QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip-Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
par value $1.00 per share |
Class | Outstanding May 14, 2021 | |||||||
Common Stock $1.00 par value |
PART I. FINANCIAL INFORMATION | |||||||||||
Page No. | |||||||||||
Item 1. Financial Statements | |||||||||||
Condensed Consolidated Balance Sheets (UNAUDITED EXCEPT FOR DECEMBER 31, 2020 AMOUNTS) | |||||||||||
Condensed Consolidated Statements of Operations (UNAUDITED) | |||||||||||
Condensed Consolidated Statements of Comprehensive Income (Loss) (UNAUDITED) | |||||||||||
Condensed Consolidated Statements of Changes in Shareholders’ Equity (UNAUDITED) | |||||||||||
Condensed Consolidated Statements of Cash Flows (UNAUDITED) | |||||||||||
Notes to Condensed Consolidated Financial Statements (UNAUDITED EXCEPT FOR DECEMBER 31, 2020 AMOUNTS) | |||||||||||
Report of Independent Registered Public Accounting Firm | |||||||||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||||||||
Item 3. Quantitative and Qualitative Disclosures about Market Risk | |||||||||||
Item 4. Controls and Procedures | |||||||||||
PART II. OTHER INFORMATION | |||||||||||
Item 1. Legal Proceedings | |||||||||||
Item 1A. Risk Factors | |||||||||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities | |||||||||||
Item 3. Defaults Upon Senior Securities | |||||||||||
Item 4. Mine Safety Disclosures | |||||||||||
Item 5. Other Information | |||||||||||
Item 6. Exhibits | |||||||||||
SIGNATURE |
($ in thousands) | March 31, 2021 | December 31, 2020 | ||||||||||||
ASSETS | (UNAUDITED) | |||||||||||||
Investments | ||||||||||||||
Fixed maturities held-to-maturity, at amortized cost (estimated fair value: 2021 - $ | $ | $ | ||||||||||||
Fixed maturities available-for-sale, at estimated fair value (cost: 2021 - $ | ||||||||||||||
Equity securities, at estimated fair value (cost: 2021 - $ | ||||||||||||||
Trading securities | ||||||||||||||
Receivable for securities sold | ||||||||||||||
Mortgage loans on real estate, at cost | ||||||||||||||
Investment real estate, at book value | ||||||||||||||
Policy loans | ||||||||||||||
Company owned life insurance | ||||||||||||||
Other invested assets | ||||||||||||||
Total Investments | ||||||||||||||
Cash and cash equivalents | ||||||||||||||
Accrued investment income | ||||||||||||||
Policy receivables and agents' balances, net | ||||||||||||||
Reinsurance recoverable | ||||||||||||||
Deferred policy acquisition costs | ||||||||||||||
Property and equipment, net | ||||||||||||||
Income tax recoverable | ||||||||||||||
Deferred income tax asset, net | ||||||||||||||
Other assets | ||||||||||||||
Total Assets | $ | $ | ||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||
Property and casualty benefit and loss reserves | $ | $ | ||||||||||||
Accident and health benefit and loss reserves | ||||||||||||||
Life and annuity benefit and loss reserves | ||||||||||||||
Unearned premiums | ||||||||||||||
Policy and contract claims | ||||||||||||||
Other policyholder funds | ||||||||||||||
Short-term notes payable and current portion of long-term debt | ||||||||||||||
Long-term debt | ||||||||||||||
Other liabilities | ||||||||||||||
Total Liabilities | ||||||||||||||
Contingencies | ||||||||||||||
Shareholders' equity | ||||||||||||||
Common stock | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated other comprehensive income | ||||||||||||||
Retained earnings | ||||||||||||||
Treasury stock, at cost | ( | ( | ||||||||||||
Total Shareholders' Equity | ||||||||||||||
Total Liabilities and Shareholders' Equity | $ | $ |
($ in thousands, except per share) | Three months ended March 31, | ||||||||||
2021 | 2020 | ||||||||||
REVENUES | |||||||||||
Net premiums earned | $ | $ | |||||||||
Net investment income | |||||||||||
Investment gains (losses) | ( | ||||||||||
Other income | |||||||||||
Total Revenues | |||||||||||
BENEFITS, LOSSES AND EXPENSES | |||||||||||
Policyholder benefits and settlement expenses | |||||||||||
Amortization of deferred policy acquisition costs | |||||||||||
Commissions | |||||||||||
General and administrative expenses | |||||||||||
Taxes, licenses and fees | |||||||||||
Interest expense | |||||||||||
Total Benefits, Losses and Expenses | |||||||||||
Income (Loss) Before Income Taxes | ( | ||||||||||
INCOME TAX EXPENSE (BENEFIT) | |||||||||||
Current | ( | ( | |||||||||
Deferred | ( | ||||||||||
( | |||||||||||
Net Income (Loss) | $ | $ | ( | ||||||||
INCOME (LOSS) PER COMMON SHARE BASIC AND DILUTED | $ | $ | ( | ||||||||
DIVIDENDS DECLARED PER SHARE | $ | $ |
($ in thousands) | Three months ended March 31, | ||||||||||
2021 | 2020 | ||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Other comprehensive income (loss), net of tax | |||||||||||
Changes in: | |||||||||||
Unrealized losses on securities, net of reclassification adjustment of $ | ( | ( | |||||||||
Unrealized gain (loss) on interest rate swap | ( | ||||||||||
Other comprehensive loss, net of tax | ( | ( | |||||||||
Comprehensive loss | $ | ( | $ | ( |
($ in thousands) | Total | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Common Stock | Additional Paid-in Capital | Treasury Stock | |||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||
Comprehensive loss: | |||||||||||||||||||||||||||||||||||
Net income for March 31, 2021 | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss (net of tax) | ( | — | ( | — | — | — | |||||||||||||||||||||||||||||
Cash dividends | ( | ( | — | — | — | — | |||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | $ | $ | $ | ( |
($ in thousands) | Total | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Common Stock | Additional Paid-in Capital | Treasury Stock | |||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||
Common stock reacquired | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||
Comprehensive loss: | |||||||||||||||||||||||||||||||||||
Net loss for March 31, 2020 | ( | ( | — | — | — | — | |||||||||||||||||||||||||||||
Other comprehensive loss (net of tax) | ( | — | ( | — | — | — | |||||||||||||||||||||||||||||
Cash dividends | ( | ( | — | — | — | — | |||||||||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | ( | $ | $ | $ | ( |
($ in thousands) | Three months ended March 31, | ||||||||||
2021 | 2020 | ||||||||||
Cash Flows from Operating Activities | |||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Depreciation expense and amortization/accretion, net | |||||||||||
Net (gains) losses on investments | ( | ||||||||||
Deferred income taxes | ( | ||||||||||
Amortization of deferred policy acquisition costs | |||||||||||
Changes in assets and liabilities: | |||||||||||
Change in receivable for securities sold | ( | ||||||||||
Change in accrued investment income | ( | ( | |||||||||
Change in reinsurance recoverable | |||||||||||
Policy acquisition costs deferred | ( | ( | |||||||||
Change in accrued income taxes | ( | ( | |||||||||
Change in net policy liabilities and claims | ( | ( | |||||||||
Change in other assets/liabilities, net | ( | ||||||||||
Other, net | ( | ||||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
Cash Flows from Investing Activities | |||||||||||
Purchase of: | |||||||||||
Available-for-sale securities | ( | ( | |||||||||
Property and equipment | ( | ( | |||||||||
Proceeds from sale or maturities of: | |||||||||||
Held-to-maturity securities | |||||||||||
Available-for-sale securities | |||||||||||
Real estate held for investment | |||||||||||
Other invested assets, net | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash Flows from Financing Activities | |||||||||||
Change in other policyholder funds | ( | ||||||||||
Dividends paid | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Net change in cash and cash equivalents | ( | ( | |||||||||
Cash and cash equivalents, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ |
($ in thousands) Available-for-sale securities: | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
U.S. Government corporations and agencies | $ | $ | $ | $ | ||||||||||||||||||||||
Agency mortgage backed securities | ||||||||||||||||||||||||||
Asset backed securities | ||||||||||||||||||||||||||
Private label mortgage backed securities | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
States, municipalities and political subdivisions | ||||||||||||||||||||||||||
Total Fixed Maturities | ||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
($ in thousands) Held-to-maturity securities: | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
Agency mortgage backed securities | $ | $ | $ | $ | ||||||||||||||||||||||
Total | $ | $ | $ | $ |
($ in thousands) Available-for-sale securities: | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
U.S. Government corporations and agencies | $ | $ | $ | $ | ||||||||||||||||||||||
Agency mortgage backed securities | ||||||||||||||||||||||||||
Asset backed securities | ||||||||||||||||||||||||||
Private label mortgage backed securities | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
States, municipalities and political subdivisions | ||||||||||||||||||||||||||
Total Fixed Maturities | ||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
($ in thousands) Held-to-maturity securities: | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
Agency mortgage backed securities | $ | $ | $ | $ | ||||||||||||||||||||||
Total | $ | $ | $ | $ |
($ in thousands) | Amortized Cost | Fair Value | ||||||||||||
Available-for-sale securities: | ||||||||||||||
Due after one year through five years | $ | $ | ||||||||||||
Due after five years through ten years | ||||||||||||||
Due after ten years | ||||||||||||||
Total | $ | $ | ||||||||||||
Held-to-maturity securities: | ||||||||||||||
Due after one year through five years | $ | $ | ||||||||||||
Due after five years through ten years | ||||||||||||||
Due after ten years | ||||||||||||||
Total | $ | $ |
($ in thousands) | Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||||||||||||||||||||||
March 31, 2021 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Total Securities in a Loss Position | |||||||||||||||||||||||||||||||||||||
U.S. Government corporations and agencies | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Agency mortgage backed securities | ||||||||||||||||||||||||||||||||||||||||||||
Asset backed securities | ||||||||||||||||||||||||||||||||||||||||||||
Private label mortgage backed securities | ||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||||||||||||||||||||
States, municipalities and political subdivisions | ||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
($ in thousands) | Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||||||||||||||||||||||
December 31, 2020 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Total Securities in a Loss Position | |||||||||||||||||||||||||||||||||||||
U.S. Government corporations and agencies | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Agency mortgage backed securities | ||||||||||||||||||||||||||||||||||||||||||||
Asset backed securities | ||||||||||||||||||||||||||||||||||||||||||||
