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Share Name | Share Symbol | Market | Type |
---|---|---|---|
The Fortegra Group Inc | NYSE:FRF | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 9.97 | 0 | 01:00:00 |
(Mark One)
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended March 31, 2014
|
|
OR
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from ____ to ____
|
Delaware
|
|
58-1461399
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
10151 Deerwood Park Boulevard, Building 100, Suite 330, Jacksonville, FL
|
|
32256
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
|
Registrant's telephone number, including area code:
|
|
(866) 961-9529
|
Large accelerated filer
o
|
|
Accelerated filer
o
|
|
|
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
x
|
PART I - FINANCIAL INFORMATION
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Page Number
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Item 1.
|
||
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Item 2.
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Item 3.
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Item 4.
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PART II - OTHER INFORMATION
|
|
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Item 1.
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||
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Item 1A.
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||
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Item 2.
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||
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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At
|
||||||
|
March 31, 2014
|
|
December 31, 2013
|
||||
Assets:
|
|
|
|
||||
Investments:
|
|
|
|
||||
Fixed maturity securities available-for-sale, at fair value (amortized cost of $136,351 at March 31, 2014 and $133,288 at December 31, 2013)
|
$
|
135,726
|
|
|
$
|
131,751
|
|
Equity securities available-for-sale, at fair value (cost of $7,081 at March 31, 2014 and $7,081 at December 31, 2013)
|
6,660
|
|
|
6,198
|
|
||
Short-term investments
|
871
|
|
|
871
|
|
||
Total investments
|
143,257
|
|
|
138,820
|
|
||
Cash and cash equivalents
|
10,974
|
|
|
21,681
|
|
||
Restricted cash
|
17,852
|
|
|
17,293
|
|
||
Accrued investment income
|
1,083
|
|
|
1,175
|
|
||
Notes receivable, net
|
15,912
|
|
|
11,920
|
|
||
Accounts and premiums receivable, net
|
20,526
|
|
|
18,702
|
|
||
Other receivables
|
28,376
|
|
|
33,409
|
|
||
Reinsurance receivables
|
210,900
|
|
|
215,084
|
|
||
Deferred acquisition costs
|
71,662
|
|
|
78,042
|
|
||
Property and equipment, net
|
13,898
|
|
|
14,332
|
|
||
Goodwill
|
73,701
|
|
|
73,701
|
|
||
Other intangible assets, net
|
47,856
|
|
|
49,173
|
|
||
Other assets
|
6,482
|
|
|
6,307
|
|
||
Assets of discontinued operations
|
791
|
|
|
791
|
|
||
Total assets
|
$
|
663,270
|
|
|
$
|
680,430
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Unpaid claims
|
$
|
36,632
|
|
|
$
|
34,732
|
|
Unearned premiums
|
249,353
|
|
|
256,380
|
|
||
Policyholder account balances
|
23,008
|
|
|
23,486
|
|
||
Accrued expenses, accounts payable and other liabilities
|
43,142
|
|
|
53,035
|
|
||
Income taxes payable
|
1,762
|
|
|
2,842
|
|
||
Deferred revenue
|
69,358
|
|
|
76,927
|
|
||
Notes payable
|
13,165
|
|
|
3,273
|
|
||
Preferred trust securities
|
35,000
|
|
|
35,000
|
|
||
Deferred income taxes, net
|
19,960
|
|
|
19,659
|
|
||
Liabilities of discontinued operations
|
1,236
|
|
|
8,603
|
|
||
Total liabilities
|
492,616
|
|
|
513,937
|
|
||
Commitments and Contingencies (Note 18)
|
|
|
|
||||
Stockholders' Equity:
|
|
|
|
||||
Preferred stock, par value $0.01; 10,000,000 shares authorized; none issued
|
—
|
|
|
—
|
|
||
Common stock, par value $0.01; 150,000,000 shares authorized; 21,258,799 and 20,912,853 shares issued at March 31, 2014 and December 31, 2013, respectively, including shares in treasury
|
213
|
|
|
209
|
|
||
Treasury stock, at cost; 1,224,182 shares at March 31, 2014 and December 31, 2013, respectively
|
(8,014
|
)
|
|
(8,014
|
)
|
||
Additional paid-in capital
|
99,687
|
|
|
99,398
|
|
||
Accumulated other comprehensive loss, net of tax
|
(2,622
|
)
|
|
(3,665
|
)
|
||
Retained earnings
|
75,430
|
|
|
72,532
|
|
||
Stockholders' equity before non-controlling interests
|
164,694
|
|
|
160,460
|
|
||
Non-controlling interests
|
5,960
|
|
|
6,033
|
|
||
Total stockholders' equity
|
170,654
|
|
|
166,493
|
|
||
Total liabilities and stockholders' equity
|
$
|
663,270
|
|
|
$
|
680,430
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Revenues:
|
|
|
|
||||
Service and administrative fees
|
$
|
43,968
|
|
|
$
|
38,858
|
|
Ceding commissions
|
10,549
|
|
|
7,163
|
|
||
Net investment income
|
707
|
|
|
903
|
|
||
Net realized investment gains
|
1
|
|
|
7
|
|
||
Net earned premium
|
34,928
|
|
|
33,142
|
|
||
Other income
|
375
|
|
|
91
|
|
||
Total revenues
|
90,528
|
|
|
80,164
|
|
||
|
|
|
|
||||
Expenses:
|
|
|
|
||||
Net losses and loss adjustment expenses
|
10,826
|
|
|
10,535
|
|
||
Member benefit claims
|
10,671
|
|
|
9,366
|
|
||
Commissions
|
40,071
|
|
|
35,362
|
|
||
Personnel costs
|
10,191
|
|
|
10,797
|
|
||
Other operating expenses
|
8,225
|
|
|
8,075
|
|
||
Depreciation and amortization
|
1,249
|
|
|
1,177
|
|
||
Amortization of intangibles
|
1,317
|
|
|
1,468
|
|
||
Interest expense
|
920
|
|
|
853
|
|
||
Loss on note receivable
|
1,317
|
|
|
—
|
|
||
Total expenses
|
84,787
|
|
|
77,633
|
|
||
Income from continuing operations before income taxes
|
5,741
|
|
|
2,531
|
|
||
Income taxes - continuing operations
|
1,982
|
|
|
482
|
|
||
Income from continuing operations before non-controlling interests
|
3,759
|
|
|
2,049
|
|
||
Discontinued operations:
|
|
|
|
||||
Income from discontinued operations - net of tax
|
—
|
|
|
1,262
|
|
||
Discontinued operations - net of tax
|
—
|
|
|
1,262
|
|
||
Net income before non-controlling interests
|
3,759
|
|
|
3,311
|
|
||
Less: net income attributable to non-controlling interests
|
861
|
|
|
818
|
|
||
Net income attributable to Fortegra Financial Corporation
|
$
|
2,898
|
|
|
$
|
2,493
|
|
|
|
|
|
||||
Earnings per share - Basic:
|
|
|
|
||||
Net income from continuing operations - net of tax
|
$
|
0.15
|
|
|
$
|
0.06
|
|
Discontinued operations - net of tax
|
—
|
|
|
0.07
|
|
||
Net income attributable to Fortegra Financial Corporation
|
$
|
0.15
|
|
|
$
|
0.13
|
|
|
|
|
|
||||
Earnings per share - Diluted:
|
|
|
|
||||
Net income from continuing operations - net of tax
|
$
|
0.14
|
|
|
$
|
0.06
|
|
Discontinued operations - net of tax
|
—
|
|
|
0.06
|
|
||
Net income attributable to Fortegra Financial Corporation
|
$
|
0.14
|
|
|
$
|
0.12
|
|
|
|
|
|
||||
Weighted average common shares outstanding:
|
|
|
|
||||
Basic
|
19,651,256
|
|
|
19,556,743
|
|
||
Diluted
|
20,436,442
|
|
|
20,625,041
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Net income before non-controlling interests
|
$
|
3,759
|
|
|
$
|
3,311
|
|
|
|
|
|
||||
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Unrealized gains (losses) on available-for-sale securities:
|
|
|
|
||||
Unrealized holding gains (losses) arising during the period
|
1,375
|
|
|
(51
|
)
|
||
Related tax (expense) benefit
|
(481
|
)
|
|
18
|
|
||
Reclassification of (gains) included in net income
|
(1
|
)
|
|
(7
|
)
|
||
Related tax expense
|
—
|
|
|
2
|
|
||
Unrealized gains (losses) on available-for-sale securities, net of tax
