 | $ 138,055 | $ 8,921 | $ (13,547) | $ 260,792 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 18,417 | $ 9,662 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization expense | 2,346 | 2,822 |
Deferred federal income taxes | (1,311) | (182) |
Net realized (gains) losses | (3,688) | 122 |
Share-based payments expense | 526 | 87 |
Change in ceded unearned premiums | (10,739) | (17,001) |
Change in premiums receivable | (15,874) | (11,315) |
Change in accounts receivable | 900 | (372) |
Change in deferred policy acquisition costs | (364) | 1,921 |
Change in unpaid losses and loss adjustment expenses | 36,248 | 32,112 |
Change in unearned premiums | 21,764 | 19,881 |
Change in reinsurance recoverable | (6,623) | (28,619) |
Change in reinsurance balances payable | 6,429 | 12,049 |
Change in current federal income tax payable | (446) | (1,407) |
Change in all other liabilities | (3,599) | 941 |
Change in all other assets | (885) | 1,009 |
Net cash provided by operating activities | 43,101 | 21,710 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (2,569) | (809) |
Net transfers from restricted cash | (6,611) | (4,692) |
Purchases of investment securities | (167,677) | (108,753) |
Maturities, sales and redemptions of investment securities | 98,344 | 113,758 |
Net cash used in investing activities | (78,513) | (496) |
Cash flows from financing activities: | ||
Activity under revolving credit facility, net | (1,473) | |
Payment of contingent consideration | (1,216) | |
Proceeds from exercise of employee stock options | 602 | 15 |
Purchase of treasury shares | (1,910) | (1,395) |
Net cash used in financing activities | (2,524) | (2,853) |
(Decrease) increase in cash and cash equivalents | (37,936) | 18,361 |
Cash and cash equivalents at beginning of period | 130,985 | 141,666 |
Cash and cash equivalents at end of period | 93,049 | 160,027 |
Supplemental cash flow information: | ||
Interest paid | 3,043 | 3,435 |
Income taxes paid | 10,139 | 5,109 |
Supplemental schedule of non-cash investing activities: | ||
Change in receivable for securities related to investment disposals that settled after the balance sheet date | 1,422 | 1,505 |
Change in payable for securities related to investment purchases that settled after the balance sheet date | $ (2,948) | $ (9,880) |
General
General | 9 Months Ended |
Sep. 30, 2015 | |
General [Abstract] | |
General | 1. General Hallmark Financial Services, Inc. (“Hallmark” and, together with subsidiaries, “we,” “us” or “our”) is an insurance holding company engaged in the sale of property/casualty insurance products to businesses and individuals. Our business involves marketing, distributing, underwriting and servicing our insurance products, as well as providing other insurance related services. We pursue our business activities primarily through subsidiaries whose operations are organized into product - specific operating units that are supported by our insurance company subsidiaries. Our Standard Commercial P&C operating unit offers industry - specific commercial insurance products and services in the standard market. Our Workers Compensation operating unit specializes in small and middle market workers compensation business. Effective July 1, 2015 , this operating unit no longer markets or retains any risk on new or renewal policies. Our MGA Commercial Products operating unit offers commercial insurance products and services in the excess and surplus lines market. Our Specialty Commercial operating unit offers general aviation and satellite launch insurance products and services, low and middle market commercial umbrella and primary/excess liability insurance, medical professional liability insurance products and services, and primary / excess commercial property coverages for both catastrophe and non-catastrophe exposures. Our Specialty Personal Lines operating unit offers non-standard personal automobile and renters insurance products and services. Our insurance company subsidiaries supporting these operating units are American Hallmark Insurance Company of Texas, Hallmark Insurance Company, Hallmark Specialty Insurance Company, Hallmark County Mutual Insurance Company, Hallmark National Insurance Company and Texas Builders Insurance Company. These operating units are segregated into three reportable industry segments for financial accounting purposes. The Standard Commercial Segment includes our Standard Commercial P&C operating unit and our Workers Compensation operating unit. The Specialty Commercial Segment includes our MGA Commercial Products operating unit and our Specialty Commercial operating unit. The Personal Segment consists solely of our Personal Lines operating unit. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 2. Basis of Presentation Our unaudited consolidated financial statements included herein have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include our accounts and the accounts of our subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2014 included in our Annual Report on Form 10-K filed with the SEC. The interim financial data as of September 30, 2015 and 2014 is unaudited. However, in the opinion of management, the interim data includes all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The results of operations for the period ended September 30, 2015 are not necessarily indicative of the operating results to be expected for the full year. Business Combinations We account for business combinations using the acquisition method of accounting pursuant to Accounting Standards Codification (“ASC”) 805, “Business Combinations.” The base cash purchase price plus the estimated fair value of any non-cash or contingent consideration given for an acquired business is allocated to the assets acquired (including identified intangible assets) and liabilities assumed based on the estimated fair values of such assets and liabilities. The excess of the fair value of the total consideration given for an acquired business over the aggregate net fair values assigned to the assets acquired and liabilities assumed is recorded as goodwill. Contingent consideration is recognized as a liability at fair value as of the acquisition date with subsequent fair value adjustments recorded in the consolidated statements of operations. The valuation of contingent consideration requires assumptions regarding anticipated cash flows, probabilities of cash flows, discount rates and other factors. Significant judgment is employed in determining the propriety of these assumptions as of the acquisition date and for each subsequent period. Accordingly, future business and economic conditions, as well as changes in any of the assumptions, can materially impact the amount of contingent consideration expense we record in any given period. Indirect and general expenses related to business combinations are expensed as incurred. Income Taxes We file a consolidated federal income tax return. Deferred federal income taxes reflect the future tax consequences of differences between the tax 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. Use of Estimates in the Preparation of the Financial Statements Our preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect our reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the date of our consolidated financial statements, as well as our reported amounts of revenues and expenses during the reporting period. Refer to “Critical Accounting Estimates and Judgments” under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2014 for information on accounting policies that we consider critical in preparing our consolidated financial statements. Actual results could differ materially from those estimates. Fair Value of Financial Instruments Fair value estimates are made at a point in time based on relevant market data as well as the best information available about the financial instruments. Fair value estimates for financial instruments for which no or limited observable market data is available are based on judgments regarding current economic conditions, credit and interest rate risk. These estimates involve significant uncertainties and judgments and cannot be determined with precision. As a result, such calculated fair value estimates may not be realizable in a current sale or immediate settlement of the instrument. In addition, changes in the underlying assumptions used in the fair value measurement technique, including discount rate and estimates of future cash flows, could significantly affect these fair value estimates. Cash and Cash Equivalents : The carrying amounts reported in the balance sheet for these instruments approximate their fair values. Restricted Cash : The carrying amount for restricted cash reported in the balance sheet approximates the fair value. Subordinated Debt Securities : Our trust preferred securities have a carried value of $56.7 million and a fair value of $ 45.9 million as of September 30, 2015. The fair value of our trust preferred securities is based on discounted cash flows using a current yield to maturity of 8.0% , which is based on similar issues to discount future cash flows. Our trust preferred securities would be included in Level 3 of the fair value hierarchy if they were reported at fair value. For reinsurance balances, premiums receivable, federal income tax payable, other assets and other liabilities, the carrying amounts approximate fair value because of the short maturity of such financial instruments. Variable Interest Entities On June 21, 2005, we formed Hallmark Statutory Trust I (“Trust I”), an unconsolidated trust subsidiary, for the sole purpose of issuing $30.0 million in trust preferred securities. Trust I used the proceeds from the sale of these securities and our initial capital contribution to purchase $30.9 million of subordinated debt securities from Hallmark. The debt securities are the sole assets of Trust I, and the payments under the debt securities are the sole revenues of Trust I. On August 23, 2007, we formed Hallmark Statutory Trust II (“Trust II”), an unconsolidated trust subsidiary, for the sole purpose of issuing $25.0 million in trust preferred securities. Trust II used the proceeds from the sale of these securities and our initial capital contribution to purchase $25.8 million of subordinated debt securities from Hallmark. The debt securities are the sole assets of Trust II, and the payments under the debt securities are the sole revenues of Trust II. We evaluate on an ongoing basis our investments in Trust I and Trust II (collectively the “Trusts”) and have determined that we do not have a variable interest in the Trusts. Therefore, the Trusts are not included in our consolidated financial statements. We are also involved in the normal course of business with variable interest entities (“VIE’s”) primarily as a passive investor in mortgage-backed securities and certain collateralized corporate bank loans issued by third party VIE’s. The maximum exposure to loss with respect to these investments is the investment carrying values included in the consolidated balance sheets. New Accounting Pronouncements In May 2014, the FASB issued guidance which revises the criteria for revenue recognition. Insurance contracts are excluded from the scope of the new guidance. Under the guidance, the transaction price is attributed to underlying performance obligations in the contract and revenue is recognized as the entity satisfies the performance obligations and transfers control of a good or service to the customer. Incremental costs of obtaining a contract may be capitalized to the extent the entity expects to recover those costs. The guidance is effective for reporting periods beginning after December 15, 2017 and is to be applied retrospectively. We are in the process of evaluating the impact of adoption, which is not expected to be material to our results of operations or financial position. In May 2015, the FASB issued guidance which requires additional disclosures about short-duration contracts for products in effect for typically a year or less. The disclosures will focus on the liability for unpaid claims and claim adjustment expenses. This guidance is effective for annual periods beginning after December 15, 2015 and interim periods within annual periods beginning after December 15, 2016. We are in the process of evaluating the impact of the adoption, which is not expected to be material to our results of operations or financial position. