Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 13, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NATIONAL SECURITY GROUP INC | |
Entity Central Index Key | 865,058 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 2,512,425 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Investments | ||
Fixed maturities held-to-maturity, at amortized cost (estimated fair value: 2016 - $2,475; 2015 - $2,504) | $ 2,370 | $ 2,439 |
Fixed maturities available-for-sale, at estimated fair value (cost: 2016 - $93,990; 2015 - $92,077) | 95,319 | 91,812 |
Equity securities available-for-sale, at estimated fair value (cost: 2016 - $2,420; 2015 - $2,420) | 5,057 | 4,897 |
Trading securities | 107 | 107 |
Mortgage loans on real estate, at cost | 190 | 202 |
Investment real estate, at book value | 3,291 | 3,291 |
Policy loans | 1,676 | 1,655 |
Company owned life insurance | 4,932 | 4,898 |
Other invested assets | 3,185 | 3,256 |
Total Investments | 116,127 | 112,557 |
Cash | 4,163 | 6,763 |
Accrued investment income | 848 | 797 |
Policy receivables and agents' balances, net | 11,776 | 11,296 |
Reinsurance recoverable | 1,446 | 1,660 |
Deferred policy acquisition costs | 8,542 | 8,485 |
Property and equipment, net | 2,004 | 1,946 |
Deferred income tax asset, net | 3,141 | 3,824 |
Other assets | 565 | 513 |
Total Assets | 148,612 | 147,841 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Property and casualty benefit and loss reserves | 8,244 | 9,645 |
Accident and health benefit and loss reserves | 3,173 | 3,197 |
Life and annuity benefit and loss reserves | 32,016 | 31,962 |
Unearned premiums | 30,543 | 29,852 |
Policy and contract claims | 856 | 826 |
Other policyholder funds | 1,584 | 1,561 |
Short-term notes payable and current portion of long-term debt | 857 | 857 |
Long-term debt | 17,102 | 17,100 |
Accrued income taxes | 172 | 101 |
Other liabilities | 7,298 | 7,857 |
Total Liabilities | $ 101,845 | $ 102,958 |
Contingencies | ||
Shareholders' equity | ||
Common stock | $ 2,512 | $ 2,512 |
Additional paid-in capital | 5,341 | 5,341 |
Accumulated other comprehensive income | 1,581 | 525 |
Retained earnings | 37,333 | 36,505 |
Total Shareholders' Equity | 46,767 | 44,883 |
Total Liabilities and Shareholders' Equity | $ 148,612 | $ 147,841 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Investments | ||
Fixed maturities held-to-maturity, at estimated fair value | $ 2,475 | $ 2,504 |
Fixed maturities available-for-sale, at cost | 93,990 | 92,077 |
Equity securities available-for-sale, at cost | $ 2,420 | $ 2,420 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
REVENUES | ||
Net premiums earned | $ 15,165 | $ 14,706 |
Net investment income | 991 | 1,002 |
Net realized investment gains (losses) | 7 | 142 |
Other income | 154 | 158 |
Total Revenues | 16,317 | 16,008 |
BENEFITS, LOSSES AND EXPENSES | ||
Policyholder benefits and settlement expenses | 9,047 | 8,262 |
Amortization of deferred policy acquisition costs | 787 | 899 |
Commissions | 2,108 | 2,055 |
General and administrative expenses | 2,129 | 2,031 |
Taxes, licenses and fees | 600 | 655 |
Interest expense | 345 | 320 |
Total Benefits, Losses and Expenses | 15,016 | 14,222 |
Income Before Income Taxes | 1,301 | 1,786 |
INCOME TAX EXPENSE | ||
Current | 221 | 471 |
Deferred | 139 | 7 |
Total income tax expense | 360 | 478 |
Net income | $ 941 | $ 1,308 |
INCOME PER COMMON SHARE BASIC AND DILUTED (in dollars per share) | $ 0.37 | $ 0.52 |
DIVIDENDS DECLARED PER SHARE (in dollars per share) | $ 0.045 | $ 0.04 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 941 | $ 1,308 |
Other comprehensive income (loss), net of tax | ||
Unrealized gains on securities, net of reclassification adjustment of $12 and $94 for 2016 and 2015, respectively | 1,158 | 365 |
Unrealized loss on interest rate swap | (102) | (117) |
Other comprehensive income, net of tax | 1,056 | 248 |
Comprehensive income | $ 1,997 | $ 1,556 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Reclassification adjustment | $ 12 | $ 94 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands | Total | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] |
Balance at Dec. 31, 2015 | $ 44,883 | $ 36,505 | $ 525 | $ 2,512 | $ 5,341 |
Net income for March 31, 2016 | 941 | 941 | |||
Other comprehensive income (net of tax) | 1,056 | 1,056 | |||
Cash dividends | (113) | (113) | |||
Balance at Mar. 31, 2016 | $ 46,767 | $ 37,333 | $ 1,581 | $ 2,512 | $ 5,341 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Cash Flows [Abstract] | ||
Net income | $ 941 | $ 1,308 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation expense and amortization/accretion, net | 85 | 79 |
Increase in cash surrender value of company owned life insurance | (34) | (44) |
Net realized gains on investments | (7) | (142) |
Deferred income taxes | 139 | 7 |
Amortization of deferred policy acquisition costs | 787 | 899 |
Change in accrued investment income | (51) | (45) |
Change in reinsurance recoverable | 214 | (571) |
Policy acquisition costs deferred | (844) | (893) |
Change in accrued income taxes | 71 | 5 |
Change in net policy liabilities and claims | (1,137) | 1,075 |
Change in other assets/liabilities, net | (695) | 1,247 |
Other, net | 8 | 8 |
Net cash provided by (used in) operating activities | (523) | 2,933 |
Cash Flows from Investing Activities | ||
Available-for-sale securities | (4,613) | (7,582) |
Property and equipment | (97) | (69) |
Held-to-maturity securities | 74 | 346 |
Available-for-sale securities | 2,666 | 5,256 |
Other invested assets, net | (17) | 383 |
Net cash used in investing activities | (1,987) | (1,666) |
Cash Flows from Financing Activities | ||
Change in other policyholder funds | 23 | 15 |
Repayments of long-term debt | 0 | (500) |
Dividends paid | (113) | (100) |
Net cash used in financing activities | (90) | (585) |
Net change in cash and cash equivalents | (2,600) | 682 |
Cash and cash equivalents, beginning of year | 6,763 | 6,426 |
Cash and cash equivalents, end of period | $ 4,163 | $ 7,108 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of The National Security Group, Inc. (the Company) and its wholly-owned subsidiaries: National Security Insurance Company (NSIC), National Security Fire and Casualty Company (NSFC) and NATSCO, Inc. (NATSCO). NSFC includes a wholly-owned subsidiary, Omega One Insurance Company (Omega). The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the condensed consolidated financial statements have been included. All significant intercompany transactions and accounts have been eliminated. The financial information presented herein should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, which includes information and disclosures not presented herein. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Among the more significant estimates included in these condensed consolidated financial statements are reserves for future life insurance policy benefits, liabilities for losses and loss adjustment expenses, reinsurance recoverable associated with loss and loss adjustment expense liabilities, deferred policy acquisition costs, deferred income tax assets and liabilities, assessments of other-than-temporary impairments on investments and accruals for contingencies. Actual results could differ from these estimates. Earnings Per Share Earnings per share of common stock is based on the weighted average number of shares outstanding during each year. The adjusted weighted average shares outstanding were 2,512,425 at March 31, 2016 and 2,507,452 at March 31, 2015. The Company did not have any dilutive securities as of March 31, 2016 and 2015. Reclassifications Certain 2015 amounts have been reclassified from the prior year condensed consolidated financial statements to conform to the 2016 presentation. Concentration of Credit Risk The Company maintains cash balances which are generally held in non-interest bearing demand deposit accounts subject to FDIC insured limits of $250,000 per entity. At March 31, 2016 , the net amount exceeding FDIC insured limits was $ 2,099,000 at one financial institution. The Company has not experienced any losses in such accounts. Management of the Company reviews financial information of financial institutions on a quarterly basis and believes the Company is not exposed to any significant credit risk on cash and cash equivalents. Policy receivables are reported at unpaid balances. Policy receivables are generally offset by associated unearned premium liabilities and are not subject to significant credit risk. Receivables from agents, less provision for credit losses, are composed of balances due from independent agents. At March 31, 2016 , the single largest balance due from one agent totaled $902,000 . Reinsurance contracts do not relieve the Company of its obligations to policyholders. A failure of a reinsurer to meet their obligation could result in losses to the insurance subsidiaries. Allowances for losses are established if amounts are believed to be uncollectible. At March 31, 2016 and December 31, 2015, no amounts were deemed uncollectible. The Company, at least annually, evaluates the financial condition of all reinsurers and evaluates any potential concentrations of credit risk. At March 31, 2016 , management does not believe the Company is exposed to any significant credit risk related to its reinsurance program. Change in Accounting Principle: Effective January 1, 2016, the Company elected to change its method of presentation relating to placement fees associated with the issuance of trust preferred securities in accordance with FASB ASU 2015-03. Prior to 2016, the Company’s policy was to present these fees in Other Assets on the balance sheet, net of accumulated amortization. Beginning in 2016, the Company has presented these fees as a direct reduction in the related note payable. Accounting Changes Not Yet Adopted Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (FASB) issued guidance on a comprehensive new revenue recognition standard. This standard will not impact accounting for insurance contracts, leases, financial instruments and guarantees. For those contracts that are impacted by the new guidance, the guidance will require an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to, in exchange for those goods or services. The guidance requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued a deferral of the effective date by one year. This guidance is effective retrospectively for fiscal years beginning after December 15, 2017 and interim periods within those years. Early adoption of this standard is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Although insurance contracts are specifically scoped out of this new guidance, the Company has minor services that may be subject to the new revenue recognition guidance and are still in the process of evaluating the impact, if any, the guidance may have on its condensed consolidated financial statements. Presentation of Financial Statements - Going Concern In August 2014, the FASB issued guidance on determining when and how to disclose going concern uncertainties in the financial statements, and requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. The updated guidance is effective for annual periods ending after December 15, 2016 and interim periods thereafter. Early adoption is permitted. The Company does not expect the adoption to have a material impact on its financial position, results of operations or disclosures. Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued guidance that requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. The guidance requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes and requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset. The guidance eliminates the requirement for public companies to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. This guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Leases In February 2016, the FASB issued guidance that requires lessees (for capital and operating leases) to recognize the lease liability and right-of-use asset at the commencement date of the lease. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Contingent Put and Call Options in Debt Instruments In March 2016, the FASB issued guidance that clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. This guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those years. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Recently Adopted Accounting Standards Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items In January 2015, the FASB issued guidance that eliminates from GAAP the concept of extraordinary items. The Company adopted this standard on January 1, 2016. This guidance did not have a material effect on results of operations or financial position. Amendments to the Consolidation Analysis In February 2015, the FASB issued additional guidance regarding the consolidation of certain legal entities. The guidance modifies the evaluation of whether or not limited partnerships and similar legal entities are variable interest entities (VIEs) and the consolidation analysis of entities involved with VIEs, particularly those that have fee arrangements and related party relationships. The Company adopted this standard on January 1, 2016. This guidance did not have a material effect on results of operations or financial position. Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. In April 2015, the FASB issued guidance to simplify the presentation of debt issuance costs. This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. The Company adopted this standard retrospectively on January 1, 2016, which resulted in the reclassification of $258,000 of unamortized debt issuance costs related to Company borrowings from other assets to long-term debt within our condensed consolidated balance sheet as of December 31, 2015. The adoption also resulted in the reclassification of $3,000 from general expenses to interest expense for the three months ended March 31, 2015. Disclosure about Short-Duration Contracts In May 2015, the FASB issued guidance that enhances disclosure about short-duration insurance liabilities to help users understand the nature, amount, timing and uncertainty of future cash flows related to insurance liabilities and the effect of those cash flows on the statement of comprehensive income. The Company adopted this standard on January 1, 2016. Required disclosures will be included in the notes to consolidated financial statements included in the Company's 2016 Annual Report on Form 10-K and in interim reports beginning in 2017. Simplifying the Accounting for Measurement-Period Adjustments In September 2015, the FASB issued guidance that requires an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The acquirer must record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The guidance requires an entity to present on the face of the income statement or to disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The Company adopted this standard on January 1, 2016. This guidance did not have a material effect on results of operations or financial position. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2016 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES The Company holds a passive interest in a limited partnership that is considered to be a Variable Interest Entity (VIE) under the provisions of ASC 810 Consolidation . The Company is not the primary beneficiary of the entity and is not required to consolidate under ASC 810. The entity is a private placement investment fund formed for the purpose of investing in private equity investments. The Company owns less than 1% of the limited partnership. The carrying value of the investment totals $228,000 and is included as a component of Other Invested Assets in the accompanying condensed consolidated balance sheets. In December 2005, the Company formed National Security Capital Trust I, a statutory trust created under the Delaware Statutory Trust Act, for the sole purpose of issuing, in private placement transactions, $9,000,000 of trust preferred securities (TPS) and using the proceeds thereof, together with the equity proceeds received from the Company in the initial formation of the Trust, to purchase $9,279,000 of variable rate subordinated debentures issued by the Company. The Company owns all voting securities of the Trust and the subordinated debentures are the sole assets of the Trust. The Trust will meet the obligations of the TPS with the interest and principal paid on the subordinated debentures. The Company received net proceeds from the TPS transactions, after commissions and other costs of issuance, of $9,005,000 . The Company also holds all the voting securities issued by the Trust and such trusts are considered to be VIE's. The Trust is not consolidated because the Company is not the primary beneficiary of the trust. The Subordinated Debentures, disclosed in Note 7, are reported in the accompanying condensed consolidated balance sheets as a component of long-term debt. The Company's equity investments in the Trust total $279,000 and are included in Other Assets in the accompanying condensed consolidated balance sheets. In June 2007, the Company formed National Security Capital Trust II for the sole purpose of issuing, in private placement transactions, $3,000,000 of trust preferred securities (TPS) and using the proceeds thereof, together with the equity proceeds received from the Company in the initial formation of the Trust, to purchase $3,093,000 unsecured junior subordinated deferrable interest debentures. The Company owns all voting securities of the Trust and the subordinated debentures are the sole assets of the Trust. The Trust will meet the obligations of the TPS with the interest and principal paid on the subordinated debentures. The Company received net proceeds from the TPS transactions, after commissions and other costs of issuance, of $2,995,000 . The Company also holds all the voting securities issued by the Trust and such trusts are considered to be VIE's. The Trust is not consolidated because the Company is not the primary beneficiary of the Trust. The Subordinated Debentures, disclosed in Note 7, are reported in the accompanying consolidated balance sheets as a component of long-term debt. The Company's equity investments in the Trust total $93,000 and are included in Other Assets in the accompanying condensed consolidated balance sheets. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2016 | |
