| | |
Minimum
|
| |
Maximum
|
| ||||||
Number of shares offered
|
| | | | 3,400,000 | | | | | | 4,600,000 | | |
Gross offering proceeds
|
| | | $ | 34,000,000 | | | | | $ | 46,000,000 | | |
Estimated offering expenses
|
| | | $ | 1,000,000 | | | | | $ | 1,000,000 | | |
Commissions(1)(2) | | | | $ | 1,895,000 | | | | | $ | 2,135,000 | | |
Net proceeds
|
| | | $ | 31,105,000 | | | | | $ | 42,865,000 | | |
Net proceeds per share
|
| | | $ | 9.15 | | | | | $ | 9.32 | | |
| | | | | 1 | | | |
| | | | | 15 | | | |
| | | | | 30 | | | |
| | | | | 31 | | | |
| | | | | 33 | | | |
| | | | | 34 | | | |
| | | | | 34 | | | |
| | | | | 36 | | | |
| | | | | 37 | | | |
| | | | | 43 | | | |
| | | | | 69 | | | |
| | | | | 85 | | | |
| | | | | 106 | | | |
| | | | | 110 | | | |
| | | | | 120 | | | |
| | | | | 121 | | | |
| | | | | 125 | | | |
| | | | | 125 | | | |
| | | | | 125 | | | |
| | | | | F-1 | | |
Stock Based Incentive Plan
|
| |
Individuals
Eligible to Receive Awards |
| |
Number of
Shares |
| |
Percentage of
shares issued in the offering |
| |
Value of shares
Based on $10.00 Share Price |
| |||||||||
Shares available for restricted stock awards
|
| | Selected officers | | | | | 140,000 | | | | | | 4.12% | | | | | $ | 1,400,000 | | |
Shares available for stock options
|
| |
Directors and selected officers
|
| | | | 340,000 | | | | | | 10.0% | | | | |
|
(1)
|
| |
| | |
Six Months Ended June 30,
|
| |
Years Ended December 31,
|
| ||||||||||||||||||
(dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
2017
|
| |
2016
|
| ||||||||||||
Statement of Operations Data: | | | | | | | | | | | | | | | | | | | | | | | | | |
Premiums written
|
| | | $ | 7,593 | | | | | $ | 7,564 | | | | | $ | 14,133 | | | | | $ | 16,299 | | |
Ceded premiums
|
| | | | (1,335) | | | | | | (968) | | | | | | (2,075) | | | | | | (1,872) | | |
Insurance revenues
|
| | | | 6,258 | | | | | | 6,596 | | | | | $ | 12,058 | | | | | $ | 14,427 | | |
Net investment income
|
| | | | 4,218 | | | | | | 4,292 | | | | | | 8,523 | | | | | | 8,821 | | |
Net realized investment gains
|
| | | | 324 | | | | | | 904 | | | | | | 2,228 | | | | | | 1,783 | | |
Other revenues
|
| | | | 97 | | | | | | 85 | | | | | | 194 | | | | | | 173 | | |
Total revenues
|
| | | | 10,897 | | | | | | 11,877 | | | | | | 23,003 | | | | | | 25,204 | | |
Benefits and expenses | | | | | | | | | | | | | | | | | | | | | | | | | |
Policyholder benefits
|
| | | | 7,018 | | | | | | 7,215 | | | | | | 13,712 | | | | | | 16,069 | | |
Interest credit to policyholder balances
|
| | | | 207 | | | | | | 114 | | | | | | 386 | | | | | | 315 | | |
Operating costs and expenses
|
| | | | 4,331 | | | | | | 3,994 | | | | | | 7,889 | | | | | | 8,099 | | |
Amortization of deferred policy acquisition and sales inducement costs
|
| | | | 897 | | | | | | 1,124 | | | | | | 2,108 | | | | | | 1,876 | | |
Taxes, licenses and fees
|
| | | | 398 | | | | | | 392 | | | | | | 716 | | | | | | 722 | | |
Dividends to policyholders
|
| | | | 31 | | | | | | 31 | | | | | | 66 | | | | | | 86 | | |
Total benefits and expenses
|
| | | | 12,882 | | | | | | 12,870 | | | | | | 24,877 | | | | | | 27,167 | | |
Net loss before taxes
|
| | | | (1,985) | | | | | | (993) | | | | | | (1,874) | | | | | | (1,963) | | |
Tax expense
|
| | | | 9 | | | | | | 14 | | | | | | 34 | | | | | | 34 | | |
Net loss
|
| | | $ | (1,994) | | | | | $ | (1,007) | | | | | $ | (1,908) | | | | | $ | (1,997) | | |
|
| | |
June 30,
|
| |
Years Ended December 31,
|
| ||||||||||||
(dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||
Balance Sheet Data: | | | | | |||||||||||||||
Total investments, cash and cash equivalents
|
| | | $ | 203,640 | | | | | $ | 208,993 | | | | | $ | 201,314 | | |
Deferred policy acquisition costs, net
|
| | | | 13,320 | | | | | | 12,179 | | | | | | 11,940 | | |
Deferred sales inducement costs, net
|
| | | | 1,076 | | | | | | 867 | | | | | | 315 | | |
Reinsurance recoverables
|
| | | | 3,622 | | | | | | 3,727 | | | | | | 2,107 | | |
Accrued investment income
|
| | | | 1,929 | | | | | | 1,886 | | | | | | 1,832 | | |
Accounts receivable
|
| | | | 2,417 | | | | | | 538 | | | | | | 575 | | |
Prepaid reinsurance premiums
|
| | | | 1,379 | | | | | | 1,358 | | | | | | 924 | | |
Deferred tax asset, net
|
| | | | 495 | | | | | | 458 | | | | | | 664 | | |
Other assets
|
| | | | 296 | | | | | | 202 | | | | | | 254 | | |
Separate account asset
|
| | | | 23,690 | | | | | | 24,779 | | | | | | 21,513 | | |
Real estate, property and equipment
|
| | | | 2,166 | | | | | | 2,151 | | | | | | 2,297 | | |
Total Assets
|
| | | $ | 254,030 | | | | | $ | 257,138 | | | | | $ | 243,735 | | |
Future life policy benefits
|
| | | $ | 72,608 | | | | | $ | 71,927 | | | | | $ | 73,097 | | |
Policyholder account balance
|
| | | | 113,654 | | | | | | 109,823 | | | | | | 99,440 | | |
Future accident and health policy benefits
|
| | | | 343 | | | | | | 386 | | | | | | 351 | | |
Reserve for deposit type contracts
|
| | | | 11,222 | | | | | | 10,850 | | | | | | 10,529 | | |
Other policyholder funds
|
| | | | 2,733 | | | | | | 1,970 | | | | | | 1,889 | | |
Separate account liability
|
| | | | 23,690 | | | | | | 24,779 | | | | | | 21,513 | | |
Unearned revenue
|
| | | | 1,357 | | | | | | 1,387 | | | | | | 1,396 | | |
Deferred reinsurance settlements
|
| | | | 2,826 | | | | | | 2,949 | | | | | | 1,512 | | |
Other liabilities
|
| | | | 2,080 | | | | | | 1,710 | | | | | | 1,146 | | |
Total Liabilities
|
| | | $ | 230,513 | | | | | $ | 225,781 | | | | | $ | 210,873 | | |
Retained earnings
|
| | | $ | 24,606 | | | | | $ | 26,600 | | | | | $ | 29,313 | | |
Accumulated other comprehensive income
|
| | | | (1,089) | | | | | | 4,757 | | | | | | 3,549 | | |
Total equity
|
| | | $ | 23,517 | | | | | $ | 31,357 | | | | | $ | 32,862 | | |
|
| | | | | | | | |
Pro Forma Capitalization
of Federal Life Group, Inc. as of June 30, 2018(2) |
| |||||||||
| | | | | | | | |
(dollars in thousands except share
and per share data) |
| |||||||||
| | |
Historical
Consolidated Capitalization of FLMHC at June 30, 2018 |
| |
Minimum
|
| |
Maximum
|
| |||||||||
Shareholders’ equity(1): | | | | | | | | | | | | | | | | | | | |
Common Stock, par value $0.01 per share; authorized 10,000,000 shares; shares to be outstanding – as
shown(2)(3) |
| | | $ | — | | | | | $ | 34 | | | | | $ | 46 | | |
Additional paid-in capital(2)(3)
|
| | | $ | — | | | | | $ | 31,071 | | | | | $ | 42,819 | | |
Retained earnings
|
| | | | 24,606 | | | | | | 24,606 | | | | | | 24,606 | | |
Accumulated other comprehensive income (loss),
net of tax |
| | | $ | (1,089) | | | | | $ | (1,089) | | | | | $ | (1,089) | | |
Total shareholders’ equity
|
| | | $ | 23,517 | | | | | $ | 54,622 | | | | | $ | 66,382 | | |
|
| | |
FLMHC
Historical Consolidated |
| |
Pro Forma
Adjustments |
| |
Federal Life
Group, Inc. Pro Forma Consolidated |
| |||||||||
Assets | | | | | | | | | | | | | | | | | | | |
Cash and investments
|
| | | $ | 203,640 | | | | | $ | 31,105 | | | | | $ | 234,745 | | |
Deferred policy acquisition costs, net
|
| | | | 13,320 | | | | | | — | | | | | | 13,320 | | |
Deferred sales inducement costs, net
|
| | | | 1,076 | | | | | | — | | | | | | 1,076 | | |
Accrued investment income
|
| | | | 1,929 | | | | | | — | | | | | | 1,929 | | |
Accounts receivable
|
| | | | 2,417 | | | | | | — | | | | | | 2,417 | | |
Prepaid reinsurance premiums
|
| | | | 1,379 | | | | | | — | | | | | | 1,379 | | |
Real estate, property and equipment
|
| | | | 2,166 | | | | | | — | | | | | | 2,166 | | |
Reinsurance recoverables
|
| | | | 3,622 | | | | | | — | | | | | | 3,622 | | |
Separate account asset
|
| | | | 23,690 | | | | | | — | | | | | | 23,690 | | |
Deferred tax asset, net
|
| | | | 495 | | | | | | — | | | | | | 495 | | |
Other assets
|
| | | | 296 | | | | | | — | | | | | | 296 | | |
Total assets
|
| | | $ | 254,030 | | | | | $ | 31,105 | | | | | $ | 285,135 | | |
|
| | |
FLMHC
Historical Consolidated |
| |
Pro Forma
Adjustments |
| |
Federal Life
Group, Inc. Pro Forma Consolidated |
| |||||||||
Liabilities | | | | | | | | | | | | | | | | | | | |
Policyholder account balance
|
| | | $ | 113,654 | | | | | | — | | | | | $ | 113,654 | | |
Separate account liability
|
| | | | 23,690 | | | | | | — | | | | | | 23,690 | | |
Future policy benefits
|
| | | | 72,951 | | | | | | — | | | | | | 72,951 | | |
Reserve for deposit accounts
|
| | | | 11,222 | | | | | | — | | | | | | 11,222 | | |
Other policyholder funds
|
| | | | 2,733 | | | | | | — | | | | | | 2,733 | | |
Deferred reinsurance settlements
|
| | | | 2,826 | | | | | | | | | | | | 2,826 | | |
Unearned revenue
|
| | | | 1,357 | | | | | | — | | | | | | 1,357 | | |
Other liabilities
|
| | | | 2,080 | | | | | | — | | | | | | 2,080 | | |
Total liabilities
|
| | | $ | 230,513 | | | | | | — | | | | | $ | 230,513 | | |
Common stock
|
| | | | — | | | | | | 34(2)(3) | | | | | $ | 34 | | |
Additional paid in capital
|
| | | | — | | | | | | 31,071 | | | | | | 31,071 | | |
Retained earnings
|
| | | $ | 24,606 | | | | | | — | | | | | | 24,606 | | |
Accumulated other comprehensive income
|
| | | | (1,089) | | | | | | — | | | | | | (1,089) | | |
Total equity
|
| | | | 23,517 | | | | | | 31,105 | | | | | | 54,622 | | |
Total liabilities and equity
|
| | | $ | 254,030 | | | | | $ | 31,105 | | | | | $ | 285,135 | | |
|
|
Sale of 3,400,000 shares at $10 per share
|
| | | $ | 34,000,000 | | |
|
Conversion and offering expenses