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Business Combinations | 3. Business Combinations Effective July 1, 2011, we acquired all of the issued and outstanding capital stock of TBIC Holding Corporation (“TBIC Holding”) for initial consideration of $1.6 million paid in cash on July 1, 2011. In addition, a holdback purchase price of $350 thousand was paid during the third quarter of 2012. A contingent purchase price of $1.2 million was paid in the third quarter of 2015 based upon a formula contained in the acquisition agreement. The sellers have asserted that up to an additional $1.8 million in contingent purchase price is payable pursuant to the contractual formula. We disagree with this assertion and are in discussions with the Sellers in regards to a potential resolution. On June 30, 2015, Redpoint Comp Holdings LLC (“Purchaser”) acquired exclusive renewal rights to our current in-force Texas workers compensation policies, together with certain physical assets associated with the administration of such in-force policies. In consideration for such renewal rights and physical assets, Purchaser assumed certain office lease obligations and offered employment to certain of our employees associated with the Workers Compensation operating unit . Purchaser also agreed to administer the run-off of all of our current workers compensation policies and claims for a period of three years. In connection with the transaction, we made a one-time payment to the Purchaser of $83,000 . We also agreed not to compete in the workers compensation line of insurance in the State of Texas (with certain exceptions) until after the assumed office lease obligations expire on October 31, 2017 . We recorded a gain of $0.2 million in Other Income in the Consolidated Statements of Operations on the sale of the renewal rights. On September 15, 2015, we executed Amendment No. 1 to the sale agreement with the Purchaser . Pursuant to the Amendment, the Purchaser has agreed to pay us an additional $115,000 and administer the run-off of all of our workers compensation policies and claims in perpetuity or through final conclusion (rather than for three years as contemplated by the original a greement) in consideration of us assigning to Purchaser the commission on all unearned premiums on such policies as of July 1, 2015. We recorded a n additional gain of $0.4 million in Other Income in the Consol idated Statements of Operations as a result of this Amendment No.1. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value [Abstract] | |
Fair Value | 4. Fair Value ASC 820 defines fair value, establishes a consistent framework for measuring fair value and expands disclosure requirements about fair value measurements. ASC 820, among other things, requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. In addition, ASC 820 precludes the use of block discounts when measuring the fair value of instruments traded in an active market, which were previously applied to large holdings of publicly traded equity securities. We determine the fair value of our financial instruments based on the fair value hierarchy established in ASC 820. In accordance with ASC 820, we utilize the following fair value hierarchy: · Level 1: quoted prices in active markets for identical assets; · Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, inputs of identical assets for less active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument; and · Level 3: inputs to the valuation methodology that are unobservable for the asset or liability. This hierarchy requires the use of observable market data when available. Under ASC 820, we determine fair value based on the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy described above. Fair value measurements for assets and liabilities where there exists limited or no observable market data are calculated based upon our pricing policy, the economic and competitive environment, the characteristics of the asset or liability and other factors as appropriate. These estimated fair values may not be realized upon actual sale or immediate settlement of the asset or liability. Where quoted prices are available on active exchanges for identical instruments, investment securities are classified within Level 1 of the valuation hierarchy. Level 1 investment securities include common and preferred stock. Level 2 investment securities include corporate bonds, collateralized corporate bank loans, municipal bonds, and U.S. Treasury securities for which quoted prices are not available on active exchanges for identical instruments. We use third party pricing services to determine fair values for each Level 2 investment security in all asset classes. Since quoted prices in active markets for identical assets are not available, these prices are determined using observable market information such as quotes from less active markets and/or quoted prices of securities with similar characteristics, among other things. We have reviewed the processes used by the pricing services and have determined that they result in fair values consistent with the requirements of ASC 820 for Level 2 investment securities. We have not adjusted any prices received from the third party pricing services. In cases where there is limited activity or less transparency around inputs to the valuation, investment securities are classified within Level 3 of the valuation hierarchy. Level 3 investments are valued based on the best available data in order to approximate fair value. This data may be internally developed and consider risk premiums that a market participant would require. Investment securities classified within Level 3 include other less liquid investment securities. There were no transfers between Level 1 and Level 2 securities during the periods presented. The following table presents for each of the fair value hierarchy levels, our assets that are measured at fair value on a recurring basis at September 30, 2015 and December 31, 2014 (in thousands): As of September 30, 2015 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 $ - $ $ - $ Corporate bonds - - Collateralized corporate bank loans - - Municipal bonds - Mortgage-backed - - Total debt securities - Total equity securities - - Total debt and equity securities $ $ $ $ As of December 31, 2014 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 $ - $ $ - $ Corporate bonds - - Collateralized corporate bank loans - Municipal bonds - Mortgage-backed - - Total debt securities - Total equity securities - - Total debt and equity securities $ $ $ $ Due to significant unobservable inputs into the valuation model for certain municipal bonds in illiquid markets, as of September 30, 2015, we classified these investments as Level 3 in the fair value hierarchy. We used an income approach in order to derive an estimated fair value of the municipal bonds classified as Level 3, which included inputs such as expected holding period, benchmark swap rate, benchmark discount rate and a discount rate premium for illiquidity. Significant changes in the unobservable inputs in the fair value measurement of our municipal bonds could result in a significant change in the fair value measurement. The following table summarizes the changes in fair value for all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the nine months ended September 30, 2015 and 2014 (in thousands): Beginning balance as of January 1, 2015 $ Sales - Settlements Purchases - Issuances - Total realized/unrealized gains included in net income - Net losses included in other comprehensive income Transfers into Level 3 - Transfers out of Level 3 - Ending balance as of September 30, 2015 $ Beginning balance as of January 1, 2014 $ Sales - Settlements Purchases - Issuances - Total realized/unrealized gains included in net income - Net gains included in other comprehensive income Transfers into Level 3 - Transfers out of Level 3 - Ending balance as of September 30, 2014 $ |
Investments
Investments | 9 Months Ended |
Sep. 30, 2015 | |
Investments [Abstract] | |
Investments | 5. Investments The amortized cost and estimated fair value of investments in debt and equity securities by category is as follows (in thousands): Gross Gross Amortized Unrealized Unrealized Fair As of September 30, 2015 Cost Gains Losses Value U.S. Treasury securities and obligations of U.S. Government $ $ $ - $ Corporate bonds Collateralized corporate bank loans Municipal bonds Mortgage-backed Total debt securities Total equity securities Total debt and equity securities $ $ $ $ As of December 31, 2014 U.S. Treasury securities and obligations of U.S. Government $ $ $ $ Corporate bonds Collateralized corporate bank loans Municipal bonds Mortgage-backed Total debt securities Total equity securities Total debt and equity securities $ $ $ $ Major categories of net realized gains (losses) on investments are summarized as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 U.S. Treasury securities and obligations of U.S. Government $ - $ - $ - $ - Corporate bonds - - Collateralized corporate bank loans Municipal bonds Mortgage-backed - Equity securities Gain (loss) on investments Other-than-temporary impairments - Net realized gains (losses) $ $ $ $ We realized gross gains on investments of $76 thousand and $0.1 million during the three months ended September 30, 2015 and 2014, respectively, and $6.0 million and $0.4 million for the nine months ended September 30, 2015 and 2014, respectively. We realized gross losses on investments of $48 thousand and $0.1 million for the three months ended September 30, 2015 and 2014, respectively, and $0.1 million and $0.2 million for the nine months ended September 30, 2015 and 2014, respectively. We recorded proceeds from the sale of investment securities of $0.8 million and $0.6 million during the three months ended September 30, 2015 and 2014, respectively, and $17.7 million and $14.9 million for the nine months ended September 30, 2015 and 2014, respectively. Realized investment gains and losses are recognized in operations on the specific identification method. The following schedules summarize the gross unrealized losses showing the length of time that investments have been continuously in an unrealized loss position as of September 30, 2015 and December 31, 2014 (in thousands): As of September 30, 2015 12 months or less Longer than 12 months Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Treasury securities and obligations of U.S. Government $ - $ - $ - $ - $ - $ - Corporate bonds - - Collateralized corporate bank loans Municipal bonds Mortgage-backed Total debt securities Total equity securities - - Total debt and equity securities $ $ $ $ $ $ As of December 31, 2014 12 months or less Longer than 12 months Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Treasury securities and obligations of U.S. Government $ $ $ - $ - $ $ Corporate bonds - - Collateralized corporate bank loans Municipal bonds Mortgage-backed Total debt securities Total equity securities - - Total debt and equity securities $ $ $ $ $ $ At September 30, 2015, the gross unrealized losses more than twelve months old were attributable to 25 debt security positions. At December 31, 2014, the gross unrealized losses more than twelve months old were attributable to 24 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. We complete a detailed analysis each quarter to assess whether any decline in the fair value of any investment below cost is deemed other-than-temporary. All securities with an unrealized loss are reviewed. We recognize an impairment loss when an investment's value declines below cost, adjusted for accretion, amortization and previous other-than-temporary impairments, and it is determined that the decline is other-than-temporary. Debt Investments : We assess whether we intend to sell, or it is more likely than not that we will be