Michigan | 38-2626206 | |
(State of Incorporation) | (IRS Employer Identification No.) |
Page
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PART I – FINANCIAL INFORMATION
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ITEM 1 –
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2-3
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4
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5
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6
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7
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8 - 27
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ITEM 2 –
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28 - 43
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ITEM 3 –
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44 - 45
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ITEM 4 –
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46
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PART II – OTHER INFORMATION
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ITEM 1 –
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47
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ITEM 1A –
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47
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ITEM 2 –
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47
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ITEM 3 –
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47
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ITEM 4 –
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47
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ITEM 5 –
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47
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ITEM 6 –
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48
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49
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As Adjusted
|
||||||||
2012
|
2011
|
|||||||
(Unaudited)
|
||||||||
(In thousands, except share data)
|
||||||||
Revenues
|
||||||||
Premiums earned
|
||||||||
Gross
|
$ | 248,581 | $ | 209,676 | ||||
Ceded
|
(37,278 | ) | (28,206 | ) | ||||
Net earned premiums
|
211,303 | 181,470 | ||||||
Net commissions and fees
|
8,552 | 7,897 | ||||||
Net investment income
|
13,683 | 13,765 | ||||||
Realized gains (losses):
|
||||||||
Total other-than-temporary impairments on securities
|
- | - | ||||||
Portion of loss recognized in other comprehensive income
|
- | - | ||||||
Net other-than-temporary impairments on securities recognized in earnings
|
- | - | ||||||
Net realized gains excluding other-than-temporary impairments on securities
|
1,567 | 1,094 | ||||||
Net realized gains
|
1,567 | 1,094 | ||||||
Total revenues
|
235,105 | 204,226 | ||||||
Expenses
|
||||||||
Losses and loss adjustment expenses
|
196,976 | 141,356 | ||||||
Reinsurance recoveries
|
(31,218 | ) | (19,953 | ) | ||||
Net losses and loss adjustment expenses
|
165,758 | 121,403 | ||||||
Policy acquisition and other underwriting expenses
|
68,993 | 62,694 | ||||||
General, selling and administrative expenses
|
6,327 | 5,631 | ||||||
General corporate expenses
|
758 | (719 | ) | |||||
Amortization expense
|
1,307 | 1,206 | ||||||
Interest expense
|
2,033 | 2,082 | ||||||
Total expenses
|
245,176 | 192,297 | ||||||
(Loss) income before taxes and equity earnings
|
(10,071 | ) | 11,929 | |||||
Federal and state income tax (benefit) expense
|
(1,782 | ) | 2,323 | |||||
Equity earnings of affiliates, net of tax
|
562 | 173 | ||||||
Equity (losses) earnings of unconsolidated subsidiaries, net of tax
|
(5 | ) | 1 | |||||
Net (loss) income
|
$ | (7,732 | ) | $ | 9,780 | |||
(Losses) Earnings Per Share
|
