Acquisition (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Unaudited Pro Forma Consolidated Results of Operations

The following table presents the Company’s unaudited pro forma consolidated results of operations for the years December 31, 2015 and 2014 as if the acquisition had occurred on January 1, 2014 instead of January 1, 2015.

	Pro Forma
	Years Ended December 31,
(Dollars in thousands except per share data)	2015		2014
Total Revenue	$	538,778	$	597,583
Net Income (Loss)	$	46,864	$	63,053
Net Income (Loss) per share (diluted)	$	1.91	$	2.46

Intangible assets

An identification and valuation of intangible assets was performed that resulted in the recognition of intangible assets of $32.0 million with values assigned as follows:

(Dollars in thousands) Description	Useful Life		Amount
State insurance licenses		Indefinite	$	5,000
Value of business acquired		< 1 year		25,500
Agent relationships		10 years		900
Trade name		7 years		600
			$	32,000

Expected Amortization Expense

The Company expects that amortization expense for the next five years will be as follows:

(Dollars in thousands)
2017	$	529
2018		529
2019		529
2020		529
2021		529

American Reliable Insurance Company

Estimated Fair Value of Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of the acquisition.

(Dollars in thousands)
ASSETS:
Investments	$	226,458
Cash and cash equivalents		21,360
Premiums receivables, net		26,102
Accounts receivable		11,311
Reinsurance receivables		13,842
Prepaid reinsurance premiums		43,506
Intangible assets		32,000
Deferred federal income taxes		915
Other assets		6,473
Total assets		381,967
LIABILITIES:
Unearned premiums		172,234
Unpaid losses and loss adjustment expenses		89,489
Reinsurance balances payable		13,219
Contingent commissions		3,903
Other liabilities		5,026
Total liabilities		283,871
Estimated fair value of net assets acquired		98,096
Purchase price		99,797
Goodwill	$	1,701

Intangible assets

The following table presents details of the Company’s intangible assets arising from the American Reliable acquisition as of December 31, 2015:

(Dollars in thousands) Description	Useful Life		Cost		Accumulated Amortization		Net Value
State insurance licenses		Indefinite	$	5,000	$	—	$	5,000
Value of business acquired		< 1 year		25,500		25,500		0
Agent relationships		10 years		900		90		810
Trade name		7 years		600		86		514
			$	32,000	$	25,676	$	6,324

Expected Amortization Expense

As of December 31, 2015, the Company expected that amortization expense for the next five years related to the American Reliable acquisition will be as follows:

(Dollars in thousands)
2016	$	176
2017		176
2018		176
2019		176
2020		176

Fair Value, Gross Contractual Amounts Due, and Contractual Cash Flows Not Expected to be Collected of Acquired Receivables

As of December 31, 2015, the fair value, gross contractual amounts due, and contractual cash flows not expected to be collected of acquired receivables were as follows:

(Dollars in thousands)	Fair Value		Gross Contractual Amounts Due		Contractual cash flows not expected to be collected
Premium receivables	$	26,102	$	26,896	$	794
Accounts receivable		11,311		11,311		—
Reinsurance receivables		13,842		13,842		—