Private label mortgage backed securities | ||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||||||||||||||||||||
States, municipalities and political subdivisions | ||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
($ in thousands) | Three months ended March 31, | ||||||||||
2021 | 2020 | ||||||||||
Fixed maturities | $ | $ | |||||||||
Equity securities | |||||||||||
Mortgage loans on real estate | |||||||||||
Investment real estate | |||||||||||
Policy loans | |||||||||||
Other | |||||||||||
Less: Investment expenses | |||||||||||
Net investment income | $ | $ |
($ in thousands) | Three months ended March 31, | ||||||||||
2021 | 2020 | ||||||||||
Realized gains on fixed maturities | $ | $ | |||||||||
Realized gains (losses) on equity securities | ( | ||||||||||
Gains on trading securities | |||||||||||
Change in fair value of equity securities | ( | ||||||||||
Change in surrender value of company owned life insurance | ( | ( | |||||||||
Other gains principally real estate | |||||||||||
Other-than-temporary impairments | ( | ||||||||||
Net investment gains (losses) | $ | $ | ( |
($ in thousands) | March 31, 2021 | March 31, 2020 | |||||||||
Fixed maturities | $ | ( | $ | ( | |||||||
Deferred income tax | |||||||||||
Change in net unrealized gains on available-for-sale securities | $ | ( | $ | ( |
($ in thousands) | Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||
Description | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||
Fixed maturities available-for-sale | ||||||||||||||||||||||||||
U.S. Government corporations and agencies | $ | $ | $ | $ | ||||||||||||||||||||||
Agency mortgage backed securities | ||||||||||||||||||||||||||
Asset backed securities | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
Private label asset backed securities | ||||||||||||||||||||||||||
States, municipalities and political subdivisions | ||||||||||||||||||||||||||
Trading securities | ||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
Total Financial Assets | $ | $ | $ | $ | ||||||||||||||||||||||
($ in thousands) For the three months ended March 31, 2021 | Equity Securities | Interest Rate Swap | ||||||||||||
Beginning balance | $ | $ | ( | |||||||||||
Total gains or losses (realized and unrealized): | ||||||||||||||
Included in earnings | ( | |||||||||||||
Included in other comprehensive income | ||||||||||||||
Purchases: | ||||||||||||||
Sales: | ||||||||||||||
Issuances: | ||||||||||||||
Settlements: | ||||||||||||||
Transfers in/(out) of Level 3 | ||||||||||||||
Ending balance | $ | $ | ||||||||||||
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held as of March 31, 2021: | $ | ( | $ |
($ in thousands) | Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||
Description | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||
Fixed maturities available-for-sale | ||||||||||||||||||||||||||
U.S. Government corporations and agencies | $ | $ | $ | $ | ||||||||||||||||||||||
Agency mortgage backed securities | ||||||||||||||||||||||||||
Asset backed securities | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
Private label asset backed securities | ||||||||||||||||||||||||||
States, municipalities and political subdivisions | ||||||||||||||||||||||||||
Trading securities | ||||||||||||||||||||||||||
Equity securities available-for-sale | ||||||||||||||||||||||||||
Total Financial Assets | $ | $ | $ | $ | ||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||
Interest rate swap | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||
Total Financial Liabilities | $ | ( | $ | $ | $ | ( |
($ in thousands) For the year ended December 31, 2020 | Equity Securities Available-for-Sale | Interest Rate Swap | ||||||||||||
Beginning balance | $ | $ | ( | |||||||||||
Total gains or losses (realized and unrealized): | ||||||||||||||
Included in earnings | ||||||||||||||
Included in other comprehensive income | ( | |||||||||||||
Purchases: | ||||||||||||||
Sales: | ||||||||||||||
Issuances: | ||||||||||||||
Settlements: | ||||||||||||||
Transfers in/(out) of Level 3 | ||||||||||||||
Ending balance | $ | $ | ( | |||||||||||
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held as of December 31, 2020: | $ | $ |
($ in thousands) | March 31, 2021 | December 31, 2020 | ||||||||||||||||||||||||
Assets and related instruments | Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||||||||||||
Held-to-maturity securities | $ | $ | $ | $ | ||||||||||||||||||||||
Mortgage loans | ||||||||||||||||||||||||||
Policy loans | ||||||||||||||||||||||||||
Company owned life insurance | ||||||||||||||||||||||||||
Other invested assets | ||||||||||||||||||||||||||
Liabilities and related instruments | ||||||||||||||||||||||||||
Other policyholder funds | ||||||||||||||||||||||||||
Short-term notes payable and current portion of long-term debt | ||||||||||||||||||||||||||
Long-term debt |
($ in thousands) | March 31, 2021 | December 31, 2020 | |||||||||
Building and improvements | $ | $ | |||||||||
Electronic data processing equipment | |||||||||||
Furniture and fixtures | |||||||||||
Less accumulated depreciation | |||||||||||
Property and equipment, net | $ | $ |
($ in thousands) | As of March 31, 2021 | As of December 31, 2020 | ||||||||||||
General expenses | $ | $ | ||||||||||||
Unearned premiums | ||||||||||||||
Claims liabilities | ||||||||||||||
NOL carryforward | ||||||||||||||
Impairment on real estate owned | ||||||||||||||
Unrealized loss on interest rate swaps | ||||||||||||||
Deferred tax assets | ||||||||||||||
Unrealized gains on trading securities | ( | ( | ||||||||||||
Depreciation | ( | ( | ||||||||||||
Deferred policy acquisition costs | ( | ( | ||||||||||||
Pre-1984 policyholder surplus account | ( | ( | ||||||||||||
Unrealized gains on securities available-for-sale | ( | ( | ||||||||||||
Unrealized gains on equity securities | ( | ( | ||||||||||||
Deferred tax liabilities | ( | ( | ||||||||||||
Net deferred tax asset | $ | $ |
($ in thousands) | Three months ended March 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Deferred policy acquisition costs | $ | ( | $ | ( | ||||||||||
Other-than-temporary impairments | ( | |||||||||||||
Trading securities | ( | ( | ||||||||||||
Unearned premiums | ( | ( | ||||||||||||
General expenses | ( | |||||||||||||
Depreciation | ( | ( | ||||||||||||
Claims liabilities | ||||||||||||||
Impact of repeal of special provision on pre-1984 policyholder surplus | ( | ( | ||||||||||||
NOL carryforward | ||||||||||||||
Unrealized gains (losses) on equity securities | ( | |||||||||||||
Deferred income tax expense (benefit) | $ | $ | ( |
Three months ended March 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Federal income tax rate applied to pre-tax income (loss) | % | % | ||||||||||||
Dividends received deduction and tax-exempt interest | ( | % | % | |||||||||||
Company owned life insurance | % | ( | % | |||||||||||
Other, net | ( | % | ( | % | ||||||||||
Effective federal income tax rate | % | % |
($ in thousands) | March 31, | December 31, | ||||||||||||
2021 | 2020 | |||||||||||||
Current portion of installment note payable due in November with variable interest rate equal to the | $ | $ | ||||||||||||
$ | $ |
($ in thousands) | March 31, | December 31, | ||||||||||||
2021 | 2020 | |||||||||||||
Promissory note with variable interest rate equal to the | $ | $ | ||||||||||||
Subordinated debentures issued on December 15, 2005 with floating rate interest equal to 3-Month LIBOR plus | ||||||||||||||
Subordinated debentures issued on June 21, 2007 with floating rate interest equal to 3-Month LIBOR plus | ||||||||||||||
$ | $ |
($ in thousands) | Three months ended March 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Summary of claims and claim adjustment expense reserves | ||||||||||||||
Balance, beginning of year | $ | $ | ||||||||||||
Less reinsurance recoverable on unpaid losses | ||||||||||||||
Net balances at beginning of year | ||||||||||||||
Net losses: | ||||||||||||||
Provision for claims and claim adjustment expenses for claims arising in current year | ||||||||||||||
Estimated claims and claim adjustment expenses for claims arising in prior years | ( | ( | ||||||||||||
Total increases | ||||||||||||||
Claims and claim adjustment expense payments for claims arising in: | ||||||||||||||
Current year | ||||||||||||||
Prior years | ||||||||||||||
Total payments | ||||||||||||||
Net balance at end of period | ||||||||||||||
Plus reinsurance recoverable on unpaid losses | ||||||||||||||
Claims and claim adjustment expense reserves at end of period | $ | $ |
Layer | Reinsurers' Limits of Liability | ||||
First Layer | |||||
Second Layer | |||||
Third Layer | |||||
Catastrophe Aggregate |
March 31, 2021 | |||||||||||||||||||||||
Authorized | Issued | Treasury | Outstanding | ||||||||||||||||||||
Preferred Stock, $ | — | ||||||||||||||||||||||
Class A Common Stock, $ | — | ||||||||||||||||||||||
Common Stock, $ |
December 31, 2020 | |||||||||||||||||||||||
Authorized | Issued | Treasury | Outstanding | ||||||||||||||||||||
Preferred Stock, $ | — | ||||||||||||||||||||||
Class A Common Stock, $ | — | ||||||||||||||||||||||
Common Stock, $ |
($ in thousands) | Three months ended March 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Unrealized Gains (Losses) on Cash Flow Hedges | ||||||||||||||
Balance at beginning of period | $ | ( | $ | ( | ||||||||||
Other comprehensive income (loss) for period: | ||||||||||||||
Other comprehensive gain (loss) before reclassifications | ( | |||||||||||||
Net current period other comprehensive income (loss) | ( | |||||||||||||
Balance at end of period | $ | $ | ( | |||||||||||
Unrealized Gains (Losses) on Available-for-Sale Securities | ||||||||||||||
Balance at beginning of period | $ | $ | ||||||||||||
Other comprehensive loss for period: | ||||||||||||||
Other comprehensive loss before reclassifications | ( | ( | ||||||||||||
Amounts reclassified from accumulated other comprehensive loss | ||||||||||||||
Net current period other comprehensive loss | ( | ( | ||||||||||||
Balance at end of period | $ | $ | ||||||||||||
Total Accumulated Other Comprehensive Income (Loss) at end of period | $ | $ | ( |
($ in thousands) Details about Accumulated Other Comprehensive Income Components | Amounts Reclassified from Accumulated Other Comprehensive Income | Affected Line Item in the Statement Where Net Income is Presented | ||||||||||||
Unrealized Gains and Losses on Available-for-Sale Securities | $ | Net investment gains | ||||||||||||
Total before tax | ||||||||||||||
Tax (expense) or benefit | ||||||||||||||
$ | Net of Tax |
($ in thousands) Details about Accumulated Other Comprehensive Income Components | Amounts Reclassified from Accumulated Other Comprehensive Income | Affected Line Item in the Statement Where Net Income is Presented | ||||||||||||
Unrealized Gains and Losses on Available-for-Sale Securities | $ | ( | Net investment losses | |||||||||||
( | Total before tax | |||||||||||||
Tax (expense) or benefit | ||||||||||||||
$ | ( | Net of Tax |
($ in thousands) Assets by industry segment | Total | P&C Insurance Operations | Life Insurance Operations | Non-Insurance Operations | ||||||||||||||||||||||