|
893
|
|
|
(38
|
)
|
||
|
|
|
|
||||
Interest rate swap:
|
|
|
|
||||
Unrealized (loss) gain on interest rate swap
|
(45
|
)
|
|
32
|
|
||
Related tax benefit (expense)
|
15
|
|
|
(11
|
)
|
||
Reclassification of losses included in net income
|
282
|
|
|
277
|
|
||
Related tax benefit
|
(99
|
)
|
|
(97
|
)
|
||
Unrealized gain on interest rate swap, net of tax
|
153
|
|
|
201
|
|
||
|
|
|
|
||||
Other comprehensive income
|
1,046
|
|
|
163
|
|
||
Comprehensive income
|
4,805
|
|
|
3,474
|
|
||
Less: comprehensive income attributable to non-controlling interests
|
864
|
|
|
818
|
|
||
Comprehensive income attributable to Fortegra Financial Corporation
|
$
|
3,941
|
|
|
$
|
2,656
|
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Retained Earnings
|
|
Non-controlling Interests
|
|
Total Stockholders' Equity
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|||||||||||||||||||||
Balance, December 31, 2013
|
20,912,853
|
|
|
$
|
209
|
|
|
(1,224,182
|
)
|
|
$
|
(8,014
|
)
|
|
$
|
99,398
|
|
|
$
|
(3,665
|
)
|
|
$
|
72,532
|
|
|
$
|
6,033
|
|
|
$
|
166,493
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,898
|
|
|
861
|
|
|
3,759
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,043
|
|
|
—
|
|
|
3
|
|
|
1,046
|
|
|||||||
Distributions to non-controlling interest partners
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(688
|
)
|
|
(688
|
)
|
|||||||
Non-controlling interest attributable to the consolidation of Creative Investigations Recovery Group, LLC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(249
|
)
|
|
(249
|
)
|
|||||||
Stock-based compensation
|
105,000
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
290
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
292
|
|
|||||||
Direct stock awards to employees
|
124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Options exercised, net of shares surrendered
|
240,822
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance, March 31, 2014
|
21,258,799
|
|
|
$
|
213
|
|
|
(1,224,182
|
)
|
|
$
|
(8,014
|
)
|
|
$
|
99,687
|
|
|
$
|
(2,622
|
)
|
|
$
|
75,430
|
|
|
$
|
5,960
|
|
|
$
|
170,654
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Operating Activities:
|
|
|
|
||||
Net income
|
$
|
2,898
|
|
|
$
|
2,493
|
|
Adjustments to reconcile net income to net cash flows (used in) operating activities:
|
|
|
|
||||
Change in deferred acquisition costs
|
6,380
|
|
|
(4,303
|
)
|
||
Depreciation and amortization
|
2,566
|
|
|
3,266
|
|
||
Deferred income tax (benefit) expense - continuing operations
|
(263
|
)
|
|
860
|
|
||
Deferred income tax expense - discontinued operations
|
—
|
|
|
186
|
|
||
Net realized investment gains
|
(1
|
)
|
|
(7
|
)
|
||
Loss on note receivable
|
1,317
|
|
|
—
|
|
||
Stock-based compensation expense
|
292
|
|
|
303
|
|
||
Direct stock awards to employees
|
1
|
|
|
2
|
|
||
Amortization of premiums and accretion of discounts on investments
|
437
|
|
|
350
|
|
||
Non-controlling interests
|
861
|
|
|
818
|
|
||
Change in allowance for doubtful accounts
|
(162
|
)
|
|
11
|
|
||
Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions:
|
|
|
|
||||
Accrued investment income
|
27
|
|
|
56
|
|
||
Accounts and premiums receivable, net
|
(1,746
|
)
|
|
(6,868
|
)
|
||
Other receivables
|
4,921
|
|
|
(14,678
|
)
|
||
Reinsurance receivables
|
4,184
|
|
|
7,281
|
|
||
Income taxes receivable
|
—
|
|
|
(375
|
)
|
||
Other assets
|
(172
|
)
|
|
(887
|
)
|
||
Unpaid claims
|
1,900
|
|
|
948
|
|
||
Unearned premiums
|
(7,027
|
)
|
|
(10,612
|
)
|
||
Policyholder account balances
|
(478
|
)
|
|
(534
|
)
|
||
Accrued expenses, accounts payable and other liabilities
|
(9,809
|
)
|
|
12,592
|
|
||
Income taxes payable
|
(1,080
|
)
|
|
—
|
|
||
Deferred revenue
|
(7,570
|
)
|
|
7,803
|
|
||
Change in liabilities of discontinued operations
|
(7,367
|
)
|
|
—
|
|
||
Net cash flows (used in) operating activities
|
(9,891
|
)
|
|
(1,295
|
)
|
||
Investing activities:
|
|
|
|
||||
Proceeds from maturities, calls and prepayments of available-for-sale investments
|
16,263
|
|
|
3,332
|
|
||
Proceeds from sales of available-for-sale investments
|
501
|
|
|
412
|
|
||
Purchases of available-for-sale investments
|
(20,267
|
)
|
|
(10,199
|
)
|
||
Purchases of property and equipment
|
(816
|
)
|
|
(993
|
)
|
||
Net paid for acquisitions of subsidiaries, net of cash received
|
20
|
|
|
(2,902
|
)
|
||
Net (issuance) from notes receivable
|
(5,162
|
)
|
|
—
|
|
||
Net proceeds from notes receivable
|
—
|
|
|
110
|
|
||
Net proceeds from related party note receivable
|
—
|
|
|
6,135
|
|
||
Change in restricted cash, net of restricted cash (paid) received from acquisitions and divestitures
|
(559
|
)
|
|
2,261
|
|
||
Net cash flows (used in) investing activities
|
(10,020
|
)
|
|
(1,844
|
)
|
||
Financing activities:
|
|
|
|
||||
Payments on notes payable
|
(23,484
|
)
|
|
(8,188
|
)
|
||
Proceeds from notes payable
|
33,376
|
|
|
10,500
|
|
||
Distributions to non-controlling interest partners
|
(688
|
)
|
|
—
|
|
||
Dividends paid to non-controlling interests
|
—
|
|
|
(43
|
)
|
||
Net cash flows provided by financing activities
|
9,204
|
|
|
2,269
|
|
||
Net (decrease) in cash and cash equivalents
|
(10,707
|
)
|
|
(870
|
)
|
||
Cash and cash equivalents, beginning of period
|
21,681
|
|
|
31,339
|
|
||
Cash and cash equivalents, end of period
|
$
|
10,974
|
|
|
$
|
30,469
|
|
•
|
4Warranty Corporation ("4Warranty")
|
•
|
Auto Knight Motor Club, Inc. ("Auto Knight")
|
•
|
Continental Car Club, Inc. ("Continental")
|
•
|
CRC Reassurance Company, Ltd. ("CRC") *
|
•
|
Digital Leash, LLC, d/b/a ProtectCELL ("ProtectCELL"),
62.4%
owned
|
•
|
Insurance Company of the South ("ICOTS") *
|
•
|
Life of the South Insurance Company ("LOTS") * and its subsidiary, Bankers Life of Louisiana ("Bankers Life") *
|
•
|
LOTS Intermediate Co. ("LOTS IM")
|
•
|
LOTS Reassurance Company ("LOTS RE") *
|
•
|
LOTSolutions, Inc.
|
•
|
Lyndon Southern Insurance Company ("Lyndon Southern") *
|
•
|
Pacific Benefits Group Northwest, LLC ("PBG")
|
•
|
Response Indemnity Company of California ("RICC") *
|
•
|
South Bay Acceptance Corporation ("South Bay")
|
•
|
South Bay Financial Services, LLC ("SBFS")
|
•
|
Southern Financial Life Insurance Company ("SFLAC"),
85.0%
owned *
|
•
|
United Motor Club of America, Inc. ("United")
|
|
At
|
||||||||||
|
March 31, 2014
|
|
December 31, 2013
|
||||||||
|
Amount
|
Percent
|
|
Amount
|
Percent
|
||||||
ProtectCELL
|
$
|
5,633
|
|
37.6
|
%
|
|
$
|
5,471
|
|
37.6
|
%
|
SFLAC
|
576
|
|
15.0
|
%
|
|
562
|
|
15.0
|
%
|
||
CIRG
|
(249
|
)
|
100.0
|
%
|
|
—
|
|
—
|
%
|
||
Total non-controlling interests
|
$
|
5,960
|
|
|
|
$
|
6,033
|
|
|
The following table presents the activity in AOCI for the following periods:
|
For the Three Months Ended March 31, 2014
|
||||||||||
|
Net unrealized gains (losses) on available-for-sale securities
|
|
Net unrealized gain (loss) on interest rate swap
|
|
Total
|
||||||
Balance at December 31, 2013, net of tax
|
$
|
(1,761
|
)
|
|
$
|
(1,904
|
)
|
|
$
|
(3,665
|
)
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
||||||
Pre-tax income (loss)
|
1,375
|
|
|
(45
|
)
|
|
1,330
|
|
|||
Income tax (expense) benefit
|
(481
|
)
|
|
15
|
|
|
(466
|
)
|
|||
Other comprehensive income (loss) before reclassifications, net of tax
|
894
|
|
|
(30
|
)
|
|
864
|
|
|||
Amounts reclassified from accumulated other comprehensive income (loss):
|
|
|
|
|
|
||||||
