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)
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(Zip Code)
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(512) 837-7100
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N/A
|
Part I. | Financial Information |
Page
Number
|
||
Item 1. | Financial Statements | |||
2
|
||||
4
|
||||
5
|
||||
7
|
||||
Item 2.
|
25
|
|||
Item 3.
|
43
|
|||
Item 4.
|
44
|
|||
Part II. | Other Information | |||
Item 1. | Legal Proceedings | 44 | ||
Item 1A. | Risk Factors | 45 | ||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 45 | ||
Item 3. | Defaults Upon Senior Securities | 45 | ||
Item 4. | Mine Safety Disclosures | 45 | ||
Item 5. | Other Information | 45 | ||
Item 6. | Exhibits | 46 |
March 31,
|
December 31,
|
|||||||
Assets
|
2012
|
2011
|
||||||
(Unaudited)
|
(As adjusted)
|
|||||||
Investments:
|
||||||||
Fixed maturities available-for-sale, at fair value (cost: $466,828 and $484,809 in 2012 and 2011, respectively)
|
$ | 497,977 | 514,253 | |||||
Fixed maturities held-to-maturity, at amortized cost (fair value: $242,383 and $230,093 in 2012 and 2011, respectively)
|
239,040 | 227,500 | ||||||
Equity securities available-for-sale, at fair value (cost: $45,397 and $45,599 in 2012 and 2011, respectively)
|
46,723 | 46,137 | ||||||
Mortgage loans on real estate
|
1,546 | 1,557 | ||||||
Policy loans
|
40,170 | 39,090 | ||||||
Real estate held for investment (less $1,184 and $1,149 accumulated depreciation in 2012 and 2011, respectively)
|
8,574 | 8,539 | ||||||
Other long-term investments
|
112 | 105 | ||||||
Short-term investments
|
2,030 | 2,048 | ||||||
Total investments
|
836,172 | 839,229 | ||||||
Cash and cash equivalents
|
61,096 | 33,255 | ||||||
Accrued investment income
|
8,853 | 7,787 | ||||||
Reinsurance recoverable
|
9,594 | 9,562 | ||||||
Deferred policy acquisition costs
|
126,333 | 124,542 | ||||||
Cost of customer relationships acquired
|
27,373 | 27,945 | ||||||
Goodwill
|
17,160 | 17,160 | ||||||
Other intangible assets
|
899 | 906 | ||||||
Federal income tax receivable
|
- | 901 | ||||||
Property and equipment, net
|
7,810 | 7,860 | ||||||
Due premiums, net (less $1,598 and $1,698 allowance for doubtful accounts in 2012 and 2011, respectively)
|
8,671 | 9,169 | ||||||
Prepaid expenses
|
1,234 | 396 | ||||||
Other assets
|
852 | 800 | ||||||
Total assets
|
$ | 1,106,047 | 1,079,512 |
See accompanying notes to consolidated financial statements.
