CITIZENS, INC.
|
(Exact name of registrant as specified in its charter)
|
Colorado
|
84-0755371
|
|
(State of other jurisdiction of incorporation or organization
|
I.R.S. Employer Identification No.)
|
|
400 East Anderson Lane, Austin, TX
|
78752
|
|
(Address of principal executive offices)
|
(Zip Code)
|
(512) 837-7100
|
N/A
|
Large accelerated filer o
|
Accelerated filer x
|
Non-accelerated filer o
|
Smaller reporting company o
|
Part I.
|
Financial Information
|
Page
Number
|
|
Item 1.
|
Financial Statements
|
||
2 | |||
4 | |||
5 | |||
6 | |||
8 | |||
Item 2.
|
26 | ||
Item 3.
|
44 | ||
Item 4.
|
46 | ||
Part II.
|
Other Information
|
||
Item 1.
|
46 | ||
Item 1A.
|
47 | ||
Item 2.
|
47 | ||
Item 3.
|
47 | ||
Item 4.
|
47 | ||
Item 5.
|
47 | ||
Item 6.
|
48 |
Assets
|
June 30,
2011
|
December 31,
2010
|
||||||
(Unaudited)
|
||||||||
Investments:
|
||||||||
Fixed maturities available-for-sale, at fair value (cost: $574,094 and $578,412 in 2011 and 2010, respectively)
|
$ | 583,108 | 575,737 | |||||
Fixed maturities held-to-maturity, at amortized cost (fair value: $108,608 and $79,103 in 2011 and 2010, respectively)
|
109,744 | 80,232 | ||||||
Equity securities available-for-sale, at fair value (cost: $20,551 and $19,844 in 2011 and 2010, respectively)
|
24,593 | 23,304 | ||||||
Mortgage loans on real estate
|
1,466 | 1,489 | ||||||
Policy loans
|
36,919 | 35,585 | ||||||
Real estate held for investment (less $1,082 and $1,017 accumulated depreciation in 2011 and 2010, respectively)
|
9,152 | 9,200 | ||||||
Other long-term investments
|
144 | 148 | ||||||
Total investments
|
765,126 | 725,695 | ||||||
Cash and cash equivalents
|
58,376 | 49,723 | ||||||
Accrued investment income
|
8,615 | 7,433 | ||||||
Reinsurance recoverable
|
9,440 | 9,729 | ||||||
Deferred policy acquisition costs
|
131,970 | 125,684 | ||||||
Cost of customer relationships acquired
|
30,083 | 31,631 | ||||||
Goodwill
|
17,160 | 17,160 | ||||||
Other intangible assets
|
970 | 1,019 | ||||||
Federal income tax receivable
|
847 | 1,914 | ||||||
Property and equipment, net
|
7,940 | 7,101 | ||||||
Due premiums, net (less $1,489 and $1,568 allowance for doubtful accounts in 2011 and 2010, respectively)
|
7,989 | 8,537 | ||||||
Prepaid expenses
|
1,463 | 474 | ||||||
Other assets
|
689 | 406 | ||||||
Total assets
|
$ | 1,040,668 | 986,506 |
See accompanying notes to consolidated financial statements.