Pre-tax (income) loss
|
(1
|
)
|
|
282
|
|
|
281
|
|
|||
Income tax (benefit)
|
—
|
|
|
(99
|
)
|
|
(99
|
)
|
|||
Amounts reclassified from accumulated other comprehensive (loss) income, net of tax
|
(1
|
)
|
|
183
|
|
|
182
|
|
|||
Current period other comprehensive income, net of tax
|
893
|
|
|
153
|
|
|
1,046
|
|
|||
Less: other comprehensive income attributable to non-controlling interest
|
3
|
|
|
—
|
|
|
3
|
|
|||
Balance at March 31, 2014, net of tax
|
$
|
(871
|
)
|
|
$
|
(1,751
|
)
|
|
$
|
(2,622
|
)
|
|
|
|
|
|
|
||||||
|
For the Three Months Ended March 31, 2013
|
||||||||||
|
Net unrealized gains (losses) on available-for-sale securities
|
|
Net unrealized gain (loss) on interest rate swap
|
|
Total
|
||||||
Balance at December 31, 2012, net of tax
|
$
|
2,189
|
|
|
$
|
(2,820
|
)
|
|
$
|
(631
|
)
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
||||||
Pre-tax (loss) income
|
(51
|
)
|
|
32
|
|
|
(19
|
)
|
|||
Income tax benefit (expense)
|
18
|
|
|
(11
|
)
|
|
7
|
|
|||
Other comprehensive (loss) income before reclassifications, net of tax
|
(33
|
)
|
|
21
|
|
|
(12
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income (loss):
|
|
|
|
|
|
||||||
Pre-tax (income) loss
|
(7
|
)
|
|
277
|
|
|
270
|
|
|||
Income tax expense (benefit)
|
2
|
|
|
(97
|
)
|
|
(95
|
)
|
|||
Amounts reclassified from accumulated other comprehensive (loss) income, net of tax
|
(5
|
)
|
|
180
|
|
|
175
|
|
|||
Current period other comprehensive (loss) income, net of tax
|
(38
|
)
|
|
201
|
|
|
163
|
|
|||
Less: other comprehensive income attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at March 31, 2013, net of tax
|
$
|
2,151
|
|
|
$
|
(2,619
|
)
|
|
$
|
(468
|
)
|
|
At March 31, 2014
|
||||||||||||||
Description of Security
|
Cost or Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Obligations of the U.S. Treasury and U.S. Government agencies
|
$
|
47,480
|
|
|
$
|
213
|
|
|
$
|
(527
|
)
|
|
$
|
47,166
|
|
Municipal securities
|
28,921
|
|
|
94
|
|
|
(278
|
)
|
|
28,737
|
|
||||
Corporate securities
|
58,950
|
|
|
376
|
|
|
(502
|
)
|
|
58,824
|
|
||||
Obligations of foreign governments
|
1,000
|
|
|
3
|
|
|
(4
|
)
|
|
999
|
|
||||
Total fixed maturity securities
|
$
|
136,351
|
|
|
$
|
686
|
|
|
$
|
(1,311
|
)
|
|
$
|
135,726
|
|
|
|
|
|
|
|
|
|
||||||||
Common stock - publicly traded
|
$
|
39
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
47
|
|
Preferred stock - publicly traded
|
5,974
|
|
|
40
|
|
|
(465
|
)
|
|
5,549
|
|
||||
Common stock - non-publicly traded
|
59
|
|
|
5
|
|
|
(13
|
)
|
|
51
|
|
||||
Preferred stock - non-publicly traded
|
1,009
|
|
|
4
|
|
|
—
|
|
|
1,013
|
|
||||
Total equity securities
|
$
|
7,081
|
|
|
$
|
57
|
|
|
$
|
(478
|
)
|
|
$
|
6,660
|
|
|
At December 31, 2013
|
||||||||||||||
Description of Security
|
Cost or Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Obligations of the U.S. Treasury and U.S. Government agencies
|
$
|
51,971
|
|
|
$
|
142
|
|
|
$
|
(678
|
)
|
|
$
|
51,435
|
|
Municipal securities
|
24,856
|
|
|
104
|
|
|
(413
|
)
|
|
24,547
|
|
||||
Corporate securities
|
56,050
|
|
|
210
|
|
|
(900
|
)
|
|
55,360
|
|
||||
Obligations of foreign governments
|
411
|
|
|
—
|
|
|
(2
|
)
|
|
409
|
|
||||
Total fixed maturity securities
|
$
|
133,288
|
|
|
$
|
456
|
|
|
$
|
(1,993
|
)
|
|
$
|
131,751
|
|
|
|
|
|
|
|
|
|
||||||||
Common stock - publicly traded
|
$
|
39
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
47
|
|
Preferred stock - publicly traded
|
5,974
|
|
|
—
|
|
|
(887
|
)
|
|
5,087
|
|
||||
Common stock - non-publicly traded
|
59
|
|
|
5
|
|
|
(13
|
)
|
|
51
|
|
||||
Preferred stock - non-publicly traded
|
1,009
|
|
|
4
|
|
|
—
|
|
|
1,013
|
|
||||
Total equity securities
|
$
|
7,081
|
|
|
$
|
17
|
|
|
$
|
(900
|
)
|
|
$
|
6,198
|
|
|
At
|
||||||
|
March 31, 2014
|
|
December 31, 2013
|
||||
Fair value of restricted investments for special deposits required by state insurance departments
|
$
|
10,254
|
|
|
$
|
10,339
|
|
Fair value of restricted investments in trust pursuant to reinsurance agreements
|
5,653
|
|
|
6,134
|
|
||
Fair value of restricted investments
|
$
|
15,907
|
|
|
$
|
16,473
|
|
|
At March 31, 2014
|
|
At December 31, 2013
|
||||||||||||
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||
Due in one year or less
|
$
|
7,120
|
|
|
$
|
7,158
|
|
|
$
|
18,766
|
|
|
$
|
18,771
|
|
Due after one year through five years
|
70,866
|
|
|
70,982
|
|
|
69,380
|
|
|
69,355
|
|
||||
Due after five years through ten years
|
36,150
|
|
|
35,634
|
|
|
22,622
|
|
|
21,731
|
|
||||
Due after ten years
|
22,215
|
|
|
21,952
|
|
|
22,520
|
|
|
21,894
|
|
||||
Total fixed maturity securities
|
$
|
136,351
|
|
|
$
|
135,726
|
|
|
$
|
133,288
|
|
|
$
|
131,751
|
|
|
At March 31, 2014
|
|||||||||||||||||||||||||
|
Less than Twelve Months
|
|
Twelve Months or Greater
|
|
Total
|
|||||||||||||||||||||
Description of Security
|
Fair Value
|
Unrealized Losses
|
# of Securities
|
|
Fair Value
|
Unrealized Losses
|
# of Securities
|
|
Fair Value
|
Unrealized Losses
|
# of Securities
|
|||||||||||||||
Obligations of the U.S. Treasury and U.S. Government agencies
|
$
|
24,330
|
|
$
|
524
|
|
51
|
|
|
$
|
225
|
|
$
|
3
|
|
6
|
|
|
$
|
24,555
|
|
$
|
527
|
|
57
|
|
Municipal securities
|
12,625
|
|
278
|
|
30
|
|
|
—
|
|
—
|
|
—
|
|
|
12,625
|
|
278
|
|
30
|
|
||||||
Corporate securities
|
25,981
|
|
415
|
|
42
|
|
|
2,498
|
|
87
|
|
3
|
|
|
28,479
|
|
502
|
|
45
|
|
||||||
Obligations of foreign governments
|
588
|
|
4
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
|
588
|
|
4
|
|
1
|
|
||||||
Total fixed maturity securities
|
$
|
63,524
|
|
$
|
1,221
|
|
124
|
|
|
$
|
2,723
|
|
$
|
90
|
|
9
|
|
|
$
|
66,247
|
|
$
|
1,311
|
|
133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Preferred stock - publicly traded
|
4,526
|
|
465
|
|
8
|
|
|
—
|
|
—
|
|
—
|
|
|
4,526
|
|
465
|
|
8
|
|
||||||
Common stock - non-publicly traded
|
—
|
|
—
|
|
—
|
|
|
31
|
|
13
|
|
2
|
|
|
31
|
|
13
|
|
2
|
|
||||||
Total equity securities
|
$
|
4,526
|
|
$
|
465
|
|
8
|
|
|
$
|
31
|
|
$
|
13
|
|
2
|
|
|
$
|
4,557
|
|
$
|
478
|
|
10
|
|
|
At December 31, 2013
|
|||||||||||||||||||||||||
|
Less than Twelve Months
|
|
Twelve Months or Greater
|
|
Total
|
|||||||||||||||||||||
Description of Security
|
Fair Value
|
Unrealized Losses
|
# of Securities
|
|
Fair Value
|
Unrealized Losses
|
# of Securities
|
|
Fair Value
|
Unrealized Losses
|
# of Securities
|
|||||||||||||||
Obligations of the U.S. Treasury and U.S. Government agencies
|
$
|
37,385
|
|
$
|
672
|
|
67
|
|
|
$
|
234
|
|
$
|
6
|
|
7
|
|
|
$
|
37,619
|
|
$
|
678
|
|
74
|
|
Municipal securities
|
10,080
|
|
413
|
|
23
|
|
|
—
|
|
—
|
|
—
|
|
|
10,080
|
|
413
|
|
23
|
|
||||||
Corporate securities
|
27,866
|
|
734
|
|
55
|
|
|
7,676
|
|
166
|
|
8
|
|
|
35,542
|
|
900
|
|
63
|
|
||||||
Obligations of foreign governments
|
409
|
|
2
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
|
409
|
|
2
|
|
1
|
|
||||||
Total fixed maturity securities
|
$
|
75,740
|
|
$
|
1,821
|
|
146
|
|
|
$
|
7,910
|
|
$
|
172
|
|
15
|
|
|
$
|
83,650
|
|
$
|
1,993
|
|
161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Preferred stock - publicly traded
|
5,087
|
|
887
|
|
9
|
|
|
—
|
|
—
|
|
—
|
|
|
5,087
|
|
887
|
|
9
|
|
||||||
Common stock - non-publicly traded
|
—
|
|
—
|
|
—
|
|
|
31
|
|
13
|
|
2
|
|
|
31
|
|
13
|
|
2
|
|
||||||
Total equity securities
|
$
|
5,087
|
|
$
|
887
|
|
9
|
|
|
$
|
31
|
|
$
|
13
|
|
2
|