|
| | | | 1,000,000 | | |
|
Commissions
|
| | | | 1,895,000 | | |
|
Total
|
| | | $ | 31,105,000 | | |
|
Common stock
|
| | | $ | 34,000 | | |
|
Additional paid in capital
|
| | | $ | 31,071,000 | | |
|
Total
|
| | | $ | 31,105,000 | | |
|
(dollars in thousands)
|
| |
FLMHC
Historical Consolidated |
| |
Pro Forma
Adjustments |
| |
Federal Life
Group, Inc. Pro Forma Consolidated |
| |||||||||
Revenues | | | | | | | | | | | | | | | | | | | |
Insurance revenues
|
| | | $ | 12,058 | | | | | $ | — | | | | | $ | 12,058 | | |
Net investment income
|
| | | | 8,523 | | | | | | —(1) | | | | | | 8,523 | | |
Net realized investment gains
|
| | | | 2,228 | | | | | | —(1) | | | | | | 2,228 | | |
Other revenues
|
| | | | 194 | | | | | | — | | | | | | 194 | | |
Total revenues
|
| | | $ | 23,003 | | | | | $ | — | | | | | $ | 23,003 | | |
Benefits and Expenses | | | | | | | | | | | | | | | | | | | |
Policyholder benefits
|
| | | | 13,712 | | | | | | — | | | | | | 13,712 | | |
Interest credit to policyholders
|
| | | | 386 | | | | | | — | | | | | | 386 | | |
Operating costs and expenses
|
| | | | 7,889 | | | | | | 350(2) | | | | | | 8,239 | | |
Amortization of deferred policy acquisition and sales inducement
costs |
| | | | 2,108 | | | | | | — | | | | | | 2,108 | | |
Taxes, licenses and fees
|
| | | | 716 | | | | | | — | | | | | | 716 | | |
Dividends to policyholders
|
| | | | 66 | | | | | | — | | | | | | 66 | | |
Total benefits and expenses
|
| | | | 24,877 | | | | | | 350 | | | | | | 25,227 | | |
Loss before income taxes
|
| | | | (1,874) | | | | | | (350) | | | | | | (2,224) | | |
Tax expense (benefit)
|
| | | | 34 | | | | |
|
(3)
|
| | | | | 34 | | |
Net loss
|
| | | $ | (1,908) | | | | | $ | (350) | | | | | $ | (2,258) | | |
Earnings per share data | | | | | | | | | | | | | | | | | | | |
Basic and diluted earnings per common share
|
| | | | | | | | | | | | | | | $ | (0.66) | | |
Weighted average basic and diluted shares outstanding
|
| | | | | | | | | | | | | | | | 3,435,000(4) | | |
(dollars in thousands)
|
| |
FLMHC
Historical Consolidated |
| |
Pro Forma
Adjustments |
| |
Federal Life
Group, Inc. Pro Forma Consolidated |
| |||||||||
Revenues | | | | | | | | | | | | | | | | | | | |
Insurance revenues
|
| | | $ | 6,258 | | | | | $ | — | | | | | $ | 6,258 | | |
Net investment income
|
| | | | 4,218 | | | | | | —(1) | | | | | | 4,218 | | |
Net realized investment gains
|
| | | | 324 | | | | | | —(1) | | | | | | 324 | | |
Other revenues
|
| | | | 97 | | | | | | — | | | | | | 97 | | |
Total revenues
|
| | | $ | 10,897 | | | | | $ | — | | | | | $ | 10,897 | | |
Benefits and Expenses | | | | | | | | | | | | | | | | | | | |
Policyholder benefits
|
| | | | 7,018 | | | | | | — | | | | | | 7,018 | | |
Interest credit to policyholders
|
| | | | 207 | | | | | | — | | | | | | 207 | | |
Operating costs and expenses
|
| | | | 4,331 | | | | | | 350(2) | | | | | | 4,681 | | |
Amortization of deferred policy acquisition and sales inducement
costs |
| | | | 897 | | | | | | — | | | | | | 897 | | |
Taxes, licenses and fees
|
| | | | 398 | | | | | | | | | | | | 398 | | |
Dividends to policyholders
|
| | | | 31 | | | | | | — | | | | | | 31 | | |
Total benefits and expenses
|
| | | | 12,882 | | | | | | 350 | | | | | | 13,232 | | |
Loss before income taxes
|
| | | | (1,985) | | | | | | (350) | | | | | | (2,335) | | |
Tax expense (benefit)
|
| | | | 9 | | | | | | —(3) | | | | | | 9 | | |
Net loss
|
| | | $ | (1,994) | | | | | $ | (350) | | | | | $ | (2,344) | | |
Loss per share data | | | | | | | | | | | | | | | | | | | |
Basic loss per common share
|
| | | | | | | | | | | | | | | $ | (0.59)(4) | | |
Diluted loss per common share
|
| | | | | | | | | | | | | | | | (0.68) | | |
Weighted average basic shares outstanding
|
| | | | | | | | | | | | | | | | 3,400,000 | | |
Weighted average diluted shares outstanding
|
| | | | | | | | | | | | | | | | 3,540,000 | | |
| | |
At or for the Year Ended June 30, 2018
|
| |||||||||||||||
| | |
3,400,000
Shares Sold at $10.00 per Share (Minimum of Range) |
| |
4,000,000
Shares Sold at $10.00 per Share (Midpoint of Range) |
| |
4,600,000
Shares Sold at $10.00 per Share (Maximum of Range) |
| |||||||||
| | |
(dollars in thousands, except share and per share data)
|
| |||||||||||||||
Pro forma offering proceeds | | | | | | | | | | | | | | | | | | | |
Gross proceeds of public offering
|
| | | $ | 34,000 | | | | | $ | 40,000 | | | | | $ | 46,000 | | |
Less offering expenses and commissions
|
| | | $ | 2,895 | | | | | $ | 3,060 | | | | | $ | 3,135 | | |
Net Proceeds
|
| | | $ | 31,105 | | | | | $ | 36,940 | | | | | $ | 42,865 | | |
Pro forma shareholders’ equity | | | | | | | | | | | | | | | | | | | |
Historical Equity
|
| | | $ | 23,517 | | | | | $ | 23,517 | | | | | $ | 23,517 | | |
Net proceeds
|
| | | $ | 31,105 | | | | | $ | 36,940 | | | | | $ | 42,865 | | |
Pro forma shareholders’ equity(1)
|
| | | $ | 54,622 | | | | | $ | 60,457 | | | | | $ | 66,382 | | |
Pro forma per share data | | | | | | | | | | | | | | | | | | | |
Total shares outstanding after the offering
|
| | | | 3,400,000 | | | | | | 4,000,000 | | | | | | 4,600,000 | | |
Pro forma book value per share
|
| | | $ | 16.06 | | | | | $ | 15.11 | | | | | $ | 14.43 | | |
Pro forma price-to-book value per share
|
| | | | 62.3% | | | | | | 66.2% | | | | | | 69.3% | | |
Pro forma net income | | | | | | | | | | | | | | | | | | | |
Historical net loss
|
| | | | (1,994) | | | | | $ | (1,994) | | | | | $ | (1,994) | | |
Pro forma loss
|
| | | $ | (2,344) | | | | | $ | (2,344) | | | | | $ | (2,344) | | |
Weighted average shares outstanding(2)
|
| | | | 3,435,000 | | | | | | 4,035,000 | | | | | | 4,635,000 | | |
Pro forma loss per share
|
| | | $ | (0.68) | | | | | $ | (0.58) | | | | | $ | (0.51) | | |
| | |
Expected Cash Flows
|
| |||||||||
Year
|
| |
From
Maturities |
| |
Average
Interest rate |
| ||||||
2018
|
| | | $ | 2,300,000 | | | | | | 6.73% | | |
2019
|
| | | $ | 7,500,000 | | | | | | 5.21% | | |
2020
|
| | | $ | 11,700,000 | | | | | | 4.84% | | |
| | |
(dollars in thousands)
|
| |||
Guaranteed Minimum Crediting Rates December 31, 2017
|
| |
Account Value at Minimum
Guaranteed Rate |
| |||
Policyholder account balances(1)
|
| | | | | | |
Greater than 0% to 1%
|
| | | $ | — | | |
Greater than 1% to 3%
|
| | | | 17,375 | | |
Greater than 3% to 4%
|
| | | | 42,808 | | |
Greater than 4%
|
| | | | 21,163 | | |
| | | | $ | 81,346 | | |
|
|
Fair Value of Investments as of December 31, 2017
(dollars in thousands) |
| ||||||||||||||||||
|
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
Fair Value |
| |||||||||
|
$37,448
|
| | | $ | 184,290 | | | | | $ | 2,182 | | | | | $ | 223,920 | | |
|
16.72%
|
| | | | 82.30% | | | | | | 0.98% | | | | | | 100.0% | | |
Deferred Tax Liability (in thousands) |
| |
December 31, 2017
|
| |
December 31, 2016
|
| ||||||
Total deferred tax assets
|
| | | $ | 9,139 | | | | | $ | 13,939 | | |
Total deferred tax liabilities
|
| | | | (4,668) | | | | | | (7,127) | | |
Deferred tax asset (liability) before valuation allowance
|
| | | | 4,471 | | | | | | 6,812 | | |
Valuation allowance
|
| | | | (4,013) | | | | | | (6,148) | | |
Deferred income tax liability
|
| | | $ | 458 | | | | | $ | 664 | | |
|
| | |
Six Months Ended June 30,
|
| |
Year Ended December 31,
|
| ||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2017
|
| |
2016
|
| ||||||||||||
REVENUES | | | | | | | | | | | | | | | | | | | | | | | | | |
Net insurance revenues
|
| | | $ | 6,258 | | | | | $ | 6,596 | | | | | $ | 12,058 | | | | | $ | 14,427 | | |
Net investment income
|
| | | | 4,218 | | | | | | 4,292 | | | | | | 8,523 | | | | | | 8,821 | | |
Net realized investment gains
|
| | | | 324 | | | | | | 904 | | | | | | 2,228 | | | | | | 1,783 | | |
Other income
|
| | | | 97 | | | | | | 85 | | | | | | 194 | | | | | | 173 | | |
Total revenues
|
| | | | 10,897 | | | | | | 11,877 | | | | | | 23,003 | | | | | | 25,204 | | |
BENEFITS AND EXPENSES | | | | | | | | | | | | | | | | | | | | | | | | | |
Policyholder benefits
|
| | | | 7,018 | | | | | | 7,215 | | | | | | 13,712 | | | | | | 16,069 | | |
Interest credit to policyholders
|
| | | | 207 | | | | | | 114 | | | | | | 386 | | | | | | 315 | | |
Operating costs and expenses
|
| | | | 4,331 | | | | | | 3,994 | | | | | | 7,889 | | | | | | 8,099 | | |
Amortization of deferred policy acquisition and sales inducement costs
|
| | | | 897 | | | | | | 1,124 | | | | | | 2,108 | | | | | | 1,876 | | |
Taxes, licenses and fees
|
| | | | 398 | | | | | | 392 | | | | | | 716 | | | | | | 722 | | |
Dividends to policyholders
|
| | | | 31 | | | | | | 31 | | | | | | 66 | | | | | | 86 | | |
Total benefits and expenses
|
| | | | 12,882 | | | | | | 12,870 | | | | | | 24,877 | | | | | | 27,167 | | |
Loss before income taxes
|
| | | | (1,985) | | | | | | (993) | | | | | | (1,874) | | | | | | (1,963) | | |
Tax expense
|
| | | | 9 | | | | | | 14 | | | | | | 34 | | | | | | 34 | | |
NET LOSS
|
| | | $ | (1,994) | | | | | $ | (1,007) | | | | | $ | (1,908) | | | | | $ | (1,997) | | |
|
| | |
Year Ended December 31,
|
| |||||||||
| | |
2017
|
| |
2016
|
| ||||||
| | |
(dollars in thousands)
|
| |||||||||
Call options: | | | | | | | | | | | | | |
Gain (loss) on option expiration
|
| | | $ | 94 | | | | | $ | 0 | | |
Change in unrealized gains (losses)
|
| | | | 140 | | | | | | — | | |
| | |
Year Ended December 31,
|
| |||
| | |
2017
|
| |
