SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2017

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of goodwill and intangible assets

Goodwill and Intangible Assets
(in thousands)			June 30,		December 31,
Reporting Unit			2017		2016
Goodwill
	Energy surety	$	25,706	$	25,706
	Miscellaneous and contract surety		15,110		15,110
	Small commercial		5,246		5,246
	Medical professional liability *		3,595		5,208
Total goodwill		$	49,657	$	51,270
Intangibles
	State insurance licenses	$	7,500	$	7,500
	Definite-lived intangibles, net of accumulated amortization of $4,077 at 6/30/17 and $5,546 at 12/31/16		3,425		5,601
Total intangibles		$	10,925	$	13,101
Total goodwill and intangibles		$	60,582	$	64,371

*   The medical professional liability goodwill balance reflects a cumulative non-cash impairment charge of $8.8 million and $7.2 million as of June 30, 2017 and December 31, 2016, respectively.

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 June 30,  2017					Ended June 30,  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	$	26,208	44,005	$	0.60	$	29,077	43,721	$	0.67
Effect of Dilutive Securities
Stock options		-	514				-	702
Diluted EPS
Income available to common shareholders	$	26,208	44,519	$	0.59	$	29,077	44,423	$	0.65
	For the Six-Month Period					For the Six-Month Period
	Ended June 30,  2017					Ended June 30,  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	$	46,036	43,983	$	1.05	$	60,470	43,659	$	1.39
Effect of Dilutive Securities
Stock options		-	534				-	722
Diluted EPS
Income available to common shareholders	$	46,036	44,517	$	1.03	$	60,470	44,381	$	1.36

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

(in thousands)	For the Three-Month Periods				For the Six-Month Periods
	Ended June 30,				Ended June 30,
Unrealized Gains/Losses on Available-for-Sale Securities	2017		2016		2017		2016
Beginning balance	$	134,379	$	145,537	$	122,610	$	123,774
Other comprehensive earnings before reclassifications		11,753		25,561		23,925		54,731
Amounts reclassified from accumulated other comprehensive earnings		(1,154)		(6,495)		(1,557)		(13,902)
Net current-period other comprehensive earnings	$	10,599	$	19,066	$	22,368	$	40,829
Ending balance	$	144,978	$	164,603	$	144,978	$	164,603

Schedule of effects of reclassifications out of accumulated other comprehensive earnings

	Amount Reclassified from Accumulated Other
(in thousands)	Comprehensive Earnings
	For the Three-Month				For the Six-Month
Component of Accumulated	Periods Ended June 30,				Periods Ended June 30,				Affected line item in the
Other Comprehensive Earnings	2017		2016		2017		2016		Statement of Earnings
Unrealized gains and losses on available-for-sale securities	$	1,775	$	9,992	$	4,485	$	21,388	Net realized gains
		-		-		(2,090)		-	Other-than-temporary impairment (OTTI) losses on investments
	$	1,775	$	9,992	$	2,395	$	21,388	Earnings before income taxes
		(621)		(3,497)		(838)		(7,486)	Income tax expense
	$	1,154	$	6,495	$	1,557	$	13,902	Net earnings