March 31, 2021 | $ | $ | $ | $ | ||||||||||||||||||||||
December 31, 2020 | $ | $ | $ | $ |
($ in thousands) Three months ended March 31, 2021 | P&C Insurance Operations | Life Insurance Operations | Non-Insurance Operations | Inter- company Eliminations | Total | ||||||||||||||||||||||||
REVENUES | |||||||||||||||||||||||||||||
Net premiums earned | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Net investment income | ( | ||||||||||||||||||||||||||||
Investment gains | |||||||||||||||||||||||||||||
Other income | ( | ||||||||||||||||||||||||||||
( | |||||||||||||||||||||||||||||
BENEFITS AND EXPENSES | |||||||||||||||||||||||||||||
Policyholder benefits paid | ( | ||||||||||||||||||||||||||||
Amortization of deferred policy acquisition costs | |||||||||||||||||||||||||||||
Commissions | |||||||||||||||||||||||||||||
General and administrative expenses | ( | ||||||||||||||||||||||||||||
Taxes, licenses and fees | |||||||||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||||||||
( | |||||||||||||||||||||||||||||
Income (Loss) Before Income Taxes | ( | ||||||||||||||||||||||||||||
INCOME TAX EXPENSE (BENEFIT) | ( | ||||||||||||||||||||||||||||
Net Income (Loss) | $ | $ | $ | ( | $ | $ |
($ in thousands) Three months ended March 31, 2020 | P&C Insurance Operations | Life Insurance Operations | Non-Insurance Operations | Inter-company Eliminations | Total | |||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||||
Net premiums earned | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Net investment income | ( | |||||||||||||||||||||||||||||||
Investment losses | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Other income | ( | |||||||||||||||||||||||||||||||
( | ||||||||||||||||||||||||||||||||
BENEFITS AND EXPENSES | ||||||||||||||||||||||||||||||||
Policyholder benefits paid | ( | |||||||||||||||||||||||||||||||
Amortization of deferred policy acquisition costs | ||||||||||||||||||||||||||||||||
Commissions | ||||||||||||||||||||||||||||||||
General and administrative expenses | ( | ( | ||||||||||||||||||||||||||||||
Taxes, licenses and fees | ||||||||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||||||||
( | ( | |||||||||||||||||||||||||||||||
Income (Loss) Before Income Taxes | ( | ( | ( | |||||||||||||||||||||||||||||
INCOME TAX EXPENSE (BENEFIT) | ( | ( | ( | |||||||||||||||||||||||||||||
Net Income (Loss) | $ | ( | $ | ( | $ | $ | $ | ( |
($ in thousands) | Three months ended March 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Life, accident and health operations premiums written: | ||||||||||||||
Traditional life insurance | $ | $ | ||||||||||||
Accident and health insurance | ||||||||||||||
Gross life, accident and health | ||||||||||||||
Reinsurance premium ceded | ( | ( | ||||||||||||
Net life, accident and health premiums written | $ | $ | ||||||||||||
Property and Casualty operations premiums written: | ||||||||||||||
Dwelling fire & extended coverage | $ | $ | ||||||||||||
Homeowners (Including mobile homeowners) | ||||||||||||||
Other liability | ||||||||||||||
Gross property and casualty | ||||||||||||||
Reinsurance premium ceded | ( | ( | ||||||||||||
Net property and casualty written | $ | $ | ||||||||||||
Consolidated gross premiums written | $ | $ | ||||||||||||
Reinsurance premium ceded | ( | ( | ||||||||||||
Consolidated net premiums written | $ | $ |
($ in thousands) | Three months ended March 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Life, accident and health operations premiums earned: | ||||||||||||||
Traditional life insurance | $ | $ | ||||||||||||
Accident and health insurance | ||||||||||||||
Gross life, accident and health | ||||||||||||||
Reinsurance premium ceded | ( | ( | ||||||||||||
Net life, accident and health premiums earned | $ | $ | ||||||||||||
Property and Casualty operations premiums earned: | ||||||||||||||
Dwelling fire & extended coverage | $ | $ | ||||||||||||
Homeowners (Including mobile homeowners) | ||||||||||||||
Other liability | ||||||||||||||
Gross property and casualty | ||||||||||||||
Reinsurance premium ceded | ( | ( | ||||||||||||
Net property and casualty earned | $ | $ | ||||||||||||
Consolidated gross premiums earned | $ | $ | ||||||||||||
Reinsurance premium ceded | ( | ( | ||||||||||||
Consolidated net premiums earned | $ | $ |
/s/ Warren Averett, LLC | ||
Birmingham, Alabama | ||
May 14, 2021 |
Unaudited Consolidated Financial Summary | Three months ended March 31, | |||||||||||||
($ in thousands, except per share) | 2021 | 2020 | ||||||||||||
Gross premiums written | $ | 18,834 | $ | 17,131 | ||||||||||
Net premiums written | $ | 16,386 | $ | 15,331 | ||||||||||
Net premiums earned | $ | 15,062 | $ | 14,955 | ||||||||||
Net investment income | 804 | 964 | ||||||||||||
Net investment gains (losses) | 310 | (990) | ||||||||||||
Other income | 136 | 145 | ||||||||||||
Total Revenues | 16,312 | 15,074 | ||||||||||||
Policyholder benefits and settlement expenses | 9,303 | 10,583 | ||||||||||||
Amortization of deferred policy acquisition costs | 971 | 1,065 | ||||||||||||
Commissions | 2,136 | 2,075 | ||||||||||||
General and administrative expenses | 2,304 | 1,394 | ||||||||||||
Taxes, licenses and fees | 536 | 721 | ||||||||||||
Interest expense | 138 | 261 | ||||||||||||
Total Benefits, Losses and Expenses | 15,388 | 16,099 | ||||||||||||
Income (Loss) Before Income Taxes | 924 | (1,025) | ||||||||||||
Income tax expense (benefit) | 202 | (165) | ||||||||||||
Net Income (Loss) | $ | 722 | $ | (860) | ||||||||||
Income (Loss) Per Common Share | $ | 0.29 | $ | (0.34) | ||||||||||
Reconciliation of Net Income (Loss) to non-GAAP Measurement | ||||||||||||||
Net income (loss) | $ | 722 | $ | (860) | ||||||||||
Income tax expense (benefit) | 202 | (165) | ||||||||||||
Investment (gains) losses, net | (310) | 990 | ||||||||||||
Pretax Income (Loss) From Operations | $ | 614 | $ | (35) |
Selected Balance Sheet Highlights | March 31, 2021 | December 31, 2020 | ||||||||||||
($ in thousands, except per share) | Unaudited | |||||||||||||
Invested Assets | $ | 104,805 | $ | 99,150 | ||||||||||
Cash | $ | 17,242 | $ | 19,887 | ||||||||||
Total Assets | $ | 151,575 | $ | 150,540 | ||||||||||
Policy Liabilities | $ | 84,104 | $ | 82,869 | ||||||||||
Total Debt | $ | 13,680 | $ | 13,677 | ||||||||||
Accumulated Other Comprehensive Income | $ | 2,439 | $ | 3,585 | ||||||||||
Shareholders' Equity | $ | 44,790 | $ | 45,366 | ||||||||||
Book Value Per Share | $ | 17.70 | $ | 17.93 |
($ in thousands) | Three months ended March 31, | Percent | ||||||||||||||||||
2021 | 2020 | increase (decrease) | ||||||||||||||||||
Life, accident and health segment premiums earned: | ||||||||||||||||||||
Traditional life insurance | $ | 1,042 | $ | 1,066 | (2.3) | % | ||||||||||||||
Accident and health insurance | 391 | 402 | (2.7) | % | ||||||||||||||||
Gross life, accident and health | 1,433 | 1,468 | (2.4) | % | ||||||||||||||||
Reinsurance premium ceded | (43) | (35) | 22.9 | % | ||||||||||||||||
Net life, accident and health premiums earned | $ | 1,390 | $ | 1,433 | (3.0) | % | ||||||||||||||
Property and Casualty segment premiums earned: | ||||||||||||||||||||
Dwelling fire & extended coverage | $ | 10,178 | $ | 9,652 | 5.4 | % | ||||||||||||||
Homeowners (Including mobile homeowners) | 5,362 | 5,081 | 5.5 | % | ||||||||||||||||
Other liability | 537 | 554 | (3.1) | % | ||||||||||||||||
Gross property and casualty premium earned | 16,077 | 15,287 | 5.2 | % | ||||||||||||||||
Reinsurance premium ceded | (2,405) | (1,765) | 36.3 | % | ||||||||||||||||
Net property and casualty premiums earned | $ | 13,672 | $ | 13,522 | 1.1 | % | ||||||||||||||
Consolidated gross premiums earned | $ | 17,510 | $ | 16,755 | 4.5 | % | ||||||||||||||
Reinsurance premium ceded | (2,448) | (1,800) | 36.0 | % | ||||||||||||||||
Consolidated net premiums earned | $ | 15,062 | $ | 14,955 | 0.7 | % |
Layer | Reinsurers' Limits of Liability | ||||
First Layer | 100% of $13,500,000 in excess of $4,000,000 retention | ||||
Second Layer | 100% of $25,000,000 in excess of $17,500,000 | ||||
Third Layer | 100% of $30,000,000 in excess of $42,500,000 | ||||
Catastrophe Aggregate | 100% of $2,000,000 in excess of $2,000,000 |
($ in thousands) | Three months ended March 31, | ||||||||||
2021 | 2020 | ||||||||||
Fixed maturities | $ | 757 | $ | 916 | |||||||
Equity securities | 49 | 41 | |||||||||
Mortgage loans on real estate | 2 | 2 | |||||||||
Investment real estate | — | 1 | |||||||||
Policy loans | 34 | 36 | |||||||||
Other | 2 | 4 | |||||||||
844 | 1,000 | ||||||||||
Less: Investment expenses | 40 | 36 | |||||||||
Net investment income | $ | 804 | $ | 964 |
($ in thousands) | Three months ended March 31, | ||||||||||
2021 | 2020 | ||||||||||
Realized gains on fixed maturities | $ | — | $ | 121 | |||||||
Realized gains (losses) on equity securities | 357 | (25) | |||||||||
Gains on trading securities | 7 | — | |||||||||
Change in fair value of equity securities | 3 | (599) | |||||||||
Change in surrender value of company owned life insurance | (57) | (251) | |||||||||
Other losses principally real estate | — | 2 | |||||||||
Other-than-temporary impairments | — | (238) | |||||||||
Net investment gains (losses) | $ | 310 | $ | (990) |
For the three months ended March 31, 2021 | For the three months ended March 31, 2020 | |||||||||||||||||||||||||||||||
($ in thousands) Catastrophe event | Reported Losses & LAE | Claim Count | Catastrophe event | Reported Losses & LAE | Claim Count | |||||||||||||||||||||||||||
Cat 2113 (Jan 25-26) | $ | 132 | 6 | Cat 2012 (Jan 10-12) | $ | 1,334 | 310 | |||||||||||||||||||||||||
Cat 2117 (Feb 16-20) | 760 | 196 | Cat 2014 (Feb 5-8) | 630 | 157 | |||||||||||||||||||||||||||
Cat 2120 (Mar 15-19) | 282 | 66 | Cat 2016 (Mar 2-4) | 261 | 61 | |||||||||||||||||||||||||||
Cat 2122 (Mar 24-26) | 494 | 85 | ||||||||||||||||||||||||||||||
Misc cats less than $100k | 68 | 16 | Misc cats less than $100k | 27 | 10 | |||||||||||||||||||||||||||
Total Cat Losses | $ | 1,736 | 369 | Total Cat Losses | $ | 2,252 | 538 | |||||||||||||||||||||||||
Non-Cat Wind & Hail | $ | 1,293 | 294 | Non-Cat Wind & Hail | $ | 1,610 | 414 |
($ in thousands) Maturity | Available- for-Sale | Held-to-Maturity | Total | Percentage of Total | ||||||||||||||||||||||
Maturity in 1-5 years | $ | 21,645 | $ | 15 | $ | 21,660 | 25.44 | % | ||||||||||||||||||
Maturity in 5-10 years | 23,899 | 3 | 23,902 | 28.07 | % | |||||||||||||||||||||
Maturity after 10 years | 38,836 | 750 | 39,586 | 46.49 | % | |||||||||||||||||||||
$ | 84,380 | $ | 768 | $ | 85,148 | 100.00 | % |
Certification Pursuant to 18 U. S. C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||
Certification Pursuant to 18 U. S. C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||
Certification Pursuant to 18 U. S. C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||
101.INS | XBRL Instance Document | ||||
101.SCH | XBRL Taxonomy Extension Schema Document | ||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
Date of Report | Date Filed | Description | ||||||||||||
January 22, 2021 | January 25, 2021 | |||||||||||||
February 26, 2021 | February 26, 2021 |