2016
|
|
S&P 500 Index
|
| |
16.04 – 18.50%
|
| |
12.59 – 12.59%
|
|
Annual point-to-point strategy | | | | | | | |
Cap
|
| |
3.00 – 3.75%
|
| |
3.50 – 3.50%
|
|
Participation Rate
|
| |
30.0 – 35.0%
|
| |
30.0 – 30.0%
|
|
| | |
Year Ended December 31,
|
| |||||||||
| | |
2017
|
| |
2016
|
| ||||||
| | |
(dollars in thousands)
|
| |||||||||
Surrender charges
|
| | | $ | 69 | | | | | $ | 22 | | |
Lifetime income benefit riders (LIBR) fees
|
| | | $ | 34 | | | | | $ | 1 | | |
| | | | $ | 103 | | | | | $ | 23 | | |
Withdrawals from annuity policies subject to surrender charges
|
| | | $ | 1,091 | | | | | $ | 624 | | |
Average surrender charge collected on withdrawals subject to surrender charges
|
| | | | 6.32% | | | | | | 3.60% | | |
Fund values on policies subject to LIBR fees
|
| | | $ | 4,496 | | | | | $ | 114 | | |
Weighted average per policy LIBR fee
|
| | | | 0.75% | | | | | | 0.76% | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2017
|
| |
2016
|
| ||||||
| | |
(dollars in thousands)
|
| |||||||||
Index credits on index policies
|
| | | $ | 145 | | | | | $ | 5 | | |
Interest credited (including interest credited on fixed allocation for fixed index annuities)
|
| | | $ | 4,209 | | | | | $ | 3,927 | | |
Lifetime income benefit riders
|
| | | | (34) | | | | | | (1) | | |
| | | | $ | 4,320 | | | | | $ | 3,931 | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
| | |
(dollars in thousands)
|
| |||||||||
Call options: | | | | | | | | | | | | | |
Gain (loss) on option expiration
|
| | | $ | 116 | | | | | $ | 2 | | |
Change in unrealized gains/losses
|
| | | $ | (108) | | | | | $ | 51 | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
S&P 500 Index
|
| | | | 14.24 – 15.72% | | | | | | 16.04 – 17.47% | | |
Annual point-to-point strategy | | | | ||||||||||
Cap
|
| | | | 3.50 – 3.50% | | | | | | 3.50 – 3.75% | | |
Participation rate
|
| | | | 35.0 – 35.0% | | | | | | 33.0 – 35.0% | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
| | |
(dollars in thousands)
|
| |||||||||
Surrender charges
|
| | | $ | 21 | | | | | $ | 5 | | |
Lifetime income benefit riders (LIBR) fees
|
| | | $ | 36 | | | | | $ | 12 | | |
| | | | $ | 57 | | | | | $ | 17 | | |
Withdrawals from annuity policies subject to surrender charges
|
| | | $ | 346 | | | | | $ | 343 | | |
Average surrender charge collected on withdrawals subject to surrender charges
|
| | | | 6.03% | | | | | | 1.36% | | |
Fund values on policies subject to LIBR fees
|
| | | $ | 4,734 | | | | | $ | 1,571 | | |
Weighted average per policy LIBR fee
|
| | | | 0.75% | | | | | | 0.75% | | |
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
| | |
(Dollars in thousands)
|
| |||||||||
Index credits on index policies
|
| | | $ | 187 | | | | | $ | 5 | | |
Interest credited (including interest credited on fixed allocation for fixed index annuities)
|
| | | $ | 2,027 | | | | | $ | 2,583 | | |
Lifetime income benefit riders
|
| | | | (36) | | | | | | (12) | | |
| | | | $ | 2,178 | | | | | $ | 2,576 | | |
|
| | |
Estimated Fair Value
|
| |||||||||||||||||||||||||||||||||
(dollars in thousands) S&P Rating |
| |
June 30, 2018
|
| |
December 31, 2017
|
| |
December 31, 2016
|
| |||||||||||||||||||||||||||
AAA
|
| | | $ | 7,151 | | | | | | 3.9% | | | | | $ | 7,176 | | | | | | 3.8% | | | | | $ | 9,669 | | | | | | 5.5% | | |
AA
|
| | | | 74,402 | | | | | | 40.6% | | | | | | 77,195 | | | | | | 41.0% | | | | | | 64,354 | | | | | | 36.8% | | |
A
|
| | | | 32,496 | | | | | | 17.7% | | | | | | 35,668 | | | | | | 18.9% | | | | | | 36,714 | | | | | | 21.0% | | |
BBB
|
| | | | 60,055 | | | | | | 32.8% | | | | | | 58,921 | | | | | | 31.3% | | | | | | 54,538 | | | | | | 31.2% | | |
Total investment grade
|
| | | $ | 174,104 | | | | | | 95.0% | | | | | $ | 178,960 | | | | | | 95.0% | | | | | $ | 165,275 | | | | | | 94.5% | | |
BB
|
| | | $ | 6,750 | | | | | | 3.7% | | | | | $ | 6,575 | | | | | | 3.8% | | | | | $ | 5,919 | | | | | | 3.4% | | |
B
|
| | | | 1,918 | | | | | | 1.1% | | | | | | 2,381 | | | | | | 1.3% | | | | | | 2,649 | | | | | | 1.5% | | |
CCC
|
| | | | 408 | | | | | | 0.2% | | | | | | 459 | | | | | | 0.2% | | | | | | 1,030 | | | | | | 0.6% | | |
CC
|
| | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | |
C
|
| | | | 69 | | | | | | 0.0% | | | | | | 77 | | | | | | 0.0% | | | | | | 3 | | | | | | 0.0% | | |
D
|
| | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | | | | | 4 | | | | | | 0.0% | | |
Total below investment grade
|
| | | | 9,145 | | | | | | 5.0% | | | | | | 9,492 | | | | | | 5.0% | | | | | | 9,605 | | | | | | 5.5% | | |
Not rated
|
| | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | | | | | 0 | | | | | | 0.0% | | |
Total
|
| | | $ | 183,249 | | | | | | 100.0% | | | | | $ | 188,452 | | | | | | 100.0% | | | | | $ | 174,880 | | | | | | 100.0% | | |
|
| | |
June 30, 2018
|
| |
December 31, 2017
|
| |
December 31, 2016
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands)
|
| |
Amortized
Cost |
| |
%
|
| |
Fair
Value |
| |
%
|
| |
Amortized
Cost |
| |
%
|
| |
Fair
Value |
| |
%
|
| |
Amortized
Cost |
| |
%
|
| |
Fair
Value |
| |
%
|
| ||||||||||||||||||||||||||||||||||||
Due in one year or less
|
| | | $ | 3,499 | | | | | | 1.9% | | | | | $ | 3,554 | | | | | | 1.9% | | | | | $ | 2,247 | | | | | | 1.2% | | | | | $ | 2,288 | | | | | | 1.2% | | | | | $ | 5,038 | | | | | | 3.0% | | | | | $ | 5,161 | | | | | | 3.0% | | |
Due after one year through five years
|
| | | $ | 41,230 | | | | | | 22.3% | | | | | $ | 41,801 | | | | | | 22.8% | | | | | $ | 40,926 | | | | | | 22.3% | | | | | $ | 42,809 | | | | | | 22.7% | | | | | $ | 34,101 | | | | | | 20.0% | | | | | $ | 36,605 | | | | | | 20.9% | | |
Due after five years through ten years
|
| | | $ | 68,467 | | | | | | 37.0% | | | | | $ | 66,976 | | | | | | 36.6% | | | | | $ | 66,739 | | | | | | 36.4% | | | | | $ | 68,151 | | | | | | 36.2% | | | | | $ | 66,029 | | | | | | 38.7% | | | | | $ | 66,648 | | | | | | 38.1% | | |
Due after ten years
|
| | | $ | 26,216 | | | | | | 14.1% | | | | | $ | 25,576 | | | | | | 14.0% | | | | | $ | 27,492 | | | | | | 15.0% | | | | | $ | 27,923 | | | | | | 14.8% | | | | | $ | 20,244 | | | | | | 11.9% | | | | | $ | 20,089 | | | | | | 11.5% | | |
Mortgage-backed securities
|
| | | $ | 45,835 | | | | | | 24.7% | | | | | $ | 45,342 | | | | | | 24.7% | | | | | $ | 46,028 | | | | | | 25.1% | | | | | $ | 47,281 | | | | | | 25.1% | | | | | $ | 45,103 | | | | | | 26.4% | | | | | $ | 46,377 | | | | | | 26.5% | | |
Total debt securities
|
| | | $ | 185,247 | | | | | | 100.0% | | | | | $ | 183,249 | | | | | | 100.0% | | | | | $ | 183,432 | | | | | | 100.0% | | | | | $ | 188,452 | | | | | | 100.0% | | | | | $ | 170,515 | | | | | | 100% | | | | | $ | 174,880 | | | | | | 100% | | |
|
| | |
Six Months Ended
June 30, |
| |
Year Ended
December 31, |
| ||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2017
|
| |
2016
|
| ||||||||||||
Book yield on fixed maturity securities available for sale(1)
|
| | | | 3.97% | | | | | | 4.14% | | | | | | 3.98% | | | | | | 4.35% | | |
| | |
As of June 30, 2018
|
| |||||||||||||||
(dollars in thousands)
|
| |
Ending
Balance |
| |
Year to Date
Interest Credited |
| |
Average
Crediting Rate |
| |||||||||
Annuity Contract Holder Deposits
|
| | | $ | 50,078 | | | | | $ | 823 | | | | | | 1.65% | | |
Dividends Left on Deposit
|
| | | | 6,898 | | | | | | 85 | | | | | | 1.22% | | |
Other
|
| | | | 620 | | | | | | 11 | | | | | | 1.79% | | |
| | | | $ | 57,596 | | | | | $ | 919 | | | | | | | | |
|
| | |
December 31, 2017
|
| |
December 31, 2016
|
| ||||||||||||||||||||||||||||||
(dollars in thousands)
|
| |
Ending
Balance |
| |
Year to Date
Interest Credit |
| |
Average
Crediting Rate |
| |
Ending
Balance |
| |
Year to Date
Interest Credit |
| |
Average
Crediting Rate |
| ||||||||||||||||||
Annuity Contract Holder Deposits
|
| | | $ | 50,728 | | | | | $ | 1,763 | | | | | | 3.47% | | | | | $ | 52,528 | | | | | $ | 1,820 | | | | | | 3.45% | | |
Dividends Left on Deposit
|
| | | | 7,067 | | | | | | 171 | | | | | | 2.40% | | | | | | 7,405 | | | | | | 184 | | | | | | 2.47% | | |
Other
|
| | | | 570 | | | | | | 18 | | | | | | 3.50% | | | | | | 461 | | | | | | 21 | | | | | | 4.66% | | |
| | | | $ | 58,365 | | | | | $ | 1,952 | | | | | | | | | | | $ | 60,394 | | | | | $ | 2,025 | | | | | | | | |
|
Net Realized Investment Gains (Losses)
(dollars in thousands) |
| |
As of June 30,
|
| |
Years Ended
December 31, |
| ||||||||||||||||||
|
2018
|
| |
2017
|
| |
2017
|
| |
2016
|
| ||||||||||||||
Sales of Investments: | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, available for sale
|
| | | $ | 36 | | | | | | 124 | | | | | $ | 177 | | | | | $ | 130 | | |
Equity securities
|
| | | | 0 | | | | | | 420 | | | | | | 897 | | | | | | 1,073 | | |
Oil and gas interests
|
| | | | 261 | | | | | | 358 | | | | | | 1,060 | | | | | | 580 | | |
Real estate
|
| | | | — | | | | | | — | | | | | | 0 | | | | | | 0 | | |
Derivatives
|
| | | | 116 | | | | | | 2 | | | | | | 94 | | | | | | 0 | | |
Other-than-temporary impairment losses on fixed maturity securities, available for sale-net
|
| | | | (89) | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Trading securities-gains and losses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities
|
| | | | — | | | | | | — | | | | | | 0 | | | | | | 0 | | |
Equity securities
|
| | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Investment expenses