Investments [Abstract] | |
Investments | INVESTMENTS The amortized cost and aggregate fair values of investments in available-for-sale securities as of March 31, 2016 are as follows ( dollars in thousands ): Available-for-sale securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 38,378 $ 1,157 $ 1,173 $ 38,362 Mortgage backed securities 14,212 370 103 14,479 Private label asset backed securities 8,866 40 631 8,275 Obligations of states and political subdivisions 13,933 938 3 14,868 U.S. Treasury securities and obligations of U.S. Government corporations and agencies 18,601 744 10 19,335 Total fixed maturities 93,990 3,249 1,920 95,319 Equity securities 2,420 2,747 110 5,057 Total $ 96,410 $ 5,996 $ 2,030 $ 100,376 The amortized cost and aggregate fair values of investments in held-to-maturity securities as of March 31, 2016 are as follows ( dollars in thousands ): Held-to-maturity securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Mortgage backed securities $ 2,332 $ 102 $ — $ 2,434 U.S. Treasury securities and obligations of U.S. Government corporations and agencies 38 3 — 41 Total $ 2,370 $ 105 $ — $ 2,475 The amortized cost and aggregate fair values of investments in available-for-sale securities as of December 31, 2015 are as follows ( dollars in thousands ): Available-for-sale securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 38,245 $ 747 $ 1,728 $ 37,264 Mortgage backed securities 15,324 157 224 15,257 Private label asset backed securities 6,029 24 380 5,673 Obligations of states and political subdivisions 14,654 869 47 15,476 U.S. Treasury securities and obligations of U.S. Government corporations and agencies 17,825 413 96 18,142 Total fixed maturities 92,077 2,210 2,475 91,812 Equity securities 2,420 2,590 113 4,897 Total $ 94,497 $ 4,800 $ 2,588 $ 96,709 The amortized cost and aggregate fair values of investments in held-to-maturity securities as of December 31, 2015 are as follows ( dollars in thousands ): Held-to-maturity securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Mortgage backed securities $ 2,395 $ 62 $ — $ 2,457 U.S. Treasury securities and obligations of U.S. Government corporations and agencies 44 3 — 47 Total $ 2,439 $ 65 $ — $ 2,504 The amortized cost and aggregate fair value of debt securities at March 31, 2016 , by contractual maturity, are presented in the following table ( dollars in thousands ). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. (Dollars in Thousands) Amortized Cost Fair Value Available-for-sale securities: Due in one year or less $ 2,038 $ 2,069 Due after one year through five years 15,799 16,127 Due after five years through ten years 34,131 33,956 Due after ten years 42,022 43,167 Total $ 93,990 $ 95,319 Held-to-maturity securities: Due in one year or less $ — $ — Due after one year through five years 66 69 Due after five years through ten years 99 108 Due after ten years 2,205 2,298 Total $ 2,370 $ 2,475 A summary of securities available-for-sale with unrealized losses as of March 31, 2016 , along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows ( dollars in thousands ): Less than 12 months 12 months or longer Total March 31, 2016 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Total Securities in a Loss Position Fixed maturities Corporate debt securities $ 8,769 $ 284 $ 4,349 $ 889 $ 13,118 $ 1,173 25 Mortgage backed securities 2,393 79 710 24 3,103 103 11 Private label asset backed securities 4,985 414 1,790 217 6,775 631 10 Obligations of state and political subdivisions — — 339 3 339 3 1 U.S. Treasury securities and obligations of U.S. Government corporations and agencies 995 3 352 7 1,347 10 3 Equity securities — — 1,176 110 1,176 110 1 $ 17,142 $ 780 $ 8,716 $ 1,250 $ 25,858 $ 2,030 51 There were no securities held-to-maturity with unrealized losses as of March 31, 2016 . A summary of securities available-for-sale with unrealized losses as of December 31, 2015 , along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows ( dollars in thousands ): Less than 12 months 12 months or longer Total December 31, 2015 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Total Securities in a Loss Position Fixed maturities Corporate debt securities $ 18,205 $ 821 $ 3,783 $ 907 $ 21,988 $ 1,728 44 Mortgage backed securities 9,069 161 675 63 9,744 224 20 Private label asset backed securities 4,962 379 84 1 5,046 380 10 Obligations of state and political subdivisions 1,920 36 331 11 2,251 47 5 U.S. Treasury securities and obligations of U.S. Government corporations and agencies 6,131 70 1,452 26 7,583 96 12 Equity securities — — 1,173 113 1,173 113 1 $ 40,287 $ 1,467 $ 7,498 $ 1,121 $ 47,785 $ 2,588 92 There were no securities held-to-maturity with unrealized losses as of December 31, 2015 . The Company conducts periodic reviews to identify and evaluate securities in an unrealized loss position in order to identify other-than-temporary impairments. For securities in an unrealized loss position, the Company assesses whether the Company has the intent to sell the security or more-likely-than-not will be required to sell the security before the anticipated recovery. If either of these conditions is met, the Company is required to recognize an other-than-temporary impairment with the entire unrealized loss reported in earnings. For securities in an unrealized loss position that do not meet these conditions, the Company assesses whether the impairment of a security is other-than-temporary. If the impairment is determined to be other-than-temporary, the Company is required to separate the other-than-temporary impairments into two components: the amount representing the credit loss and the amount related to all other factors. The credit loss is the portion of the amortized book value in excess of the net present value of the projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. The credit loss component of other-than-temporary impairments is reported in earnings, whereas the amount relating to factors other than credit losses are recorded in other comprehensive income, net of taxes. Management has evaluated each security in a significant unrealized loss position. The Company has no material exposure to sub-prime mortgage loans and less than 5.14% of the fixed income investment portfolio is rated below investment grade. In evaluating whether or not the equity loss positions were other-than-temporary impairments, Management evaluated financial information on each company and where available, reviewed analyst reports from at least two independent sources. Based on a review of the available financial information, the prospect for future earnings of each company and consideration of the Company’s intent and ability to hold the securities until market values recovered, it was determined that the securities in an accumulated loss position in the portfolio were temporary impairments. For the three months ended March 31, 2016 and year ended December 31, 2015, the Company realized no other-than-temporary impairments. At March 31, 2016, the single largest loss not realized as an impairment was in the bond portfolio and totaled $247,000 . The second largest loss position was in the bond portfolio and totaled $245,000 . The third largest loss position was in the bond portfolio and totaled $196,000 . At December 31, 2015, the single largest loss not realized as an impairment was in the bond portfolio and totaled $252,000 . The second largest loss position was in the bond portfolio and totaled $211,000 . The third largest loss position was in the bond portfolio and totaled $186,000 . Major categories of investment income are summarized as follows (dollars in thousands): Three months ended March 31, 2016 2015 Fixed maturities $ 901 $ 894 Equity securities 28 30 Mortgage loans on real estate 1 4 Investment real estate 2 2 Policy loans 32 29 Company owned life insurance change in surrender value 34 44 Other 49 42 1,047 1,045 Less: Investment expenses 56 43 Net investment income $ 991 $ 1,002 Major categories of realized investment gains and losses are summarized as follows (dollars in thousands): Three months ended March 31, 2016 2015 Fixed maturities $ 17 $ 142 Other, principally real estate (10 ) — Net realized investment gains $ 7 $ 142 An analysis of the net change in unrealized appreciation on available-for-sale securities follows (dollars in thousands): March 31, 2016 December 31, 2015 Net change in unrealized appreciation on available-for-sale securities before deferred tax $ 1,754 $ (3,225 ) Deferred income tax (596 ) 1,097 Net change in unrealized appreciation on available-for-sale securities $ 1,158 $ (2,128 ) |
Fair Value of Financial Assets
Fair Value of Financial Assets and Financial Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Financial Liabilities | FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES Our available-for-sale securities consists of fixed maturity and equity securities which are recorded at fair value in the accompanying consolidated balance sheets. The change in the fair value of these investments, unless deemed to be other-than-temporarily impaired, is recorded as a component of other comprehensive income. We are permitted to elect to measure financial instruments and certain other items at fair value, with the change in fair value recorded in earnings. We elected not to measure any eligible items using the fair value option. Accounting standards define fair value as the price that would be received to sell an asset or would be paid to transfer a liability in an orderly transaction between market participants at the measurement date, and establishes a framework to make the measurement of fair value more consistent and comparable. In determining fair value, we primarily use prices and other relevant information generated by market transactions involving identical or comparable assets. The Company categorizes assets and liabilities carried at their fair value based upon a fair value hierarchy: Level 1 – Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 1 assets and liabilities consist of money market fund deposits and certain of our marketable debt and equity instruments, including equity instruments offsetting deferred compensation, that are traded in an active market with sufficient volume and frequency of transactions. Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets include certain of our marketable debt and equity instruments with quoted market prices that are traded in less active markets or priced using a quoted market price for similar instruments. Level 2 assets also include marketable equity instruments with security-specific restrictions that would transfer to the buyer, marketable debt instruments priced using indicator prices which represent non-binding market consensus prices that can be corroborated by observable market quotes, as well as derivative contracts and debt instruments priced using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Marketable debt instruments in this category generally include commercial paper, bank time deposits, repurchase agreements for fixed-income instruments, and a majority of floating-rate notes, corporate bonds, and municipal bonds. Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. Level 3 assets and liabilities include marketable debt instruments, non-marketable equity investments, derivative contracts, and company issued debt whose values are determined using inputs that are both unobservable and significant to the values of the instruments being measured. Level 3 assets also include marketable debt instruments that are priced using indicator prices that we were unable to corroborate with observable market quotes. Marketable debt instruments in this category generally include asset-backed securities and certain floating-rate notes, corporate bonds, and municipal bonds. Assets/Liabilities Measured at Fair Value on a Recurring Basis Financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2016 are summarized in the following table by the type of inputs applicable to the fair value measurements (in thousands): Fair Value Measurements at Reporting Date Using Description Total Level 1 Level 2 Level 3 Financial Assets Fixed maturities available-for-sale Corporate debt securities $ 38,362 $ — $ 38,362 $ — Mortgage backed securities 14,479 — 14,479 — Private label asset backed securities 8,275 — 8,275 — Obligations of states and political subdivisions 14,868 — 14,868 — U.S. Treasury securities and obligations of U.S. Government corporations and agencies 19,335 19,335 — — Trading securities 107 107 — — Equity securities available-for-sale 5,057 3,881 — 1,176 Total Financial Assets $ 100,483 $ 23,323 $ 75,984 $ 1,176 Financial Liabilities Interest rate swap $ (1,574 ) $ — $ — $ (1,574 ) Total Financial Liabilities $ (1,574 ) $ — $ — $ (1,574 ) The methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis are summarized below. Fixed maturities available-for-sale — The fair values of the Company’s public fixed maturity securities are generally based on prices obtained from independent pricing services. Consistent with the fair value hierarchy described above, securities with validated quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. Trading securities — Trading securities consist primarily of mutual funds whose fair values are determined consistent with similar instruments described above under “Fixed Maturities” and below under “Equity Securities.” Equity securities — Equity securities consist principally of investments in common and preferred stock of publicly traded companies and privately traded securities. The fair values of our publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for our privately traded equity securities require a substantial level of judgment. Privately traded equity securities are classified within Level 3. Interest rate swaps — Interest rate swaps are recorded at fair value either as assets, within other assets or as liabilities, within other liabilities. The fair values of our interest rate swaps are provided by a third-party broker and are classified within Level 3. As of March 31, 2016 , Level 3 fair value measurements of assets include $1,176,000 of equity securities in a local community bank whose value is based on an evaluation of the financial statements of the entity. The Company does not develop the unobservable inputs used in measuring fair value. As of March 31, 2016 , Level 3 fair value measurements of liabilities include $1,574,000 net fair value of various interest rate swap agreements whose value is based on analysis provided by a third party broker who utilizes financial modeling tools and assumptions on interest and other factors. The Company does not develop the unobservable inputs used in measuring fair value. Additional information regarding the interest rate swap agreements is provided in Note 7. The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2016 (in thousands): For the three months ended March 31, 2016 Equity Securities Available-for-Sale Interest Rate Swap Beginning balance $ 1,173 $ (1,419 ) Total gains or losses (realized and unrealized): Included in earnings — — Included in other comprehensive income 3 (155 ) Purchases: — — Sales: — — Issuances: — — Settlements: — — Transfers in/(out) of Level 3 — — Ending balance $ 1,176 $ (1,574 ) The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held as of March 31, 2016: $ — $ — For the three months ended March 31, 2016 , there were no assets or liabilities measured at fair values on a nonrecurring basis. Financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 are summarized in the following table by the type of inputs applicable to the fair value measurements (in thousands): Fair Value