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Share Name | Share Symbol | Market | Type |
---|---|---|---|
National Security Group Inc | NASDAQ:NSEC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 16.36 | 16.32 | 16.40 | 0 | 01:00:00 |
☑
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
63-1020300
|
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(IRS Employer
Identification No.)
|
|
|
|
|
|
661 East Davis Street
|
|
|
|
Elba,
|
Alabama
|
|
36323
|
(Address of principal executive offices)
|
|
(Zip-Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock,
par value $1.00 per share |
NSEC
|
The NASDAQ Stock Market LLC
|
Class
|
|
Outstanding May 14, 2020
|
|
|
|
Common Stock $1.00 par value
|
|
2,529,866 shares
|
PART I. FINANCIAL INFORMATION
|
|
||
|
|
|
Page No.
|
|
Item 1. Financial Statements
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets (UNAUDITED EXCEPT FOR DECEMBER 31, 2019 AMOUNTS)
|
|
|
|
Condensed Consolidated Statements of Operations (UNAUDITED)
|
|
|
|
Condensed Consolidated Statements of Comprehensive Income (Loss) (UNAUDITED)
|
|
|
|
Condensed Consolidated Statements of Changes in Shareholders’ Equity (UNAUDITED)
|
|
|
|
Condensed Consolidated Statements of Cash Flows (UNAUDITED)
|
|
|
|
Notes to Condensed Consolidated Financial Statements (UNAUDITED EXCEPT FOR DECEMBER 31, 2019 AMOUNTS)
|
|
|
|
Review Report of Independent Registered Public Accounting Firm
|
|
|
|
|
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
||
|
|
|
|
|
Item 3. Quantitative and Qualitative Disclosures about Market Risk
|
||
|
|
|
|
|
Item 4. Controls and Procedures
|
||
|
|
|
|
|
|
|
|
PART II. OTHER INFORMATION
|
|
||
|
|
|
|
|
Item 1. Legal Proceedings
|
||
|
Item 1A. Risk Factors
|
||
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of
Equity Securities
|
||
|
Item 3. Defaults Upon Senior Securities
|
||
|
Item 4. Mine Safety Disclosures
|
||
|
Item 5. Other Information
|
||
|
Item 6. Exhibits
|
||
|
|
|
|
SIGNATURE
|
▪
|
The insurance industry is highly competitive and the Company encounters significant competition in all lines of business from other insurance companies. Many of the competing companies have more abundant financial resources than the Company.
|
▪
|
Insurance is a highly regulated industry. It is possible that legislation may be enacted which would have an adverse effect on the Company's business.
|
▪
|
The Company is subject to regulation by state governments for each of the states in which it conducts business. The Company cannot predict the subject of any future regulatory initiative(s) or its (their) impact on the Company's business. Company insurance rates are also subject to approval by state insurance departments in each of these states. We are often limited in the level of rate increases we can obtain.
|
▪
|
The Company is rated by various insurance rating agencies. If a rating is downgraded from its current level by one of these agencies, sales of the Company's products and stock price could be adversely impacted.
|
▪
|
The Company's financial results are adversely affected by increases in policy claims received by the Company. While a manageable risk, this fluctuation is often unpredictable.
|
▪
|
The Company's investments are subject to a variety of risks. Investments are subject to defaults and changes in market value. Market value can be affected by changes in interest rates, market performance and the economy.
|
▪
|
The Company mitigates risk associated with life policies through implementing effective underwriting and reinsurance strategies. These factors mitigate, not eliminate, risk related to mortality and morbidity exposure. The Company has established reserves for claims and future policy benefits based on amounts determined by independent actuaries. There is no assurance that these estimated reserves will prove to be sufficient or that the Company will not incur claims exceeding reserves, which could result in operating losses and loss of capital.
|
▪
|
The Company mitigates risk associated with property and casualty policies through implementing effective underwriting and reinsurance strategies. The Company obtains reinsurance which increases underwriting capacity and limits the risk associated with policy claims. The Company is subject to credit risk with regard to reinsurers as reinsurance does not alleviate the Company's liability to its insured's for the ceded risks. The Company utilizes a third-party to develop a reinsurance treaty with reinsurers who are reliable and financially stable. However, there is no guarantee that booked reinsurance recoverable will actually be recovered. A reinsurer's insolvency or inability to make payments due could have a material adverse impact on the financial condition of the Company.
|
▪
|
The Company's ability to continue to pay dividends to shareholders is contingent upon profitability and capital adequacy of the insurance subsidiaries. The insurance subsidiaries operate under regulatory restrictions that could limit the ability to fund future dividend payments of the Company. An adverse event or series of events could materially impact the ability of the insurance subsidiaries to fund future dividends, and consequently, the Board of Directors would have to suspend the declaration of dividends to shareholders.
|
▪
|
The Company is subject to the risk of adverse settlements or judgments resulting from litigation of contested
|
($ in thousands)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