required to sell, a fixed maturity investment before recovery of its amortized cost basis less any current period credit losses. For fixed maturity investments that are considered other-than-temporarily impaired and that we do not intend to sell and will not be required to sell, we separate the amount of the impairment into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings and is the difference between the investment’s amortized cost basis and the present value of its expected future cash flows. The remaining difference between the investment’s fair value and the present value of future expected cash flows is recognized in other comprehensive income. Equity Investments : Some of the factors considered in evaluating whether a decline in fair value for an equity investment is other-than-temporary include: (1) our ability and intent to retain the investment for a period of time sufficient to allow for an anticipated recovery in value; (2) the recoverability of cost; (3) the length of time and extent to which the fair value has been less than cost; and (4) the financial condition and near-term and long-term prospects for the issuer, including the relevant industry conditions and trends, and implications of rating agency actions and offering prices. When it is determined that an equity investment is other-than-temporarily impaired, the security is written down to fair value, and the amount of the impairment is included in earnings as a realized investment loss. The fair value then becomes the new cost basis of the investment, and any subsequent recoveries in fair value are recognized at disposition. We recognize a realized loss when impairment is deemed to be other-than-temporary even if a decision to sell an equity investment has not been made. When we decide to sell a temporarily impaired available-for-sale equity investment and we do not expect the fair value of the equity investment to fully recover prior to the expected time of sale, the investment is deemed to be other-than-temporarily impaired in the period in which the decision to sell is made. The amortized cost and estimated fair value of debt securities at September 30, 2015 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 $ $ Due after one year through five years Due after five years through ten years Due after ten years Mortgage-backed $ $ |
Pledged Investments
Pledged Investments | 9 Months Ended |
Sep. 30, 2015 | |
Pledged Investments [Abstract] | |
Pledged Investments | 6. Pledged Investments We have pledged certain of our securities for the benefit of various state insurance departments and reinsurers. These securities are included with our available-for-sale debt securities because we have the ability to trade these securities. We retain the interest earned on these securities. These securities had a carrying value of $19.9 million and $20.3 million at September 30, 2015 and December 31, 2014, respectively. |
Reserves for Unpaid Losses and
Reserves for Unpaid Losses and Loss Adjustment Expenses | 9 Months Ended |
Sep. 30, 2015 | |
Reserves for Unpaid Losses and Loss Adjustment Expenses [Abstract] | |
Reserves for Unpaid Losses and Loss Adjustment Expenses | 7. Reserves for Unpaid Losses and Loss Adjustment Expenses We recorded $3.1 million of favorable prior years’ net loss development during the three months ended September 30, 2015. We recorded $4.6 million of favorable prior years’ net loss development during the nine months ended September 30, 2015. For the year to date, the $4.6 million of favorable development was attributable to $4.0 million favorable development on claims incurred in the 2014 accident year, $2.1 million favorable development on claims incurred during the 2011 and prior accident years, partially offset by $0.5 million unfavorable development on claims incurred in the 2013 accident year and $1.0 million unfavorable development on claims incurred in the 2012 accident year. During the nine months ended September 30, 2015, our Standard Commercial P&C operating unit accounted for $4.0 million of the favorable development , o ur Workers Compensation operating unit accounted for $0.8 million of the favorable development, our MGA Commercial Products operating unit accounted for $0.5 million of the favorable development and our Specialty Commercial operating unit accounted for $1.3 million of the favorable development. These favorable developments were partially offset by unfavorable development of $2.0 million in our Personal Segment. The favorable development for our Standard Commercial P&C operating unit of $4.0 million was driven primarily by our general liability and commercial property lines of business in the 2014 and prior accident years. The favorable development of $0.8 million for our Workers Compensation operating unit was primarily attributable to the 2014 through 2011 accident years. The favorable development of $0.5 million in our MGA Commercial Products operating unit was primarily driven by favorable development in our commercial auto liability and general liability lines of business. The favorable development of $1.3 million in our Specialty Commercial operating unit consisted of $0.3 million of favorable development in our commercial excess liability line of business, $0.3 million in our professional medical liability products and $0.7 million of favorable development in our general aviation line of business. The unfavorable development of $2.0 million in our Personal Segment was primarily attributable to the 2014 and prior accident years. We recorded $1.5 million of unfavorable prior years’ net loss development during the three months ended September 30, 2014. We recorded $5.4 million of favorable prior year net loss development during the nine months ended September 30, 2014. For the year to date, the $5.4 million of favorable development was attributable to $6.9 million favorable development on claims incurred in the 2013 accident year, $3.6 million favorable development on claims incurred during the 2011 accident year, partially offset by $3.4 million unfavorable development on claims incurred in the 2012 accident year and $1.7 million unfavorable development on claims incurred in the 2010 and prior accident years. During the nine months ended September 30, 2014, our Standard Commercial P&C operating unit accounted for $3.0 million of the favorable development. Our Personal Segment accounted for $3.1 million of the favorable development, our Workers Compensation operating unit accounted for $1.9 million of the favorable development and our Specialty Commercial operating unit accounted for $0.7 million of the favorable development. These favorable developments were partially offset by unfavorable development of $3.3 million in our MGA Commercial Products operating unit. The favorable development for our Standard Commercial P&C operating unit of $3.0 million was driven primarily by our general liability line of business in the 2011 accident year. The favorable development for our Personal Segment of $3.1 million was primarily attributable to the 2013 accident year. The favorable development of $1.9 million for our Workers Compensation operating unit was primarily attributable to the 2013 and 2012 accident years. The favorable development of $0.7 million in our Specialty Commercial operating unit consisted of $0.9 million of favorable development in our commercial excess liability line of business and $0.5 million in our professional medical liability products, partially offset by $0.7 million of unfavorable development in our general aviation line of business. The unfavorable development of $3.3 million in our MGA Commercial Products operating unit was primarily driven by unfavorable development in our commercial auto liability and general liability lines of business. |
Share-Based Payment Arrangement
Share-Based Payment Arrangements | 9 Months Ended |
Sep. 30, 2015 | |
Share-Based Payment Arrangements [Abstract] | |
Share-Based Payment Arrangements | 8. Share-Based Payment Arrangements Our 2005 Long Term Incentive Plan (“2005 LTIP”) is a stock compensation plan for key employees and non-employee directors that was initially approved by the shareholders on May 26, 2005 and expired by its terms on May 27, 2015. As of September 30, 2015, there were outstanding incentive stock options to purchase 623,290 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 289,830 shares of our common stock. 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. A new equity compensation plan for our key employees and non-employee directors, the 2015 Long Term Incentive Plan (“2015 LTIP”), was approved by shareholders on May 29, 2015. There are 2,000,000 shares authorized for issuance under the 2015 L TIP. As of September 30, 2015, restricted stock units representing the right to receive up to 154,457 shares of our common stock were outstanding under the 2015 LTIP . There were no stock option awards granted under the 2015 LTIP as of September 30, 2015. 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 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 vests in equal annual increments on each of the first three anniversary dates and terminates 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 September 30, 2015 and changes during the nine months ended is presented below: Average Weighted Remaining Aggregate Average Contractual Intrinsic Number of Exercise Term Value Shares Price (Years) ($000) Outstanding at January 1, 2015 $ Granted - Exercised $ Forfeited or expired $ Outstanding at September 30, 2015 $ $ Exercisable at September 30, 2015 $ $ The following table details the intrinsic value of options exercised, total cost of share-based payments charged against income before income tax benefit and the amount of related income tax benefit recognized in income for the periods indicated (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Intrinsic value of options exercised $ $ - $ $ Cost of share-based payments (non-cash) $ $ $ $ Income tax benefit of share-based payments recognized in income $ $ $ $ As of September 30, 2015, there was $79 thousand of total unrecognized compensation cost related to non-vested stock options granted under our plans, of which $39 thousand is expected to be recognized during the remainder of 2015 and $40 thousand is expected to be recognized in 2016. 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 during the first nine months of 2015 or 2014. 