Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 27, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | AMSF | |
Entity Registrant Name | AMERISAFE, INC. | |
Entity Central Index Key | 0001018979 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 001-12251 | |
Entity Tax Identification Number | 75-2069407 | |
Entity Address, Address Line One | 2301 Highway 190 West | |
Entity Address, City or Town | DeRidder | |
Entity Address, State or Province | LA | |
Entity Address, Postal Zip Code | 70634 | |
City Area Code | 337 | |
Local Phone Number | 463-9052 | |
Entity Common Stock, Shares Outstanding | 19,331,059 | |
Entity Incorporation, State or Country Code | TX | |
Title of 12(b) Security | Common | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Investments: | ||
Fixed maturity securities—held-to-maturity, at amortized cost net of allowance for credit losses of $357 and $0 in 2020 and 2019, respectively, (fair value $609,281 and $621,343 in 2020 and 2019, respectively) | $ 576,191 | $ 599,421 |
Fixed maturity securities—available-for-sale, at fair value (amortized cost $392,117, allowance for credit losses of $0 in 2020 and amortized cost $425,698, allowance for credit losses of $0 in 2019) | 416,240 | 441,146 |
Equity securities, at fair value (cost $33,227 and $24,457 in 2020 and 2019, respectively) | 33,480 | 27,903 |
Short-term investments | 72,849 | 56,548 |
Total investments | 1,098,760 | 1,125,018 |
Cash and cash equivalents | 110,281 | 43,813 |
Amounts recoverable from reinsurers (net of allowance for credit losses of $388 and $0 in 2020 and 2019, respectively) | 103,524 | 95,913 |
Premiums receivable (net of allowance for credit losses of $5,277 and $5,112 in 2020 and 2019, respectively) | 175,241 | 157,953 |
Deferred income taxes | 16,704 | 17,513 |
Accrued interest receivable | 9,297 | 9,730 |
Property and equipment, net | 6,385 | 6,331 |
Deferred policy acquisition costs | 19,765 | 19,048 |
Other assets | 10,016 | 17,587 |
Total assets | 1,549,973 | 1,492,906 |
Liabilities: | ||
Reserves for loss and loss adjustment expenses | 768,767 | 772,887 |
Unearned premiums | 147,824 | 140,873 |
Amounts held for others | 41,501 | 37,937 |
Policyholder deposits | 43,285 | 44,718 |
Insurance-related assessments | 25,955 | 22,967 |
Federal income tax payable | 12,098 | 3,220 |
Accounts payable and other liabilities | 40,712 | 40,089 |
Payable for investments purchased | 7,035 | |
Total liabilities | 1,087,177 | 1,062,691 |
Shareholders’ equity: | ||
Common stock: voting—$0.01 par value authorized shares—50,000,000 in 2020 and 2019; 20,589,309 and 20,560,833 shares issued and 19,331,059 and 19,302,583 shares outstanding in 2020 and 2019, respectively | 206 | 205 |
Additional paid-in capital | 214,894 | 213,004 |
Treasury stock, at cost (1,258,250 shares in 2020 and 2019) | (22,370) | (22,370) |
Accumulated earnings | 250,888 | 227,165 |
Accumulated other comprehensive income, net | 19,178 | 12,211 |
Total shareholders’ equity | 462,796 | 430,215 |
Total liabilities and shareholders’ equity | $ 1,549,973 | $ 1,492,906 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Fixed maturity securities, held-to-maturity, allowance for credit losses | $ 357,000 | $ 0 |
Fixed maturity securities, fair value | 609,281,000 | 621,343,000 |
Fixed maturity securities, available-for-sale, allowance for credit losses | 0 | 0 |
Fixed maturity securities, amortized cost | 392,117,000 | 425,698,000 |
Equity securities, cost | 33,227,000 | 24,457,000 |
Amounts recoverable from reinsurers, allowance for credit losses | 388,000 | 0 |
Premiums receivable, allowance for credit losses | $ 5,277,000 | $ 5,112,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 20,589,309 | 20,560,833 |
Common stock, shares outstanding | 19,331,059 | 19,302,583 |
Treasury stock, shares | 1,258,250 | 1,258,250 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues | ||||
Gross premiums written | $ 80,289 | $ 87,018 | $ 167,360 | $ 180,125 |
Ceded premiums written | (2,672) | (2,204) | (5,455) | (4,634) |
Net premiums written | 77,617 | 84,814 | 161,905 | 175,491 |
Net premiums earned | 75,964 | 82,951 | 154,954 | 167,899 |
Net investment income | 7,324 | 8,169 | 15,073 | 16,184 |
Net realized gains (losses) on investments | 163 | (82) | 1,155 | (23) |
Net unrealized gains (losses) on equity securities | 5,570 | 642 | (3,193) | 2,800 |
Fee and other income | 90 | 73 | 291 | 83 |
Total revenues | 89,082 | 91,753 | 168,251 | 186,943 |
Loss on disposal of assets | (29) | (29) | ||
Expenses | ||||
Loss and loss adjustment expenses incurred | 37,530 | 48,868 | 81,177 | 98,482 |
Underwriting and certain other operating costs | 7,786 | 7,416 | 16,003 | 14,968 |
Commissions | 5,812 | 6,243 | 11,867 | 12,611 |
Salaries and benefits | 7,533 | 6,059 | 14,545 | 12,806 |
Policyholder dividends | 948 | 998 | 1,971 | 2,098 |
Total expenses | 59,691 | 69,584 | 125,619 | 140,965 |
Provision for investment related credit loss expense | 82 | 56 | ||
Income before income taxes | 29,391 | 22,169 | 42,632 | 45,978 |
Income tax expense | 5,443 | 4,279 | 7,884 | 8,688 |
Net income | $ 23,948 | $ 17,890 | $ 34,748 | $ 37,290 |
Earnings per share | ||||
Basic | $ 1.24 | $ 0.93 | $ 1.80 | $ 1.94 |
Diluted | $ 1.24 | $ 0.93 | $ 1.80 | $ 1.93 |
Shares used in computing earnings per share | ||||
Basic | 19,280,684 | 19,245,592 | 19,273,347 | 19,237,401 |
Diluted | 19,335,707 | 19,306,953 | 19,335,748 | 19,316,276 |
Cash dividends declared per common share | $ 0.27 | $ 0.25 | $ 0.54 | $ 0.50 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 23,948 | $ 17,890 | $ 34,748 | $ 37,290 |
Other comprehensive income: | ||||
Unrealized gain on debt securities, net of tax | 5,483 | 4,980 | 6,967 | 10,972 |
Change in deferred tax valuation allowance | 198 | |||
Comprehensive income | $ 29,431 | $ 23,068 | $ 41,715 | $ 48,262 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Beginning Balance at Dec. 31, 2018 | $ 409,762 | $ 205 | $ 211,431 | $ (22,370) | $ 221,328 | $ (832) |
Beginning Balance, Shares at Dec. 31, 2018 | 20,528,230 | (1,258,250) | ||||
Impact of adoption of ASU | ASU 2016-02 [Member] | (1) | (1) | ||||
Comprehensive income: | ||||||
Net income | 37,290 | 37,290 | ||||
Other comprehensive income: | ||||||
Change in unrealized gains (losses), net of tax | 10,972 | 10,972 | ||||
Comprehensive income | 48,262 | |||||
Common stock issued upon exercise of options | $ 20 | 20 | ||||
Common stock issued upon exercise of options, Shares | 5,000 | 5,000 | ||||
Common stock issued | $ 560 | 560 | ||||
Common stock issued, Shares | 23,281 | |||||
Share-based compensation | 482 | 482 | ||||
Dividends to shareholders | (9,642) | (9,642) | ||||
Ending Balance at Jun. 30, 2019 | 449,443 | $ 205 | 212,493 | $ (22,370) | 248,975 | 10,140 |
Ending Balance, Shares at Jun. 30, 2019 | 20,556,511 | (1,258,250) | ||||
Beginning Balance at Mar. 31, 2019 | 430,405 | $ 205 | 211,700 | $ (22,370) | 235,908 | 4,962 |
Beginning Balance, Shares at Mar. 31, 2019 | 20,533,230 | (1,258,250) | ||||
Comprehensive income: | ||||||
Net income | 17,890 | 17,890 | ||||
Other comprehensive income: | ||||||
Change in unrealized gains (losses), net of tax | 4,980 | 4,980 | ||||
Change in deferred tax valuation allowance | 198 | 198 | ||||
Comprehensive income | 23,068 | |||||
Common stock issued | 560 | 560 | ||||
Common stock issued, Shares | 23,281 | |||||
Share-based compensation | 233 | 233 | ||||
Dividends to shareholders | (4,823) | (4,823) | ||||
Ending Balance at Jun. 30, 2019 | 449,443 | $ 205 | 212,493 | $ (22,370) | 248,975 | 10,140 |
Ending Balance, Shares at Jun. 30, 2019 | 20,556,511 | (1,258,250) | ||||
Beginning Balance at Dec. 31, 2019 | $ 430,215 | $ 205 | 213,004 | $ (22,370) | 227,165 | 12,211 |
Beginning Balance, Shares at Dec. 31, 2019 | 19,302,583 | 20,560,833 | (1,258,250) | |||
Impact of adoption of ASU | ASU 2016-13 [Member] | $ (594) | (594) | ||||
Comprehensive income: | ||||||
Net income | 34,748 | 34,748 | ||||
Other comprehensive income: | ||||||
Change in unrealized gains (losses), net of tax | 6,967 | 6,967 | ||||
Comprehensive income | $ 41,715 | |||||
Common stock issued upon exercise of options, Shares | 0 | |||||
Common stock issued | $ 1,360 | $ 1 | 1,359 | |||
Common stock issued, Shares | 28,476 | |||||
Share-based compensation | 531 | 531 | ||||
Dividends to shareholders | (10,431) | (10,431) | ||||
Ending Balance at Jun. 30, 2020 | $ 462,796 | $ 206 | 214,894 | $ (22,370) | 250,888 | 19,178 |
Ending Balance, Shares at Jun. 30, 2020 | 19,331,059 | 20,589,309 | (1,258,250) | |||
Beginning Balance at Mar. 31, 2020 | $ 436,956 | $ 205 | 213,267 | $ (22,370) | 232,159 | 13,695 |
Beginning Balance, Shares at Mar. 31, 2020 | 20,561,034 | (1,258,250) | ||||
Comprehensive income: | ||||||
Net income | 23,948 | 23,948 | ||||
Other comprehensive income: | ||||||
Change in unrealized gains (losses), net of tax | 5,483 | 5,483 | ||||
Comprehensive income | 29,431 | |||||
Common stock issued | 1,360 | $ 1 | 1,359 | |||
Common stock issued, Shares | 28,275 | |||||
Share-based compensation | 268 | 268 | ||||
Dividends to shareholders | (5,219) | (5,219) | ||||
Ending Balance at Jun. 30, 2020 | $ 462,796 | $ 206 | $ 214,894 | $ (22,370) | $ 250,888 | $ 19,178 |
Ending Balance, Shares at Jun. 30, 2020 | 19,331,059 | 20,589,309 | (1,258,250) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities | ||
Net income | $ 34,748 | $ 37,290 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 496 | 449 |
Net amortization of investments | 4,198 | 4,483 |
Change in investment related allowance for credit losses | 56 | |
Deferred income taxes | (893) | (526) |
Net realized (gains) losses on investments | (1,155) | 23 |
Net unrealized (gains) losses on equity securities | 3,193 | (2,800) |
Net realized losses on disposal of assets | 29 | |
Share-based compensation | 1,778 | 509 |
Changes in operating assets and liabilities: | ||
Premiums receivable, net | (17,288) | (12,542) |
Accrued interest receivable | 433 | 111 |
Deferred policy acquisition costs | (717) | (816) |
Amounts held by others | 7,855 | 1 |
Other assets | (248) | (947) |
Reserves for loss and loss adjustment expenses | (4,120) | (3,363) |
Unearned premiums | 6,951 | 7,593 |
Reinsurance balances | (8,054) | 8,317 |
Amounts held for others and policyholder deposits | 2,131 | 1,976 |
Accounts payable and other liabilities | 12,777 | (189) |
Net cash provided by operating activities | 42,170 | 39,569 |
Investing activities | ||
Purchases of investments held-to-maturity | (38,658) | (67,571) |
Purchases of investments available-for-sale | (29,303) | (27,356) |
Purchases of equity securities | (8,770) | (2,620) |
Purchases of short-term investments | (68,787) | (79,224) |
Proceeds from maturities of investments held-to-maturity | 59,543 | 73,865 |
Proceeds from sales and maturities of investments available-for-sale | 68,430 | 60,494 |
Proceeds from sales and maturities of short-term investments | 52,959 | 23,679 |
Purchases of property and equipment | (579) | (148) |
Net cash provided by (used in) investing activities | 34,835 | (18,881) |
Financing activities | ||
Proceeds from stock option exercises | 20 | |
Finance lease purchases | (25) | (23) |
Dividends to shareholders | (10,512) | (9,783) |
Net cash used in financing activities | (10,537) | (9,786) |
Change in cash and cash equivalents | 66,468 | 10,902 |
Cash and cash equivalents at beginning of period | 43,813 | 40,344 |
Cash and cash equivalents at end of period | $ 110,281 | $ 51,246 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation AMERISAFE, Inc. (the “Company”) is an insurance holding company incorporated in the state of Texas. The accompanying unaudited consolidated financial statements include the accounts of AMERISAFE and its subsidiaries: American Interstate Insurance Company (“AIIC”) and its insurance subsidiaries, Silver Oak Casualty, Inc. (“SOCI”) and American Interstate Insurance Company of Texas (“AIICTX”), Amerisafe Risk Services, Inc. (“RISK”) and Amerisafe General Agency, Inc. (“AGAI”). AIIC and SOCI are property and casualty insurance companies organized under the laws of the state of Nebraska. AIICTX is a property and casualty insurance company organized under the laws of the state of Texas. RISK, a wholly owned subsidiary of the Company, is a claims and safety service company currently servicing only affiliated insurance companies. AGAI, a wholly owned subsidiary of the Company, is a general agent for the Company. AGAI sells insurance, which is underwritten by AIIC, SOCI and AIICTX, as well as by nonaffiliated insurance carriers. The assets and operations of AGAI are not significant to that of the Company and its consolidated subsidiaries. The terms “AMERISAFE,” the “Company,” “we,” “us” or “our” refer to AMERISAFE, Inc. and its consolidated subsidiaries, as the context requires. The Company provides workers’ compensation insurance for small to mid-sized employers engaged in hazardous industries, principally construction, trucking, logging and lumber, manufacturing, agriculture, maritime, and oil and gas. Assets and revenues of AIIC and its subsidiaries represent at least 95% of comparable consolidated amounts of the Company for each of the six months ended June 30, 2020 and 2019. In the opinion of management of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position, the results of operations and cash flows for the periods presented. The unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q under the Securities Exchange Act of 1934 and therefore do not include all information and footnotes to be in conformity with accounting