ASSETS
|
|
(UNAUDITED)
|
|
|
||||
Investments
|
|
|
|
|
||||
Fixed maturities held-to-maturity, at amortized cost (estimated fair value: 2020 -
$1,354; 2019 - $1,345)
|
|
$
|
1,249
|
|
|
$
|
1,290
|
|
Fixed maturities available-for-sale, at estimated fair value (cost: 2020 -
$101,828; 2019 - $97,102)
|
|
102,530
|
|
|
100,260
|
|
||
Equity securities, at estimated fair value (cost: 2020 - $2,127; 2019 - $2,127)
|
|
4,704
|
|
|
5,303
|
|
||
Trading securities
|
|
125
|
|
|
149
|
|
||
Receivable for securities sold
|
|
2
|
|
|
56
|
|
||
Mortgage loans on real estate, at cost
|
|
147
|
|
|
147
|
|
||
Investment real estate, at book value
|
|
2,934
|
|
|
2,934
|
|
||
Policy loans
|
|
1,912
|
|
|
1,895
|
|
||
Company owned life insurance
|
|
4,405
|
|
|
4,655
|
|
||
Other invested assets
|
|
2,240
|
|
|
2,280
|
|
||
Total Investments
|
|
120,248
|
|
|
118,969
|
|
||
Cash and cash equivalents
|
|
5,869
|
|
|
11,809
|
|
||
Accrued investment income
|
|
756
|
|
|
706
|
|
||
Policy receivables and agents' balances, net
|
|
12,431
|
|
|
12,028
|
|
||
Reinsurance recoverable
|
|
276
|
|
|
276
|
|
||
Deferred policy acquisition costs
|
|
7,525
|
|
|
7,666
|
|
||
Property and equipment, net
|
|
1,625
|
|
|
1,630
|
|
||
Deferred income tax asset, net
|
|
676
|
|
|
—
|
|
||
Other assets
|
|
1,080
|
|
|
850
|
|
||
Total Assets
|
|
$
|
150,486
|
|
|
$
|
153,934
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
||
Property and casualty benefit and loss reserves
|
|
$
|
6,465
|
|
|
$
|
7,199
|
|
Accident and health benefit and loss reserves
|
|
3,950
|
|
|
4,046
|
|
||
Life and annuity benefit and loss reserves
|
|
34,352
|
|
|
34,269
|
|
||
Unearned premiums
|
|
31,325
|
|
|
30,555
|
|
||
Policy and contract claims
|
|
1,132
|
|
|
1,053
|
|
||
Other policyholder funds
|
|
1,335
|
|
|
1,350
|
|
||
Short-term notes payable and current portion of long-term debt
|
|
500
|
|
|
500
|
|
||
Long-term debt
|
|
13,667
|
|
|
13,664
|
|
||
Accrued income taxes
|
|
173
|
|
|
226
|
|
||
Deferred income tax liability
|
|
—
|
|
|
96
|
|
||
Other liabilities
|
|
7,629
|
|
|
7,515
|
|
||
Total Liabilities
|
|
100,528
|
|
|
100,473
|
|
||
Contingencies
|
|
|
|
|
|
|
||
Shareholders' equity
|
|
|
|
|
|
|
||
Common stock
|
|
2,532
|
|
|
2,532
|
|
||
Additional paid-in capital
|
|
5,602
|
|
|
5,602
|
|
||
Accumulated other comprehensive income (loss)
|
|
(42
|
)
|
|
2,443
|
|
||
Retained earnings
|
|
41,879
|
|
|
42,891
|
|
||
Treasury stock, at cost
|
|
(13
|
)
|
|
(7
|
)
|
||
Total Shareholders' Equity
|
|
49,958
|
|
|
53,461
|
|
||
Total Liabilities and Shareholders' Equity
|
|
$
|
150,486
|
|
|
$
|
153,934
|
|
($ in thousands, except per share)
|
|
Three months ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
REVENUES
|
|
|
|
|
||||
Net premiums earned
|
|
$
|
14,955
|
|
|
$
|
14,718
|
|
Net investment income
|
|
964
|
|
|
962
|
|
||
Investment gains (losses)
|
|
(990
|
)
|
|
2,120
|
|
||
Other income
|
|
145
|
|
|
146
|
|
||
Total Revenues
|
|
15,074
|
|
|
17,946
|
|
||
BENEFITS, LOSSES AND EXPENSES
|
|
|
|
|
|
|
||
Policyholder benefits and settlement expenses
|
|
10,583
|
|
|
9,023
|
|
||
Amortization of deferred policy acquisition costs
|
|
1,065
|
|
|
980
|
|
||
Commissions
|
|
2,075
|
|
|
2,033
|
|
||
General and administrative expenses
|
|
1,394
|
|
|
2,332
|
|
||
Taxes, licenses and fees
|
|
721
|
|
|
687
|
|
||
Interest expense
|
|
261
|
|
|
295
|
|
||
Total Benefits, Losses and Expenses
|
|
16,099
|
|
|
15,350
|
|
||
|
|
|
|
|
||||
Income (Loss) Before Income Taxes
|
|
(1,025
|
)
|
|
2,596
|
|
||
|
|
|
|
|
||||
INCOME TAX EXPENSE (BENEFIT)
|
|
|
|
|
|
|
||
Current
|
|
(53
|
)
|
|
245
|
|
||
Deferred
|
|
(112
|
)
|
|
(92
|
)
|
||
|
|
(165
|
)
|
|
153
|
|
||
|
|
|
|
|
||||
Net Income (Loss)
|
|
$
|
(860
|
)
|
|
$
|
2,443
|
|
|
|
|
|
|
||||
INCOME (LOSS) PER COMMON SHARE BASIC AND DILUTED
|
|
$
|
(0.34
|
)
|
|
$
|
0.97
|
|
|
|
|
|
|
||||
DIVIDENDS DECLARED PER SHARE
|
|
$
|
0.06
|
|
|
$
|
0.05
|
|
($ in thousands)
|
|
Three months ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
(860
|
)
|
|
$
|
2,443
|
|
|
|
|
|
|
||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
||||
Changes in:
|
|
|
|
|
||||
Unrealized gains (losses) on securities, net of reclassification adjustment of $(92) and $8 for 2020 and 2019, respectively
|
|
(1,940
|
)
|
|
1,734
|
|
||
Unrealized gain (loss) on interest rate swap
|
|
(545
|
)
|
|
25
|
|
||
|
|
|
|
|
||||
Other comprehensive income (loss), net of tax
|
|
(2,485
|
)
|
|
1,759
|
|
||
|
|
|
|
|
||||
Comprehensive income (loss)
|
|
$
|
(3,345
|
)
|
|
$
|
4,202
|
|
($ in thousands)
|
Total
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury Stock
|
||||||||||||
Balance at December 31, 2019
|
$
|
53,461
|
|
|
$
|
42,891
|
|
|
$
|
2,443
|
|
|
$
|
2,532
|
|
|
$
|
5,602
|
|
|
$
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Common stock reacquired
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss for March 31, 2020
|
(860
|
)
|
|
(860
|
)
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive loss (net of tax)
|
(2,485
|
)
|
|
|
|
(2,485
|
)
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash dividends
|
(152
|
)
|
|
(152
|
)
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at March 31, 2020
|
$
|
49,958
|
|
|
$
|
41,879
|
|
|
$
|
(42
|
)
|
|
$
|
2,532
|
|
|
$
|
5,602
|
|
|
$
|
(13
|
)
|
|
Total
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury Stock
|
||||||||||||
Balance at December 31, 2018
|
$
|
45,866
|
|
|
$
|
39,355
|