|
(Continued)
|
Liabilities and Stockholders' Equity
|
June 30,
2011
|
December 31,
2010
|
||||||
(Unaudited)
|
||||||||
Liabilities:
|
||||||||
Policy liabilities:
|
|
|||||||
Future policy benefit reserves:
|
||||||||
Life insurance
|
$ | 661,534 | 637,140 | |||||
Annuities
|
44,241 | 42,096 | ||||||
Accident and health
|
5,634 | 5,910 | ||||||
Dividend accumulations
|
10,028 | 9,498 | ||||||
Premiums paid in advance
|
25,282 | 23,675 | ||||||
Policy claims payable
|
9,507 | 10,540 | ||||||
Other policyholders' funds
|
8,137 | 8,191 | ||||||
Total policy liabilities
|
764,363 | 737,050 | ||||||
Commissions payable
|
2,564 | 2,538 | ||||||
Deferred federal income tax
|
13,695 | 9,410 | ||||||
Payable for securities in process of settlement
|
10,078 | - | ||||||
Warrants outstanding
|
372 | 1,587 | ||||||
Other liablities
|
9,047 | 8,287 | ||||||
Total liabilities
|
800,119 | 758,872 | ||||||
Commitments and contingencies (Note 8)
|
||||||||
Stockholders' equity:
|
||||||||
Common stock:
|
||||||||
Class A, no par value, 100,000,000 shares authorized, 51,825,079 shares isued in 2011 and 51,822,497 shares issued in 2010,including shares in treasury of 3,135,738 in 2011 and 2010
|
256,720 | 256,703 | ||||||
Class B, no par value, 2,000,000 shares authorized, 1,001,714 shares issued and outstanding in 2011 and 2010
|
3,184 | 3,184 | ||||||
Accumulated deficit
|
(17,558 | ) | (22,581 | ) | ||||
Accumulated other comprehensive income:
|
||||||||
Unrealized gains on securities, net of tax
|
9,214 | 1,339 | ||||||
Treasury stock, at cost
|
(11,011 | ) | (11,011 | ) | ||||
Total stockholders' equity
|
240,549 | 227,634 | ||||||
Total liabilities and stockholders' equity
|
$ | 1,040,668 | 986,506 |
2011
|
2010
|
|||||||
Revenues:
|
||||||||
Premiums:
|
||||||||
Life insurance
|
$ | 38,231 | 35,085 | |||||
Accident and health insurance
|
396 | 409 | ||||||
Property insurance
|
1,259 | 1,182 | ||||||
Net investment income
|
7,717 | 8,275 | ||||||
Realized investment gains (losses), net
|
(13 | ) | 692 | |||||
Decrease in fair value of warrants
|
816 | 366 | ||||||
Other income
|
104 | 151 | ||||||
Total revenues
|
48,510 | 46,160 | ||||||
Benefits and expenses:
|
||||||||
Insurance benefits paid or provided:
|
||||||||
Claims and surrenders
|
14,905 | 15,094 | ||||||
Increase in future policy benefit reserves
|
13,000 | 9,783 | ||||||
Policyholders' dividends
|
1,920 | 1,777 | ||||||
Total insurance benefits paid or provided
|
29,825 | 26,654 | ||||||
Commissions
|
9,930 | 9,028 | ||||||
Other general expenses
|
6,919 | 7,122 | ||||||
Capitalization of deferred policy acquisition costs
|
(7,884 | ) | (6,978 | ) | ||||
Amortization of deferred policy acquisition costs
|
4,229 | 5,218 | ||||||
Amortization of cost of customer relationships acquired
|
751 | 754 | ||||||
Total benefits and expenses
|
43,770 | 41,798 | ||||||
Income before federal income tax
|
4,740 | 4,362 | ||||||
Federal income tax expense (benefit)
|
1,497 | 1,177 | ||||||
Net income (loss)
|
$ | 3,243 | 3,185 | |||||
Per Share Amounts:
|
||||||||
Basic earnings per share of Class A common stock
|
$ | 0.07 | 0.07 | |||||
Basic earnings per share of Class B common stock
|
0.03 | 0.03 | ||||||
Diluted earnings per share of Class A common stock
|
0.07 | 0.07 | ||||||
Diluted earnings per share of Class B common stock
|
0.03 | 0.03 |
2011
|
2010
|
|||||||
Revenues:
|
||||||||
Premiums:
|
||||||||
Life insurance
|
$ | 73,842 | 68,681 | |||||
Accident and health insurance
|
768 | 823 | ||||||
Property insurance
|
2,504 | 2,362 | ||||||
Net investment income
|
15,231 | 16,624 | ||||||
Realized investment gains (losses), net
|
6 | 751 | ||||||
Decrease in fair value of warrants