principles generally accepted in the United States (“GAAP”). The results for the interim periods are not necessarily indicative of the results of operations that may be expected for the year. The unaudited consolidated financial statements contained herein should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of our assets, liabilities, revenues and expenses and related disclosures. Some of the estimates result from judgments that can be subjective and complex and, consequently, actual results in future periods might differ from these estimates. Adopted Accounting Guidance On January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses (“CECL”). The prior guidance delays the recognition of credit losses until a probable loss has occurred. The new guidance requires credit losses for securities measured at amortized cost to be determined using current expected credit loss estimates. These estimates are derived from historical, current and reasonable supporting forecasts, including prepayments and estimates, and are recorded through a valuation account. The same method is used for available-for-sale securities, but the valuation account is limited to the amount by which the fair value is below amortized cost. The Company implemented the new standard using the modified retrospective approach. Results for reporting periods beginning after January 1, 2020 are presented under the new guidance while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company recorded a net decrease to Retained Earnings of $594 thousand as of January 1, 2020, for the cumulative effect of adopting ASU 2016-13. The transition adjustment includes a $243 thousand impact to establish a credit loss allowance for held-to-maturity securities. The remaining $351 thousand of the transition adjustment was due to the creation of the reinsurance recoverable credit allowance. The Company believes that under the standard there is no current expected credit allowance necessary for U.S. Government Securities in its judgment as: 1) Treasury securities typically are the most highly rated securities among rating agencies; 2) Treasury securities have a long history of no credit losses; 3) Treasury securities are guaranteed by a sovereign entity (the U.S. Government) that can print its own money and whose currency (the U.S. dollar) is the reserve currency. The Company believes that under the standard there is no current expected credit allowance necessary for GNMA Securities in its judgment as: 1) GNMA securities typically are the most highly rated securities among rating agencies; 2) GNMA securities have a long history of no credit losses and payments are explicitly guaranteed by the United States; 3) Underlying mortgage loans for GNMA securities are insured by the Federal Housing Administration or guaranteed by the U.S. Department of Veteran Affairs; 4) the U.S. Government can print its own money to retire GNMA obligations. The Company believes that under the standard there is no current expected credit allowance necessary for FNMA or Freddie Mac (FHLMC) Securities in its judgment as: 1) These securities typically are among the most highly rated securities among rating agencies; 2) There is a long history of no credit losses; 3) Principal and interest payments are guaranteed by the issuing agency; 4) There is an explicit guarantee by the U.S. Government that can print its own money and whose currency (the U.S. dollar) is the reserve currency. The Company researched various options and methodologies and has chosen to use Moody’s default rates and recovery rates for our held-to-maturity fixed income securities based on the current credit rating of the security and the time period to the stated maturity date. This is a probability of default (PD) and loss given default (LGD) methodology. The credit rating used for held-to-maturity fixed income securities is the rating for each security as published by Moody’s, S&P, and Fitch to determine the probability of default. If there are two ratings, the lower rating is used. If there are three ratings, the median rating is used. If there is one rating, that rating is used. This methodology provides additional conservatism in determining the credit loss allowance needed. For corporate fixed income securities, the probability of default (given a rating) comes from Moody’s annual study of Corporate Bond defaults published each February. This study also contains the average recovery rates based on the historical defaults in the Moody’s study. We have chosen to use the 1983-2018 data as more reflective of the current historical pattern of defaults (the study goes back to 1920). The maximum maturity using the default rate is 20 years (any maturity greater than 20 years will use the 20-year rate). For municipal fixed income securities the probability of default (given a rating) comes from Moody’s annual study of Municipal Bond defaults published each July/August. This study also contains the average recovery rates based on the historical defaults in the Moody’s study. This study covers 1970-2018 data, which we believe is reflective of the current historical pattern of defaults. The maximum maturity using the default rate is 20 years (any maturity greater than 20 years will use the 20-year rate). The Company did not record a credit allowance for available-for-sale securities. The available-for-sale portfolio is composed of highly rated securities, which carry a low risk of default. The Company’s concentrations in municipal bonds have helped lower default risk, as the historical default rates and recovery rates for municipal bonds has been much better than corporate bonds rated at the same level. The Company creates a watch list of available-for-sale securities that are below book value at the end of each quarter. This watch list excludes US Treasury securities, GNMA Securities, and government agency securities (FNMA, etc.) as none of those securities will have an expected credit loss. The watch list will also exclude those securities that are trading at least at $95 or above (par value $100) as the Company believes any slight difference between $95 and par likely reflect interest rate changes and liquidity only and are not a sign of credit impairment or market expectations for any current expected credit loss. The list is reviewed by the Management Investment Committee to evaluate any security where the discounted cash flows expected no longer exceed the book value of the security. If the Company intends to sell the security (or more likely than not be required to sell the security before recovery of the loss) the Company will write down the security to fair value through earnings. If the Company intends to hold the security, the Company will establish a credit loss allowance for the security through earnings, and adjust the allowance each quarter through earnings, as the security changes in value. In determining the amount of the credit loss allowance, the Company will consider all of the following factors: 1. The extent to which the fair value is less than the amortized cost basis 2. Adverse conditions in the security, industry, or geography, including: a.) Changes in technology b.) Discontinuation of a segment of business that may affect future earnings c.) Changes in the quality of the credit enhancement, if any 3. Changes in the payment structure of the debt security 4. Failure of the issuer to make scheduled interest or principal payments 5. Any changes to the rating of the security by a rating agency The calculation of the credit loss allowance will not take into account the amount of time the security has been below book value or when the security might be expected to recover in value. The Company has researched various options and methodologies and has chosen to use Moody’s default rates and recovery rates for our unsecured reinsurance recoverables based on the current credit rating of the reinsurer and a time period of ten years. This is a probability of default (PD) and loss given default (LGD) methodology. The ten-year period is consistent with our current working layer reinsurance treaty where we have a three-year The credit rating used for reinsurance recoverables uses the average rating for each reinsurer as published by Moody’s, S&P, Fitch and A.M. Best to determine the probability of default. The median rating is used if there are three ratings. The probability of default (given a rating) comes from Moody’s annual study of Corporate Bond defaults published each February. This study also contains the average recovery rates based on the historical defaults in the Moody’s study. We have chosen to use the 1983-2018 data as more reflective of the current historical pattern of defaults (the study goes back to 1920). The Company does not hold any debt securities for which an other-than-temporary impairment has been recognized. Additionally, the Company does not hold any financial assets purchased with credit deterioration. The Company’s internal working group evaluated the existing allowance for doubtful accounts reserving methodology for premiums receivable and determined the calculation was consistent with the new credit loss guidance. There was no impact to the premiums receivable balance as a result of the adoption of the new standard. The Company has elected not to establish a credit allowance for investment interest receivable. The Company plans to continue use of the current policy for writing off investment related interest receivable balances over ninety days old. Prospective Accounting Guidance All issued but not yet effective accounting and reporting standards as of June 30, 2020 are either not applicable to the Company or are not expected to have a material impact on the Company. |
Stock Options and Restricted St
Stock Options and Restricted Stock | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Options and Restricted Stock | Note 2. Stock Options and Restricted Stock As of June 30, 2020, the Company has two equity incentive plans: the AMERISAFE Non-Employee Director Restricted Stock Plan (the “Restricted Stock Plan”) and the AMERISAFE 2012 Equity and Incentive Compensation Plan (the “2012 Incentive Plan”). In connection with the approval of the 2012 Incentive Plan by the Company’s shareholders, no further grants were made under the AMERISAFE 2005 Incentive Plan. There are no outstanding options or restricted stock awards under the 2005 Incentive Plan. See Note 12 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 for additional information regarding the Company’s incentive plans. During the six months ended June 30, 2020, the Company issued 23,207 shares of common stock pursuant to vested performance awards and 5,269 shares of restricted common stock to non-employee directors. The market value of these shares totaled $1.8 million. During the six months ended June 30, 2019, the Company issued 9,391 shares of common stock pursuant to vested performance awards and 9,000 shares of restricted common stock to executive officers. During the six months ended June 30, 2019, the Company issued 4,890 shares of restricted common stock to non-employee directors. The market value of these shares totaled $1.4 million. During the six months ended June 30, 2020, there were no exercises of options to purchase common stock. During the six months ended June 30, 2019, options to purchase 5,000 shares of common stock were exercised. In connection with these exercises, the Company received $20 thousand of stock option proceeds. The Company had no stock options outstanding as of June 30, 2020. The Company recognized share-based compensation expense of $1.0 million in the quarter ended June 30, 2020 and a negative share-based compensation expense of $0.1 million for the same period in 2019. The Company recognized share-based compensation expense of $1.8 million in the six months ended June 30, 2020 and $0.5 million for the same period in 2019. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 3. Earnings Per Share The Company computes earnings per share (“EPS”) in accordance with FASB Accounting Standards Codification (“ASC”) Topic 260, Earnings Per Share Basic EPS is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. The diluted EPS calculation includes potential common shares assumed issued under the treasury stock method, which reflects the potential dilution that would occur if any outstanding options were exercised or restricted stock becomes vested. Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 (in thousands, except share and per share amounts) Basic EPS Net income $ 23,948 $ 17,890 $ 34,748 $ 37,290 Basic weighted average common shares 19,280,684 19,245,592 19,273,347 19,237,401 Basic earnings per common share $ 1.24 $ 0.93 $ 1.80 $ 1.94 Diluted EPS Net income $ 23,948 $ 17,890 $ 34,748 $ 37,290 Diluted weighted average common shares: Weighted average common shares 19,280,684 19,245,592 19,273,347 19,237,401 Stock options and restricted stock 55,023 61,361 62,401 78,875 Diluted weighted average common shares 19,335,707 19,306,953 19,335,748 19,316,276 Diluted earnings per common share $ 1.24 $ 0.93 $ 1.80 $ 1.93 |
Investments
Investments | 6 Months Ended |