|
|
$
|
(1,570
|
)
|
|
$
|
2,527
|
|
|
$
|
5,554
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income for March 31, 2019
|
2,443
|
|
|
2,443
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (net of tax)
|
1,759
|
|
|
|
|
1,759
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash dividends
|
(126
|
)
|
|
(126
|
)
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at March 31, 2019
|
$
|
49,942
|
|
|
$
|
41,672
|
|
|
$
|
189
|
|
|
$
|
2,527
|
|
|
$
|
5,554
|
|
|
$
|
—
|
|
($ in thousands)
|
Three months ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Cash Flows from Operating Activities
|
|
|
|
||||
Net income (loss)
|
$
|
(860
|
)
|
|
$
|
2,443
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|||
Depreciation expense and amortization/accretion, net
|
69
|
|
|
72
|
|
||
Net (gains) losses on investments
|
990
|
|
|
(2,120
|
)
|
||
Deferred income taxes
|
(112
|
)
|
|
(92
|
)
|
||
Amortization of deferred policy acquisition costs
|
1,065
|
|
|
980
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Change in receivable for securities sold
|
54
|
|
|
—
|
|
||
Change in accrued investment income
|
(50
|
)
|
|
(13
|
)
|
||
Change in reinsurance recoverable
|
—
|
|
|
376
|
|
||
Policy acquisition costs deferred
|
(924
|
)
|
|
(895
|
)
|
||
Change in accrued income taxes
|
(53
|
)
|
|
618
|
|
||
Change in net policy liabilities and claims
|
(306
|
)
|
|
(281
|
)
|
||
Change in other assets/liabilities, net
|
(800
|
)
|
|
617
|
|
||
Other, net
|
(1
|
)
|
|
4
|
|
||
Net cash provided by (used in) operating activities
|
(928
|
)
|
|
1,709
|
|
||
Cash Flows from Investing Activities
|
|
|
|
|
|||
Purchase of:
|
|
|
|
||||
Available-for-sale securities
|
(9,926
|
)
|
|
(4,119
|
)
|
||
Trading securities and short-term investments
|
—
|
|
|
(26
|
)
|
||
Property and equipment
|
(25
|
)
|
|
(3
|
)
|
||
Proceeds from sale or maturities of:
|
|
|
|
||||
Held-to-maturity securities
|
45
|
|
|
19
|
|
||
Available-for-sale securities
|
5,076
|
|
|
2,282
|
|
||
Real estate held for investment
|
2
|
|
|
11
|
|
||
Other invested assets, net
|
(17
|
)
|
|
2,037
|
|
||
Net cash provided by (used in) investing activities
|
(4,845
|
)
|
|
201
|
|
||
Cash Flows from Financing Activities
|
|
|
|
|
|
||
Change in other policyholder funds
|
(15
|
)
|
|
(42
|
)
|
||
Dividends paid
|
(152
|
)
|
|
(126
|
)
|
||
Net cash used in financing activities
|
(167
|
)
|
|
(168
|
)
|
||
Net change in cash and cash equivalents
|
(5,940
|
)
|
|
1,742
|
|
||
Cash and cash equivalents, beginning of year
|
11,809
|
|
|
5,676
|
|
||
Cash and cash equivalents, end of period
|
$
|
5,869
|
|
|
$
|
7,418
|
|
($ in thousands)
Available-for-sale securities:
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
U.S. Government corporations and agencies
|
|
$
|
4,569
|
|
|
$
|
326
|
|
|
$
|
—
|
|
|
$
|
4,895
|
|
Agency mortgage backed securities
|
|
33,437
|
|
|
1,569
|
|
|
19
|
|
|
34,987
|
|
||||
Asset backed securities
|
|
10,195
|
|
|
37
|
|
|
962
|
|
|
9,270
|
|
||||
Private label mortgage backed securities
|
|
8,255
|
|
|
115
|
|
|
50
|
|
|
8,320
|
|
||||
Corporate bonds
|
|
38,365
|
|
|
1,170
|
|
|
1,721
|
|
|
37,814
|
|
||||
States, municipalities and political subdivisions
|
|
6,178
|
|
|
153
|
|
|
14
|
|
|
6,317
|
|
||||
Foreign governments
|
|
829
|
|
|
98
|
|
|
—
|
|
|
927
|
|
||||
Total Fixed Maturities
|
|
101,828
|
|
|
3,468
|
|
|
2,766
|
|
|
102,530
|
|
||||
Equity securities
|
|
2,127
|
|
|
2,607
|
|
|
30
|
|
|
4,704
|
|
||||
Total
|
|
$
|
103,955
|
|
|
$
|
6,075
|
|
|
$
|
2,796
|
|
|
$
|
107,234
|
|
($ in thousands)
Held-to-maturity securities:
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Agency mortgage backed securities
|
|
$
|
1,249
|
|
|
$
|
105
|
|
|
$
|
—
|
|
|
$
|
1,354
|
|
Total
|
|
$
|
1,249
|
|
|
$
|
105
|
|
|
$
|
—
|
|
|
$
|
1,354
|
|
($ in thousands)
Available-for-sale securities:
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
U.S. Government corporations and agencies
|
|
$
|
4,131
|
|
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
4,281
|
|
Agency mortgage backed securities
|
|
32,283
|
|
|
861
|
|
|
157
|
|
|
32,987
|
|
||||
Asset backed securities
|
|
10,307
|
|
|
71
|
|
|
104
|
|
|
10,274
|
|
||||
Private label mortgage backed securities
|
|
6,815
|
|
|
441
|
|
|
4
|
|
|
7,252
|
|
||||
Corporate bonds
|
|
36,074
|
|
|
1,816
|
|
|
70
|
|
|
37,820
|
|
||||
States, municipalities and political subdivisions
|
|
6,669
|
|
|
109
|
|
|
1
|
|
|
6,777
|
|
||||
Foreign governments
|
|
823
|
|
|
46
|
|
|
—
|
|
|
869
|
|
||||
Total Fixed Maturities
|
|
97,102
|
|
|
3,494
|
|
|
336
|
|
|
100,260
|
|
||||
Equity securities
|
|
2,127
|
|
|
3,176
|
|
|
—
|
|
|
5,303
|
|
||||
Total
|
|
$
|
99,229
|
|
|
$
|
6,670
|
|
|
$
|
336
|
|
|
$
|
105,563
|
|
($ in thousands)
Held-to-maturity securities:
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Agency mortgage backed securities
|
|
$
|
1,290
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
1,345
|
|
Total
|
|
$
|
1,290
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
1,345
|
|
($ in thousands)
|
|
Amortized
Cost
|
|
Fair
Value
|
||||
Available-for-sale securities:
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
1,637
|
|
|
$
|
1,629
|
|
Due after one year through five years
|
|
18,944
|
|
|
18,644
|
|
||
Due after five years through ten years
|
|
27,489
|
|
|
26,786
|
|
||
Due after ten years
|
|
53,758
|
|
|
55,471
|
|
||
Total
|
|
$
|
101,828
|
|
|
$
|
102,530
|
|
|
|
|
|
|
||||
Held-to-maturity securities:
|
|