|
(Continued)
|
March 31,
|
December 31,
|
|||||||
Liabilities and Stockholders' Equity
|
2012
|
2011
|
||||||
(Unaudited)
|
(As adjusted)
|
|||||||
Liabilities:
|
||||||||
Policy liabilities:
|
|
|||||||
Future policy benefit reserves:
|
||||||||
Life insurance
|
$ | 711,148 | 697,502 | |||||
Annuities
|
48,119 | 47,060 | ||||||
Accident and health
|
5,556 | 5,612 | ||||||
Dividend accumulations
|
10,864 | 10,601 | ||||||
Premiums paid in advance
|
26,276 | 25,291 | ||||||
Policy claims payable
|
9,070 | 10,020 | ||||||
Other policyholders' funds
|
8,832 | 8,760 | ||||||
Total policy liabilities
|
819,865 | 804,846 | ||||||
Commissions payable
|
2,442 | 2,851 | ||||||
Current federal income tax payable
|
396 | - | ||||||
Deferred federal income tax
|
14,201 | 13,940 | ||||||
Payable for securities in process of settlement
|
7,546 | - | ||||||
Warrants outstanding
|
415 | 451 | ||||||
Other liabilities
|
9,981 | 9,382 | ||||||
Total liabilities
|
854,846 | 831,470 | ||||||
Commitments and contingencies (Note 7)
|
||||||||
Stockholders' equity:
|
||||||||
Class A, no par value, 100,000,000 shares authorized, 52,098,676 shares issued in 2012 and 52,089,189 shares issued in 2011, including shares in treasury of 3,135,738 in 2012 and 2011
|
258,616 | 258,548 | ||||||
Class B, no par value, 2,000,000 shares authorized, 1,001,714 shares issued and outstanding in 2012 and 2011
|
3,184 | 3,184 | ||||||
Accumulated deficit
|
(20,339 | ) | (21,851 | ) | ||||
Accumulated other comprehensive income:
|
||||||||
Unrealized gains on securities, net of tax
|
20,751 | 19,172 | ||||||
Treasury stock, at cost
|
(11,011 | ) | (11,011 | ) | ||||
Total stockholders' equity
|
251,201 | 248,042 | ||||||
Total liabilities and stockholders' equity
|
$ | 1,106,047 | 1,079,512 |
2012
|
2011
|
|||||||||||||||
Revenues:
|
(As adjusted)
|
|||||||||||||||
Premiums:
|
||||||||||||||||
Life insurance
|
$ | 37,406 | 35,611 | |||||||||||||
Accident and health insurance
|
413 | 372 | ||||||||||||||
Property insurance
|
1,277 | 1,245 | ||||||||||||||
Net investment income
|
7,577 | 7,300 | ||||||||||||||
Realized investment gains, net
|
98 | 19 | ||||||||||||||
Decrease in fair value of warrants
|
36 | 399 | ||||||||||||||
Other income
|
98 | 123 | ||||||||||||||
Total revenues
|
46,905 | 45,069 | ||||||||||||||
Benefits and expenses:
|
||||||||||||||||
Insurance benefits paid or provided:
|
||||||||||||||||
Claims and surrenders
|
14,754 | 14,879 | ||||||||||||||
Increase in future policy benefit reserves
|
14,141 | 12,318 | ||||||||||||||
Policyholders' dividends
|
1,874 | 1,662 | ||||||||||||||
Total insurance benefits paid or provided
|
30,769 | 28,859 | ||||||||||||||
Commissions
|
8,664 | 9,072 | ||||||||||||||
Other general expenses
|
6,616 | 6,403 | ||||||||||||||
Capitalization of deferred policy acquisition costs
|
(5,939 | ) | (6,641 | ) | ||||||||||||
Amortization of deferred policy acquisition costs
|
4,126 | 4,238 | ||||||||||||||
Amortization of cost of customer relationships acquired
|
576 | 647 | ||||||||||||||
Total benefits and expenses
|
44,812 | 42,578 | ||||||||||||||
Income before federal income tax
|
2,093 | 2,491 | ||||||||||||||
Federal income tax expense
