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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 9 Months Ended
Sep. 30, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
Schedule of goodwill and intangible assets

 

 

 

 

 

 

 

Goodwill and Intangible Assets

 

 

September 30,

 

 

December 31,

(in thousands)

 

 

2018

 

 

2017

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

Total goodwill

 

$

46,062

 

$

49,657

 

 

 

 

 

 

 

Intangibles

 

 

 

 

 

 

State insurance licenses

 

$

7,500

 

$

7,500

Definite-lived intangibles, net of accumulated amortization of $2,929 at 9/30/18 and $5,678 at 12/31/17

 

 

1,064

 

 

2,145

Total intangibles

 

$

8,564

 

$

9,645

 

 

 

 

 

 

 

Total goodwill and intangibles

 

$

54,626

 

$

59,302

*   The medical professional liability goodwill balance reflects a cumulative non-cash impairment charge of $12.4 million and $8.8 million as of September 30, 2018 and December 31, 2017, 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 September 30, 2018

 

Ended September 30, 2017

 

 

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

   

$

39,372

    

44,400

    

$

0.89

    

$

1,734

    

44,058

    

$

0.04

Effect of Dilutive Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

 -

 

540

 

 

 

 

 

 -

 

457

 

 

 

Diluted EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income available to common shareholders

 

$

39,372

 

44,940

 

$

0.88

 

$

1,734

 

44,515

 

$

0.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine-Month Period

 

For the Nine-Month Period

 

 

Ended September 30, 2018

 

Ended September 30, 2017

 

 

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

   

$

84,839

    

44,311

    

$

1.91

    

$

47,770

    

44,008

    

$

1.09

Effect of Dilutive Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

 -

 

449

 

 

 

 

 

 -

 

509

 

 

 

Diluted EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income available to common shareholders

 

$

84,839

 

44,760

 

$

1.90

 

$

47,770

 

44,517

 

$

1.07

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

For the Three-Month Periods

 

For the Nine-Month Periods

 

 

Ended September 30,

 

Ended September 30,

Unrealized Gains/Losses on Available-for-Sale Securities

    

2018

    

2017

    

2018

    

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

(14,648)

 

$

144,978

 

$

157,919

 

$

122,610

Cumulative effect adjustment of ASU 2016-01

 

 

 -

 

 

 -

 

 

(142,219)

 

 

 -

Adjusted beginning balance

 

$

(14,648)

 

$

144,978

 

$

15,700

 

$

122,610

Other comprehensive earnings before reclassifications

 

 

(7,034)

 

 

9,141

 

 

(41,829)

 

 

33,066

Amounts reclassified from accumulated other comprehensive earnings

 

 

(662)

 

 

(697)

 

 

60

 

 

(2,254)

Net current-period other comprehensive earnings (loss)

 

$

(7,696)

 

$

8,444

 

$

(41,769)

 

$

30,812

Reclassification of stranded tax effect per ASU 2018-02

 

 

 -

 

 

 -

 

 

3,725

 

 

 -

Ending balance

 

$

(22,344)

 

$

153,422

 

$

(22,344)

 

$

153,422

 

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 Nine-Month

 

 

Component of Accumulated 

 

Periods Ended September 30, 

 

Periods Ended September 30, 

 

Affected line item in the

Other Comprehensive Earnings

    

2018

    

2017

    

2018

    

2017

    

Statement of Earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains and losses on available-for-sale securities

 

$

999

 

$

1,073

 

$

141

 

$

5,558

 

Net realized gains (losses)

 

 

 

(161)

 

 

 -

 

 

(217)

 

 

(2,090)

 

Other-than-temporary impairment (OTTI) losses on investments

 

 

$

838

 

$

1,073

 

$

(76)

 

$

3,468

 

Earnings (loss) before income taxes

 

 

 

(176)

 

 

(376)

 

 

16

 

 

(1,214)

 

Income tax expense (benefit)

 

 

$

662

 

$

697

 

$

(60)

 

$

2,254

 

Net earnings (loss)