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Mortgage loans impairments
|
| | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Total net realized investment gains (losses)
|
| | | | 324 | | | | | | 904 | | | | | $ | 2,228 | | | | | $ | 1,783 | | |
|
Accumulated Other Comprehensive Income
(dollars in thousands) |
| |
Six Months Ended
June 30, |
| |
Years Ended
December 31, |
| ||||||||||||||||||
|
2018
|
| |
2017
|
| |
2017
|
| |
2016
|
| ||||||||||||||
Unrealized holding gains (losses) from changes in the market
value of securities, including the related impact to future policy benefit liabilities, the policyholder dividend obligation, and deferred policy acquisition cost balances |
| | | $ | (5,884) | | | | | $ | 1,273 | | | | | $ | 611 | | | | | $ | (539) | | |
Income tax effect
|
| | | | 38 | | | | | | (433) | | | | | | (208) | | | | | | 183 | | |
Cumulative effect of adoption of new accounting principle
|
| | | | 0 | | | | | | 0 | | | | | | 805 | | | | | | 0 | | |
Net increase in accumulated other comprehensive income
|
| | | $ | (5,846) | | | | | $ | 840 | | | | | $ | 1,208 | | | | | $ | (356) | | |
|
| | |
Six Months Ended
|
| |
Year Ended December 31,
|
| ||||||||||||||||||
Consolidated Summary of Cash Flow (in thousands) |
| |
June 30,
2018 |
| |
June 30,
2017 |
| |
2017
|
| |
2016
|
| ||||||||||||
Cash flows provided by (used for) operating activities
|
| | | $ | (3,883) | | | | | $ | (1,362) | | | | | $ | (5,779) | | | | | $ | (5,056) | | |
Cash flows from investing activities
|
| | | | (493) | | | | | | (4,461) | | | | | | (9,228) | | | | | | 1,653 | | |
Cash flows provided by (used for) financing activities
|
| | | | 4,204 | | | | | | 4,615 | | | | | | 10,703 | | | | | | 5,239 | | |
Net increase (decrease) in cash
|
| | | | (172) | | | | | $ | (1,208) | | | | | $ | (4,304) | | | | | $ | 1,836 | | |
|
Contractual Cash Obligations (dollars in thousands) |
| |
Total
|
| |
Less than
1 year |
| |
1 – 3 years
|
| |
3 – 5 years
|
| |
More than
5 years |
| |||||||||||||||
Future policy benefits and claims(1)
|
| | | $ | 159,093 | | | | | $ | 7,075 | | | | | $ | 14,145 | | | | | $ | 20,949 | | | | | $ | 116,924 | | |
Policyholder account balances(2)
|
| | | | 162,087 | | | | | | 9,086 | | | | | | 16,875 | | | | | | 21,767 | | | | | | 114,359 | | |
Other policyholder liabilities(3)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commissions(4) | | | | | 6,023 | | | | | | 680 | | | | | | 958 | | | | | | 1,148 | | | | | | 3,237 | | |
Reinsurance liabilities and payables(5)
|
| | | | 5,162 | | | | | | 173 | | | | | | 487 | | | | | | 863 | | | | | | 3,639 | | |
Total contractual obligations
|
| | | $ | 332,365 | | | | | $ | 17,014 | | | | | $ | 32,465 | | | | | $ | 44,727 | | | | | $ | 238,159 | | |
|
| | |
Net Premium Revenue and Annuity Deposits
|
| |||||||||||||||||||||
| | |
Six Months Ended June 30,
|
| |
Years Ended December 31,
|
| ||||||||||||||||||
(dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
2017
|
| |
2016
|
| ||||||||||||
Life
|
| | | $ | 6,258 | | | | | $ | 6,596 | | | | | $ | 12,058 | | | | | $ | 14,427 | | |
Annuity deposits
|
| | | | 5,206 | | | | | | 6,184 | | | | | | 12,969 | | | | | | 8,107 | | |
Total
|
| | | $ | 11,464 | | | | | $ | 12,780 | | | | | $ | 25,027 | | | | | $ | 22,534 | | |
|
| | |
For the Year Ended December 31,
|
| |||||||||||||||||||||||||||
| | |
2015
|
| |
2014
|
| |
2013
|
| |
2012
|
| |
2011
|
| |||||||||||||||
| | |
(Dollars in thousands)
|
| |||||||||||||||||||||||||||
Total industry sales of fixed index annuities
|
| | | $ | 53,069,850 | | | | | $ | 46,896,350 | | | | | $ | 38,646,864 | | | | | $ | 33,975,442 | | | | | $ | 32,387,045 | | |
Increase from prior year
|
| | | | 6,173,500 | | | | | | 8,249,486 | | | | | | 4,671,422 | | | | | | 1,588,397 | | | | | | 41,481 | | |
Increase from prior year
|
| | | | 13.2% | | | | | | 21.3% | | | | | | 13.7% | | | | | | 4.9% | | | | | | 0.1% | | |
| | |
Year Ended December 31,
|
| |||||||||||||||||||||||||||||||||
| | |
2017
|
| |
2016
|
| |
2015
|
| |||||||||||||||||||||||||||
Product Type
|
| |
Deposits
Collected |
| |
Deposits as
a % of Total |
| |
Deposits
Collected |
| |
Deposits as
a % of Total |
| |
Deposits
Collected |
| |
Deposits as
a % of Total |
| ||||||||||||||||||
| | |
(Dollars in thousands)
|
| |||||||||||||||||||||||||||||||||
Fixed index annuities
|
| | | $ | 11,349 | | | | | | 87% | | | | | $ | 5,788 | | | | | | 71% | | | | | $ | 250 | | | | | | 7.0% | | |
Single premium fixed rate annuities
|
| | | | 231 | | | | | | 2% | | | | | | 161 | | | | | | 2% | | | | | | 1,015 | | | | | | 31% | | |
Flexible premium fixed rate annuities
|
| | | | 716 | | | | | | 6% | | | | | | 1,428 | | | | | | 18% | | | | | | 1,650 | | | | | | 50% | | |
Single premium immediate annuities
|
| | | | 672 | | | | | | 5% | | | | | | 731 | | | | | | 9% | | | | | | 401 | | | | | | 12% | | |
| | | | $ | 12,969 | | | | | | 100% | | | | | $ | 8,107 | | | | | | 100% | | | | | $ | 3,316 | | | | | | 100% | | |
|
| | |
For the Year Ended December 31,
|
| |||||||||||||||
| | |
2017
|
| |
2016
|
| |
2015
|
| |||||||||
| | |
(dollars in thousands)
|
| |||||||||||||||
Annuity Surrender Charges:
|
| | | $ | 2,666 | | | | | $ | 1,295 | | | | | $ | 603 | | |
Average years at issue
|
| | | | 8 | | | | | | 7 | | | | | | 7 | | |
Average years remaining
|
| | | | 4 | | | | | | 2 | | | | | | 1 | | |
Average surrender charge percentage remaining
|
| | | | 4.42% | | | | | | 2.59% | | | | | | 1.32% | | |
Annuity Account Value (net of coinsurance)
|
| | | $ | 60,257 | | | | | $ | 49,931 | | | | | $ | 45,498 | | |
| | |
As of December 31, 2017
|
| |||||||||||||||||||||
| | |
2017 A.M.
Best’s Rating |
| |
Ceded Future
Policy Benefits |
| |
Claims and
Other Amounts Recoverable |
| |
Total
Reinsurance Recoverables |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Reinsurer | | | | | | | | | | | | | | | | | | | | | | | | | |
Optimum Re Insurance Company
|
| | | | A- | | | | | $ | 3,275 | | | | | $ | 77 | | | | | $ | 3,352 | | |
SCOR Global Life Americas Reins Co
|
| | | | A+ | | | | | | 444 | | | | | | — | | | | | | 444 | | |
Prudential Insurance Co of America
|
| | | | A+ | | | | | | 3 | | | | | | — | | | | | | 3 | | |
Swiss Re Life & Health America Inc.
|
| | | | A+ | | | | | | 5 | | | | | | 2 | | | | | | 7 | | |
| | | | | | | | | | $ | 3,727 | | | | | $ | 79 | | | | | $ | 3,806 | | |
|
|
Fixed maturities, available for sale, at fair value
|
| | | $ | 188,452 | | |
|
Equity securities, available for sale, at fair value
|
| | | | 6,209 | | |
|
Policy loans
|
| | | | 9,852 | | |
|
Derivative instruments
|
| | | | 395 | | |
|
Total Investments
|
| | | | 204,908 | | |
|
Cash and cash equivalents
|
| | | | 4,085 | | |
|
Total Cash and Investments
|
| | | $ | 208,993 | | |
|
| | |
% of Stock owned
|
| |||||||||||||||||||||
Name
|
| |
Amount ($)
|
| |
Number of
shares |
| |
Minimum
|
| |
Adjusted
Maximum |
| ||||||||||||
Directors | | | | | | | | | | | | | | | | | | | | | | | | | |
Joseph D. Austin
|
| | | $ | 1,700,000 | | | | | | 170,000 | | | | | | 5.0% | | | | | | 3.7% | | |
William S. Austin
|
| | | | 610,000 | | | | | | 61,000 | | | | | | 1.8% | | | | | | 1.3% | | |
Michael Austin
|
| | | | 500,000 | | | | | | 50,000 | | | | | | 1.5% | | | | | | 1.1% | | |
Wayne R. Ebersberger
|
| | | | 50,000 | | | | | | 5,000 | | | | | | * | | | | | | * | | |
William H. Springer
|
| | | | 50,000 | | | | | | 5,000 | | | | | | * | | | | | | * | | |
James H. Stacke
|
| | | | 50,000 | | | | | | 5,000 | | | | | | * | | | | | | * | | |
Executive Officers (who are not also directors) Anders Raaum
|
| | | | 100,000 | | | | | | 10,000 | | | | | | * | | | | | | * | | |
All Directors and Executive Officers as a Group (7 persons)
|
| | | $ | 3,060,000 | | | | | | 306,000 | | | | | | 9.0% | | | | | | 6.7% | | |
|
| | | | | | | | | | | |
Trailing 12 Months
|
| |
As of 12/22/2017
|
| ||||||||||||||||||
Ticker
|
| |
Company
|
| |
Total
Assets ($Mil) |
| |
Policy
Revenues ($Mil) |
| |
Total
Revenues ($Mil) |
| |
Common
Stock Price ($) |
| |
Market
Value ($Mil) |
| |||||||||||||||
| | |
Federal Life Insurance Company(1)
|
| | | $ | 258 | | | | | $ | 13 | | | | | $ | 24 | | | | | | NA | | | | | | NA | | |
AEL | | |
American Equity Investment Life Holding Company
|
| | | $ | 60,380 | | | | | $ | 230 | | | | | $ | 3,275 | | | | | $ | 32.13 | | | | | $ | 2,863 | | |
CIA | | |
Citizens, Inc.
|
| | | $ | 1,651 | | | | | $ | 199 | | | | | $ | 253 | | | | | $ | 7.48 | | | | | $ | 375 | | |
CNO | | |
CNO Financial Group, Inc.
|
| | | $ | 32,705 | | | | | $ | 2,641 | | | | | $ | 4,212 | | | | | $ | 24.87 | | | | | $ | 4,172 | | |
FFG | | |
FBL Financial Group, Inc.
|
| | | $ | 9,892 | | | | | $ | 311 | | | | | $ | 737 | | | | | $ | 71.80 | | | | | $ | 1,790 | | |
IHC | | |
Independence Holding Company
|
| | | $ | 1,039 | | | | | $ | 278 | | | | | $ | 317 | | | | | $ | 27.95 | | | | | $ | 415 | | |
KCLI | | |
Kansas City Life Insurance Company
|
| | | $ | 4,511 | | | | | $ | 292 | | | | | $ | 450 | | | | | $ | 45.10 | | | | | $ | 437 | | |
NWLI | | |
National Western Life Group, Inc.
|
| | | $ | 12,138 | | | | | $ | 181 | | | | | $ | 811 | | | | | $ | 337.03 | | | | | $ | 1,158 | | |
SNFCA | | |
Security National Financial Corporation
|
| | | $ | 1,008 | | | | | $ | 69 | | | | | $ | 288 | | | | | $ | 5.40 | | | | | $ | 82 | | |
UTGN | | |
UTG, Inc.