Jun. 30, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | Note 4. Investments The gross unrecognized gains and losses on, amortized cost, allowance for credit losses, carrying amount, and fair value of, those investments classified as held-to-maturity at June 30, 2020 are summarized as follows: Amortized Cost Allowance for Credit Losses Carrying Amount Gross Unrecognized Gains Gross Unrecognized Losses Fair Value (in thousands) States and political subdivisions $ 469,538 $ (49 ) $ 469,489 $ 28,907 $ (20 ) $ 498,376 Corporate bonds 83,879 (299 ) 83,580 3,054 — 86,634 U.S. agency-based mortgage-backed securities 9,227 — 9,227 720 — 9,947 U.S. Treasury securities and obligations of U.S. government agencies 13,710 — 13,710 422 — 14,132 Asset-backed securities 194 (9 ) 185 7 — 192 Totals $ 576,548 $ (357 ) $ 576,191 $ 33,110 $ (20 ) $ 609,281 The gross unrealized gains and losses on, and the amortized cost, allowance for credit losses, and fair value of, those investments classified as available-for-sale at June 30, 2020 are summarized as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Allowance for Credit Losses (in thousands) States and political subdivisions $ 227,932 $ 16,750 $ — $ 244,682 $ — Corporate bonds 103,713 5,711 (47 ) 109,377 — U.S. agency-based mortgage-backed securities 28,581 575 — 29,156 — U.S. Treasury securities and obligations of U.S. government agencies 31,891 1,134 — 33,025 — Totals $ 392,117 $ 24,170 $ (47 ) $ 416,240 $ — The gross unrealized gains and losses on, and the cost of equity securities at June 30, 2020 are summarized as follows: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Equity securities: Domestic common stock $ 33,227 $ 1,425 $ (1,172 ) $ 33,480 Total equity securities $ 33,227 $ 1,425 $ (1,172 ) $ 33,480 The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at December 31, 2019 are summarized as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) States and political subdivisions $ 466,270 $ 19,570 $ (193 ) $ 485,647 Corporate bonds 109,241 1,684 — 110,925 U.S. agency-based mortgage-backed securities 10,967 544 — 11,511 U.S. Treasury securities and obligations of U.S. government agencies 12,723 330 (12 ) 13,041 Asset-backed securities 220 — (1 ) 219 Totals $ 599,421 $ 22,128 $ (206 ) $ 621,343 The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2019 are summarized as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) States and political subdivisions $ 225,895 $ 11,906 $ (26 ) $ 237,775 Corporate bonds 130,453 3,326 (1 ) 133,778 U.S. agency-based mortgage-backed securities 29,499 64 (96 ) 29,467 U.S. Treasury securities and obligations of U.S. government agencies 39,851 317 (42 ) 40,126 Totals $ 425,698 $ 15,613 $ (165 ) $ 441,146 The gross unrealized gains and losses on, and the cost of equity securities at December 31, 2019 are summarized as follows: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Equity securities: Domestic common stock $ 24,457 $ 3,446 $ — $ 27,903 Total equity securities $ 24,457 $ 3,446 $ — $ 27,903 A summary of the carrying amounts and fair value of investments in fixed maturity securities, classified as held-to-maturity, by contractual maturity, is as follows: June 30, 2020 December 31, 2019 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Maturity: Within one year $ 59,898 $ 60,504 $ 49,967 $ 50,348 After one year through five years 195,398 204,082 198,025 202,109 After five years through ten years 80,484 84,789 110,460 113,877 After ten years 230,999 249,767 229,782 243,279 U.S. agency-based mortgage-backed securities 9,227 9,947 10,967 11,511 Asset-backed securities 185 192 220 219 Totals $ 576,191 $ 609,281 $ 599,421 $ 621,343 A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as available-for-sale, by contractual maturity, is as follows: June 30, 2020 December 31, 2019 Amortized Cost Fair Value Amortized Cost Fair Value (in thousands) Maturity: Within one year $ 65,386 $ 66,197 $ 27,160 $ 27,194 After one year through five years 89,127 93,818 144,142 146,469 After five years through ten years 45,235 49,460 47,175 49,419 After ten years 163,788 177,609 177,722 188,597 U.S. agency-based mortgage-backed securities 28,581 29,156 29,499 29,467 Totals $ 392,117 $ 416,240 $ 425,698 $ 441,146 The following table summarizes the fair value and gross unrealized losses on securities classified as available-for-sale, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position as of June 30, 2020: Less Than 12 Months 12 Months or Greater Total Fair Value of Investments with Unrealized Losses Gross Unrealized Losses Fair Value of Investments with Unrealized Losses Gross Unrealized Losses Fair Value of Investments with Unrealized Losses Gross Unrealized Losses (in thousands) June 30, 2020 Available-for-Sale Fixed maturity securities: Corporate bonds 3,506 47 — — 3,506 47 Total available-for-sale securities $ 3,506 $ 47 $ — $ — $ 3,506 $ 47 At June 30, 2020, we held 2 individual fixed maturity securities classified as available-for-sale that were in an unrealized loss position, of which none were in a continuous unrealized loss position for longer than 12 months. The following table summarizes the fair value and gross unrealized losses on securities, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position as of December 31, 2019: Less Than 12 Months 12 Months or Greater Total Fair Value of Investments with Unrealized Losses Gross Unrealized Losses Fair Value of Investments with Unrealized Losses Gross Unrealized Losses Fair Value of Investments with Unrealized Losses Gross Unrealized Losses (in thousands) December 31, 2019 Held-to-Maturity Fixed maturity securities: States and political subdivisions $ 21,074 $ 193 $ — $ — $ 21,074 $ 193 U.S. Treasury securities and obligations of U.S. government agencies — — 3,243 12 3,243 12 Asset-backed securities — — 68 1 68 1 Total held-to-maturity securities 21,074 193 3,311 13 24,385 206 Available-for-Sale Fixed maturity securities: States and political subdivisions $ 4,140 $ 26 $ — $ — $ 4,140 $ 26 Corporate bonds 6,426 1 — — 6,426 1 U.S. agency-based mortgage-backed securities 13,007 95 1,152 1 14,159 96 U.S. Treasury securities and obligations of U.S. government agencies — — 17,068 42 17,068 42 Total available-for-sale securities 23,573 122 18,220 43 41,793 165 Total $ 44,647 $ 315 $ 21,531 $ 56 $ 66,178 $ 371 The following table illustrates the changes in the allowance for credit losses by major security type of the investments classified as held-to-maturity for the quarter ended June 30, 2020. States and Political Subdivisions Corporate Bonds U.S. Agency-Based Mortgage-Backed Securities U.S. Treasury Securities and Obligations of U.S. Government Agencies Asset-Backed Securities Totals (in thousands) Balance at March 31, 2020 $ 50 $ 215 $ — $ — $ 10 $ 275 Provision for credit loss expense (benefit) (1 ) 84 — — (1 ) 82 Allowance for securities purchased with credit deterioration — — — — — — Securities charged off — — — — — — Recoveries — — — — — — Balance at June 30, 2020 $ 49 $ 299 $ — $ — $ 9 $ 357 The following table illustrates the changes in the allowance for credit losses by major security type of the investments classified as held-to-maturity for the six months ended June 30, 2020. States and Political Subdivisions Corporate Bonds U.S. Agency-Based Mortgage-Backed Securities U.S. Treasury Securities and Obligations of U.S. Government Agencies Asset-Backed Securities Totals (in thousands) Balance at January 1, 2020 $ 45 $ 245 $ — $ — $ 11 $ 301 Provision for credit loss expense (benefit) 4 54 — — (2 ) 56 Allowance for securities purchased with credit deterioration — — — — — — Securities charged off — — — — — — Recoveries — — — — — — Balance at June 30, 2020 $ 49 $ 299 $ — $ — $ 9 $ 357 The Company has established an allowance for credit losses on 390 held-to-maturity securities totaling $0.4 million. The majority of those securities were corporate bonds and states and political subdivisions at 32 and 355, respectively. The Company has no allowance for credit losses on investments classified as available-for-sale for the period ended June 30, 2020. The credit rating used for held-to-maturity fixed income securities is the rating for each security as published by Moody’s, S&P, and Fitch to determine the probability of default. If there are two ratings, the lower rating is used. If there are three ratings, the median rating is used. If there is one rating, that rating is used. For corporate fixed income securities the probability of default (given a rating) comes from Moody’s annual study of corporate bond defaults published each February. The maximum maturity using the default rate is 20 years (any maturity greater than 20 years will use the 20-year rate). For municipal fixed income securities the probability of default (given a rating) comes from Moody’s annual study of municipal bond defaults published each July/August. The calculation of the credit loss allowance takes the amortized cost of the fixed income security and assumes default and recovery based on the average recovery rates from the Moody’s default studies. The amortized cost of the security, minus the amount recovered, is the estimated full amount the Company could lose in a default scenario. Then this amount is multiplied by the probability of default to determine the allowance for credit loss. The lower the security is rated, the higher likelihood of default, and therefore a higher allowance for credit loss. The longer to the maturity date of a security, the higher the default risk. The table below presents the amortized cost of held-to-maturity securities aggregated by credit quality indicator as of June 30, 2020. States and Political Subdivisions Corporate Bonds U.S. Agency-Based Mortgage-Backed Securities U.S. Treasury Securities and Obligations of U.S. Government Agencies Asset-Backed Securities Totals Amortized cost (in thousands) AAA/AA/A ratings $ 467,104 $ 31,595 $ 9,227 $ 13,710 $ 135 $ 521,771 Baa/BBB ratings 2,434 52,284 — — 18 54,736 B ratings — — — — 41 41 Total $ 469,538 $ 83,879 $ 9,227 $ 13,710 $ 194 $ 576,548 Net realized gains in the quarter ended June 30, 2020 were $0.2 million resulting from the call of fixed maturity securities. Net realized losses in the quarter ended June 30, 2019 were $0.1 million, also from the call of fixed maturity securities. Net realized gains in the six months ended June 30, 2020 were $1.2 million resulting primarily from the sale of fixed maturity securities classified as available-for-sale. Net realized losses in the six months ended June 30, 2019 were immaterial. During the second quarter of 2020, we recognized through income $5.6 million of net unrealized gains on equity securities held as of June 30, 2020. During the second quarter of 2019, we recognized through income $0.6 million of net unrealized gains on equity securities held as of June 30, 2019. During the six months ended June 30, 2020, we recognized through income $3.2 million of net unrealized losses on equity securities held as of June 30, 2020. During the six months ended June 30, 2019, we recognized through income $2.8 million of net unrealized gains on equity securities held as of June 30, 2019. Investment income is recognized as it is earned. The discount or premium on fixed maturity securities is amortized using the “constant yield” method. Anticipated prepayments, where applicable, are considered when determining the amortization of premiums or discounts. Realized investment gains and losses are determined using the specific identification method. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 5. Income Taxes In accordance with FASB ASC Topic 740, “Income Taxes,” we provide for the recognition and measurement of deferred income tax benefits based on the likelihood of their realization in future years. The Company had a valuation allowance of $1.9 million and $0.2 million against its deferred income tax benefits as of June 30, 2020 and 2019, respectively. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. There were no uncertain tax positions for the periods ended June 30, 2020 and 2019. Tax years 2017 through 2020 are subject to examination by the federal and state taxing authorities. |
Loss Reserves
Loss Reserves | 6 Months Ended |
Jun. 30, 2020 | |
Insurance [Abstract] | |
