FEDERATED NATIONAL HOLDING COMPANY (UNAUDITED)

12 Months Ended

Dec. 31, 2012

FEDERATED NATIONAL HOLDING COMPANY (UNAUDITED) [Abstract]

FEDERATED NATIONAL HOLDING COMPANY (UNAUDITED)

(19)  FEDERATED NATIONAL HOLDING COMPANY (UNAUDITED)

FNHC (the parent company only) has no long term obligations, guarantees or material contingencies as of December 31, 2012. The following summarizes the major categories of the parent company's financial statements.

Condensed Balance Sheets (Unaudited)	Period Ending December 31,
ASSETS	2012			2011
	(Dollars in Thousands)
Cash and short term investments	$	1,494		$	2,283
Investments and advances to subsidiaries		61,005			60,554
Deferred income taxes receivable		4,338			8,612
Income taxes receivable		9,515			9,474
Property, plant and equipment, net		98			260
Other assets		4,069			4,024
Total assets	$	80,519		$	85,207
LIABILITIES AND SHAREHOLDERS' EQUITY
Income taxes payable		-			78
Other liabilities		125			143
Total liabilities		125			221
Shareholders' equity:
Common stock		80			80
Additional paid-in capital		45,378			45,250
Accumulated other comprehensive (loss) income		(1,039	)		494
Retained earnings		35,975			39,162
Total shareholders' equity		80,394			84,986
Total liabilities and shareholders' equity	$	80,519		$	85,207

Condensed Statements of Operations (Unaudited)	Years Ended December 31,
	2012		2011			2010
	(Dollars in Thousands)
Revenue:
Management fees from subsidiaries	$	1,228	$	1,734		$	1,669
Equity in income of subsidiaries		8,787		(48	)		(10,080	)
Net investment income		34		31			2
Other income		476		1,345			518
Total revenue		10,525		3,062			(7,891	)
Expenses:
Salaries and wages		1,853		1,775			1,930
Legal fees		198		54			19
Other expenses		1,726		2,233			2,114
Total expenses		3,777		4,062			4,063
Income (loss) before provision for income tax expense (benefit)		6,748		(1,000	)		(11,955	)
Provision for income tax expense (benefit)		2,435		(570	)		(3,959	)
Net income (loss)	$	4,313	$	(430	)	$	(7,996	)

Condensed Statements of Cash Flow (Unaudited)
	Years Ended December 31,
	2012			2011			2010
	(Dollars in Thousands)
Cash flow from operating activities:
Net income (loss)	$	4,313		$	(430	)	$	(7,996	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Equity in (income) loss of subsidiaries		(8,787	)		48			10,080
Depreciation and amortization of property plant and equipment, net		23			7			13
Deferred income tax (benefit) expense		(4,274	)		696			3,241
Income tax (payable) recoverable		(78	)		78			-
Change in dividends payable		-			-			(477	)
Non-cash compensation		188			263			431
Changes in operating assets and liabilities:
Property, plant and equipment		(138	)		73			(259	)
Deferred gain on sale of assets		(30	)		(506	)		(500	)
Other assets		45			(292	)		(301	)
Other liabilities		(18	)		(770	)		(675	)
Net cash provided by operating activities		(8,756	)		(833	)		3,557
Cash flow used in investing activities:
Purchases of investment securities available for sale		(451	)		(846	)		(5,024	)
Increased capital of subsidiaries		-			-			(5,025	)
Cash flow used in investing activities:		(451	)		(846	)		(10,049	)
Net cash used in financing activities:
Dividends paid		(159	)		-			(477	)
Stock options exercised		128			-			-
Tax benefit related to non-cash compensation		100			92			151
Advances (to) from subsidiaries		8,349			668			3,832
Net cash used in financing activities:		8,418			760			3,506
Net decrease in cash and short term investments		(789	)		(919	)		(2,986	)
Cash and short term investments at beginning of year		2,283			3,202			6,188
Cash and short term investments at end of year	$	1,494		$	2,283		$	3,202