|
|
|
|
|
||
Due after one year through five years
|
|
$
|
26
|
|
|
$
|
27
|
|
Due after five years through ten years
|
|
4
|
|
|
5
|
|
||
Due after ten years
|
|
1,219
|
|
|
1,322
|
|
||
Total
|
|
$
|
1,249
|
|
|
$
|
1,354
|
|
($ in thousands)
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||||
March 31, 2020
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Total
Securities in a Loss Position
|
||||||||||||
Agency mortgage backed securities
|
|
$
|
364
|
|
|
$
|
5
|
|
|
$
|
536
|
|
|
$
|
14
|
|
|
$
|
900
|
|
|
$
|
19
|
|
|
3
|
Asset backed securities
|
|
6,291
|
|
|
610
|
|
|
1,135
|
|
|
352
|
|
|
7,426
|
|
|
962
|
|
|
11
|
||||||
Private label mortgage backed securities
|
|
2,450
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
2,450
|
|
|
50
|
|
|
6
|
||||||
Corporate bonds
|
|
16,831
|
|
|
1,712
|
|
|
491
|
|
|
9
|
|
|
17,322
|
|
|
1,721
|
|
|
36
|
||||||
States, municipalities and political subdivisions
|
|
1,483
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
1,483
|
|
|
14
|
|
|
3
|
||||||
Equity securities
|
|
128
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
128
|
|
|
30
|
|
|
2
|
||||||
|
|
$
|
27,547
|
|
|
$
|
2,421
|
|
|
$
|
2,162
|
|
|
$
|
375
|
|
|
$
|
29,709
|
|
|
$
|
2,796
|
|
|
61
|
($ in thousands)
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||||
December 31, 2019
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Total
Securities in a Loss Position
|
||||||||||||
Agency mortgage backed securities
|
|
$
|
5,663
|
|
|
$
|
104
|
|
|
$
|
1,751
|
|
|
$
|
53
|
|
|
$
|
7,414
|
|
|
$
|
157
|
|
|
18
|
Asset backed securities
|
|
4,241
|
|
|
33
|
|
|
1,579
|
|
|
71
|
|
|
5,820
|
|
|
104
|
|
|
9
|
||||||
Private label mortgage backed securities
|
|
1,060
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
1,060
|
|
|
4
|
|
|
1
|
||||||
Corporate bonds
|
|
6,363
|
|
|
54
|
|
|
1,484
|
|
|
16
|
|
|
7,847
|
|
|
70
|
|
|
14
|
||||||
States, municipalities and political subdivisions
|
|
512
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
512
|
|
|
1
|
|
|
1
|
||||||
|
|
$
|
17,839
|
|
|
$
|
196
|
|
|
$
|
4,814
|
|
|
$
|
140
|
|
|
$
|
22,653
|
|
|
$
|
336
|
|
|
43
|
($ in thousands)
|
|
Three months ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
Fixed maturities
|
|
$
|
916
|
|
|
$
|
937
|
|
Equity securities
|
|
41
|
|
|
27
|
|
||
Mortgage loans on real estate
|
|
2
|
|
|
2
|
|
||
Investment real estate
|
|
1
|
|
|
2
|
|
||
Policy loans
|
|
36
|
|
|
34
|
|
||
Other
|
|
4
|
|
|
3
|
|
||
|
|
1,000
|
|
|
1,005
|
|
||
Less: Investment expenses
|
|
36
|
|
|
43
|
|
||
Net investment income
|
|
$
|
964
|
|
|
$
|
962
|
|
($ in thousands)
|
|
Three months ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
Realized gains on fixed maturities
|
|
$
|
121
|
|
|
$
|
10
|
|
Gains (losses) on trading securities
|
|
(25
|
)
|
|
3
|
|
||
Change in fair value of equity securities
|
|
(599
|
)
|
|
126
|
|
||
Change in surrender value of company owned life insurance
|
|
(251
|
)
|
|
189
|
|
||
Realized gain on company owned life insurance
|
|
—
|
|
|
1,792
|
|
||
Other gains principally real estate
|
|
2
|
|
|
—
|
|
||
Other-than-temporary impairments
|
|
(238
|
)
|
|
—
|
|
||
Net investment gains (losses)
|
|
$
|
(990
|
)
|
|
$
|
2,120
|
|
($ in thousands)
|
March 31,
2020 |
|
December 31, 2019
|
||||
Fixed maturities
|
$
|
(2,456
|
)
|
|
$
|
4,910
|
|
Deferred income tax
|
516
|
|
|
(1,031
|
)
|
||
Change in net unrealized gains (losses) on available-for-sale securities
|
$
|
(1,940
|
)
|
|
$
|
3,879
|
|
($ in thousands)
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||
Description
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturities available-for-sale
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government corporations and agencies
|
|
$
|
4,895
|
|
|
$
|
4,895
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Agency mortgage backed securities
|
|
34,987
|
|
|
19,684
|
|
|
15,303
|
|
|
—
|
|
||||
Asset backed securities
|
|
9,270
|
|
|
2,545
|
|
|
6,725
|
|
|
—
|
|
||||
Corporate bonds
|
|
37,814
|
|
|
—
|
|
|
37,814
|
|
|
—
|
|
||||
Private label asset backed securities
|
|
8,320
|
|
|
967
|
|
|
7,353
|
|
|
—
|
|
||||
States, municipalities and political subdivisions
|
|
6,317
|
|
|
—
|
|
|
6,317
|
|
|
—
|
|
||||
Foreign governments
|
|
927
|
|
|
927
|
|
|
—
|
|
|
—
|
|
||||
Trading securities
|
|
125
|
|
|
125
|
|
|
—
|
|
|
—
|
|
||||
Equity securities
|
|
4,704
|
|
|
3,343
|
|
|
—
|
|
|
1,361
|
|
||||
Total Financial Assets
|
|
$
|
107,359
|
|
|
$
|
32,486
|
|
|
$
|
73,512
|
|
|
$
|
1,361
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest rate swap
|
|
$
|
(754
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(754
|
)
|
Total Financial Liabilities
|
|
$
|
(754
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(754
|
)
|
($ in thousands)
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||
Description
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturities available-for-sale
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government corporations and agencies
|
|
$
|
4,281
|
|
|
$
|
4,281
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Agency mortgage backed securities
|
|
32,987
|
|
|
19,330
|
|
|
13,657
|
|
|
—
|
|
||||
Asset backed securities
|
|
10,274
|
|
|
2,601
|
|
|
7,673
|
|
|
—
|
|
||||
Corporate bonds
|
|
37,820
|
|
|
—
|
|
|
37,820
|
|
|
—
|
|
||||
Private label asset backed securities
|
|
7,252
|
|
|
1,060
|
|
|
6,192
|
|
|
—
|
|
||||
States, municipalities and political subdivisions