|
| | | $ | 405 | | | | | $ | 6 | | | | | $ | 21 | | | | | $ | 25.00 | | | | | $ | 83 | | |
| | |
Market Prices
As of 12/22/2017 |
| |
Financial Data as of
September 30, 2017 |
| |
Key Pricing Ratios as of
December 22, 2017 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
Company Name
|
| |
Closing
Price ($) |
| |
Market
Value ($Mil) |
| |
Assets
($Mil) |
| |
Equity/
Assets (%) |
| |
ROAA
(%) |
| |
ROAE
(%) |
| |
Price/
Book (%) |
| |
Price/
Tangible Book (%) |
| |
Price/
TTM Earnings (x) |
| |
Price/
TTM Revenue (x) |
| ||||||||||||||||||||||||||||||
Federal Life Insurance Company | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
Maximum
|
| | | $ | 10.00 | | | | | $ | 46.00 | | | | | $ | 300 | | | | | | 26.10% | | | | | | 0.06% | | | | | | -0.22% | | | | | | 58.8% | | | | | | 58.8% | | | | | | NM | | | | | | 1.83x | | |
Midpoint
|
| | | $ | 10.00 | | | | | $ | 40.00 | | | | | $ | 294 | | | | | | 24.69% | | | | | | 0.12% | | | | | | -0.48% | | | | | | 55.1% | | | | | | 55.1% | | | | | | NM | | | | | | 1.60x | | |
Minimum
|
| | | $ | 10.00 | | | | | $ | 34.00 | | | | | $ | 288 | | | | | | 23.23% | | | | | | 0.18% | | | | | | -0.78% | | | | | | 50.8% | | | | | | 50.8% | | | | | | NM | | | | | | 1.37x | | |
Peer Group | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average
|
| | | $ | 64.08 | | | | | $ | 1,264.1 | | | | | $ | 13,748 | | | | | | 17.52% | | | | | | 0.88% | | | | | | 5.65% | | | | | | 93.9% | | | | | | 97.4% | | | | | | 19.56x | | | | | | 1.52x | | |
Median
|
| | | $ | 27.95 | | | | | $ | 436.7 | | | | | $ | 4,511 | | | | | | 14.93% | | | | | | 0.62% | | | | | | 5.38% | | | | | | 85.8% | | | | | | 85.8% | | | | | | 14.16x | | | | | | 1.31x | | |
All Public Life Insurance Companies | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
Average
|
| | | $ | 66.40 | | | | | $ | 10,482.5 | | | | | $ | 130,630 | | | | | | 12.98% | | | | | | 0.42% | | | | | | 1.29% | | | | | | 112.3% | | | | | | 119.8% | | | | | | 17.51x | | | | | | 1.35x | | |
Median
|
| | | $ | 51.48 | | | | | $ | 4,373.7 | | | | | $ | 45,699 | | | | | | 13.36% | | | | | | 0.59% | | | | | | 8.35% | | | | | | 98.6% | | | | | | 117.9% | | | | | | 12.81x | | | | | | 1.16x | | |
Name
|
| |
Age(1)
|
| |
Position
|
|
Joseph D. Austin | | |
90
|
| | Director and Executive Chairman | |
William S. Austin | | |
54
|
| | Director, President, and Chief Executive Officer | |
Anders Raaum | | |
53
|
| | Chief Financial Officer | |
Michael Austin | | |
60
|
| |
Director, Executive Vice President, and Chief of Marketing Officer
|
|
Wayne R. Ebersberger | | |
63
|
| | Director | |
William H. Springer | | |
88
|
| | Director | |
James H. Stacke | | |
79
|
| | Director | |
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
Non-Equity
Incentive Plan Compensation ($) |
| |
All Other
Compensation ($)(1) |
| |
Total
($) |
| ||||||||||||
Joseph D. Austin
Chairman and Chief Executive Officer |
| |
2017
|
| | | $ | 418,140 | | | | | | — | | | | | $ | 25,333 | | | | | $ | 443,473 | | |
|
2016
|
| | | | 404,000 | | | | | | — | | | | | | 23,713 | | | | | | 427,713 | | | ||
William S. Austin
President and Chief Operating Officer |
| |
2017
|
| | | | 265,000 | | | | | | — | | | | | | 33,184 | | | | | | 298,184 | | |
|
2016
|
| | | | 254,702 | | | | | | — | | | | | | 32,897 | | | | | | 287,599 | | | ||
Anders Raaum
Chief Financial Officer |
| |
2017
|
| | | | 194,953 | | | | | | — | | | | | | 5,813 | | | | | | 200,766 | | |
|
2016
|
| | | | 190,740 | | | | | | — | | | | | | 5,722 | | | | | | 196,462 | | | ||
Michael Austin
Executive Vice President and Chief Marketing Officer |
| |
2017
|
| | | | 245,861 | | | | | | — | | | | | | 24,892 | | | | | | 270,753 | | |
|
2016
|
| | | | 238,700 | | | | | | — | | | | | | 24,914 | | | | | | 263,614 | | |
Name
|
| |
Title
|
| |
Equity Award(1)(2)
|
|
Joseph D. Austin | | | Chairman | | | Options to purchase 40,000 shares and 60,000 shares of restricted stock | |
William S. Austin | | | President and Chief Operating Officer | | | Options to purchase 70,000 shares and 36,666 shares of restricted stock | |
Anders Raaum | | | Chief Financial Officer | | | Options to purchase 35,000 shares and 16,667 shares of restricted stock | |
Michael Austin | | | Executive Vice President and Chief Marketing Officer | | | Options to purchase 35,000 shares and 16,667 shares of restricted stock | |
Judy Manning | | | Secretary | | | 10,000 shares of restricted stock | |
Wayne R. Ebersberger | | | Director | | | Options to purchase 11,667 shares | |
William H. Springer | | | Director | | | Options to purchase 11,667 shares | |
James H. Stacke | | | Director | | | Options to purchase 11,667 shares | |
Name
|
| |
Fees Earned
or Paid in Cash |
| |
Non-Equity
Incentive Plan Compensation(1) |
| |
Total
|
| |||||||||
Wayne R. Ebersberger
|
| | | $ | 38,350 | | | | | $ | -0- | | | | | $ | 38,350 | | |
William H. Springer
|
| | | $ | 36,950 | | | | | $ | -0- | | | | | $ | 36,950 | | |
James H. Stacke
|
| | | $ | 36,950 | | | | | $ | -0- | | | | | $ | 36,950 | | |
| | |
Page
|
| |||
Audited Consolidated Financial Statements | | | | | | | |
| | | | F-2 | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-7 | | | |
Unaudited Consolidated Financial Statements | | | | | | | |
| | | | F-31 | | | |
| | | | F-32 | | | |
| | | | F-33 | | | |
| | | | F-34 | | | |
| | | | F-35 | | |
(in thousands of dollars)
|
| |
2017
|
| |
2016
|
| ||||||
Assets | | | | | | | | | | | | | |
Investments | | | | | | | | | | | | | |
Securities available for sale, at fair value:
|
| | | | | | | | | | | | |
Fixed maturities (amortized cost; 2017, $183,432; 2016, $170,515)
|
| | | $ | 188,452 | | | | | $ | 174,880 | | |
Equity securities
|
| | | | 6,209 | | | | | | 7,927 | | |
Policy loans
|
| | | | 9,852 | | | | | | 10,059 | | |
Derivative instruments, at fair value
|
| | | | 395 | | | | | | 59 | | |
Total investments
|
| | | | 204,908 | | | | | | 192,925 | | |
Cash and cash equivalents
|
| | | | 4,085 | | | | | | 8,389 | | |
Real estate, property and equipment
|
| | | | 2,151 | | | | | | 2,297 | | |
Accrued investment income
|
| | | | 1,886 | | | | | | 1,832 | | |
Accounts receivable
|
| | | | 538 | | | | | | 575 | | |
Reinsurance recoverables
|
| | | | 3,727 | | | | | | 2,107 | | |
Prepaid reinsurance premiums
|
| | | | 1,358 | | | | | | 924 | | |
Deferred policy acquisition costs, net
|
| | | | 12,179 | | | | | | 11,940 | | |
Deferred sales inducement costs, net
|
| | | | 867 | | | | | | 315 | | |
Deferred tax asset, net
|
| | | | 458 | | | | | | 664 | | |
Other assets
|
| | | | 202 | | | | | | 254 | | |
Separate account asset
|
| | | | 24,779 | | | | | | 21,513 | | |
Total Assets
|
| | | | 257,138 | | | | | | 243,735 | | |
Liabilities | | | | | | | | | | | | | |
Policy liabilities and accruals | | | | | | | | | | | | | |
Policyholder account balance
|
| | | | 109,823 | | | | | | 99,440 | | |
Future life policy benefits
|
| | | | 71,927 | | | | | | 73,097 | | |
Future accident and health policy benefits
|
| | | | 386 | | | | | | 351 | | |
Reserve for deposit type contracts
|
| | | | 10,850 | | | | | | 10,529 | | |
Other policyholder funds
|
| | | | 1,970 | | | | | | 1,889 | | |
Unearned revenue
|
| | | | 1,387 | | | | | | 1,396 | | |
Deferred reinsurance settlements
|
| | | | 2,949 | | | | | | 1,512 | | |
Taxes payable
|
| | | | 7 | | | | | | 6 | | |
Other liabilities
|
| | | | 1,703 | | | | | | 1,140 | | |
Separate account liability
|
| | | | 24,779 | | | | | | 21,513 | | |
Total Liabilities
|
| | | | 225,781 | | | | | | 210,873 | | |
Equity | | | | | | | | | | | | | |
Retained earnings
|
| | | | 26,600 | | | | | | 29,313 | | |
Accumulated other comprehensive income
|
| | | | 4,757 | | | | | | 3,549 | | |
Total Equity
|
| | | | 31,357 | | | | | | 32,862 | | |
Total Liabilities and Equity
|
| | | $ | 257,138 | | | | | $ | 243,735 | | |
|
(in thousands of dollars)
|
| |
2017
|
| |
2016
|
| ||||||
Revenues | | | | | | | | | | | | | |
Insurance revenues
|
| | | $ | 12,058 | | | | | $ | 14,427 | | |
Net investment income
|
| | | | 8,523 | | | | | | 8,821 | | |
Net realized investment gains
|
| | | | 2,228 | | | | | | 1,783 | | |
Other revenues
|
| | | | 194 | | | | | | 173 | | |
Total Revenues
|
| | | | 23,003 | | | | | | 25,204 | | |
Benefits and expenses | | | | | | | | | | | | | |
Policyholder benefits
|
| | | | 13,712 | | | | | | 16,069 | | |
Interest credit to policyholders
|
| | | | 386 | | | | | | 315 | | |
Operating costs and expenses
|
| | | | 7,889 | | | | | | 8,099 | | |
Amortization of deferred acquisition and sales inducement costs
|
| | | | 2,108 | | | | | | 1,876 | | |
Taxes, licenses and fees
|
| | | | 716 | | | | | | 722 | | |
Dividends to policyholders
|
| | | | 66 | | | | | | 86 | | |
Total Benefits and Expenses
|
| | | | 24,877 | | | | | | 27,167 | | |
Net loss before taxes
|
| | | | (1,874) | | | | | | (1,963) | | |
Tax expense
|
| | | | 34 | | | | | | 34 | | |
Net loss
|
| | | $ | (1,908) | | | | | $ | (1,997) | | |
Other Comprehensive Income (Loss), net of tax: | | | | | | | | | | | | | |
Unrealized holding gains (losses) arising during the year (net of tax expense (benefit) of: 2017 $236; 2016 ($185))
|
| | | | 458 | | | | | | (359) | | |
Adjustment to deferred acquisition costs (net of tax expense (benefit) of: 2017 ($28); 2016 $1)
|
| | | | (55) | | | | | | 3 | | |
Other Comprehensive Income (Loss)
|
| | | | 403 | | | | | | (356) | | |
Comprehensive Loss
|
| | | $ | (1,505) | | | | | $ | (2,353) | | |
|
(in thousands of dollars)
|
| |
Accumulated Other
Comprehensive Income |
| |
Retained
Earnings |
| |
Total
|
| |||||||||
Balance, January 1, 2016
|
| | | $ | 3,905 | | | | | $ | 31,310 | | | | | $ | 35,215 | | |
Net loss
|
| | | | — | | | | | | (1,997) | | | | | | (1,997) | | |
Other Comprehensive Loss
|
| | | | (356) | | | | | | — | | | | | | (356) | | |
Balance, December 31, 2016
|
| | | $ | 3,549 | | | | | $ | 29,313 | | | | | $ | 32,862 | | |
|
(in thousands of dollars)
|
| |
Accumulated Other
Comprehensive Income |
| |
Retained
Earnings |
| |
Total
|
| |||||||||
Balance, January 1, 2017
|
| | | $ | 3,549 | | | | | $ | 29,313 | | | | | $ | 32,862 | | |
Net loss
|
| | | | — | | | | | | (1,908) | | | | | | (1,908) | | |
Other Comprehensive Income
|
| | | | 403 | | | | | | — | | | | | | 403 | | |
Cumulative effect of adoption of new accounting principle (see Note 3)
|
| | | | 805 | | | | | | (805) | | | | | | — | | |
Balance, December 31, 2017
|
| | | $ | 4,757 | | | | | $ | 26,600 | | | | | $ | 31,357 | | |
|
(in thousands of dollars)
|
| |
2017
|
| |
2016
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (1,908) | | | | | $ | (1,997) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Realized investment gains, net
|
| | | | (2,228) | | | | | | (1,783) | | |
Amortization on investments
|
| | | | (42) | | | | | | (180) | | |
Depreciation
|
| | | | 271 | | | | | | 263 | | |
Deferred taxes
|
| | | | (1) | | | | | | 1 | | |
Deferred insurance acquisition costs
|
| | | | (2,354) | | | | | | (2,267) | | |
Deferred sales inducement costs
|
| | | | (545) | | | | | | (246) | | |
Interest and amortization of deferred acquisition and sales inducement costs