Measurements at Reporting Date Using Description Total Level 1 Level 2 Level 3 Financial Assets Fixed maturities available-for-sale Corporate debt securities $ 37,264 $ — $ 37,264 $ — Mortgage backed securities 15,257 — 15,257 — Private label asset backed securities 5,673 — 5,673 — Obligations of states and political subdivisions 15,476 — 15,476 — U.S. Treasury securities and obligations of U.S. Government corporations and agencies 18,142 18,142 — — Trading securities 107 107 — — Equity securities available-for-sale 4,897 3,724 — 1,173 Total Financial Assets $ 96,816 $ 21,973 $ 73,670 $ 1,173 Financial Liabilities Interest rate swap $ (1,419 ) $ — $ — $ (1,419 ) Total Financial Liabilities $ (1,419 ) $ — $ — $ (1,419 ) The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2015 (in thousands): For the year ended December 31, 2015 Equity Securities Available-for-Sale Interest Rate Swap Beginning balance $ 1,116 $ (1,238 ) Total gains or losses (realized and unrealized): Included in earnings — — Included in other comprehensive income 57 (181 ) Purchases: — — Sales: — — Issuances: — — Settlements: — — Transfers in/(out) of Level 3 — — Ending balance $ 1,173 $ (1,419 ) The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held as of December 31, 2015: $ — $ — For the year ended December 31, 2015 , there were no assets or liabilities measured at fair values on a nonrecurring basis. The Company is exposed to certain risks in the normal course of its business operations. The primary risk that is managed through the use of derivatives is interest rate risk on floating rate borrowings. This risk is managed through the use of interest rate swap agreements which are designated as cash flow hedges. For cash flow hedges, the effective portion of the gain or loss on the interest rate swap is included as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction is recognized in earnings. The Company does not hold or issue derivatives that are not designated as hedging instruments. See Note 7 for additional information about the interest rate swap agreements. The following methods and assumptions were used to estimate fair value of each class of financial instrument for which it is practical to estimate that value: Cash and cash equivalents — the carrying amount is a reasonable estimate of fair value. Fixed maturities held-to-maturity — the carrying amount is amortized cost; the fair values of the Company’s public fixed maturity securities that are classified as held-to-maturity are generally based on prices obtained from independent pricing services. Mortgage loans — the carrying amount is a reasonable estimate of fair value due to the restrictive nature and limited marketability of the mortgage notes. Policy loans — the carrying amount is a reasonable estimate of fair value. Company owned life insurance — the carrying amount is a reasonable estimate of fair value. Other invested assets — the carrying amount is a reasonable estimate of fair value. Other policyholder funds — the carrying amount is a reasonable estimate of fair value. Debt — the carrying amount is a reasonable estimate of fair value. The carrying amount and estimated fair value of the Company’s financial instruments as of March 31, 2016 and December 31, 2015 are as follows (in thousands): March 31, 2016 December 31, 2015 Assets and related instruments Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Held-to-maturity securities $ 2,370 $ 2,475 $ 2,439 $ 2,504 Mortgage loans 190 190 202 202 Policy loans 1,676 1,676 1,655 1,655 Company owned life insurance 4,932 4,932 4,898 4,898 Other invested assets 3,185 3,185 3,256 3,256 Liabilities and related instruments Other policyholder funds 1,584 1,584 1,561 1,561 Short-term notes payable and current portion of long-term debt 857 857 857 857 Long-term debt 17,102 17,102 17,100 17,100 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT Major categories of property and equipment are summarized as follows (dollars in thousands): March 31, 2016 December 31, 2015 Building and improvements $ 3,348 $ 3,350 Electronic data processing equipment 1,726 1,631 Furniture and fixtures 533 529 5,607 5,510 Less accumulated depreciation 3,603 3,564 Property and equipment, net $ 2,004 $ 1,946 Depreciation expense for the three months ended March 31, 2016 was $39,000 ( $168,000 for the year ended December 31, 2015). |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company recognizes tax-related interest and penalties as a component of tax expense. The Company files income tax returns in the U.S. federal jurisdiction and various states. The Company is not subject to examinations by authorities related to its U.S. federal or state income tax filings for years prior to 2010. Tax returns have been filed through the year 2014. Net deferred tax liabilities are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of the enacted tax laws. Management believes that, based on its historical pattern of taxable income, the Company will produce sufficient income in the future to realize its deferred tax assets. The Company recognized net deferred tax asset positions of $3,141,000 at March 31, 2016 and $3,824,000 at December 31, 2015 . The tax effect of significant differences representing deferred tax assets and liabilities are as follows (dollars in thousands): As of March 31, 2016 As of December 31, 2015 General expenses $ 1,487 $ 1,569 Unearned premiums 2,082 2,039 Claims liabilities 724 730 Litigation settlement 1,748 1,748 AMT credit 742 816 Impairment on real estate owned 187 187 Unrealized loss on interest rate swaps 535 483 Deferred tax assets 7,505 7,572 Depreciation (112 ) (111 ) Deferred policy acquisition costs (2,904 ) (2,885 ) Unrealized gains on securities available-for-sale (1,348 ) (752 ) Deferred tax liabilities (4,364 ) (3,748 ) Net deferred tax asset $ 3,141 $ 3,824 The appropriate income tax effects of changes in temporary differences are as follows (dollars in thousands): Three months ended March 31, 2016 2015 Deferred policy acquisition costs $ 19 $ (2 ) Unearned premiums (43 ) (48 ) General expenses 82 (44 ) Depreciation 1 (4 ) Claims liabilities 6 (14 ) AMT credit 74 119 Deferred income tax expense $ 139 $ 7 Total income tax expense (benefit) varies from amounts computed by applying current federal income tax rates to income or loss before income taxes. The reasons for these differences and the approximate tax effects are as follows: Three months ended March 31, 2016 2015 Federal income tax rate applied to pre-tax income/loss 34.0 % 34.0 % Dividends received deduction and tax-exempt interest (1.8 )% (1.5 )% Company owned life insurance (0.9 )% (0.8 )% Small life deduction (4.4 )% (3.2 )% Other, net 0.8 % (1.8 )% Effective federal income tax rate 27.7 % 26.7 % |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable and Long-Term Debt | NOTES PAYABLE AND LONG-TERM DEBT Short-term debt and current portion of long-term debt consisted of the following as of March 31, 2016 and December 31, 2015 ( dollars in thousands) : March 31, December 31, 2016 2015 Current portion of installment note payable due November 2016 with variable interest rate equal to the WSJ prime rate plus 1%. Unsecured. 857 857 $ 857 $ 857 Long-term debt consisted of the following as of March 31, 2016 and December 31, 2015 ( dollars in thousands ): March 31, December 31, 2016 2015 Line of credit with variable interest rate equal to the WSJ prime rate, subject to a 5.0% floor; maturity March 2018. Interest payments due quarterly. Unsecured. $ 700 $ 700 Line of credit, $1,000,000 available, with variable interest rate equal to the WSJ prime rate, subject to a 4.5% floor; maturity September 2017. Interest payments due monthly. Secured. — — Long term portion of installment note with variable interest rate equal to the WSJ prime rate plus 1% and adjustable each November; maturity November 2021. Interest payable annually with principal payable in equal annual installments. Next principal installment on long term portion due November 2016. Unsecured. 4,286 4,286 Subordinated debentures issued on December 15, 2005 with fixed interest rate of 8.83% each distribution period thereafter until December 15, 2015 when the coupon rate shall equal the 3-Month LIBOR plus 3.75% applied to the outstanding principal; net of $185,000 in debt issuance cost ($187,000 in 2015); maturity December 2035. Interest payments due quarterly. All may be redeemed at any time following the tenth anniversary of issuance. Unsecured. 9,094 9,092 Subordinated debentures issued on June 21, 2007 with a floating interest rate equal to the 3-Month LIBOR plus 3.40% applied to the outstanding principal; applied to the outstanding principal; net of $70,000 in debt issuance cost ($71,000 in 2015); maturity June 15, 2037. Interest payments due quarterly. All may be redeemed at any time following the fifth anniversary of issuance. Unsecured. 3,022 3,022 $ 17,102 $ 17,100 The Company has entered into various swap agreements related to the trust preferred securities. On March 19, 2009, the Company entered into a forward swap effective September 17, 2012, with a notional amount of $3,000,000 and designated the swap as a hedge against changes in cash flows attributable to changes in the benchmark interest rate (LIBOR) associated with the subordinated debentures issued June 21, 2007. Quarterly, commencing September 17, 2012, under the terms of the forward swap, the Company will pay interest at a fixed rate of 7.02% until March 15, 2019. On May 26, 2010, the Company entered into a forward swap with a notional amount of $9,000,000 effective December 15, 2015, which hedges against changes in cash flows following the termination of the fixed rate period. Quarterly, commencing March 16, 2016 under the terms of the forward swap, the Company pays interest at a fixed rate of 8.49% until March 15, 2020. The swaps entered into in 2009 and 2010 have fair values of $243,000 (liability) and $1,331,000 (liability), respectively, for a total liability of $1,574,000 at March 31, 2016 ( $1,419,000 at December 31, 2015 ). The swap liability is reported as a component of other liabilities on the consolidated balance sheets. A net valuation loss of $102,000 (net of tax) is included in accumulated other comprehensive income related to the swap agreements at March 31, 2016 . A net valuation loss of $119,000 (net of tax) was included in accumulated other comprehensive income related to the swap at December 31, 2015 . We use dollar offset at the hedge's inception and for each reporting period thereafter to assess whether the derivative used in a hedging transaction is expected to be, and has been, effective in offsetting changes in the fair value of the hedged item. Since inception, no portion of the hedged item has been deemed ineffective. For all hedges, we discontinue hedge accounting if it is determined that a derivative is not expected to be, or has ceased to be, effective as a hedge. The Company’s interest rate swaps include provisions requiring the Company to post collateral when the derivative is in a net liability position. At March 31, 2016 , the Company has securities on deposit with fair market values of $1,515,000 and cash of $230,000 (all of which is posted as collateral). At December 31, 2015 , the Company had securities on deposit with fair market values of $1,482,000 and cash of $130,000 (all of which is posted as collateral). See Note 4 for additional information about the interest rate swaps. |
Reinsurance
Reinsurance | 3 Months Ended |
Mar. 31, 2016 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | REINSURANCE The Company's insurance operations utilize reinsurance in order to limit losses, minimize exposure to large risks, provide additional capacity for future growth and effect business-sharing arrangements. Life reinsurance is accomplished through yearly renewable term coverage. Property and casualty reinsurance is placed on an excess of loss basis to cover losses from catastrophe events. Reinsurance ceded arrangements do not discharge the insurance subsidiaries as the primary insurer, except for cases involving a novation. Failure of re-insurers to honor their obligations could result in losses to the insurance subsidiaries. The insurance subsidiaries evaluate the financial conditions of their reinsurance companies and monitor concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the companies to minimize their exposure to significant losses from reinsurance insolvencies. In the normal course of business, NSFC seeks to reduce the loss that may arise from catastrophes or other individually significant large loss events that cause unfavorable underwriting results by re-insuring certain levels of risk in various areas of exposure with reinsurance companies. NSFC maintains a catastrophe reinsurance agreement to cover losses from catastrophic events, primarily hurricanes. Under the catastrophe reinsurance program, the Company retains the first $4,000,000 in losses from each catastrophe event. Catastrophe reinsurance coverage is maintained in three layers as follows: Layer Reinsurers' Limits of Liability First Layer 100% of $13,500,000 in excess of $4,000,000 retention Second Layer 100% of $25,000,000 in excess of $17,500,000 Third Layer 100% of $30,000,000 in excess of $42,500,000 Each reinsurance layer covers events occurring from January 1 through December 31 of the contract year. All significant reinsurance companies under the program carry A.M. Best ratings of A- (Excellent) or higher, or equivalent ratings. The Company's catastrophe reinsurance contract allows for one reinstatement. The Company maintains reinstatement premium protection (RPP) to cover reinstatement premiums incurred. The RPP further reduces risk from a major catastrophe and serves to strengthen the Company's capital position by reducing the modeled 100 year event net cost. Amounts recoverable from re-insurers are estimated in a manner consistent with the claim liability associated with the underlying insurance policies. Amounts paid for prospective reinsurance contracts are reported as prepaid reinsurance premiums and amortized over the remaining contract period. In the normal course of business, NSIC seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding reinsurance to reinsurance companies under excess coverage contracts. NSIC retains a maximum of $50,000 of coverage per individual life. The cost of reinsurance is amortized over the contract period of the reinsurance. At March 31, 2016 , the largest reinsurance recoverable of a single reinsurer was $ 17,000 ($ 12,000 at December 31, 2015). Amounts reported as ceded incurred losses in both 2016 and 2015 were related to the development of losses from prior year catastrophes. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS The Company and its subsidiaries have an established retirement savings plan (401K Plan). All full-time employees are eligible to participate, and all employer contributions are fully vested for employees who have completed 1,000 hours of service in the year of contribution. Company matching contributions for the three months ended March 31, 2016 and 2015 amounted to $68,000 and $43,000 , respectively. The Company contributes dollar-for-dollar matching contributions up to 5% of compensation subject to government limitations. In January 2006, the Company established a non-qualified plan under which directors are allowed to defer all or a portion of directors' fees into various investment options. The supplemental executive retirement plan (SERP) became effective March 1, 2008 and covers named executive officers, with the Company contributing 15% of executive compensation to the plan. Contributions to the plan are fully vested upon the earlier of death, disability, change in control, or ten years of participation in the plan. Costs for amounts credited to the non-qualified deferred compensation plans for the three months ended March 31, 2016 and 2015 amounted to approximately $64,000 and $45,000 , respectively. The Company and its subsidiaries established an Employee Stock Ownership Plan (ESOP) in January 2010, to enable its eligible employees to acquire a proprietary interest in the Company's common stock and to provide retirement and other benefits to such employees. There were $150,000 costs incurred in the first quarter of 2016 and no costs incurred in the first quarter of 2015 related to ESOP plan contributions. All contributions were made in cash for purchase of Company shares in the open market. The Company has not allocated shares directly to the plan and the plan has no debt. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | SHAREHOLDERS' EQUITY During the three months ended March 31, 2016 and year ended December 31, 2015 , changes in shareholders' equity consisted of net income of $941,000 and $4,697,000 , respectively; dividends paid of $113,000 in 2016 and $402,000 in 2015; increases in accumulated other comprehensive income, net of applicable taxes, of $1,056,000 in 2016 and decreases in accumulated other comprehensive income, net of applicable taxes, of $2,247,000 in 2015. Other comprehensive gains and loss consisted of accumulated unrealized gains and losses on securities available for sale and unrealized loss on interest rate swaps. Preferred Stock Preferred Stock may be issued in one or more series as shall from time to time be determined and authorized by the Board of Directors. The directors may make specific provisions regarding (a) the voting rights, if any (b) whether such dividends are to be cumulative or noncumulative (c) the redemption provisions, if any (d) participating rights, if any (e) any sinking fund or other retirement provisions (f) dividend rates (g) the number of shares of such series and (h) liquidation preference. Common Stock The holders of the Class A Common Stock will have one-twentieth of one vote per share, and the holders of the common stock will have one vote per share. There is currently no Class A Common Stock issued or outstanding. In the event of any liquidation, dissolution or distribution of the assets of the Company remaining after the payments to the holders of the Preferred Stock of the full preferential amounts to which they may be entitled as provided in the resolution or resolutions creating any series thereof, the remaining assets of the Company shall be divided and distributed among the holders of both classes of common stock, except as may otherwise be provided in any such resolution or resolutions. The table below provides information regarding the Company's preferred and common stock as of March 31, 2016 and December 31, 2015 : Authorized Issued Outstanding Preferred Stock, $1 par value 500,000 — — Class A Common Stock, $1 par value 2,000,000 — — Common Stock, $1 par value 3,000,000 2,512,425 2,512,425 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | ACCUMULATED OTHER COMPREHENSIVE INCOME Accumulated other comprehensive income (loss) ("AOCI") includes certain items that are reported directly within a separate component of shareholders' equity. The following table presents changes in AOCI balances (dollars in thousands): Three months ended March 31, 2016 2015 Gains and Losses on Cash Flow Hedges Balance at beginning of period $ (935 ) $ (816 ) Other comprehensive loss for period: Other comprehensive loss before reclassifications (102 ) (117 ) Amounts reclassified from accumulated other comprehensive income — — Net current period other comprehensive loss (102 ) (117 ) Balance at end of period $ (1,037 ) $ (933 ) Unrealized Gains and Losses on Available-for-Sale Securities Balance at beginning of period $ 1,460 $ 3,588 Other comprehensive income for period: Other comprehensive income before reclassifications 1,170 459 Amounts reclassified from accumulated other comprehensive income (12 ) (94 ) Net current period other comprehensive income 1,158 365 Balance at end of period $ 2,618 $ 3,953 Total Accumulated Other Comprehensive Income at end of period $ 1,581 $ 3,020 The following table presents the amounts reclassified out of AOCI for the three months ended March 31, 2016 (dollars in thousands): Details about Accumulated Other Comprehensive Income Components Amounts Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement Where Net Income is Presented Unrealized Gains and Losses on Available-for-Sale Securities $ 18 Net realized investment gains 18 Total before tax (6 ) Tax (expense) or benefit $ 12 Net of Tax The following table presents the amounts reclassified out of AOCI for the three months ended March 31, 2015 (dollars in thousands): Details about Accumulated Other Comprehensive Income Components Amounts Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement Where Net Income is Presented Unrealized Gains and Losses on Available-for-Sale Securities $ 142 Net realized investment gains 142 Total before tax (48 ) Tax (expense) or benefit $ 94 Net of Tax |
Segments
Segments | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
Segments | SEGMENTS The Company’s property and casualty insurance operations comprise one business segment. The property and casualty insurance segment primarily underwrites home insurance coverage with primary lines of business consisting of dwelling fire and extended coverage, homeowners (including mobile homeowners) and other liability. Management organizes the business utilizing a niche strategy focusing on lower valued dwellings. Our chief decision makers (Chief Executive Officer, Chief Financial Officer and President) review results and operating plans making decisions on resource allocations on a company-wide basis. The Company’s products are primarily produced through independent agents within the states in which we operate. The Company’s life and accident and health operations comprise the second business segment. The life and accident and health insurance segment consists of two lines of business: traditional life insurance and accident and health insurance. Total assets by industry segment at March 31, 2016 and at December 31, 2015 are summarized below ( dollars in thousands ): Total P&C Insurance Operations Life Insurance Operations Non-Insurance Operations March 31, 2016 $ 148,612 $ 84,837 $ 57,638 $ 6,137 December 31, 2015 $ 147,841 $ 84,435 $ 57,067 $ 6,339 Premium revenues and operating income by business segment for the quarters ended March 31, 2016 and 2015 are summarized below ( dollars in thousands ): Three months ended March 31, 2016 Total P&C Insurance Operations Life Insurance Operations Non-Insurance Operations REVENUE Net premiums earned $ 15,165 $ 13,601 $ 1,564 $ — Net investment income 991 453 521 17 Net realized investment gains (losses) 7 — 7 — Other income 154 153 1 — 16,317 14,207 2,093 17 BENEFITS AND EXPENSES Policyholder benefits paid 9,047 7,862 1,185 — Amortization of deferred policy acquisition costs 787 696 91 — Commissions 2,108 2,016 92 — General and administrative expenses 2,129 1,421 505 203 Taxes, licenses and fees 600 535 65 — Interest expense 345 — 18 327 15,016 12,530 1,956 530 Income (Loss) Before Income Taxes $ 1,301 $ 1,677 $ 137 $ (513 ) Three months ended March 31, 2015 Total P&C Insurance Operations Life Insurance Operations Non-Insurance Operations REVENUE Net premiums earned $ 14,706 $ 13,122 $ 1,584 $ — Net investment income 1,002 490 493 19 Net realized investment gains 142 31 111 — Other income 158 157 1 — 16,008 13,800 2,189 19 BENEFITS AND EXPENSES Policyholder benefits paid 8,262 6,777 1,485 — Amortization of deferred policy acquisition costs 899 675 224 — Commissions 2,055 1,968 87 — General and administrative expenses 2,031 1,540 337 154 Taxes, licenses and fees 655 544 111 — Interest expense 320 — 10 310 14,222 11,504 2,254 464 Income (Loss) Before Income Taxes $ 1,786 $ 2,296 $ (65 ) $ (445 ) The following table presents the Company’s gross and net premiums written for the property and casualty segment and the life and accident and health segment for the three months ended March 31, 2016 and 2015 , respectively: Three months ended March 31, 2016 2015 Life, accident and health operations premiums written: Traditional life insurance $ 1,119 $ 1,137 Accident and health insurance 418 419 Gross life, accident and health 1,537 1,556 Reinsurance premium ceded (25 ) (15 ) Net life, accident and health premiums written $ 1,512 $ 1,541 Property and Casualty operations premiums written: Dwelling fire & extended coverage $ 9,192 $ 8,728 Homeowners (Including mobile homeowners) 5,712 5,751 Other liability 523 505 Gross property and casualty 15,427 14,984 Reinsurance premium ceded (1,002 ) (1,491 ) Net property and casualty written $ 14,425 $ 13,493 Consolidated gross premiums written $ 16,964 $ 16,540 Reinsurance premium ceded (1,027 ) (1,506 ) Consolidated net premiums written $ 15,937 $ 15,034 The following table presents the Company’s gross and net premiums earned for the property and casualty segment and the life and accident and health segment for the three months ended March 31, 2016 and 2015 , respectively: Three months ended March 31, 2016 2015 Life, accident and health operations premiums earned: Traditional life insurance $ 1,173 $ 1,178 Accident and health insurance 416 421 Gross life, accident and health 1,589 1,599 Reinsurance premium ceded (25 ) (15 ) Net life, accident and health premiums earned $ 1,564 $ 1,584 Property and Casualty operations premiums earned: Dwelling fire & extended coverage $ 8,662 $ 8,200 Homeowners (Including mobile homeowners) 5,906 5,948 Other liability 493 465 Gross property and casualty 15,061 14,613 Reinsurance premium ceded (1,460 ) (1,491 ) Net property and casualty earned $ 13,601 $ 13,122 Consolidated gross premiums earned $ 16,650 $ 16,212 Reinsurance premium ceded (1,485 ) (1,506 ) Consolidated net premiums earned $ 15,165 $ 14,706 |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | CONTINGENCIES The Company and its subsidiaries continue to be named individually as parties to litigation related to the conduct of their insurance operations. These suits involve alleged breaches of contracts, torts, including bad faith and fraud claims based on alleged wrongful or fraudulent acts of the Company's subsidiaries, and other miscellaneous causes of action. The Company's property & casualty subsidiaries are defending a limited number of matters filed in the aftermath of Hurricane Ike in Texas. These actions include individual lawsuits with allegations of underpayment of hurricane-related claims. The various suits seek a variety of remedies, including actual and/or punitive damages in unspecified amounts and/or declaratory relief. The Company has reserves set up on litigated claims and the reserves are included in benefit and loss reserves. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest during the three months ended March 31, 2016 was $277,000 ( $280,000 in 2015). Cash paid for income taxes during the three months ended March 31, 2016 was $150,000 ( $500,000 in 2015). |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Management has evaluated subsequent events and their potential effects on these consolidated financial statements through the filing date of this Form 10-Q. |
Significant Accounting Polici24
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | The accompanying condensed consolidated financial statements include the accounts of The National Security Group, Inc. (the Company) and its wholly-owned subsidiaries: National Security Insurance Company (NSIC), National Security Fire and Casualty Company (NSFC) and NATSCO, Inc. (NATSCO). NSFC includes a wholly-owned subsidiary, Omega One Insurance Company (Omega). The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the condensed consolidated financial statements have been included. All significant intercompany transactions and accounts have been eliminated. The financial information presented herein should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, which includes information and disclosures not presented herein. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Among the more significant estimates included in these condensed consolidated financial statements are reserves for future life insurance policy benefits, liabilities for losses and loss adjustment expenses, reinsurance recoverable associated with loss and loss adjustment expense liabilities, deferred policy acquisition costs, deferred income tax assets and liabilities, assessments of other-than-temporary impairments on investments and accruals for contingencies. Actual results could differ from these estimates. |
Earnings Per Share | Earnings per share of common stock is based on the weighted average number of shares outstanding during each year. The adjusted weighted average shares outstanding were 2,512,425 at March 31, 2016 and 2,507,452 at March 31, 2015. The Company did not have any dilutive securities as of March 31, 2016 and 2015. |
Reclassifications | Certain 2015 amounts have been reclassified from the prior year condensed consolidated financial statements to conform to the 2016 presentation. |
Concentration of Credit Risk | The Company maintains cash balances which are generally held in non-interest bearing demand deposit accounts subject to FDIC insured limits of $250,000 per entity. At March 31, 2016 , the net amount exceeding FDIC insured limits was $ 2,099,000 at one financial institution. The Company has not experienced any losses in such accounts. Management of the Company reviews financial information of financial institutions on a quarterly basis and believes the Company is not exposed to any significant credit risk on cash and cash equivalents. Policy receivables are reported at unpaid balances. Policy receivables are generally offset by associated unearned premium liabilities and are not subject to significant credit risk. Receivables from agents, less provision for credit losses, are composed of balances due from independent agents. At March 31, 2016 , the single largest balance due from one agent totaled $902,000 . Reinsurance contracts do not relieve the Company of its obligations to policyholders. A failure of a reinsurer to meet their obligation could result in losses to the insurance subsidiaries. Allowances for losses are established if amounts are believed to be uncollectible. At March 31, 2016 and December 31, 2015, no amounts were deemed uncollectible. The Company, at least annually, evaluates the financial condition of all reinsurers and evaluates any potential concentrations of credit risk. At March 31, 2016 , management does not believe the Company is exposed to any significant credit risk related to its reinsurance program. |
Recently Adopted Accounting Standards | Change in Accounting Principle: Effective January 1, 2016, the Company elected to change its method of presentation relating to placement fees associated with the issuance of trust preferred securities in accordance with FASB ASU 2015-03. Prior to 2016, the Company’s policy was to present these fees in Other Assets on the balance sheet, net of accumulated amortization. Beginning in 2016, the Company has presented these fees as a direct reduction in the related note payable. Accounting Changes Not Yet Adopted Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (FASB) issued guidance on a comprehensive new revenue recognition standard. This standard will not impact accounting for insurance contracts, leases, financial instruments and guarantees. For those contracts that are impacted by the new guidance, the guidance will require an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to, in exchange for those goods or services. The guidance requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued a deferral of the effective date by one year. This guidance is effective retrospectively for fiscal years beginning after December 15, 2017 and interim periods within those years. Early adoption of this standard is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Although insurance contracts are specifically scoped out of this new guidance, the Company has minor services that may be subject to the new revenue recognition guidance and are still in the process of evaluating the impact, if any, the guidance may have on its condensed consolidated financial statements. Presentation of Financial Statements - Going Concern In August 2014, the FASB issued guidance on determining when and how to disclose going concern uncertainties in the financial statements, and requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. The updated guidance is effective for annual periods ending after December 15, 2016 and interim periods thereafter. Early adoption is permitted. The Company does not expect the adoption to have a material impact on its financial position, results of operations or disclosures. Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued guidance that requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. The guidance requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes and requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset. The guidance eliminates the requirement for public companies to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. This guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Leases In February 2016, the FASB issued guidance that requires lessees (for capital and operating leases) to recognize the lease liability and right-of-use asset at the commencement date of the lease. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Contingent Put and Call Options in Debt Instruments In March 2016, the FASB issued guidance that clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. This guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those years. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Recently Adopted Accounting Standards Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items In January 2015, the FASB issued guidance that eliminates from GAAP the concept of extraordinary items. The Company adopted this standard on January 1, 2016. This guidance did not have a material effect on results of operations or financial position. Amendments to the Consolidation Analysis In February 2015, the FASB issued additional guidance regarding the consolidation of certain legal entities. The guidance modifies the evaluation of whether or not limited partnerships and similar legal entities are variable interest entities (VIEs) and the consolidation analysis of entities involved with VIEs, particularly those that have fee arrangements and related party relationships. The Company adopted this standard on January 1, 2016. This guidance did not have a material effect on results of operations or financial position. Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. In April 2015, the FASB issued guidance to simplify the presentation of debt issuance costs. This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. The Company adopted this standard retrospectively on January 1, 2016, which resulted in the reclassification of $258,000 of unamortized debt issuance costs related to Company borrowings from other assets to long-term debt within our condensed consolidated balance sheet as of December 31, 2015. The adoption also resulted in the reclassification of $3,000 from general expenses to interest expense for the three months ended March 31, 2015. Disclosure about Short-Duration Contracts In May 2015, the FASB issued guidance that enhances disclosure about short-duration insurance liabilities to help users understand the nature, amount, timing and uncertainty of future cash flows related to insurance liabilities and the effect of those cash flows on the statement of comprehensive income. The Company adopted this standard on January 1, 2016. Required disclosures will be included in the notes to consolidated financial statements included in the Company's 2016 Annual Report on Form 10-K and in interim reports beginning in 2017. Simplifying the Accounting for Measurement-Period Adjustments In September 2015, the FASB issued guidance that requires an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The acquirer must record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The guidance requires an entity to present on the face of the income statement or to disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The Company adopted this standard on January 1, 2016. This guidance did not have a material effect on results of operations or financial position. |