/s/ Brian R. McLeod | /s/ William L. Brunson, Jr. | |||||||
Brian R. McLeod | William L. Brunson, Jr. | |||||||
Chief Financial Officer and Treasurer | President, Chief Executive Officer and Director |
Date: May 14, 2021 | |||||
/s/ William L. Brunson, Jr. | |||||
William L. Brunson, Jr. | |||||
President and Chief Executive Officer |
Date: May 14, 2021 | |||||
/s/ Brian R. McLeod | |||||
Brian R. McLeod | |||||
Chief Financial Officer |
Date: May 14, 2021 | |||||||||||
/s/ William L. Brunson, Jr. | /s/ Brian R. McLeod | ||||||||||
Name: William L. Brunson, Jr. Title: Chief Executive Officer | Name: Brian R. McLeod, CPA Title: Chief Financial Officer |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Investments | ||
Fixed maturities held-to-maturity, at estimated fair value | $ 835 | $ 946 |
Fixed maturities available-for-sale, at cost | 84,380 | 76,241 |
Equity securities, at cost | $ 1,761 | $ 1,918 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 722 | $ (860) |
Other comprehensive income (loss), net of tax | ||
Unrealized losses on securities, net of reclassification adjustment of $— and $(92) for 2021 and 2020, respectively | (1,635) | (1,940) |
Unrealized gain (loss) on interest rate swap | 489 | (545) |
Other comprehensive loss, net of tax | (1,146) | (2,485) |
Comprehensive loss | $ (424) | $ (3,345) |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Statement of Comprehensive Income [Abstract] | ||
Reclassification adjustment | $ 0 | $ (92) |
SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES Principles of Consolidation and Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of The National Security Group, Inc. (the Company) and its wholly-owned subsidiaries: National Security Insurance Company (NSIC), National Security Fire and Casualty Company (NSFC) and NATSCO, Inc. (NATSCO). NSFC includes a wholly-owned subsidiary, Omega One Insurance Company (Omega). The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the condensed consolidated financial statements have been included. All significant intercompany transactions and accounts have been eliminated in the condensed consolidated financial statements. The financial information presented herein should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, which includes information and disclosures not presented herein. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Among the more significant estimates included in these condensed consolidated financial statements are reserves for future life insurance policy benefits, liabilities for losses and loss adjustment expenses, reinsurance recoverable associated with loss and loss adjustment expense liabilities, deferred policy acquisition costs, deferred income tax assets and liabilities, assessments of other-than-temporary impairments on investments and accruals for contingencies. Actual results could differ from the estimates used in preparing these condensed consolidated financial statements. Earnings Per Share Earnings per share of common stock is based on the weighted average number of shares outstanding during each year. The adjusted weighted average shares outstanding were 2,530,370 at March 31, 2021 and 2,530,783 at March 31, 2020. The Company did not have any dilutive securities as of March 31, 2021 and 2020. Concentration of Credit Risk The Company maintains cash balances which are generally held in non-interest bearing demand deposit accounts subject to FDIC insured limits of $250,000 per entity. At March 31, 2021, the net amount exceeding FDIC insured limits was $6,813,000 at three financial institutions. The Company has not experienced any losses in such accounts. Management of the Company reviews financial information of financial institutions on a quarterly basis and believes the Company is not exposed to any significant credit risk on cash and cash equivalents. Policy receivables are reported at unpaid balances. Policy receivables are generally offset by associated unearned premium liabilities and are not subject to significant credit risk. Receivables from agents, less provision for credit losses, are composed of balances due from independent agents. At March 31, 2021, the single largest balance due from one agent totaled $497,000. Reinsurance contracts do not relieve the Company of its obligations to policyholders. A failure of a reinsurer to meet its obligation could result in losses to the insurance subsidiaries. Allowances for losses on reinsurance recoverables are established if amounts are believed to be uncollectible. At March 31, 2021 and December 31, 2020, no amounts were deemed uncollectible. The Company, at least annually, evaluates the financial condition of all reinsurers and evaluates any potential concentrations of credit risk. At March 31, 2021, management does not believe the Company is exposed to any significant credit risk related to its reinsurance program. Accounting Changes Not Yet Adopted Reference Rate Reform In March 2020, the Financial Accounting Standards Board (FASB) issued guidance that provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The Company has exposure to LIBOR based financial instruments through its subordinated debentures. The contracts with respect to these borrowings contain alternative reference rates that would automatically take effect upon the phasing out of LIBOR and would not materially change the liability exposure. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is evaluating the optional expedients and exceptions in the guidance but does not expect the adoption of this guidance to have a material impact on its financial position or results of operations. Targeted Improvements to the Accounting for Long-Duration Contracts In August 2018, the FASB issued guidance to improve the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The guidance improves timeliness of recognizing changes in the liability for future policy benefits and modifies the rate used to discount future cash flows. The guidance will simplify and improve accounting for certain market-based options or guarantees associated with deposit type contracts and simplify the amortization of deferred policy acquisition costs. The guidance also introduces certain financial statement presentation requirements, as well as significant additional quantitative and qualitative disclosures. The guidance is effective for fiscal years beginning after December 15, 2024 and interim periods within those fiscal years beginning after December 15, 2025. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. Due to the nature and extent of the changes required to the Company’s life insurance operations, the adoption of this standard is expected to have a material impact on the consolidated financial statements. Financial Instruments - Credit Losses In June 2016, the FASB issued guidance that replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The FASB released additional guidance in November 2018 that provides scope clarification. This guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those years. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Recently Adopted Accounting Standards Simplifying the Accounting for Income Taxes In December 2019, the FASB issued guidance to simplify the accounting for income taxes. The guidance removes certain exceptions to general principles in the income tax guidance and amends existing guidance to improve consistent application. The guidance is effective for fiscal years beginning after December 15, 2020. The Company adopted this guidance on January 1, 2021. The adoption of this guidance did not have a material impact on its financial position or results of operations.
|
VARIABLE INTEREST ENTITIES |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
Variable Interest Entities [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES The Company holds passive interests in limited partnerships that are considered to be Variable Interest Entities (VIE) under the provisions of ASC 810 Consolidation. The Company is not the primary beneficiary of the entities and is not required to consolidate under ASC 810. The entities are private placement investment funds formed for the purpose of investing in private equity investments. The Company owns less than 1% of the limited partnerships. The carrying value of the investments totals $472,000 at March 31, 2021 ($460,000 at December 31, 2020) and is included as a component of Other Invested Assets in the accompanying condensed consolidated balance sheets. In December 2005, the Company formed National Security Capital Trust I, a statutory trust created under the Delaware Statutory Trust Act, for the sole purpose of issuing, in private placement transactions, $9,000,000 of trust preferred securities (TPS) and using the proceeds thereof, together with the equity proceeds received from the Company in the initial formation of the Trust, to purchase $9,279,000 of variable rate subordinated debentures issued by the Company. The Company owns all voting securities of the Trust and the subordinated debentures are the sole assets of the Trust. The Trust will meet the obligations of the TPS with the interest and principal paid on the subordinated debentures. The Company received net proceeds from the TPS transactions, after commissions and other costs of issuance, of $9,005,000. The Company also holds all the voting securities issued by the Trust and such trusts are considered to be VIE's. The Trust is not consolidated because the Company is not the primary beneficiary of the trust. The Subordinated Debentures, disclosed in Note 7, are reported in the accompanying condensed consolidated balance sheets as a component of long-term debt. The Company's equity investments in the Trust total $279,000 and are included in Other Assets in the accompanying condensed consolidated balance sheets. In June 2007, the Company formed National Security Capital Trust II for the sole purpose of issuing, in private placement transactions, $3,000,000 of trust preferred securities and using the proceeds thereof, together with the equity proceeds received from the Company in the initial formation of the Trust, to purchase $3,093,000 of unsecured junior subordinated deferrable interest debentures. The Company owns all voting securities of the Trust and the subordinated debentures are the sole assets of the Trust. The Trust will meet the obligations of the TPS with the interest and principal paid on the subordinated debentures. The Company received net proceeds from the TPS transactions, after commissions and other costs of issuance, of $2,995,000. The Company also holds all the voting securities issued by the Trust and such trusts are considered to be VIE's. The Trust is not consolidated because the Company is not the primary beneficiary of the Trust. The Subordinated Debentures, disclosed in Note 7, are reported in the accompanying condensed consolidated balance sheets as a component of long-term debt. The Company's equity investments in the Trust total $93,000 and are included in Other Assets in the accompanying condensed consolidated balance sheets.