Loss Reserves | Note 6. Loss Reserves We record reserves for estimated losses under insurance policies that we write and for loss adjustment expenses related to the investigation and settlement of policy claims. Our reserves for loss and loss adjustment expenses represent the estimated cost of all reported and unreported loss and loss adjustment expenses incurred and unpaid as of a given point in time. The reserves for loss and loss adjustment expenses are estimated using individual case-basis valuations, statistical analyses and estimates based upon experience for unreported claims and their associated loss and loss adjustment expenses. Such estimates may be more or less than the amounts ultimately paid when the claims are settled. The estimates are subject to the effects of trends in loss severity and frequency. Although considerable variability is inherent in these estimates, management believes that the reserves for loss and loss adjustment expenses are adequate. The estimates are continually reviewed internally and periodically evaluated with our independent actuary. Adjustments are made as experience develops and new information becomes known. Any such adjustments are included in income from current operations. See Note 9 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 for additional information regarding the Company’s loss and loss adjustment expense development. The following table provides the Company’s liability for unpaid loss and loss adjustment expenses, net of related amounts recoverable from reinsurers, for the six months ended June 30, 2020 and 2019: Six Months Ended June 30, 2020 2019 (in thousands) Balance, beginning of period $ 772,887 $ 798,409 Less amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses 95,343 107,216 Net balance, beginning of period 677,544 691,193 Add incurred related to: Current accident year 112,342 121,727 Prior accident years (31,165 ) (23,245 ) Total incurred 81,177 98,482 Less paid related to: Current accident year 13,629 15,926 Prior accident years 78,303 77,362 Total paid 91,932 93,288 Net balance, end of period 666,789 696,387 Add amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses 101,978 98,659 Balance, end of period $ 768,767 $ 795,046 The foregoing reconciliation reflects favorable development of the net reserves at June 30, 2020 and June 30, 2019. The favorable development reduced loss and loss adjustment expenses incurred by $31.2 million and $23.2 million in 2020 and 2019, respectively. The revisions to the Company’s reserves reflect new information gained by claims adjusters in the normal course of adjusting claims and is reflected in the financial statements when the information becomes available. It is typical for more serious claims to take several years or longer to settle and the Company continually revises estimates as more information about claimants’ medical conditions and potential disability becomes known and the claims get closer to being settled. Multiple factors can cause loss development both unfavorable and favorable. The favorable loss development we experienced across accident years was largely due to favorable case reserve development from closed claims and claims where the worker had reached maximum medical improvement. The table below presents the change in the allowance for credit losses on amounts recoverable from reinsurers for the three and six months ended June 30, 2020. Three Months Ended June 30, Six Months Ended June 30, 2020 2020 (in thousands) Balance, beginning of period $ 449 $ 444 Provision for credit loss benefit (61 ) (56 ) Balance, end of period $ 388 $ 388 |
Comprehensive Income and Accumu
Comprehensive Income and Accumulated Other Comprehensive Income | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Comprehensive Income and Accumulated Other Comprehensive Income | Note 7. Comprehensive Income and Accumulated Other Comprehensive Income Comprehensive income was $29.4 million for the three months ended June 30, 2020, compared to $23.1 million for the three months ended June 30, 2019. Comprehensive income was $41.7 million for the six months ended June 30, 2020, compared to $48.3 million for the same period in 2019. The difference between net income as reported and comprehensive income was due primarily to changes in unrealized gains and losses, net of tax on available-for-sale debt securities. Comprehensive income includes net income plus unrealized gains (losses) on our available-for-sale investment securities, net of tax. In reporting comprehensive income on a net basis in the statements of comprehensive income, we used a 21 percent tax rate in 2020 and 2019 The following table illustrates the changes in the balance of each component of accumulated other comprehensive income for each period presented in the interim financial statements. Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (in thousands) Balance, beginning of period $ 13,695 $ 4,962 $ 12,211 $ (832 ) Other comprehensive income before reclassification 5,588 5,001 7,373 10,889 Amounts reclassified from accumulated other comprehensive income (105 ) (21 ) (406 ) 83 Change in deferred tax valuation allowance — 198 — — Net current period other comprehensive income 5,483 5,178 6,967 10,972 Balance, end of period $ 19,178 $ 10,140 $ 19,178 $ 10,140 The sale or other-than-temporary impairment of an available-for-sale security results in amounts being reclassified from accumulated other comprehensive income to current period net income. The effects of reclassifications out of accumulated other comprehensive income by the respective line items of net income are presented in the following table. Component of Accumulated Other Three Months Ended Six Months Ended Affected line item in the Comprehensive Income June 30, June 30, statement of income 2020 2019 2020 2019 (in thousands) Unrealized gains (losses) on available-for-sale securities $ 133 $ 26 $ 514 $ (105 ) Net realized gains (losses) on investments 133 26 514 (105 ) Income before income taxes (28 ) (5 ) (108 ) 22 Income tax expense $ 105 $ 21 $ 406 $ (83 ) Net income |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 8. Fair Value Measurements The Company carries available-for-sale securities at fair value in our consolidated financial statements and determines fair value measurements and disclosure in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures. The Company determines the fair values of its financial instruments based on the fair value hierarchy established in ASC Topic 820, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard defines fair value, describes three levels of inputs that may be used to measure fair value, and expands disclosures about fair value measurements. Fair value is defined in ASC Topic 820 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is the price to sell an asset or transfer a liability and, therefore, represents an exit price, not an entry price. Fair value is the exit price in the principal market (or, if lacking a principal market, the most advantageous market) in which the reporting entity would transact. Fair value is a market-based measurement, not an entity-specific measurement, and, as such, is determined based on the assumptions that market participants would use in pricing the asset or liability. The exit price objective of a fair value measurement applies regardless of the reporting entity’s intent and/or ability to sell the asset or transfer the liability at the measurement date. ASC Topic 820 requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present value amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset, also known as current replacement cost. Valuation techniques used to measure fair value are to be consistently applied. In ASC Topic 820, inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value (such as a pricing model) and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable: • Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. • Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Valuation techniques used to measure fair value are intended to maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 establishes a fair value hierarchy that prioritizes the use of inputs used in valuation techniques into the following three levels: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. • Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data. • Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are to be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. The fair values of the Company’s investments are based upon prices provided by an independent pricing service. The Company has reviewed these prices for reasonableness and has not adjusted any prices received from the independent provider. Securities reported at fair value utilizing Level 1 inputs represent assets whose fair value is determined based upon observable unadjusted quoted market prices for identical assets in active markets. Level 2 securities represent assets whose fair value is determined using observable market information such as previous day trade prices, quotes from less active markets or quoted prices of securities with similar characteristics. There were no transfers between Level 1 and Level 2 during the six months ended June 30, 2020. At June 30, 2020, assets measu r June 30, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value (in thousands) Financial instruments carried at fair value, classified as a part of: Securities available-for-sale—fixed maturity: States and political subdivisions $ — $ 244,682 $ — $ 244,682 Corporate bonds — 109,377 — 109,377 U.S. agency-based mortgage-backed securities — 29,156 — 29,156 U.S. Treasury securities 33,025 — — 33,025 Total securities available-for-sale—fixed maturity 33,025 383,215 — 416,240 Equity securities: Domestic common stock 33,480 — — 33,480 Total $ 66,505 $ 383,215 $ — $ 449,720 At June 30, 2020, assets measured at amortized cost net of allowance for credit losses are summarized below: June 30, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value (in thousands) Securities held-to-maturity—fixed maturity: States and political subdivisions $ — $ 498,376 $ — $ 498,376 Corporate bonds — 86,634 — 86,634 U.S. agency-based mortgage-backed securities — 9,947 — 9,947 U.S. Treasury securities 9,019 — — 9,019 Obligations of U.S. government agencies — 5,113 — 5,113 Asset-backed securities — 192 — 192 Total held-to-maturity $ 9,019 $ 600,262 $ — $ 609,281 At December 31, 2019, assets measured at fair value on a recurring basis are summarized below: December 31, 2019 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value (in thousands) Financial instruments carried at fair value, classified as a part of: Securities available-for-sale—fixed maturity: States and political subdivisions $ — $ 237,775 $ — $ 237,775 Corporate bonds — 133,778 — 133,778 U.S. agency-based mortgage-backed securities — 29,467 — 29,467 U.S. Treasury securities 40,126 — — 40,126 Total securities available-for-sale—fixed maturity $ 40,126 $ 401,020 $ — $ 441,146 Equity securities: Domestic common stock 27,903 — — 27,903 Total $ 68,029 $ 401,020 $ — $ 469,049 At December 31, 2019, assets measured at amortized cost are summarized below: December 31, 2019 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value (in thousands) Securities held-to-maturity—fixed maturity: States and political subdivisions $ — $ 485,647 $ — $ 485,647 Corporate bonds — 110,925 — 110,925 U.S. agency-based mortgage-backed securities — 11,511 — 11,511 U.S. Treasury securities 7,873 — — 7,873 Obligations of U.S. government agencies — 5,168 — 5,168 Asset-backed securities — 219 — 219 Total held-to-maturity $ 7,873 $ 613,470 $ — $ 621,343 The Company determines fair value amounts for financial instruments using available third-party market information. When such information is not available, the Company determines the fair value amounts using appropriate valuation methodologies. Nonfinancial instruments such as real estate, property and equipment, deferred policy acquisition costs, deferred income taxes and loss and loss adjustment expense reserves are excluded from the fair value disclosure. Cash and Cash Equivalents —The carrying amounts reported in the accompanying consolidated balance sheets for these financial instruments approximate their fair values, which are characterized as Level 1 assets. Investments —The fair values for fixed maturity and equity securities are based on prices obtained from an independent pricing service. Equity and treasury securities are characterized as Level 1 assets, as their fair values are based on quoted prices in active markets. Fixed maturity securities, other than treasury securities, are characterized as Level 2 assets, as their fair values are determined using observable market inputs. Short Term Investments —The carrying amounts reported in the accompanying consolidated balance sheets for these financial instruments approximate their fair values. These securities are characterized as Level 2 assets in the fair value hierarchy. The following table summarizes the carrying amounts and corresponding fair values for financial instruments: As of June 30, 2020 As of December 31, 2019 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Assets: Fixed maturity securities—held-to-maturity $ 576,191 $ 609,281 $ 599,421 $ 621,343 Fixed maturity securities—available-for-sale 416,240 416,240 441,146 441,146 Equity securities 33,480 33,480 27,903 27,903 Short-term investments 72,849 72,849 56,548 56,548 Cash and cash equivalents 110,281 110,281 43,813 43,813 |
Treasury Stock