|
581 | 869 | ||||||||||||||
Net income
|
1,512 | 1,622 | ||||||||||||||
Per Share Amounts:
|
|
|||||||||||||||
Basic earnings per share of Class A common stock
|
$ | 0.03 | 0.03 | |||||||||||||
Basic earnings per share of Class B common stock
|
0.02 | 0.02 | ||||||||||||||
Diluted earnings per share of Class A common stock
|
0.03 | 0.03 | ||||||||||||||
Diluted earnings per share of Class B common stock
|
0.02 | 0.01 | ||||||||||||||
Other comprehensive income:
|
||||||||||||||||
Unrealized gains on available-for-sale securities:
|
||||||||||||||||
Unrealized holding gains arising during period
|
2,561 | 1,626 | ||||||||||||||
Reclassification adjustment for gains included in net income
|
(86 | ) | (19 | ) | ||||||||||||
Unrealized gains on available-for-sale securities, net
|
2,475 | 1,607 | ||||||||||||||
Income tax expense on unrealized gains on available-for-sale securities
|
(896 | ) | (562 | ) | ||||||||||||
Other comprehensive income
|
1,579 | 1,045 | ||||||||||||||
Comprehensive income
|
$ | 3,091 | 2,667 |
2012
|
2011
|
|||||||
(As adjusted)
|
||||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 1,512 | 1,622 | |||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Realized gains on sale of investments and other assets
|
(98 | ) | (19 | ) | ||||
Net deferred policy acquisition costs
|
(1,813 | ) | (2,403 | ) | ||||
Amortization of cost of customer relationships acquired
|
576 | 647 | ||||||
Decrease in fair value of warrants
|
(36 | ) | (399 | ) | ||||
Depreciation
|
299 | 205 | ||||||
Amortization of premiums and discounts on fixed maturities and short-term investments
|
1,015 | 1,240 | ||||||
Deferred federal income tax benefit
|
(636 | ) | (250 | ) | ||||
Change in:
|
||||||||
Accrued investment income
|
(1,066 | ) | (999 | ) | ||||
Reinsurance recoverable
|
(32 | ) | 332 | |||||
Due premiums and other receivables
|
498 | 353 | ||||||
Future policy benefit reserves
|
14,026 | 12,100 | ||||||
Other policyholders' liabilities
|
370 | 1,212 | ||||||
Federal income tax receivable
|
1,297 | 2,042 | ||||||
Commissions payable and other liabilities
|
190 | 193 | ||||||
Other, net
|
(890 | ) | (1,547 | ) | ||||
Net cash provided by operating activities
|
15,212 | 14,329 | ||||||
Cash flows from investing activities:
|
||||||||
Sale of fixed maturities, available-for-sale
|
503 | - | ||||||
Maturities and calls of fixed maturities, available-for-sale
|
70,619 | 8,871 | ||||||
Maturities and calls of fixed maturities, held-to-maturity
|
22,000 | 19,000 | ||||||
Purchase of fixed maturities, available-for-sale
|
(37,650 | ) | (47,922 | ) | ||||
Purchase of fixed maturities, held-to-maturity
|
(42,508 | ) | (5,973 | ) | ||||
Calls of equity securities, available-for-sale
|
325 | 150 | ||||||
Principal payments on mortgage loans
|
11 | 11 | ||||||
Increase in policy loans, net
|
(1,080 | ) | (721 | ) | ||||
Sale of other long-term investments
|
2 | 1 | ||||||
Purchase of other long-term investments
|
(69 | ) | - | |||||
Purchase of property and equipment
|
(215 | ) | (579 | ) | ||||
Net cash provided by (used in) investing activities
|
11,938 | (27,162 | ) |
See accompanying notes to consolidated financial statements.