Consolidation, Variable Interest Entity | The Company holds a passive interest in a limited partnership that is considered to be a Variable Interest Entity (VIE) under the provisions of ASC 810 Consolidation . The Company is not the primary beneficiary of the entity and is not required to consolidate under ASC 810. The entity is a private placement investment fund formed for the purpose of investing in private equity investments. The Company owns less than 1% of the limited partnership. The carrying value of the investment totals $228,000 and is included as a component of Other Invested Assets in the accompanying condensed consolidated balance sheets. |
Marketable Securities | In evaluating whether or not the equity loss positions were other-than-temporary impairments, Management evaluated financial information on each company and where available, reviewed analyst reports from at least two independent sources. For securities in an unrealized loss position, the Company assesses whether the Company has the intent to sell the security or more-likely-than-not will be required to sell the security before the anticipated recovery. If either of these conditions is met, the Company is required to recognize an other-than-temporary impairment with the entire unrealized loss reported in earnings. For securities in an unrealized loss position that do not meet these conditions, the Company assesses whether the impairment of a security is other-than-temporary. If the impairment is determined to be other-than-temporary, the Company is required to separate the other-than-temporary impairments into two components: the amount representing the credit loss and the amount related to all other factors. The credit loss is the portion of the amortized book value in excess of the net present value of the projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. The credit loss component of other-than-temporary impairments is reported in earnings, whereas the amount relating to factors other than credit losses are recorded in other comprehensive income, net of taxes. |
Fair Value | Our available-for-sale securities consists of fixed maturity and equity securities which are recorded at fair value in the accompanying consolidated balance sheets. The change in the fair value of these investments, unless deemed to be other-than-temporarily impaired, is recorded as a component of other comprehensive income. We are permitted to elect to measure financial instruments and certain other items at fair value, with the change in fair value recorded in earnings. We elected not to measure any eligible items using the fair value option. Accounting standards define fair value as the price that would be received to sell an asset or would be paid to transfer a liability in an orderly transaction between market participants at the measurement date, and establishes a framework to make the measurement of fair value more consistent and comparable. In determining fair value, we primarily use prices and other relevant information generated by market transactions involving identical or comparable assets. The Company categorizes assets and liabilities carried at their fair value based upon a fair value hierarchy: Level 1 – Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 1 assets and liabilities consist of money market fund deposits and certain of our marketable debt and equity instruments, including equity instruments offsetting deferred compensation, that are traded in an active market with sufficient volume and frequency of transactions. Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets include certain of our marketable debt and equity instruments with quoted market prices that are traded in less active markets or priced using a quoted market price for similar instruments. Level 2 assets also include marketable equity instruments with security-specific restrictions that would transfer to the buyer, marketable debt instruments priced using indicator prices which represent non-binding market consensus prices that can be corroborated by observable market quotes, as well as derivative contracts and debt instruments priced using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Marketable debt instruments in this category generally include commercial paper, bank time deposits, repurchase agreements for fixed-income instruments, and a majority of floating-rate notes, corporate bonds, and municipal bonds. Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. Level 3 assets and liabilities include marketable debt instruments, non-marketable equity investments, derivative contracts, and company issued debt whose values are determined using inputs that are both unobservable and significant to the values of the instruments being measured. Level 3 assets also include marketable debt instruments that are priced using indicator prices that we were unable to corroborate with observable market quotes. Marketable debt instruments in this category generally include asset-backed securities and certain floating-rate notes, corporate bonds, and municipal bonds. Fixed maturities available-for-sale — The fair values of the Company’s public fixed maturity securities are generally based on prices obtained from independent pricing services. Consistent with the fair value hierarchy described above, securities with validated quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. Trading securities — Trading securities consist primarily of mutual funds whose fair values are determined consistent with similar instruments described above under “Fixed Maturities” and below under “Equity Securities.” Equity securities — Equity securities consist principally of investments in common and preferred stock of publicly traded companies and privately traded securities. The fair values of our publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for our privately traded equity securities require a substantial level of judgment. Privately traded equity securities are classified within Level 3. Interest rate swaps — Interest rate swaps are recorded at fair value either as assets, within other assets or as liabilities, within other liabilities. The fair values of our interest rate swaps are provided by a third-party broker and are classified within Level 3. The following methods and assumptions were used to estimate fair value of each class of financial instrument for which it is practical to estimate that value: Cash and cash equivalents — the carrying amount is a reasonable estimate of fair value. Fixed maturities held-to-maturity — the carrying amount is amortized cost; the fair values of the Company’s public fixed maturity securities that are classified as held-to-maturity are generally based on prices obtained from independent pricing services. Mortgage loans — the carrying amount is a reasonable estimate of fair value due to the restrictive nature and limited marketability of the mortgage notes. Policy loans — the carrying amount is a reasonable estimate of fair value. Company owned life insurance — the carrying amount is a reasonable estimate of fair value. Other invested assets — the carrying amount is a reasonable estimate of fair value. Other policyholder funds — the carrying amount is a reasonable estimate of fair value. Debt — the carrying amount is a reasonable estimate of fair value. |
Derivatives | The Company is exposed to certain risks in the normal course of its business operations. The primary risk that is managed through the use of derivatives is interest rate risk on floating rate borrowings. This risk is managed through the use of interest rate swap agreements which are designated as cash flow hedges. For cash flow hedges, the effective portion of the gain or loss on the interest rate swap is included as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction is recognized in earnings. The Company does not hold or issue derivatives that are not designated as hedging instruments. We use dollar offset at the hedge's inception and for each reporting period thereafter to assess whether the derivative used in a hedging transaction is expected to be, and has been, effective in offsetting changes in the fair value of the hedged item. Since inception, no portion of the hedged item has been deemed ineffective. For all hedges, we discontinue hedge accounting if it is determined that a derivative is not expected to be, or has ceased to be, effective as a hedge. The swap liability is reported as a component of other liabilities on the consolidated balance sheets. |
Income Taxes | The Company recognizes tax-related interest and penalties as a component of tax expense. Net deferred tax liabilities are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of the enacted tax laws. |
Reinsurance | Amounts recoverable from re-insurers are estimated in a manner consistent with the claim liability associated with the underlying insurance policies. Amounts paid for prospective reinsurance contracts are reported as prepaid reinsurance premiums and amortized over the remaining contract period. In the normal course of business, NSIC seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding reinsurance to reinsurance companies under excess coverage contracts. NSIC retains a maximum of $50,000 of coverage per individual life. The cost of reinsurance is amortized over the contract period of the reinsurance. The Company's insurance operations utilize reinsurance in order to limit losses, minimize exposure to large risks, provide additional capacity for future growth and effect business-sharing arrangements. Life reinsurance is accomplished through yearly renewable term coverage. Property and casualty reinsurance is placed on an excess of loss basis to cover losses from catastrophe events. Reinsurance ceded arrangements do not discharge the insurance subsidiaries as the primary insurer, except for cases involving a novation. Failure of re-insurers to honor their obligations could result in losses to the insurance subsidiaries. The insurance subsidiaries evaluate the financial conditions of their reinsurance companies and monitor concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the companies to minimize their exposure to significant losses from reinsurance insolvencies. In the normal course of business, NSFC seeks to reduce the loss that may arise from catastrophes or other individually significant large loss events that cause unfavorable underwriting results by re-insuring certain levels of risk in various areas of exposure with reinsurance companies. NSFC maintains a catastrophe reinsurance agreement to cover losses from catastrophic events, primarily hurricanes. |
Business Segment | The Company’s property and casualty insurance operations comprise one business segment. The property and casualty insurance segment primarily underwrites home insurance coverage with primary lines of business consisting of dwelling fire and extended coverage, homeowners (including mobile homeowners) and other liability. The Company’s life and accident and health operations comprise the second business segment. The life and accident and health insurance segment consists of two lines of business: traditional life insurance and accident and health insurance. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Investments [Abstract] | |
Schedule of Amortized Cost and Aggregate Fair Values of Investments in Available-for-Sale Securities | The amortized cost and aggregate fair values of investments in available-for-sale securities as of December 31, 2015 are as follows ( dollars in thousands ): Available-for-sale securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 38,245 $ 747 $ 1,728 $ 37,264 Mortgage backed securities 15,324 157 224 15,257 Private label asset backed securities 6,029 24 380 5,673 Obligations of states and political subdivisions 14,654 869 47 15,476 U.S. Treasury securities and obligations of U.S. Government corporations and agencies 17,825 413 96 18,142 Total fixed maturities 92,077 2,210 2,475 91,812 Equity securities 2,420 2,590 113 4,897 Total $ 94,497 $ 4,800 $ 2,588 $ 96,709 The amortized cost and aggregate fair values of investments in available-for-sale securities as of March 31, 2016 are as follows ( dollars in thousands ): Available-for-sale securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 38,378 $ 1,157 $ 1,173 $ 38,362 Mortgage backed securities 14,212 370 103 14,479 Private label asset backed securities 8,866 40 631 8,275 Obligations of states and political subdivisions 13,933 938 3 14,868 U.S. Treasury securities and obligations of U.S. Government corporations and agencies 18,601 744 10 19,335 Total fixed maturities 93,990 3,249 1,920 95,319 Equity securities 2,420 2,747 110 5,057 Total $ 96,410 $ 5,996 $ 2,030 $ 100,376 |
Schedule of Amortized Cost and Aggregate Fair Values of Investments in Held-to-Maturity Securities | The amortized cost and aggregate fair values of investments in held-to-maturity securities as of December 31, 2015 are as follows ( dollars in thousands ): Held-to-maturity securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Mortgage backed securities $ 2,395 $ 62 $ — $ 2,457 U.S. Treasury securities and obligations of U.S. Government corporations and agencies 44 3 — 47 Total $ 2,439 $ 65 $ — $ 2,504 The amortized cost and aggregate fair values of investments in held-to-maturity securities as of March 31, 2016 are as follows ( dollars in thousands ): Held-to-maturity securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Mortgage backed securities $ 2,332 $ 102 $ — $ 2,434 U.S. Treasury securities and obligations of U.S. Government corporations and agencies 38 3 — 41 Total $ 2,370 $ 105 $ — $ 2,475 |
Schedule of Amortized Cost and Aggregate Fair Value of Debt Securities, by Contractual Maturity | The amortized cost and aggregate fair value of debt securities at March 31, 2016 , by contractual maturity, are presented in the following table ( dollars in thousands ). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. (Dollars in Thousands) Amortized Cost Fair Value Available-for-sale securities: Due in one year or less $ 2,038 $ 2,069 Due after one year through five years 15,799 16,127 Due after five years through ten years 34,131 33,956 Due after ten years 42,022 43,167 Total $ 93,990 $ 95,319 Held-to-maturity securities: Due in one year or less $ — $ — Due after one year through five years 66 69 Due after five years through ten years 99 108 Due after ten years 2,205 2,298 Total $ 2,370 $ 2,475 |