|
|
$
|
5,118
|
|
$
|
900
|
|
11
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Gross proceeds from sales
|
$
|
501
|
|
|
$
|
412
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Gross realized gains
|
$
|
1
|
|
|
$
|
7
|
|
Gross realized losses
|
—
|
|
|
—
|
|
||
Total net gains from investment sales
|
1
|
|
|
7
|
|
||
Impairment write-downs (other-than-temporary impairments)
|
—
|
|
|
—
|
|
||
Net realized investment gains
|
$
|
1
|
|
|
$
|
7
|
|
The following table presents the components of net investment income:
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Fixed income securities
|
$
|
615
|
|
|
$
|
737
|
|
Cash on hand and on deposit
|
—
|
|
|
20
|
|
||
Common and preferred stock dividends
|
98
|
|
|
76
|
|
||
Notes receivable
|
93
|
|
|
72
|
|
||
Other income
|
—
|
|
|
114
|
|
||
Investment expenses
|
(99
|
)
|
|
(116
|
)
|
||
Net investment income
|
$
|
707
|
|
|
$
|
903
|
|
Premiums
|
For the Three Months Ended March 31,
|
||||||||||||
|
2014
|
|
2013
|
||||||||||
|
Written
|
Earned
|
|
Written
|
Earned
|
||||||||
Direct and assumed
|
$
|
101,472
|
|
$
|
108,499
|
|
|
$
|
81,510
|
|
$
|
92,122
|
|
Ceded
|
(69,590
|
)
|
(73,571
|
)
|
|
(50,676
|
)
|
(58,980
|
)
|
||||
Net
|
$
|
31,882
|
|
$
|
34,928
|
|
|
$
|
30,834
|
|
$
|
33,142
|
|
Losses and LAE incurred
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Direct and assumed
|
$
|
26,118
|
|
|
$
|
21,040
|
|
Ceded
|
(15,292
|
)
|
|
(10,505
|
)
|
||
Net losses and LAE incurred
|
$
|
10,826
|
|
|
$
|
10,535
|
|
The following table presents the components of the reinsurance receivables:
|
At
|
||||||
|
March 31, 2014
|
|
December 31, 2013
|
||||
Prepaid reinsurance premiums:
|
|
|
|
||||
Life
(1)
|
$
|
49,995
|
|
|
$
|
51,355
|
|
Accident and health
(1)
|
34,088
|
|
|
36,214
|
|
||
Property
|
97,714
|
|
|
98,650
|
|
||
Total
|
181,797
|
|
|
186,219
|
|
||
Ceded claim reserves:
|
|
|
|
||||
Life
|
1,601
|
|
|
1,594
|
|
||
Accident and health
|
7,417
|
|
|
7,826
|
|
||
Property
|
14,118
|
|
|
12,102
|
|
||
Total ceded claim reserves recoverable
|
23,136
|
|
|
21,522
|
|
||
Other reinsurance settlements recoverable
|
5,967
|
|
|
7,343
|
|
||
Reinsurance receivables
|
$
|
210,900
|
|
|
$
|
215,084
|
|
|
At
|
||||||
|
March 31, 2014
|
|
December 31, 2013
|
||||
Total of the three largest receivable balances from unrelated reinsurers
|
$
|
131,151
|
|
|
$
|
136,061
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Total amortization of deferred acquisition costs - insurance related
|
$
|
17,242
|
|
|
$
|
16,291
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Total amortization of deferred acquisition costs - non-insurance related
|
$
|
14,497
|
|
|
$
|
19,815
|
|
|
At
|
||||||
|
March 31, 2014
|
|
December 31, 2013
|
||||
Assets:
|
|
|
|
||||
Other receivables
|
$
|
791
|
|
|
$
|
791
|
|
Assets of discontinued operations
|
$
|
791
|
|
|
$
|
791
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accrued expenses, accounts payable and other liabilities
|
$
|
1,236
|
|
|
$
|
2,708
|
|
Income taxes payable
|
—
|
|
|
5,895
|
|
||
Liabilities of discontinued operations
|
$
|
1,236
|
|
|
$
|
8,603
|
|
|
For the Three Months Ended
|
||
|
March 31, 2013
|
||
Income from discontinued operations:
|
|
||
Revenues:
|
|
||
Brokerage commissions and fees
|
$
|
9,731
|
|
Net investment income
|
6
|
|
|
Total revenues
|
9,737
|
|
|
|
|
||
Expenses:
|
|
||
Personnel costs
|
5,049
|
|
|
Other operating expenses
|
1,342
|
|
|
Depreciation and amortization
|
141
|
|
|
Amortization of intangibles
|
480
|
|
|
Interest expense
|
591
|
|
|
Total expenses
|
7,603
|
|
|
Income from discontinued operations before income taxes
|
2,134
|
|
|
Income taxes - discontinued operations
|
872
|
|
|
Income from discontinued operations - net of tax
|
$
|
1,262
|
|
|
|
|
|
|
At March 31, 2014
|
|
At December 31, 2013
|
||||||||||||||||||||
|
Amortization Period (Years)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||||
Customer and agent relationships
|
7
|
to
|
15
|
|
$
|
40,075
|
|
|
$
|
(14,337
|
)
|
|
$
|
25,738
|
|
|
$
|
40,075
|
|
|
$
|
(13,262
|
)
|
|
$
|
26,813
|
|
Tradenames
|
8
|
to
|
10
|
|
1,460
|
|
|
(166
|
)
|
|
1,294
|
|
|
1,460
|
|
|
(128
|
)
|
|
1,332
|
|
||||||
Software
|
2.25
|
to
|
10
|
|
5,336
|
|
|
(3,117
|
)
|
|
2,219
|
|
|
5,336
|
|
|
(2,930
|
)
|
|
2,406
|
|
||||||
Present value of future profits
|
0.3
|
to
|
0.75
|
|
548
|
|
|
(548
|
)
|
|
—
|
|
|
548
|
|
|
(548
|
)
|
|
—
|
|
||||||
Non-compete agreements
|
1.5
|
to
|
6
|
|
1,378
|
|
|
(912
|
)
|
|
466
|
|
|
1,378
|
|
|
(895
|
)
|
|
483
|
|
||||||
Total finite-lived other intangible assets
|
|
|
|
|
$
|
48,797
|
|
|
$
|
(19,080
|
)
|
|
$
|
29,717
|
|
|
$
|
48,797
|
|
|
$
|
(17,763
|
)
|
|
$
|
31,034
|
|
The following table presents the carrying amount of indefinite-lived other intangible assets:
|
At
|
||||||
|
March 31, 2014
|
|
December 31, 2013
|
||||
Tradenames
|
$
|
17,764
|
|
|
$
|
17,764
|
|
Licenses
|
375
|
|
|
375
|
|
||
Total
|
$
|
18,139
|
|
|
$
|
18,139
|
|
Balance at December 31, 2013
|
$
|
49,173
|
|
Less: amortization expense
|
1,317
|
|
|
Balance at March 31, 2014
|
$
|
47,856
|
|
|
Estimated Amortization Expense
|
||
Remainder of 2014
|
$
|
3,952
|
|
2015
|
5,115
|
|
|
2016
|
4,868
|
|
|
2017
|
3,648
|
|
|
2018
|
2,230
|
|
|
Thereafter
|
9,904
|
|
|
Total
|
$
|
29,717
|
|
|
At
|
||
|
March 31, 2014
|
||
The Company's maximum exposure to loss in the VIE
|
$
|
174
|
|
The Company's Notes Payable consisted of the following:
|
At
|
||||||
|
March 31, 2014
|
|
December 31, 2013
|
||||
Wells Fargo Bank, N.A. credit facility, maturing August 2019
(1)
|
$
|
7,067
|
|
|
$
|
—
|
|
Synovus Bank, revolving line of credit, maturing April 2017
|
6,098
|
|
|
3,273
|
|
||
Total
|
$
|
13,165
|
|
|
$
|
3,273
|
|
|
|
|
|
||||
Maximum balance allowed on the Wells Fargo Bank, N.A. credit facility
(1)
|
$
|
100,000
|
|
|
$
|
75,000
|
|
Interest rate at the end of the respective period, Wells Fargo Bank, N.A. credit facility
(2)
|
4.25
|
%
|
|
—
|
%
|
||
|
|
|
|
||||
Maximum balance allowed on the Synovus Bank, revolving line of credit
|
$
|
15,000
|
|
|
$
|
15,000
|
|
Interest rate at the end of the respective period, Synovus Bank, revolving line of credit
|
3.24
|
%
|
|
3.24
|
%
|
|
Maturities
|
||
Remainder of 2014
|
$
|
6,098
|
|
2015
|
—
|
|
|
2016
|
—
|
|
|
2017
|
—
|
|
|
2018
|
—
|
|
|
Thereafter
(1)
|
7,067
|
|
|
Total maturities
|
$
|
13,165
|
|
|
|
Actual At
|
|
Covenant
|
Covenant Requirement
|
|
March 31, 2014
|
Total leverage ratio
|
not more than 3.25
|
|
0.84
|
Fixed charge coverage ratio
|
not less than 2.00
|
|
3.51
|
Reinsurance ratio
|
not less than 50%
|
|
68.0%
|
|
|
|
|
|
|
|
Actual At
|
|
|
|
December 31, 2013
|
RBC Ratios:
|
|
|
|
RBC Ratio - Bankers Life of Louisiana
|
not less than 250%
|
|
435.0%
|
RBC Ratio - Southern Financial Life Insurance Company
|
not less than 250%
|
|
2,096.0%
|
RBC Ratio - Insurance Company of the South
|
not less than 250%
|
|
366.0%
|
RBC Ratio - Lyndon Southern Insurance Company
|
not less than 250%
|
|
305.0%
|
RBC Ratio - Life of the South Insurance Company
|
not less than 250%
|
|
430.0%
|
RBC Ratio - Response Indemnity Company of California
|
not less than 250%
|
|
39,754.0%
|
|
Balance Sheet Location
|
|
At
|
||||||
|
|
March 31, 2014
|
|
December 31, 2013
|
|||||
Derivatives designated as cash flow hedging instruments:
|
|
|
|
|
|
||||
Interest rate swap - notional value
|
|
|
$
|
35,000
|
|
|
$
|
35,000
|
|
Fair value of the Swap