|
|
6,777
|
|
|
—
|
|
|
6,777
|
|
|
—
|
|
||||
Foreign governments
|
|
869
|
|
|
869
|
|
|
—
|
|
|
—
|
|
||||
Trading securities
|
|
149
|
|
|
149
|
|
|
—
|
|
|
—
|
|
||||
Equity securities available-for-sale
|
|
5,303
|
|
|
3,988
|
|
|
—
|
|
|
1,315
|
|
||||
Total Financial Assets
|
|
$
|
105,712
|
|
|
$
|
32,278
|
|
|
$
|
72,119
|
|
|
$
|
1,315
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap
|
|
$
|
(65
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(65
|
)
|
Total Financial Liabilities
|
|
$
|
(65
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(65
|
)
|
($ in thousands)
For the year ended December 31, 2019
|
|
Equity Securities Available-for-Sale
|
|
Interest Rate Swap
|
||||
Beginning balance
|
|
$
|
1,125
|
|
|
$
|
(234
|
)
|
Total gains or losses (realized and unrealized):
|
|
|
|
|
|
|
||
Included in earnings
|
|
645
|
|
|
—
|
|
||
Included in other comprehensive income
|
|
—
|
|
|
169
|
|
||
Purchases:
|
|
—
|
|
|
—
|
|
||
Sales:
|
|
(455
|
)
|
|
—
|
|
||
Issuances:
|
|
—
|
|
|
—
|
|
||
Settlements:
|
|
—
|
|
|
—
|
|
||
Transfers in/(out) of Level 3
|
|
—
|
|
|
—
|
|
||
Ending balance
|
|
$
|
1,315
|
|
|
$
|
(65
|
)
|
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, 2019:
|
|
$
|
—
|
|
|
$
|
—
|
|
($ in thousands)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
Assets and related instruments
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
||||||||
Held-to-maturity securities
|
|
$
|
1,249
|
|
|
$
|
1,354
|
|
|
$
|
1,290
|
|
|
$
|
1,345
|
|
Mortgage loans
|
|
147
|
|
|
147
|
|
|
147
|
|
|
147
|
|
||||
Policy loans
|
|
1,912
|
|
|
1,912
|
|
|
1,895
|
|
|
1,895
|
|
||||
Company owned life insurance
|
|
4,405
|
|
|
4,405
|
|
|
4,655
|
|
|
4,655
|
|
||||
Other invested assets
|
|
2,240
|
|
|
2,240
|
|
|
2,280
|
|
|
2,280
|
|
||||
Liabilities and related instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other policyholder funds
|
|
1,335
|
|
|
1,335
|
|
|
1,350
|
|
|
1,350
|
|
||||
Short-term notes payable and current portion of long-term debt
|
|
500
|
|
|
500
|
|
|
500
|
|
|
500
|
|
||||
Long-term debt
|
|
13,667
|
|
|
13,667
|
|
|
13,664
|
|
|
13,664
|
|
($ in thousands)
|
March 31, 2020
|
|
December 31, 2019
|
||||
Building and improvements
|
$
|
3,472
|
|
|
$
|
3,472
|
|
Electronic data processing equipment
|
1,495
|
|
|
1,470
|
|
||
Furniture and fixtures
|
483
|
|
|
483
|
|
||
|
5,450
|
|
|
5,425
|
|
||
Less accumulated depreciation
|
3,825
|
|
|
3,795
|
|
||
Property and equipment, net
|
$
|
1,625
|
|
|
$
|
1,630
|
|
($ in thousands)
|
|
As of March 31,
2020 |
|
As of December 31,
2019 |
||||
General expenses
|
|
$
|
1,161
|
|
|
$
|
1,269
|
|
Unearned premiums
|
|
1,318
|
|
|
1,288
|
|
||
Claims liabilities
|
|
615
|
|
|
645
|
|
||
Impairment on real estate owned
|
|
159
|
|
|
119
|
|
||
Unrealized losses on trading securities
|
|
5
|
|
|
—
|
|
||
Unrealized loss on interest rate swaps
|
|
158
|
|
|
14
|
|
||
Deferred tax assets
|
|
3,416
|
|
|
3,335
|
|
||
|
|
|
|
|
||||
Unrealized gains on trading securities
|
|
—
|
|
|
(1
|
)
|
||
Depreciation
|
|
(91
|
)
|
|
(93
|
)
|
||
Deferred policy acquisition costs
|
|
(1,580
|
)
|
|
(1,610
|
)
|
||
Pre-1984 policyholder surplus account
|
|
(381
|
)
|
|
(397
|
)
|
||
Unrealized gains on securities available-for-sale
|
|
(147
|
)
|
|
(663
|
)
|
||
Unrealized gains on equity securities
|
|
(541
|
)
|
|
(667
|
)
|
||
Deferred tax liabilities
|
|
(2,740
|
)
|
|
(3,431
|
)
|
||
Net deferred tax asset (liability)
|
|
$
|
676
|
|
|
$
|
(96
|
)
|
($ in thousands)
|
|
Three months ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
Deferred policy acquisition costs
|
|
$
|
(30
|
)
|
|
$
|
(18
|
)
|
Other-than-temporary impairments
|
|
(40
|
)
|
|
—
|
|
||
Trading securities
|
|
(6
|
)
|
|
1
|
|
||
Unearned premiums
|
|
(30
|
)
|
|
(29
|
)
|
||
General expenses
|
|
108
|
|
|
(54
|
)
|
||
Depreciation
|
|
(2
|
)
|
|
(2
|
)
|
||
Claims liabilities
|
|
30
|
|
|
—
|
|
||
Impact of repeal of special provision on pre-1984 policyholder surplus
|
|
(16
|
)
|
|
(16
|
)
|
||
Unrealized gains (losses) on equity securities
|
|
(126
|
)
|
|
26
|
|
||
Deferred income tax expense (benefit)
|
|
$
|
(112
|
)
|
|
$
|
(92
|
)
|
|
|
Three months ended
March 31, |
||||
|
|
2020
|
|
2019
|
||
Federal income tax rate applied to pre-tax income (loss)
|
|
21.0
|
%
|
|
21.0
|
%
|
Dividends received deduction and tax-exempt interest
|
|
0.3
|
%
|
|
(0.3
|
)%
|
Company owned life insurance
|
|
(5.1
|
)%
|
|
(16.0
|
)%
|
Other, net
|
|
(0.1
|
)%
|
|
1.2
|
%
|
Effective federal income tax rate
|
|
16.1
|
%
|
|
5.9
|
%
|
($ in thousands)
|
|
March 31,
|
|
December 31,
|
||||
|
|
2020
|
|
2019
|
||||
Current portion of installment note payable due in November with variable interest rate equal to the WSJ prime rate plus 0.5%, with a 4.75% floor. Unsecured.
|
|
$
|
500
|
|
|
$
|
500
|
|
|
|
$
|
500
|
|
|
$
|
500
|
|
($ in thousands)
|
|
March 31,
|
|
December 31,
|
||||
|
|
2020
|
|
2019
|
||||
|
|
|
|
|
||||
Promissory note with variable interest rate equal to the WSJ prime rate plus 0.5%, with a 4.75% floor; maturity November 2023. Annual installment payments beginning November 2020. Unsecured.
|
|
$
|
1,500
|
|
|
$
|
1,500
|
|
|
|
|
|
|
||||
Subordinated debentures issued on December 15, 2005 with floating rate interest equal to 3-Month LIBOR plus 375 basis points; net of $148,000 in debt issuance cost ($150,000 in 2019); maturity December 15, 2035. Interest payable quarterly. Redeemable prior to maturity. Unsecured.