Schedule of Securities Available-for-Sale with Unrealized Losses | A summary of securities available-for-sale with unrealized losses as of March 31, 2016 , along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows ( dollars in thousands ): Less than 12 months 12 months or longer Total March 31, 2016 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Total Securities in a Loss Position Fixed maturities Corporate debt securities $ 8,769 $ 284 $ 4,349 $ 889 $ 13,118 $ 1,173 25 Mortgage backed securities 2,393 79 710 24 3,103 103 11 Private label asset backed securities 4,985 414 1,790 217 6,775 631 10 Obligations of state and political subdivisions — — 339 3 339 3 1 U.S. Treasury securities and obligations of U.S. Government corporations and agencies 995 3 352 7 1,347 10 3 Equity securities — — 1,176 110 1,176 110 1 $ 17,142 $ 780 $ 8,716 $ 1,250 $ 25,858 $ 2,030 51 A summary of securities available-for-sale with unrealized losses as of December 31, 2015 , along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows ( dollars in thousands ): Less than 12 months 12 months or longer Total December 31, 2015 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Total Securities in a Loss Position Fixed maturities Corporate debt securities $ 18,205 $ 821 $ 3,783 $ 907 $ 21,988 $ 1,728 44 Mortgage backed securities 9,069 161 675 63 9,744 224 20 Private label asset backed securities 4,962 379 84 1 5,046 380 10 Obligations of state and political subdivisions 1,920 36 331 11 2,251 47 5 U.S. Treasury securities and obligations of U.S. Government corporations and agencies 6,131 70 1,452 26 7,583 96 12 Equity securities — — 1,173 113 1,173 113 1 $ 40,287 $ 1,467 $ 7,498 $ 1,121 $ 47,785 $ 2,588 92 |
Summary of Major Categories of Investment Income | Major categories of investment income are summarized as follows (dollars in thousands): Three months ended March 31, 2016 2015 Fixed maturities $ 901 $ 894 Equity securities 28 30 Mortgage loans on real estate 1 4 Investment real estate 2 2 Policy loans 32 29 Company owned life insurance change in surrender value 34 44 Other 49 42 1,047 1,045 Less: Investment expenses 56 43 Net investment income $ 991 $ 1,002 |
Schedule of Realized Investments Gains (Losses) | Major categories of realized investment gains and losses are summarized as follows (dollars in thousands): Three months ended March 31, 2016 2015 Fixed maturities $ 17 $ 142 Other, principally real estate (10 ) — Net realized investment gains $ 7 $ 142 |
Schedule of Net Change in Unrealized Appreciation | An analysis of the net change in unrealized appreciation on available-for-sale securities follows (dollars in thousands): March 31, 2016 December 31, 2015 Net change in unrealized appreciation on available-for-sale securities before deferred tax $ 1,754 $ (3,225 ) Deferred income tax (596 ) 1,097 Net change in unrealized appreciation on available-for-sale securities $ 1,158 $ (2,128 ) |
Fair Value of Financial Asset26
Fair Value of Financial Assets and Financial Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 are summarized in the following table by the type of inputs applicable to the fair value measurements (in thousands): Fair Value Measurements at Reporting Date Using Description Total Level 1 Level 2 Level 3 Financial Assets Fixed maturities available-for-sale Corporate debt securities $ 37,264 $ — $ 37,264 $ — Mortgage backed securities 15,257 — 15,257 — Private label asset backed securities 5,673 — 5,673 — Obligations of states and political subdivisions 15,476 — 15,476 — U.S. Treasury securities and obligations of U.S. Government corporations and agencies 18,142 18,142 — — Trading securities 107 107 — — Equity securities available-for-sale 4,897 3,724 — 1,173 Total Financial Assets $ 96,816 $ 21,973 $ 73,670 $ 1,173 Financial Liabilities Interest rate swap $ (1,419 ) $ — $ — $ (1,419 ) Total Financial Liabilities $ (1,419 ) $ — $ — $ (1,419 ) Financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2016 are summarized in the following table by the type of inputs applicable to the fair value measurements (in thousands): Fair Value Measurements at Reporting Date Using Description Total Level 1 Level 2 Level 3 Financial Assets Fixed maturities available-for-sale Corporate debt securities $ 38,362 $ — $ 38,362 $ — Mortgage backed securities 14,479 — 14,479 — Private label asset backed securities 8,275 — 8,275 — Obligations of states and political subdivisions 14,868 — 14,868 — U.S. Treasury securities and obligations of U.S. Government corporations and agencies 19,335 19,335 — — Trading securities 107 107 — — Equity securities available-for-sale 5,057 3,881 — 1,176 Total Financial Assets $ 100,483 $ 23,323 $ 75,984 $ 1,176 Financial Liabilities Interest rate swap $ (1,574 ) $ — $ — $ (1,574 ) Total Financial Liabilities $ (1,574 ) $ — $ — $ (1,574 ) |
Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2015 (in thousands): For the year ended December 31, 2015 Equity Securities Available-for-Sale Interest Rate Swap Beginning balance $ 1,116 $ (1,238 ) Total gains or losses (realized and unrealized): Included in earnings — — Included in other comprehensive income 57 (181 ) Purchases: — — Sales: — — Issuances: — — Settlements: — — Transfers in/(out) of Level 3 — — Ending balance $ 1,173 $ (1,419 ) The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held as of December 31, 2015: $ — $ — The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2016 (in thousands): For the three months ended March 31, 2016 Equity Securities Available-for-Sale Interest Rate Swap Beginning balance $ 1,173 $ (1,419 ) Total gains or losses (realized and unrealized): Included in earnings — — Included in other comprehensive income 3 (155 ) Purchases: — — Sales: — — Issuances: — — Settlements: — — Transfers in/(out) of Level 3 — — Ending balance $ 1,176 $ (1,574 ) The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held as of March 31, 2016: $ — $ — |
Schedule of Fair Value, by Balance Sheet Grouping | The carrying amount and estimated fair value of the Company’s financial instruments as of March 31, 2016 and December 31, 2015 are as follows (in thousands): March 31, 2016 December 31, 2015 Assets and related instruments Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Held-to-maturity securities $ 2,370 $ 2,475 $ 2,439 $ 2,504 Mortgage loans 190 190 202 202 Policy loans 1,676 1,676 1,655 1,655 Company owned life insurance 4,932 4,932 4,898 4,898 Other invested assets 3,185 3,185 3,256 3,256 Liabilities and related instruments Other policyholder funds 1,584 1,584 1,561 1,561 Short-term notes payable and current portion of long-term debt 857 857 857 857 Long-term debt 17,102 17,102 17,100 17,100 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Major categories of property and equipment are summarized as follows (dollars in thousands): March 31, 2016 December 31, 2015 Building and improvements $ 3,348 $ 3,350 Electronic data processing equipment 1,726 1,631 Furniture and fixtures 533 529 5,607 5,510 Less accumulated depreciation 3,603 3,564 Property and equipment, net $ 2,004 $ 1,946 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | The tax effect of significant differences representing deferred tax assets and liabilities are as follows (dollars in thousands): As of March 31, 2016 As of December 31, 2015 General expenses $ 1,487 $ 1,569 Unearned premiums 2,082 2,039 Claims liabilities 724 730 Litigation settlement 1,748 1,748 AMT credit 742 816 Impairment on real estate owned 187 187 Unrealized loss on interest rate swaps 535 483 Deferred tax assets 7,505 7,572 Depreciation (112 ) (111 ) Deferred policy acquisition costs (2,904 ) (2,885 ) Unrealized gains on securities available-for-sale (1,348 ) (752 ) Deferred tax liabilities (4,364 ) (3,748 ) Net deferred tax asset $ 3,141 $ 3,824 |
Changes in Temporary Differences in Federal Income Tax | The appropriate income tax effects of changes in temporary differences are as follows (dollars in thousands): Three months ended March 31, 2016 2015 Deferred policy acquisition costs $ 19 $ (2 ) Unearned premiums (43 ) (48 ) General expenses 82 (44 ) Depreciation 1 (4 ) Claims liabilities 6 (14 ) AMT credit 74 119 Deferred income tax expense $ 139 $ 7 |
Schedule of Effective Income Tax Rate Reconciliation | Total income tax expense (benefit) varies from amounts computed by applying current federal income tax rates to income or loss before income taxes. The reasons for these differences and the approximate tax effects are as follows: Three months ended March 31, 2016 2015 Federal income tax rate applied to pre-tax income/loss 34.0 % 34.0 % Dividends received deduction and tax-exempt interest (1.8 )% (1.5 )% Company owned life insurance (0.9 )% (0.8 )% Small life deduction (4.4 )% (3.2 )% Other, net 0.8 % (1.8 )% Effective federal income tax rate 27.7 % 26.7 % |
Notes Payable and Long-Term D29
Notes Payable and Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt | Short-term debt and current portion of long-term debt consisted of the following as of March 31, 2016 and December 31, 2015 ( dollars in thousands) : March 31, December 31, 2016 2015 Current portion of installment note payable due November 2016 with variable interest rate equal to the WSJ prime rate plus 1%. Unsecured. 857 857 $ 857 $ 857 |
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following as of March 31, 2016 and December 31, 2015 ( dollars in thousands ): March 31, December 31, 2016 2015 Line of credit with variable interest rate equal to the WSJ prime rate, subject to a 5.0% floor; maturity March 2018. Interest payments due quarterly. Unsecured. $ 700 $ 700 Line of credit, $1,000,000 available, with variable interest rate equal to the WSJ prime rate, subject to a 4.5% floor; maturity September 2017. Interest payments due monthly. Secured. — — Long term portion of installment note with variable interest rate equal to the WSJ prime rate plus 1% and adjustable each November; maturity November 2021. Interest payable annually with principal payable in equal annual installments. Next principal installment on long term portion due November 2016. Unsecured. 4,286 4,286 Subordinated debentures issued on December 15, 2005 with fixed interest rate of 8.83% each distribution period thereafter until December 15, 2015 when the coupon rate shall equal the 3-Month LIBOR plus 3.75% applied to the outstanding principal; net of $185,000 in debt issuance cost ($187,000 in 2015); maturity December 2035. Interest payments due quarterly. All may be redeemed at any time following the tenth anniversary of issuance. Unsecured. 9,094 9,092 Subordinated debentures issued on June 21, 2007 with a floating interest rate equal to the 3-Month LIBOR plus 3.40% applied to the outstanding principal; applied to the outstanding principal; net of $70,000 in debt issuance cost ($71,000 in 2015); maturity June 15, 2037. Interest payments due quarterly. All may be redeemed at any time following the fifth anniversary of issuance. Unsecured. 3,022 3,022 $ 17,102 $ 17,100 |
Reinsurance (Tables)
Reinsurance (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Reinsurance Disclosures [Abstract] | |
Schedule of Reinsurance | Catastrophe reinsurance coverage is maintained in three layers as follows: Layer Reinsurers' Limits of Liability First Layer 100% of $13,500,000 in excess of $4,000,000 retention Second Layer 100% of $25,000,000 in excess of $17,500,000 Third Layer 100% of $30,000,000 in excess of $42,500,000 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock by Class | The table below provides information regarding the Company's preferred and common stock as of March 31, 2016 and December 31, 2015 : Authorized Issued Outstanding Preferred Stock, $1 par value 500,000 — — Class A Common Stock, $1 par value 2,000,000 — — Common Stock, $1 par value 3,000,000 2,512,425 2,512,425 |
Accumulated Other Comprehensi32
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents changes in AOCI balances (dollars in thousands): Three months ended March 31, 2016 2015 Gains and Losses on Cash Flow Hedges Balance at beginning of period $ (935 ) $ (816 ) Other comprehensive loss for period: Other comprehensive loss before reclassifications (102 ) (117 ) Amounts reclassified from accumulated other comprehensive income — — Net current period other comprehensive loss (102 ) (117 ) Balance at end of period $ (1,037 ) $ (933 ) Unrealized Gains and Losses on Available-for-Sale Securities Balance at beginning of period $ 1,460 $ 3,588 Other comprehensive income for period: Other comprehensive income before reclassifications 1,170 459 Amounts reclassified from accumulated other comprehensive income (12 ) (94 ) Net current period other comprehensive income 1,158 365 Balance at end of period $ 2,618 $ 3,953 Total Accumulated Other Comprehensive Income at end of period $ 1,581 $ 3,020 |
Reclassification out of Accumulated Other Comprehensive Income | The following table presents the amounts reclassified out of AOCI for the three months ended March 31, 2016 (dollars in thousands): Details about Accumulated Other Comprehensive Income Components Amounts Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement Where Net Income is Presented Unrealized Gains and Losses on Available-for-Sale Securities $ 18 Net realized investment gains 18 Total before tax (6 ) Tax (expense) or benefit $ 12 Net of Tax The following table presents the amounts reclassified out of AOCI for the three months ended March 31, 2015 (dollars in thousands): Details about Accumulated Other Comprehensive Income Components Amounts Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement Where Net Income is Presented Unrealized Gains and Losses on Available-for-Sale Securities $ 142 Net realized investment gains 142 Total before tax (48 ) Tax (expense) or benefit $ 94 Net of Tax |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Total assets by industry segment at March 31, 2016 and at December 31, 2015 are summarized below ( dollars in thousands ): Total P&C Insurance Operations Life Insurance Operations Non-Insurance Operations March 31, 2016 $ 148,612 $ 84,837 $ 57,638 $ 6,137 December 31, 2015 $ 147,841 $ 84,435 $ 57,067 $ 6,339 Premium revenues and operating income by business segment for the quarters ended March 31, 2016 and 2015 are summarized below ( dollars in thousands ): Three months ended March 31, 2016 Total P&C Insurance Operations Life Insurance Operations Non-Insurance Operations REVENUE Net premiums earned $ 15,165 $ 13,601 $ 1,564 $ — Net investment income 991 453 521 17 Net realized investment gains (losses) 7 — 7 — Other income 154 153 1 — 16,317 14,207 2,093 17 BENEFITS AND EXPENSES Policyholder benefits paid 9,047 7,862 1,185 — Amortization of deferred policy acquisition costs 787 696 91 — Commissions 2,108 2,016 92 — General and administrative expenses 2,129 1,421 505 203 Taxes, licenses and fees 600 535 65 — Interest expense 345 — 18 327 15,016 12,530 1,956 530 Income (Loss) Before Income Taxes $ 1,301 $ 1,677 $ 137 $ (513 ) Three months ended March 31, 2015 Total P&C Insurance Operations Life Insurance Operations Non-Insurance Operations REVENUE Net premiums earned $ 14,706 $ 13,122 $ 1,584 $ — Net investment income 1,002 490 493 19 Net realized investment gains 142 31 111 — Other income 158 157 1 — 16,008 13,800 2,189 19 BENEFITS AND EXPENSES Policyholder benefits paid 8,262 6,777 1,485 — Amortization of deferred policy acquisition costs 899 675 224 — Commissions 2,055 1,968 87 — General and administrative expenses 2,031 1,540 337 154 Taxes, licenses and fees 655 544 111 — Interest expense 320 — 10 310 14,222 11,504 2,254 464 Income (Loss) Before Income Taxes $ 1,786 $ 2,296 $ (65 ) $ (445 ) |
Schedule of Gross and Net Premiums Written | The following table presents the Company’s gross and net premiums written for the property and casualty segment and the life and accident and health segment for the three months ended March 31, 2016 and 2015 , respectively: Three months ended March 31, 2016 2015 Life, accident and health operations premiums written: Traditional life insurance $ 1,119 $ 1,137 Accident and health insurance 418 419 Gross life, accident and health 1,537 1,556 Reinsurance premium ceded (25 ) (15 ) Net life, accident and health premiums written $ 1,512 $ 1,541 Property and Casualty operations premiums written: Dwelling fire & extended coverage $ 9,192 $ 8,728 Homeowners (Including mobile homeowners) 5,712 5,751 Other liability 523 505 Gross property and casualty 15,427 14,984 Reinsurance premium ceded (1,002 ) (1,491 ) Net property and casualty written $ 14,425 $ 13,493 Consolidated gross premiums written $ 16,964 $ 16,540 Reinsurance premium ceded (1,027 ) (1,506 ) Consolidated net premiums written $ 15,937 $ 15,034 |
Schedule of Gross and Net Premiums Earned | The following table presents the Company’s gross and net premiums earned for the property and casualty segment and the life and accident and health segment for the three months ended March 31, 2016 and 2015 , respectively: Three months ended March 31, 2016 2015 Life, accident and health operations premiums earned: Traditional life insurance $ 1,173 $ 1,178 Accident and health insurance 416 421 Gross life, accident and health 1,589 1,599 Reinsurance premium ceded (25 ) (15 ) Net life, accident and health premiums earned $ 1,564 $ 1,584 Property and Casualty operations premiums earned: Dwelling fire & extended coverage $ 8,662 $ 8,200 Homeowners (Including mobile homeowners) 5,906 5,948 Other liability 493 465 Gross property and casualty 15,061 14,613 Reinsurance premium ceded (1,460 ) (1,491 ) Net property and casualty earned $ 13,601 $ 13,122 Consolidated gross premiums earned $ 16,650 $ 16,212 Reinsurance premium ceded (1,485 ) (1,506 ) Consolidated net premiums earned $ 15,165 $ 14,706 |