|
| | | | 2,108 | | | | | | 1,876 | | |
Change in accrued investment income
|
| | | | (54) | | | | | | 119 | | |
Change in receivables
|
| | | | 37 | | | | | | (23) | | |
Change in reinsurance recoverable
|
| | | | (1,620) | | | | | | (1,696) | | |
Change in prepaid reinsurance premiums
|
| | | | (434) | | | | | | (821) | | |
Change in policy benefits
|
| | | | (1,053) | | | | | | 349 | | |
Change in unearned revenue
|
| | | | (8) | | | | | | 162 | | |
Change in deferred reinsurance settlements
|
| | | | 1,437 | | | | | | 1,512 | | |
Change in other assets and liabilities
|
| | | | 615 | | | | | | (325) | | |
Net cash used in operating activities
|
| | | $ | (5,779) | | | | | $ | (5,056) | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Proceeds from investments sold or matured:
|
| | | | | | | | | | | | |
Fixed maturity securities
|
| | | | 23,130 | | | | | | 26,986 | | |
Equity securities
|
| | | | 4,043 | | | | | | 3,974 | | |
Derivatives
|
| | | | 154 | | | | | | 0 | | |
Policy loans
|
| | | | 206 | | | | | | 70 | | |
Costs of investments purchased:
|
| | | | | | | | | | | | |
Fixed maturity securities
|
| | | | (35,816) | | | | | | (28,479) | | |
Equity securities
|
| | | | (327) | | | | | | (486) | | |
Derivatives
|
| | | | (255) | | | | | | (60) | | |
Real estate additions
|
| | | | (84) | | | | | | (226) | | |
Other investing activities
|
| | | | (238) | | | | | | (17) | | |
Purchase of property and equipment
|
| | | | (41) | | | | | | (109) | | |
Net cash (used in) provided by investing activities
|
| | | | (9,228) | | | | | | 1,653 | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Policyholder account balances:
|
| | | | | | | | | | | | |
Deposits
|
| | | | 19,300 | | | | | | 14,559 | | |
Withdrawals
|
| | | | (8,482) | | | | | | (9,366) | | |
Net transfers (to) from separate accounts
|
| | | | (115) | | | | | | 46 | | |
Net cash provided by financing activities
|
| | | | 10,703 | | | | | | 5,239 | | |
Net (decrease) increase in cash
|
| | | | (4,304) | | | | | | 1,836 | | |
Cash, beginning of year
|
| | | | 8,389 | | | | | | 6,553 | | |
Cash, end of year
|
| | | $ | 4,085 | | | | | $ | 8,389 | | |
|
| | |
December 31, 2017
|
| |||||||||||||||||||||
| | |
Amortized
Cost |
| |
Gross Unrealized
|
| |
Fair
Value |
| |||||||||||||||
| | |
Gains
|
| |
Losses
|
| ||||||||||||||||||
U.S. government
|
| | | $ | 4,075 | | | | | $ | 207 | | | | | $ | (120) | | | | | $ | 4,162 | | |
States, political subdivisions, other
|
| | | | 26,850 | | | | | | 876 | | | | | | (112) | | | | | | 27,614 | | |
Corporate
|
| | | | 106,479 | | | | | | 3,459 | | | | | | (543) | | | | | | 109,395 | | |
Residential mortgage-backed securities
|
| | | | 41,818 | | | | | | 1,480 | | | | | | (212) | | | | | | 43,086 | | |
Commercial mortgage-backed securities
|
| | | | 4,210 | | | | | | 26 | | | | | | (41) | | | | | | 4,195 | | |
Total fixed maturity securities
|
| | | | 183,432 | | | | | | 6,048 | | | | | | (1,028) | | | | | | 188,452 | | |
Equity securities
|
| | | | 4,443 | | | | | | 1,766 | | | | | | — | | | | | | 6,209 | | |
Total fixed maturity and equity securities
|
| | | $ | 187,875 | | | | | $ | 7,814 | | | | | $ | (1,028) | | | | | $ | 194,661 | | |
|
| | |
December 31, 2016
|
| |||||||||||||||||||||
| | |
Amortized
Cost |
| |
Gross Unrealized
|
| |
Fair
Value |
| |||||||||||||||
| | |
Gains
|
| |
Losses
|
| ||||||||||||||||||
U.S. government
|
| | | $ | 4,087 | | | | | $ | 267 | | | | | $ | (140) | | | | | $ | 4,214 | | |
States, political subdivisions, other
|
| | | | 19,627 | | | | | | 616 | | | | | | (130) | | | | | | 20,113 | | |
Corporate
|
| | | | 101,698 | | | | | | 3,452 | | | | | | (974) | | | | | | 104,176 | | |
Residential mortgage-backed securities
|
| | | | 35,282 | | | | | | 1,450 | | | | | | (314) | | | | | | 36,418 | | |
Commercial mortgage-backed securities
|
| | | | 9,821 | | | | | | 228 | | | | | | (90) | | | | | | 9,959 | | |
Total fixed maturity securities
|
| | | | 170,515 | | | | | | 6,013 | | | | | | (1,648) | | | | | | 174,880 | | |
Equity securities
|
| | | | 6,202 | | | | | | 1,745 | | | | | | (20) | | | | | | 7,927 | | |
Total fixed maturity and equity securities
|
| | | $ | 176,717 | | | | | $ | 7,758 | | | | | $ | (1,668) | | | | | $ | 182,807 | | |
|
| | |
December 31, 2017
|
| |
December 31, 2016
|
| ||||||||||||||||||
| | |
Amortized
Cost |
| |
Fair
Value |
| |
Amortized
Cost |
| |
Fair
Value |
| ||||||||||||
Due in one year or less
|
| | | $ | 2,247 | | | | | $ | 2,288 | | | | | $ | 5,038 | | | | | $ | 5,161 | | |
Due after one year through five years
|
| | | | 40,926 | | | | | | 42,809 | | | | | | 34,101 | | | | | | 36,605 | | |
Due after five years through ten years
|
| | | | 66,739 | | | | | | 68,151 | | | | | | 66,029 | | | | | | 66,648 | | |
Due after ten years
|
| | | | 27,492 | | | | | | 27,923 | | | | | | 20,244 | | | | | | 20,089 | | |
Mortgage-backed securities
|
| | | | 46,028 | | | | | | 47,281 | | | | | | 45,103 | | | | | | 46,377 | | |
Total
|
| | | $ | 183,432 | | | | | $ | 188,452 | | | | | $ | 170,515 | | | | | $ | 174,880 | | |
|
| | |
2017
|
| |||||||||||||||
| | |
Fixed
Maturities |
| |
Equity
Securities |
| |
Derivative
Instruments |
| |||||||||
Proceeds from sales or maturities
|
| | | $ | 23,130 | | | | | $ | 4,043 | | | | | $ | 154 | | |
Gross gains from sales or maturities
|
| | | | 200 | | | | | | 1,957 | | | | | | 183 | | |
Gross losses from sales or maturities
|
| | | | (23) | | | | | | — | | | | | | (89) | | |
| | |
2016
|
| |||||||||
| | |
Fixed
Maturities |
| |
Equity
Securities |
| ||||||
Proceeds from sales or maturities
|
| | | $ | 26,986 | | | | | $ | 3,974 | | |
Gross gains from sales or maturities
|
| | | | 208 | | | | | | 1,714 | | |
Gross losses from sales or maturities
|
| | | | (78) | | | | | | (61) | | |
2017
|
| |
Less than 12 months
|
| |
12 months or longer
|
| |
Total
|
| |||||||||||||||||||||||||||
Description of Securities
|
| |
Fair
Value |
| |
Gross
Unrealized Loss |
| |
Fair
Value |
| |
Gross
Unrealized Loss |
| |
Fair
Value |
| |
Gross
Unrealized Loss |
| ||||||||||||||||||
U.S. government
|
| | | $ | 1,161 | | | | | $ | (31) | | | | | $ | 1,782 | | | | | $ | (89) | | | | | $ | 2,943 | | | | | $ | (120) | | |
States, political subdivisions, other
|
| | | | 8,773 | | | | | | (86) | | | | | | 714 | | | | | | (26) | | | | | | 9,487 | | | | | | (112) | | |
Corporate
|
| | | | 10,935 | | | | | | (169) | | | | | | 6,853 | | | | | | (374) | | | | | | 17,788 | | | | | | (543) | | |
Residential mortgage-backed securities
|
| | | | 11,517 | | | | | | (126) | | | | | | 2,263 | | | | | | (86) | | | | | | 13,780 | | | | | | (212) | | |
Commercial mortgage-backed securities
|
| | | | 2,039 | | | | | | (27) | | | | | | 77 | | | | | | (14) | | | | | | 2,116 | | | | | | (41) | | |
Equity securities
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 34,425 | | | | | $ | (439) | | | | | $ | 11,689 | | | | | $ | (589) | | | | | $ | 46,114 | | | | | $ | (1,028) | | |
|
2016
|
| |
Less than 12 months
|
| |
12 months or longer
|
| |
Total
|
| |||||||||||||||||||||||||||
Description of Securities
|
| |
Fair
Value |
| |
Gross
Unrealized Loss |
| |
Fair
Value |
| |
Gross
Unrealized Loss |
| |
Fair
Value |
| |
Gross
Unrealized Loss |
| ||||||||||||||||||
U.S. government
|
| | | $ | 2,932 | | | | | $ | (140) | | | | | $ | — | | | | | $ | — | | | | | $ | 2,932 | | | | | $ | (140) | | |
States, political subdivisions, other
|
| | | | 5,983 | | | | | | (130) | | | | | | — | | | | | | — | | | | | | 5,983 | | | | | | (130) | | |
Corporate
|
| | | | 25,055 | | | | | | (791) | | | | | | 3,239 | | | | | | (183) | | | | | | 28,294 | | | | | | (974) | | |
Residential mortgage-backed securities
|
| | | | 11,367 | | | | | | (314) | | | | | | — | | | | | | — | | | | | | 11,367 | | | | | | (314) | | |
Commercial mortgage-backed securities
|
| | | | 979 | | | | | | (25) | | | | | | 538 | | | | | | (65) | | | | | | 1,517 | | | | | | (90) | | |
Equity securities
|
| | | | 183 | | | | | | (3) | | | | | | 180 | | | | | | (17) | | | | | | 363 | | | | | | (20) | | |
Total
|
| | | $ | 46,499 | | | | | $ | (1,403) | | | | | $ | 3,957 | | | | | $ | (265) | | | | | $ | 50,456 | | | | | $ | (1,668) | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Fixed maturity securities
|
| | | $ | 7,350 | | | | | $ | 7,818 | | |
Equity securities
|
| | | | 181 | | | | | | 253 | | |
Real estate
|
| | | | 149 | | | | | | 122 | | |
Cash equivalents
|
| | | | 32 | | | | | | 9 | | |
Policy loans
|
| | | | 723 | | | | | | 737 | | |
Other
|
| | | | 685 | | | | | | 470 | | |
Subtotal
|
| | | | 9,120 | | | | | | 9,409 | | |
Investment expense
|
| | | | (597) | | | | | | (588) | | |
Net investment income
|
| | | $ | 8,523 | | | | | $ | 8,821 | | |
|
| | |
December 31, 2017
|
| |||||||||||||||||||||
| | |
Fair
Value |
| |
Gross Unrealized
|
| |
Net
Unrealized Gain (Loss) |
| |||||||||||||||
| | |
Gains
|
| |
Losses
|
| ||||||||||||||||||
Fixed income securities
|
| | | $ | 188,452 | | | | | $ | 6,048 | | | | | $ | (1,028) | | | | | $ | 5,020 | | |
Equity securities
|
| | | | 6,209 | | | | | | 1,766 | | | | | | — | | | | | | 1,766 | | |
Net unrealized capital gains
|
| | | | | | | | | | | | | | | | | | | | | $ | 6,786 | | |
|
| | |
December 31, 2016
|
| |||||||||||||||||||||
| | |
Fair
Value |
| |
Gross Unrealized
|
| |
Net
Unrealized Gain (Loss) |
| |||||||||||||||
| | |
Gains
|
| |
Losses
|
| ||||||||||||||||||
Fixed income securities
|
| | | $ | 174,880 | | | | | $ | 6,013 | | | | | $ | (1,648) | | | | | $ | 4,365 | | |
Equity securities
|
| | | | 7,927 | | | | | | 1,745 | | | | | | (20) | | | | | | 1,725 | | |
Net unrealized capital gains
|
| | | | | | | | | | | | | | | | | | | | | $ | 6,090 | | |
|
| | |
Carrying/Fair
Value 12/31/2017 |
| |
Carrying/Fair
Value 12/31/2016 |
| ||||||
Financial instruments recorded as assets: | | | | | | | | | | | | | |
Fixed maturity securities
|
| | | $ | 188,452 | | | | | $ | 174,880 | | |
Equity securities
|
| | | | 6,209 | | | | | | 7,927 | | |
Policy loans
|
| | | | 9,852 | | | | | | 10,059 | | |
Derivative instruments
|
| | | | 395 | | | | | | 59 | | |
Cash and cash equivalents
|
| | | | 4,085 | | | | | | 8,389 | | |
Separate account
|
| | | | 24,779 | | | | | | 21,513 | | |
Financial Instruments recorded as liabilities: | | | | | | | | | | | | | |
Policyholder account balance:
|
| | | | | | | | | | | | |
Interest sensitive life contracts
|
| | | | 41,078 | | | | | | 40,508 | | |
Annuities
|
| | | | 68,745 | | | | | | 58,932 | | |
Dividend accumulations and other(1)
|
| | | | 7,076 | | | | | | 7,413 | | |
Separate account
|
| | | | 24,779 | | | | | | 21,513 | | |
| | |
Recurring Fair Value Measurements
at December 31, 2017 Using: |
| |||||||||||||||||||||
Description
|
| |
Fair Values
|
| |
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
Fixed maturity securities: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government
|
| | | $ | 4,162 | | | | | $ | 4,162 | | | | | $ | — | | | | | $ | — | | |
States, political subdivisions, other
|
| | | | 27,614 | | | | | | — | | | | | | 27,614 | | | | | | — | | |
Corporate
|
