SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2017

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of goodwill and intangible assets

Goodwill and Intangible Assets
(in thousands)			March 31,		December 31,
Reporting Unit			2017		2016
Goodwill
	Energy surety	$	25,706	$	25,706
	Miscellaneous and contract surety		15,110		15,110
	P&C package business		5,246		5,246
	Medical professional liability *		5,208		5,208
Total goodwill		$	51,270	$	51,270
Intangibles
	State insurance licenses	$	7,500	$	7,500
	Definite-lived intangibles, net of accumulated amortization of $3,606 at 3/31/17 and $5,546 at 12/31/16		5,395		5,601
Total intangibles		$	12,895	$	13,101
Total goodwill and intangibles		$	64,165	$	64,371

*   The medical professional liability goodwill balance reflects a $7.2 million non-cash impairment charge recorded in the second quarter of 2016.

Schedule of reconciliation of numerator and denominator of the basic and diluted earnings per share computations

	For the Three-Month Period					For the Three-Month Period
	Ended March 31,  2017					Ended March 31,  2016
	Income		Shares	Per Share		Income		Shares	Per Share
(in thousands, except per share data)	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic EPS
Income available to common shareholders	$	19,828	43,961	$	0.45	$	31,393	43,597	$	0.72
Effect of Dilutive Securities
Stock options		-	541				-	764
Diluted EPS
Income available to common shareholders	$	19,828	44,502	$	0.45	$	31,393	44,361	$	0.71

Schedule of changes in the balance of each component of accumulated other comprehensive earnings

(in thousands)	For the Three-Month Periods
	Ended March 31,
Unrealized Gains/Losses on Available-for-Sale Securities	2017		2016
Beginning balance	$	122,610	$	123,774
Other comprehensive earnings before reclassifications		12,172		29,171
Amounts reclassified from accumulated other comprehensive earnings		(403)		(7,408)
Net current-period other comprehensive earnings (loss)	$	11,769	$	21,763
Ending balance	$	134,379	$	145,537

Schedule of effects of reclassifications out of accumulated other comprehensive earnings

	Amount Reclassified from Accumulated Other
(in thousands)	Comprehensive Earnings
	For the Three-Month
Component of Accumulated	Periods Ended March 31,				Affected line item in the
Other Comprehensive Earnings	2017		2016		Statement of Earnings
Unrealized gains and losses on available-for-sale securities	$	2,710	$	11,397	Net realized gains
		(2,090)		-	Other-than-temporary impairment (OTTI) losses on investments
	$	620	$	11,397	Earnings before income taxes
		(217)		(3,989)	Income tax expense
	$	403	$	7,408	Net earnings