Significant Accounting Polici34
Significant Accounting Policies (Earnings Per Share) (Details) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accounting Policies [Abstract] | ||
Weighted average number of shares outstanding | 2,512,425 | 2,507,452 |
Significant Accounting Polici35
Significant Accounting Policies (Concentration of Credit Risk) (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Concentration Risk [Line Items] | ||
Cash, uninsured amount | $ 2,099,000 | |
Policy receivables and agents' balances, net | 11,776,000 | $ 11,296,000 |
Single Largest Agent Balance Due [Member] | ||
Concentration Risk [Line Items] | ||
Policy receivables and agents' balances, net | $ 902,000 |
Significant Accounting Polici36
Significant Accounting Policies (Recently Adopted Accounting Standards) (Details) - Accounting Standards Update 2015-03 [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2015 | |
Interest Expense [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Prior Period Reclassification Adjustment | $ 3 | |
General and Administrative Expense [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Prior Period Reclassification Adjustment | $ (3) | |
Long-term Debt [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Debt issuance costs, net | $ 258 | |
Other Assets [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Debt issuance costs, net | $ (258) |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Jun. 30, 2007 | Dec. 31, 2005 | Mar. 31, 2016 | |
Variable Interest Entity [Line Items] | |||
Carrying amount of investments | $ 228 | ||
Trust Preferred Security Offering, 2005 [Member] | |||
Variable Interest Entity [Line Items] | |||
Payments to acquire trust preferred securities | $ 9,000 | ||
Subordinated debt | 9,279 | ||
Proceeds from issuance of trust preferred securities | 9,005 | ||
Equity investment | $ 279 | ||
Trust Preferred Security Offering, 2007 [Member] | |||
Variable Interest Entity [Line Items] | |||
Payments to acquire trust preferred securities | $ 3,000 | ||
Proceeds from issuance of trust preferred securities | 2,995 | ||
Equity investment | 93 | ||
Trust Preferred Security Offering, 2007 [Member] | Unsecured Debt [Member] | |||
Variable Interest Entity [Line Items] | |||
Subordinated debt | $ 3,093 | ||
Maximum [Member] | |||
Variable Interest Entity [Line Items] | |||
Limited partnership, percent owned | 1.00% |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Gain (Loss) on Investments [Line Items] | ||
Securities held-to-maturity with unrealized losses | $ 0 | $ 0 |
Other-than-temporary impairments, available-for-sale securities | 0 | 0 |
Single Largest Loss Position | 247,000 | 252,000 |
Second Largest Loss Position | 245,000 | 211,000 |
Third Largest Loss Position | $ 196,000 | $ 186,000 |
Maximum [Member] | ||
Gain (Loss) on Investments [Line Items] | ||
Percent of investment portfolio below investment grade | 5.14% |
Investments (Available-for-Sale
Investments (Available-for-Sale Securities) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 96,410 | $ 94,497 |
Gross Unrealized Gains | 5,996 | 4,800 |
Gross Unrealized Losses | 2,030 | 2,588 |
Fair Value | 100,376 | 96,709 |
Corporate Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 38,378 | 38,245 |
Gross Unrealized Gains | 1,157 | 747 |
Gross Unrealized Losses | 1,173 | 1,728 |
Fair Value | 38,362 | 37,264 |
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 14,212 | 15,324 |
Gross Unrealized Gains | 370 | 157 |
Gross Unrealized Losses | 103 | 224 |
Fair Value | 14,479 | 15,257 |
Private Label Asset Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 8,866 | 6,029 |
Gross Unrealized Gains | 40 | 24 |
Gross Unrealized Losses | 631 | 380 |
Fair Value | 8,275 | 5,673 |
US States and Political Subdivisions Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 13,933 | 14,654 |
Gross Unrealized Gains | 938 | 869 |
Gross Unrealized Losses | 3 | 47 |
Fair Value | 14,868 | 15,476 |
US Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 18,601 | 17,825 |
Gross Unrealized Gains | 744 | 413 |
Gross Unrealized Losses | 10 | 96 |
Fair Value | 19,335 | 18,142 |
Available-for-sale Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 93,990 | 92,077 |
Gross Unrealized Gains | 3,249 | 2,210 |
Gross Unrealized Losses | 1,920 | 2,475 |
Fair Value | 95,319 | 91,812 |
Equity Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,420 | 2,420 |
Gross Unrealized Gains | 2,747 | 2,590 |
Gross Unrealized Losses | 110 | 113 |
Fair Value | $ 5,057 | $ 4,897 |
Investments (Held-to-Maturity S
Investments (Held-to-Maturity Securities) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 2,370 | $ 2,439 |
Held-to-maturity securities, unrealized gains | 105 | 65 |
Held-to-maturity securities, unrealized losses | 0 | 0 |
Fair Value | 2,475 | 2,504 |
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 2,332 | 2,395 |
Held-to-maturity securities, unrealized gains | 102 | 62 |
Held-to-maturity securities, unrealized losses | 0 | 0 |
Fair Value | 2,434 | 2,457 |
US Treasury Securities [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 38 | 44 |
Held-to-maturity securities, unrealized gains | 3 | 3 |
Held-to-maturity securities, unrealized losses | 0 | 0 |
Fair Value | $ 41 | $ 47 |
Investments (Amortized Cost and
Investments (Amortized Cost and Aggregate Fair Value of Debt Securities, by Contractual Maturity) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Investments [Abstract] | ||
Available-for-sale Securities, Due in one year or less, Amortized Cost | $ 2,038 | |
Available-for-sale Securities, Due in one year or less, Fair Value | 2,069 | |
Available-for-sale Securities, Due after one year through five years, Amortized Cost | 15,799 | |
Available-for-sale Securities, Due after one year through five years, Fair Value | 16,127 | |
Available-for-sale Securities, Due after five years through ten years, Amortized Cost | 34,131 | |
Available-for-sale Securities, Due after five years through ten years, Fair Value | 33,956 | |
Available-for-sale Securities, Due after ten years, Amortized Cost | 42,022 | |
Available-for-sale Securities, Due after ten years, Fair Value | 43,167 | |
Available-for-sale securities, Amortized Cost | 93,990 | $ 92,077 |
Available-for-sale Securities, Fair Value | 95,319 | |
Held-to-maturity Securities, Due in one year or less, Amortized Cost | 0 | |
Held-to-maturity Securities, Due in one year or less, Fair Value | 0 | |
Held-to-maturity Securities, Due after one year through five years, Amortized Cost | 66 | |
Held-to-maturity Securities, Due after one year through five years, Fair Value | 69 | |
Held-to-maturity Securities, Due after five years through ten years, Amortized Cost | 99 | |
Held-to-maturity Securities, Due after five years through ten years, Fair Value | 108 | |
Held-to-maturity Securities, Due after ten years, Amortized Cost | 2,205 | |
Held-to-maturity Securities, Due after ten years, Fair Value | 2,298 | |
Held-to-maturity Securities, Amortized Cost | 2,370 | 2,439 |
Held-to-maturity Securities, Fair Value | $ 2,475 | $ 2,504 |
Investments (Schedule of Contin
Investments (Schedule of Continuous Losses) (Details) $ in Thousands | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Fair Value | $ 17,142 | $ 40,287 |
Less than 12 Months, Gross Unrealized Losses | 780 | 1,467 |
12 Months or Longer, Fair Value | 8,716 | 7,498 |
12 Months or Longer, Gross Unrealized Losses | 1,250 | 1,121 |
Total Fair Value | 25,858 | 47,785 |
Total Gross Unrealized Losses | $ 2,030 | $ 2,588 |
Total Securities in a Loss Position | 51 | 92 |
Corporate Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Fair Value | $ 8,769 | $ 18,205 |
Less than 12 Months, Gross Unrealized Losses | 284 | 821 |
12 Months or Longer, Fair Value | 4,349 | 3,783 |
12 Months or Longer, Gross Unrealized Losses | 889 | 907 |
Total Fair Value | 13,118 | 21,988 |
Total Gross Unrealized Losses | $ 1,173 | $ 1,728 |
Total Securities in a Loss Position | 25 | 44 |
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Fair Value | $ 2,393 | $ 9,069 |
Less than 12 Months, Gross Unrealized Losses | 79 | 161 |
12 Months or Longer, Fair Value | 710 | 675 |
12 Months or Longer, Gross Unrealized Losses | 24 | 63 |
Total Fair Value | 3,103 | 9,744 |
Total Gross Unrealized Losses | $ 103 | $ 224 |
Total Securities in a Loss Position | 11 | 20 |
Private Label Asset Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Fair Value | $ 4,985 | $ 4,962 |
Less than 12 Months, Gross Unrealized Losses | 414 | 379 |
12 Months or Longer, Fair Value | 1,790 | 84 |
12 Months or Longer, Gross Unrealized Losses | 217 | 1 |
Total Fair Value | 6,775 | 5,046 |
Total Gross Unrealized Losses | $ 631 | $ 380 |
Total Securities in a Loss Position | 10 | 10 |
US States and Political Subdivisions Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Fair Value | $ 0 | $ 1,920 |
Less than 12 Months, Gross Unrealized Losses | 0 | 36 |
12 Months or Longer, Fair Value | 339 | 331 |
12 Months or Longer, Gross Unrealized Losses | 3 | 11 |
Total Fair Value | 339 | 2,251 |
Total Gross Unrealized Losses | $ 3 | $ 47 |
Total Securities in a Loss Position | 1 | 5 |
US Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Fair Value | $ 995 | $ 6,131 |
Less than 12 Months, Gross Unrealized Losses | 3 | 70 |
12 Months or Longer, Fair Value | 352 | 1,452 |
12 Months or Longer, Gross Unrealized Losses | 7 | 26 |
Total Fair Value | 1,347 | 7,583 |
Total Gross Unrealized Losses | $ 10 | $ 96 |
Total Securities in a Loss Position | 3 | 12 |
Equity Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months, Fair Value | $ 0 | $ 0 |
Less than 12 Months, Gross Unrealized Losses | 0 | 0 |
12 Months or Longer, Fair Value | 1,176 | 1,173 |
12 Months or Longer, Gross Unrealized Losses | 110 | 113 |
Total Fair Value | 1,176 | 1,173 |
Total Gross Unrealized Losses | $ 110 | $ 113 |
Total Securities in a Loss Position | 1 | 1 |
Investments (Major Categories o
Investments (Major Categories of Investment Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Gross investment income | $ 1,047 | $ 1,045 |
Less: Investment expenses | 56 | 43 |
Net investment income | 991 | 1,002 |
Fixed Maturities [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Gross investment income | 901 | 894 |
Equity Securities [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Gross investment income | 28 | 30 |
Mortgage Loans on Real Estate [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Gross investment income | 1 | 4 |
Investment Real Estate [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Gross investment income | 2 | 2 |
Policy Loans [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Gross investment income | 32 | 29 |
Company Owned Life Insurance [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Gross investment income | 34 | 44 |
Other, Principally Short-term Investments [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Gross investment income | $ 49 | $ 42 |
Investments (Major Categories44
Investments (Major Categories of Investment Gains and Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Gain (Loss) on Investments [Line Items] | ||
Net realized investment gains (losses) | $ 7 | $ 142 |
Fixed Maturities [Member] | ||
Gain (Loss) on Investments [Line Items] | ||
Net realized investment gains (losses) | 17 | 142 |
Other, Principally Real Estate [Member] | ||
Gain (Loss) on Investments [Line Items] | ||
Net realized investment gains (losses) | $ (10) | $ 0 |
Investments (Schedule of Unreal
Investments (Schedule of Unrealized Appreciation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Investments [Abstract] | ||
Net change in unrealized appreciation on available-for-sale securities before deferred tax | $ 1,754 | $ (3,225) |
Deferred income tax | (596) | 1,097 |
Net change in unrealized appreciation on available-for-sale securities | $ 1,158 | $ (2,128) |
Fair Value of Financial Asset46
Fair Value of Financial Assets and Financial Liabilities (Narrative) (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Fair value measurements of assets | $ 1,176,000 | |
Fair value measurements of liabilities | (1,574,000) | |
Assets measured at fair values on a nonrecurring basis | 0 | $ 0 |
Liabilities measured at fair values on a nonrecurring basis | $ 0 | $ 0 |
Fair Value of Financial Asset47
Fair Value of Financial Assets and Financial Liabilities (Assets/Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | $ 100,376 | $ 96,709 |
Trading securities | 107 | 107 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Assets | 100,483 | 96,816 |
Total Financial Liabilities | (1,574) | (1,419) |
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member] | Derivative Financial Instruments, Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Liabilities | (1,574) | (1,419) |
Fair Value, Measurements, Recurring [Member] | Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 38,362 | 37,264 |
Fair Value, Measurements, Recurring [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 14,479 | 15,257 |
Fair Value, Measurements, Recurring [Member] | Private Label Asset Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 8,275 | 5,673 |
Fair Value, Measurements, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 14,868 | 15,476 |
Fair Value, Measurements, Recurring [Member] | US Government Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 19,335 | 18,142 |
Fair Value, Measurements, Recurring [Member] | Trading Account Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 107 | 107 |
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 5,057 | 4,897 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Assets | 23,323 | 21,973 |
Total Financial Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Interest Rate Swap [Member] | Derivative Financial Instruments, Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Private Label Asset Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | US States and Political Subdivisions Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | US Government Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 19,335 | 18,142 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Trading Account Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 107 | 107 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 3,881 | 3,724 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Assets | 75,984 | 73,670 |
Total Financial Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | Derivative Financial Instruments, Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 38,362 | 37,264 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 14,479 | 15,257 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Private Label Asset Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 8,275 | 5,673 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | US States and Political Subdivisions Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 14,868 | 15,476 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | US Government Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Trading Account Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Assets | 1,176 | 1,173 |
Total Financial Liabilities | (1,574) | (1,419) |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap [Member] | Derivative Financial Instruments, Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Liabilities | (1,574) | (1,419) |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Private Label Asset Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | US States and Political Subdivisions Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | US Government Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Trading Account Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fixed maturities available-for-sale | $ 1,176 | $ 1,173 |
Fair Value of Financial Asset48
Fair Value of Financial Assets and Financial Liabilities (Level 3 Reconciliation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Equity Securities Available-for-Sale | ||
Ending balance | $ 1,176 | |
Interest Rate Swap | ||
Ending balance | (1,574) | |
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member] | ||
Interest Rate Swap | ||
Beginning balance | (1,419) | $ (1,238) |
Included in earnings | 0 | 0 |
Included in other comprehensive income | (155) | (181) |
Purchases: | 0 | 0 |
Sales: | 0 | 0 |
Issuances: | 0 | 0 |
Settlements: | 0 | 0 |
Transfers in/(out) of Level 3 | 0 | 0 |
Ending balance | (1,574) | (1,419) |
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Available-for-sale Securities [Member] | ||
Equity Securities Available-for-Sale | ||
Beginning balance: | 1,173 | 1,116 |
Included in earnings | 0 | 0 |
Included in other comprehensive income | 3 | 57 |
Purchases: | 0 | 0 |
Sales: | 0 | 0 |
Issuances: | 0 | 0 |
Settlements: | 0 | 0 |
Transfers in/(out) of Level 3 | 0 | 0 |
Ending balance | 1,176 | 1,173 |
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held | $ 0 | $ 0 |