|
1,215 | 252 | ||||||
Other income
|
227 | 499 | ||||||
Total revenues
|
93,793 | 89,992 | ||||||
Benefits and expenses:
|
||||||||
Insurance benefits paid or provided:
|
||||||||
Claims and surrenders
|
29,784 | 30,671 | ||||||
Increase in future policy benefit reserves
|
25,318 | 19,328 | ||||||
Policyholders' dividends
|
3,582 | 3,347 | ||||||
Total insurance benefits paid or provided
|
58,684 | 53,346 | ||||||
Commissions
|
19,002 | 17,156 | ||||||
Other general expenses
|
13,529 | 13,975 | ||||||
Capitalization of deferred policy acquisition costs
|
(15,049 | ) | (12,973 | ) | ||||
Amortization of deferred policy acquisition costs
|
8,749 | 10,162 | ||||||
Amortization of cost of customer relationships acquired
|
1,405 | 1,592 | ||||||
Total benefits and expenses
|
86,320 | 83,258 | ||||||
Income before federal income tax
|
7,473 | 6,734 | ||||||
Federal income tax expense (benefit)
|
2,450 | 1,944 | ||||||
Net income (loss)
|
$ | 5,023 | 4,790 | |||||
Per Share Amounts:
|
||||||||
Basic earnings per share of Class A common stock
|
$ | 0.10 | 0.10 | |||||
Basic earnings per share of Class B common stock
|
0.05 | 0.05 | ||||||
Diluted earnings per share of Class A common stock
|
0.08 | 0.10 | ||||||
Diluted earnings per share of Class B common stock
|
0.04 | 0.05 |
2011
|
2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 5,023 | 4,790 | |||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||
Realized (gains) losses on sale of investments and other assets
|
(6 | ) | (751 | ) | ||||
Net deferred policy acquisition costs
|
(6,300 | ) | (2,811 | ) | ||||
Amortization of cost of customer relationships acquired
|
1,405 | 1,592 | ||||||
Increase (decrease) in fair value of warrants
|
(1,215 | ) | (252 | ) | ||||
Depreciation
|
451 | 524 | ||||||
Amortization of premiums and discounts on fixed maturities and short-term investments
|
2,243 | 1,377 | ||||||
Deferred federal income tax expense (benefit)
|
45 | 27 | ||||||
Change in:
|
||||||||
Accrued investment income
|
(1,182 | ) | 276 | |||||
Reinsurance recoverable
|
289 | 1,185 | ||||||
Due premiums and other receivables
|
548 | 1,037 | ||||||
Future policy benefit reserves
|
24,942 | 18,903 | ||||||
Other policyholders' liabilities
|
1,050 | 2,833 | ||||||
Federal income tax receivable
|
1,067 | 746 | ||||||
Commissions payable and other liabilities
|
786 | (3,492 | ) | |||||
Other, net
|
(1,101 | ) | (1,945 | ) | ||||
Net cash provided by (used in) operating activities
|
28,045 | 24,039 | ||||||
Cash flows from investing activities:
|
||||||||
Sale of fixed maturities, available-for-sale
|
- | 6,866 | ||||||
Maturity and calls of fixed maturities, available-for-sale
|
61,186 | 86,600 | ||||||
Maturity and calls of fixed maturities, held-to-maturity
|
27,000 | 51,250 | ||||||
Purchase of fixed maturities, available-for-sale
|
(51,507 | ) | (105,524 | ) | ||||
Purchase of fixed maturities, held-to-maturity
|
(54,174 | ) | (31,140 | ) | ||||
Sale of equity securities, available-for-sale
|
- | 591 | ||||||
Calls of equity securities, available-for-sale
|
432 | 50 | ||||||
Purchase of equity securities, available-for-sale
|
(1,000 | ) | (136 | ) | ||||
Principal payments on mortgage loans
|
23 | 24 | ||||||
Increase in policy loans
|
(1,334 | ) | (1,877 | ) | ||||
Sale of other long-term investments
|
3 | - | ||||||
Purchase of other long-term investments
|
(17 | ) | (261 | ) | ||||
Purchase of property and equipment
|
(1,342 | ) | (1,071 | ) | ||||
Maturity of short-term investments
|
- | 2,500 | ||||||
Net cash provided by (used in) investing activities
|
(20,730 | ) | 7,872 |
See accompanying notes to consolidated financial statements.