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 awarded under the 2005 LTIP 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 of our employees 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. Subsequently on September 8, 2014, an aggregate of 175,983 restricted stock units were granted to certain employees. On May 29, 2015, an aggregate of 102,971 restricted stock units were granted to certain employees under the 2015 LTIP. The performance criteria for all restricted stock units require that we 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. Grantees of restricted stock units do not have any rights of a stockholder, and do not participate in any distributions to our common stockholders, until the award fully vests upon satisfaction of the vesting schedule, performance criteria and other conditions set forth in their award agreement. Therefore, unvested restricted stock units are not considered participating securities under ASC 260, “Earnings Per Share,” and are not included in the calculation of basic or diluted earnings per share. On April 1, 2015, 8,616 shares of common stock were issued with respect to 8,616 restricted stock units which were granted on July 27, 2012 and vested on March 31, 2015. If and to the extent specified performance criteria have been achieved, the restricted stock units granted on April 10, 2013 will vest on March 31, 2016, the restricted stock units granted on September 8, 2014 (except for one grant) will vest on March 31, 2017 , one grant of restricted stock units granted on September 8, 2014 will vest on March 31, 2018 and the restricted stock units granted on May 29, 2015 under the 2015 LTIP will vest on March 31, 2018. Compensation cost is measured as an amount equal to the fair value of the restricted stock units on the date of grant 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 our best estimate of the ultimate achievement level. The grant date fair value of the restricted stock units granted in 2012 and 2013 is $9.20 per unit. The grant date fair value of the restricted stock units granted in 2014 is $9.66 per unit. The grant date fair value of the restricted stock units granted in 2015 is $11.10 per unit. We incurred a benefit to compensation expense of $49 thousand related to restricted stock units during the three months ended September 30, 2015. We incurred compensation expense of $408 thousand related to restricted stock units during the nine months ended September 30, 2015. We incurred a benefit to compensation expense of $170 thousand and $46 thousand related to the restricted stock units during the three and nine months ended September 30, 2014. We recorded an income tax (benefit) expense of ($17) thousand and $143 thousand related to restricted stock units during the three and nine months ended September 30, 2015. We recorded an income tax expense of $59 thousand and $16 thousand related to restricted stock units during the three and nine months ended September 30, 2014. A summary of the status of our restricted stock units as of September 30, 2015 and changes during the nine months then ended is presented below: Number of Restricted Stock Units Non-vested at January 1, 2015 Granted Vested Forfeited Non-vested at September 30, 2015 As of September 30, 2015, there was $1.6 million of total unrecognized compensation cost related to unvested restricted stock units granted under our 2005 LTIP and 2015 LTIP, of which $184 thousand is expected to be recognized during the remainder of 2015, $723 thousand is expected to be recognized in 2016, $587 thousand is expected to be recognized in 2017 and $136 thousand is expected to be recognized in 2018. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Information [Abstract] | |
Segment Information | 9. Segment Information The following is business segment information for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Revenues: Standard Commercial Segment $ $ $ $ Specialty Commercial Segment Personal Segment Corporate Consolidated $ $ $ $ Pre-tax income (loss): Standard Commercial Segment $ $ $ $ Specialty Commercial Segment Personal Segment Corporate Consolidated $ $ $ $ The following is additional business segment information as of the dates indicated (in thousands): September 30, December 31, 2015 2014 Assets Standard Commercial Segment $ $ Specialty Commercial Segment Personal Segment Corporate $ $ |
Reinsurance
Reinsurance | 9 Months Ended |
Sep. 30, 2015 | |
Reinsurance [Abstract] | |
Reinsurance | 10. Reinsurance We reinsure a portion of the risk we underwrite in order to control the exposure to losses and to protect capital resources. We cede to reinsurers a portion of these risks and pay premiums based upon the risk and exposure of the policies subject to such reinsurance. Ceded reinsurance involves credit risk and is generally subject to aggregate loss limits. Although the reinsurer is liable to us to the extent of the reinsurance ceded, we are ultimately liable as the direct insurer on all risks reinsured. Reinsurance recoverables are reported after allowances for uncollectible amounts. We monitor the financial condition of reinsurers on an ongoing basis and review our reinsurance arrangements periodically. Reinsurers are selected based on their financial condition, business practices and the price of their product offerings. In order to mitigate credit risk to reinsurance companies, most of our reinsurance recoverable balance as of September 30, 2015 was with reinsurers that had an A.M. Best rating of “A–” or better. The following table shows earned premiums ceded and reinsurance loss recoveries by period (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Ceded earned premiums $ $ $ $ Reinsurance recoveries $ $ $ $ |
Revolving Credit Facility
Revolving Credit Facility | 9 Months Ended |
Sep. 30, 2015 | |
Revolving Credit Facility [Abstract] | |
Revolving Credit Facility | 11. Revolving Credit Facility Our Second Restated Credit Agreement with The Frost National Bank (“Frost”) dated June 30, 2015, reinstates the credit facility with Frost which expired by its terms on April 30, 2015. The Second Restated Credit Agreement also amends certain provisions of the credit facility and restates the agreement with Frost in its entirety. The Second Restated Credit Agreement provides a $15.0 million revolving credit facility, with a $5.0 million letter of credit sub-facility. The outstanding balance of the revolving credit facility bears interest at a rate equal to the prime rate or LIBOR plus 2.5 % , at our election. We pay an annual fee of 0.25 % of the average daily unused balance of the credit facility and letter of credit fees at the rate of 1.00 % per annum. 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 September 30, 2015, we were in compliance with all of our covenants and had no outstanding borrowings under this revolving credit facility. |
Subordinated Debt Securities
Subordinated Debt Securities | 9 Months Ended |
Sep. 30, 2015 | |
Subordinated Debt Securities [Abstract] | |
Subordinated Debt Securities | 12. Subordinated Debt Securities On June 21, 2005, we entered into a trust preferred securities transaction pursuant to which we issued $30.9 million aggregate principal amount of subordinated debt securities due in 2035 . To effect the transaction, we formed Trust I as a Delaware statutory trust. Trust I issued $30.0 million of preferred securities to investors and $0.9 million of common securities to us. Trust I used the proceeds from these issuances to purchase the subordinated debt securities. The initial interest rate on our Trust I subordinated debt securities was 7.25 % until June 15, 2015 , after which interest adjusts quarterly to the three-month LIBOR rate plus 3.25 percentage points . Trust I pays dividends on its preferred securities at the same rate. Under the terms of our Trust I subordinated debt securities, we pay interest only each quarter and the principal of the note at maturity. The subordinated debt securities are uncollaterized and do not require maintenance of minimum financial covenants. As of September 30, 2015, the balance of our Trust I subordinated debt was $30.9 million and the interest rate was 3.59% per annum. On August 23, 2007, we entered into a trust preferred securities transaction pursuant to which we issued $25.8 million aggregate principal amount of subordinated debt securities due in 2037 . To effect the transaction, we formed Trust II as a Delaware statutory trust. Trust II issued $25.0 million of preferred securities to investors and $0.8 million of common securities to us. Trust II used the proceeds from these issuances to purchase the subordinated debt securities. Our Trust II subordinated debt securities bear an initial interest rate of 8.28 % until September 15, 2017 , at which time interest will adjust quarterly to the three-month LIBOR rate plus 2.90 percentage points. Trust II pays dividends on its preferred securities at the same rate. Under the terms of our Trust II subordinated debt securities, we pay interest only each quarter and the principal of the note at maturity. The subordinated debt securities are uncollaterized and do not require maintenance of minimum financial covenants. As of September 30, 2015, the balance of our Trust II subordinated debt was $25.8 million. |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Policy Acquisition Costs [Abstract] | |
Deferred Policy Acquisition Costs | 13. Deferred Policy Acquisition Costs The following table shows total deferred and amortized policy acquisition cost activity by period (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Deferred $ $ $ $ Amortized Net $ $ $ $ |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings per Share [Abstract] | |
Earnings per Share | 14. Earnings per Share The following table sets forth basic and diluted weighted average shares outstanding for the periods indicated (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Weighted average shares - basic Effect of dilutive securities Weighted average shares - assuming dilution For the three and nine months ended September 30, 2015, 504,999 shares of common stock potentially issuable upon the exercise of employee stock options were excluded from the weighted average number of shares outstanding on a diluted basis because the effect of such options would be anti-dilutive. For the three and nine months ended September 30, 2014, 715,832 shares of common stock potentially issuable upon the exercise of employee stock options were excluded from the weighted average number of shares outstanding on a diluted basis because the effect of such options would be anti-dilutive. |
Net Periodic Pension Cost
Net Periodic Pension Cost | 9 Months Ended |
Sep. 30, 2015 | |
Net Periodic Pension Cost [Abstract] | |
Net Periodic Pension Cost | 15. Net Periodic Pension Cost The following table details the net periodic pension cost incurred by period (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Interest cost $ $ $ $ Amortization of net loss Expected return on plan assets Net periodic pension cost $ $ $ $ Contributed amount $ - $ $ - $ Refer to Note 14 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2014 for more discussion of our retirement plans. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes [Abstract] | |
Income Taxes | 16. Income Taxes Our effective income tax rate for the first nine months ended September 30, 2015 and 2014 was 31.3% and 26.7 %, respectively. The rates varied from the statutory tax rate primarily due to the amount of tax exempt income in relation to pre-tax income. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 17. Commitments and Contingencies We are engaged in various 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. During the third quarter of 2015 we paid $1.2 million in fulfillment of the contingent purchase price with the sellers of TBIC Holding. The sellers have disputed the calculation of the amount paid and assert that an additional $1.8 million is due. We disagree with this assertion and are in discussions with the Sellers in regards to a potential resolution. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income Balances | 9 Months Ended |
Sep. 30, 2015 | |
Changes in Accumulated Other Comprehensive Income Balances [Abstract] | |
Changes in Accumulated Other Comprehensive Income Balances | 18. Changes in Accumulated Other Comprehensive Income Balances The changes in accumulated other comprehensive income balances as of September 30, 2015 and 2014 were as follows (in thousands): Minimum Accumulated Other Pension Unrealized Comprehensive Liability Gains (Loss) Income Balance at December 31, 2013 $ $ $ Other comprehensive income : Change in net actuarial gain - Tax effect on change in net actuarial gain - Net unrealized holding gains arising during the period - Tax effect on unrealized gains arising during the period - Reclassification adjustment for losses included in net realized gains - Tax effect on reclassification adjustment for losses included in income tax expense - Other comprehensive income, net of tax Balance at September 30, 2014 $ $ $ Balance at December 31, 2014 $ $ $ Other comprehensive income : Change in net actuarial gain - Tax effect on change in net actuarial gain - Net unrealized holding losses arising during the period - Tax effect on unrealized losses arising during the period - Reclassification adjustment for gains included in net realized gains - Tax effect on reclassification adjustment for gains included in income tax expense - Other comprehensive income (loss), net of tax Balance at September 30, 2015 $ $ $ |
Basis of Presentation (Policy)
Basis of Presentation (Policy) | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation [Abstract] | |