Treasury Stock | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Treasury Stock | Note 9. Treasury Stock The Company’s Board of Directors initiated a share repurchase program in February 2010. In October 2016, the Board reauthorized this program with a limit of $25.0 million with no expiration date. There were no shares repurchased under this program in the six months ended June 30, 2020 and 2019. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10. Subsequent Events On July 27, 2020, the Company’s Board of Directors declared a quarterly cash dividend of $0.27 per share payable on September 25, 2020 to shareholders of record as of September 11, 2020. The Board considers the payment of a regular cash dividend each calendar quarter. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Adopted Accounting Guidance | Adopted Accounting Guidance On January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses (“CECL”). The prior guidance delays the recognition of credit losses until a probable loss has occurred. The new guidance requires credit losses for securities measured at amortized cost to be determined using current expected credit loss estimates. These estimates are derived from historical, current and reasonable supporting forecasts, including prepayments and estimates, and are recorded through a valuation account. The same method is used for available-for-sale securities, but the valuation account is limited to the amount by which the fair value is below amortized cost. The Company implemented the new standard using the modified retrospective approach. Results for reporting periods beginning after January 1, 2020 are presented under the new guidance while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company recorded a net decrease to Retained Earnings of $594 thousand as of January 1, 2020, for the cumulative effect of adopting ASU 2016-13. The transition adjustment includes a $243 thousand impact to establish a credit loss allowance for held-to-maturity securities. The remaining $351 thousand of the transition adjustment was due to the creation of the reinsurance recoverable credit allowance. The Company believes that under the standard there is no current expected credit allowance necessary for U.S. Government Securities in its judgment as: 1) Treasury securities typically are the most highly rated securities among rating agencies; 2) Treasury securities have a long history of no credit losses; 3) Treasury securities are guaranteed by a sovereign entity (the U.S. Government) that can print its own money and whose currency (the U.S. dollar) is the reserve currency. The Company believes that under the standard there is no current expected credit allowance necessary for GNMA Securities in its judgment as: 1) GNMA securities typically are the most highly rated securities among rating agencies; 2) GNMA securities have a long history of no credit losses and payments are explicitly guaranteed by the United States; 3) Underlying mortgage loans for GNMA securities are insured by the Federal Housing Administration or guaranteed by the U.S. Department of Veteran Affairs; 4) the U.S. Government can print its own money to retire GNMA obligations. The Company believes that under the standard there is no current expected credit allowance necessary for FNMA or Freddie Mac (FHLMC) Securities in its judgment as: 1) These securities typically are among the most highly rated securities among rating agencies; 2) There is a long history of no credit losses; 3) Principal and interest payments are guaranteed by the issuing agency; 4) There is an explicit guarantee by the U.S. Government that can print its own money and whose currency (the U.S. dollar) is the reserve currency. The Company researched various options and methodologies and has chosen to use Moody’s default rates and recovery rates for our held-to-maturity fixed income securities based on the current credit rating of the security and the time period to the stated maturity date. This is a probability of default (PD) and loss given default (LGD) methodology. The credit rating used for held-to-maturity fixed income securities is the rating for each security as published by Moody’s, S&P, and Fitch to determine the probability of default. If there are two ratings, the lower rating is used. If there are three ratings, the median rating is used. If there is one rating, that rating is used. This methodology provides additional conservatism in determining the credit loss allowance needed. For corporate fixed income securities, the probability of default (given a rating) comes from Moody’s annual study of Corporate Bond defaults published each February. This study also contains the average recovery rates based on the historical defaults in the Moody’s study. We have chosen to use the 1983-2018 data as more reflective of the current historical pattern of defaults (the study goes back to 1920). The maximum maturity using the default rate is 20 years (any maturity greater than 20 years will use the 20-year rate). For municipal fixed income securities the probability of default (given a rating) comes from Moody’s annual study of Municipal Bond defaults published each July/August. This study also contains the average recovery rates based on the historical defaults in the Moody’s study. This study covers 1970-2018 data, which we believe is reflective of the current historical pattern of defaults. The maximum maturity using the default rate is 20 years (any maturity greater than 20 years will use the 20-year rate). The Company did not record a credit allowance for available-for-sale securities. The available-for-sale portfolio is composed of highly rated securities, which carry a low risk of default. The Company’s concentrations in municipal bonds have helped lower default risk, as the historical default rates and recovery rates for municipal bonds has been much better than corporate bonds rated at the same level. The Company creates a watch list of available-for-sale securities that are below book value at the end of each quarter. This watch list excludes US Treasury securities, GNMA Securities, and government agency securities (FNMA, etc.) as none of those securities will have an expected credit loss. The watch list will also exclude those securities that are trading at least at $95 or above (par value $100) as the Company believes any slight difference between $95 and par likely reflect interest rate changes and liquidity only and are not a sign of credit impairment or market expectations for any current expected credit loss. The list is reviewed by the Management Investment Committee to evaluate any security where the discounted cash flows expected no longer exceed the book value of the security. If the Company intends to sell the security (or more likely than not be required to sell the security before recovery of the loss) the Company will write down the security to fair value through earnings. If the Company intends to hold the security, the Company will establish a credit loss allowance for the security through earnings, and adjust the allowance each quarter through earnings, as the security changes in value. In determining the amount of the credit loss allowance, the Company will consider all of the following factors: 1. The extent to which the fair value is less than the amortized cost basis 2. Adverse conditions in the security, industry, or geography, including: a.) Changes in technology b.) Discontinuation of a segment of business that may affect future earnings c.) Changes in the quality of the credit enhancement, if any 3. Changes in the payment structure of the debt security 4. Failure of the issuer to make scheduled interest or principal payments 5. Any changes to the rating of the security by a rating agency The calculation of the credit loss allowance will not take into account the amount of time the security has been below book value or when the security might be expected to recover in value. The Company has researched various options and methodologies and has chosen to use Moody’s default rates and recovery rates for our unsecured reinsurance recoverables based on the current credit rating of the reinsurer and a time period of ten years. This is a probability of default (PD) and loss given default (LGD) methodology. The ten-year period is consistent with our current working layer reinsurance treaty where we have a three-year The credit rating used for reinsurance recoverables uses the average rating for each reinsurer as published by Moody’s, S&P, Fitch and A.M. Best to determine the probability of default. The median rating is used if there are three ratings. The probability of default (given a rating) comes from Moody’s annual study of Corporate Bond defaults published each February. This study also contains the average recovery rates based on the historical defaults in the Moody’s study. We have chosen to use the 1983-2018 data as more reflective of the current historical pattern of defaults (the study goes back to 1920). The Company does not hold any debt securities for which an other-than-temporary impairment has been recognized. Additionally, the Company does not hold any financial assets purchased with credit deterioration. The Company’s internal working group evaluated the existing allowance for doubtful accounts reserving methodology for premiums receivable and determined the calculation was consistent with the new credit loss guidance. There was no impact to the premiums receivable balance as a result of the adoption of the new standard. The Company has elected not to establish a credit allowance for investment interest receivable. The Company plans to continue use of the current policy for writing off investment related interest receivable balances over ninety days old. |
Prospective Accounting Guidance | Prospective Accounting Guidance All issued but not yet effective accounting and reporting standards as of June 30, 2020 are either not applicable to the Company or are not expected to have a material impact on the Company. |
Fair Value Measurements (Polici
Fair Value Measurements (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | The Company carries available-for-sale securities at fair value in our consolidated financial statements and determines fair value measurements and disclosure in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures. The Company determines the fair values of its financial instruments based on the fair value hierarchy established in ASC Topic 820, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard defines fair value, describes three levels of inputs that may be used to measure fair value, and expands disclosures about fair value measurements. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Earnings Per Share | The diluted EPS calculation includes potential common shares assumed issued under the treasury stock method, which reflects the potential dilution that would occur if any outstanding options were exercised or restricted stock becomes vested. Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 (in thousands, except share and per share amounts) Basic EPS Net income $ 23,948 $ 17,890 $ 34,748 $ 37,290 Basic weighted average common shares 19,280,684 19,245,592 19,273,347 19,237,401 Basic earnings per common share $ 1.24 $ 0.93 $ 1.80 $ 1.94 Diluted EPS Net income $ 23,948 $ 17,890 $ 34,748 $ 37,290 Diluted weighted average common shares: Weighted average common shares 19,280,684 19,245,592 19,273,347 19,237,401 Stock options and restricted stock 55,023 61,361 62,401 78,875 Diluted weighted average common shares 19,335,707 19,306,953 19,335,748 19,316,276 Diluted earnings per common share $ 1.24 $ 0.93 $ 1.80 $ 1.93 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Gross Unrecognized Gains and Losses and Cost or Amortized Cost, Allowance for Credit Losses, Carrying Amount and Fair Value of Investments Classified as Held-to-Maturity | The gross unrecognized gains and losses on, amortized cost, allowance for credit losses, carrying amount, and fair value of, those investments classified as held-to-maturity at June 30, 2020 are summarized as follows: Amortized Cost Allowance for Credit Losses Carrying Amount Gross Unrecognized Gains Gross Unrecognized Losses Fair Value (in thousands) States and political subdivisions $ 469,538 $ (49 ) $ 469,489 $ 28,907 $ (20 ) $ 498,376 Corporate bonds 83,879 (299 ) 83,580 3,054 — 86,634 U.S. agency-based mortgage-backed securities 9,227 — 9,227 720 — 9,947 U.S. Treasury securities and obligations of U.S. government agencies 13,710 — 13,710 422 — 14,132 Asset-backed securities 194 (9 ) 185 7 — 192 Totals $ 576,548 $ (357 ) $ 576,191 $ 33,110 $ (20 ) $ 609,281 The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at December 31, 2019 are summarized as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) States and political subdivisions $ 466,270 $ 19,570 $ (193 ) $ 485,647 Corporate bonds 109,241 1,684 — 110,925 U.S. agency-based mortgage-backed securities 10,967 544 — 11,511 U.S. Treasury securities and obligations of U.S. government agencies 12,723 330 (12 ) 13,041 Asset-backed securities 220 — (1 ) 219 Totals $ 599,421 $ 22,128 $ (206 ) $ 621,343 |
Gross Unrealized Gains and Losses and Cost or Amortized Cost, Allowance for Credit Losses and Fair Value of Investments Classified as Available-for-sale | The gross unrealized gains and losses on, and the amortized cost, allowance for credit losses, and fair value of, those investments classified as available-for-sale at June 30, 2020 are summarized as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Allowance for Credit Losses (in thousands) States and political subdivisions $ 227,932 $ 16,750 $ — $ 244,682 $ — Corporate bonds 103,713 5,711 (47 ) 109,377 — U.S. agency-based mortgage-backed securities 28,581 575 — 29,156 — U.S. Treasury securities and obligations of U.S. government agencies 31,891 1,134 — 33,025 — Totals $ 392,117 $ 24,170 $ (47 ) $ 416,240 $ — The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2019 are summarized as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) States and political subdivisions $ 225,895 $ 11,906 $ (26 ) $ 237,775 Corporate bonds 130,453 3,326 (1 ) 133,778 U.S. agency-based mortgage-backed securities 29,499 64 (96 ) 29,467 U.S. Treasury securities and obligations of U.S. government agencies 39,851 317 (42 ) 40,126 Totals $ 425,698 $ 15,613 $ (165 ) $ 441,146 |
Gross Unrealized Gains and Losses and Cost of Equity | The gross unrealized gains and losses on, and the cost of equity securities at June 30, 2020 are summarized as follows: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Equity securities: Domestic common stock $ 33,227 $ 1,425 $ (1,172 ) $ 33,480 Total equity securities $ 33,227 $ 1,425 $ (1,172 ) $ 33,480 The gross unrealized gains and losses on, and the cost of equity securities at December 31, 2019 are summarized as follows: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Equity securities: Domestic common stock $ 24,457 $ 3,446 $ — $ 27,903 Total equity securities $ 24,457 $ 3,446 $ — $ 27,903 |