||||||||
Basic
|
$ | (0.15 | ) | $ | 0.18 | |||
Diluted
|
$ | (0.15 | ) | $ | 0.18 | |||
Weighted average number of common shares
|
||||||||
Basic
|
50,251,591 | 53,100,479 | ||||||
Diluted
|
50,251,591 | 53,248,573 | ||||||
Dividends paid per common share
|
$ | 0.05 | $ | 0.04 |
As Adjusted
|
||||||||
2012
|
2011
|
|||||||
(Unaudited)
|
||||||||
(In thousands, except share data)
|
||||||||
Revenues
|
||||||||
Premiums earned
|
||||||||
Gross
|
$ | 476,027 | $ | 410,362 | ||||
Ceded
|
(71,909 | ) | (58,234 | ) | ||||
Net earned premiums
|
404,118 | 352,128 | ||||||
Net commissions and fees
|
17,517 | 16,335 | ||||||
Net investment income
|
27,415 | 27,337 | ||||||
Realized gains (losses):
|
||||||||
Total other-than-temporary impairments on securities
|
- | (84 | ) | |||||
Portion of loss recognized in other comprehensive income
|
- | - | ||||||
Net other-than-temporary impairments on securities recognized in earnings
|
- | (84 | ) | |||||
Net realized gains excluding other-than-temporary impairments on securities
|
2,299 | 1,990 | ||||||
Net realized gains
|
2,299 | 1,906 | ||||||
Total revenues
|
451,349 | 397,706 | ||||||
Expenses
|
||||||||
Losses and loss adjustment expenses
|
358,495 | 270,079 | ||||||
Reinsurance recoveries
|
(59,990 | ) | (43,414 | ) | ||||
Net losses and loss adjustment expenses
|
298,505 | 226,665 | ||||||
Policy acquisition and other underwriting expenses
|
132,106 | 120,851 | ||||||
General, selling and administrative expenses
|
12,666 | 11,875 | ||||||
General corporate expenses
|
2,131 | 636 | ||||||
Amortization expense
|
2,723 | 2,438 | ||||||
Interest expense
|
4,010 | 4,254 | ||||||
Total expenses
|
452,141 | 366,719 | ||||||
(Loss) income before taxes and equity earnings
|
(792 | ) | 30,987 | |||||
Federal and state income tax expense
|
73 | 7,782 | ||||||
Equity earnings of affiliates, net of tax
|
1,250 | 1,246 | ||||||
Equity losses of unconsolidated subsidiaries, net of tax
|
(13 | ) | (22 | ) | ||||
Net income
|
$ | 372 | $ | 24,429 | ||||
Earnings Per Share
|
||||||||
Basic
|
$ | 0.01 | $ | 0.46 | ||||
Diluted
|
$ | 0.01 | $ | 0.46 | ||||
Weighted average number of common shares
|
||||||||
Basic
|
50,583,368 | 53,175,824 | ||||||
Diluted
|
50,583,368 | 53,323,802 | ||||||
Dividends paid per common share
|
$ | 0.10 | $ | 0.08 |
As Adjusted
|
||||||||
2012
|
2011
|
|||||||
(Unaudited)
|
||||||||
(In thousands)
|
||||||||
Net (loss) income
|
$ | (7,732 | ) | $ | 9,780 | |||
Other comprehensive (loss) income, net of tax:
|
||||||||
Unrealized gain on securities
|
7,900 | 13,528 | ||||||
Unrealized gains in affiliates and unconsolidated subsidiaries
|
16 | 50 | ||||||
Increase (decrease) on non-credit other-than-temporary impairments on securities
|
34 | (231 | ) | |||||
Net deferred derivative losses - hedging activity
|
(413 | ) | (381 | ) | ||||
Less reclassification adjustment for investment gains included in net income
|
(1,645 | ) | (1,070 | ) | ||||
Other comprehensive gains
|
5,892 | 11,896 | ||||||
Comprehensive (loss) income
|
$ | (1,840 | ) | $ | 21,676 |
As Adjusted
|
||||||||
2012
|
2011
|
|||||||
(Unaudited)
|
||||||||
(In thousands)
|
||||||||
Net income
|
$ | 372 | $ | 24,429 | ||||
Other comprehensive income, net of tax:
|
||||||||
Unrealized gains on securities
|
7,732 | 11,148 | ||||||
Unrealized gains (losses) in affiliates and unconsolidated subsidiaries
|
165 | (1 | ) | |||||
Increase on non-credit other-than-temporary impairments on securities
|
292 | 85 | ||||||
Net deferred derivative (losses) gains - hedging activity
|
(113 | ) | 285 | |||||
Less reclassification adjustment for investment gains included in net income
|
(2,356 | ) | (1,880 | ) | ||||
Other comprehensive gains
|
5,720 | 9,637 | ||||||
Comprehensive income