|
(Continued)
|
2012
|
2011
|
|||||||
(As adjusted)
|
||||||||
Cash flows from financing activities:
|
||||||||
Warrants exercised
|
$ | 68 | - | |||||
Annuity deposits
|
1,586 | 1,560 | ||||||
Annuity withdrawals
|
(963 | ) | (1,000 | ) | ||||
Net cash provided by financing activities
|
691 | 560 | ||||||
Net increase (decrease) in cash and cash equivalents
|
27,841 | (12,273 | ) | |||||
Cash and cash equivalents at beginning of year
|
33,255 | 49,723 | ||||||
Cash and cash equivalents at end of period
|
$ | 61,096 | 37,450 | |||||
Supplemental disclosures of operating activities:
|
||||||||
Cash received during the period for income taxes recovered
|
$ | (79 | ) | (923 | ) |
As Previously
Reported |
Impact of
Change in |
As
Adjusted |
||||||||||
(In thousands, except per share data)
|
||||||||||||
Balance Sheet Accounts:
|
||||||||||||
As of December 31, 2011
|
|
|
||||||||||
Deferred acquisition costs
|
$ | 136,300 | (11,758 | ) | 124,542 | |||||||
Deferred federal income taxes
|
18,055 | (4,115 | ) | 13,940 | ||||||||
Accumulated deficit
|
(14,208 | ) | (7,643 | ) | (21,851 | ) | ||||||
Statement of Operations:
|
||||||||||||
As of March 31, 2011
|
||||||||||||
Capitalization of deferred policy acquisition costs
|
$ | (7,165 | ) | 524 | (6,641 | ) | ||||||
Amortization of deferred policy acquisition costs
|
4,520 | (282 | ) | 4,238 | ||||||||
Federal income tax expense
|
953 | (84 | ) | 869 | ||||||||
Net income
|
1,780 | (158 | ) | 1,622 | ||||||||
Per share of Class A common stock:
|
||||||||||||
Basic earnings per share
|
$ | 0.04 | (0.01 | ) | 0.03 | |||||||
Diluted earnings per share
|
$ | 0.03 | - | 0.03 |
Three Months Ended
March 31, 2012 |
||||||||||||||||
Life
Insurance |
Home
Service |
Other
Non-Insurance |
Consolidated
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Revenues:
|
|
|||||||||||||||
Premiums
|
$ | 28,169 | 10,927 | - | 39,096 | |||||||||||
Net investment income
|
4,158 | 3,155 | 264 | 7,577 | ||||||||||||
Realized investment gains, net
|
2 | 87 | 9 | 98 | ||||||||||||
Decrease in fair value of warrants
|
- | - | 36 | 36 | ||||||||||||
Other income
|
57 | 6 | 35 | 98 | ||||||||||||
Total revenue
|
32,386 | 14,175 | 344 | 46,905 | ||||||||||||
Benefits and expenses:
|
||||||||||||||||
Insurance benefits paid or provided:
|
||||||||||||||||
Claims and surrenders
|
9,927 | 4,827 | - | 14,754 | ||||||||||||
Increase in future policy benefit reserves
|
13,218 | 923 | - | 14,141 | ||||||||||||
Policyholders' dividends
|
1,862 | 12 | - | 1,874 | ||||||||||||
Total insurance benefits paid or provided
|
25,007 | 5,762 | - | 30,769 | ||||||||||||
Commissions
|
5,022 | 3,642 | - | 8,664 | ||||||||||||
Other general expenses
|
2,920 | 2,964 | 732 | 6,616 | ||||||||||||
Capitalization of deferred policy acquisition costs
|
(4,512 | ) | (1,427 | ) | - | (5,939 | ) | |||||||||
Amortization of deferred policy acquisition costs
|
3,651 | 475 | - | 4,126 | ||||||||||||
Amortization of cost of customer relationships acquired
|
209 | 367 | - | 576 | ||||||||||||
Total benefits and expenses
|
32,297 | 11,783 | 732 | 44,812 | ||||||||||||
Income (loss) before income tax expense
|
$ | 89 | 2,392 | (388 | ) | 2,093 |
Three Months Ended
March 31, 2011 |
||||||||||||||||
Life
Insurance |
Home
Service |
Other
Non-Insurance |
Consolidated
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Revenues:
|
|
|||||||||||||||
Premiums
|