|
INVESTMENTS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS | INVESTMENTS Our investment in available-for-sale securities, which are reported at fair value, includes fixed maturity securities and equity securities. Net unrealized gains or losses on fixed maturities are reported after-tax as a component of other comprehensive income. Changes in fair value of equity securities are reported in investment gains/losses as a component of net income. The amortized cost and aggregate fair values of investments in available-for-sale securities as of March 31, 2021 are as follows:
The amortized cost and aggregate fair values of investments in held-to-maturity securities as of March 31, 2021 are as follows:
The amortized cost and aggregate fair values of investments in available-for-sale securities as of December 31, 2020 are as follows:
The amortized cost and aggregate fair values of investments in held-to-maturity securities as of December 31, 2020 are as follows:
The amortized cost and aggregate fair value of debt securities at March 31, 2021, by contractual maturity, are presented in the following table. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
A summary of securities available-for-sale with unrealized losses as of March 31, 2021, along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows:
There were no securities held-to-maturity with unrealized losses as of March 31, 2021. A summary of securities available-for-sale with unrealized losses as of December 31, 2020, along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows:
There were no securities held-to-maturity with unrealized losses as of December 31, 2020. The Company conducts periodic reviews to identify and evaluate securities in an unrealized loss position in order to identify other-than-temporary impairments. For securities in an unrealized loss position, the Company assesses whether the Company has the intent to sell the security or more-likely-than-not will be required to sell the security before the anticipated recovery. If either of these conditions is met, the Company is required to recognize an other-than-temporary impairment with the entire unrealized loss reported in earnings. For securities in an unrealized loss position that do not meet these conditions, the Company assesses whether the impairment of a security is other-than-temporary. If the impairment is determined to be other-than-temporary, the Company is required to separate the other-than-temporary impairments into two components: the amount representing the credit loss and the amount related to all other factors. The credit loss is the portion of the amortized book value in excess of the net present value of the projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. The credit loss component of other-than-temporary impairments is reported in earnings, whereas the amount relating to factors other than credit losses are recorded in other comprehensive income, net of taxes. Management has evaluated each security in a significant unrealized loss position in the fixed maturity investment portfolio. The Company has no material exposure to sub-prime mortgage loans and approximately 6% of the fixed income investment portfolio is rated below investment grade. Based on a review of the available financial information, the prospect for future earnings of each company and consideration of the Company’s intent and ability to hold the securities until market values recovered, it was determined that the securities in an accumulated loss position in the portfolio were temporary impairments. For the three months ended March 31, 2021, the Company realized no other-than-temporary impairments. For the year ended December 31, 2020, the Company realized $180,000 other-than-temporary impairments. At March 31, 2021, the three largest losses not realized as an impairment in the fixed maturity portfolio totaled $104,000, $80,000 and $75,000. After evaluation by management, it was determined that each of these losses were driven by changes in market interest rates. Management currently has the intent and ability to hold these investments until recovery so no other-than-temporary impairments were recognized. At December 31, 2020, the three largest losses not realized as an impairment in the fixed maturity portfolio totaled $55,000, $37,000 and $27,000. Major categories of investment income are summarized as follows:
Major categories of investment gains and losses are summarized as follows:
An analysis of the net change in unrealized gains (losses) on available-for-sale securities follows:
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FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES | FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES Our available-for-sale securities consists of fixed maturity and equity securities which are recorded at fair value in the accompanying condensed consolidated balance sheets. We are permitted to elect to measure financial instruments and certain other items at fair value, with the change in fair value recorded in earnings. We elected not to measure any eligible items using the fair value option. Accounting standards define fair value as the price that would be received to sell an asset or would be paid to transfer a liability in an orderly transaction between market participants at the measurement date, and establishes a framework to make the measurement of fair value more consistent and comparable. In determining fair value, we primarily use prices and other relevant information generated by market transactions involving identical or comparable assets. The Company categorizes assets and liabilities carried at their fair value based upon a fair value hierarchy: Level 1 - Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 1 assets and liabilities consist of money market fund deposits and certain of our marketable debt and equity instruments, including equity instruments offsetting deferred compensation, that are traded in an active market with sufficient volume and frequency of transactions. Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets include certain of our marketable debt and equity instruments with quoted market prices that are traded in less active markets or priced using a quoted market price for similar instruments. Level 2 assets also include marketable equity instruments with security-specific restrictions that would transfer to the buyer, marketable debt instruments priced using indicator prices which represent non-binding market consensus prices that can be corroborated by observable market quotes, as well as derivative contracts and debt instruments priced using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Marketable debt instruments in this category generally include commercial paper, bank time deposits, repurchase agreements for fixed-income instruments, and a majority of floating-rate notes, corporate bonds, and municipal bonds. Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. Level 3 assets and liabilities include marketable debt instruments, non-marketable equity investments, derivative contracts, and company issued debt with values are determined using inputs that are both unobservable and significant to the values of the instruments being measured. Level 3 assets also include marketable debt instruments that are priced using indicator prices that we were unable to corroborate with observable market quotes. Marketable debt instruments in this category generally include asset-backed securities and certain floating-rate notes, corporate bonds, and municipal bonds. Assets/Liabilities Measured at Fair Value on a Recurring Basis Financial assets measured at fair value on a recurring basis as of March 31, 2021 are summarized in the following table by the type of inputs applicable to the fair value measurements:
The methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis are summarized below. Fixed maturities available-for-sale — The fair values of the Company’s public fixed maturity securities are generally based on prices obtained from independent pricing services. Consistent with the fair value hierarchy described above, securities with quoted market prices in active markets for identical assets are reflected within Level 1 while securities with validated quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. Trading securities — Trading securities consist primarily of mutual funds whose fair values are determined consistent with similar instruments described above under “Fixed Maturities” and below under “Equity Securities.” Equity securities — Equity securities consist principally of investments in common and preferred stock of publicly traded companies and privately traded securities. The fair values of our publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for our privately traded equity securities require a substantial level of judgment. Privately traded equity securities are classified within Level 3. Interest rate swaps — Interest rate swaps are recorded at fair value either as assets, within other assets or as liabilities, within other liabilities. The fair values of our interest rate swaps are provided by a third-party broker and are classified within Level 3. As of March 31, 2021, Level 3 fair value measurements of assets include $1,496,000 of equity securities in a local community bank whose value is based on an evaluation of the financial statements of the entity. The Company does not develop the unobservable inputs used in measuring fair value. As of March 31, 2021, there were no liabilities with Level 3 fair value measurements. In 2020, liabilities with Level 3 fair value measurements included various interest rate swap agreements whose value was based on analysis provided by a third party that utilizes financial modeling tools and assumptions on interest and other factors. The Company does not develop the unobservable inputs used in measuring fair value. Additional information regarding the interest rate swap agreements is provided in Note 7. The table below presents a reconciliation for all assets and for all liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2021:
For the three months ended March 31, 2021, there were no assets or liabilities measured at fair values on a nonrecurring basis. Financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2020 are summarized in the following table by the type of inputs applicable to the fair value measurements:
The table below presents a reconciliation for all assets and for all liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2020:
For the year ended December 31, 2020, there were no assets or liabilities measured at fair values on a nonrecurring basis. The Company is exposed to certain risks in the normal course of its business operations. The primary risk that is managed through the use of derivatives is interest rate risk on floating rate borrowings. This risk is managed through the use of interest rate swap agreements which are designated as cash flow hedges. For cash flow hedges, the effective portion of the gain or loss on the interest rate swap is included as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction is recognized in earnings. The Company does not hold or issue derivatives that are not designated as hedging instruments. See Note 7 for additional information about the interest rate swap agreements. The following methods and assumptions were used to estimate fair value of each class of financial instrument for which it is practical to estimate that value: Cash and cash equivalents — the carrying amount is a reasonable estimate of fair value. Fixed maturities held-to-maturity — the carrying amount is amortized cost; the fair values of the Company’s public fixed maturity securities that are classified as held-to-maturity are generally based on prices obtained from independent pricing services. Mortgage loans — the carrying amount is a reasonable estimate of fair value due to the restrictive nature and limited marketability of the mortgage notes. Policy loans — the carrying amount is a reasonable estimate of fair value. Company owned life insurance — the carrying amount is a reasonable estimate of fair value. Other invested assets — the carrying amount is a reasonable estimate of fair value. Other policyholder funds — the carrying amount is a reasonable estimate of fair value. Debt — the carrying amount is a reasonable estimate of fair value. The carrying amount and estimated fair value of the Company’s financial instruments as of March 31, 2021 and December 31, 2020 are as follows:
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PROPERTY AND EQUIPMENT |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Major categories of property and equipment are summarized as follows:
Depreciation expense for the three months ended March 31, 2021 was $24,000 ($109,000 for the year ended December 31, 2020).
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The Company recognizes tax-related interest and penalties as a component of tax expense. The Company files income tax returns in the U.S. federal jurisdiction and various states. The Company is not subject to examinations by authorities related to its U.S. federal or state income tax filings for years prior to 2015. Tax returns have been filed through the year 2019. Net deferred tax liabilities are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of the enacted tax laws. Management believes that, based on its historical pattern of taxable income, the Company will produce sufficient income in the future to realize its deferred tax assets. The Company recognized net deferred tax asset positions of $776,000 at March 31, 2021 and $706,000 at December 31, 2020. The tax effect of significant differences representing deferred tax assets and liabilities are as follows:
The appropriate income tax effects of changes in temporary differences are as follows:
Total income tax expense (benefit) varies from amounts computed by applying current federal income tax rates to income or loss before income taxes. The reasons for these differences and the approximate tax effects are as follows:
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NOTES PAYABLE AND LONG-TERM DEBT |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES PAYABLE AND LONG-TERM DEBT | NOTES PAYABLE AND LONG-TERM DEBT Short-term debt and current portion of long-term debt consisted of the following as of March 31, 2021 and December 31, 2020:
Long-term debt consisted of the following as of March 31, 2021 and December 31, 2020:
On February 26, 2020, the Company entered into a forward swap effective March 16, 2020, with a notional amount of $3,000,000 and designated the swap as a hedge against changes in cash flows attributable to changes in the benchmark interest rate (LIBOR) associated with the subordinated debentures issued June 21, 2007. Quarterly, commencing June 15, 2020, under the terms of the forward swap, the Company pays interest at a fixed rate of 4.93% until March 15, 2030. On February 26, 2020, the Company entered into a forward swap with a notional amount of $9,000,000 effective March 16, 2020, which hedges against changes in cash flows following the termination of the fixed rate period. Quarterly, commencing June 15, 2020 under the terms of the forward swap, the Company pays interest at a fixed rate of 5.28% until March 15, 2030. These swaps were terminated on March 22, 2021. At December 31, 2020, the swaps had fair values of $155,000 (liability) and $464,000 (liability), respectively, for a total liability of $619,000. The December 31, 2020 swap liability is reported as a component of other liabilities on the condensed consolidated balance sheets. A net valuation gain of $489,000 (net of tax) is included in accumulated other comprehensive income related to the swap agreements at March 31, 2021. A net valuation loss of $438,000 (net of tax) was included in accumulated other comprehensive income related to the swap at December 31, 2020. The Company’s interest rate swaps included provisions requiring the Company to post collateral when the derivative is in a net liability position. At December 31, 2020, the Company had securities on deposit with fair market values of $957,000 (all of which was posted as collateral).
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POLICY AND CLAIM RESERVES |
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Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
POLICY AND CLAIM RESERVES | POLICY AND CLAIM RESERVES The Company regularly updates its reserve estimates as new information becomes available and events occur that may impact the resolution of unsettled claims. Reserve estimation can be an inherently uncertain process and reserve estimates can be revised up or down depending on changes in circumstances. Changes in prior years' reserve estimates are reflected in the results of operations in the year such changes are determined. The following table is a reconciliation of beginning and ending property and casualty reserve balances for claims and claim adjustment expense:
Claims and claim adjustment expense reserves before reinsurance recoverable at March 31, 2021 were up compared to the same period last year due to an increase in hurricane activity in the third and fourth quarter of 2020. The most significant event contributing to remaining claim reserves at December 31, 2020 was Hurricane Zeta which occurred in late October. The estimate for claims arising in prior years was reduced $1,098,000 in 2021 (reduced $32,000 in 2020) due to favorable loss development during the year on claims arising in prior years. Accident and Health Claim Reserves The Company, through its life insurance subsidiary, underwrites a limited number of short duration accident and health contracts. These claims are typically settled in three years or less and the reserve for unpaid claims totaled $450,000 at March 31, 2021 ($426,000 at December 31, 2020). These claims are a component of policy and contract claims which totaled $1,222,000 at March 31, 2021 ($1,309,000 at December 31, 2020).
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REINSURANCE |
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Reinsurance Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||
REINSURANCE | REINSURANCE The Company's insurance operations utilize reinsurance in the risk management process in order to limit losses, minimize exposure to large risks, provide additional capacity for future growth and effect business-sharing arrangements. Life reinsurance is placed through yearly renewable term coverage. Property and casualty reinsurance is placed on an excess of loss basis to cover losses from catastrophe events. Reinsurance contracts do not relieve the insurance subsidiaries of the obligation indemnify policyholders with respect to the underlying insurance contracts. Failure of re-insurers to honor their obligations could result in credit related losses to the insurance subsidiaries. The insurance subsidiaries evaluate the financial conditions of their reinsurance companies and monitor concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the companies to minimize their exposure to significant losses from reinsurance insolvencies. In the normal course of business, NSFC seeks to reduce the loss that may arise from catastrophes or other individually significant large loss events that cause unfavorable underwriting results or have adverse impacts on regulatory capital levels by re-insuring certain levels of risk in various areas of exposure with reinsurance companies. NSFC maintains a catastrophe reinsurance agreement to cover losses from catastrophic events, primarily hurricanes and tropical storms. Under the catastrophe reinsurance program, the Company retains the first $4,000,000 in losses from the first catastrophe event and $2,000,000 from a second catastrophe event. Catastrophe reinsurance coverage is maintained in three layers as follows:
Each reinsurance layer covers events occurring from January 1 through December 31 of the contract year. All significant reinsurance companies under the program carry A.M. Best ratings of A- (Excellent) or higher, or equivalent ratings. The Company's catastrophe reinsurance contract allows for one reinstatement. The Company maintains reinstatement premium protection (RPP) to cover reinstatement premiums incurred. The RPP further reduces risk from a major catastrophe and serves to protect the Company's capital position by reducing the modeled 100 year event net cost. Amounts recoverable from re-insurers are estimated in a manner consistent with the claim liability associated with the underlying insurance policies. Amounts paid for prospective reinsurance contracts are reported as prepaid reinsurance premiums and amortized over the remaining contract period. In the normal course of business, NSIC seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding reinsurance to reinsurance companies under excess coverage contracts. NSIC retains a maximum of $50,000 of coverage per individual life. Cost is amortized over the reinsurance contract period. At March 31, 2021, the largest reinsurance recoverable of a single reinsurer was $269,000 ($1,263,000 at December 31, 2020). Amounts reported as ceded incurred losses were related to development of losses from prior year catastrophes.