|
Accrued expenses, accounts payable and other liabilities
|
|
2,693
|
|
|
2,930
|
|
||
Unrealized loss, net of tax, on the fair value of the Swap
|
AOCI
|
|
1,751
|
|
|
1,904
|
|
||
Variable rate of the interest rate swap
|
|
|
0.23
|
%
|
|
0.24
|
%
|
||
Fixed rate of the interest rate swap
|
|
|
3.47
|
%
|
|
3.47
|
%
|
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
(Loss) gain recognized in AOCI on the derivative-effective portion
|
$
|
(45
|
)
|
|
$
|
32
|
|
|
|
|
|
||||
Loss reclassified from AOCI into income-effective portion
|
$
|
282
|
|
|
$
|
277
|
|
|
|
|
|
||||
Gain (loss) recognized in income on the derivative-ineffective portion
|
$
|
—
|
|
|
$
|
—
|
|
|
At
|
||
|
March 31, 2014
|
||
Estimated loss to be reclassified to earnings from AOCI during the next 12 months
|
$
|
1,133
|
|
|
Time-Based
|
|
Performance-Based
|
||||||||||||||||||||||||
|
Options Outstanding
|
|
Weighted Average Exercise Price (in dollars per share)
|
|
Options Exercisable
|
|
Weighted Average Exercise Price (in dollars per share)
|
|
Options Outstanding
|
|
Weighted Average Exercise Price (in dollars per share)
|
|
Options Exercisable
|
|
Weighted Average Exercise Price (in dollars per share)
|
||||||||||||
Balance, December 31, 2013
|
1,930,407
|
|
|
$
|
4.22
|
|
|
1,806,251
|
|
|
$
|
3.98
|
|
|
289,306
|
|
|
$
|
8.46
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
15,000
|
|
|
8.27
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Vested
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Exercised
|
(391,389
|
)
|
|
3.10
|
|
|
(391,389
|
)
|
|
3.10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Canceled/forfeited
|
(74,176
|
)
|
|
7.90
|
|
|
(74,176
|
)
|
|
7.90
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance, March 31, 2014
|
1,479,842
|
|
|
$
|
4.37
|
|
|
1,340,686
|
|
|
$
|
4.01
|
|
|
289,306
|
|
|
$
|
8.46
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average remaining contractual term at March 31, 2014 (in years)
|
3.8
|
|
|
|
|
3.3
|
|
|
|
|
8.5
|
|
|
|
|
—
|
|
|
|
|
Time-Based
|
|
Performance-Based
|
||||||||||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
||||||
Shares outstanding at December 31, 2013
|
139,680
|
|
|
$
|
8.59
|
|
|
130,629
|
|
|
$
|
10.20
|
|
Grants
|
105,000
|
|
|
7.26
|
|
|
—
|
|
|
—
|
|
||
Vests
|
(45,000
|
)
|
|
8.51
|
|
|
—
|
|
|
—
|
|
||
Forfeitures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Shares outstanding at March 31, 2014
|
199,680
|
|
|
$
|
7.91
|
|
|
130,629
|
|
|
$
|
10.20
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Personnel costs
|
$
|
160
|
|
|
$
|
185
|
|
Other operating expenses
|
132
|
|
|
118
|
|
||
Income tax benefit
|
(112
|
)
|
|
(116
|
)
|
||
Net stock-based compensation expense
|
$
|
180
|
|
|
$
|
187
|
|
Additional information on total non-vested stock-based compensation is as follows:
|
At March 31, 2014
|
||||||
|
Stock Options
|
|
Restricted Stock Awards
|
||||
Unrecognized compensation cost related to non-vested awards
|
$
|
398
|
|
|
$
|
1,517
|
|
Weighted-average recognition period (in years)
|
3.2
|
|
|
3.6
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Income taxes - continuing operations
|
$
|
1,982
|
|
|
$
|
482
|
|
Income taxes - discontinued operations
|
—
|
|
|
872
|
|
||
Income taxes
|
$
|
1,982
|
|
|
$
|
1,354
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Current
|
$
|
2,245
|
|
|
$
|
(378
|
)
|
Deferred
|
(263
|
)
|
|
860
|
|
||
Income taxes - continuing operations
|
$
|
1,982
|
|
|
$
|
482
|
|
|
For the Three Months Ended March 31,
|
||||||||||||
|
2014
|
2013
|
|||||||||||
|
Amount
|
|
Percent of Pre-tax Income
|
|
Amount
|
|
Percent of Pre-tax Income
|
||||||
Income taxes at federal income tax rate
|
$
|
2,009
|
|
|
35.00
|
%
|
|
$
|
886
|
|
|
35.00
|
%
|
Effect of:
|
|
|
|
|
|
|
|
||||||
Small life deduction
|
(107
|
)
|
|
(1.86
|
)
|
|
(109
|
)
|
|
(4.31
|
)
|
||
Non-deductible expenses
|
22
|
|
|
0.38
|
|
|
18
|
|
|
0.71
|
|
||
Tax exempt interest
|
(34
|
)
|
|
(0.59
|
)
|
|
(31
|
)
|
|
(1.22
|
)
|
||
State taxes
|
162
|
|
|
2.82
|
|
|
59
|
|
|
2.33
|
|
||
Non-controlling interest
|
(304
|
)
|
|
(5.30
|
)
|
|
(286
|
)
|
|
(11.30
|
)
|
||
Other, net
|
234
|
|
|
4.08
|
|
|
(55
|
)
|
|
(2.17
|
)
|
||
Income taxes - continuing operations
|
$
|
1,982
|
|
|
34.53
|
%
|
|
$
|
482
|
|
|
19.04
|
%
|
The carrying and fair values of financial instruments are as follows:
|
At
|
||||||||||||||
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
10,974
|
|
|
$
|
10,974
|
|
|
$
|
21,681
|
|
|
$
|
21,681
|
|
Restricted cash
|
17,852
|
|
|
17,852
|
|
|
17,293
|
|
|
17,293
|
|
||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Obligations of the U.S. Treasury and U.S. Government agencies
|
47,166
|
|
|
47,166
|
|
|
51,435
|
|
|
51,435
|
|
||||
Municipal securities
|
28,737
|
|
|
28,737
|
|
|
24,547
|
|
|
24,547
|
|
||||
Corporate securities
|
58,824
|
|
|
58,824
|
|
|
55,360
|
|
|
55,360
|
|
||||
Obligations of foreign governments
|
999
|
|
|
999
|
|
|
409
|
|
|
409
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common stock - publicly traded
|
47
|
|
|
47
|
|
|
47
|
|
|
47
|
|
||||
Preferred stock - publicly traded
|
5,549
|
|
|
5,549
|
|
|
5,087
|
|
|
5,087
|
|
||||
Common stock - non-publicly traded
|
51
|
|
|
51
|
|
|
51
|
|
|
51
|
|
||||
Preferred stock - non-publicly traded
|
1,013
|
|
|
1,013
|
|
|
1,013
|
|
|
1,013
|
|
||||
Notes receivable
|
15,912
|
|
|
15,912
|
|
|
11,920
|
|
|
11,920
|
|
||||
Accounts and premiums receivable, net
|
20,526
|
|
|
20,526
|
|
|
18,702
|
|
|
18,702
|
|
||||
Other receivables
|
28,376
|
|
|
28,376
|
|
|
33,409
|
|
|
33,409
|
|
||||
Short-term investments
|
871
|
|
|
871
|
|
|
871
|
|
|
871
|
|
||||
Total financial assets
|
$
|
236,897
|
|
|
$
|
236,897
|
|
|
$
|
241,825
|
|
|
$
|
241,825
|
|
|
|
|
|
|
|
|
|
||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Notes payable
|
$
|
13,165
|
|
|
$
|
13,165
|
|
|
$
|
3,273
|
|
|
$
|
3,273
|
|
Preferred trust securities
|
35,000
|
|
|
35,000
|
|
|
35,000
|
|
|
35,000
|
|
||||
Interest rate swap
|
2,693
|
|
|
2,693
|
|
|
2,930
|
|
|
2,930
|
|
||||
Total financial liabilities
|
$
|
50,858
|
|
|
$
|
50,858
|
|
|
$
|
41,203
|
|
|
$
|
41,203
|
|
|
At March 31, 2014
|
|||||||||||
|
|
Fair Value Measurements Using:
|
||||||||||
|
|
Quoted prices in active markets for identical assets
|
Significant other observable inputs
|
Significant unobservable inputs
|
||||||||
|
Fair Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||
Financial Assets:
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
||||||||
Obligations of the U.S. Treasury and U.S. Government agencies
|
$
|
47,166
|
|
$
|
—
|
|
$
|
47,166
|
|
$
|
—
|
|
Municipal securities
|
28,737
|
|
—
|
|
28,737
|
|
—
|
|
||||
Corporate securities
|
58,824
|
|
—
|
|
58,824
|
|
—
|
|
||||
Obligations of foreign governments
|
999
|
|
—
|
|
999
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
||||||||
Common stock - publicly traded
|
47
|
|
47
|
|
—
|
|
—
|
|
||||
Preferred stock - publicly traded
|
5,549
|
|
5,549
|
|
—
|
|
—
|
|
||||
Common stock - non-publicly traded
|
51
|
|
—
|
|
—
|
|
51
|
|
||||
Preferred stock - non-publicly traded
|
1,013
|
|
—
|
|
—
|
|
1,013
|
|
||||
Short-term investments
|
871
|
|
871
|
|
—
|
|
—
|
|
||||
Total assets
|
$
|
143,257
|
|
$
|
6,467
|
|
$
|
135,726
|
|
$
|
1,064
|
|
|
|
|
|
|
||||||||
Financial Liabilities:
|
|
|
|
|
||||||||
Interest rate swap
|
$
|
2,693
|
|
$
|
—
|
|
$
|
2,693
|
|
$
|
—
|