Fair Value of Financial Asset49
Fair Value of Financial Assets and Financial Liabilities (Fair Value of Assets and Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Insurance Claims [Member] | ||
Liabilities and Related Instruments [Abstract] | ||
Carrying Value, Liabilities | $ 1,584 | $ 1,561 |
Estimated Fair Value, Liabilities | 1,584 | 1,561 |
Short-term Debt [Member] | ||
Liabilities and Related Instruments [Abstract] | ||
Carrying Value, Liabilities | 857 | 857 |
Estimated Fair Value, Liabilities | 857 | 857 |
Long-term Debt [Member] | ||
Liabilities and Related Instruments [Abstract] | ||
Carrying Value, Liabilities | 17,102 | 17,100 |
Estimated Fair Value, Liabilities | 17,102 | 17,100 |
Held-to-maturity Securities [Member] | ||
Assets and Related Instruments [Abstract] | ||
Carrying Value, Assets | 2,370 | 2,439 |
Estimated Fair Value, Assets | 2,475 | 2,504 |
Mortgage Loans on Real Estate [Member] | ||
Assets and Related Instruments [Abstract] | ||
Carrying Value, Assets | 190 | 202 |
Estimated Fair Value, Assets | 190 | 202 |
Policy Loans [Member] | ||
Assets and Related Instruments [Abstract] | ||
Carrying Value, Assets | 1,676 | 1,655 |
Estimated Fair Value, Assets | 1,676 | 1,655 |
Cash Surrender Value [Member] | ||
Assets and Related Instruments [Abstract] | ||
Carrying Value, Assets | 4,932 | 4,898 |
Estimated Fair Value, Assets | 4,932 | 4,898 |
Other Long-term Investments [Member] | ||
Assets and Related Instruments [Abstract] | ||
Carrying Value, Assets | 3,185 | 3,256 |
Estimated Fair Value, Assets | $ 3,185 | $ 3,256 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,607 | $ 5,510 |
Less accumulated depreciation | 3,603 | 3,564 |
Property and equipment, net | 2,004 | 1,946 |
Depreciation expense | 39 | 168 |
Building and improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,348 | 3,350 |
Electronic Data Processing Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,726 | 1,631 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 533 | $ 529 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Net deferred tax asset position | $ 3,141 | $ 3,824 |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
General expenses | $ 1,487 | $ 1,569 |
Unearned premiums | 2,082 | 2,039 |
Claims liabilities | 724 | 730 |
Litigation settlement | 1,748 | 1,748 |
AMT Credit | 742 | 816 |
Impairment on real estate owned | 187 | 187 |
Unrealized loss on interest rate swaps | 535 | 483 |
Deferred tax assets | 7,505 | 7,572 |
Depreciation | (112) | (111) |
Deferred policy acquisition costs | (2,904) | (2,885) |
Unrealized gains on securities available-for-sale | (1,348) | (752) |
Deferred tax liabilities | (4,364) | (3,748) |
Net deferred tax asset | $ 3,141 | $ 3,824 |
Income Taxes (Schedule of Inco
Income Taxes (Schedule of Income Tax Effects of Changes in Temporary Differences) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Deferred policy acquisition costs | $ 19 | $ (2) |
Unearned premiums | (43) | (48) |
General expenses | 82 | (44) |
Depreciation | 1 | (4) |
Claims liabilities | 6 | (14) |
AMT credit | 74 | 119 |
Deferred income tax expense | $ 139 | $ 7 |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax rate applied to pre-tax income/loss | 34.00% | 34.00% |
Dividends received deduction and tax-exempt interest | (1.80%) | (1.50%) |
Company owned life insurance | (0.90%) | (0.80%) |
Small life deduction | (4.40%) | (3.20%) |
Other, net | 0.80% | (1.80%) |
Effective federal income tax rate | 27.70% | 26.70% |
Notes Payable and Long-Term D55
Notes Payable and Long-Term Debt (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2010 | May. 26, 2010 | Dec. 31, 2009 | Mar. 19, 2009 | |
Debt Instrument [Line Items] | |||||||
Derivative, Notional Amount | $ 9,000 | $ 3,000 | |||||
Derivative, fixed interest rate | 8.49% | 7.02% | |||||
Cash flow hedge, derivative instrument liabilities at fair value | $ 1,574 | $ 1,419 | |||||
Unrealized loss on interest rate swap | 102 | $ 117 | 119 | ||||
Available-for-sale securities pledged as collateral | 1,515 | 1,482 | |||||
Cash pledged as collateral | $ 230 | $ 130 | |||||
Interest Rate Swap [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Cash flow hedge, liability at fair value | $ 243 | ||||||
Cash Flow Hedging [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Cash flow hedge, liability at fair value | $ 1,331 |
Notes Payable and Long-Term D56
Notes Payable and Long-Term Debt (Short-Term Debt) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Short-term Debt [Line Items] | ||
Short-term notes payable | $ 857 | $ 857 |
Unsecured Debt [Member] | ||
Short-term Debt [Line Items] | ||
Current portion of installment note payable November 2015 with variable interest rate equal to the WSJ prime rate plus 1%; Unsecured | 857 | 857 |
Short-term notes payable | $ 857 | $ 857 |
Interest rate description | WSJ | WSJ |
Basis spread on variable rate | 1.00% | 1.00% |
Notes Payable and Long-Term D57
Notes Payable and Long-Term Debt (Schedule of Long-Term Debt) (Details) - USD ($) $ in Thousands | Jun. 21, 2007 | Dec. 15, 2005 | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||||
Long-term debt | $ 17,102 | $ 17,100 | ||
Unsecured Debt [Member] | Promissory Note [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 4,286 | 4,286 | ||
Payment terms | Annual installment payments. | |||
Unsecured Debt [Member] | Promissory Note [Member] | Prime Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.00% | |||
Unsecured Debt [Member] | Trust Preferred Security Offering, 2005 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 9,094 | 9,092 | ||
Fixed interest rate | 8.83% | |||
Payment terms | Interest payments due quarterly. | |||
Debt issuance costs, net | $ 185 | 187 | ||
Unsecured Debt [Member] | Trust Preferred Security Offering, 2005 [Member] | Three-month LIBOR [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.75% | |||
Unsecured Debt [Member] | Trust Preferred Security Offering, 2007 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 3,022 | 3,022 | ||
Payment terms | Interest payments due quarterly. | |||
Debt issuance costs, net | $ 70 | 71 | ||
Unsecured Debt [Member] | Trust Preferred Security Offering, 2007 [Member] | Three-month LIBOR [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.40% | |||
Line of Credit [Member] | Unsecured Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Amount outstanding | $ 700 | 700 | ||
Payment terms | Interest payment due quarterly | |||
Line of Credit [Member] | Unsecured Debt [Member] | Prime Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage bearing variable interest, percentage rate | 5.00% | |||
Line of Credit [Member] | Secured Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Amount outstanding | $ 0 | $ 0 | ||
Payment terms | Interest payments due monthly. | |||
Current borrowing capacity | $ 1,000 | |||
Line of Credit [Member] | Secured Debt [Member] | Prime Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage bearing variable interest, percentage rate | 4.50% |
Reinsurance (Reinsurers' Limits
Reinsurance (Reinsurers' Limits of Liability) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Reinsurance Maintained by Layers [Line Items] | ||
Catastrophe reinsurance retention | $ 4,000,000 | |
Life insurance policy reinsurance limit | 50,000 | |
Reinsurance recoverable | 1,446,000 | $ 1,660,000 |
Single Reinsurer [Member] | ||
Reinsurance Maintained by Layers [Line Items] | ||
Reinsurance recoverable | $ 17,000 | $ 12,000 |
First Layer [Member] | ||
Reinsurance Maintained by Layers [Line Items] | ||
Percent of reinsured losses covered by layer | 100.00% | |
Covered losses | $ 13,500,000 | |
Reinsurer's limit of liability | $ 17,500,000 | |
Second Layer [Member] | ||
Reinsurance Maintained by Layers [Line Items] | ||
Percent of reinsured losses covered by layer | 100.00% | |
Covered losses | $ 25,000,000 | |
Reinsurer's limit of liability | $ 42,500,000 | |
Third Layer [Member] | ||
Reinsurance Maintained by Layers [Line Items] | ||
Percent of reinsured losses covered by layer | 100.00% | |
Covered losses | $ 30,000,000 | |
Reinsurer's limit of liability | $ 72,500,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) | 3 Months Ended | |
Mar. 31, 2016USD ($)hours | Mar. 31, 2015USD ($) | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Minimum hours of service completed in year of contribution | hours | 1,000 | |
Matching contribution | $ 68,000 | $ 43,000 |
Employer matching contribution, percent | 5.00% | |
Cash contributions to ESOP | $ 150,000 | 0 |
Employee Stock Ownership Plan (ESOP), Debt Structure, Indirect Loan, Amount | 0 | |
Non-Qualified Deferred Compensation Plans [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Deferred compensation arrangement | $ 64,000 | $ 45,000 |
Executive Officers [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Employer matching contribution, percent | 15.00% |
Shareholders' Equity (Narrative
Shareholders' Equity (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |||
Net income | $ 941 | $ 1,308 | $ 4,697 |
Dividends paid | (113) | (402) | |
Other comprehensive income, net of tax | $ 1,056 | $ 248 | $ (2,247) |
Shareholders' Equity (Preferred
Shareholders' Equity (Preferred and Common Stock) (Details) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Class of Stock [Line Items] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 3,000,000 | 3,000,000 |
Common stock, shares issued | 2,512,425 | 2,512,425 |
Common stock, shares outstanding | 2,512,425 | 2,512,425 |
Common Class A [Member] | ||
Class of Stock [Line Items] | ||
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 2,000,000 | 2,000,000 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
Accumulated Other Comprehensi62
Accumulated Other Comprehensive Income (Changes in AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning balance | $ 525 | ||
Other comprehensive income, net of tax | 1,056 | $ 248 | $ (2,247) |
Ending balance | 1,581 | 3,020 | 525 |
Gains and Losses on Cash Flow Hedges [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning balance | (935) | (816) | (816) |
Other comprehensive income (loss) before reclassifications | (102) | (117) | |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | |
Other comprehensive income, net of tax | (102) | (117) | |
Ending balance | (1,037) | (933) | (935) |
Unrealized Gains and Losses on Available-for-Sale Securities [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning balance | 1,460 | 3,588 | 3,588 |
Other comprehensive income (loss) before reclassifications | 1,170 | 459 | |
Amounts reclassified from accumulated other comprehensive income | (12) | (94) | |
Other comprehensive income, net of tax | 1,158 | 365 | |
Ending balance | $ 2,618 | $ 3,953 | $ 1,460 |
Accumulated Other Comprehensi63
Accumulated Other Comprehensive Income (Amounts reclassified out of AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Net realized investment gains (losses) | $ 7 | $ 142 | |
Tax (expense) or benefit | (360) | (478) | |
Net income | 941 | 1,308 | $ 4,697 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains and Losses on Available-for-Sale Securities [Member] | |||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Net realized investment gains (losses) | 18 | 142 | |
Total before tax | 18 | 142 | |
Tax (expense) or benefit | (6) | (48) | |
Net income | $ 12 | $ 94 |
Segments (Narrative) (Details)
Segments (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2016Segments | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Segments (Schedule of Segment R
Segments (Schedule of Segment Reporting Information, by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Assets | $ 148,612 | $ 147,841 | |
Net premiums earned | 15,165 | $ 14,706 | |
Net investment income | 991 | 1,002 | |
Net realized investment gains (losses) | 7 | 142 | |
Other income | 154 | 158 | |
Total Revenues | 16,317 | 16,008 | |
Policyholder benefits paid | 9,047 | 8,262 | |
Amortization of deferred policy acquisition costs | 787 | 899 | |
Commissions | 2,108 | 2,055 | |
General and administrative expenses | 2,129 | 2,031 | |
Taxes, licenses and fees | 600 | 655 | |
Interest expense | 345 | 320 | |
Total Benefits, Losses and Expenses | 15,016 | 14,222 | |
Income Before Income Taxes | 1,301 | 1,786 | |
P&C Insurance Operations [Member] | |||
Segment Reporting Information [Line Items] | |||
Assets | 84,837 | 84,435 | |
Net premiums earned | 13,601 | 13,122 | |
Net investment income | 453 | 490 | |
Net realized investment gains (losses) | 0 | 31 | |
Other income | 153 | 157 | |
Total Revenues | 14,207 | 13,800 | |
Policyholder benefits paid | 7,862 | 6,777 | |
Amortization of deferred policy acquisition costs | 696 | 675 | |
Commissions | 2,016 | 1,968 | |
General and administrative expenses | 1,421 | 1,540 | |
Taxes, licenses and fees | 535 | 544 | |
Interest expense | 0 | 0 | |
Total Benefits, Losses and Expenses | 12,530 | 11,504 | |
Income Before Income Taxes | 1,677 | 2,296 | |
Life Insurance Operations [Member] | |||
Segment Reporting Information [Line Items] | |||
Assets | 57,638 | 57,067 | |
Net premiums earned | 1,564 | 1,584 | |
Net investment income | 521 | 493 | |
Net realized investment gains (losses) | 7 | 111 | |
Other income | 1 | 1 | |
Total Revenues | 2,093 | 2,189 | |
Policyholder benefits paid | 1,185 | 1,485 | |
Amortization of deferred policy acquisition costs | 91 | 224 | |
Commissions | 92 | 87 | |
General and administrative expenses | 505 | 337 | |
Taxes, licenses and fees | 65 | 111 | |
Interest expense | 18 | 10 | |
Total Benefits, Losses and Expenses | 1,956 | 2,254 | |
Income Before Income Taxes | 137 | (65) | |
Non-Insurance Operations [Member] | |||
Segment Reporting Information [Line Items] | |||
Assets | 6,137 | $ 6,339 | |
Net premiums earned | 0 | 0 | |
Net investment income | 17 | 19 | |
Net realized investment gains (losses) | 0 | 0 | |
Other income | 0 | 0 | |
Total Revenues | 17 | 19 | |
Policyholder benefits paid | 0 | 0 | |
Amortization of deferred policy acquisition costs | 0 | 0 | |
Commissions | 0 | 0 | |
General and administrative expenses | 203 | 154 | |
Taxes, licenses and fees | 0 | 0 | |
Interest expense | 327 | 310 | |
Total Benefits, Losses and Expenses | 530 | 464 | |
Income Before Income Taxes | $ (513) | $ (445) |
Segments (Schedule of Gross and
Segments (Schedule of Gross and Net Premiums Written) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 16,964 | $ 16,540 |
Reinsurance premium ceded | (1,027) | (1,506) |
Net premiums written | 15,937 | 15,034 |
Life Insurance Operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | 1,537 | 1,556 |
Reinsurance premium ceded | (25) | (15) |
Net premiums written | 1,512 | 1,541 |
Life Insurance Operations [Member] | Traditional Life Insurance [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | 1,119 | 1,137 |
Life Insurance Operations [Member] | Accident and Health Insurance [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | 418 | 419 |
P&C Insurance Operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | 15,427 | 14,984 |
Reinsurance premium ceded | (1,002) | (1,491) |
Net premiums written | 14,425 | 13,493 |
P&C Insurance Operations [Member] | Dwelling Fire & Extended Coverage [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | 9,192 | 8,728 |
P&C Insurance Operations [Member] | Homeowners (Including Mobile Homeowners) [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | 5,712 | 5,751 |
P&C Insurance Operations [Member] | Other Liability [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 523 | $ 505 |
Segments (Schedule of Gross a67
Segments (Schedule of Gross and Net Premiums Earned) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Gross premiums earned | $ 16,650 | $ 16,212 |
Reinsurance premium ceded | (1,485) | (1,506) |
Net premiums earned | 15,165 | 14,706 |
Life Insurance Operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross premiums earned | 1,589 | 1,599 |
Reinsurance premium ceded | (25) | (15) |
Net premiums earned | 1,564 | 1,584 |
Life Insurance Operations [Member] | Traditional Life Insurance [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross premiums earned | 1,173 | 1,178 |
Life Insurance Operations [Member] | Accident and Health Insurance [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross premiums earned | 416 | 421 |
P&C Insurance Operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross premiums earned | 15,061 | 14,613 |
Reinsurance premium ceded | (1,460) | (1,491) |
Net premiums earned | 13,601 | 13,122 |
P&C Insurance Operations [Member] | Dwelling Fire & Extended Coverage [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross premiums earned | 8,662 | 8,200 |
P&C Insurance Operations [Member] | Homeowners (Including Mobile Homeowners) [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross premiums earned | 5,906 | 5,948 |
P&C Insurance Operations [Member] | Other Liability [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross premiums earned | $ 493 | $ 465 |
Supplemental Cash Flow Inform68
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid | $ 277 | $ 280 |
Income taxes paid | $ 150 | $ 500 |