|
|
9,131
|
|
|
9,129
|
|
||
|
|
|
|
|
||||
Subordinated debentures issued on June 21, 2007 with floating rate interest equal to 3-Month LIBOR plus 340 basis points; net of $57,000 in debt issuance cost ($58,000 in 2019); maturity June 15, 2037. Interest payable quarterly. Redeemable prior to maturity. Unsecured.
|
|
3,036
|
|
|
3,035
|
|
||
|
|
$
|
13,667
|
|
|
$
|
13,664
|
|
($ in thousands)
|
|
Three months ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
Summary of claims and claim adjustment expense reserves
|
|
|
|
|
||||
Balance, beginning of year
|
|
$
|
7,199
|
|
|
$
|
8,208
|
|
Less reinsurance recoverable on unpaid losses
|
|
249
|
|
|
1,384
|
|
||
Net balances at beginning of year
|
|
6,950
|
|
|
6,824
|
|
||
Net losses:
|
|
|
|
|
||||
Provision for claims and claim adjustment expenses for claims arising in current year
|
|
9,622
|
|
|
8,585
|
|
||
Estimated claims and claim adjustment expenses for claims arising in prior years
|
|
(32
|
)
|
|
(604
|
)
|
||
Total increases
|
|
9,590
|
|
|
7,981
|
|
||
Claims and claim adjustment expense payments for claims arising in:
|
|
|
|
|
||||
Current year
|
|
6,856
|
|
|
5,596
|
|
||
Prior years
|
|
3,460
|
|
|
2,510
|
|
||
Total payments
|
|
10,316
|
|
|
8,106
|
|
||
Net balance at end of period
|
|
6,224
|
|
|
6,699
|
|
||
Plus reinsurance recoverable on unpaid losses
|
|
241
|
|
|
1,264
|
|
||
Claims and claim adjustment expense reserves at end of period
|
|
$
|
6,465
|
|
|
$
|
7,963
|
|
|
December 31, 2019
|
||||||||||
|
Authorized
|
|
Issued
|
|
Treasury
|
|
Outstanding
|
||||
Preferred Stock, $1 par value
|
500,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Class A Common Stock, $1 par value
|
2,000,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Common Stock, $1 par value
|
3,000,000
|
|
|
2,531,552
|
|
|
436
|
|
|
2,531,116
|
|
($ in thousands)
|
|
Three months ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
Unrealized Gains (Losses) on Cash Flow Hedges
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
(51
|
)
|
|
$
|
(185
|
)
|
Other comprehensive income (loss) for period:
|
|
|
|
|
||||
Other comprehensive gain (loss) before reclassifications
|
|
(545
|
)
|
|
25
|
|
||
Net current period other comprehensive income (loss)
|
|
(545
|
)
|
|
25
|
|
||
Balance at end of period
|
|
$
|
(596
|
)
|
|
$
|
(160
|
)
|
|
|
|
|
|
||||
Unrealized Gains (Losses) on Available-for-Sale Securities
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
2,494
|
|
|
$
|
(1,385
|
)
|
Other comprehensive income (loss) for period:
|
|
|
|
|
||||
Other comprehensive income (loss) before reclassifications
|
|
(2,032
|
)
|
|
1,742
|
|
||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
92
|
|
|
(8
|
)
|
||
Net current period other comprehensive income (loss)
|
|
(1,940
|
)
|
|
1,734
|
|
||
Balance at end of period
|
|
$
|
554
|
|
|
$
|
349
|
|
|
|
|
|
|
||||
Total Accumulated Other Comprehensive Income (Loss) at end of period
|
|
$
|
(42
|
)
|
|
$
|
189
|
|
($ 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
|
|
$
|
(117
|
)
|
|
Net investment losses
|
|
|
(117
|
)
|
|
Total before tax
|
|
|
|
25
|
|
|
Tax benefit
|
|
|
|
$
|
(92
|
)
|
|
Net of Tax
|
($ in thousands)
Assets by industry segment
|
|
Total
|
|
P&C Insurance Operations
|
|
Life Insurance Operations
|
|
Non-Insurance Operations
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2020
|
|
$
|
150,486
|
|
|
$
|
83,614
|
|
|
$
|
62,001
|
|
|
$
|
4,871
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
December 31, 2019
|
|
$
|
153,934
|
|
|
$
|
83,917
|
|
|
$
|
65,605
|
|
|
$
|
4,412
|
|
($ in thousands)
Three months ended March 31, 2020
|
P&C Insurance Operations
|
|
Life Insurance Operations
|
|
Non-Insurance Operations
|
|
Inter- company Eliminations
|
|
Total
|
||||||||||
REVENUE
|
|
|
|
|
|
|
|
|
|
||||||||||
Net premiums earned
|
$
|
13,522
|
|
|
$
|
1,433
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,955
|
|
Net investment income
|
425
|
|
|
663
|
|
|
11
|
|
|
(135
|
)
|
|
964
|
|
|||||
Investment losses
|
(438
|
)
|
|
(527
|
)
|
|
(25
|
)
|
|
—
|
|
|
(990
|
)
|
|||||
Other income
|
145
|
|
|
258
|
|
|
231
|
|
|
(489
|
)
|
|
145
|
|
|||||
|
13,654
|
|
|
1,827
|
|
|
217
|
|
|
(624
|
)
|
|
15,074
|
|
|||||
BENEFITS AND EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Policyholder benefits paid
|
9,591
|
|
|
1,138
|
|
|
—
|
|
|
(146
|
)
|
|
10,583
|
|
|||||
Amortization of deferred policy acquisition costs
|
681
|
|
|
384
|
|
|
—
|
|
|
—
|
|
|
1,065
|
|
|||||
Commissions
|
1,990
|
|
|
85
|
|
|
—
|
|
|
—
|
|
|
2,075
|
|
|||||
General and administrative expenses
|
1,821
|
|
|
400
|
|
|
(349
|
)
|
|
(478
|
)
|
|
1,394
|
|
|||||
Taxes, licenses and fees
|
619
|
|
|
102
|
|
|
—
|
|
|
—
|
|
|
721
|
|
|||||
Interest expense
|
—
|
|
|
9
|
|
|
252
|
|
|
—
|
|
|
261
|
|
|||||
|
14,702
|
|
|
2,118
|
|
|
(97
|
)
|
|
(624
|
)
|
|
16,099
|
|
|||||
Income (Loss) Before Income Taxes
|
(1,048
|