|
(Continued)
|
2011
|
2010
|
|||||||
Cash flows from financing activities:
|
||||||||
Warrants exercised
|
$ | 17 | - | |||||
Annuity deposits
|
3,162 | 2,458 | ||||||
Annuity withdrawals
|
(1,841 | ) | (1,669 | ) | ||||
Net cash provided by (used in) financing activities
|
1,338 | 789 | ||||||
Net increase (decrease) in cash and cash equivalents
|
8,653 | 32,700 | ||||||
Cash and cash equivalents at beginning of year
|
49,723 | 48,625 | ||||||
Cash and cash equivalents at end of period
|
$ | 58,376 | 81,325 | |||||
Supplemental disclosures of operating activities:
|
||||||||
Cash paid during the period for income taxes
|
$ | 1,338 | 1,171 |
Three Months Ended June 30, 2011
|
||||||||||||||||
Life
Insurance |
Home
Service |
Other
Non-Insurance |
Consolidated
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Revenues:
|
|
|||||||||||||||
Premiums
|
$ | 29,016 | 10,870 | - | 39,886 | |||||||||||
Net investment income
|
4,272 | 3,275 | 170 | 7,717 | ||||||||||||
Realized investment gains (losses), net
|
4 | (17 | ) | - | (13 | ) | ||||||||||
Decrease in fair value of warrants
|
- | - | 816 | 816 | ||||||||||||
Other income
|
77 | 6 | 21 | 104 | ||||||||||||
Total revenue
|
33,369 | 14,134 | 1,007 | 48,510 | ||||||||||||
Benefits and expenses:
|
||||||||||||||||
Insurance benefits paid or provided:
|
||||||||||||||||
Claims and surrenders
|
10,456 | 4,449 | - | 14,905 | ||||||||||||
Increase in future policy benefit reserves
|
12,015 | 985 | - | 13,000 | ||||||||||||
Policyholders' dividends
|
1,901 | 19 | - | 1,920 | ||||||||||||
Total insurance benefits paid or provided
|
24,372 | 5,453 | - | 29,825 | ||||||||||||
Commissions
|
6,058 | 3,872 | - | 9,930 | ||||||||||||
Other general expenses
|
2,999 | 3,173 | 747 | 6,919 | ||||||||||||
Capitalization of deferred policy acquisition costs
|
(6,060 | ) | (1,824 | ) | - | (7,884 | ) | |||||||||
Amortization of deferred policy acquisition costs
|
3,772 | 457 | - | 4,229 | ||||||||||||
Amortization of cost of customer relationships acquired
|
276 | 475 | - | 751 | ||||||||||||
Total benefits and expenses
|
31,417 | 11,606 | 747 | 43,770 | ||||||||||||
Income (loss) before income tax expense
|
$ | 1,952 | 2,528 | 260 | 4,740 |
Six Months Ended June 30, 2011
|
||||||||||||||||
Life
Insurance |
Home
Service |
Other
Non-Insurance |
Consolidated
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Revenues:
|
|
|||||||||||||||
Premiums
|
$ | 55,536 | 21,578 | - | 77,114 | |||||||||||
Net investment income
|
8,353 | 6,512 | 366 | 15,231 | ||||||||||||
Realized investment gains (losses), net
|
4 | 2 | - | 6 | ||||||||||||
Decrease in fair value of warrants
|
- | - | 1,215 | 1,215 | ||||||||||||
Other income
|
164 | 14 | 49 | 227 | ||||||||||||
Total revenue
|
64,057 | 28,106 | 1,630 | 93,793 | ||||||||||||
Benefits and expenses:
|
||||||||||||||||
Insurance benefits paid or provided:
|
||||||||||||||||
Claims and surrenders
|
19,857 | 9,927 | - | 29,784 | ||||||||||||
Increase in future policy benefit reserves
|
23,824 | 1,494 | - | 25,318 | ||||||||||||
Policyholders' dividends
|
3,544 | 38 | - | 3,582 | ||||||||||||
Total insurance benefits paid or provided
|
47,225 | 11,459 | - | 58,684 | ||||||||||||
Commissions
|
11,400 | 7,602 | - | 19,002 | ||||||||||||
Other general expenses
|
5,953 | 6,255 | 1,321 | 13,529 | ||||||||||||
Capitalization of deferred policy acquisition costs
|
(11,487 | ) | (3,562 | ) | - | (15,049 | ) | |||||||||
Amortization of deferred policy acquisition costs
|
7,610 | 1,139 | - | 8,749 | ||||||||||||
Amortization of cost of customer relationships acquired
|
499 | 906 | - | 1,405 | ||||||||||||
Total benefits and expenses
|
61,200 | 23,799 | 1,321 | 86,320 | ||||||||||||
Income (loss) before income tax expense
|
$ | 2,857 | 4,307 | 309 | 7,473 |
Three Months Ended June 30, 2010
|
||||||||||||||||
Life Insurance
|
Home