Business Combinations | Business Combinations We account for business combinations using the acquisition method of accounting pursuant to Accounting Standards Codification (“ASC”) 805, “Business Combinations.” The base cash purchase price plus the estimated fair value of any non-cash or contingent consideration given for an acquired business is allocated to the assets acquired (including identified intangible assets) and liabilities assumed based on the estimated fair values of such assets and liabilities. The excess of the fair value of the total consideration given for an acquired business over the aggregate net fair values assigned to the assets acquired and liabilities assumed is recorded as goodwill. Contingent consideration is recognized as a liability at fair value as of the acquisition date with subsequent fair value adjustments recorded in the consolidated statements of operations. The valuation of contingent consideration requires assumptions regarding anticipated cash flows, probabilities of cash flows, discount rates and other factors. Significant judgment is employed in determining the propriety of these assumptions as of the acquisition date and for each subsequent period. Accordingly, future business and economic conditions, as well as changes in any of the assumptions, can materially impact the amount of contingent consideration expense we record in any given period. Indirect and general expenses related to business combinations are expensed as incurred. |
Income Taxes | Income Taxes We file a consolidated federal income tax return. Deferred federal income taxes reflect the future tax consequences of differences between the tax 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. |
Use of Estimates in the Preparation of the Financial Statements | Use of Estimates in the Preparation of the Financial Statements Our preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect our reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the date of our consolidated financial statements, as well as our reported amounts of revenues and expenses during the reporting period. Refer to “Critical Accounting Estimates and Judgments” under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2014 for information on accounting policies that we consider critical in preparing our consolidated financial statements. Actual results could differ materially from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value estimates are made at a point in time based on relevant market data as well as the best information available about the financial instruments. Fair value estimates for financial instruments for which no or limited observable market data is available are based on judgments regarding current economic conditions, credit and interest rate risk. These estimates involve significant uncertainties and judgments and cannot be determined with precision. As a result, such calculated fair value estimates may not be realizable in a current sale or immediate settlement of the instrument. In addition, changes in the underlying assumptions used in the fair value measurement technique, including discount rate and estimates of future cash flows, could significantly affect these fair value estimates. Cash and Cash Equivalents : The carrying amounts reported in the balance sheet for these instruments approximate their fair values. Restricted Cash : The carrying amount for restricted cash reported in the balance sheet approximates the fair value. Subordinated Debt Securities : Our trust preferred securities have a carried value of $56.7 million and a fair value of $ 45.9 million as of September 30, 2015. The fair value of our trust preferred securities is based on discounted cash flows using a current yield to maturity of 8.0% , which is based on similar issues to discount future cash flows. Our trust preferred securities would be included in Level 3 of the fair value hierarchy if they were reported at fair value. For reinsurance balances, premiums receivable, federal income tax payable, other assets and other liabilities, the carrying amounts approximate fair value because of the short maturity of such financial instruments. |
Variable Interest Entities | Variable Interest Entities On June 21, 2005, we formed Hallmark Statutory Trust I (“Trust I”), an unconsolidated trust subsidiary, for the sole purpose of issuing $30.0 million in trust preferred securities. Trust I used the proceeds from the sale of these securities and our initial capital contribution to purchase $30.9 million of subordinated debt securities from Hallmark. The debt securities are the sole assets of Trust I, and the payments under the debt securities are the sole revenues of Trust I. On August 23, 2007, we formed Hallmark Statutory Trust II (“Trust II”), an unconsolidated trust subsidiary, for the sole purpose of issuing $25.0 million in trust preferred securities. Trust II used the proceeds from the sale of these securities and our initial capital contribution to purchase $25.8 million of subordinated debt securities from Hallmark. The debt securities are the sole assets of Trust II, and the payments under the debt securities are the sole revenues of Trust II. We evaluate on an ongoing basis our investments in Trust I and Trust II (collectively the “Trusts”) and have determined that we do not have a variable interest in the Trusts. Therefore, the Trusts are not included in our consolidated financial statements. We are also involved in the normal course of business with variable interest entities (“VIE’s”) primarily as a passive investor in mortgage-backed securities and certain collateralized corporate bank loans issued by third party VIE’s. The maximum exposure to loss with respect to these investments is the investment carrying values included in the consolidated balance sheets. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the FASB issued guidance which revises the criteria for revenue recognition. Insurance contracts are excluded from the scope of the new guidance. Under the guidance, the transaction price is attributed to underlying performance obligations in the contract and revenue is recognized as the entity satisfies the performance obligations and transfers control of a good or service to the customer. Incremental costs of obtaining a contract may be capitalized to the extent the entity expects to recover those costs. The guidance is effective for reporting periods beginning after December 15, 2017 and is to be applied retrospectively. We are in the process of evaluating the impact of adoption, which is not expected to be material to our results of operations or financial position. In May 2015, the FASB issued guidance which requires additional disclosures about short-duration contracts for products in effect for typically a year or less. The disclosures will focus on the liability for unpaid claims and claim adjustment expenses. This guidance is effective for annual periods beginning after December 15, 2015 and interim periods within annual periods beginning after December 15, 2016. We are in the process of evaluating the impact of the adoption, which is not expected to be material to our results of operations or financial position. |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The following table presents for each of the fair value hierarchy levels, our assets that are measured at fair value on a recurring basis at September 30, 2015 and December 31, 2014 (in thousands): As of September 30, 2015 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 $ - $ $ - $ Corporate bonds - - Collateralized corporate bank loans - - Municipal bonds - Mortgage-backed - - Total debt securities - Total equity securities - - Total debt and equity securities $ $ $ $ As of December 31, 2014 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 $ - $ $ - $ Corporate bonds - - Collateralized corporate bank loans - Municipal bonds - Mortgage-backed - - Total debt securities - Total equity securities - - Total debt and equity securities $ $ $ $ |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table summarizes the changes in fair value for all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the nine months ended September 30, 2015 and 2014 (in thousands): Beginning balance as of January 1, 2015 $ Sales - Settlements Purchases - Issuances - Total realized/unrealized gains included in net income - Net losses included in other comprehensive income Transfers into Level 3 - Transfers out of Level 3 - Ending balance as of September 30, 2015 $ Beginning balance as of January 1, 2014 $ Sales - Settlements Purchases - Issuances - Total realized/unrealized gains included in net income - Net gains included in other comprehensive income Transfers into Level 3 - Transfers out of Level 3 - Ending balance as of September 30, 2014 $ |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investments [Abstract] | |
Amortized Cost and Estimated Fair Value of Investments in Debt and Equity Securities by Category | The amortized cost and estimated fair value of investments in debt and equity securities by category is as follows (in thousands): Gross Gross Amortized Unrealized Unrealized Fair As of September 30, 2015 Cost Gains Losses Value U.S. Treasury securities and obligations of U.S. Government $ $ $ - $ Corporate bonds Collateralized corporate bank loans Municipal bonds Mortgage-backed Total debt securities Total equity securities Total debt and equity securities $ $ $ $ As of December 31, 2014 U.S. Treasury securities and obligations of U.S. Government $ $ $ $ Corporate bonds Collateralized corporate bank loans Municipal bonds Mortgage-backed Total debt securities Total equity securities Total debt and equity securities $ $ $ $ |
Summary of Realized Gain (Loss) on Investments | Major categories of net realized gains (losses) on investments are summarized as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 U.S. Treasury securities and obligations of U.S. Government $ - $ - $ - $ - Corporate bonds - - Collateralized corporate bank loans Municipal bonds Mortgage-backed - Equity securities Gain (loss) on investments Other-than-temporary impairments - Net realized gains (losses) $ $ $ $ |
Summary of Gross Unrealized Losses for Investments that have been Continuously in Unrealized Loss Position | The following schedules summarize the gross unrealized losses showing the length of time that investments have been continuously in an unrealized loss position as of September 30, 2015 and December 31, 2014 (in thousands): As of September 30, 2015 12 months or less Longer than 12 months Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Treasury securities and obligations of U.S. Government $ - $ - $ - $ - $ - $ - Corporate bonds - - Collateralized corporate bank loans Municipal bonds Mortgage-backed Total debt securities Total equity securities - - Total debt and equity securities $ $ $ $ $ $ As of December 31, 2014 12 months or less Longer than 12 months Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Treasury securities and obligations of U.S. Government $ $ $ - $ - $ $ Corporate bonds - - Collateralized corporate bank loans Municipal bonds Mortgage-backed Total debt securities Total equity securities - - Total debt and equity securities $ $ $ $ $ $ |
Schedule of Amortized Cost and Estimated Fair Value of Debt Securities by Contractual Maturities | Amortized Fair Cost Value (in thousands) Due in one year or less $ $ Due after one year through five years Due after five years through ten years Due after ten years Mortgage-backed $ $ |
Share-Based Payment Arrangeme29
Share-Based Payment Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Share-Based Payment Arrangements [Abstract] | |
Summary of the Status of Stock Options | A summary of the status of our stock options as of September 30, 2015 and changes during the nine months ended is presented below: Average Weighted Remaining Aggregate Average Contractual Intrinsic Number of Exercise Term Value Shares Price (Years) ($000) Outstanding at January 1, 2015 $ Granted - Exercised $ Forfeited or expired $ Outstanding at September 30, 2015 $ $ Exercisable at September 30, 2015 $ $ |