|
|
At December 31, 2013
|
|||||||||||
|
|
Fair Value Measurements Using:
|
||||||||||
|
|
Quoted prices in active markets for identical assets
|
Significant other observable inputs
|
Significant unobservable inputs
|
||||||||
|
Fair Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||
Financial Assets:
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
||||||||
Obligations of the U.S. Treasury and U.S. Government agencies
|
$
|
51,435
|
|
$
|
—
|
|
$
|
51,435
|
|
$
|
—
|
|
Municipal securities
|
24,547
|
|
—
|
|
24,547
|
|
—
|
|
||||
Corporate securities
|
55,360
|
|
—
|
|
55,360
|
|
—
|
|
||||
Obligations of foreign governments
|
409
|
|
—
|
|
409
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
||||||||
Common stock - publicly traded
|
47
|
|
47
|
|
—
|
|
—
|
|
||||
Preferred stock - publicly traded
|
5,087
|
|
5,087
|
|
—
|
|
—
|
|
||||
Common stock - non-publicly traded
|
51
|
|
—
|
|
—
|
|
51
|
|
||||
Preferred stock - non-publicly traded
|
1,013
|
|
—
|
|
—
|
|
1,013
|
|
||||
Short-term investments
|
871
|
|
871
|
|
—
|
|
—
|
|
||||
Total Assets
|
$
|
138,820
|
|
$
|
6,005
|
|
$
|
131,751
|
|
$
|
1,064
|
|
|
|
|
|
|
||||||||
Financial Liabilities:
|
|
|
|
|
||||||||
Interest rate swap
|
$
|
2,930
|
|
$
|
—
|
|
$
|
2,930
|
|
$
|
—
|
|
The following table presents the changes in Level 3 assets measured at fair value:
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Beginning balance, January 1,
|
$
|
1,064
|
|
|
$
|
1,123
|
|
Total investment gains or losses (realized/unrealized):
|
|
|
|
||||
Included in other comprehensive (loss)
|
—
|
|
|
(25
|
)
|
||
Transfers (out of) Level 3
|
—
|
|
|
(27
|
)
|
||
Ending balance, March 31,
|
$
|
1,064
|
|
|
$
|
1,071
|
|
|
For the Three Months Ended March 31,
|
|
For the Twelve Months Ended December 31,
|
||||
|
2014
|
|
2013
|
||||
Ordinary dividends
|
$
|
—
|
|
|
$
|
2,383
|
|
Extraordinary dividends
|
—
|
|
|
—
|
|
||
Total dividends
|
$
|
—
|
|
|
$
|
2,383
|
|
|
At
|
||||||
|
March 31, 2014
|
|
December 31, 2013
|
||||
Combined statutory capital and surplus of the Company's insurance company subsidiaries
|
$
|
75,079
|
|
|
$
|
69,269
|
|
|
|
|
|
||||
Required minimum statutory capital and surplus
|
$
|
17,200
|
|
|
$
|
17,200
|
|
|
|
|
|
|
|
||
Amount available for ordinary dividends of the Company's insurance company subsidiaries
|
$
|
4,244
|
|
|
$
|
3,989
|
|
(in thousands, except shares, per share amounts and percentages)
|
For the Three Months Ended March 31,
|
||||||||||
|
2014
|
2013
|
$ Change from 2013
|
% Change from 2013
|
|||||||
Revenues:
|
|
|
|
|
|||||||
Service and administrative fees
|
$
|
43,968
|
|
$
|
38,858
|
|
$
|
5,110
|
|
13.2
|
%
|
Ceding commissions
|
10,549
|
|
7,163
|
|
3,386
|
|
47.3
|
|
|||
Net investment income
|
707
|
|
903
|
|
(196
|
)
|
(21.7
|
)
|
|||
Net realized investment gains
|
1
|
|
7
|
|
(6
|
)
|
(85.7
|
)
|
|||
Net earned premium
|
34,928
|
|
33,142
|
|
1,786
|
|
5.4
|
|
|||
Other income
|
375
|
|
91
|
|
284
|
|
312.1
|
|
|||
Total revenues
|
90,528
|
|
80,164
|
|
10,364
|
|
12.9
|
|
|||
Expenses:
|
|
|
|
|
|||||||
Net losses and loss adjustment expenses
|
10,826
|
|
10,535
|
|
291
|
|
2.8
|
|
|||
Member benefit claims
|
10,671
|
|
9,366
|
|
1,305
|
|
13.9
|
|
|||
Commissions
|
40,071
|
|
35,362
|
|
4,709
|
|
13.3
|
|
|||
Personnel costs
|
10,191
|
|
10,797
|
|
(606
|
)
|
(5.6
|
)
|
|||
Other operating expenses
|
8,225
|
|
8,075
|
|
150
|
|
1.9
|
|
|||
Depreciation and amortization
|
1,249
|
|
1,177
|
|
72
|
|
6.1
|
|
|||
Amortization of intangibles
|
1,317
|
|
1,468
|
|
(151
|
)
|
(10.3
|
)
|
|||
Interest expense
|
920
|
|
853
|
|
67
|
|
7.9
|
|
|||
Loss on note receivable
|
1,317
|
|
—
|
|
1,317
|
|
100.0
|
|
|||
Total expenses
|
84,787
|
|
77,633
|
|
7,154
|
|
9.2
|
|
|||
Income from continuing operations before income taxes
|
5,741
|
|
2,531
|
|
3,210
|
|
126.8
|
|
|||
Income taxes - continuing operations
|
1,982
|
|
482
|
|
1,500
|
|
311.2
|
|
|||
Income from continuing operations before non-controlling interests
|
3,759
|
|
2,049
|
|
1,710
|
|
83.5
|
|
|||
Discontinued operations:
|
|
|
|
|
|||||||
Income from discontinued operations - net of tax
|
—
|
|
1,262
|
|
(1,262
|
)
|
(100.0
|
)
|
|||
Discontinued operations - net of tax
|
—
|
|
1,262
|
|
(1,262
|
)
|
(100.0
|
)
|
|||
Net income before non-controlling interests
|
3,759
|
|
3,311
|
|
448
|
|
13.5
|
|
|||
Less: net income attributable to non-controlling interests
|
861
|
|
818
|
|
43
|
|
5.3
|
|
|||
Net income attributable to Fortegra Financial Corporation
|
$
|
2,898
|
|
$
|
2,493
|
|
$
|
405
|
|
16.2
|
%
|
|
|
|
|
|
|||||||
Earnings per share - Basic:
|
|
|
|
|
|||||||
Net income from continuing operations - net of tax
|
$
|
0.15
|
|
$
|
0.06
|
|
|
|
|||
Discontinued operations - net of tax
|
—
|
|
0.07
|
|
|
|
|||||
Net income attributable to Fortegra Financial Corporation
|
$
|
0.15
|
|
$
|
0.13
|
|
|
|
|||
|
|
|
|
|
|||||||
Earnings per share - Diluted:
|
|
|
|
|
|||||||
Net income from continuing operations - net of tax
|
$
|
0.14
|
|
$
|
0.06
|
|
|
|
|||
Discontinued operations - net of tax
|
—
|
|
0.06
|
|
|
|
|||||
Net income attributable to Fortegra Financial Corporation
|
$
|
0.14
|
|
$
|
0.12
|
|
|
|
|||
|
|
|
|
|
|||||||
Weighted average common shares outstanding:
|
|
|
|
|
|||||||
Basic
|
19,651,256
|
|
19,556,743
|
|
|
|
|||||
Diluted
|
20,436,442
|
|
20,625,041
|
|
|
|
(in thousands)
|
For the Three Months Ended
|
||
|
March 31, 2013
|
||
Income from discontinued operations:
|
|
||
Revenues:
|
|
||
Brokerage commissions and fees
|
$
|
9,731
|
|
Net investment income
|
6
|
|
|
Total revenues
|
9,737
|
|
|
Expenses:
|
|
||
Personnel costs
|
5,049
|
|
|
Other operating expenses
|
1,342
|
|
|
Depreciation and amortization
|
141
|
|
|
Amortization of intangibles
|
480
|
|
|
Interest expense
|
591
|
|
|
Total expenses
|
7,603
|
|
|
Income from discontinued operations before income taxes
|
2,134
|
|
|
Income taxes - discontinued operations
|
872
|
|
|
Discontinued operations - net of tax
|
$
|
1,262
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Total revenues
|
90,528
|
|
|
80,164
|
|
||
Less :
|
|
|
|
||||
Net losses and loss adjustment expenses
|
10,826
|
|
|
10,535
|
|
||
Member benefit claims
|
10,671
|
|
|
9,366
|
|
||
Commissions
|
40,071
|
|
|
35,362
|
|
||
Net Revenues
|
$
|
28,960
|
|
|
$
|
24,901
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Personnel costs
|
10,191
|
|
|
10,797
|
|
||
Other operating expenses
|
8,225
|
|
|
8,075
|
|
||
Operating expenses
|
$
|
18,416
|
|
|
$
|
18,872
|
|
|
For the Three Months Ended March 31,
|
||||||
(in thousands)
|
2014
|
|
2013
|
||||
Income from continuing operations before non-controlling interests
|
$
|
3,759
|
|
|
$
|
2,049
|
|
Depreciation
|
1,249
|
|
|
1,177
|
|
||
Amortization of intangibles
|
1,317
|
|
|
1,468
|
|
||
Interest expense
|
920
|
|
|
853
|
|
||
Income taxes
|
1,982
|
|
|
482
|
|
||
EBITDA from continuing operations
|
9,227
|
|
|
6,029
|
|
||
Transaction costs
(1)
|
10
|
|
|
86
|
|
||
Restructuring expenses
|
—
|
|
|
1,154
|
|
||
Stock-based compensation expense
|
290
|
|
|
304
|
|
||
Loss on note receivable
|
1,317
|
|
|
—
|
|
||
Adjusted EBITDA from continuing operations
|
$
|
10,844
|
|
|
$
|
7,573
|
|
|
|
|
|
||||
EBITDA from continuing operations margin
(2)
|
31.9
|
%
|
|
24.2
|
%
|
||
Adjusted EBITDA from continuing operations margin
(3)
|
37.4
|
%
|
|
30.4
|
%
|
||
|
|
|
|
||||
(1)
Represents transaction costs associated with acquisitions.