Service
Insurance
|
Other
Non-Insurance Enterprises
|
Consolidated
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Revenues:
|
|
|||||||||||||||
Premiums
|
$ | 26,081 | 10,595 | - | 36,676 | |||||||||||
Net investment income
|
4,635 | 3,475 | 165 | 8,275 | ||||||||||||
Realized investment gains (losses), net
|
144 | 548 | - | 692 | ||||||||||||
Decrease in fair value of warrants
|
- | - | 366 | 366 | ||||||||||||
Other income
|
132 | 4 | 15 | 151 | ||||||||||||
Total revenue
|
30,992 | 14,622 | 546 | 46,160 | ||||||||||||
Benefits and expenses:
|
||||||||||||||||
Insurance benefits paid or provided:
|
||||||||||||||||
Claims and surrenders
|
10,247 | 4,847 | - | 15,094 | ||||||||||||
Increase in future policy benefit reserves
|
8,773 | 1,010 | - | 9,783 | ||||||||||||
Policyholders' dividends
|
1,760 | 17 | - | 1,777 | ||||||||||||
Total insurance benefits paid or provided
|
20,780 | 5,874 | - | 26,654 | ||||||||||||
Commissions
|
5,239 | 3,789 | - | 9,028 | ||||||||||||
Other general expenses
|
2,654 | 3,794 | 674 | 7,122 | ||||||||||||
Capitalization of deferred policy acquisition costs
|
(5,219 | ) | (1,759 | ) | - | (6,978 | ) | |||||||||
Amortization of deferred policy acquisition costs
|
5,001 | 217 | - | 5,218 | ||||||||||||
Amortization of cost of customer relationships acquired
|
275 | 479 | - | 754 | ||||||||||||
Total benefits and expenses
|
28,730 | 12,394 | 674 | 41,798 | ||||||||||||
Income (loss) before income tax expense
|
$ | 2,262 | 2,228 | (128 | ) | 4,362 |
Six Months Ended June 30, 2010
|
||||||||||||||||
Life Insurance
|
Home
Service
Insurance
|
Other
Non-Insurance Enterprises
|
Consolidated
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Revenues:
|
|
|||||||||||||||
Premiums
|
$ | 50,850 | 21,016 | - | 71,866 | |||||||||||
Net investment income
|
9,346 | 7,007 | 271 | 16,624 | ||||||||||||
Realized investment gains (losses), net
|
115 | 681 | (45 | ) | 751 | |||||||||||
Decrease in fair value of warrants
|
- | - | 252 | 252 | ||||||||||||
Other income
|
409 | 53 | 37 | 499 | ||||||||||||
Total revenue
|
60,720 | 28,757 | 515 | 89,992 | ||||||||||||
Benefits and expenses:
|
||||||||||||||||
Insurance benefits paid or provided:
|
||||||||||||||||
Claims and surrenders
|
20,146 | 10,525 | - | 30,671 | ||||||||||||
Increase in future policy benefit reserves
|
17,435 | 1,893 | - | 19,328 | ||||||||||||
Policyholders' dividends
|
3,302 | 45 | - | 3,347 | ||||||||||||
Total insurance benefits paid or provided
|
40,883 | 12,463 | - | 53,346 | ||||||||||||
Commissions
|
9,744 | 7,412 | - | 17,156 | ||||||||||||
Other general expenses
|
5,631 | 7,435 | 909 | 13,975 | ||||||||||||
Capitalization of deferred policy acquisition costs
|
(9,683 | ) | (3,290 | ) | - | (12,973 | ) | |||||||||
Amortization of deferred policy acquisition costs
|
9,660 | 502 | - | 10,162 | ||||||||||||
Amoritzation of cost of customer relationships acquired
|
605 | 987 | - | 1,592 | ||||||||||||
Total benefits and expenses
|
56,840 | 25,509 | 909 | 83,258 | ||||||||||||
Income (loss) before income tax expense
|
$ | 3,880 | 3,248 | (394 | ) | 6,734 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(In thousands)
|
||||||||||||||||
|
||||||||||||||||
Net income (loss)
|
$ | 3,243 | 3,185 | 5,023 | 4,790 | |||||||||||
Other comprehensive income (loss) net of effects of deferred acquisiton costs and taxes:
|
||||||||||||||||
Unrealized gains (losses) on available-for-sale securities
|
10,508 | 3,815 | 12,115 | 10,266 | ||||||||||||
Tax (expense) benefit
|
(3,678 | ) | (2,646 | ) | (4,240 | ) | (4,435 | ) | ||||||||
Other comprehensive income (loss)
|
6,830 | 1,169 | 7,875 | 5,831 | ||||||||||||
Total comprehensive income (loss)
|
$ | 10,073 | 4,354 | 12,898 | 10,621 |
(5)
|
Earnings Per Share
|
|
The following tables set forth the computation of basic and diluted earnings per share.
