SCHEDULE II - Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Disclosure [Abstract]

Statements of financial information of parent company only (Parent Company)

Condensed Financial Information of Registrant

Balance Sheets (Parent Company)

	December 31,
	2019		2018
	(in thousands)
Assets
Cash and cash equivalents	$	1,521	$	240
Investment in subsidiaries	987,221		882,407
Due from subsidiaries	7,371		5,775
Other assets	2,842		1,579
Total assets	$	998,955	$	890,001
Liabilities and shareholders’ equity
Liabilities:
Accrued expenses	$	1,592	$	2,322
Senior debt	143,300		103,300
Junior subordinated debt	15,928		15,928
Notes payable to subsidiary	40,000		40,000
Due to subsidiaries	18,822		18,605
Other liabilities	732		605
Total liabilities	220,374		180,760
Commitments and contingent liabilities
Shareholders’ equity:
Class A common shares	6		6
Additional paid-in capital	657,875		645,310
Retained earnings	89,586		79,753
Accumulated other comprehensive income (loss)	31,114		(15,828		)
Total shareholders’ equity	778,581		709,241
Total liabilities and shareholders’ equity	$	998,955	$	890,001

See accompanying notes.

SCHEDULE II​

JAMES RIVER GROUP HOLDINGS, LTD. AND SUBSIDIARIES

Condensed Financial Information of Registrant

Statements of Income and Comprehensive Income (Parent Company)

	Year Ended December 31,
	2019			2018			2017
	(in thousands)
Revenues:
Other income	$	61		$	58		$	49
Total revenues	61			58			49
Expenses:
Other operating expenses	14,267			13,768			10,375
Other expenses	—			337			640
Interest expense	5,047			5,122			4,130
Total expenses	19,314			19,227			15,145
Loss before equity in net income of subsidiaries	(19,253		)	(19,169		)	(15,096		)
Equity in net income of subsidiaries	57,592			82,999			58,662
Net income	$	38,339		$	63,830		$	43,566
Other comprehensive income (loss):
Equity in other comprehensive earnings (losses) of subsidiaries	46,942			(22,203		)	9,219
Total comprehensive income	$	85,281		$	41,627		$	52,785

See accompanying notes.

SCHEDULE II​

JAMES RIVER GROUP HOLDINGS, LTD. AND SUBSIDIARIES

Condensed Financial Information of Registrant

Statements of Cash Flows (Parent Company)

	Year Ended December 31,
	2019			2018			2017
Operating activities
Net income	$	38,339		$	63,830		$	43,566
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Provision for depreciation and amortization	182			176			176
Share based compensation expense	7,178			6,228			7,688
Equity in undistributed earnings of subsidiaries	(49,592		)	6,000			(23,662		)
Changes in operating assets and liabilities	(2,782		)	(5,653		)	684
Net cash (used in) provided by operating activities	(6,675		)	70,581			28,452
Investing activities
Dividends from subsidiaries	—			—			20,000
Net cash provided by investing activities	—			—			20,000
Financing activities
Dividends paid	(36,720		)	(36,123		)	(50,832		)
Senior debt issuance	60,000			20,000			10,000
Senior debt repayments	(20,000		)	—			—
Subsidiary note repayments	—			(60,000		)	—
Debt issue costs paid	(711		)	—			—
Issuances of common shares under equity incentive plans	8,286			5,172			1,708
Common share repurchases	(2,899		)	(2,239		)	(9,448		)
Net cash provided by (used in) financing activities	7,956			(73,190		)	(48,572		)
Change in cash and cash equivalents	1,281			(2,609		)	(120		)
Cash and cash equivalents at beginning of period	240			2,849			2,969
Cash and cash equivalents at end of period	$	1,521		$	240		$	2,849
Supplemental information
Interest paid	$	5,710		$	5,052		$	4,612

​

See accompanying notes.

SCHEDULE II​

JAMES RIVER GROUP HOLDINGS, LTD. AND SUBSIDIARIES

Condensed Financial Information of Registrant

Notes to Condensed Financial Statements

1. Accounting Policies

Organization

James River Group Holdings, Ltd. (the “Company”) is an exempted holding company registered in Bermuda, organized for the purpose of acquiring and managing insurance and reinsurance entities.

Basis of Presentation

The accompanying condensed financial statements have been prepared using the equity method. Under the equity method, the investment in consolidated subsidiaries is stated at cost plus equity in undistributed earnings of consolidated subsidiaries since the date of acquisition. These condensed financial statements should be read in conjunction with the Company’s consolidated financial statements.

Estimates and Assumptions

Preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates.

Adopted Accounting Standards

Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842). This update requires the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. The Company adopted the new standard using a modified retrospective transition method, applying the transition provisions at the beginning of the period of adoption. The Company elected the package of practical expedients permitted under the transition guidance within the new standard and did not elect to use hindsight in determining the lease term. Upon adoption of the new standard, the Company derecognized assets of $22.6 million and liabilities of $30.9 million associated with a lease that was designated as build-to-suit under the previous guidance, and recorded a cumulative-effect adjustment to increase retained earnings by $8.3 million.

The Company recorded right-of-use assets of $17.2 million and lease liabilities of $17.8 million at adoption of the new standard associated with operating leases for office space in Bermuda, North Carolina, Virginia, Arizona, and Georgia. The new standard did not materially impact the Company's results of operations, earnings per share, or cash flows, and did not impact compliance under the covenants of the Company's current credit agreements.