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Schedule II - Condensed Financial Information of Registrant
 12 Months Ended
Dec. 31, 2019
Condensed Financial Information Disclosure [Abstract]  
Condensed Financial Information of Parent Company Only Disclosure
Schedule II
KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES
Condensed Financial Information of Registrant
Balance Sheets

 
 
December 31,
 
 
2019
 
2018
 
 
(in thousands)
Assets
 
 
 
 
Cash and cash equivalents
 
$
14,726

 
$
10,016

Due from subsidiaries
 
16,836

 
1,001

Investment in subsidiaries
 
391,071

 
251,591

Deferred tax assets
 
519

 
369

Income taxes recoverable
 
—

 
787

Other assets
 
208

 
549

Total assets
 
$
423,360

 
$
264,313

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
 
Liabilities:
 
 
 
 
Accounts payable and accrued expenses
 
$
260

 
$
308

Income taxes payable
 
434

 
—

Credit facility
 
16,744

 
—

Other liabilities
 
42

 
19

Total liabilities
 
17,480

 
327

 
 
 
 
 
Stockholders’ equity:
 
 
 
 
Common stock
 
222

 
212

Additional paid-in capital
 
229,229

 
158,485

Retained earnings
 
162,911

 
106,545

Accumulated other comprehensive income (loss)
 
13,518

 
(1,256
)
Stockholders’ equity
 
405,880

 
263,986

Total liabilities and stockholders’ equity
 
$
423,360

 
$
264,313



See accompanying notes.
See accompanying Report of Independent Registered Public Accounting Firm.

Schedule II
KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES
Condensed Financial Information of Registrant
Statements of Income and Comprehensive Income

 
 
Years Ended December 31,
 
 
2019
 
2018
 
2017
 
 
(in thousands)
Revenues:
 
 
 
 
 
 
Management fees from subsidiaries
 
$
4,502

 
$
3,215

 
$
2,037

Total revenues
 
4,502

 
3,215

 
2,037

 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
Other operating expenses
 
2,473

 
2,457

 
2,526

Other expenses
 
2,742

 
1,598

 
652

Total expenses
 
5,215

 
4,055

 
3,178

 
 
 
 
 
 
 
Loss before income taxes
 
(713
)
 
(840
)
 
(1,141
)
Income tax benefit
 
(2,714
)
 
(1,158
)
 
(739
)
Income (loss) before equity in net income of subsidiaries
 
2,001

 
318

 
(402
)
Equity in net income of subsidiaries
 
61,315

 
33,469

 
25,303

Net income
 
63,316

 
33,787

 
24,901

 
 
 
 
 
 
 
Other comprehensive income (loss):
 
 
 
 
 
 
Equity in other comprehensive earnings (losses) of subsidiaries
 
14,774

 
(5,469
)
 
6,384

Total comprehensive income
 
$
78,090

 
$
28,318

 
$
31,285



See accompanying notes.
See accompanying Report of Independent Registered Public Accounting Firm.


Schedule II
KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES
Condensed Financial Information of Registrant
Statements of Cash Flows

 
 
Years Ended December 31,
 
 
2019
 
2018
 
2017
 
 
(in thousands)
Operating activities
 
 
 
 
 
 
Net income
 
$
63,316

 
$
33,787

 
$
24,901

Adjustments to reconcile net income to net cash used in operating activities:
 
 
 
 
 
 
Deferred tax (benefit) expense
 
(150
)
 
(170
)
 
429

Stock compensation expense
 
2,742

 
1,597

 
652

Equity in undistributed earnings of subsidiaries
 
(61,315
)
 
(33,469
)
 
(25,303
)
Changes in operating assets and liabilities
 
(14,247
)
 
(633
)
 
(1,583
)
Dividends received from subsidiary
 
5,000

 
11,500

 
4,500

Net cash (used in) provided by operating activities
 
(4,654
)
 
12,612

 
3,596

 
 
 
 
 
 
 
Investing activities
 
 
 
 
 
 
Contributions to subsidiary
 
(68,391
)
 
—

 
—

Net cash used in investing activities
 
(68,391
)
 
—

 
—

 
 
 
 
 
 
 
Financing activities
 
 
 
 
 
 
Common stock issued, net of transaction costs
 
65,879

 
—

 
—

Common stock issued, stock options exercised
 
2,750

 
1,808

 
1,077

Payroll taxes withheld and remitted on share-based payments
 
(617
)
 
—

 
—

Dividends paid
 
(6,929
)
 
(5,906
)
 
(5,039
)
Proceeds from credit facility
 
17,300

 
—

 
—

Debt issuance costs
 
(628
)
 
—

 
—

Net cash provided by (used in) financing activities
 
77,755

 
(4,098
)
 
(3,962
)
Net change in cash and cash equivalents
 
4,710

 
8,514

 
(366
)
Cash and cash equivalents at beginning of year
 
10,016

 
1,502

 
1,868

Cash and cash equivalents at end of year
 
$
14,726

 
$
10,016

 
$
1,502


See accompanying notes.
See accompanying Report of Independent Registered Public Accounting Firm.
KINSALE CAPITAL GROUP, INC.
Condensed Financial Information of Registrant
Notes to Condensed Financial Information


1. Accounting policies
Organization
Kinsale Capital Group, Inc., a Delaware domiciled insurance holding company, was formed on June 3, 2009 for the purpose of acquiring and managing insurance 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. Certain prior year amounts have been reclassified to conform to the current year's presentation.
Estimates and assumptions
Preparation of the condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed financial statements and accompanying disclosures. Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates.
Credit agreement
On May 28, 2019, the Company entered into a Credit Agreement (the “Credit Agreement”) that provided the Company with a $50.0 million senior unsecured revolving credit facility (the “Credit Facility”) and an uncommitted accordion feature that permits the Company to increase the commitments by an additional $30.0 million. The Credit Facility has a maturity of May 28, 2024. Borrowings under the Credit Facility will be used to fund construction of the Company’s new headquarters and may also be used for working capital and general corporate purposes.
Loans under the Credit Facility may be subject to varying rates of interest depending on whether the loan is a Eurodollar loan or an alternate base rate (ABR) loan, at the Company's election. Eurodollar loans bear an interest rate per annum equal to adjusted LIBOR for the applicable interest period plus a margin of 1.75%. ABR loans bear an interest rate per annum equal to the higher of the prime rate, the New York Federal Reserve Board Rate or the one-month adjusted LIBOR, plus the applicable margin of 0.75% to 1.75%, depending on which interest option was applicable for the particular ABR loan. As of December 31, 2019, there was $17.3 million outstanding under the Credit Facility, net of debt issuance cost of $0.6 million, with a weighted average interest rate of 3.75%. Total interest expense under the Credit Facility was $0.2 million for the year ended December 31, 2019 and was capitalized as part of the real estate project under construction. See Note 1 for further details. Interest paid was $0.1 million for the year ending December 31, 2019. There were no credit agreements outstanding at December 31, 2018 or December 31, 2017.
The Credit Agreement also contains representations and warranties and affirmative and negative covenants customary for financings of this type, as well as customary events of default. As of December 31, 2019, the Company was in compliance with all of its financial covenants under the Credit Facility.
Dividends from subsidiary
Cash dividends paid to Kinsale Capital Group, Inc. by its wholly-owned subsidiary, Kinsale Insurance Company, were $5.0 million for the year ended December 31, 2019, $11.5 million for the year ended December 31, 2018, and $4.5 million for the year ended December 31, 2017.