|
$ | 6,092 | $ | 34,066 |
As Adjusted
|
||||||||
June 30,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
(Unaudited)
|
||||||||
(In thousands, except share data)
|
||||||||
ASSETS
|
||||||||
Investments
|
||||||||
Debt securities available for sale, at fair value (amortized cost of $1,352,554 and $1,252,775)
|
$ | 1,466,000 | $ | 1,358,749 | ||||
Equity securities available for sale, at fair value (cost of $23,065 and $25,176)
|
25,823 | 27,174 | ||||||
Cash and cash equivalents
|
88,159 | 101,757 | ||||||
Accrued investment income
|
14,528 | 13,757 | ||||||
Premiums and agent balances receivable, net
|
216,485 | 183,160 | ||||||
Reinsurance recoverable on:
|
||||||||
Paid losses
|
12,788 | 9,870 | ||||||
Unpaid losses
|
349,361 | 315,884 | ||||||
Prepaid reinsurance premiums
|
37,678 | 33,754 | ||||||
Deferred policy acquisition costs
|
80,554 | 74,467 | ||||||
Goodwill
|
121,041 | 120,792 | ||||||
Other intangible assets
|
32,837 | 34,483 | ||||||
Other assets
|
102,351 | 96,251 | ||||||
Total assets
|
$ | 2,547,605 | $ | 2,370,098 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Liabilities
|
||||||||
Losses and loss adjustment expenses
|
$ | 1,301,002 | $ | 1,194,977 | ||||
Unearned premiums
|
424,760 | 386,750 | ||||||
Debt
|
61,000 | 28,375 | ||||||
Debentures
|
80,930 | 80,930 | ||||||
Accounts payable and accrued expenses
|
39,233 | 38,716 | ||||||
Funds held and reinsurance balances payable
|
34,264 | 25,903 | ||||||
Payable to insurance companies
|
6,059 | 4,321 | ||||||
Deferred income taxes, net
|
8,966 | 8,453 | ||||||
Other liabilities
|
16,407 | 16,522 | ||||||
Total liabilities
|
1,972,621 | 1,784,947 | ||||||
Shareholders' Equity
|
||||||||
Common stock, $0.01 par value; authorized 75,000,000 shares; 49,776,011 and 51,050,204 shares issued and outstanding
|
505 | 520 | ||||||
Additional paid-in capital
|
272,198 | 279,005 | ||||||
Retained earnings
|
229,459 | 238,539 | ||||||
Note receivable from officer
|
(752 | ) | (767 | ) | ||||
Accumulated other comprehensive income
|
73,574 | 67,854 | ||||||
Total shareholders' equity
|
574,984 | 585,151 | ||||||
Total liabilities and shareholders' equity
|
$ | 2,547,605 | $ | 2,370,098 |
Common
Stock
|
Additional Paid-
In Capital
|
Retained
Earnings
|
Note
Receivable
from Officer
|
Accumulated Other
Comprehensive
Income
|
Total
Shareholders'
Equity
|
|||||||||||||||||||
(Unaudited, In thousands)
|
||||||||||||||||||||||||
Balances December 31, 2011 (As previously reported)
|
$ | 520 | $ | 279,005 | $ | 245,816 | $ | (767 | ) | $ | 67,854 | $ | 592,428 | |||||||||||
Cumulative effect of adjustment resulting from adoption of new accounting guidance
|
- | - | (7,277 | ) | - | - | (7,277 | ) | ||||||||||||||||
As Adjusted Balances December 31, 2011
|
520 | 279,005 | 238,539 | (767 | ) | 67,854 | 585,151 | |||||||||||||||||
Net income
|
- | - | 372 | - | - | 372 | ||||||||||||||||||
Dividends declared
|
- | - | (5,057 | ) | - | - | (5,057 | ) | ||||||||||||||||
Change in unrealized gain or loss on available for sale securities, net of tax
|
- | - | - | - | 5,351 | 5,351 | ||||||||||||||||||
Change in valuation allowance on deferred tax assets
|
- | - | - | - | 317 | 317 | ||||||||||||||||||
Net deferred derivative loss - hedging activity
|
- | - | - | - | (113 | ) | (113 | ) | ||||||||||||||||
Stock award
|
- | 194 | - | - | - | 194 | ||||||||||||||||||
Long term incentive plan; stock award for 2012 plan years
|
- | 106 | - | - | - | 106 | ||||||||||||||||||
Change in investment of affiliates, net of tax
|
- | - | - | - | 156 | 156 | ||||||||||||||||||
Change in investment of unconsolidated subsidiaries
|
- | - | - | - | 9 | 9 | ||||||||||||||||||
Repurchase of 1,267,300 shares of common stock
|