|
Three Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
(In thousands,
except per share amounts)
|
||||||||
Basic and diluted earnings per share:
|
||||||||
Numerator:
|
|
|||||||
Net income
|
$ | 3,243 | 3,185 | |||||
Net income allocated to Class A common stock
|
$ | 3,210 | 3,153 | |||||
Net income allocated to Class B common stock
|
33 | 32 | ||||||
Net income available to common stockholders
|
$ | 3,243 | 3,185 | |||||
Denominator:
|
||||||||
Weighted average shares of Class A outstanding - basic and diluted
|
48,689 | 48,687 | ||||||
Weighted average shares of Class B outstanding - basic and diluted
|
1,002 | 1,002 | ||||||
Basic and diluted earnings per share of Class A common stock
|
$ | 0.07 | 0.07 | |||||
Basic and diluted earnings per share of Class B common stock
|
0.03 | 0.03 |
Six Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
(In thousands,
except per share amounts)
|
||||||||
Basic and diluted earnings per share:
|
||||||||
Numerator:
|
|
|||||||
Net income
|
$ | 5,023 | 4,790 | |||||
Net income allocated to Class A common stock
|
$ | 4,972 | 4,741 | |||||
Net income allocated to Class B common stock
|
51 | 49 | ||||||
Net income available to common stockholders
|
$ | 5,023 | 4,790 | |||||
Denominator:
|
||||||||
Weighted average shares of Class A outstanding - basic
|
48,688 | 48,687 | ||||||
Weighted average shares of Class A outstanding - diluted
|
48,704 | 48,687 | ||||||
Weighted average shares of Class B outstanding - basic and diluted
|
1,002 | 1,002 | ||||||
Basic earnings per share of Class A common stock
|
$ | 0.10 | 0.10 | |||||
Basic earnings per share of Class B common stock
|
0.05 | 0.05 | ||||||
Diluted earnings per share of Class A common stock
|
0.08 | 0.10 | ||||||
Diluted earnings per share of Class B common stock
|
0.04 | 0.05 |
(6)
|
Investments
|
|
The Company invests primarily in fixed maturity securities, which totaled 84.1% of total investments and cash and cash equivalents at June 30, 2011.
|
June 30, 2011
|
December 31, 2010
|
|||||||||||||||
Carrying
Value
|
% of Total
Carrying Value
|
Carrying
Value
|
% of Total
Carrying Value
|
|||||||||||||
(In thousands)
|
(In thousands)
|
|||||||||||||||
Fixed maturity securities
|
$ | 692,852 | 84.1 | $ | 655,969 | 84.6 | ||||||||||
Equity securities
|
24,593 | 3.0 | 23,304 | 3.0 | ||||||||||||
Mortage loans
|
1,466 | 0.2 | 1,489 | 0.2 | ||||||||||||
Policy loans
|
36,919 | 4.5 | 35,585 | 4.6 | ||||||||||||
Real estate
|
9,152 | 1.1 | 9,200 | 1.2 | ||||||||||||
Other long-term investments
|
144 | - | 148 | - | ||||||||||||
Cash and cash equivalents
|
58,376 | 7.1 | 49,723 | 6.4 | ||||||||||||
Total cash, cash equivalents and investments
|
$ | 823,502 | 100.0 | $ | 775,418 | 100.0 |
|
Cash balances fluctuate as excess available funds are pending investment into fixed maturity securities.