Schedule of Options, Grants in Period and Grant Date Intrinsic Value | The following table details the intrinsic value of options exercised, total cost of share-based payments charged against income before income tax benefit and the amount of related income tax benefit recognized in income for the periods indicated (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Intrinsic value of options exercised $ $ - $ $ Cost of share-based payments (non-cash) $ $ $ $ Income tax benefit of share-based payments recognized in income $ $ $ $ |
Summary of the Status of Restricted Stock Units | A summary of the status of our restricted stock units as of September 30, 2015 and changes during the nine months then ended is presented below: Number of Restricted Stock Units Non-vested at January 1, 2015 Granted Vested Forfeited Non-vested at September 30, 2015 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Information [Abstract] | |
Schedule of Business Segment Information | The following is business segment information for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Revenues: Standard Commercial Segment $ $ $ $ Specialty Commercial Segment Personal Segment Corporate Consolidated $ $ $ $ Pre-tax income (loss): Standard Commercial Segment $ $ $ $ Specialty Commercial Segment Personal Segment Corporate Consolidated $ $ $ $ |
Schedule of Additional Business Segment Information | The following is additional business segment information as of the dates indicated (in thousands): September 30, December 31, 2015 2014 Assets Standard Commercial Segment $ $ Specialty Commercial Segment Personal Segment Corporate $ $ |
Reinsurance (Tables)
Reinsurance (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Reinsurance [Abstract] | |
Schedule of Reinsurance Ceded and Recoveries | The following table shows earned premiums ceded and reinsurance loss recoveries by period (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Ceded earned premiums $ $ $ $ Reinsurance recoveries $ $ $ $ |
Deferred Policy Acquisition C32
Deferred Policy Acquisition Costs (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Policy Acquisition Costs [Abstract] | |
Deferred Amortized Policy Acquisition Costs | The following table shows total deferred and amortized policy acquisition cost activity by period (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Deferred $ $ $ $ Amortized Net $ $ $ $ |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings per Share [Abstract] | |
Schedule of Weighted Average Number of Shares Outstanding | The following table sets forth basic and diluted weighted average shares outstanding for the periods indicated (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Weighted average shares - basic Effect of dilutive securities Weighted average shares - assuming dilution |
Net Periodic Pension Cost (Tabl
Net Periodic Pension Cost (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Net Periodic Pension Cost [Abstract] | |
Schedule of Net Benefit Costs | The following table details the net periodic pension cost incurred by period (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Interest cost $ $ $ $ Amortization of net loss Expected return on plan assets Net periodic pension cost $ $ $ $ Contributed amount $ - $ $ - $ |
Changes in Accumulated Other 35
Changes in Accumulated Other Comprehensive Income Balances (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Changes in Accumulated Other Comprehensive Income Balances [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income | The changes in accumulated other comprehensive income balances as of September 30, 2015 and 2014 were as follows (in thousands): Minimum Accumulated Other Pension Unrealized Comprehensive Liability Gains (Loss) Income Balance at December 31, 2013 $ $ $ Other comprehensive income : Change in net actuarial gain - Tax effect on change in net actuarial gain - Net unrealized holding gains arising during the period - Tax effect on unrealized gains arising during the period - Reclassification adjustment for losses included in net realized gains - Tax effect on reclassification adjustment for losses included in income tax expense - Other comprehensive income, net of tax Balance at September 30, 2014 $ $ $ Balance at December 31, 2014 $ $ $ Other comprehensive income : Change in net actuarial gain - Tax effect on change in net actuarial gain - Net unrealized holding losses arising during the period - Tax effect on unrealized losses arising during the period - Reclassification adjustment for gains included in net realized gains - Tax effect on reclassification adjustment for gains included in income tax expense - Other comprehensive income (loss), net of tax Balance at September 30, 2015 $ $ $ |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) - USD ($) $ in Millions | Aug. 23, 2007 | Jun. 21, 2005 | Sep. 30, 2015 |
Hallmark Statutory Trust I [Member] | |||
Variable Interest Entity [Line Items] | |||
Proceeds from issuance of trust preferred securities | $ 30 | ||
Hallmark Statutory Trust II [Member] | |||
Variable Interest Entity [Line Items] | |||
Proceeds from issuance of trust preferred securities | $ 25 | ||
Subordinated Debt [Member] | |||
Variable Interest Entity [Line Items] | |||
Trust preferred securities, carrying value | $ 56.7 | ||
Trust preferred securities, fair value | $ 45.9 | ||
Current yield to maturity percentage | 8.00% | ||
Subordinated Debt [Member] | Hallmark Statutory Trust I [Member] | |||
Variable Interest Entity [Line Items] | |||
Payments to acquire trust preferred investments | $ 30.9 | ||
Subordinated Debt [Member] | Hallmark Statutory Trust II [Member] | |||
Variable Interest Entity [Line Items] | |||
Payments to acquire trust preferred investments | $ 25.8 |
Business Combinations (Narrativ
Business Combinations (Narrative) (Details) - USD ($) | Sep. 15, 2015 | Jul. 02, 2011 | Jun. 30, 2015 | Sep. 30, 2012 | Jun. 30, 2015 | Sep. 30, 2015 |
Business Acquisition [Line Items] | ||||||
Payment of contingent consideration | $ 1,216,000 | |||||
Renewal Rights [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Proceeds from sale of finite lived assets | $ 115,000 | |||||
Gain (loss) on disposition of property plant equipment | $ 400,000 | |||||
TBIC Holding Corporation [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Total consideration for acquisition | $ 1,600,000 | |||||
Holdback purchase price paid | $ 350,000 | |||||
Fair value of contingent consideration | $ 1,800,000 | |||||
Workers Compensation Business Unit [Member] | Renewal Rights [Member] | ||||||
Business Acquisition [Line Items] | ||||||
One-time payment related to divesture of renewal rights | $ 83,000 | |||||
Gain on disposition of intangible assets | $ 200,000 |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) | Sep. 30, 2015USD ($) |
Fair Value [Abstract] | |
Fair value, equity, Level 1 to Level 2 transfers, amount | $ 0 |
Fair value, equity, Level 2 to Level 1 transfers, amount | $ 0 |
Fair Value (Fair Value, Assets
Fair Value (Fair Value, Assets Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | $ 519,163 | $ 450,785 |
Total equity securities | 48,229 | 56,444 |
Total debt and equity securities | 567,392 | 507,229 |
US Treasury Securities and Obligations of U.S. Government [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 91,681 | 93,305 |
Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 50,610 | 29,442 |
Collateralized Corporate Bank Loans [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 122,134 | 113,649 |
Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 191,948 | 162,329 |
Mortgage Backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 62,790 | 52,060 |
Quoted Prices in Active Markets for Identical Assets, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total equity securities | 48,229 | 56,444 |
Total debt and equity securities | 48,229 | 56,444 |
Other Observable Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 505,315 | 436,187 |
Total debt and equity securities | 505,315 | 436,187 |
Other Observable Inputs, Level 2 [Member] | US Treasury Securities and Obligations of U.S. Government [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 91,681 | 93,305 |
Other Observable Inputs, Level 2 [Member] | Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 50,610 | 29,442 |
Other Observable Inputs, Level 2 [Member] | Collateralized Corporate Bank Loans [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 122,134 | 113,402 |
Other Observable Inputs, Level 2 [Member] | Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 178,100 | 147,978 |
Other Observable Inputs, Level 2 [Member] | Mortgage Backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 62,790 | 52,060 |
Unobservable Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 13,848 | 14,598 |
Total debt and equity securities | 13,848 | 14,598 |
Unobservable Inputs, Level 3 [Member] | Collateralized Corporate Bank Loans [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | 247 | |
Unobservable Inputs, Level 3 [Member] | Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt securities | $ 13,848 | $ 14,351 |
Fair Value (Fair Value, Asset40
Fair Value (Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Fair Value [Abstract] | ||
Beginning balance | $ 14,598 | $ 17,517 |
Sales | ||
Settlements | $ (370) | $ (3,434) |
Purchases | ||
Issuances | ||
Total realized/unrealized gains included in net income | ||
Net losses included in other comprehensive income | $ (380) | $ 460 |
Transfers into Level 3 | ||
Transfers out of Level 3 | ||
Ending balance | $ 13,848 | $ 14,543 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)security | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)security | Sep. 30, 2014USD ($) | Dec. 31, 2014security | |
Investments [Abstract] | |||||
Gross gains on investments | $ 76,000 | $ 100 | $ 6,000 | $ 400 | |
Gross losses on investments | 48 | 100 | 100 | 200 | |
Proceeds from sale of investment securities | $ 800 | $ 600 | $ 17,700 | $ 14,900 | |
Number of debt security positions, greater than 12 months | security | 25 | 25 | 24 |
Investments (Amortized Cost and
Investments (Amortized Cost and Estimated Fair Value of Investments in Debt and Equity Securities by Category) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Schedule of Investments [Line Items] | ||
Investments, Amortized Cost | $ 549,865 | $ 476,130 |
Investments, Gross Unrealized Gains | 27,689 | 35,076 |
Investments, Gross Unrealized Losses | (10,162) | (3,977) |
Investments, Fair Value | 567,392 | 507,229 |
Equity Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Investments, Amortized Cost | 24,957 | 25,360 |
Investments, Gross Unrealized Gains | 23,998 | 31,086 |
Investments, Gross Unrealized Losses | (726) | (2) |
Investments, Fair Value | 48,229 | 56,444 |
Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Investments, Amortized Cost | 524,908 | 450,770 |
Investments, Gross Unrealized Gains | 3,691 | 3,990 |
Investments, Gross Unrealized Losses | (9,436) | (3,975) |
Investments, Fair Value | 519,163 | 450,785 |
US Treasury Securities and Obligations of U.S. Government [Member] | Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Investments, Amortized Cost | 91,311 | 93,280 |
Investments, Gross Unrealized Gains | 370 | 29 |
Investments, Gross Unrealized Losses | (4) | |
Investments, Fair Value | 91,681 | 93,305 |
Corporate Bonds [Member] | Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Investments, Amortized Cost | 50,638 | 28,643 |
Investments, Gross Unrealized Gains | 586 | 884 |
Investments, Gross Unrealized Losses | (614) | (85) |
Investments, Fair Value | 50,610 | 29,442 |
Collateralized Corporate Bank Loans [Member] | Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Investments, Amortized Cost | 124,158 | 115,358 |
Investments, Gross Unrealized Gains | 344 | 206 |
Investments, Gross Unrealized Losses | (2,368) | (1,915) |
Investments, Fair Value | 122,134 | 113,649 |
Municipal Bonds [Member] | Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Investments, Amortized Cost | 196,174 | 161,546 |
Investments, Gross Unrealized Gains | 2,108 | 2,384 |
Investments, Gross Unrealized Losses | (6,334) | (1,601) |
Investments, Fair Value | 191,948 | 162,329 |
Mortgage Backed [Member] | Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Investments, Amortized Cost | 62,627 | 51,943 |