$ | 26,520 | 10,708 | - | 37,228 | |||||||||||
Net investment income
|
3,867 | 3,237 | 196 | 7,300 | ||||||||||||
Realized investment gains, net
|
- | 19 | - | 19 | ||||||||||||
Decrease in fair value of warrants
|
- | - | 399 | 399 | ||||||||||||
Other income
|
87 | 8 | 28 | 123 | ||||||||||||
Total revenue
|
30,474 | 13,972 | 623 | 45,069 | ||||||||||||
Benefits and expenses:
|
||||||||||||||||
Insurance benefits paid or provided:
|
||||||||||||||||
Claims and surrenders
|
9,401 | 5,478 | - | 14,879 | ||||||||||||
Increase in future policy benefit reserves
|
11,809 | 509 | - | 12,318 | ||||||||||||
Policyholders' dividends
|
1,643 | 19 | - | 1,662 | ||||||||||||
Total insurance benefits paid or provided
|
22,853 | 6,006 | - | 28,859 | ||||||||||||
Commissions
|
5,342 | 3,730 | - | 9,072 | ||||||||||||
Other general expenses
|
2,854 | 2,975 | 574 | 6,403 | ||||||||||||
Capitalization of deferred policy acquisition costs
|
(5,065 | ) | (1,576 | ) | - | (6,641 | ) | |||||||||
Amortization of deferred policy acquisition costs
|
3,652 | 586 | - | 4,238 | ||||||||||||
Amortization of cost of customer relationships acquired
|
216 | 431 | - | 647 | ||||||||||||
Total benefits and expenses
|
29,852 | 12,152 | 574 | 42,578 | ||||||||||||
Income before income tax expense
|
$ | 622 | 1,820 | 49 | 2,491 |
(4)
|
Earnings Per Share
|
|
The following tables set forth the computation of basic and diluted earnings per share.
|
Three Months Ended
March 31,
|
||||||||
2012
|
2011
|
|||||||
(In thousands,
except per share amounts) |
||||||||
Basic and diluted earnings per share:
|
||||||||
Numerator:
|
|
|||||||
Net income
|
$ | 1,512 | 1,622 | |||||
Net income allocated to Class A common stock
|
$ | 1,497 | 1,606 | |||||
Net income allocated to Class B common stock
|
15 | 16 | ||||||
Net income available to common stockholders
|
$ | 1,512 | 1,622 | |||||
Denominator:
|
||||||||
Weighted average shares of Class A outstanding - basic and diluted
|
48,959 | 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
|
$ | 0.03 | 0.03 | |||||
Basic earnings per share of Class B common stock
|
0.02 | 0.02 | ||||||
Diluted earnings per share of Class A common stock
|
0.03 | 0.03 | ||||||
Diluted earnings per share of Class B common stock
|
0.02 | 0.01 |
(5)
|
Investments
|
|
The Company invests primarily in fixed maturity securities, which totaled 82.1% of total investments and cash and cash equivalents at March 31, 2012.
|
March 31, 2012
|
December 31, 2011
|
|||||||||||||||
Carrying
Value |
% of Total
Carrying Value |
Carrying
Value |
% of Total
Carrying Value |
|||||||||||||
(In thousands)
|
(In thousands)
|
|||||||||||||||
Fixed maturity securities
|
$ | 737,017 | 82.1 | $ | 741,753 | 85.0 | ||||||||||
Equity securities
|
46,723 | 5.2 | 46,137 | 5.3 | ||||||||||||
Mortgage loans
|
1,546 | 0.2 | 1,557 | 0.2 | ||||||||||||
Policy loans
|
40,170 | 4.5 | 39,090 | 4.5 | ||||||||||||
Real estate and other long-term investments
|
8,686 | 1.0 | 8,644 | 1.0 | ||||||||||||
Short-term investments
|
2,030 | 0.2 | 2,048 | 0.2 | ||||||||||||
Cash and cash equivalents
|
61,096 | 6.8 | 33,255 | 3.8 | ||||||||||||
Total cash, cash equivalents and investments
|
$ | 897,268 | 100.0 | $ | 872,484 | 100.0 |
March 31, 2012
|
||||||||||||||||
Cost or
Amortized |
Gross
Unrealized |
Gross
Unrealized |
Fair
Value |
|||||||||||||
(In thousands)
|
||||||||||||||||
Fixed maturities:
|
||||||||||||||||
Fixed maturities available-for-sale:
|
|
|||||||||||||||
U.S. Treasury securities
|
$ | 10,213 | 3,226 | - | 13,439 | |||||||||||
U.S. Government-sponsored enterprises
|
94,839 | 2,800 | 28 | 97,611 | ||||||||||||
States of the United States and political subdivisions of the states
|
154,747 | 11,932 | 794 | 165,885 | ||||||||||||
Foreign governments
|
105 | 33 | - | 138 | ||||||||||||
Corporate
|
199,092 | 14,773 | 1,348 | 212,517 | ||||||||||||
Securities not due at a single maturity date
|
7,832 | 559 | 4 | 8,387 | ||||||||||||
Total available-for-sale securities
|
466,828 | 33,323 | 2,174 | 497,977 | ||||||||||||
Held-to-maturity securities:
|
||||||||||||||||
U.S. Government-sponsored enterprises
|
154,425 | 542 | 226 | 154,741 | ||||||||||||
States of the United States and political subdivisions of the states
|
58,293 | 2,808 | 29 | 61,072 | ||||||||||||
Corporate
|
26,322 | 293 | 45 | 26,570 | ||||||||||||
Total held-to-maturity securities
|
239,040 | 3,643 | 300 | 242,383 | ||||||||||||
Total fixed maturities
|
$ | 705,868 | 36,966 | 2,474 | 740,360 | |||||||||||
Equity securities:
|
||||||||||||||||
Stock mutual funds
|
$ | 12,686 | 656 | 97 | 13,245 | |||||||||||
Bond mutual funds
|
31,504 | 267 | 59 | 31,712 | ||||||||||||
Common stock
|
17 | 4 | - | 21 | ||||||||||||
Preferred stock
|
1,190 | 555 | - | 1,745 | ||||||||||||
Total equity securities
|
$ | 45,397 | 1,482 | 156 | 46,723 |
December 31, 2011
|
||||||||||||||||
Cost or
Amortized |
Gross
Unrealized |
Gross
Unrealized |
Fair
Value |
|||||||||||||
(In thousands)
|
||||||||||||||||
Fixed maturities:
|
||||||||||||||||
Available-for-sale securities:
|
|
|||||||||||||||
U.S. Treasury securities
|
$ | 10,228 | 3,730 | - | 13,958 | |||||||||||
U.S. Government-sponsored enterprises
|
143,684 | 3,198 | 65 | 146,817 | ||||||||||||
States of the United States and political subdivisions of the states
|
151,058 | 10,275 | 1,391 | 159,942 | ||||||||||||
Foreign governments
|
105 | 37 | - | 142 | ||||||||||||
Corporate
|
171,462 | 14,576 | 1,493 | 184,545 | ||||||||||||
Securities not due at a single maturity date
|
8,272 | 585 | 8 | 8,849 | ||||||||||||
Total available-for-sale securities
|
484,809 | 32,401 | 2,957 | 514,253 | ||||||||||||
Held-to-maturity securities:
|
||||||||||||||||
U.S. Government-sponsored enterprises
|
160,411 | 742 | 12 | 161,141 | ||||||||||||
States of the United States and political subdivisions of the states
|
56,260 | 1,941 | 84 | 58,117 | ||||||||||||
Corporate
|
10,829 | 49 | 43 | 10,835 | ||||||||||||
Total held-to-maturity securities
|
227,500 | 2,732 | 139 | 230,093 | ||||||||||||
Total fixed maturity securities
|
$ | 712,309 | 35,133 | 3,096 | 744,346 | |||||||||||
Equity securities:
|
||||||||||||||||
Stock mutual funds
|
$ | 12,686 | 415 | 376 | 12,725 | |||||||||||
Bond mutual funds
|
31,504 | 27 | 117 | 31,414 | ||||||||||||
Common stock
|
17 | 7 | - | 24 | ||||||||||||
Preferred stock
|
1,392 | 582 | - | 1,974 | ||||||||||||
Total equity securities
|
$ | 45,599 | 1,031 | 493 | 46,137 |
|
At March 31, 2012, the Company had $7.8 million of mortgage-backed security holdings based on amortized cost, of which $7.2 million, or 91.3%, were residential U.S. Government-sponsored issues. Mortgage-backed securities are also referred to as securities not due at a single maturity date throughout this report. The majority of the Company's equity securities are diversified stock and bond mutual funds.