Summary of Carrying Amount and Fair Value of Investments in Fixed Maturity Securities, by Contractual Maturity | A summary of the carrying amounts and fair value of investments in fixed maturity securities, classified as held-to-maturity, by contractual maturity, is as follows: June 30, 2020 December 31, 2019 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Maturity: Within one year $ 59,898 $ 60,504 $ 49,967 $ 50,348 After one year through five years 195,398 204,082 198,025 202,109 After five years through ten years 80,484 84,789 110,460 113,877 After ten years 230,999 249,767 229,782 243,279 U.S. agency-based mortgage-backed securities 9,227 9,947 10,967 11,511 Asset-backed securities 185 192 220 219 Totals $ 576,191 $ 609,281 $ 599,421 $ 621,343 |
Investment Securities Continuous Unrealized Loss Position | The following table summarizes the fair value and gross unrealized losses on securities classified as available-for-sale, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position as of June 30, 2020: Less Than 12 Months 12 Months or Greater Total Fair Value of Investments with Unrealized Losses Gross Unrealized Losses Fair Value of Investments with Unrealized Losses Gross Unrealized Losses Fair Value of Investments with Unrealized Losses Gross Unrealized Losses (in thousands) June 30, 2020 Available-for-Sale Fixed maturity securities: Corporate bonds 3,506 47 — — 3,506 47 Total available-for-sale securities $ 3,506 $ 47 $ — $ — $ 3,506 $ 47 The following table summarizes the fair value and gross unrealized losses on securities, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position as of December 31, 2019: Less Than 12 Months 12 Months or Greater Total Fair Value of Investments with Unrealized Losses Gross Unrealized Losses Fair Value of Investments with Unrealized Losses Gross Unrealized Losses Fair Value of Investments with Unrealized Losses Gross Unrealized Losses (in thousands) December 31, 2019 Held-to-Maturity Fixed maturity securities: States and political subdivisions $ 21,074 $ 193 $ — $ — $ 21,074 $ 193 U.S. Treasury securities and obligations of U.S. government agencies — — 3,243 12 3,243 12 Asset-backed securities — — 68 1 68 1 Total held-to-maturity securities 21,074 193 3,311 13 24,385 206 Available-for-Sale Fixed maturity securities: States and political subdivisions $ 4,140 $ 26 $ — $ — $ 4,140 $ 26 Corporate bonds 6,426 1 — — 6,426 1 U.S. agency-based mortgage-backed securities 13,007 95 1,152 1 14,159 96 U.S. Treasury securities and obligations of U.S. government agencies — — 17,068 42 17,068 42 Total available-for-sale securities 23,573 122 18,220 43 41,793 165 Total $ 44,647 $ 315 $ 21,531 $ 56 $ 66,178 $ 371 |
Changes in Allowance for Credit Losses by Major Security Type of Investments Classified as Held-to-Maturity | The following table illustrates the changes in the allowance for credit losses by major security type of the investments classified as held-to-maturity for the quarter ended June 30, 2020. States and Political Subdivisions Corporate Bonds U.S. Agency-Based Mortgage-Backed Securities U.S. Treasury Securities and Obligations of U.S. Government Agencies Asset-Backed Securities Totals (in thousands) Balance at March 31, 2020 $ 50 $ 215 $ — $ — $ 10 $ 275 Provision for credit loss expense (benefit) (1 ) 84 — — (1 ) 82 Allowance for securities purchased with credit deterioration — — — — — — Securities charged off — — — — — — Recoveries — — — — — — Balance at June 30, 2020 $ 49 $ 299 $ — $ — $ 9 $ 357 The following table illustrates the changes in the allowance for credit losses by major security type of the investments classified as held-to-maturity for the six months ended June 30, 2020. States and Political Subdivisions Corporate Bonds U.S. Agency-Based Mortgage-Backed Securities U.S. Treasury Securities and Obligations of U.S. Government Agencies Asset-Backed Securities Totals (in thousands) Balance at January 1, 2020 $ 45 $ 245 $ — $ — $ 11 $ 301 Provision for credit loss expense (benefit) 4 54 — — (2 ) 56 Allowance for securities purchased with credit deterioration — — — — — — Securities charged off — — — — — — Recoveries — — — — — — Balance at June 30, 2020 $ 49 $ 299 $ — $ — $ 9 $ 357 |
Schedule of Amortized Cost Held-to-Maturity Securities Aggregated By Credit Quality Indicator | The table below presents the amortized cost of held-to-maturity securities aggregated by credit quality indicator as of June 30, 2020. States and Political Subdivisions Corporate Bonds U.S. Agency-Based Mortgage-Backed Securities U.S. Treasury Securities and Obligations of U.S. Government Agencies Asset-Backed Securities Totals Amortized cost (in thousands) AAA/AA/A ratings $ 467,104 $ 31,595 $ 9,227 $ 13,710 $ 135 $ 521,771 Baa/BBB ratings 2,434 52,284 — — 18 54,736 B ratings — — — — 41 41 Total $ 469,538 $ 83,879 $ 9,227 $ 13,710 $ 194 $ 576,548 |
Available-for-Sale Securities [Member] | |
Summary of Carrying Amount and Fair Value of Investments in Fixed Maturity Securities, by Contractual Maturity | A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as available-for-sale, by contractual maturity, is as follows: June 30, 2020 December 31, 2019 Amortized Cost Fair Value Amortized Cost Fair Value (in thousands) Maturity: Within one year $ 65,386 $ 66,197 $ 27,160 $ 27,194 After one year through five years 89,127 93,818 144,142 146,469 After five years through ten years 45,235 49,460 47,175 49,419 After ten years 163,788 177,609 177,722 188,597 U.S. agency-based mortgage-backed securities 28,581 29,156 29,499 29,467 Totals $ 392,117 $ 416,240 $ 425,698 $ 441,146 |
Loss Reserves (Tables)
Loss Reserves (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Insurance [Abstract] | |
Liability for Unpaid Loss and Loss Adjustment Expenses, Net of Related Amounts Recoverable from Reinsurers | The following table provides the Company’s liability for unpaid loss and loss adjustment expenses, net of related amounts recoverable from reinsurers, for the six months ended June 30, 2020 and 2019: Six Months Ended June 30, 2020 2019 (in thousands) Balance, beginning of period $ 772,887 $ 798,409 Less amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses 95,343 107,216 Net balance, beginning of period 677,544 691,193 Add incurred related to: Current accident year 112,342 121,727 Prior accident years (31,165 ) (23,245 ) Total incurred 81,177 98,482 Less paid related to: Current accident year 13,629 15,926 Prior accident years 78,303 77,362 Total paid 91,932 93,288 Net balance, end of period 666,789 696,387 Add amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses 101,978 98,659 Balance, end of period $ 768,767 $ 795,046 |
Change in Allowance for Credit Losses on Amounts Recoverable from Reinsurers | The table below presents the change in the allowance for credit losses on amounts recoverable from reinsurers for the three and six months ended June 30, 2020. Three Months Ended June 30, Six Months Ended June 30, 2020 2020 (in thousands) Balance, beginning of period $ 449 $ 444 Provision for credit loss benefit (61 ) (56 ) Balance, end of period $ 388 $ 388 |
Comprehensive Income and Accu_2
Comprehensive Income and Accumulated Other Comprehensive Income (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (AOCI) | The following table illustrates the changes in the balance of each component of accumulated other comprehensive income for each period presented in the interim financial statements. Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (in thousands) Balance, beginning of period $ 13,695 $ 4,962 $ 12,211 $ (832 ) Other comprehensive income before reclassification 5,588 5,001 7,373 10,889 Amounts reclassified from accumulated other comprehensive income (105 ) (21 ) (406 ) 83 Change in deferred tax valuation allowance — 198 — — Net current period other comprehensive income 5,483 5,178 6,967 10,972 Balance, end of period $ 19,178 $ 10,140 $ 19,178 $ 10,140 |
Reclassification Out of Accumulated Other Comprehensive Income | The effects of reclassifications out of accumulated other comprehensive income by the respective line items of net income are presented in the following table. Component of Accumulated Other Three Months Ended Six Months Ended Affected line item in the Comprehensive Income June 30, June 30, statement of income 2020 2019 2020 2019 (in thousands) Unrealized gains (losses) on available-for-sale securities $ 133 $ 26 $ 514 $ (105 ) Net realized gains (losses) on investments 133 26 514 (105 ) Income before income taxes (28 ) (5 ) (108 ) 22 Income tax expense $ 105 $ 21 $ 406 $ (83 ) Net income |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured at Fair Value on Recurring Basis | At June 30, 2020, assets measu r June 30, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value (in thousands) Financial instruments carried at fair value, classified as a part of: Securities available-for-sale—fixed maturity: States and political subdivisions $ — $ 244,682 $ — $ 244,682 Corporate bonds — 109,377 — 109,377 U.S. agency-based mortgage-backed securities — 29,156 — 29,156 U.S. Treasury securities 33,025 — — 33,025 Total securities available-for-sale—fixed maturity 33,025 383,215 — 416,240 Equity securities: Domestic common stock 33,480 — — 33,480 Total $ 66,505 $ 383,215 $ — $ 449,720 At December 31, 2019, assets measured at fair value on a recurring basis are summarized below: December 31, 2019 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value (in thousands) Financial instruments carried at fair value, classified as a part of: Securities available-for-sale—fixed maturity: States and political subdivisions $ — $ 237,775 $ — $ 237,775 Corporate bonds — 133,778 — 133,778 U.S. agency-based mortgage-backed securities — 29,467 — 29,467 U.S. Treasury securities 40,126 — — 40,126 Total securities available-for-sale—fixed maturity $ 40,126 $ 401,020 $ — $ 441,146 Equity securities: Domestic common stock 27,903 — — 27,903 Total $ 68,029 $ 401,020 $ — $ 469,049 |
Schedule of Assets Measured at Amortized Cost Net of Allowance For Credit Losses | At June 30, 2020, assets measured at amortized cost net of allowance for credit losses are summarized below: June 30, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value (in thousands) Securities held-to-maturity—fixed maturity: States and political subdivisions $ — $ 498,376 $ — $ 498,376 Corporate bonds — 86,634 — 86,634 U.S. agency-based mortgage-backed securities — 9,947 — 9,947 U.S. Treasury securities 9,019 — — 9,019 Obligations of U.S. government agencies — 5,113 — 5,113 Asset-backed securities — 192 — 192 Total held-to-maturity $ 9,019 $ 600,262 $ — $ 609,281 At December 31, 2019, assets measured at amortized cost are summarized below: December 31, 2019 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value (in thousands) Securities held-to-maturity—fixed maturity: States and political subdivisions $ — $ 485,647 $ — $ 485,647 Corporate bonds — 110,925 — 110,925 U.S. agency-based mortgage-backed securities — 11,511 — 11,511 U.S. Treasury securities 7,873 — — 7,873 Obligations of U.S. government agencies — 5,168 — 5,168 Asset-backed securities — 219 — 219 Total held-to-maturity $ 7,873 $ 613,470 $ — $ 621,343 |
Summary of Carrying Amounts and Corresponding Fair Values for Financial Instruments | The following table summarizes the carrying amounts and corresponding fair values for financial instruments: As of June 30, 2020 As of December 31, 2019 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Assets: Fixed maturity securities—held-to-maturity $ 576,191 $ 609,281 $ 599,421 $ 621,343 Fixed maturity securities—available-for-sale 416,240 416,240 441,146 441,146 Equity securities 33,480 33,480 27,903 27,903 Short-term investments 72,849 72,849 56,548 56,548 Cash and cash equivalents 110,281 110,281 43,813 43,813 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - USD ($) | Jan. 01, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Percentage of comparable consolidated amounts | 95.00% | 95.00% | ||
Credit allowance for held-to-maturity fixed income securities | $ 357,000 | $ 0 | ||
Credit allowance for reinsurance recoverables | 388,000 | 0 | ||
Available-for-sale securities, credit allowance | $ 0 | $ 0 | ||
Trading securities, par value per share | $ 100 | |||
Reinsurance recoverables, current credit rating period | 10 years | |||
Reinsurance treaty term to be commuted by end of current credit rating period | 3 years | |||
Other-than-temporary impairment loss, debt securities, portion recognized in earnings | $ 0 | |||
Financial assets purchased with credit deterioration, financing receivable | 0 | |||
Financial assets purchased with credit deterioration, held-to-maturity debt securities | 0 | |||
Financial assets purchased with credit deterioration, available-for-sale debt securities | $ 0 | |||
Threshold period for writing off balances receivable | 90 days | |||
Minimum [Member] | ||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Trading price of securities excluded from watch list | $ 95 | |||
Corporate Fixed Income Securities [Member] | Maximum [Member] | ||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Investments maturity period using default rate | 20 years | |||
Municipal Fixed Income Securities [Member] | Maximum [Member] | ||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Investments maturity period using default rate | 20 years | |||
ASU 2016-13 [Member] | ||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Net decrease to retained earnings, cumulative effect | $ 594,000 | |||
Credit allowance for held-to-maturity fixed income securities | 243,000 | |||
Credit allowance for reinsurance recoverables | $ 351,000 |
Stock Options and Restricted _2
Stock Options and Restricted Stock - Additional Information (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)Incentive_Planshares | Jun. 30, 2019USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of equity incentive plans | Incentive_Plan | 2 | |||