Investments, Gross Unrealized Gains | 283 | 487 |
Investments, Gross Unrealized Losses | (120) | (370) |
Investments, Fair Value | $ 62,790 | $ 52,060 |
Investments (Summary of Realize
Investments (Summary of Realized Gain (Loss) on Investments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Schedule of Investments [Line Items] | ||||
Gain (loss) on investments | $ 28 | $ (23) | $ 5,881 | $ 152 |
Other-than-temporary impairment | (363) | (2,193) | (274) | |
Net realized (losses) gains | $ (335) | $ (23) | $ 3,688 | $ (122) |
US Treasury Securities and Obligations of U.S. Government [Member] | ||||
Schedule of Investments [Line Items] | ||||
Gain (loss) on investments | ||||
Corporate Bonds [Member] | ||||
Schedule of Investments [Line Items] | ||||
Gain (loss) on investments | $ (22) | $ 111 | ||
Collateralized Corporate Bank Loans [Member] | ||||
Schedule of Investments [Line Items] | ||||
Gain (loss) on investments | $ 8 | 10 | $ 158 | 99 |
Municipal Bonds [Member] | ||||
Schedule of Investments [Line Items] | ||||
Gain (loss) on investments | (12) | (69) | (54) | (123) |
Mortgage Backed [Member] | ||||
Schedule of Investments [Line Items] | ||||
Gain (loss) on investments | 29 | 240 | 31 | |
Equity Securities [Member] | ||||
Schedule of Investments [Line Items] | ||||
Gain (loss) on investments | $ 32 | $ 29 | $ 5,537 | $ 34 |
Investments (Summary of Gross U
Investments (Summary of Gross Unrealized Losses for Investments that have been Continuously in Unrealized Loss Position) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Schedule of Investments [Line Items] | ||
Fair Value 12 months or less | $ 159,947 | $ 158,413 |
Unrealized Losses 12 months or less | (3,362) | (2,225) |
Fair Value Longer than 12 months | 26,700 | 27,548 |
Unrealized Losses Longer than 12 months | (6,800) | (1,752) |
Total Fair Value | 186,647 | 185,961 |
Total Unrealized Losses | (10,162) | (3,977) |
Equity Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Fair Value 12 months or less | 4,611 | 129 |
Unrealized Losses 12 months or less | (726) | (2) |
Total Fair Value | 4,611 | 129 |
Total Unrealized Losses | (726) | (2) |
Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Fair Value 12 months or less | 155,336 | 158,284 |
Unrealized Losses 12 months or less | (2,636) | (2,223) |
Fair Value Longer than 12 months | 26,700 | 27,548 |
Unrealized Losses Longer than 12 months | (6,800) | (1,752) |
Total Fair Value | 182,036 | 185,832 |
Total Unrealized Losses | (9,436) | (3,975) |
US Treasury Securities and Obligations of U.S. Government [Member] | Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Fair Value 12 months or less | 15,005 | |
Unrealized Losses 12 months or less | (4) | |
Total Fair Value | 15,005 | |
Total Unrealized Losses | (4) | |
Corporate Bonds [Member] | Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Fair Value 12 months or less | 30,917 | 7,552 |
Unrealized Losses 12 months or less | (614) | (85) |
Total Fair Value | 30,917 | 7,552 |
Total Unrealized Losses | (614) | (85) |
Collateralized Corporate Bank Loans [Member] | Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Fair Value 12 months or less | 59,675 | 64,712 |
Unrealized Losses 12 months or less | (1,387) | (824) |
Fair Value Longer than 12 months | 4,643 | 8,898 |
Unrealized Losses Longer than 12 months | (981) | (1,091) |
Total Fair Value | 64,318 | 73,610 |
Total Unrealized Losses | (2,368) | (1,915) |
Municipal Bonds [Member] | Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Fair Value 12 months or less | 38,894 | 50,546 |
Unrealized Losses 12 months or less | (517) | (945) |
Fair Value Longer than 12 months | 21,985 | 15,684 |
Unrealized Losses Longer than 12 months | (5,817) | (656) |
Total Fair Value | 60,879 | 66,230 |
Total Unrealized Losses | (6,334) | (1,601) |
Mortgage Backed [Member] | Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Fair Value 12 months or less | 25,850 | 20,469 |
Unrealized Losses 12 months or less | (118) | (365) |
Fair Value Longer than 12 months | 72 | 2,966 |
Unrealized Losses Longer than 12 months | (2) | (5) |
Total Fair Value | 25,922 | 23,435 |
Total Unrealized Losses | $ (120) | $ (370) |
Investments (Schedule of Amorti
Investments (Schedule of Amortized Cost and Estimated Fair Value of Debt Securities by Contractual Maturities) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Schedule of Investments [Line Items] | ||
Due in one year or less, Amortized Cost | $ 58,057 | |
Due after one year through five years, Amortized Cost | 232,118 | |
Due after five years through ten years, Amortized Cost | 116,755 | |
Due after ten years, Amortized Cost | 55,351 | |
Debt securities, available-for-sale, cost (in dollars) | 524,908 | $ 450,770 |
Due in one year or less, Fair Value | 57,912 | |
Due after one year through five years, Fair Value | 230,320 | |
Due after five years through ten years, Fair Value | 113,043 | |
Due after ten years, Fair Value | 55,098 | |
Debt Securities, Fair Value | 519,163 | 450,785 |
Mortgage Backed [Member] | ||
Schedule of Investments [Line Items] | ||
Debt securities, available-for-sale, cost (in dollars) | 62,627 | |
Debt Securities, Fair Value | $ 62,790 | $ 52,060 |
Pledged Investments (Narrative)
Pledged Investments (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Pledged Investments [Abstract] | ||
Securities available-for-sale pledged, carrying value | $ 19.9 | $ 20.3 |
Reserves for Unpaid Losses an47
Reserves for Unpaid Losses and Loss Adjustment Expenses (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
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 | $ 3.1 | $ 4.6 | $ 5.4 | |
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | $ 1.5 | |||
Loss and Loss Adjustment Expenses Incurred in 2014 Accident Year [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 4 | |||
Loss and Loss Adjustment Expenses Incurred in 2014 and Prior Accident Year [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 4 | |||
Loss and Loss Adjustment Expenses Incurred in 2013 Accident Year [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 6.9 | |||
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 0.5 | |||
Loss and Loss Adjustment Expenses Incurred In 2012 Accident Year [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 1 | 3.4 | ||
Loss and Loss Adjustment Expenses Incurred In 2011 Accident Year [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 3.6 | |||
Loss and Loss Adjustment Expenses Incurred in 2011 and Prior Accident Year [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 2.1 | |||
Loss And Loss Adjustment Expenses Incurred In 2010 And Prior Accident Year [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 1.7 | |||
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 | 4 | 3 | ||
Standard Commercial P & C Business Unit [Member] | Loss and Loss Adjustment Expenses Incurred In 2011 Accident Year [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 3 | |||
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 | 0.8 | 1.9 | ||
Workers Compensation Business Unit [Member] | Loss and Loss Adjustment Expenses Incurred in 2014 and 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 | 0.8 | |||
Workers Compensation Business Unit [Member] | Loss and Loss Adjustment Expenses Incurred in 2013 and 2012 Accident Year [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 1.9 | |||
Specailty Commercial Segment [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 | 1.3 | 0.7 | ||
MGA Commerical Products [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 | 0.5 | |||
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 3.3 | |||
Commerical Excess Liability [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 0.3 | 0.9 | ||
Medical Professional Liability Products [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 | 0.3 | 0.5 | ||
General Aviation [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 | 0.7 | |||
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 0.7 | |||
Personal Segment [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 | 3.1 | |||
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | 2 | |||
Personal Segment [Member] | Loss and Loss Adjustment Expenses Incurred in 2014 and Prior Accident Year [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Unfavorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | $ 2 | |||
Personal Segment [Member] | Loss and Loss Adjustment Expenses Incurred in 2013 Accident Year [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Favorable Adjustment to Prior Years Liability for Unpaid Claims and Claims Adjustment Expense | $ 3.1 |
Share-Based Payment Arrangeme48
Share-Based Payment Arrangements (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | May. 29, 2015 | Apr. 02, 2015 | Apr. 10, 2013 | Jul. 27, 2012 | Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Total unrecognized compensation cost related to non-vested share-based compensation arrangements | $ 79 | $ 79 | |||||||||
Compensation costs expected to be recognized during remainder of the fiscal period | 39 | 39 | |||||||||
Compensation costs expected to be recognized during next fiscal year | $ 40 | $ 40 | |||||||||
Other than options, granted | 8,616 | ||||||||||
Stock options, granted | |||||||||||
Long Term Incentive Plan 2005 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of incentive stock options to purchase shares of common stock outstanding | 623,290 | ||||||||||
Number of non-qualified stock options to purchase shares of common stock outstanding | 304,157 | ||||||||||
Number of restricted stock units to receive shares of common stock | 289,830 | ||||||||||
Long Term Incentive Plan 2005 [Member] | First Anniversary [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Percentage of options vested or expected to vest | 10.00% | 10.00% | |||||||||
Long Term Incentive Plan 2005 [Member] | Second Anniversary [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Percentage of options vested or expected to vest | 20.00% | 20.00% | |||||||||
Long Term Incentive Plan 2005 [Member] | Third Anniversary [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Percentage of options vested or expected to vest | 30.00% | 30.00% | |||||||||
Long Term Incentive Plan 2005 [Member] | Fourth Anniversary [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Percentage of options vested or expected to vest | 40.00% | 40.00% | |||||||||
Long Term Incentive Plan 2015 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock compensation plan, number of shares authorized | 2,000,000 | ||||||||||
Number of options vested or expected to vest | 154,457 | 154,457 | |||||||||
Incentive Stock Options 2009 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Incentive stock options termination period | 7 years | ||||||||||
Share-based payment, award vesting period | 10 years | ||||||||||
Incentive Stock Options 2010 [Member] | 25,000 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Incentive stock options termination period | 10 years | ||||||||||
Share-based payment, award vesting period | 3 years | ||||||||||
Number of options vested or expected to vest | 25,000 | 25,000 | |||||||||
Non Qualified Stock Options [Member] | Long Term Incentive Plan 2005 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Percentage of options vested or expected to vest | 100.00% | 100.00% | |||||||||
Incentive stock options termination period | 10 years | ||||||||||
Incentive Non Qualified Stock Options 2009 [Member] | 200,000 Grant [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Incentive stock options termination period | 10 years | ||||||||||
Share-based payment, award vesting period | 7 years | ||||||||||
Number of options vested or expected to vest | 200,000 | 200,000 | |||||||||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Percentage of restricted stock units granted as result of meeting growth rates | 50.00% | 50.00% | |||||||||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Percentage of restricted stock units granted as result of meeting growth rates | 150.00% | 150.00% | |||||||||