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EMPLOYEE BENEFIT PLANS |
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Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS The Company and its subsidiaries have an established retirement savings plan (401K Plan). All full-time employees are eligible to participate, and all employer contributions are fully vested for employees who have completed 1,000 hours of service in the year of contribution. Company matching contributions for the three months ended March 31, 2021 amounted to $46,000 (also $46,000 in 2020). The Company contributes dollar-for-dollar matching contributions up to 5% of compensation subject to government limits. The Company established a non-qualified deferred compensation plan under which Company directors are allowed to defer all or a portion of directors' fees into various investment options. A supplemental executive retirement plan (SERP) covers named executive officers, with the Company contributing 15% of executive compensation to the plan. Contributions to the plan are fully vested upon the earlier of death, disability, change in control, or ten years of participation in the plan. Costs for amounts related to the non-qualified deferred compensation plans for the three months ended March 31, 2021 and 2020 amounted to an approximate increase of $24,000 and a decrease of $361,000 in employee benefit related expenses, respectively. The Company and its subsidiaries established an Employee Stock Ownership Plan (ESOP) in January 2010, to enable eligible employees to acquire a proprietary interest in the Company's common stock and to provide retirement and other benefits to such employees. There were no contributions during the three months ended March 31, 2021 and contributions of $100,000 were made during the three months ended March 31, 2020. All contributions were made in cash for purchase of Company shares in the open market. The Company has not allocated newly issued shares directly to the plan and the plan has no debt.
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SHAREHOLDERS' EQUITY |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY During the three months ended March 31, 2021 and year ended December 31, 2020, changes in shareholders' equity consisted of net income of $722,000 and a net loss of $8,619,000, respectively; dividends paid of $152,000 in 2021 and $607,000 in 2020; an other comprehensive loss of $1,146,000 in 2021 and other comprehensive income of $1,142,000 in 2020; common stock issued of $25,000 in 2020; and the purchase of treasury shares of $36,000 in 2020. Other comprehensive income consisted of changes in accumulated unrealized gains/losses on securities available-for-sale and changes in accumulated unrealized losses on interest rate swaps. Preferred Stock Preferred Stock may be issued in one or more series as shall from time to time be determined and authorized by the Board of Directors. The directors may make specific provisions regarding (a) the voting rights, if any (b) whether such dividends are to be cumulative or noncumulative (c) the redemption provisions, if any (d) participating rights, if any (e) any sinking fund or other retirement provisions (f) dividend rates (g) the number of shares of such series and (h) liquidation preference. There is currently no Preferred Stock issued or outstanding. Common Stock The holders of the Class A Common Stock will have one-twentieth of one vote per share, and the holders of the common stock will have one vote per share. There is currently no Class A Common Stock issued or outstanding. In the event of any liquidation, dissolution or distribution of the assets of the Company remaining after the payments to the holders of the Preferred Stock of the full preferential amounts to which they may be entitled as provided in the resolution or resolutions creating any series thereof, the remaining assets of the Company shall be divided and distributed among the holders of both classes of common stock, except as may otherwise be provided in any such resolution or resolutions. The table below provides information regarding the Company's preferred and common stock as of March 31, 2021 and December 31, 2020:
Treasury Stock Treasury stock may be purchased pursuant to the share repurchase plan authorized by the Board of Directors in May 2020. Effective June 1, 2020, the Board authorized the repurchase of up to $500,000 of the Company's outstanding common stock. The plan expires May 31, 2021. During the three months ended March 31, 2021, the Company repurchased no shares of common stock. During the year ended December 31, 2020, the Company purchased 2,509 shares of common stock which were placed in treasury stock.
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Accumulated other comprehensive income (loss) ("AOCI") includes certain items that are reported directly within a separate component of shareholders' equity. The following table presents changes in AOCI balances:
The following table presents the amounts reclassified out of AOCI for the three months ended March 31, 2021:
The following table presents the amounts reclassified out of AOCI for the three months ended March 31, 2020:
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SEGMENTS |
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Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENTS | SEGMENTS The Company’s property and casualty insurance operations comprise one business segment. The property and casualty insurance segment primarily underwrites home insurance coverage with primary lines of business consisting of dwelling fire and extended coverage, homeowners (including mobile homeowners) and other liability. Management organizes the business utilizing a niche strategy focusing on lower valued dwellings and older homes that can be difficult to insure in the standard insurance market. Our chief decision makers (Chief Executive Officer, Chief Financial Officer and subsidiary President) review results and operating plans making decisions on resource allocations on a company-wide basis. The Company’s products are primarily produced through independent agents within the states in which we operate. The Company’s life and accident and health operations comprise the second business segment. The life and accident and health insurance segment consists of two lines of business: traditional life insurance and supplemental accident and health insurance. Total assets by industry segment at March 31, 2021 and December 31, 2020 are summarized below:
Net income (loss) by business segment for the three months ended March 31, 2021 and 2020 is summarized below:
The following table presents the Company’s gross and net premiums written for the property and casualty segment and the life and accident and health segment for the three months ended March 31, 2021 and 2020, respectively:
The following table presents the Company’s gross and net premiums earned for the property and casualty segment and the life and accident and health segment for the three months ended March 31, 2021 and 2020, respectively:
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CONTINGENCIES |
3 Months Ended |
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Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES In the ordinary course of business, the Company and its subsidiaries are routinely a defendant in or party to pending or threatened legal actions and proceedings related to the conduct of their insurance operations. These suits can involve alleged breaches of contracts, torts, including bad faith and fraud claims based on alleged wrongful or fraudulent acts of the Company's subsidiaries, and other miscellaneous causes of action. It is inherently difficult to predict the outcome of such matters, particularly when the claimant seeks very large or indeterminate damages or when the matters present novel legal theories or involve multiple parties. An accrued liability is established when loss contingencies are both probable and estimable. However, there is potential loss exposure in excess of any accrued amounts. The Company monitors pending matters for further development that could affect the amount of the accrued liability. The Company's property & casualty subsidiaries had one longstanding action remaining in Texas filed in the aftermath of Hurricane Ike which was favorably resolved in the second quarter of 2020 with no material impact on these consolidated financial statements. The Company maintains loss and loss adjustment expense reserves on litigated claims that occur in the routine course of business in the insurance operations of the subsidiaries. These reserves are included in the liability for benefit and loss reserves on the balance sheet and include estimates for associated legal costs for individual claims. In addition the Company has a current accrual of $625,000 for legal expenses and third party claimant settlement cost. There are no individual actions not accrued that are deemed material by management based upon an evaluation of information presently available.
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SUPPLEMENTAL CASH FLOW INFORMATION |
3 Months Ended |
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Mar. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest during the three months ended March 31, 2021 was $169,000 ($248,000 in 2020). There was no cash received or paid from income taxes during the three months ended March 31, 2021. There was no cash received or paid from income taxes during the three months ended March 31, 2020. |
SUBSEQUENT EVENTS |
3 Months Ended |
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Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Management has evaluated subsequent events and their potential effects on these condensed consolidated financial statements through the filing date of this Form 10-Q. |
SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
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Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The accompanying condensed consolidated financial statements include the accounts of The National Security Group, Inc. (the Company) and its wholly-owned subsidiaries: National Security Insurance Company (NSIC), National Security Fire and Casualty Company (NSFC) and NATSCO, Inc. (NATSCO). NSFC includes a wholly-owned subsidiary, Omega One Insurance Company (Omega). The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the condensed consolidated financial statements have been included. All significant intercompany transactions and accounts have been eliminated in the condensed consolidated financial statements. |
Basis of Presentation | The financial information presented herein should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, which includes information and disclosures not presented herein. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Among the more significant estimates included in these condensed consolidated financial statements are reserves for future life insurance policy benefits, liabilities for losses and loss adjustment expenses, reinsurance recoverable associated with loss and loss adjustment expense liabilities, deferred policy acquisition costs, deferred income tax assets and liabilities, assessments of other-than-temporary impairments on investments and accruals for contingencies. Actual results could differ from the estimates used in preparing these condensed consolidated financial statements. |
Earnings Per Share | Earnings per share of common stock is based on the weighted average number of shares outstanding during each year. The adjusted weighted average shares outstanding were 2,530,370 at March 31, 2021 and 2,530,783 at March 31, 2020. The Company did not have any dilutive securities as of March 31, 2021 and 2020. |
Concentration of Credit Risk | The Company maintains cash balances which are generally held in non-interest bearing demand deposit accounts subject to FDIC insured limits of $250,000 per entity. At March 31, 2021, the net amount exceeding FDIC insured limits was $6,813,000 at three financial institutions. The Company has not experienced any losses in such accounts. Management of the Company reviews financial information of financial institutions on a quarterly basis and believes the Company is not exposed to any significant credit risk on cash and cash equivalents. Policy receivables are reported at unpaid balances. Policy receivables are generally offset by associated unearned premium liabilities and are not subject to significant credit risk. Receivables from agents, less provision for credit losses, are composed of balances due from independent agents. At March 31, 2021, the single largest balance due from one agent totaled $497,000. Reinsurance contracts do not relieve the Company of its obligations to policyholders. A failure of a reinsurer to meet its obligation could result in losses to the insurance subsidiaries. Allowances for losses on reinsurance recoverables are established if amounts are believed to be uncollectible. At March 31, 2021 and December 31, 2020, no amounts were deemed uncollectible. The Company, at least annually, evaluates the financial condition of all reinsurers and evaluates any potential concentrations of credit risk. At March 31, 2021, management does not believe the Company is exposed to any significant credit risk related to its reinsurance program.
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Accounting Changes Not Yet Adopted and Recently Adopted Accounting Standards | Accounting Changes Not Yet Adopted Reference Rate Reform In March 2020, the Financial Accounting Standards Board (FASB) issued guidance that provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The Company has exposure to LIBOR based financial instruments through its subordinated debentures. The contracts with respect to these borrowings contain alternative reference rates that would automatically take effect upon the phasing out of LIBOR and would not materially change the liability exposure. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is evaluating the optional expedients and exceptions in the guidance but does not expect the adoption of this guidance to have a material impact on its financial position or results of operations. Targeted Improvements to the Accounting for Long-Duration Contracts In August 2018, the FASB issued guidance to improve the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The guidance improves timeliness of recognizing changes in the liability for future policy benefits and modifies the rate used to discount future cash flows. The guidance will simplify and improve accounting for certain market-based options or guarantees associated with deposit type contracts and simplify the amortization of deferred policy acquisition costs. The guidance also introduces certain financial statement presentation requirements, as well as significant additional quantitative and qualitative disclosures. The guidance is effective for fiscal years beginning after December 15, 2024 and interim periods within those fiscal years beginning after December 15, 2025. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. Due to the nature and extent of the changes required to the Company’s life insurance operations, the adoption of this standard is expected to have a material impact on the consolidated financial statements. Financial Instruments - Credit Losses In June 2016, the FASB issued guidance that replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The FASB released additional guidance in November 2018 that provides scope clarification. This guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those years. The Company does not expect the adoption to have a material impact on its financial position or results of operations. Recently Adopted Accounting Standards Simplifying the Accounting for Income Taxes In December 2019, the FASB issued guidance to simplify the accounting for income taxes. The guidance removes certain exceptions to general principles in the income tax guidance and amends existing guidance to improve consistent application. The guidance is effective for fiscal years beginning after December 15, 2020. The Company adopted this guidance on January 1, 2021. The adoption of this guidance did not have a material impact on its financial position or results of operations.