(15 | ) | (7,107 | ) | (4,395 | ) | - | - | (11,517 | ) | ||||||||||||||
Note receivable from officer
|
- | - | - | 15 | - | 15 | ||||||||||||||||||
Balances June 30, 2012
|
$ | 505 | $ | 272,198 | $ | 229,459 | $ | (752 | ) | $ | 73,574 | $ | 574,984 |
As Adjusted
|
||||||||
2012
|
2011
|
|||||||
(Unaudited)
|
||||||||
(In thousands)
|
||||||||
Cash Flows From Operating Activities
|
||||||||
Net income
|
$ | 372 | $ | 24,429 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Amortization of other intangible assets
|
2,723 | 2,438 | ||||||
Amortization of deferred debenture issuance costs
|
63 | 63 | ||||||
Depreciation of furniture, equipment, and building
|
2,821 | 2,697 | ||||||
Net amortization of discount and premiums on bonds
|
2,990 | 1,829 | ||||||
Gain on sale of investments, net
|
(2,356 | ) | (1,880 | ) | ||||
Gain on sale of fixed assets
|
(44 | ) | (44 | ) | ||||
Long-term incentive plan expense (benefit)
|
106 | (973 | ) | |||||
Stock award
|
194 | 366 | ||||||
Equity earnings of affiliates, net of taxes
|
(1,250 | ) | (1,246 | ) | ||||
Equity losses of unconsolidated subsidiaries, net of tax
|
13 | 22 | ||||||
Deferred income tax benefit
|
(2,075 | ) | (522 | ) | ||||
Goodwill adjustment
|
(249 | ) | - | |||||
Write-off of book of business
|
123 | - | ||||||
Changes in operating assets and liabilities:
|
||||||||
Decrease (increase) in:
|
||||||||
Premiums and agent balances receivable
|
(33,325 | ) | (25,634 | ) | ||||
Reinsurance recoverable on paid and unpaid losses
|
(36,395 | ) | (11,771 | ) | ||||
Prepaid reinsurance premiums
|
(3,924 | ) | (292 | ) | ||||
Deferred policy acquisition costs
|
(6,087 | ) | (5,115 | ) | ||||
Other assets
|
(3,561 | ) | (285 | ) | ||||
Increase (decrease) in:
|
||||||||
Losses and loss adjustment expenses
|
106,025 | 60,160 | ||||||
Unearned premiums
|
38,010 | 27,257 | ||||||
Payable to insurance companies
|
1,738 | 2,373 | ||||||
Funds held and reinsurance balances payable
|
8,361 | 2,825 | ||||||
Other liabilities
|
(1,233 | ) | (14,826 | ) | ||||
Total adjustments
|
72,668 | 37,442 | ||||||
Net cash provided by operating activities
|
73,040 | 61,871 | ||||||
Cash Flows From Investing Activities
|
||||||||
Purchase of debt securities available for sale
|
(169,329 | ) | (133,777 | ) | ||||
Proceeds from sales and maturities of debt securities available for sale
|
69,247 | 78,352 | ||||||
Proceeds from sales of equity securities available for sale
|
2,506 | 200 | ||||||
Capital expenditures
|
(958 | ) | (3,970 | ) | ||||
Acquisition of rights renewals
|
- | (129 | ) | |||||
Other investing activities
|
(4,367 | ) | 592 | |||||
Net cash used in investing activities
|
(102,901 | ) | (58,732 | ) | ||||
Cash Flows From Financing Activities
|
||||||||
Proceeds from line of credit and FHLBI
|
40,000 | - | ||||||
Payments on term loan
|
(7,375 | ) | (6,500 | ) | ||||
Book overdrafts
|
197 | (1,785 | ) | |||||
Dividends paid on common stock
|
(5,057 | ) | (4,262 | ) | ||||
Share repurchases
|
(11,517 | ) | (3,904 | ) | ||||
Other financing activities
|
15 | 20 | ||||||
Net cash used in financing activities
|
16,263 | (16,431 | ) | |||||
Net decrease in cash and cash equivalents
|
(13,598 | ) | (13,292 | ) | ||||
Cash and cash equivalents, beginning of period
|
101,757 | 90,414 | ||||||
Cash and cash equivalents, end of period
|
$ | 88,159 | $ | 77,122 | ||||
Supplemental Disclosure of Cash Flow Information:
|
||||||||
Interest paid
|
$ | 3,695 | $ | 4,070 | ||||
Net income taxes paid (1)
|
$ | 3,476 | $ | 14,678 | ||||
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
|
||||||||
Stock-based employee compensation
|
$ | 194 | $ | 366 |
(1)
|
Tax return refunds were received in first quarter of 2012 and 2011 for $475 and $732, respectively.