|
March 31, 2012
|
||||||||||||||||||||||||||||||||||||
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)
|
||||||||||||||||||||||||||||||||||||
Fixed maturities:
|
|
|||||||||||||||||||||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||||||||||||||||||||||
U.S. Government-sponsored enterprises
|
$ | 6,233 | 26 | 5 | 1,001 | 2 | 1 | 7,234 | 28 | 6 | ||||||||||||||||||||||||||
States of the United States and political subdivisions of the states
|
8,192 | 91 | 9 | 6,417 | 703 | 3 | 14,609 | 794 | 12 | |||||||||||||||||||||||||||
Corporate
|
46,239 | 503 | 34 | 8,544 | 845 | 6 | 54,783 | 1,348 | 40 | |||||||||||||||||||||||||||
Securities not due at a single maturity date
|
237 | 1 | 1 | 66 | 3 | 2 | 303 | 4 | 3 | |||||||||||||||||||||||||||
Total available-for-sale securities
|
60,901 | 621 | 49 | 16,028 | 1,553 | 12 | 76,929 | 2,174 | 61 | |||||||||||||||||||||||||||
Held-to-maturity securities:
|
||||||||||||||||||||||||||||||||||||
U.S. Government-sponsored enterprises
|
53,043 | 215 | 27 | 1,112 | 11 | 1 | 54,155 | 226 | 28 | |||||||||||||||||||||||||||
States of the United States and political subdivisions of the states
|
7,462 | 29 | 5 | - | - | - | 7,462 | 29 | 5 | |||||||||||||||||||||||||||
Corporate
|
12,458 | 45 | 9 | - | - | - | 12,458 | 45 | 9 | |||||||||||||||||||||||||||
Total held-to-maturity securities
|
72,963 | 289 | 41 | 1,112 | 11 | 1 | 74,075 | 300 | 42 | |||||||||||||||||||||||||||
Total fixed maturities
|
$ | 133,864 | 910 | 90 | 17,140 | 1,564 | 13 | 151,004 | 2,474 | 103 | ||||||||||||||||||||||||||
Equity securities:
|
||||||||||||||||||||||||||||||||||||
Stock mutual funds
|
$ | 7,437 | 97 | 2 | - | - | - | 7,437 | 97 | 2 | ||||||||||||||||||||||||||
Bond mutual funds
|
6,364 | 59 | 3 | - | - | - | 6,364 | 59 | 3 | |||||||||||||||||||||||||||
Total equities
|
$ | 13,801 | 156 | 5 | - | - | - | 13,801 | 156 | 5 |
As of March 31, 2012, the Company had 12 available-for-sale securities and 1 held-to-maturity security that were in an unrealized loss position for greater than 12 months. These securities consisted of U.S. Government-sponsored enterprises, municipals, corporate and mortgage-backed securities.