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Variable Interest Entities | The Company holds passive interests in limited partnerships that are considered to be Variable Interest Entities (VIE) under the provisions of ASC 810 Consolidation. The Company is not the primary beneficiary of the entities and is not required to consolidate under ASC 810. The entities are private placement investment funds formed for the purpose of investing in private equity investments. The Company owns less than 1% of the limited partnerships. The carrying value of the investments totals $472,000 at March 31, 2021 ($460,000 at December 31, 2020) and is included as a component of Other Invested Assets in the accompanying condensed consolidated balance sheets. |
Marketable Securities | For securities in an unrealized loss position, the Company assesses whether the Company has the intent to sell the security or more-likely-than-not will be required to sell the security before the anticipated recovery. If either of these conditions is met, the Company is required to recognize an other-than-temporary impairment with the entire unrealized loss reported in earnings. For securities in an unrealized loss position that do not meet these conditions, the Company assesses whether the impairment of a security is other-than-temporary. If the impairment is determined to be other-than-temporary, the Company is required to separate the other-than-temporary impairments into two components: the amount representing the credit loss and the amount related to all other factors. The credit loss is the portion of the amortized book value in excess of the net present value of the projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. The credit loss component of other-than-temporary impairments is reported in earnings, whereas the amount relating to factors other than credit losses are recorded in other comprehensive income, net of taxes. |
Derivatives | The Company is exposed to certain risks in the normal course of its business operations. The primary risk that is managed through the use of derivatives is interest rate risk on floating rate borrowings. This risk is managed through the use of interest rate swap agreements which are designated as cash flow hedges. For cash flow hedges, the effective portion of the gain or loss on the interest rate swap is included as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction is recognized in earnings. The Company does not hold or issue derivatives that are not designated as hedging instruments. The December 31, 2020 swap liability is reported as a component of other liabilities on the condensed consolidated balance sheets. |
Fair Values of Financial Instruments | Our available-for-sale securities consists of fixed maturity and equity securities which are recorded at fair value in the accompanying condensed consolidated balance sheets. We are permitted to elect to measure financial instruments and certain other items at fair value, with the change in fair value recorded in earnings. We elected not to measure any eligible items using the fair value option. Accounting standards define fair value as the price that would be received to sell an asset or would be paid to transfer a liability in an orderly transaction between market participants at the measurement date, and establishes a framework to make the measurement of fair value more consistent and comparable. In determining fair value, we primarily use prices and other relevant information generated by market transactions involving identical or comparable assets. The Company categorizes assets and liabilities carried at their fair value based upon a fair value hierarchy: Level 1 - Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 1 assets and liabilities consist of money market fund deposits and certain of our marketable debt and equity instruments, including equity instruments offsetting deferred compensation, that are traded in an active market with sufficient volume and frequency of transactions. Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets include certain of our marketable debt and equity instruments with quoted market prices that are traded in less active markets or priced using a quoted market price for similar instruments. Level 2 assets also include marketable equity instruments with security-specific restrictions that would transfer to the buyer, marketable debt instruments priced using indicator prices which represent non-binding market consensus prices that can be corroborated by observable market quotes, as well as derivative contracts and debt instruments priced using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Marketable debt instruments in this category generally include commercial paper, bank time deposits, repurchase agreements for fixed-income instruments, and a majority of floating-rate notes, corporate bonds, and municipal bonds. Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. Level 3 assets and liabilities include marketable debt instruments, non-marketable equity investments, derivative contracts, and company issued debt with values are determined using inputs that are both unobservable and significant to the values of the instruments being measured. Level 3 assets also include marketable debt instruments that are priced using indicator prices that we were unable to corroborate with observable market quotes. Marketable debt instruments in this category generally include asset-backed securities and certain floating-rate notes, corporate bonds, and municipal bonds. Fixed maturities available-for-sale — The fair values of the Company’s public fixed maturity securities are generally based on prices obtained from independent pricing services. Consistent with the fair value hierarchy described above, securities with quoted market prices in active markets for identical assets are reflected within Level 1 while securities with validated quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. Trading securities — Trading securities consist primarily of mutual funds whose fair values are determined consistent with similar instruments described above under “Fixed Maturities” and below under “Equity Securities.” Equity securities — Equity securities consist principally of investments in common and preferred stock of publicly traded companies and privately traded securities. The fair values of our publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for our privately traded equity securities require a substantial level of judgment. Privately traded equity securities are classified within Level 3. Interest rate swaps — Interest rate swaps are recorded at fair value either as assets, within other assets or as liabilities, within other liabilities. The fair values of our interest rate swaps are provided by a third-party broker and are classified within Level 3. The following methods and assumptions were used to estimate fair value of each class of financial instrument for which it is practical to estimate that value: Cash and cash equivalents — the carrying amount is a reasonable estimate of fair value. Fixed maturities held-to-maturity — the carrying amount is amortized cost; the fair values of the Company’s public fixed maturity securities that are classified as held-to-maturity are generally based on prices obtained from independent pricing services. Mortgage loans — the carrying amount is a reasonable estimate of fair value due to the restrictive nature and limited marketability of the mortgage notes. Policy loans — the carrying amount is a reasonable estimate of fair value. Company owned life insurance — the carrying amount is a reasonable estimate of fair value. Other invested assets — the carrying amount is a reasonable estimate of fair value. Other policyholder funds — the carrying amount is a reasonable estimate of fair value. Debt — the carrying amount is a reasonable estimate of fair value.
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Reinsurance | The Company's insurance operations utilize reinsurance in the risk management process in order to limit losses, minimize exposure to large risks, provide additional capacity for future growth and effect business-sharing arrangements. Life reinsurance is placed through yearly renewable term coverage. Property and casualty reinsurance is placed on an excess of loss basis to cover losses from catastrophe events. Reinsurance contracts do not relieve the insurance subsidiaries of the obligation indemnify policyholders with respect to the underlying insurance contracts. Failure of re-insurers to honor their obligations could result in credit related losses to the insurance subsidiaries. The insurance subsidiaries evaluate the financial conditions of their reinsurance companies and monitor concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the companies to minimize their exposure to significant losses from reinsurance insolvencies. In the normal course of business, NSFC seeks to reduce the loss that may arise from catastrophes or other individually significant large loss events that cause unfavorable underwriting results or have adverse impacts on regulatory capital levels by re-insuring certain levels of risk in various areas of exposure with reinsurance companies. NSFC maintains a catastrophe reinsurance agreement to cover losses from catastrophic events, primarily hurricanes and tropical stormsAmounts recoverable from re-insurers are estimated in a manner consistent with the claim liability associated with the underlying insurance policies. Amounts paid for prospective reinsurance contracts are reported as prepaid reinsurance premiums and amortized over the remaining contract period.In the normal course of business, NSIC seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding reinsurance to reinsurance companies under excess coverage contracts. NSIC retains a maximum of $50,000 of coverage per individual life. Cost is amortized over the reinsurance contract period. |
Business Segment | The Company’s property and casualty insurance operations comprise one business segment. The property and casualty insurance segment primarily underwrites home insurance coverage with primary lines of business consisting of dwelling fire and extended coverage, homeowners (including mobile homeowners) and other liability. The Company’s life and accident and health operations comprise the second business segment. The life and accident and health insurance segment consists of two lines of business: traditional life insurance and supplemental accident and health insurance. |
INVESTMENTS (Tables) |
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amortized Cost and Aggregate Fair Values of Investments in Available-for-Sale Securities | The amortized cost and aggregate fair values of investments in available-for-sale securities as of March 31, 2021 are as follows:
The amortized cost and aggregate fair values of investments in available-for-sale securities as of December 31, 2020 are as follows:
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Schedule of Held-to-Maturity Securities | The amortized cost and aggregate fair values of investments in held-to-maturity securities as of March 31, 2021 are as follows:
The amortized cost and aggregate fair values of investments in held-to-maturity securities as of December 31, 2020 are as follows:
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Schedule of Amortized Cost and Aggregate Fair Value of Debt Securities, by Contractual Maturity | The amortized cost and aggregate fair value of debt securities at March 31, 2021, by contractual maturity, are presented in the following table. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
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Schedule of Securities with Unrealized Losses | A summary of securities available-for-sale with unrealized losses as of March 31, 2021, along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows:
There were no securities held-to-maturity with unrealized losses as of March 31, 2021. A summary of securities available-for-sale with unrealized losses as of December 31, 2020, along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows:
There were no securities held-to-maturity with unrealized losses as of December 31, 2020.