| | | | 109,395 | | | | | | — | | | | | | 109,395 | | | | | | — | | |
Residential mortgage-backed securities
|
| | | | 43,086 | | | | | | — | | | | | | 43,086 | | | | | | — | | |
Commercial mortgage-backed securities
|
| | | | 4,195 | | | | | | — | | | | | | 4,195 | | | | | | — | | |
Total fixed maturities
|
| | | | 188,452 | | | | | | 4,162 | | | | | | 184,290 | | | | | | — | | |
Equities
|
| | | | 6,209 | | | | | | 4,027 | | | | | | — | | | | | | 2,182 | | |
Derivative instruments
|
| | | | 395 | | | | | | 395 | | | | | | — | | | | | | — | | |
Cash equivalents(1)
|
| | | | 4,085 | | | | | | 4,085 | | | | | | — | | | | | | — | | |
Separate accounts(2)
|
| | | | 24,779 | | | | | | 24,779 | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 223,920 | | | | | $ | 37,448 | | | | | $ | 184,290 | | | | | $ | 2,182 | | |
|
| | |
Recurring Fair Value Measurements
at December 31, 2016 Using: |
| |||||||||||||||||||||
Description
|
| |
Fair Values
|
| |
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
Fixed maturity securities: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government
|
| | | $ | 4,214 | | | | | $ | 4,214 | | | | | $ | — | | | | | $ | — | | |
States, political subdivisions, other
|
| | | | 20,113 | | | | | | — | | | | | | 20,113 | | | | | | — | | |
Corporate
|
| | | | 104,176 | | | | | | — | | | | | | 104,176 | | | | | | — | | |
Residential mortgage-backed securities
|
| | | | 36,418 | | | | | | — | | | | | | 36,418 | | | | | | — | | |
Commercial mortgage-backed securities
|
| | | | 9,959 | | | | | | — | | | | | | 9,959 | | | | | | — | | |
Total fixed maturities
|
| | | | 174,880 | | | | | | 4,214 | | | | | | 170,666 | | | | | | — | | |
Equities
|
| | | | 7,927 | | | | | | 4,758 | | | | | | — | | | | | | 3,169 | | |
Derivative instruments
|
| | | | 59 | | | | | | 59 | | | | | | — | | | | | | — | | |
Cash equivalents(1)
|
| | | | 5,670 | | | | | | 5,670 | | | | | | — | | | | | | — | | |
Separate accounts(2)
|
| | | | 21,513 | | | | | | 21,513 | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 210,049 | | | | | $ | 36,214 | | | | | $ | 170,666 | | | | | $ | 3,169 | | |
|
Fair value at December 31, 2017
|
| | | | | | | |
Primary Valuation
Technique(s) |
| |
Significant
Unobservable Inputs |
| |
Range
|
| |
Weighted
Average |
| ||||||||||||
|
Min
|
| |
Max
|
| ||||||||||||||||||||||||||
Rreef America REIT II
|
| | | $ | 2,150 | | | |
Discounted Cash Flows
|
| | Discounted Rate | | | | | 5.50% | | | | | | 9.00% | | | | | | 6.61% | | |
| | | | | | | | | | | |
Term capitalization rate
|
| | | | 4.00% | | | | | | 8.25% | | | | | | 5.62% | | |
Fair value at December 31, 2016
|
| | | | | | | |
Primary Valuation
Technique(s) |
| |
Significant
Unobservable Inputs |
| |
Range
|
| |
Weighted
Average |
| ||||||||||||
|
Min
|
| |
Max
|
| ||||||||||||||||||||||||||
Rreef America REIT II
|
| | | $ | 3,074 | | | |
Discounted cash flows
|
| | Discounted Rate | | | | | 5.50% | | | | | | 10.75% | | | | | | 6.71% | | |
| | | | | | | | | | | |
Term capitalization rate
|
| | | | 4.00% | | | | | | 9.50% | | | | | | 5.70% | | |
| | |
2017
|
| |
2016
|
| ||||||
Balance, beginning of year
|
| | | $ | 3,169 | | | | | $ | 6,006 | | |
Gains included in net income
|
| | | | 396 | | | | | | 1,131 | | |
Settlements
|
| | | | (1,000) | | | | | | (3,000) | | |
Unrealized gains (losses) in OCI
|
| | | | (383) | | | | | | (968) | | |
Balance, end of year
|
| | | $ | 2,182 | | | | | $ | 3,169 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Balance, beginning of year
|
| | | $ | 11,940 | | | | | $ | 12,288 | | |
Capitalization of commissions, sales and issue expenses
|
| | | | 2,437 | | | | | | 2,263 | | |
Accrual of interest
|
| | | | 544 | | | | | | 530 | | |
Amortization
|
| | | | (2,659) | | | | | | (2,462) | | |
Change in Shadow DAC
|
| | | | (83) | | | | | | (679) | | |
Balance end of year
|
| | | $ | 12,179 | | | | | $ | 11,940 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Balance, beginning of year
|
| | | $ | 315 | | | | | $ | 13 | | |
Capitalization of commissions and issue expenses
|
| | | | 545 | | | | | | 246 | | |
Accrual of interest
|
| | | | 18 | | | | | | — | | |
Amortization
|
| | | | (11) | | | | | | 56 | | |
Balance end of year
|
| | | $ | 867 | | | | | $ | 315 | | |
|
| | |
Unrealized
Investment Gains (losses) |
| |
Shadow DAC
|
| |
Accumulated
Other Comprehensive Income (loss) |
| |||||||||
Balance, December 31, 2015
|
| | | $ | 4,356 | | | | | $ | (451) | | | | | $ | 3,905 | | |
Available-for-sale investment gains (losses) arising during the year:
|
| | | | | | | | | | | | | | | | | | |
Fixed maturity securities net of tax benefit of $29
|
| | | | (56) | | | | | | | | | | | | (56) | | |
Equity securities net of tax benefit of $156
|
| | | | (303) | | | | | | | | | | | | (303) | | |
Change in Shadow DAC net of tax of $1
|
| | | | | | | | | | 3 | | | | | | 3 | | |
Balance, December 31, 2016
|
| | | $ | 3,997 | | | | | $ | (448) | | | | | $ | 3,549 | | |
Available-for-sale investment gains (losses) arising during the year:
|
| | | | | | | | | | | | | | | | | | |
Fixed maturity securities net of tax of $227
|
| | | | 440 | | | | | | | | | | | | 440 | | |
Equity securities net of tax of $9
|
| | | | 18 | | | | | | | | | | | | 18 | | |
Change in Shadow DAC net of tax benefit of $28
|
| | | | | | | | | | (55) | | | | | | (55) | | |
Cumulative effect of adoption of new accounting principle (see Note 3)
|
| | | | 904 | | | | | | (99) | | | | | | 805 | | |
Balance, December 31, 2017
|
| | | $ | 5,359 | | | | | $ | (602) | | | | | $ | 4,757 | | |
| | |
December 31, 2017
|
| |
December 31, 2016
|
| ||||||
Balance, beginning of year
|
| | | $ | 21,513 | | | | | $ | 23,335 | | |
Cost of bonds and stocks acquired
|
| | | | 299 | | | | | | 80 | | |
Unrealized valuation increase
|
| | | | 3,275 | | | | | | 91 | | |
Total gain on disposals
|
| | | | 186 | | | | | | 1,820 | | |
Deduction consideration for bonds and stocks disposed of
|
| | | | (562) | | | | | | (3,813) | | |
Other assets
|
| | | | 68 | | | | | | — | | |
Balance end of year
|
| | | $ | 24,779 | | | | | $ | 21,513 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Traditional life contracts
|
| | | $ | 62,311 | | | | | $ | 63,141 | | |
Immediate annuities and pension plan
|
| | | | 6,774 | | | | | | 7,135 | | |
Supplemental contracts with life contingencies
|
| | | | 2,522 | | | | | | 2,500 | | |
Accident and health
|
| | | | 386 | | | | | | 351 | | |
Accident death benefits
|
| | | | 132 | | | | | | 130 | | |
Disability
|
| | | | 188 | | | | | | 191 | | |
| | | | $ | 72,313 | | | | | $ | 73,448 | | |
|
Product
|
| |
Mortality
|
| |
Interest Rate
|
| |
Estimation Method
|
|
Immediate fixed annuities | | | 1971, 1983, 2000, and 2012 annuity mortality tables |
| | Rates range from 4% to 6.5% |
| | Present value of expected future benefits based on historical experience | |
Traditional life insurance | | | Actual company experience plus loading |
| | Rates range from 2.5% to 5.75% |
| | Net level premium reserve method using the Company’s withdrawal experience |
|
Accident and health | | | Actual company experience plus loading |
| | n/a | | | Unearned premium; additional contract reserves for mortality risk |
|
| | |
2017
|
| |
2016
|
| ||||||
Interest sensitive life contracts
|
| | | $ | 41,078 | | | | | $ | 40,508 | | |
Annuities
|
| | | | 68,745 | | | | | | 58,932 | | |
| | | | $ | 109,823 | | | | | $ | 99,440 | | |
|
Product
|
| |
Interest Rate
|
| |
Withdrawal/surrender charges
|
|
Interest-sensitive life insurance | | | Rates range from 3% to 7% | | | Either a percentage of account balance or a dollar amount grading off generally over 20 years | |
Fixed annuities | | | Rates range from 0% to 8% | | | Either a declining or level charge generally over 9 years or less | |
Other investment contracts | | | Rates range from 2% to 6% | | | No explicit charge assumed | |
| | |
2017
|
| |
2016
|
| ||||||
Balance, beginning of year
|
| | | $ | 99,440 | | | | | $ | 94,691 | | |
Deposits
|
| | | | 17,994 | | | | | | 13,005 | | |
Interests credited
|
| | | | 4,353 | | | | | | 3,932 | | |
Benefits
|
| | | | (2,734) | | | | | | (2,446) | | |
Surrenders and partial withdrawals
|
| | | | (4,835) | | | | | | (5,769) | | |
COI charges
|
| | | | (2,973) | | | | | | (2,852) | | |
Contract charges
|
| | | | (1,307) | | | | | | (1,167) | | |
Net transfers from separate accounts
|
| | | | (115) | | | | | | 46 | | |
Balance, end of year
|
| | | $ | 109,823 | | | | | $ | 99,440 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Payout annuities without life contingencies
|
| | | $ | 3,774 | | | | | $ | 3,116 | | |
Dividend accumulations and other
|
| | | | 7,076 | | | | | | 7,413 | | |
| | | | $ | 10,850 | | | | | $ | 10,529 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Land
|
| | | $ | 405 | | | | | $ | 405 | | |
Building and other
|
| | | | 8,378 | | | | | | 8,294 | | |
| | | | | 8,783 | | | | | | 8,699 | | |
Accumulated depreciation
|
| | | | (6,828) | | | | | | (6,712) | | |
Real Estate, net
|
| | | $ | 1,955 | | | | | $ | 1,987 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
EDP equipment
|
| | | $ | 3,955 | | | | | $ | 3,963 | | |
Furniture
|
| | | | 1,522 | | | | | | 1,501 | | |
EDP equipment & furniture cost
|
| | | | 5,477 | | | | | | 5,464 | | |
Accumulated depreciation
|
| | | | (5,281) | | | | | | (5,154) | | |
Property and Equipment, net
|
| | | $ | 196 | | | | | $ | 310 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Current
|
| | | $ | 34 | | | | | $ | 34 | | |
Deferred
|
| | | | — | | | | | | — | | |
Provision for income tax
|
| | | $ | 34 | | | | | $ | 34 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Income taxes at statutory rate
|
| | | $ | (637) | | | | | $ | (667) | | |
Dividends received deduction
|
| | | | — | | | | | | — | | |
Tax effect from change in enacted tax rate
|
| | | | 805 | | | | | | — | | |
Other
|
| | | | (134) | | | | | | (701) | | |
Income tax (benefit) expense
|
| | | $ | 34 | | | | | $ | 34 | | |
Effective tax rate
|
| | | | -1.8% | | | | | | -1.7% | | |
| | |
2017
|
| |
2016
|
| ||||||
Deferred federal tax assets: | | | | | | | | | | | | | |
Difference between financial reporting and the tax basis of: | | | | | | | | | | | | | |
Operating loss carry forward
|
| | | $ | 5,859 | | | | | $ | 9,567 | | |
Other than temporary impairments
|
| | | | 947 | | | | | | 1,545 | | |
Deferred premiums
|
| | | | 734 | | | | | | 1,465 | | |
Life policy reserves
|
| | | | 600 | | | | | | 103 | | |
Other
|
| | | | 380 | | | | | | 745 | | |
Deferred reinsurance settlements
|
| | | | 619 | | | | | | 514 | | |
Total deferred tax assets
|
| | | $ | 9,139 | | | | | | 13,939 | | |
Deferred federal tax liabilities: | | | | | | | | | | | | | |
Difference between financial reporting and the tax basis of: | | | | | | | | | | | | | |
Deferred acquisition costs and sales inducements
|
| | | $ | 2,147 | | | | | | 3,215 | | |
Net unrealized gains
|
| | | | 1,421 | | | | | | 2,064 | | |
Reinsurance recoverable
|
| | | | 766 | | | | | | 716 | | |
Amortized discount on bonds
|
| | | | 138 | | | | | | 527 | | |
Other
|