Stock options outstanding | 0 | 0 | ||
Market value of shares | $ | $ 1,800 | $ 1,400 | ||
Stock options exercised, Shares | 0 | 5,000 | ||
Proceeds from stock option exercises | $ | $ 20 | |||
Share-based compensation expense | $ | $ 1,000 | $ (100) | $ 1,800 | $ 500 |
Restricted Stock [Member] | Non-employee Directors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock issued, shares | 5,269 | 4,890 | ||
Restricted Stock [Member] | Executive Officers [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock issued, shares | 9,000 | |||
Performance Awards [Member] | Non-employee Directors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock issued, shares | 23,207 | |||
Performance Awards [Member] | Executive Officers [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock issued, shares | 9,391 | |||
2005 Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options outstanding | 0 | 0 | ||
2005 Incentive Plan [Member] | Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock outstanding | 0 | 0 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share Basic [Abstract] | ||||
Net income | $ 23,948 | $ 17,890 | $ 34,748 | $ 37,290 |
Basic weighted average common shares | 19,280,684 | 19,245,592 | 19,273,347 | 19,237,401 |
Basic earnings per common share | $ 1.24 | $ 0.93 | $ 1.80 | $ 1.94 |
Net income | $ 23,948 | $ 17,890 | $ 34,748 | $ 37,290 |
Weighted average common shares | 19,280,684 | 19,245,592 | 19,273,347 | 19,237,401 |
Stock options and restricted stock | 55,023 | 61,361 | 62,401 | 78,875 |
Diluted weighted average common shares | 19,335,707 | 19,306,953 | 19,335,748 | 19,316,276 |
Diluted earnings per common share | $ 1.24 | $ 0.93 | $ 1.80 | $ 1.93 |
Investments - Gross Unrecognize
Investments - Gross Unrecognized Gains and Losses and Cost or Amortized Cost, Allowance for Credit Losses, Carrying Amount and Fair Value of Investments Classified as Held-to-Maturity (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule Of Held To Maturity Securities [Line Items] | ||
Held-to-maturity, Amortized Cost, Totals | $ 576,548 | $ 599,421 |
Held-to-Maturity, Allowance for Credit Losses | (357) | 0 |
Held-to-Maturity, Carrying Amount | 576,191 | 599,421 |
Held-to-Maturity, Gross Unrecognized Gains | 33,110 | 22,128 |
Held-to-Maturity, Gross Unrecognized Losses | (20) | (206) |
Held-to-Maturity, Fair Value | 609,281 | 621,343 |
States and Political Subdivisions [Member] | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Held-to-maturity, Amortized Cost, Totals | 469,538 | 466,270 |
Held-to-Maturity, Allowance for Credit Losses | (49) | |
Held-to-Maturity, Carrying Amount | 469,489 | |
Held-to-Maturity, Gross Unrecognized Gains | 28,907 | 19,570 |
Held-to-Maturity, Gross Unrecognized Losses | (20) | (193) |
Held-to-Maturity, Fair Value | 498,376 | 485,647 |
Corporate Bonds [Member] | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Held-to-maturity, Amortized Cost, Totals | 83,879 | 109,241 |
Held-to-Maturity, Allowance for Credit Losses | (299) | |
Held-to-Maturity, Carrying Amount | 83,580 | |
Held-to-Maturity, Gross Unrecognized Gains | 3,054 | 1,684 |
Held-to-Maturity, Fair Value | 86,634 | 110,925 |
U.S. Agency-Based Mortgage-Backed Securities [Member] | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Held-to-maturity, Amortized Cost, Totals | 9,227 | 10,967 |
Held-to-Maturity, Carrying Amount | 9,227 | |
Held-to-Maturity, Gross Unrecognized Gains | 720 | 544 |
Held-to-Maturity, Fair Value | 9,947 | 11,511 |
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member] | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Held-to-maturity, Amortized Cost, Totals | 13,710 | 12,723 |
Held-to-Maturity, Carrying Amount | 13,710 | |
Held-to-Maturity, Gross Unrecognized Gains | 422 | 330 |
Held-to-Maturity, Gross Unrecognized Losses | (12) | |
Held-to-Maturity, Fair Value | 14,132 | 13,041 |
Asset-Backed Securities [Member] | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Held-to-maturity, Amortized Cost, Totals | 194 | 220 |
Held-to-Maturity, Allowance for Credit Losses | (9) | |
Held-to-Maturity, Carrying Amount | 185 | |
Held-to-Maturity, Gross Unrecognized Gains | 7 | |
Held-to-Maturity, Gross Unrecognized Losses | (1) | |
Held-to-Maturity, Fair Value | $ 192 | $ 219 |
Investments - Gross Unrealized
Investments - Gross Unrealized Gains and Losses and Cost or Amortized Cost, Allowance for Credit Losses and Fair Value of Investments Classified as Available-for-Sale (Detail) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale, Amortized Cost | $ 392,117,000 | $ 425,698,000 |
Available-for-sale, Gross Unrealized Gains | 24,170,000 | 15,613,000 |
Available-for-sale, Gross Unrealized Losses | (47,000) | (165,000) |
Available-for-sale, Fair Value | 416,240,000 | 441,146,000 |
Available-for-sale, Allowance for Credit Losses | 0 | 0 |
States and Political Subdivisions [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale, Amortized Cost | 227,932,000 | 225,895,000 |
Available-for-sale, Gross Unrealized Gains | 16,750,000 | 11,906,000 |
Available-for-sale, Gross Unrealized Losses | (26,000) | |
Available-for-sale, Fair Value | 244,682,000 | 237,775,000 |
Corporate Bonds [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale, Amortized Cost | 103,713,000 | 130,453,000 |
Available-for-sale, Gross Unrealized Gains | 5,711,000 | 3,326,000 |
Available-for-sale, Gross Unrealized Losses | (47,000) | (1,000) |
Available-for-sale, Fair Value | 109,377,000 | 133,778,000 |
U.S. Agency-Based Mortgage-Backed Securities [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale, Amortized Cost | 28,581,000 | 29,499,000 |
Available-for-sale, Gross Unrealized Gains | 575,000 | 64,000 |
Available-for-sale, Gross Unrealized Losses | (96,000) | |
Available-for-sale, Fair Value | 29,156,000 | 29,467,000 |
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale, Amortized Cost | 31,891,000 | 39,851,000 |
Available-for-sale, Gross Unrealized Gains | 1,134,000 | 317,000 |
Available-for-sale, Gross Unrealized Losses | (42,000) | |
Available-for-sale, Fair Value | $ 33,025,000 | $ 40,126,000 |
Investments - Gross Unrealize_2
Investments - Gross Unrealized Gains and Losses and Cost of Equity (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule Of Trading Securities And Other Trading Assets [Line Items] | ||
Equity securities, Cost | $ 33,227 | $ 24,457 |
Equity securities, Gross Unrealized Gains | 1,425 | 3,446 |
Equity securities, Gross Unrealized Losses | (1,172) | |
Equity securities, Fair Value | 33,480 | 27,903 |
Domestic Common Stock [Member] | ||
Schedule Of Trading Securities And Other Trading Assets [Line Items] | ||
Equity securities, Cost | 33,227 | 24,457 |
Equity securities, Gross Unrealized Gains | 1,425 | 3,446 |
Equity securities, Gross Unrealized Losses | (1,172) | |
Equity securities, Fair Value | $ 33,480 | $ 27,903 |
Investments - Summary of Carryi
Investments - Summary of Carrying Amounts and Fair Value of Investments in Fixed Maturity Securities, Classified as Held-to-Maturity (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule Of Held To Maturity Securities [Line Items] | ||
Within one year, Carrying Amount | $ 59,898 | $ 49,967 |
After one year through five years, Carrying Amount | 195,398 | 198,025 |
After five years through ten years, Carrying Amount | 80,484 | 110,460 |
After ten years, Carrying Amount | 230,999 | 229,782 |
Held-to-maturity, Carrying Amount, Totals | 576,191 | 599,421 |
Within one year, Fair Value | 60,504 | 50,348 |
After one year through five years, Fair Value | 204,082 | 202,109 |
After five years through ten years, Fair Value | 84,789 | 113,877 |
After ten years, Fair Value | 249,767 | 243,279 |
Held-to-maturity, Fair Value, Totals | 609,281 | 621,343 |
U.S. Agency-Based Mortgage-Backed Securities [Member] | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Without single maturity, Carrying Amount | 9,227 | 10,967 |
Held-to-maturity, Carrying Amount, Totals | 9,227 | |
Without single maturity, Fair Value | 9,947 | 11,511 |
Held-to-maturity, Fair Value, Totals | 9,947 | 11,511 |
Asset-Backed Securities [Member] | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Without single maturity, Carrying Amount | 185 | 220 |
Held-to-maturity, Carrying Amount, Totals | 185 | |
Without single maturity, Fair Value | 192 | 219 |
Held-to-maturity, Fair Value, Totals | $ 192 | $ 219 |
Investments - Summary of Amorti
Investments - Summary of Amortized Cost and Fair Value of Investments in Fixed Maturity Securities, Classified as Available-for-Sale (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule Of Available For Sale Securities [Line Items] | ||
Within one year, Amortized Cost | $ 65,386 | $ 27,160 |
After one year through five years, Amortized Cost | 89,127 | 144,142 |
After five years through ten years, Amortized Cost | 45,235 | 47,175 |
After ten years, Amortized Cost | 163,788 | 177,722 |
Available-for-sale, Amortized Cost | 392,117 | 425,698 |
Within one year, Fair Value | 66,197 | 27,194 |
After one year through five years, Fair Value | 93,818 | 146,469 |
After five years through ten years, Fair Value | 49,460 | 49,419 |
After ten years, Fair Value | 177,609 | 188,597 |
Available-for-sale, Fair Value | 416,240 | 441,146 |
U.S. Agency-Based Mortgage-Backed Securities [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Without single maturity date, Amortized Cost | 28,581 | 29,499 |
Available-for-sale, Amortized Cost | 28,581 | 29,499 |
Without single maturity date, Fair value | 29,156 | 29,467 |
Available-for-sale, Fair Value | $ 29,156 | $ 29,467 |
Investments - Investment Securi
Investments - Investment Securities Continuous Unrealized Loss Position (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Marketable Securities [Line Items] | ||
Held-to-Maturity, Fair Value of Investments with Unrealized Losses, Less Than 12 Months | $ 21,074 | |
Held-to-Maturity, Gross Unrealized Losses, Less Than 12 Months | 193 | |
Held-to-Maturity, Fair Value of Investments with Unrealized Losses, 12 Months or Greater | 3,311 | |
Held-to-Maturity, Gross Unrealized Losses, 12 Months or Greater | 13 | |
Held-to-Maturity, Fair Value of Investments with Unrealized Losses, Total | 24,385 | |
Held-to-Maturity, Gross Unrealized Losses, Total | $ 20 | 206 |
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months | 3,506 | 23,573 |
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months | 47 | 122 |
Available-for Sale, Fair Value of Investments with Unrealized Losses, 12 Months or Greater | 18,220 | |
Available-for Sale, Gross Unrealized Losses, 12 Months or Greater | 43 | |
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total | 3,506 | 41,793 |
Available-for Sale, Gross Unrealized Losses, Total | 47 | 165 |
Fair Value of Investments with Unrealized Losses, Less Than 12 months | 44,647 | |
Gross Unrealized Loss, Less Than 12 Months | 315 | |
Fair Value of Investments with Unrealized Losses, 12 Months or Greater | 21,531 | |
Gross Unrealized Losses, 12 Months or Greater | 56 | |
Fair Value of Investments with Unrealized Losses, Total | 66,178 | |
Gross Unrealized Losses, Total | 371 | |
Corporate Bonds [Member] | ||
Marketable Securities [Line Items] | ||
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months | 3,506 | 6,426 |
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months | 47 | 1 |
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total | 3,506 | 6,426 |
Available-for Sale, Gross Unrealized Losses, Total | 47 | 1 |
States and Political Subdivisions [Member] | ||
Marketable Securities [Line Items] | ||
Held-to-Maturity, Fair Value of Investments with Unrealized Losses, Less Than 12 Months | 21,074 | |
Held-to-Maturity, Gross Unrealized Losses, Less Than 12 Months | 193 | |
Held-to-Maturity, Fair Value of Investments with Unrealized Losses, Total | 21,074 | |
Held-to-Maturity, Gross Unrealized Losses, Total | $ 20 | 193 |
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months | 4,140 | |
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months | 26 | |
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total | 4,140 | |
Available-for Sale, Gross Unrealized Losses, Total | 26 | |
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member] | ||
Marketable Securities [Line Items] | ||
Held-to-Maturity, Fair Value of Investments with Unrealized Losses, 12 Months or Greater | 3,243 | |
Held-to-Maturity, Gross Unrealized Losses, 12 Months or Greater | 12 | |
Held-to-Maturity, Fair Value of Investments with Unrealized Losses, Total | 3,243 | |
Held-to-Maturity, Gross Unrealized Losses, Total | 12 | |
Available-for Sale, Fair Value of Investments with Unrealized Losses, 12 Months or Greater | 17,068 | |
Available-for Sale, Gross Unrealized Losses, 12 Months or Greater | 42 | |
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total | 17,068 | |
Available-for Sale, Gross Unrealized Losses, Total | 42 | |
Asset-Backed Securities [Member] | ||
Marketable Securities [Line Items] | ||
Held-to-Maturity, Fair Value of Investments with Unrealized Losses, 12 Months or Greater | 68 | |
Held-to-Maturity, Gross Unrealized Losses, 12 Months or Greater | 1 | |
Held-to-Maturity, Fair Value of Investments with Unrealized Losses, Total | 68 | |
Held-to-Maturity, Gross Unrealized Losses, Total | 1 | |
U.S. Agency-Based Mortgage-Backed Securities [Member] | ||
Marketable Securities [Line Items] | ||
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months | 13,007 | |
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months | 95 | |
Available-for Sale, Fair Value of Investments with Unrealized Losses, 12 Months or Greater | 1,152 | |