|
December 31, 2011
|
||||||||||||
(In thousands)
|
As Previously
Reported
|
Adjustment
|
As Adjusted
Reported
|
|||||||||
Deferred policy acquisition costs
|
$ | 85,663 | $ | (11,196 | ) | $ | 74,467 | |||||
Total assets
|
2,381,294 | (11,196 | ) | 2,370,098 | ||||||||
Deferred income tax, net
|
12,372 | (3,919 | ) | 8,453 | ||||||||
Total liabilities
|
1,788,866 | (3,919 | ) | 1,784,947 | ||||||||
Retained earnings
|
245,816 | (7,277 | ) | 238,539 | ||||||||
Total shareholders' equity
|
592,428 | (7,277 | ) | 585,151 | ||||||||
Total liabilities and shareholders' equity
|
2,381,294 | (11,196 | ) | 2,370,098 |
Three Months Ended June 30, 2011
|
||||||||||||
(In thousands)
|
As Previously
Reported
|
Adjustment
|
As Adjusted
Reported
|
|||||||||
Policy acquisition and other underwriting expenses
|
$ | 62,450 | $ | 244 | $ | 62,694 | ||||||
Total expenses
|
192,053 | 244 | 192,297 | |||||||||
Income before taxes and equity earnings
|
12,173 | (244 | ) | 11,929 | ||||||||
Federal and state income tax expense
|
2,408 | (85 | ) | 2,323 | ||||||||
Net income
|
9,939 | (159 | ) | 9,780 | ||||||||
Comprehensive income
|
21,835 | (159 | ) | 21,676 | ||||||||
Earnings per share
|
||||||||||||
Basic
|
$ | 0.19 | $ | (0.01 | ) | $ | 0.18 | |||||
Diluted
|
$ | 0.19 | $ | (0.01 | ) | $ | 0.18 |
Six Months Ended June 30, 2011
|
||||||||||||
(In thousands)
|
As Previously
Reported
|
Adjustment
|
As Adjusted
Reported
|
|||||||||
Policy acquisition and other underwriting expenses
|
$ | 119,888 | $ | 963 | $ | 120,851 | ||||||
Total expenses
|
365,756 | 963 | 366,719 | |||||||||
Income before taxes and equity earnings
|
31,950 | (963 | ) | 30,987 | ||||||||
Federal and state income tax expense
|
8,119 | (337 | ) | 7,782 | ||||||||
Net income
|
25,055 | (626 | ) | 24,429 | ||||||||
Comprehensive income
|
34,692 | (626 | ) | 34,066 | ||||||||
Earnings per share
|
||||||||||||
Basic
|
$ | 0.47 | $ | (0.01 | ) | $ | 0.46 | |||||
Diluted
|
$ | 0.47 | $ | (0.01 | ) | $ | 0.46 |
Six Months Ended June 30, 2011
|
||||||||||||
(In thousands)
|
As Previously
Reported
|
Adjustment
|
As adjusted
Reported
|
|||||||||
Net income
|
$ | 25,055 | $ | (626 | ) | $ | 24,429 | |||||
Deferred income tax expense
|
(185 | ) | (337 | ) | (552 | ) | ||||||
Deferred policy acquisition costs
|
(6,078 | ) | 963 | (5,115 | ) |
June 30, 2012
|
||||||||||||||||||||
Cost or
Amortized
Cost
|
Gross Unrealized
|
Estimated
Fair Value
|
||||||||||||||||||
Gains
|
Losses
|
Non-Credit
OTTI
|
||||||||||||||||||
Debt Securities:
|
||||||||||||||||||||
U.S. Government and agencies
|
$ | 21,077 | $ | 1,772 | $ | - | $ | - | $ | 22,849 | ||||||||||
Obligations of states and political subs
|
598,436 | 50,344 | (371 | ) | - | 648,409 | ||||||||||||||
Corporate securities
|
547,966 | 47,728 | (525 | ) | - | 595,169 | ||||||||||||||
Redeemable preferred stock
|
1,743 | 460 | - | - | 2,203 | |||||||||||||||
Residential mortgage-backed securities
|
134,203 | 10,294 | (112 | ) | - | 144,385 | ||||||||||||||
Commercial mortgage-backed securities
|
37,066 | 2,633 | - | - | 39,699 | |||||||||||||||
Other asset-backed securities
|
12,063 | 1,596 | (373 | ) | - | 13,286 | ||||||||||||||
Total debt securities available for sale
|
1,352,554 | 114,827 | (1,381 | ) | - | 1,466,000 | ||||||||||||||
Equity Securities:
|
||||||||||||||||||||
Perpetual preferred stock
|
8,302 | 2,029 | (10 | ) | - | 10,321 | ||||||||||||||