|
June 30, 2011
|
||||||||||||||||
Cost or
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Fixed maturities available-for-sale:
|
|
|||||||||||||||
U.S. Treasury securities
|
$ | 10,455 | 2,040 | - | 12,495 | |||||||||||
U.S. Government-sponsored enterprises
|
262,470 | 696 | 2,850 | 260,316 | ||||||||||||
States of the United States and political subdivisions of the states
|
132,740 | 3,104 | 2,701 | 133,143 | ||||||||||||
Foreign governments
|
105 | 28 | - | 133 | ||||||||||||
Corporate
|
158,250 | 8,860 | 782 | 166,328 | ||||||||||||
Securities not due at a single maturity date
|
10,074 | 632 | 13 | 10,693 | ||||||||||||
Total fixed maturities available-for-sale
|
574,094 | 15,360 | 6,346 | 583,108 | ||||||||||||
Fixed maturities held-to-maturity
|
||||||||||||||||
U.S. Government-sponsored enterprises
|
80,734 | 206 | 779 | 80,161 | ||||||||||||
States of the United States and political subdivisions of the states
|
29,010 | 3 | 566 | 28,447 | ||||||||||||
Total fixed maturities held-to-maturity
|
109,744 | 209 | 1,345 | 108,608 | ||||||||||||
Total fixed maturities
|
$ | 683,838 | 15,569 | 7,691 | 691,716 | |||||||||||
Total equity securities
|
$ | 20,551 | 4,042 | - | 24,593 |
December 31, 2010
|
||||||||||||||||
Cost or
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Fixed maturities available-for-sale:
|
|
|||||||||||||||
U.S. Treasury securities
|
$ | 10,908 | 1,917 | - | 12,825 | |||||||||||
U.S. Government-sponsored enterprises
|
290,904 | 441 | 6,390 | 284,955 | ||||||||||||
States of the United States and political subdivisions of the states
|
107,214 | 539 | 6,034 | 101,719 | ||||||||||||
Foreign governments
|
106 | 26 | - | 132 | ||||||||||||
Corporate
|
155,277 | 7,237 | 1,216 | 161,298 | ||||||||||||
Securities not due at a single maturity date
|
14,003 | 833 | 28 | 14,808 | ||||||||||||
Total fixed maturities available-for-sale
|
578,412 | 10,993 | 13,668 | 575,737 | ||||||||||||
Fixed maturities held-to-maturity
|
||||||||||||||||
U.S. Government-sponsored enterprises
|
80,232 | 272 | 1,401 | 79,103 | ||||||||||||
Total fixed maturities
|
$ | 658,644 | 11,265 | 15,069 | 654,840 | |||||||||||
Total equity securities
|
$ | 19,844 | 3,460 | - | 23,304 |
June 30, 2011
|
||||||||||||||||||||||||||||||||||||
Less than 12 months
|
Greater than 12 months
|
Total
|
||||||||||||||||||||||||||||||||||
Fair
Value |
Unrealized
Losses |
# of
Securities |
Fair
Value |
Unrealized
Losses |
# of
Securities |
Fair
Value |
Unrealized
Losses |
# of
Securities |
||||||||||||||||||||||||||||
(In thousands, except for # of securities)
|
||||||||||||||||||||||||||||||||||||
Available-for-sale securities:
|
|
|||||||||||||||||||||||||||||||||||
U.S. Treasury securities
|
$ | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||
U.S. Government-sponsored enterprises
|
183,732 | 2,850 | 131 | - | - | - | 183,732 | 2,850 | 131 | |||||||||||||||||||||||||||
Securities issued by states and political subdivisions
|
25,695 | 454 | 24 | 10,139 | 2,247 | 8 | 35,834 | 2,701 | 32 | |||||||||||||||||||||||||||
Corporate
|
14,754 | 486 | 13 | 6,157 | 296 | 5 | 20,911 | 782 | 18 | |||||||||||||||||||||||||||
Securities not due at a single maturity date
|
- | - | - | 187 | 13 | 4 | 187 | 13 | 4 | |||||||||||||||||||||||||||
Total available-for-sale securities
|
224,181 | 3,790 | 168 | 16,483 | 2,556 | 17 | 240,664 | 6,346 | 185 | |||||||||||||||||||||||||||
Held to-maturity securities:
|
||||||||||||||||||||||||||||||||||||
U.S. Government-sponsored enterprises
|
58,920 | 779 | 28 | - | - | - | 58,920 | 779 | 28 | |||||||||||||||||||||||||||
Securities issued by states and political subdivisions