|
|
|
|
||||
(2)
EBITDA from continuing operations margin is calculated by dividing EBITDA from continuing operations by Net Revenues.
|
|
|
|
||||
(3)
Adjusted EBITDA from continuing operations margin is calculated by dividing Adjusted EBITDA from continuing operations by Net Revenues.
|
|
|
|
|
For the Three Months Ended
|
|
For the Twelve Months Ended
|
||||
(in thousands)
|
March 31, 2014
|
|
December 31, 2013
|
||||
Ordinary dividends
|
$
|
—
|
|
|
$
|
2,383
|
|
Extraordinary dividends
|
—
|
|
|
—
|
|
||
Total dividends
|
$
|
—
|
|
|
$
|
2,383
|
|
(in thousands)
|
For the Three Months Ended March 31,
|
||||||
Cash provided by (used in):
|
2014
|
|
2013
|
||||
Operating activities
|
$
|
(9,891
|
)
|
|
$
|
(1,295
|
)
|
Investing activities
|
(10,020
|
)
|
|
(1,844
|
)
|
||
Financing activities
|
9,204
|
|
|
2,269
|
|
||
Net change in cash and cash equivalents
|
$
|
(10,707
|
)
|
|
$
|
(870
|
)
|
•
|
a reduction in the demand for, and availability of, consumer credit, which could result in reduced demand by consumers for our products and our clients opting to no longer make such products available;
|
•
|
higher than anticipated loss ratios on our products due to rising unemployment or disability claims;
|
•
|
higher risk of increased fraudulent claims;
|
•
|
individuals terminating loans or canceling credit insurance policies, thereby reducing our revenues;
|
•
|
a reduction in the demand for consumer warranty service contracts, service contract offerings, mobile device protection and motor club memberships;
|
•
|
individuals terminating warranty service contracts, service contracts, mobile device protection contracts or motor club memberships, thereby reducing our revenues;
|
•
|
our clients being more likely to experience financial distress or declare bankruptcy or liquidation, which could have an adverse impact on demand for our services and products and the remittance of premiums from such customers, as well as the collection of receivables from such clients for items such as unearned premiums, commissions or related accounts receivable, which could make the collection of receivables from our clients more difficult;
|
•
|
increased pricing sensitivity or reduced demand for our services and products;
|
•
|
increased costs associated with, or the inability to obtain, debt financing to fund acquisitions or the expansion of our business; and
|
•
|
defaults in our fixed income investment portfolio or lower than anticipated rates of return as a result of low interest rate environments.
|
•
|
demand for our services and products;
|
•
|
the length of our sales cycle;
|
•
|
the amount of sales to new clients;
|
•
|
the timing of implementations of our services and products with new clients;
|
•
|
seasonality;
|
•
|
the timing of acquisitions;
|
•
|
competitive factors;
|
•
|
prevailing interest rates;
|
•
|
pricing changes by us or our competitors;
|
•
|
transaction volumes in our clients' businesses;
|
•
|
the introduction of new services and products by us and our competitors;
|
•
|
changes in strategic partnerships;
|
•
|
changes in regulatory and accounting standards; and
|
•
|
our ability to control costs.
|
•
|
the quality and perceived value of our product and service offerings by existing and prospective clients;
|
•
|
the effectiveness of our sales and marketing efforts;
|
•
|
the successful installation and implementation of our services and products for new and existing clients;
|
•
|
availability of capital to complete investments in new or complementary products, services and technologies;
|
•
|
the availability of adequate reinsurance for us and our clients, including the ability of our clients to form, capitalize and operate captive reinsurance companies;
|
•
|
our ability to find suitable acquisition candidates, successfully complete such acquisitions and effectively integrate such acquisitions;
|
•
|
our ability to integrate technology into our services and products to avoid obsolescence and provide scalability;
|
•
|
the reliability, execution and accuracy of our services; and
|
•
|
client willingness to accept any price increases for our services and products.
|
•
|
failure to achieve anticipated revenues, earnings or cash flows;
|
•
|
increased expenses;
|
•
|
diversion of management time and attention;
|
•
|
failure to retain the acquired business' customers or personnel;
|
•
|
difficulties in realizing projected efficiencies;
|
•
|
ability to realize synergies and cost savings;
|
•
|
difficulties in integrating systems and personnel; and
|
•
|
inaccurate assessment of liabilities.
|
•
|
licensing and authorizing companies and agents to transact business;
|
•
|
regulating capital and surplus and dividend requirements;
|
•
|
regulating underwriting limitations;
|
•
|
regulating the ability of companies to enter and exit markets;
|
•
|
imposing statutory accounting requirements and annual statement disclosures;
|
•
|
approving changes in control of insurance companies;
|
•
|
regulating premium rates, including the ability to increase or maintain premium rates;
|
•
|
regulating trade billing and claims practices;
|
•
|
regulating certain transactions between affiliates;
|
•
|
regulating reinsurance arrangements, including the balance sheet credit that may be taken by the ceding or direct insurer;
|
•
|
mandating certain terms and conditions of coverage and benefits;
|
•
|
regulating the content of disclosures to consumers;
|
•
|
regulating the type, amounts and valuation of investments;
|
•
|
mandating assessments or other surcharges for guaranty funds and the ability to recover such assessments in the future through premium increases;
|
•
|
regulating market conduct and sales practices of insurers and agents, including compensation arrangements; and
|
•
|
regulating a variety of other financial and non-financial components of an insurer's business.
|
•
|
prohibiting our clients from providing debt cancellation policies or offering other ancillary products;
|
•
|
prohibiting insurers from fronting captive reinsurance arrangements;
|
•
|
placing or reducing interest rate caps on the consumer finance products our clients offer or including voluntary products in the annual percentage rate calculation;
|
•
|
limitations or imposed reductions on premium levels or the ability to raise premiums on existing policies;
|
•
|
increases in minimum capital, reserves and other financial viability requirements;
|
•
|
impositions of increased fines, taxes or other penalties for improper licensing, the failure to promptly pay claims, however defined, or other regulatory violations;
|
•
|
increased licensing requirements;
|
•
|
restrictions on the ability to offer certain types of products;
|
•
|
new or different disclosure requirements on certain types of products; and
|
•
|
imposition of new or different requirements for coverage determinations.
|
•
|
disputes over coverage or claims adjudication;
|
•
|
disputes over claim payment amounts and compliance with individual state regulatory requirements;
|
•
|
disputes regarding sales practices, disclosures, premium refunds, licensing, regulatory compliance, underwriting and compensation arrangements;
|
•
|
disputes with taxation and insurance authorities regarding our tax liabilities;
|
•
|
periodic examinations of compliance with applicable federal and state laws; and
|
•
|
industry-wide investigations regarding business practices including, but not limited to, the use of finite reinsurance and the marketing and refunding of insurance policies or certificates of insurance.