|
December 31, 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)
|
||||||||||||||||||||||||||||||||||||
Fixed maturities:
|
|
|||||||||||||||||||||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||||||||||||||||||||||
U.S. Government-sponsored enterprises
|
$ | - | - | - | 3,718 | 65 | 2 | 3,718 | 65 | 2 | ||||||||||||||||||||||||||
States of the United States and political subdivisions of the states
|
1,965 | 29 | 4 | 11,777 | 1,362 | 9 | 13,742 | 1,391 | 13 | |||||||||||||||||||||||||||
Corporate
|
27,239 | 976 | 30 | 8,886 | 517 | 6 | 36,125 | 1,493 | 36 | |||||||||||||||||||||||||||
Securities not due at a single maturity date
|
536 | 4 | 1 | 67 | 4 | 2 | 603 | 8 | 3 | |||||||||||||||||||||||||||
Total available-for-sale securities
|
29,740 | 1,009 | 35 | 24,448 | 1,948 | 19 | 54,188 | 2,957 | 54 | |||||||||||||||||||||||||||
Held-to-maturity securities:
|
||||||||||||||||||||||||||||||||||||
U.S. Government-sponsored enterprises
|
6,997 | 2 | 4 | 1,121 | 10 | 1 | 8,118 | 12 | 5 | |||||||||||||||||||||||||||
States of the United States and political subdivisions of the states
|
8,345 | 84 | 7 | - | - | - | 8,345 | 84 | 7 | |||||||||||||||||||||||||||
Corporate
|
6,706 | 43 | 4 | - | - | - | 6,706 | 43 | 4 | |||||||||||||||||||||||||||
Total held-to-maturity securities
|
22,048 | 129 | 15 | 1,121 | 10 | 1 | 23,169 | 139 | 16 | |||||||||||||||||||||||||||
Total fixed maturities
|
$ | 51,788 | 1,138 | 50 | 25,569 | 1,958 | 20 | 77,357 | 3,096 | 70 | ||||||||||||||||||||||||||
Equity securities:
|
||||||||||||||||||||||||||||||||||||
Stock mutual funds
|
$ | 7,158 | 376 | 2 | - | - | - | 7,158 | 376 | 2 | ||||||||||||||||||||||||||
Bond mutual funds
|
25,387 | 117 | 10 | - | - | - | 25,387 | 117 | 10 | |||||||||||||||||||||||||||
Total equities
|
$ | 32,545 | 493 | 12 | - | - | - | 32,545 | 493 | 12 |
|
We have reviewed these securities for the periods ended March 31, 2012 and December 31, 2011 and determined that no other-than-temporary impairment exists based on our evaluation of the credit worthiness of the issuers and the fact that we do not intend to sell the investments nor is it likely that we will be required to sell the securities before recovery of their amortized cost bases which may be maturity. We continue to monitor all securities on an on-going basis, and future information may become available which could result in impairments being recorded.
|
|
The amortized cost and fair value of fixed maturity securities at March 31, 2012 by contractual maturity are shown in the table below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
|
March 31, 2012
|
||||||||
Amortized
Cost |
Fair
Value |
|||||||
(In thousands)
|
||||||||
Available-for-sale securities:
|
||||||||
Due in one year or less
|
$ | 7,339 | 7,450 | |||||
Due after one year through five years
|
52,579 | 54,785 | ||||||
Due after five years through ten years
|
108,692 | 115,135 | ||||||
Due after ten years
|
290,386 | 312,220 | ||||||
Total available-for-sale securities
|
458,996 | 489,590 | ||||||
Held-to-maturity securities:
|
||||||||
Due in one year or less
|
4,975 | 4,969 | ||||||
Due after one year through five years
|
15,091 | 15,129 | ||||||
Due after five years through ten years
|
35,939 | 37,418 | ||||||
Due after ten years
|
183,035 | 184,867 | ||||||
Total held-to-maturity securities
|
239,040 | 242,383 | ||||||
Securities not due at a single maturity date
|
7,832 | 8,387 | ||||||
Total fixed maturities
|
$ | 705,868 | 740,360 |
|
The securities not due at a single maturity date are primarily mortgage-backed obligations of U.S. Government-sponsored enterprises and corporate securities.
|
Three Months Ended
March 31,
|
||||||||||||||||
Fixed Maturities Available-for-Sale
|
Equity Securities
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Proceeds
|
$ | 503 | - | - | - | |||||||||||
Gross realized gains
|
$ | 1 | - | - | - |
|
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.
|