SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2019

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of goodwill and intangible assets

Goodwill and Intangible Assets		September 30,		December 31,
(in thousands)		2019		2018
Goodwill
Energy surety	$	25,706	$	25,706
Miscellaneous and contract surety		15,110		15,110
Small commercial		5,246		5,246
Total goodwill	$	46,062	$	46,062
Intangibles
State insurance licenses	$	7,500	$	7,500
Definite-lived intangibles, net of accumulated amortization of $3,368 at 9/30/19 and $3,062 at 12/31/18		666		972
Total intangibles	$	8,166	$	8,472
Total goodwill and intangibles	$	54,228	$	54,534

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, 2019					Ended September 30, 2018
	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	$	32,324	44,823	$	0.72	$	39,372	44,400	$	0.89
Effect of Dilutive Securities
Stock options		-	526				-	540
Diluted EPS
Income available to common shareholders	$	32,324	45,349	$	0.71	$	39,372	44,940	$	0.88
	For the Nine-Month Period					For the Nine-Month Period
	Ended September 30, 2019					Ended September 30, 2018
	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	$	138,264	44,689	$	3.09	$	84,839	44,311	$	1.91
Effect of Dilutive Securities
Stock options		-	503				-	449
Diluted EPS
Income available to common shareholders	$	138,264	45,192	$	3.06	$	84,839	44,760	$	1.90

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	2019		2018		2019		2018
Beginning balance	$	42,593	$	(14,648)	$	(14,572)	$	157,919
Cumulative effect adjustment of ASU 2016-01		-		-		-		(142,219)
Adjusted beginning balance	$	42,593	$	(14,648)	$	(14,572)	$	15,700
Other comprehensive earnings before reclassifications		16,231		(7,034)		74,414		(41,829)
Amounts reclassified from accumulated other comprehensive earnings		(890)		(662)		(1,908)		60
Net current-period other comprehensive earnings (loss)	$	15,341	$	(7,696)	$	72,506	$	(41,769)
Reclassification of stranded tax effect per ASU 2018-02		-		-		-		3,725
Ending balance	$	57,934	$	(22,344)	$	57,934	$	(22,344)

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	2019		2018		2019		2018		Statement of Earnings
Unrealized gains and losses on available-for-sale securities	$	1,126	$	999	$	2,415	$	141	Net realized gains (losses)
		-		(161)		-		(217)	Other-than-temporary impairment (OTTI) losses on investments
	$	1,126	$	838	$	2,415	$	(76)	Earnings before income taxes
		(236)		(176)		(507)		16	Income tax benefit (expense)
	$	890	$	662	$	1,908	$	(60)	Net earnings (loss)