Restricted Stock Units (RSUs) [Member] | Long Term Incentive Plan 2005 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Total unrecognized compensation cost related to non-vested share-based compensation arrangements | $ 1,600 | $ 1,600 | |||||||||
Compensation costs expected to be recognized during remainder of the fiscal period | 184 | 184 | |||||||||
Compensation costs expected to be recognized during next fiscal year | 723 | 723 | |||||||||
Restricted stock or unit expense | 408 | ||||||||||
Restricted stock expense, benefit portion | 49 | $ 170 | $ 46 | ||||||||
Compensation costs expected to be recognized during year two | 587 | 587 | |||||||||
Compensation costs expected to be recognized during year three | 136 | $ 136 | |||||||||
Other than options, granted | 122,823 | 129,463 | 102,971 | 175,983 | |||||||
Other than options, forfeited | 9,280 | 83,380 | |||||||||
Vested | (8,616) | ||||||||||
Other than options, grant date fair value | $ 11.10 | $ 9.66 | $ 9.20 | ||||||||
Income tax benefit of share-based payments recognized in income | $ (17) | ||||||||||
Income tax expense of share-based payments recognized in income | $ 59 | $ 143 | $ 16 | ||||||||
Restricted Stock Units (RSUs) [Member] | Long Term Incentive Plan 2015 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Other than options, granted | 102,971 |
Share-Based Payment Arrangeme49
Share-Based Payment Arrangements (Summary of the Status of Stock Options) (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($)$ / sharesshares | |
Share-Based Payment Arrangements [Abstract] | |
Stock Options, Outstanding at January 1, 2015 | 1,062,134 |
Stock options, granted | |
Stock Options, Exercised | (86,827) |
Stock Options, Forfeited or Expired | (47,860) |
Stock Options, Outstanding at September 30, 2015 | 927,447 |
Stock Options, Exercisable at September 30, 2015 | 875,661 |
Weighted Average Exercise Price, Outstanding at January 1, 2015 | $ / shares | $ 9.51 |
Weighted Average Exercise Price, Exercised | $ / shares | 6.93 |
Weighted Average Exercise Price, Forfeited or Expired | $ / shares | 11.26 |
Weighted Average Exercise Price, Outstanding at September 30, 2015 | $ / shares | 9.66 |
Weighted Average Exercise Price, Exercisable at September 30, 2015 | $ / shares | $ 9.84 |
Average Remaining Contractual Term, Outstanding at September 30, 2015 | 2 years 10 months 24 days |
Average Remaining Contractual Term, Exercisable at September 30, 2015 | 2 years 10 months 24 days |
Aggregate Intrinsic Value, Outstanding at September 30, 2015 | $ | $ 2,002 |
Aggregate Intrinsic Value, Exercisable at September 30, 2015 | $ | $ 1,749 |
Share-Based Payment Arrangeme50
Share-Based Payment Arrangements (Schedule of Options, Grants in Period and Grant Date Intrinsic Value) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Cost of share-based payments (non-cash) | $ 526 | $ 87 | ||
Employee Stock Option [Member] | ||||
Intrinsic value of options exercised | $ 5 | 387 | 9 | |
Cost of share-based payments (non-cash) | 38 | $ 35 | 118 | 133 |
Income tax benefit of share-based payments recognized in income | $ 8 | $ 8 | $ 23 | $ 23 |
Share-Based Payment Arrangeme51
Share-Based Payment Arrangements (Summary of the Status of Restricted Stock Units) (Details) - shares | Apr. 02, 2015 | Apr. 10, 2013 | Jul. 27, 2012 | Jun. 30, 2013 | Sep. 30, 2015 | Sep. 30, 2014 |
Granted | 8,616 | |||||
Long Term Incentive Plan 2005 [Member] | Restricted Stock Units (RSUs) [Member] | ||||||
Nonvested at January 1, 2015 | 285,216 | |||||
Granted | 122,823 | 129,463 | 102,971 | 175,983 | ||
Vested | (8,616) | |||||
Forfeited | (9,280) | (83,380) | ||||
Nonvested at September 30, 2015 | 296,191 |
Segment Information (Schedule o
Segment Information (Schedule of Business Segment Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues [Abstract] | ||||
Revenues | $ 93,684 | $ 81,417 | $ 282,331 | $ 249,362 |
Pre-tax income (loss) [Abstract] | ||||
Pre-tax income (loss) | 9,835 | 4,728 | 26,799 | 13,182 |
Standard Commercial Segment [Member] | ||||
Revenues [Abstract] | ||||
Revenues | 18,477 | 20,985 | 58,941 | 60,667 |
Pre-tax income (loss) [Abstract] | ||||
Pre-tax income (loss) | 2,893 | 2,244 | 7,247 | 318 |
Specialty Commercial Segment [Member] | ||||
Revenues [Abstract] | ||||
Revenues | 63,395 | 57,983 | 188,070 | 179,167 |
Pre-tax income (loss) [Abstract] | ||||
Pre-tax income (loss) | 11,291 | 7,653 | 28,739 | 27,042 |
Personal Segment [Member] | ||||
Revenues [Abstract] | ||||
Revenues | 12,716 | 4,225 | 33,096 | 14,699 |
Pre-tax income (loss) [Abstract] | ||||
Pre-tax income (loss) | (224) | 662 | (596) | 1,916 |
Corporate [Member] | ||||
Revenues [Abstract] | ||||
Revenues | (904) | (1,776) | 2,224 | (5,171) |
Pre-tax income (loss) [Abstract] | ||||
Pre-tax income (loss) | $ (4,125) | $ (5,831) | $ (8,591) | $ (16,094) |
Segment Information (Schedule53
Segment Information (Schedule of Additional Business Segment Information) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Segment Reporting Information [Line Items] | ||
Assets | $ 1,048,660 | $ 980,869 |
Standard Commercial Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 153,606 | 145,355 |
Specialty Commercial Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 637,729 | 590,852 |
Personal Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 236,218 | 222,183 |
Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 21,107 | $ 22,479 |
Reinsurance (Schedule of Reinsu
Reinsurance (Schedule of Reinsurance Ceded and Recoveries) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Reinsurance [Abstract] | ||||
Ceded earned premiums | $ 38,435 | $ 37,360 | $ 105,367 | $ 105,594 |
Reinsurance recoveries | $ 23,507 | $ 25,785 | $ 66,796 | $ 74,302 |
Revolving Credit Facility (Narr
Revolving Credit Facility (Narrative) (Details) - USD ($) $ in Millions | 6 Months Ended | 9 Months Ended |
Jun. 30, 2015 | Sep. 30, 2015 | |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 15 | |
Line of credit facility, amount outstanding | $ 0 | |
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% | |
Debt instrument, covenant compliance | As of September 30, 2015, we were in compliance with all of our covenants | |
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, basis spread on variable rate | 2.50% | |
Letter of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 5 | |
Line of credit facility, commitment fee percentage | 1.00% |
Subordinated Debt Securities (N
Subordinated Debt Securities (Narrative) (Details) - USD ($) $ in Millions | Jun. 16, 2015 | Aug. 23, 2007 | Jun. 21, 2005 | Sep. 30, 2015 |
Subordinated Debt Due In 2035 [Member] | Trust I [Member] | ||||
Subordinated Borrowing [Line Items] | ||||
Long-term debt, gross | $ 30.9 | $ 30.9 | ||
Proceeds from issuance of trust preferred securities | 30 | |||
Proceeds from issuance of common stock | $ 0.9 | |||
Subordinated borrowing, interest rate | 7.25% | |||
Debt instrument, interest rate fixed to floating date | Jun. 15, 2015 | |||
Debt instrument, maturity date | Jun. 15, 2035 | |||
Debt instrument, description of variable rate basis | interest adjusts quarterly to the three-month LIBOR rate plus 3.25 percentage points | |||
Debt instrument, basis spread on variable rate | 3.25% | |||
Debt instrument, interest rate, effective percentage | 3.59% | |||
Subordinated Debt Due In 2037 [Member] | Trust II [Member] | ||||
Subordinated Borrowing [Line Items] | ||||
Long-term debt, gross | $ 25.8 | $ 25.8 | ||
Proceeds from issuance of trust preferred securities | 25 | |||
Proceeds from issuance of common stock | $ 0.8 | |||
Subordinated borrowing, interest rate | 8.28% | |||
Debt instrument, interest rate fixed to floating date | Sep. 15, 2017 | |||
Debt instrument, maturity date | Sep. 15, 2037 | |||
Debt instrument, description of variable rate basis | three-month LIBOR rate plus 2.90 percentage | |||
Debt instrument, basis spread on variable rate | 2.90% |
Deferred Policy Acquisition C57
Deferred Policy Acquisition Costs (Deferred Amortized Policy Acquisition Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Document and Entity Information [Abstract] | ||||
Deferred | $ (10,977) | $ 3,873 | $ (18,698) | $ (19,749) |
Amortized | 11,177 | (4,782) | 18,334 | 21,670 |
Net | $ 200 | $ (909) | $ (364) | $ 1,921 |
Earnings per Share (Narrative)
Earnings per Share (Narrative) (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 504,999 | 715,832 | 504,999 | 715,832 |
Earnings per Share (Schedule of
Earnings per Share (Schedule of Weighted Average Number of Shares Outstanding) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Mar. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings per Share [Abstract] | ||||
Weighted average shares - basic | 19,203 | 19,181 | 19,233 | 19,227 |
Effect of dilutive securities | 179 | 168 | 182 | 137 |
Weighted average shares - assuming dilution | 19,382 | 19,349 | 19,415 | 19,364 |
Net Periodic Pension Cost (Sche
Net Periodic Pension Cost (Schedule of Net Benefit Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net Periodic Pension Cost [Abstract] | ||||
Interest cost | $ 129 | $ 133 | $ 388 | $ 399 |
Amortization of net loss | 26 | 41 | 78 | 122 |
Expected return on plan assets | (175) | (175) | (526) | (524) |
Net periodic pension cost | $ (20) | (1) | $ (60) | (3) |
Contributed amount | $ 299 | $ 533 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Income Taxes [Abstract] | ||
Effective income tax rate, continuing operations | 31.30% | 26.70% |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Payment of contingent consideration | $ 1,216 |
TBIC Holding Corporation [Member] | |
Fair value of contingent consideration | $ 1,800 |
Changes in Accumulated Other 63
Changes in Accumulated Other Comprehensive Income Balances (Schedule of Changes in Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | $ 17,801 | |||
Other comprehensive income (loss): | ||||
Change in net actuarial loss | $ 26 | $ 40 | 78 | $ 122 |
Tax effect on change in net actuarial gain | (9) | (14) | (27) | (43) |
Net unrealized holding gains (losses) arising during the period | (10,821) | (221) | (7,858) | 1,900 |
Tax effect on unrealized gains arising during the period | 3,787 | 77 | 2,750 | (665) |
Reclassification adjustment for gains included in net realized gains (losses) | (28) | 23 | (5,881) | 122 |
Tax effect on reclassification adjustment for gains (losses) included in net income | 10 | (8) | 2,058 | (43) |
Other comprehensive income (loss), net of tax | (7,035) | (103) | (8,880) | 1,393 |
Ending Balance | 8,921 | 8,921 | ||
Minimum Pension Liability [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (2,600) | (1,480) | ||
Other comprehensive income (loss): | ||||
Change in net actuarial loss | 78 | 122 | ||
Tax effect on change in net actuarial gain | (27) | (43) | ||
Other comprehensive income (loss), net of tax | 51 | 79 | ||
Ending Balance | (2,549) | (1,401) | (2,549) | (1,401) |
Unrealized Gain (Loss) [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | 20,401 | 18,363 | ||
Other comprehensive income (loss): | ||||
Net unrealized holding gains (losses) arising during the period | (7,858) | 1,900 | ||
Tax effect on unrealized gains arising during the period | 2,750 | (665) | ||
Reclassification adjustment for gains included in net realized gains (losses) | (5,881) | 122 | ||
Tax effect on reclassification adjustment for gains (losses) included in net income | 2,058 | (43) | ||
Other comprehensive income (loss), net of tax | (8,931) | 1,314 | ||
Ending Balance | 11,470 | 19,677 | 11,470 | 19,677 |
Accumulated Other Comprehensive Income [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | 17,801 | 16,883 | ||
Other comprehensive income (loss): | ||||
Change in net actuarial loss | 78 | 122 | ||
Tax effect on change in net actuarial gain | (27) | (43) | ||
Net unrealized holding gains (losses) arising during the period | (7,858) | 1,900 | ||
Tax effect on unrealized gains arising during the period | 2,750 | (665) | ||
Reclassification adjustment for gains included in net realized gains (losses) | (5,881) | 122 | ||
Tax effect on reclassification adjustment for gains (losses) included in net income | 2,058 | (43) | ||
Other comprehensive income (loss), net of tax | (8,880) | 1,393 | ||
Ending Balance | $ 8,921 | $ 18,276 | $ 8,921 | $ 18,276 |