|
26,979 | 566 | 22 | - | - | - | 26,979 | 566 | 22 | |||||||||||||||||||||||||||
Total held-to-maturity securities
|
85,899 | 1,345 | 50 | - | - | - | 85,899 | 1,345 | 50 | |||||||||||||||||||||||||||
Total fixed maturities
|
$ | 310,080 | 5,135 | 218 | 16,483 | 2,556 | 17 | 326,563 | 7,691 | 235 |
December 31, 2010
|
||||||||||||||||||||||||||||||||||||
Less than 12 months
|
Greater than 12 months
|
Total
|
||||||||||||||||||||||||||||||||||
Fair
Value |
Unrealized
Losses |
# of
Securities |
Fair
Value |
Unrealized
Losses |
# of
Securities |
Fair
Value |
Unrealized
Losses |
# of
Securities |
||||||||||||||||||||||||||||
(In thousands, except for # of securities)
|
||||||||||||||||||||||||||||||||||||
Available-for-sale securities:
|
|
|||||||||||||||||||||||||||||||||||
U.S. Government-sponsored enterprises
|
$ | 234,994 | 6,390 | 170 | - | - | - | 234,994 | 6,390 | 170 | ||||||||||||||||||||||||||
Securities issued by states and political subdivisions
|
66,836 | 3,270 | 60 | 9,626 | 2,764 | 8 | 76,462 | 6,034 | 68 | |||||||||||||||||||||||||||
Corporate
|
28,072 | 1,040 | 21 | 2,443 | 176 | 7 | 30,515 | 1,216 | 28 | |||||||||||||||||||||||||||
Securities not due at a single maturity date
|
569 | 8 | 2 | 201 | 20 | 5 | 770 | 28 | 7 | |||||||||||||||||||||||||||
Total available-for-sale securities
|
330,471 | 10,708 | 253 | 12,270 | 2,960 | 20 | 342,741 | 13,668 | 273 | |||||||||||||||||||||||||||
Held to-maturity securities:
|
||||||||||||||||||||||||||||||||||||
U.S. Government-sponsored enterprises
|
45,699 | 1,401 | 18 | - | - | - | 45,699 | 1,401 | 18 | |||||||||||||||||||||||||||
Total fixed maturities
|
$ | 376,170 | 12,109 | 271 | 12,270 | 2,960 | 20 | 388,440 | 15,069 | 291 |
June 30, 2011
|
||||||||
Amortized
Cost
|
Fair
Value
|
|||||||
(In thousands)
|
||||||||
Available-for-sale securities:
|
||||||||
Due in one year or less
|
$ | 4,770 | 4,919 | |||||
Due after one year through five years
|
34,212 | 36,045 | ||||||
Due after five years through ten years
|
116,642 | 120,342 | ||||||
Due after ten years
|
408,396 | 411,109 | ||||||
Total available-for-sale securities
|
564,020 | 572,415 | ||||||
Held-to-maturity securities:
|
||||||||
Due after five years through ten years
|
16,889 | 16,596 | ||||||
Due after ten years
|
92,855 | 92,012 | ||||||
Total held-to-maturity securities
|
109,744 | 108,608 | ||||||
Securities not due at a single maturity date
|
10,074 | 10,693 | ||||||
Total fixed maturities
|
$ | 683,838 | 691,716 |
Fixed Maturities Available-for-Sale
|
Equity Securities
|
|||||||||||||||||||||||||||||||
Three Months
Ended June 30,
|
Six Months
Ended June 30,
|
Three Months
Ended June 30,
|
Six Months
Ended June 30,
|
|||||||||||||||||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||
Proceeds
|
$ | - | 4,740 | - | 6,866 | - | 487 | - | 591 | |||||||||||||||||||||||
Gross realized gains
|
$ | - | 615 | - | 742 | - | 141 | - | 166 |
(7)
|
Fair Value Measurements
|
|
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We hold available-for-sale fixed maturity securities and equity securities, which are carried at fair value.
|
|
Fair value measurements are generally based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. All assets and liabilities carried at fair value are required to be classified and disclosed in one of the following three categories:
|
|
·
|
Level 1 - Quoted prices for identical instruments in active markets.
|
|
·
|
Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs or whose significant value drivers are observable.
|
|
·
|
Level 3 - Instruments whose significant value drivers are unobservable.
|
June 30, 2011
|
||||||||||||||||