Common stock
|
14,763 | 971 | (232 | ) | - | 15,502 | ||||||||||||||
Total equity securities available for sale
|
23,065 | 3,000 | (242 | ) | - | 25,823 | ||||||||||||||
Total securities available for sale
|
$ | 1,375,619 | $ | 117,827 | $ | (1,623 | ) | $ | - | $ | 1,491,823 |
December 31, 2011
|
||||||||||||||||||||
Cost or
Amortized
Cost
|
Gross Unrealized
|
Estimated
Fair Value
|
||||||||||||||||||
Gains
|
Losses
|
Non-Credit
OTTI
|
||||||||||||||||||
Debt Securities:
|
||||||||||||||||||||
U.S. Government and agencies
|
$ | 20,510 | $ | 1,856 | $ | - | $ | - | $ | 22,366 | ||||||||||
Obligations of states and political subs
|
556,265 | 49,742 | (5 | ) | - | 606,002 | ||||||||||||||
Corporate securities
|
469,770 | 40,591 | (1,292 | ) | - | 509,069 | ||||||||||||||
Redeemable preferred stock
|
1,924 | 330 | - | - | 2,254 | |||||||||||||||
Residential mortgage-backed securities
|
152,719 | 11,534 | (40 | ) | (228 | ) | 163,985 | |||||||||||||
Commercial mortgage-backed securities
|
37,191 | 2,337 | - | - | 39,528 | |||||||||||||||
Other asset-backed securities
|
14,396 | 1,695 | (33 | ) | (513 | ) | 15,545 | |||||||||||||
Total debt securities available for sale
|
1,252,775 | 108,085 | (1,370 | ) | (741 | ) | 1,358,749 | |||||||||||||
Equity Securities:
|
||||||||||||||||||||
Perpetual preferred stock
|
10,413 | 1,792 | (58 | ) | - | 12,147 | ||||||||||||||
Common stock
|
14,763 | 597 | (333 | ) | - | 15,027 | ||||||||||||||
Total equity securities available for sale
|
25,176 | 2,389 | (391 | ) | - | 27,174 | ||||||||||||||
Total securities available for sale
|
$ | 1,277,951 | $ | 110,474 | $ | (1,761 | ) | $ | (741 | ) | $ | 1,385,923 |
June 30, 2012
|
December 31, 2011
|
|||||||
Unrealized gains
|
$ | 117,827 | $ | 110,474 | ||||
Unrealized losses
|
(1,623 | ) | (1,761 | ) | ||||
Non-credit OTTI
|
- | (741 | ) | |||||
Net unrealized gains
|
116,204 | 107,972 | ||||||
Deferred federal income tax expense
|
(40,671 | ) | (37,790 | ) | ||||
Net unrealized gains on investments, net of deferred federal income taxes
|
$ | 75,533 | $ | 70,182 |
For the Three Months
Ended June 30,
|
For the Six Months
Ended June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Realized gains (losses):
|
||||||||||||||||
Debt securities:
|
||||||||||||||||
Gross realized gains
|
$ | 1,328 | $ | 942 | $ | 1,994 | $ | 1,866 | ||||||||
Gross realized losses
|
(21 | ) | (27 | ) | (33 | ) | (141 | ) | ||||||||
Total debt securities
|
1,307 | 915 | 1,961 | 1,725 | ||||||||||||
Equity securities:
|
||||||||||||||||
Gross realized gains
|
338 | 154 | 395 | 154 | ||||||||||||
Gross realized losses
|
- | - | - | - | ||||||||||||
Total equity securities
|
338 | 154 | 395 | 154 | ||||||||||||
Net realized gains
|
$ | 1,645 | $ | 1,069 | $ | 2,356 | $ | 1,879 | ||||||||
OTTI included in realized losses on securities above
|
$ | - | $ | - | $ | - | $ | (84 | ) |
Available for Sale
|
||||||||
|
Amortized
Cost
|
Estimated
Fair Value
|
||||||
Due in one year or less
|
$ | 31,634 | $ | 32,007 | ||||
Due after one year through five years
|
329,713 | 346,905 | ||||||
Due after five years through ten years
|
634,506 | 705,493 | ||||||
Due after ten years
|
173,369 | 184,225 | ||||||
Mortgage-backed securities, collateralized obligations and asset-backed securities
|
183,332 | 197,370 | ||||||
$ | 1,352,554 | $ | 1,466,000 |
For the Three Months