)
|
|
(291
|
)
|
|
314
|
|
|
—
|
|
|
(1,025
|
)
|
|||||
INCOME TAX EXPENSE (BENEFIT)
|
(168
|
)
|
|
(62
|
)
|
|
65
|
|
|
—
|
|
|
(165
|
)
|
|||||
Net Income (Loss)
|
$
|
(880
|
)
|
|
$
|
(229
|
)
|
|
$
|
249
|
|
|
$
|
—
|
|
|
$
|
(860
|
)
|
($ in thousands)
|
|
Three months ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
Life, accident and health operations premiums written:
|
|
|
|
|
|
|||
Traditional life insurance
|
|
$
|
1,058
|
|
|
$
|
1,057
|
|
Accident and health insurance
|
|
407
|
|
|
405
|
|
||
Gross life, accident and health
|
|
1,465
|
|
|
1,462
|
|
||
Reinsurance premium ceded
|
|
(35
|
)
|
|
(38
|
)
|
||
Net life, accident and health premiums written
|
|
$
|
1,430
|
|
|
$
|
1,424
|
|
Property and Casualty operations premiums written:
|
|
|
|
|
|
|||
Dwelling fire & extended coverage
|
|
$
|
10,252
|
|
|
$
|
9,928
|
|
Homeowners (Including mobile homeowners)
|
|
4,835
|
|
|
4,971
|
|
||
Other liability
|
|
579
|
|
|
575
|
|
||
Gross property and casualty
|
|
15,666
|
|
|
15,474
|
|
||
Reinsurance premium ceded
|
|
(1,765
|
)
|
|
(1,298
|
)
|
||
Net property and casualty written
|
|
$
|
13,901
|
|
|
$
|
14,176
|
|
Consolidated gross premiums written
|
|
$
|
17,131
|
|
|
$
|
16,936
|
|
Reinsurance premium ceded
|
|
(1,800
|
)
|
|
(1,336
|
)
|
||
Consolidated net premiums written
|
|
$
|
15,331
|
|
|
$
|
15,600
|
|
($ in thousands)
|
|
Three months ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
Life, accident and health operations premiums earned:
|
|
|
|
|||||
Traditional life insurance
|
|
$
|
1,066
|
|
|
$
|
1,090
|
|
Accident and health insurance
|
|
402
|
|
|
405
|
|
||
Gross life, accident and health
|
|
1,468
|
|
|
1,495
|
|
||
Reinsurance premium ceded
|
|
(35
|
)
|
|
(38
|
)
|
||
Net life, accident and health premiums earned
|
|
$
|
1,433
|
|
|
$
|
1,457
|
|
Property and Casualty operations premiums earned:
|
|
|
|
|
|
|||
Dwelling fire & extended coverage
|
|
$
|
9,652
|
|
|
$
|
9,280
|
|
Homeowners (Including mobile homeowners)
|
|
5,081
|
|
|
5,196
|
|
||
Other liability
|
|
554
|
|
|
541
|
|
||
Gross property and casualty
|
|
15,287
|
|
|
15,017
|
|
||
Reinsurance premium ceded
|
|
(1,765
|
)
|
|
(1,756
|
)
|
||
Net property and casualty earned
|
|
$
|
13,522
|
|
|
$
|
13,261
|
|
Consolidated gross premiums earned
|
|
$
|
16,755
|
|
|
$
|
16,512
|
|
Reinsurance premium ceded
|
|
(1,800
|
)
|
|
(1,794
|
)
|
||
Consolidated net premiums earned
|
|
$
|
14,955
|
|
|
$
|
14,718
|
|
/s/ Warren Averett, LLC
|
|
Birmingham, Alabama
|
|
May 14, 2020
|
•
|
The Property and Casualty (P&C) segment is the most significant segment, accounting for 91.2% of gross earned premium in 2020. The P&C segment operates in the states of Alabama, Arkansas, Georgia, Louisiana, Mississippi, Oklahoma, South Carolina, and Tennessee.
|
•
|
The Life segment accounted for 8.8% of gross premium revenue in 2020. The Life segment is licensed to underwrite life and accident and health insurance in Alabama, Florida, Georgia, Mississippi, South Carolina, Tennessee and Texas.
|
Unaudited Consolidated Financial Summary
|
|
Three months ended
March 31,
|
||||||
($ in thousands, except per share)
|
|
2020
|
|
2019
|
||||
Gross premiums written
|
|
$
|
17,131
|
|
|
$
|
16,936
|
|
Net premiums written
|
|
$
|
15,331
|
|
|
$
|
15,600
|
|
|
|
|
|
|
||||
Net premiums earned
|
|
$
|
14,955
|
|
|
$
|
14,718
|
|
Net investment income
|
|
964
|
|
|
962
|
|
||
Net investment gains (losses)
|
|
(990
|
)
|
|
2,120
|
|
||
Other income
|
|
145
|
|
|
146
|
|
||
Total Revenues
|
|
15,074
|
|
|
17,946
|
|
||
Policyholder benefits and settlement expenses
|
|
10,583
|
|
|
9,023
|
|
||
Amortization of deferred policy acquisition costs
|
|
1,065
|
|
|
980
|
|
||
Commissions
|
|
2,075
|
|
|
2,033
|
|
||
General and administrative expenses
|
|
1,394
|
|
|
2,332
|
|
||
Taxes, licenses and fees
|
|
721
|
|
|
687
|
|
||
Interest expense
|
|
261
|
|
|
295
|
|
||
Total Benefits, Losses and Expenses
|
|
16,099
|
|
|
15,350
|
|
||
Income (Loss) Before Income Taxes
|
|
(1,025
|
)
|
|
2,596
|
|
||
Income tax expense (benefit)
|
|
(165
|
)
|
|
153
|
|
||
Net Income (Loss)
|
|
$
|
(860
|
)
|
|
$
|
2,443
|
|
Income (Loss) Per Common Share
|
|
$
|
(0.34
|
)
|
|
$
|
0.97
|
|
Reconciliation of Net Income (Loss) to non-GAAP Measurement
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
(860
|
)
|
|
$
|
2,443
|
|
Income tax expense (benefit)
|
|
(165
|
)
|
|
153
|
|
||
Investment (gains) losses, net
|
|
990
|
|
|
(2,120
|
)
|
||
Pretax Income (Loss) From Operations
|
|
$
|
(35
|
)
|
|
$
|
476
|
|
Selected Balance Sheet Highlights
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
($ in thousands, except per share)
|
|
UNAUDITED
|
|
|
||||
Invested Assets
|
|
$
|
120,248
|
|
|
$
|
118,969
|
|
Cash
|
|
$
|
5,869
|
|
|
$
|
11,809
|
|
Total Assets
|
|
$
|
150,486
|
|
|
$
|
153,934
|
|
Policy Liabilities
|
|
$
|
78,559
|
|
|
$
|
78,472
|
|
Total Debt
|
|
$
|
14,167
|
|
|
