Note 11. Stockholders' Equity

12 Months Ended

Dec. 31, 2014

Notes

Note 11. Stockholders' Equity

Note 11.          Stockholders’ Equity

Preferred Stock

            IHC has 100,000 authorized shares of preferred stock, par value $1.00 per share, none of which was issued as of December 31, 2014 and 2013.

Common Stock

In 2012, IHC issued 1,638,849 shares of common stock, net of treasury shares, in connection with a special stock dividend payable to shareholders of record on February 17, 2012 with a distribution date of March 5, 2012. Accordingly, IHC charged retained earnings $15,799,000, representing the fair value of such shares on the distribution date, and recorded a credit to common stock for the par value of such shares and a credit to paid-in capital for the remaining difference. Fractional shares were paid in cash in-lieu of stock. All references to number of common shares and earnings per share amounts have been adjusted retroactively for all periods presented to reflect the change in capital structure.

In June 2012, the stockholders of the Company approved an amendment to the Company’s restated certificate of incorporation to increase the number of authorized shares of common stock from 20,000,000 shares to 23,000,000 shares.

Treasury Stock

In 1991, IHC initiated a program of repurchasing shares of its common stock. In August 2014, the Board of Directors authorized the repurchase of up to 500,000 shares of IHC’s common stock, in addition to prior authorizations, under the 1991 plan. The Company has repurchased 296,775, 334,305 and 100,246 shares in 2014, 2013 and 2012, respectively.  All of the shares repurchased have been either retired, reissued, or have become treasury shares. At December 31, 2014, there were 468,218 shares still authorized to be repurchased under the plan authorized by the Board of Directors.

Accumulated Other Comprehensive Income (Loss)

The components of other comprehensive income (loss) include (i) the after-tax net unrealized gains and losses on investment securities available-for-sale, including the subsequent increases and decreases in fair value of available-for-sale securities previously impaired and the non-credit related component of other-than-temporary impairments of fixed maturities and (ii) the after-tax unrealized gains and losses on a cash flow hedge.

            Changes in the balances for each component of accumulated other comprehensive income (loss), shown net of taxes, for the years indicated were as follows (in thousands):

		Unrealized
		Gains (Losses) on
		Available-for Sale		Cash Flow
		Securities		Hedge		Total
Balance at December 31, 2011	$	8,150	$	(297)	$	7,853
Other comprehensive income (loss) before reclassifications		10,480		79		10,559
Amounts reclassified from accumulated OCI		(3,284)		-		(3,284)
Net other comprehensive income (loss)		7,196		79		7,275
Less: Other comprehensive income attributable
to noncontrolling interests		(118)		-		(118)
Acquired from noncontrolling interests		3		-		3
Balance at December 31, 2012		15,231		(218)		15,013
Other comprehensive income (loss) before reclassifications		(14,361)		96		(14,265)
Amounts reclassified from accumulated OCI		(11,826)		-		(11,826)
Net other comprehensive income (loss)		(26,187)		96		(26,091)
Less: Other comprehensive loss attributable
to noncontrolling interests		665		-		665
Acquired from noncontrolling interests		(59)		-		(59)
Balance at December 31, 2013		(10,350)		(122)		(10,472)
Other comprehensive income (loss) before reclassifications		15,872		72		15,944
Amounts reclassified from accumulated OCI		(5,251)		-		(5,251)
Net other comprehensive income (loss)		10,621		72		10,693
Less: Other comprehensive loss attributable
to noncontrolling interests		(199)		-		(199)
Balance at December 31, 2014	$	72	$	(50)	$	22

Presented below are the amounts reclassified out of accumulated other comprehensive income (loss) and recognized in earnings for each of the years indicated (in thousands):

		2014		2013		2012
Unrealized gains (losses) on available-for-sale securities
reclassified during the period to the following income
statement line items:
Net realized investment gains	$	7,637	$	17,841	$	5,490
Net impairment losses recognized in earnings		-		-		(704)
Income before income tax		7,637		17,841		4,786
Tax effect		2,386		6,015		1,502
Net income	$	5,251	$	11,826	$	3,284