Ended June 30,
|
For the Six Months
Ended June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Net Investment Income Earned From:
|
||||||||||||||||
Debt securities
|
$ | 13,507 | $ | 13,436 | $ | 26,800 | $ | 26,628 | ||||||||
Equity Securities
|
370 | 473 | 876 | 979 | ||||||||||||
Cash and cash equivalents
|
143 | 174 | 417 | 390 | ||||||||||||
Total gross investment income
|
14,020 | 14,083 | 28,093 | 27,997 | ||||||||||||
Less investment expenses
|
337 | 318 | 678 | 660 | ||||||||||||
Net investment income
|
$ | 13,683 | $ | 13,765 | $ | 27,415 | $ | 27,337 |
|
·
|
Historical and implied volatility of the security;
|
|
·
|
Length of time and extent to which the fair value has been less than amortized cost;
|
|
·
|
Conditions specifically related to the security such as default rates, loss severities, loan to value ratios, current levels of subordination, third party guarantees, and vintage;
|
|
·
|
Specific conditions in an industry or geographic area;
|
|
·
|
Any changes to the rating of the security by a rating agency;
|
|
·
|
Failure, if any, of the issuer of the security to make scheduled payments; and
|
|
·
|
Recoveries or additional declines in fair value subsequent to the balance sheet date.
|
June 30, 2012
|
||||||||||||||||||||||||||||||||||||
Less than 12 months
|
Greater than 12 months
|
Total
|
||||||||||||||||||||||||||||||||||
Number of
Issues
|
Fair Value of
Investments
with
Unrealized
Losses
|
Gross
Unrealized
Losses and
Non-Credit
OTTI
|
Number
of
Issues
|
Fair Value of
Investments
with Unrealized
Losses
|
Gross
Unrealized
Losses and
Non-Credit
OTTI
|
Number
of
Issues
|
Fair Value of
Investments
with Unrealized
Losses
|
Gross
Unrealized
Losses and
Non-Credit
OTTI
|
||||||||||||||||||||||||||||
Debt Securities:
|
||||||||||||||||||||||||||||||||||||
U.S. Government and agencies
|
1 | $ | 151 | $ | - | - | $ | - | $ | - | 1 | $ | 151 | $ | - | |||||||||||||||||||||
Obligations of states and political subs
|
13 | 39,769 | (371 | ) | - | - | - | 13 | 39,769 | (371 | ) | |||||||||||||||||||||||||
Corporate securities
|
10 | 24,653 | (481 | ) | 1 | 3,005 | (44 | ) | 11 | 27,658 | (525 | ) | ||||||||||||||||||||||||
Redeemable preferred stock
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Residential mortgage-backed securities
|
2 | 93 | - | 3 | 3,538 | (112 | ) | 5 | 3,631 | (112 | ) | |||||||||||||||||||||||||
Commercial mortgage-backed securities
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Other asset-backed securities
|
1 | 1,120 | (7 | ) | 9 | 1,406 | (366 | ) | 10 | 2,526 | (373 | ) | ||||||||||||||||||||||||
Total debt securities
|
27 | 65,786 | (859 | ) | 13 | 7,949 | (522 | ) | 40 | 73,735 | (1,381 | ) | ||||||||||||||||||||||||
Equity Securities:
|
||||||||||||||||||||||||||||||||||||
Perpetual preferred stock
|
2 | 4 | (10 | ) | - | - | - | 2 | 4 | (10 | ) | |||||||||||||||||||||||||
Common stock
|
1 | 279 | (11 | ) | 3 | 4,932 | (221 | ) | 4 | 5,211 | (232 | ) | ||||||||||||||||||||||||
Total equity securities
|
3 | 283 | (21 | ) | 3 | 4,932 | (221 | ) | 6 | 5,215 | (242 | ) | ||||||||||||||||||||||||
Total securities
|
30 | $ | 66,069 | $ | (880 | ) | 16 | $ | 12,881 | $ | (743 | ) | 46 | $ | 78,950 | $ | (1,623 | ) |
December 31, 2011
|
||||||||||||||||||||||||||||||||||||
Less than 12 months
|
Greater than 12 months
|
Total
|
||||||||||||||||||||||||||||||||||
Number
of Issues
|