Available-for Sale, Gross Unrealized Losses, 12 Months or Greater | 1 | |
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total | 14,159 | |
Available-for Sale, Gross Unrealized Losses, Total | $ 96 |
Investments - Additional Inform
Investments - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($)Security | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)Security | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Marketable Securities [Line Items] | |||||
Individual fixed maturity held in unrealized loss position | Security | 2 | 2 | |||
Individual fixed maturity held in unrealized loss position longer than 12 months | Security | 0 | 0 | |||
Number of fixed maturity securities, allowance for credit loss | Security | 390 | 390 | |||
Fixed maturity securities, allowance for credit loss | $ 357,000 | $ 357,000 | $ 0 | ||
Fixed maturity securities, available-for-sale, allowance for credit losses | 0 | 0 | $ 0 | ||
Net realized gains (losses) | 200,000 | $ (100,000) | 1,200,000 | ||
Net unrealized gains (losses) on equity securities | 5,570,000 | $ 642,000 | (3,193,000) | $ 2,800,000 | |
Corporate Bonds [Member] | |||||
Marketable Securities [Line Items] | |||||
Fixed maturity securities, allowance for credit loss | $ 299,000 | $ 299,000 | |||
Number of majority securities | Security | 32 | 32 | |||
States and Political Subdivisions [Member] | |||||
Marketable Securities [Line Items] | |||||
Fixed maturity securities, allowance for credit loss | $ 49,000 | $ 49,000 | |||
Number of majority securities | Security | 355 | 355 | |||
Corporate Fixed Income Securities [Member] | Maximum [Member] | |||||
Marketable Securities [Line Items] | |||||
Investments maturity period using default rate | 20 years |
Investments - Changes in Allowa
Investments - Changes in Allowance for Credit Losses by Major Security Type of Investments Classified as Held-to-Maturity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Schedule Of Held To Maturity Securities [Line Items] | ||
Balance | $ 275 | $ 301 |
Provision for credit loss expense (benefit) | 82 | 56 |
Balance | 357 | 357 |
States and Political Subdivisions [Member] | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Balance | 50 | 45 |
Provision for credit loss expense (benefit) | (1) | 4 |
Balance | 49 | 49 |
Corporate Bonds [Member] | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Balance | 215 | 245 |
Provision for credit loss expense (benefit) | 84 | 54 |
Balance | 299 | 299 |
Asset-Backed Securities [Member] | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Balance | 10 | 11 |
Provision for credit loss expense (benefit) | (1) | (2) |
Balance | $ 9 | $ 9 |
Investments - Schedule of Amort
Investments - Schedule of Amortized Cost Held-to-Maturity Securities Aggregated By Credit Quality Indicator (Detail) $ in Thousands | Jun. 30, 2020USD ($) |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | $ 576,548 |
AAA/AA/A Ratings [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 521,771 |
Baa/BBB Ratings [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 54,736 |
B Ratings [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 41 |
States and Political Subdivisions [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 469,538 |
States and Political Subdivisions [Member] | AAA/AA/A Ratings [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 467,104 |
States and Political Subdivisions [Member] | Baa/BBB Ratings [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 2,434 |
Corporate Bonds [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 83,879 |
Corporate Bonds [Member] | AAA/AA/A Ratings [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 31,595 |
Corporate Bonds [Member] | Baa/BBB Ratings [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 52,284 |
U.S. Agency-Based Mortgage-Backed Securities [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 9,227 |
U.S. Agency-Based Mortgage-Backed Securities [Member] | AAA/AA/A Ratings [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 9,227 |
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 13,710 |
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member] | AAA/AA/A Ratings [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 13,710 |
Asset-Backed Securities [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 194 |
Asset-Backed Securities [Member] | AAA/AA/A Ratings [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 135 |
Asset-Backed Securities [Member] | Baa/BBB Ratings [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | 18 |
Asset-Backed Securities [Member] | B Ratings [Member] | |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | |
Amortized cost | $ 41 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance | $ 1,900,000 | $ 200,000 |
Uncertain tax positions recognized | $ 0 | $ 0 |
Loss Reserves - Liability for U
Loss Reserves - Liability for Unpaid Loss and Loss Adjustment Expenses, Net of Related Amounts Recoverable from Reinsurers (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Roll Forward In Liability For Unpaid Claims And Claims Adjustment Expense [Abstract] | ||
Balance, beginning of period | $ 772,887 | $ 798,409 |
Less amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses | 95,343 | 107,216 |
Net balance, beginning of period | 677,544 | 691,193 |
Add incurred related to: | ||
Current accident year | 112,342 | 121,727 |
Prior accident years | (31,165) | (23,245) |
Total incurred | 81,177 | 98,482 |
Less paid related to: | ||
Current accident year | 13,629 | 15,926 |
Prior accident years | 78,303 | 77,362 |
Total paid | 91,932 | 93,288 |
Net balance, end of period | 666,789 | 696,387 |
Add amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses | 101,978 | 98,659 |
Balance, end of period | $ 768,767 | $ 795,046 |
Loss Reserves - Additional Info
Loss Reserves - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Insurance [Abstract] | ||
Loss and LAE Related to Prior Periods | $ 31,165 | $ 23,245 |
Loss Reserves - Change in Allow
Loss Reserves - Change in Allowance for Credit Losses on Amounts Recoverable from Reinsurers (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Insurance [Abstract] | ||
Balance, beginning of period | $ 449 | $ 444 |
Provision for credit loss benefit | (61) | (56) |
Balance, end of period | $ 388 | $ 388 |
Comprehensive Income and Accu_3
Comprehensive Income and Accumulated Other Comprehensive Income - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | ||||
Comprehensive income | $ 29,431 | $ 23,068 | $ 41,715 | $ 48,262 |
Comprehensive income tax rate | 21.00% | 21.00% |
Comprehensive Income and Accu_4
Comprehensive Income and Accumulated Other Comprehensive Income - Schedule of Changes in Accumulated Other Comprehensive Income (AOCI) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | $ 436,956 | $ 430,405 | $ 430,215 | $ 409,762 |
Other comprehensive income before reclassification | 5,588 | 5,001 | 7,373 | 10,889 |
Amounts reclassified from accumulated other comprehensive income | (105) | (21) | (406) | 83 |
Change in deferred tax valuation allowance | 198 | |||
Net current period other comprehensive income | 5,483 | 5,178 | 6,967 | 10,972 |
Ending Balance | 462,796 | 449,443 | 462,796 | 449,443 |
Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | 13,695 | 4,962 | 12,211 | (832) |
Ending Balance | $ 19,178 | $ 10,140 | $ 19,178 | $ 10,140 |
Comprehensive Income and Accu_5
Comprehensive Income and Accumulated Other Comprehensive Income - Reclassification Out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Net realized gains (losses) on investments | $ 163 | $ (82) | $ 1,155 | $ (23) |
Income before income taxes | 29,391 | 22,169 | 42,632 | 45,978 |
Income tax expense | (5,443) | (4,279) | (7,884) | (8,688) |
Net income | 23,948 | 17,890 | 34,748 | 37,290 |
Unrealized Gains (losses) on Available-for-Sale Securities [Member] | Reclassification Out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Net realized gains (losses) on investments | 133 | 26 | 514 | (105) |
Income before income taxes | 133 | 26 | 514 | (105) |
Income tax expense | (28) | (5) | (108) | 22 |
Net income | $ 105 | $ 21 | $ 406 | $ (83) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale—fixed maturity, Fair Value | $ 416,240 | $ 441,146 |
Equity securities, Fair Value | 33,480 | 27,903 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale—fixed maturity, Fair Value | 416,240 | 441,146 |
Total | 449,720 | 469,049 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale—fixed maturity, Fair Value | 33,025 | 40,126 |
Total | 66,505 | 68,029 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale—fixed maturity, Fair Value | 383,215 | 401,020 |
Total | 383,215 | 401,020 |
Fair Value, Measurements, Recurring [Member] | States and Political Subdivisions [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale—fixed maturity, Fair Value | 244,682 | 237,775 |
Fair Value, Measurements, Recurring [Member] | States and Political Subdivisions [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale—fixed maturity, Fair Value | 244,682 | 237,775 |
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale—fixed maturity, Fair Value | 109,377 | 133,778 |
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale—fixed maturity, Fair Value | 109,377 | 133,778 |
Fair Value, Measurements, Recurring [Member] | U.S. Agency-Based Mortgage-Backed Securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale—fixed maturity, Fair Value | 29,156 | 29,467 |
Fair Value, Measurements, Recurring [Member] | U.S. Agency-Based Mortgage-Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale—fixed maturity, Fair Value | 29,156 | 29,467 |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale—fixed maturity, Fair Value | 33,025 | 40,126 |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale—fixed maturity, Fair Value | 33,025 | 40,126 |
Fair Value, Measurements, Recurring [Member] | Common Stock [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity securities, Fair Value | 33,480 | 27,903 |
Fair Value, Measurements, Recurring [Member] | Common Stock [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity securities, Fair Value | $ 33,480 | $ 27,903 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Assets Measured at Amortized Cost Net of Allowance For Credit Losses (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | $ 609,281 | $ 621,343 |
States and Political Subdivisions [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | 498,376 | 485,647 |
Corporate Bonds [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | 86,634 | 110,925 |
U.S. Agency-Based Mortgage-Backed Securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | 9,947 | 11,511 |
U.S. Treasury Securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | 9,019 | 7,873 |
Obligations of U.S. Government Agencies [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | 5,113 | 5,168 |
Asset-Backed Securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | 192 | 219 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | 9,019 | 7,873 |
Fair Value, Inputs, Level 1 [Member] | U.S. Treasury Securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | 9,019 | 7,873 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | 600,262 | 613,470 |
Fair Value, Inputs, Level 2 [Member] | States and Political Subdivisions [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | 498,376 | 485,647 |
Fair Value, Inputs, Level 2 [Member] | Corporate Bonds [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | 86,634 | 110,925 |
Fair Value, Inputs, Level 2 [Member] | U.S. Agency-Based Mortgage-Backed Securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | 9,947 | 11,511 |
Fair Value, Inputs, Level 2 [Member] | Obligations of U.S. Government Agencies [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | 5,113 | 5,168 |
Fair Value, Inputs, Level 2 [Member] | Asset-Backed Securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities held-to-maturity-fixed maturity, Fair Value | $ 192 | $ 219 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Carrying Amounts and Corresponding Fair Values for Financial Instruments (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturity securities—held-to-maturity | $ 609,281 | $ 621,343 |
Fixed maturity securities—available-for-sale | 416,240 | 441,146 |
Equity securities | 33,480 | 27,903 |
Short-term investments | 72,849 | 56,548 |
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturity securities—held-to-maturity | 576,191 | 599,421 |
Fixed maturity securities—available-for-sale | 416,240 | 441,146 |
Equity securities | 33,480 | 27,903 |
Short-term investments | 72,849 | 56,548 |
Cash and cash equivalents | 110,281 | 43,813 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturity securities—held-to-maturity | 609,281 | 621,343 |
Fixed maturity securities—available-for-sale | 416,240 | 441,146 |
Equity securities | 33,480 | 27,903 |
Short-term investments | 72,849 | 56,548 |
Cash and cash equivalents | $ 110,281 | $ 43,813 |
Treasury Stock - Additional Inf
Treasury Stock - Additional Information (Detail) - USD ($) | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Oct. 31, 2016 | |
Equity [Abstract] | |||
Share repurchase program, new limit amount | $ 25,000,000 | ||
Shares repurchased under the program | 0 | 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] - Dividend Declared [Member] | Jul. 27, 2020$ / shares |
Subsequent Event [Line Items] | |
Date of dividend declared | Jul. 27, 2020 |
Cash dividend per share | $ 0.27 |
Date of payment for dividend | Sep. 25, 2020 |
Date of record for dividend payment | Sep. 11, 2020 |