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Summary of Major Categories of Investment Income | Major categories of investment income are summarized as follows:
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Schedule of Realized Investments Gains (Losses) | Major categories of investment gains and losses are summarized as follows:
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Schedule of Net Change in Unrealized Appreciation | An analysis of the net change in unrealized gains (losses) on available-for-sale securities follows:
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FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Tables) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Financial assets measured at fair value on a recurring basis as of March 31, 2021 are summarized in the following table by the type of inputs applicable to the fair value measurements:
Financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2020 are summarized in the following table by the type of inputs applicable to the fair value measurements:
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Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The table below presents a reconciliation for all assets and for all liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2021:
The table below presents a reconciliation for all assets and for all liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2020:
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Schedule of Fair Value, by Balance Sheet Grouping | The carrying amount and estimated fair value of the Company’s financial instruments as of March 31, 2021 and December 31, 2020 are as follows:
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PROPERTY AND EQUIPMENT (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Major categories of property and equipment are summarized as follows:
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INCOME TAXES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Tax Assets and Liabilities | The tax effect of significant differences representing deferred tax assets and liabilities are as follows:
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Changes in Temporary Differences in Federal Income Tax | The appropriate income tax effects of changes in temporary differences are as follows:
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Schedule of Effective Income Tax Rate Reconciliation | Total income tax expense (benefit) varies from amounts computed by applying current federal income tax rates to income or loss before income taxes. The reasons for these differences and the approximate tax effects are as follows:
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NOTES PAYABLE AND LONG-TERM DEBT (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-term Debt | Short-term debt and current portion of long-term debt consisted of the following as of March 31, 2021 and December 31, 2020:
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Schedule of Long-term Debt Instruments | Long-term debt consisted of the following as of March 31, 2021 and December 31, 2020:
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POLICY AND CLAIM RESERVES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Policy and Claim Reserves | The following table is a reconciliation of beginning and ending property and casualty reserve balances for claims and claim adjustment expense:
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REINSURANCE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||
Reinsurance Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Reinsurance | Catastrophe reinsurance coverage is maintained in three layers as follows:
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SHAREHOLDERS' EQUITY (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock by Class | The table below provides information regarding the Company's preferred and common stock as of March 31, 2021 and December 31, 2020:
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents changes in AOCI balances:
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Reclassification out of Accumulated Other Comprehensive Income | The following table presents the amounts reclassified out of AOCI for the three months ended March 31, 2021:
The following table presents the amounts reclassified out of AOCI for the three months ended March 31, 2020:
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SEGMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Total assets by industry segment at March 31, 2021 and December 31, 2020 are summarized below:
Net income (loss) by business segment for the three months ended March 31, 2021 and 2020 is summarized below:
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Schedule of Gross and Net Premiums Written | The following table presents the Company’s gross and net premiums written for the property and casualty segment and the life and accident and health segment for the three months ended March 31, 2021 and 2020, respectively:
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Schedule of Gross and Net Premiums Earned | The following table presents the Company’s gross and net premiums earned for the property and casualty segment and the life and accident and health segment for the three months ended March 31, 2021 and 2020, respectively:
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SIGNIFICANT ACCOUNTING POLICIES (Earnings Per Share, Concentration of Credit Risk) (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
|
Accounting Policies [Abstract] | |||
Weighted average number of shares outstanding | 2,530,370 | 2,530,783 | |
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 | |
Cash, uninsured amount | $ 6,813,000 | ||
Allowance for credit loss on reinsurance recoverable | 0 | $ 0 | |
Concentration Risk [Line Items] | |||
Policy receivables and agents' balances, net | 13,733,000 | $ 12,345,000 | |
Single Largest Agent Balance Due | |||
Concentration Risk [Line Items] | |||
Policy receivables and agents' balances, net | $ 497,000 |
INVESTMENTS (Narrative) (Details) - USD ($) |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2021 |
Dec. 31, 2020 |
|
Gain (Loss) on Securities [Line Items] | ||
Held-to-maturity securities, unrealized losses | $ 0 | $ 0 |
Other-than-temporary impairments, available-for-sale securities | 0 | 180,000 |
Single largest loss position | 104,000 | 55,000 |
Second largest loss position | 80,000 | 37,000 |
Third largest loss position | $ 75,000 | $ 27,000 |
Maximum | ||
Gain (Loss) on Securities [Line Items] | ||
Percent of investment portfolio below investment grade | 6.00% |
INVESTMENTS (Held-to-Maturity Securities) (Details) - USD ($) |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 768,000 | $ 873,000 |
Held-to-maturity securities, unrealized gains | 67,000 | 73,000 |
Held-to-maturity securities, unrealized losses | 0 | 0 |
Fair Value | 835,000 | 946,000 |
Agency mortgage backed securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 768,000 | 873,000 |
Held-to-maturity securities, unrealized gains | 67,000 | 73,000 |
Held-to-maturity securities, unrealized losses | 0 | 0 |
Fair Value | $ 835,000 | $ 946,000 |
INVESTMENTS (Major Categories of Investment Gains and Losses) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Gain (Loss) on Securities [Line Items] | ||
Investment gains (losses) | $ 310 | $ (990) |
Gains on trading securities | 7 | 0 |
Other-than-temporary impairments | 0 | 238 |
Realized gains on fixed maturities | ||
Gain (Loss) on Securities [Line Items] | ||
Investment gains (losses) | 0 | 121 |
Change in fair value of equity securities | ||
Gain (Loss) on Securities [Line Items] | ||
Investment gains (losses) | 3 | (599) |
Change in surrender value of company owned life insurance | ||
Gain (Loss) on Securities [Line Items] | ||
Investment gains (losses) | (57) | (251) |
Other gains principally real estate | ||
Gain (Loss) on Securities [Line Items] | ||
Investment gains (losses) | 0 | 2 |
Equity securities | ||
Gain (Loss) on Securities [Line Items] | ||
Investment gains (losses) | $ 357 | $ (25) |
INVESTMENTS (Schedule of Unrealized Appreciation) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Investments [Abstract] | ||
Fixed maturities | $ (2,069) | $ (2,456) |
Deferred income tax | 434 | 516 |
Change in net unrealized gains on available-for-sale securities | $ (1,635) | $ (1,940) |
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Narrative) (Details) - USD ($) |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Fair value measurements of assets | $ 1,496,000 | |
Fair value measurements of liabilities | 0 | |
Nonrecurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 0 | $ 0 |
Liabilities, fair value | $ 0 | $ 0 |
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2021 |
Dec. 31, 2020 |
|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,476 | $ 5,472 |
Less accumulated depreciation | 3,925 | 3,900 |
Property and equipment, net | 1,551 | 1,572 |
Depreciation expense | 24 | 109 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,491 | 3,491 |
Electronic data processing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,502 | 1,498 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 483 | $ 483 |
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Deferred income tax asset | $ 776 | $ 706 |
INCOME TAXES (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
General expenses | $ 1,456 | $ 1,448 |
Unearned premiums | 1,395 | 1,313 |
Claims liabilities | 685 | 698 |
NOL carryforward | 296 | 632 |
Impairment on real estate owned | 147 | 147 |
Unrealized loss on interest rate swaps | 0 | 130 |
Deferred tax assets | 3,979 | 4,368 |
Unrealized losses on trading securities | (1) | (3) |
Depreciation | (93) | (95) |
Deferred policy acquisition costs | (1,551) | (1,555) |
Pre-1984 policyholder surplus account | (314) | (331) |
Unrealized gains on securities available-for-sale | (649) | (1,083) |
Unrealized gains on equity securities | (595) | (595) |
Deferred tax liabilities | (3,203) | (3,662) |
Net deferred tax asset | $ 776 | $ 706 |
INCOME TAXES (Schedule of Income Tax Effects of Changes in Temporary Differences) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Income Tax Disclosure [Abstract] | ||
Deferred policy acquisition costs | $ (4) | $ (30) |
Other-than-temporary impairments | 0 | (40) |
Trading securities | (2) | (6) |
Unearned premiums | (82) | (30) |
General expenses | (8) | 108 |
Depreciation | (2) | (2) |
Claims liabilities | 13 | 30 |
Impact of repeal of special provision on pre-1984 policyholder surplus | (17) | (16) |
NOL carryforward | 336 | 0 |
Unrealized gains (losses) on equity securities | 0 | (126) |
Deferred income tax expense (benefit) | $ 234 | $ (112) |
INCOME TAXES (Schedule of Effective Income Tax Rate Reconciliation) (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Income Tax Disclosure [Abstract] | ||
Federal income tax rate applied to pre-tax income (loss) | 21.00% | 21.00% |
Dividends received deduction and tax-exempt interest | (0.30%) | 0.30% |
Company owned life insurance | 1.30% | (5.10%) |
Other, net | (0.10%) | (0.10%) |
Effective federal income tax rate | 21.90% | 16.10% |
NOTES PAYABLE AND LONG-TERM DEBT (Short-Term Debt) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Dec. 31, 2020 |
|
Short-term Debt [Line Items] | ||
Short-term notes payable and current portion of long-term debt | $ 500 | $ 500 |
Notes Payable to Banks | Unsecured Debt | ||
Short-term Debt [Line Items] | ||
Interest rate description | WSJ | |
Basis spread on variable rate | 0.50% | |
Floor | 4.75% | |
Short-term notes payable and current portion of long-term debt | $ 500 | $ 500 |
NOTES PAYABLE AND LONG-TERM DEBT (Schedule of Long-Term Debt) (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Jun. 21, 2007 |
Dec. 15, 2005 |
Mar. 31, 2021 |
Dec. 31, 2020 |
|
Debt Instrument [Line Items] | ||||
Long-term debt | $ 13,180 | $ 13,177 | ||
Unsecured Debt | Promissory Note | ||||
Debt Instrument [Line Items] | ||||
Interest rate description | WSJ | |||
Basis spread on variable rate | 0.50% | |||
Floor | 4.75% | |||
Long-term debt | $ 1,000 | 1,000 | ||
Unsecured Debt | Trust Preferred Security Offering, 2005 | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs, net | 138 | 140 | ||
Long-term debt | 9,141 | 9,139 | ||
Unsecured Debt | Trust Preferred Security Offering, 2005 | Three-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.75% | |||
Unsecured Debt | Trust Preferred Security Offering, 2007 | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs, net | 54 | 55 | ||
Long-term debt | $ 3,039 | $ 3,038 | ||
Unsecured Debt | Trust Preferred Security Offering, 2007 | Three-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.40% |
NOTES PAYABLE AND LONG-TERM DEBT (Narrative) (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
Feb. 26, 2020 |
|
Debt Instrument [Line Items] | ||||
Cash flow hedge, derivative instrument liabilities at fair value | $ 619,000 | |||
Unrealized gain (loss) on interest rate swap | $ 489,000 | $ (545,000) | 438,000 | |
Securities on deposit | 957,000 | |||
Collateral Pledged [Member] | ||||
Debt Instrument [Line Items] | ||||
Available-for-sale securities pledged as collateral | 957,000 | |||
Interest rate swap | ||||
Debt Instrument [Line Items] | ||||
Derivative, notional amount | $ 3,000,000 | |||
Derivative, fixed interest rate | 4.93% | |||
Cash flow hedge, liability at fair value | 155,000 | |||
Interest rate swap | ||||
Debt Instrument [Line Items] | ||||
Derivative, notional amount | $ 9,000,000 | |||
Derivative, fixed interest rate | 5.28% | |||
Cash flow hedge, liability at fair value | $ 464,000 |
POLICY AND CLAIM RESERVES (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
|
Insurance [Abstract] | |||
Estimated claims and claim adjustment expenses for claims arising in prior years | $ 1,098 | $ 32 | |
Reserve for unpaid claims | 450 | $ 426 | |
Policy and contract claims | $ 1,222 | $ 1,309 |
EMPLOYEE BENEFIT PLANS (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2021
USD ($)
hours
|
Mar. 31, 2020
USD ($)
|
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Minimum hours of service completed in year of contribution | hours | 1,000 | |
Matching contribution | $ 46,000 | $ 46,000 |
Employer matching contribution, percent | 5.00% | |
Cash contributions to ESOP | $ 0 | 100,000 |
ESOP debt structure | 0 | |
Non-Qualified Deferred Compensation Plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Increase (decrease) in deferred compensation arrangement | $ 24,000 | $ (361,000) |
Executive Officers | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Employer matching contribution, percent | 15.00% |
SHAREHOLDERS' EQUITY (Narrative) (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
Jun. 01, 2020 |
|
Stockholders' Equity Note [Abstract] | ||||
Net income (loss) | $ 722,000 | $ (860,000) | $ (8,619,000) | |
Dividends paid | (152,000) | (152,000) | (607,000) | |
Other comprehensive income, net of tax | $ (1,146,000) | (2,485,000) | 1,142,000 | |
Common stock issued | 25,000 | |||
Treasury stock acquired | $ 6,000 | $ 36,000 | ||
Shares of common stock repurchased and placed in treasury (in shares) | 0 | 2,509 | ||
Maximum | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||
Stock repurchase program, authorized amount | $ 500,000 |
SHAREHOLDERS' EQUITY (Preferred and Common Stock) (Details) - $ / shares |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Class of Stock [Line Items] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 3,000,000 | 3,000,000 |
Common stock, shares issued (in shares) | 2,533,315 | 2,533,315 |
Treasury (in shares) | 2,945 | 2,945 |
Common stock, shares outstanding (in shares) | 2,530,370 | 2,530,370 |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Amounts reclassified out of AOCI) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
|
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Investment gains (losses) | $ 310 | $ (990) | |
Tax (expense) or benefit | (202) | 165 | |
Net Income (Loss) | 722 | (860) | $ (8,619) |
Amounts Reclassified from Accumulated Other Comprehensive Income | Unrealized Gains (Losses) on Available-for-Sale Securities | |||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Investment gains (losses) | 0 | (117) | |
Total before tax | 0 | (117) | |
Tax (expense) or benefit | 0 | 25 | |
Net Income (Loss) | $ 0 | $ (92) |
SEGMENTS (Narrative) (Details) |
3 Months Ended |
---|---|
Mar. 31, 2021
Segments
| |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
CONTINGENCIES (Details) $ in Thousands |
Mar. 31, 2021
USD ($)
claim
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Current accruals for legal fees | $ | $ 625 |
Hurricane | Texas | |
Loss Contingencies [Line Items] | |
Pending claims, number | claim | 1 |
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
|
Supplemental Cash Flow Elements [Abstract] | |||
Interest paid | $ 169,000 | $ 248,000 | |
Income taxes (received) paid | $ 0 | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Increase in equity | $ 25,000 |
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