Fair Value of
Investments
with
Unrealized
Losses
|
Gross
Unrealized
Losses and
Non-Credit
OTTI
|
Number
of
Issues
|
Fair Value of
Investments
with Unrealized
Losses
|
Gross
Unrealized
Losses and
Non-Credit
OTTI
|
Number
of
Issues
|
Fair Value of
Investments
with Unrealized
Losses
|
Gross
Unrealized
Losses and
Non-Credit
OTTI
|
||||||||||||||||||||||||||||
Debt Securities:
|
||||||||||||||||||||||||||||||||||||
U.S. Government and agencies
|
- | $ | - | $ | - | - | $ | - | $ | - | - | $ | - | $ | - | |||||||||||||||||||||
Obligations of states and political subs
|
1 | 202 | (2 | ) | 2 | 923 | (3 | ) | 3 | 1,125 | (5 | ) | ||||||||||||||||||||||||
Corporate securities
|
15 | 27,154 | (1,292 | ) | - | - | - | 15 | 27,154 | (1,292 | ) | |||||||||||||||||||||||||
Redeemable preferred stock
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Residential mortgage-backed securities
|
4 | 183 | (38 | ) | 2 | 3,561 | (230 | ) | 6 | 3,744 | (268 | ) | ||||||||||||||||||||||||
Commercial mortgage-backed securities
|
1 | 683 | - | - | - | - | 1 | 683 | - | |||||||||||||||||||||||||||
Other asset-backed securities
|
3 | 1,163 | (27 | ) | 8 | 1,831 | (519 | ) | 11 | 2,994 | (546 | ) | ||||||||||||||||||||||||
Total debt securities
|
24 | 29,385 | (1,359 | ) | 12 | 6,315 | (752 | ) | 36 | 35,700 | (2,111 | ) | ||||||||||||||||||||||||
Equity Securities:
|
||||||||||||||||||||||||||||||||||||
Perpetual preferred stock
|
3 | 1,079 | (58 | ) | - | - | - | 3 | 1,079 | (58 | ) | |||||||||||||||||||||||||
Common stock
|
1 | 279 | (12 | ) | 3 | 4,851 | (321 | ) | 4 | 5,130 | (333 | ) | ||||||||||||||||||||||||
Total equity securities
|
4 | 1,358 | (70 | ) | 3 | 4,851 | (321 | ) | 7 | 6,209 | (391 | ) | ||||||||||||||||||||||||
Total securities
|
28 | $ | 30,743 | $ | (1,429 | ) | 15 | $ | 11,166 | $ | (1,073 | ) | 43 | $ | 41,909 | $ | (2,502 | ) |
Balance as of December 31, 2011
|
$ | (789 | ) | |
Additional credit impairments on:
|
||||
Previously impaired securities
|
- | |||
Securities for which an impairment was not previously recognized
|
- | |||
Reductions
|
- | |||
Balance as of June 30, 2012
|
$ | (789 | ) |
Fair Value Measurements Using
|
||||||||||||||||
June 30, 2012
|
Quoted Prices
in Active
Markets for
Identical Assets
|
Significant Other
Observable Inputs
|
Significant
Unobservable
Inputs
|
|||||||||||||
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Debt Securities:
|
||||||||||||||||
U.S. Government and agencies
|
$ | 22,849 | $ | - | $ | 22,849 | $ | - | ||||||||
Obligations of states and political subs
|
648,409 | - | 648,409 | - | ||||||||||||
Corporate securities
|
595,169 | - | 594,045 | 1,124 | ||||||||||||
Redeemable preferred stock
|
2,203 | 2,203 | - | - | ||||||||||||
Residential mortgage-backed securities
|
144,385 | - | 144,385 | - | ||||||||||||
Commercial mortgage-backed securities
|
39,699 | - | 39,699 | - | ||||||||||||
Other asset-backed securities
|
13,286 | - | 9,657 | 3,629 | ||||||||||||
Total debt securities available for sale
|
1,466,000 | 2,203 | 1,459,044 | 4,753 | ||||||||||||
Equity Securities:
|
||||||||||||||||
Perpetual preferred stock
|
10,321 | 9,582 | 739 | - | ||||||||||||
Common stock
|
15,502 | 15,502 | - | - | ||||||||||||
Total equity securities available for sale
|
25,823 | 25,084 | 739 | - | ||||||||||||
Total securities available for sale
|
$ | 1,491,823 | $ | 27,287 | $ | 1,459,783 | $ |