$
|
14,164
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
$
|
(42
|
)
|
|
$
|
2,443
|
|
Shareholders' Equity
|
|
$
|
49,958
|
|
|
$
|
53,461
|
|
Book Value Per Share
|
|
$
|
19.74
|
|
|
$
|
21.12
|
|
($ in thousands)
|
|
Three months ended
March 31,
|
|
Percent
|
|||||||
|
|
2020
|
|
2019
|
|
increase (decrease)
|
|||||
Life, accident and health operations premiums earned:
|
|
|
|
|
|
|
|||||
Traditional life insurance
|
|
$
|
1,066
|
|
|
$
|
1,090
|
|
|
(2.2
|
)%
|
Accident and health insurance
|
|
402
|
|
|
405
|
|
|
(0.7
|
)%
|
||
Gross life, accident and health
|
|
1,468
|
|
|
1,495
|
|
|
(1.8
|
)%
|
||
Reinsurance premium ceded
|
|
(35
|
)
|
|
(38
|
)
|
|
(7.9
|
)%
|
||
Net life, accident and health premiums earned
|
|
$
|
1,433
|
|
|
$
|
1,457
|
|
|
(1.6
|
)%
|
|
|
|
|
|
|
|
|||||
Property and Casualty operations premiums earned:
|
|
|
|
|
|
|
|
||||
Dwelling fire & extended coverage
|
|
$
|
9,652
|
|
|
$
|
9,280
|
|
|
4.0
|
%
|
Homeowners (Including mobile homeowners)
|
|
5,081
|
|
|
5,196
|
|
|
(2.2
|
)%
|
||
Other liability
|
|
554
|
|
|
541
|
|
|
2.4
|
%
|
||
Gross property and casualty
|
|
15,287
|
|
|
15,017
|
|
|
1.8
|
%
|
||
Reinsurance premium ceded
|
|
(1,765
|
)
|
|
(1,756
|
)
|
|
0.5
|
%
|
||
Net property and casualty premiums earned
|
|
$
|
13,522
|
|
|
$
|
13,261
|
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|||||
Consolidated gross premiums earned
|
|
$
|
16,755
|
|
|
$
|
16,512
|
|
|
1.5
|
%
|
Reinsurance premium ceded
|
|
(1,800
|
)
|
|
(1,794
|
)
|
|
0.3
|
%
|
||
Consolidated net premiums earned
|
|
$
|
14,955
|
|
|
$
|
14,718
|
|
|
1.6
|
%
|
($ in thousands)
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Fixed maturities
|
$
|
916
|
|
|
$
|
937
|
|
Equity securities
|
41
|
|
|
27
|
|
||
Mortgage loans on real estate
|
2
|
|
|
2
|
|
||
Investment real estate
|
1
|
|
|
2
|
|
||
Policy loans
|
36
|
|
|
34
|
|
||
Other
|
4
|
|
|
3
|
|
||
|
1,000
|
|
|
1,005
|
|
||
Less: Investment expenses
|
36
|
|
|
43
|
|
||
Net investment income
|
$
|
964
|
|
|
$
|
962
|
|
($ in thousands)
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Realized gains on fixed maturities
|
$
|
121
|
|
|
$
|
10
|
|
Gains (losses) on trading securities
|
(25
|
)
|
|
3
|
|
||
Change in fair value of equity securities
|
(599
|
)
|
|
126
|
|
||
Change in surrender value of company owned life insurance
|
(251
|
)
|
|
189
|
|
||
Realized gain on company owned life insurance
|
—
|
|
|
1,792
|
|
||
Other gains principally real estate
|
2
|
|
|
—
|
|
||
Other-than-temporary impairments
|
(238
|
)
|
|
—
|
|
||
Net investment gains (losses)
|
$
|
(990
|
)
|
|
$
|
2,120
|
|
For the three months ended March 31, 2020
|
|
For the three months ended March 31, 2019
|
||||||||||||||
($ in thousands)
Catastrophe event
|
|
Reported
Losses & LAE
|
|
Claim Count
|
|
Catastrophe event
|
|
Reported
Losses & LAE
|
|
Claim Count
|
||||||
Cat 2012 (Jan 10-12)
|
|
$
|
1,334
|
|
|
310
|
|
|
Cat 1916 (Feb 23-26)
|
|
$
|
262
|
|
|
76
|
|
Cat 2014 (Feb 5-8)
|
|
630
|
|
|
157
|
|
|
Cat 1918 (Mar 3-4)
|
|
693
|
|
|
65
|
|
||
Cat 2016 (Mar 2-4)
|
|
261
|
|
|
61
|
|
|
|
|
|
|
|
||||
Misc cats less than $100k
|
|
27
|
|
|
10
|
|
|
Misc cats less than $100k
|
|
—
|
|
|
—
|
|
||
Total Cat losses
|
|
$
|
2,252
|
|
|
538
|
|
|
Total Cat losses
|
|
$
|
955
|
|
|
141
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Non-cat wind & hail
|
|
$
|
1,610
|
|
|
414
|
|
|
Non-cat wind & hail
|
|
$
|
2,081
|
|
|
585
|
|
($ in thousands)
Maturity
|
|
Available- for-Sale
|
|
Held-to-Maturity
|
|
Total
|
|
Percentage of Total
|
|||||||
Maturity in less than 1 year
|
|
$
|
1,637
|
|
|
$
|
—
|
|
|
$
|
1,637
|
|
|
1.59
|
%
|
Maturity in 1-5 years
|
|
18,944
|
|
|
26
|
|
|
18,970
|
|
|
18.40
|
%
|
|||
Maturity in 5-10 years
|
|
27,489
|
|
|
4
|
|
|
27,493
|
|
|
26.67
|
%
|
|||
Maturity after 10 years
|
|
53,758
|
|
|
1,219
|
|
|
54,977
|
|
|
53.34
|
%
|
|||
|
|
$
|
101,828
|
|
|
$
|
1,249
|
|
|
$
|
103,077
|
|
|
100.00
|
%
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a)
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (a)
|
||||||
Jan. 1 - Jan. 31, 2020
|
|
349
|
|
|
$
|
15.80
|
|
|
785
|
|
|
$
|
987,870
|
|
Feb. 1 - Feb. 29, 2020
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
987,870
|
|
|
Mar. 1 - Mar. 31, 2020
|
|
89
|
|
|
11.01
|
|
|
874
|
|
|
$
|
986,890
|
|
Certification Pursuant to 18 U. S. C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Certification Pursuant to 18 U. S. C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Certification Pursuant to 18 U. S. C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
/s/ Brian R. McLeod
|
|
/s/ William L. Brunson, Jr.
|
Brian R. McLeod
|
|
William L. Brunson, Jr.
|
Chief Financial Officer and Treasurer and Director
|
|
President, Chief Executive Officer and Director
|
1 Year National Security Chart |
1 Month National Security Chart |
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