
4)	ACQUISITION

On February 3, 2015, we successfully completed the acquisition of Family Security Holdings, LLC and its two wholly-owned subsidiaries. The purchase price of FSH consisted of an initial purchase price of $12,994,000 in common stock and $540,000 in contingent consideration that will be paid out one year after the closing of the merger.

The business combination has been accounted for using the acquisition method of accounting, which requires, among other things, that most assets acquired, liabilities assumed and earn-out consideration be recognized at their fair values as of the acquisition date.

The purchase price consisted of the following amounts:



Fair market value of common stock issued	$	12,994
Estimate of potential contingent consideration⁽¹⁾	540
Total purchase price	$	13,534

⁽¹⁾

The amount of the contingent consideration reflected in the table above reflects our estimate, as of March 31, 2015, of the amount of contingent consideration that we will be required to pay to the former shareholders of FSH pursuant to the purchase agreement to acquire Family Security Holdings, LLC and it subsidiaries. The contingent consideration will be paid out in additional shares of our stock based on the 180-day average of the closing price of our stock in the 180-days immediately prior to the one-year anniversary of the closing of the acquisition. The contingent consideration will be measured at each reporting date with changes in its fair value recognized in our Consolidated Statements of Comprehensive Income.

The operations of FSH are included in our Unaudited Consolidated Statements of Comprehensive Income effective February 3, 2015. We have one year from the acquisition date to finalize the allocation of the purchase price of FSH. The initial purchase price allocation is as follows:



Cash	$	12,745
Investments	7,310
Premium and Agents' Receivable	1,496
Intangible assets	6,312
Goodwill	5,237
Other assets	609
Loss reserves	(2,390		)
Unearned premiums	(9,646		)
Reinsurance payable	(998		)
Loans payable	(2,246		)
Deferred taxes	(3,223		)
Other liabilities	(1,672		)
Total purchase price	$	13,534

The unaudited pro forma information has been prepared as if the Family Security Holdings, LLC acquisition had taken place on January 1, 2015. The unaudited pro forma information is not necessarily indicative of the results that we would have achieved had the transaction taken place on January 1, 2015, and the unaudited pro forma information does not purport to be indicative of future financial operating results.



	For the Quarter Ended March 31, 2015
			Pro Forma
	As Reported		Adjustments		Pro Forma
Revenues	$	82,396	$	1,127	$	83,523

Net income	$	198	$	77	$	275

Diluted earnings per share	$	0.01	$	—	$	0.01