|
•
|
make it more difficult for us to satisfy our obligations with respect to our indebtedness, including financial and other restrictive covenants, which could result in an event of default under the agreements governing our indebtedness;
|
•
|
make us more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
|
•
|
require us to dedicate a substantial portion of our cash flows from operations to payments on our indebtedness, thereby reducing the availability of our cash flows to fund working capital, capital expenditures, acquisitions and other general corporate purposes;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
|
•
|
place us at a competitive disadvantage compared to competitors that have less debt; and
|
•
|
limit our ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy or other purposes.
|
•
|
incur or guarantee additional debt;
|
•
|
incur liens;
|
•
|
complete mergers, consolidations and dissolutions;
|
•
|
sell certain of our assets that have been pledged as collateral; and
|
•
|
undergo a change in control.
|
•
|
the inability to effectively market and price our services and products and make underwriting and reserving decisions;
|
•
|
the loss of existing clients;
|
•
|
difficulty attracting new clients;
|
•
|
regulatory problems, such as a failure to meet prompt payment obligations;
|
•
|
internal control problems;
|
•
|
exposure to litigation;
|
•
|
security breaches resulting in loss of data; and
|
•
|
increases in administrative expenses.
|
•
|
market conditions in the broader stock market;
|
•
|
actual or anticipated fluctuations in our quarterly financial and operating results;
|
•
|
introduction of new products or services by us or our competitors;
|
•
|
issuance of new or changed securities analysts' reports or recommendations;
|
•
|
investor perceptions of us and the industries in which we operate;
|
•
|
sales, or anticipated sales, of large blocks of our stock;
|
•
|
additions or departures of key personnel;
|
•
|
regulatory or political developments;
|
•
|
litigation and governmental investigations; and
|
•
|
changing economic conditions.
|
•
|
restrictions on the ability of our stockholders to call a special meeting and the business that can be conducted at such meeting;
|
•
|
restrictions on the ability of our stockholders to remove a director or fill a vacancy on the Board of Directors;
|
•
|
our ability to issue preferred stock with terms that the Board of Directors may determine, without stockholder approval;
|
•
|
the absence of cumulative voting in the election of directors;
|
•
|
a prohibition of action by written consent of stockholders unless such action is recommended by all directors then in office; and
|
•
|
advance notice requirements for stockholder proposals and nominations.
|
Period
|
|
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plan
|
|
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan
|
||||||
Balance at December 31, 2013
|
|
|
|
|
|
1,179,634
|
|
|
$
|
7,167,376
|
|
|||||
January 1, 2014
|
to
|
January 31, 2014
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
7,167,376
|
|
|
February 1, 2014
|
to
|
February 28, 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,167,376
|
|
||
March 1, 2014
|
to
|
March 31, 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,167,376
|
|
||
Total
|
|
|
|
—
|
|
|
$
|
—
|
|
|
1,179,634
|
|
|
|
|
|
|
|
Fortegra Financial Corporation
|
Date:
|
May 14, 2014
|
|
By:
|
/s/ Richard S. Kahlbaugh
|
|
|
|
|
Richard S. Kahlbaugh
|
|
|
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
|
(Duly authorized officer)
|
|
|
|
|
|
Date:
|
May 14, 2014
|
|
By:
|
/s/ Walter P. Mascherin
|
|
|
|
|
Walter P. Mascherin
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(Duly authorized officer and Principal Financial and Accounting Officer)
|
EXHIBIT INDEX
|
|||||||
|
|
Incorporated by Reference
|
|
|
|
||
Exhibit Number
|
Description of Exhibits
|
Form
|
File Number
|
Date Filed
|
Original Exhibit Number
|
Filed Herewith
|
Furnished Herewith
|
|
|
|
|
|
|
|
|
10.10*
|
1995 Key Employee Stock Option Plan.
|
S-1/A
|
333-169550
|
10/29/2010
|
10.29
|
|
|
10.11*
|
Stock Option Agreement by and between Life of the South Corporation and Richard S. Kahlbaugh, dated as of November 18, 2005, as amended on March 7, 2007 and June 20, 2007.
|
S-1/A
|
333-169550
|
11/16/2010
|
10.30
|
|
|
10.12*
|
Stock Option Agreement by and between Life of the South Corporation and Richard Kahlbaugh, dated as of October 25, 2007.
|
S-1/A
|
333-169550
|
11/16/2010
|
10.31
|
|
|
10.13*
|
2010 Omnibus Incentive Plan.
|
S-1/A
|
333-169550
|
12/3/2010
|
10.32
|
|
|
10.14*
|
Employee Stock Purchase Plan.
|
S-1/A
|
333-169550
|
12/3/2010
|
10.33
|
|
|
10.15*
|
Deferred Compensation Agreement, dated January 1, 2006, between Life of the South Corporation and Richard S. Kahlbaugh.
|
S-1/A
|
333-169550
|
10/29/2010
|
10.35
|
|
|
10.16*
|
Form of Restricted Stock Award Agreement for Directors.
|
S-1/A
|
333-169550
|
12/3/2010
|
10.47
|
|
|
10.16.1*
|
Amended - Form of Restricted Stock Award Agreement for Directors, effective February 2013.
|
10-K
|
001-35009
|
4/1/2013
|
10.26.1
|
|
|
10.17*
|
Form of Restricted Stock Award Agreement for Employees.
|
S-1/A
|
333-169550
|
12/3/2010
|
10.48
|
|
|
10.17.1*
|
Amended - Form of Restricted Stock Award Agreement for Employees, effective February 18, 2013.
|
10-Q
|
001-35009
|
5/15/2013
|
10.27.1
|
|
|
10.18*
|
Form of Restricted Stock Award Agreement (Bonus Pool).
|
S-1/A
|
333-169550
|
12/3/2010
|
10.49
|
|
|
10.19*
|
Form of Nonqualified Stock Option Award Agreement.
|
S-1/A
|
333-169550
|
12/3/2010
|
10.50
|
|
|
10.19.1*
|
Amended - Form of Nonqualified Stock Option Award Agreement, effective February 18, 2013.
|
10-Q
|
001-35009
|
5/15/2013
|
10.29.1
|
|
|
10.20*
|
Executive Employment and Non-Competition Agreement, dated as of January 1, 2009, by and between Fortegra Financial Corporation and Joseph McCaw.
|
10-Q
|
001-35009
|
5/15/2012
|
10.39
|
|
|
10.21
|
Credit Agreement, dated August 2, 2012, as amended by amendment to Credit Agreement, dated October 4, 2013, among Fortegra Financial Corporation and LOTS Intermediate Co., as Borrowers; the initial Lenders named therein; Wells Fargo Bank, N.A., as Administrative Agent, Swingline Lender, and Issuing Lender; Wells Fargo Securities, LLC, as Bookrunner and Joint Lead Arranger; and Synovus Bank as Joint Lead Arranger and Syndication Agent. (Conformed Copy).
|
10-Q
|
001-35009
|
11/14/2013
|
10.34
|
|
|
10.21.1
|
Second Amendment to the Credit Agreement, dated April 11, 2014, by and among Fortegra Financial Corporation and LOTS Intermediate Co., as Borrowers; the Subsidiaries (as defined in the Credit Agreement) party thereto, each of the Lenders (as defined in the Credit Agreement) and Wells Fargo Bank, National Association, as administrative agent.
|
8-K
|
001-35009
|
4/16/2014
|
10.1
|
|
|
10.22
|
Subsidiary Guaranty Agreement, dated August 2, 2012, among certain subsidiaries, as Guarantors, of Fortegra Financial Corporation and LOTS Intermediate Co., as Borrowers, and Wells Fargo Bank, N.A., as Administrative Agent, and each of the Guaranteed Parties.
|
8-K
|
001-35009
|
8/7/2012
|
10.2
|
|
|
10.23
|
Pledge Agreement, dated August 2, 2012, by Fortegra Financial Corporation and LOTSoluntions, Inc., as Pledgors, and Wells Fargo Bank, N.A., as Administrative Agent for its benefit and the benefit of other Lenders.
|
8-K
|
001-35009
|
8/7/2012
|
10.3
|
|
|
10.24
|
Security Agreement, dated August 2, 2012, among Fortegra Financial Corporation, LOTS Intermediate Co. and certain of its subsidiaries, as Grantors, and Wells Fargo Bank, N.A., as Administrative Agent for its benefit and the benefit of the Secured Creditors.
|
8-K
|
001-35009
|
8/7/2012
|
10.4
|
|
|
10.24.1
|
Security Agreement Joinder, dated April 11, 2014, to the Security Agreement dated as of August 2, 2012, by and among Fortegra Financial Corporation and LOTS Intermediate Co., as Borrowers, certain subsidiaries of the Borrowers, as Grantors, and Wells Fargo Bank, N.A., as Administrative Agent for its benefit and the benefit of the Secured Creditors.
|
|
|
|
|
X
|
|
10.25
|
Trademark Security Agreement, dated August 2, 2012, among the Fortegra Financial Corporation, LOTSolutions, Inc., Pacific Benefits Group Northwest, L.L.C., eReinsure.com, Inc., as Grantors, and Wells Fargo Bank, N.A., as Administrative Agent and Grantee, for the benefit of the Secured Creditors.
|
8-K
|
001-35009
|
8/7/2012
|
10.5
|
|
|
10.26*
|
2013 Executive Annual Incentive Plan.
|
10-Q
|
001-35009
|
8/14/2013
|
10.41
|
|
|
10.27*
|
Quarterly Incentive Plan.
|
10-Q
|
001-35009
|
8/14/2013
|
10.42
|
|
|
1 Year The Fortegra Chart |
1 Month The Fortegra Chart |
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