| | | | 143 | | | | | | 516 | | |
Fixed assets
|
| | | | 53 | | | | | | 89 | | |
Total deferred tax liabilities
|
| | | | 4,668 | | | | | | 7,127 | | |
Net
|
| | | | 4,471 | | | | | | 6,812 | | |
Less valuation allowance
|
| | | | (4,013) | | | | | | (6,148) | | |
Net deferred tax asset
|
| | | $ | 458 | | | | | $ | 664 | | |
|
Expiring
|
| | |||||
2018
|
| | | $ | 167 | | |
2019
|
| | | | 1,590 | | |
2020
|
| | | | 2,296 | | |
2021
|
| | | | 651 | | |
2022
|
| | | | 520 | | |
2023
|
| | | | 861 | | |
2024
|
| | | | 1,762 | | |
2025
|
| | | | 7,836 | | |
2026
|
| | | | 2,188 | | |
2027
|
| | | | 1,353 | | |
2028
|
| | | | 2,664 | | |
2029
|
| | | | 509 | | |
2030
|
| | | | 2,240 | | |
2031
|
| | | | 1,119 | | |
2032
|
| | | | 596 | | |
Total
|
| | | $ | 26,352 | | |
|
(in thousands of dollars)
|
| |
6/30/2018
|
| |
12/31/2017
|
| ||||||
| | |
(unaudited)
|
| | ||||||||
Assets | | | | | | | | | | | | | |
Investments | | | | | | | | | | | | | |
Securities available for sale, at fair value:
|
| | | | | | | | | | | | |
Fixed maturities (amortized cost; 2018, $185,247; 2017, $183,432)
|
| | | $ | 183,249 | | | | | $ | 188,452 | | |
Equity securities
|
| | | | 6,362 | | | | | | 6,209 | | |
Policy loans
|
| | | | 9,718 | | | | | | 9,852 | | |
Derivative instruments, at fair value
|
| | | | 398 | | | | | | 395 | | |
Total investments
|
| | | | 199,727 | | | | | | 204,908 | | |
Cash and cash equivalents
|
| | | | 3,913 | | | | | | 4,085 | | |
Real estate, property and equipment
|
| | | | 2,166 | | | | | | 2,151 | | |
Accrued investment income
|
| | | | 1,929 | | | | | | 1,886 | | |
Accounts receivable
|
| | | | 2,417 | | | | | | 538 | | |
Reinsurance recoverables
|
| | | | 3,622 | | | | | | 3,727 | | |
Prepaid reinsurance premiums
|
| | | | 1,379 | | | | | | 1,358 | | |
Deferred policy acquisition costs, net
|
| | | | 13,320 | | | | | | 12,179 | | |
Deferred sales inducement costs, net
|
| | | | 1,076 | | | | | | 867 | | |
Deferred tax asset, net
|
| | | | 495 | | | | | | 458 | | |
Other assets
|
| | | | 296 | | | | | | 202 | | |
Separate account asset
|
| | | | 23,690 | | | | | | 24,779 | | |
Total Assets
|
| | | | 254,030 | | | | | | 257,138 | | |
Liabilities | | | | | | | | | | | | | |
Policy liabilities and accruals | | | | | | | | | | | | | |
Policyholder account balance
|
| | | | 113,654 | | | | | | 109,823 | | |
Future life policy benefits
|
| | | | 72,608 | | | | | | 71,927 | | |
Future accident and health policy benefits
|
| | | | 343 | | | | | | 386 | | |
Reserve for deposit type contracts
|
| | | | 11,222 | | | | | | 10,850 | | |
Other policyholder funds
|
| | | | 2,733 | | | | | | 1,970 | | |
Unearned revenue
|
| | | | 1,357 | | | | | | 1,387 | | |
Deferred reinsurance settlements
|
| | | | 2,826 | | | | | | 2,949 | | |
Taxes payable
|
| | | | 7 | | | | | | 7 | | |
Other liabilities
|
| | | | 2,073 | | | | | | 1,703 | | |
Separate account liability
|
| | | | 23,690 | | | | | | 24,779 | | |
Total Liabilities
|
| | | | 230,513 | | | | | | 225,781 | | |
Equity | | | | | | | | | | | | | |
Retained earnings
|
| | | | 24,606 | | | | | | 26,600 | | |
Accumulated other comprehensive income (loss)
|
| | | | (1,089) | | | | | | 4,757 | | |
Total Equity
|
| | | | 23,517 | | | | | | 31,357 | | |
Total Liabilities and Equity
|
| | | $ | 254,030 | | | | | $ | 257,138 | | |
|
| | |
for the six-month periods ended
|
| |||||||||
(in thousands of dollars)
|
| |
6/30/2018
|
| |
6/30/2017
|
| ||||||
Revenues | | | | | | | | | | | | | |
Insurance revenues
|
| | | $ | 6,258 | | | | | $ | 6,596 | | |
Net investment income
|
| | | | 4,218 | | | | | | 4,292 | | |
Net realized investment gains
|
| | | | 324 | | | | | | 904 | | |
Other revenues
|
| | | | 97 | | | | | | 85 | | |
Total Revenues
|
| | | | 10,897 | | | | | | 11,877 | | |
Benefits and expenses | | | | | | | | | | | | | |
Policyholder benefits
|
| | | | 7,018 | | | | | | 7,215 | | |
Interest credit to policyholders
|
| | | | 207 | | | | | | 114 | | |
Operating costs and expenses
|
| | | | 4,331 | | | | | | 3,994 | | |
Amortization of deferred acquisition and sales inducement costs
|
| | | | 897 | | | | | | 1,124 | | |
Taxes, licenses and fees
|
| | | | 398 | | | | | | 392 | | |
Dividends to policyholders
|
| | | | 31 | | | | | | 31 | | |
Total Benefits and Expenses
|
| | | | 12,882 | | | | | | 12,870 | | |
Net loss before taxes
|
| | | | (1,985) | | | | | | (993) | | |
Tax expense
|
| | | | 9 | | | | | | 14 | | |
Net loss
|
| | | $ | (1,994) | | | | | $ | (1,007) | | |
Other Comprehensive Income (Loss), net of tax: | | | | | | | | | | | | | |
Unrealized holding gains (losses) arising during the year (net of
tax expense (benefit) of: 2018 ($255); 2017 $506) |
| | | | (6,663) | | | | | | 982 | | |
Adjustment to deferred acquisition costs (net of tax expense
(benefit) of: 2018 $217; 2017 ($73)) |
| | | | 817 | | | | | | (142) | | |
Other Comprehensive Income (Loss)
|
| | | | (5,846) | | | | | | 840 | | |
Comprehensive Loss
|
| | | $ | (7,840) | | | | | $ | (167) | | |
|
(in thousands of dollars)
|
| |
Accumulated Other
Comprehensive Income (Loss) |
| |
Retained
Earnings |
| |
Total
|
| |||||||||
Balance, January 1, 2018
|
| | | $ | 4,757 | | | | | $ | 26,600 | | | | | $ | 31,357 | | |
Net loss
|
| | | | — | | | | | | (1,994) | | | | | | (1,994) | | |
Other Comprehensive Loss
|
| | | | (5,846) | | | | | | — | | | | | | (5,846) | | |
Balance, June 30, 2018
|
| | | $ | (1,089) | | | | | $ | 24,606 | | | | | $ | 23,517 | | |
|
| | |
for the six-month periods ended
|
| |||||||||
(in thousands of dollars)
|
| |
6/30/2018
|
| |
6/30/2017
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (1,994) | | | | | $ | (1,007) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Realized investment gains, net
|
| | | | (324) | | | | | | (904) | | |
Amortization on investments
|
| | | | (40) | | | | | | (46) | | |
Depreciation
|
| | | | 137 | | | | | | 137 | | |
Deferred taxes
|
| | | | 1 | | | | | | — | | |
Deferred insurance acquisition costs
|
| | | | (2,046) | | | | | | (1,039) | | |
Deferred sales inducement costs
|
| | | | (201) | | | | | | (263) | | |
Interest and amortization of deferred acquisition and sales inducement costs
|
| | | | 897 | | | | | | 1,124 | | |
Change in accrued investment income
|
| | | | (42) | | | | | | (13) | | |
Change in receivables
|
| | | | (1,879) | | | | | | (1,455) | | |
Change in reinsurance recoverable
|
| | | | 105 | | | | | | 4 | | |
Change in prepaid reinsurance premiums
|
| | | | (21) | | | | | | (36) | | |
Change in policy benefits
|
| | | | 1,401 | | | | | | 1,650 | | |
Change in unearned revenue
|
| | | | (30) | | | | | | (8) | | |
Change in deferred reinsurance settlements
|
| | | | (123) | | | | | | (108) | | |
Change in other assets and liabilities
|
| | | | 276 | | | | | | 602 | | |
Net cash used in operating activities
|
| | | $ | (3,883) | | | | | $ | (1,362) | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Proceeds from investments sold or matured:
|
| | | | | | | | | | | | |
Fixed maturity securities
|
| | | | 8,197 | | | | | | 13,346 | | |
Equity securities
|
| | | | 261 | | | | | | 1,541 | | |
Derivatives
|
| | | | 206 | | | | | | 3 | | |
Policy loans
|
| | | | 134 | | | | | | 151 | | |
Costs of investments purchased:
|
| | | | | | | | | | | | |
Fixed maturity securities
|
| | | | (10,026) | | | | | | (18,938) | | |
Equity securities
|
| | | | (41) | | | | | | (167) | | |
Derivatives
|
| | | | (202) | | | | | | (90) | | |
Real estate additions
|
| | | | (61) | | | | | | (3) | | |
Other investing activies
|
| | | | 1,131 | | | | | | (277) | | |
Purchase of property and equipment
|
| | | | (92) | | | | | | (27) | | |
Net cash used in investing activities
|
| | | | (493) | | | | | | (4,461) | | |
Cash flows from financing activites: | | | | | | | | | | | | | |
Policyholder account balances:
|
| | | | | | | | | | | | |
Deposits
|
| | | | 8,388 | | | | | | 9,104 | | |
Withdrawals
|
| | | | (4,184) | | | | | | (4,749) | | |
Net transfers from separate acounts
|
| | | | 0 | | | | | | 260 | | |
Net cash provided by financing activities
|
| | | | 4,204 | | | | | | 4,615 | | |
Net decrease in cash
|
| | | | (172) | | | | | | (1,208) | | |
Cash, beginning of year
|
| | | | 4,085 | | | | | | 8,389 | | |
Cash, end of period
|
| | | $ | 3,913 | | | | | $ | 7,181 | | |
|
| | |
June 30, 2018
|
| |||||||||||||||||||||
| | |
Amortized
Cost |
| |
Gross Unrealized
|
| |
Fair
Value |
| |||||||||||||||
| | |
Gains
|
| |
Losses
|
| ||||||||||||||||||
U.S. government
|
| | | $ | 4,070 | | | | | $ | 162 | | | | | $ | (202) | | | | | $ | 4,030 | | |
States, political subdivisions, other
|
| | | | 28,262 | | | | | | 493 | | | | | | (534) | | | | | | 28,221 | | |
Corporate
|
| | | | 107,080 | | | | | | 1,034 | | | | | | (2,458) | | | | | | 105,656 | | |
Residential mortgage-backed securities
|
| | | | 42,039 | | | | | | 670 | | | | | | (1,046) | | | | | | 41,663 | | |
Commercial mortgage-backed securities
|
| | | | 3,796 | | | | | | 11 | | | | | | (128) | | | | | | 3,679 | | |
Total fixed maturity securities
|
| | | | 185,247 | | | | | | 2,370 | | | | | | (4,368) | | | | | | 183,249 | | |
Equity securities
|
| | | | 4,484 | | | | | | 1,878 | | | | | | — | | | | | | 6,362 | | |
Total fixed maturity and equity securities
|
| | | $ | 189,731 | | | | | $ | 4,248 | | | | | $ | (4,368) | | | | | $ | 189,611 | | |
|
| | |
December 31, 2017
|
| |||||||||||||||||||||
| | |
Amortized
Cost |
| |
Gross Unrealized
|
| |
Fair
Value |
| |||||||||||||||
| | |
Gains
|
| |
Losses
|
| ||||||||||||||||||
U.S. government
|
| | | $ | 4,075 | | | | | $ | 207 | | | | | $ | (120) | | | | | $ | 4,162 | | |
States, political subdivisions, other
|
| | | | 26,850 | | | | | | 876 | | | | | | (112) | | | | | | 27,614 | | |
Corporate
|
| | | | 106,479 | | | | | | 3,459 | | | | | | (543) | | | | | | 109,395 | | |
Residential mortgage-backed securities
|
| | | | 41,818 | | | | | | 1,480 | | | | | | (212) | | | | | | 43,086 | | |
Commercial mortgage-backed securities
|
| | | | 4,210 | | | | | | 26 | | | | | | (41) | | | | | | 4,195 | | |
Total fixed maturity securities
|
| | | | 183,432 | | | | | | 6,048 | | | | | | (1,028) | | | | | | 188,452 | | |
Equity securities
|
| | | | 4,443 | | | | | | 1,766 | | | | | | — | | | | | | 6,209 | | |
Total fixed maturity and equity securities
|
| | | $ | 187,875 | | | | | $ | 7,814 | | | | | $ | (1,028) | | | | | $ | 194,661 | | |
|
| | |
June 30, 2018
|
| |
December 31, 2017
|
| ||||||||||||||||||
| | |
Amortized
Cost |
| |
Fair
Value |
| |
Amortized
Cost |
| |
Fair
Value |
| ||||||||||||
Due in one year or less
|
| | | $ | 3,499 | | | | | $ | 3,554 | | | | | $ | 2,247 | | | | | $ | 2,288 | | |
Due after one year through five years
|
| | | | 41,230 | | | | | | 41,801 | | | | | | 40,926 | | | | | | 42,809 | | |
Due after five years through ten years
|
| | | | 68,467 | | | | | | 66,976 | | | | | | 66,739 | | | | | | 68,151 | | |
Due after ten years
|
| | | | 26,216 | | | | | | 25,576 | | | | | | 27,492 | | | | | | 27,923 | | |
Mortgage-backed securities
|
| | | | 45,835 | | | | | | 45,342 | | | | | | 46,028 | | | | | | 47,281 | | |
Total
|
| | | $ | 185,247 | | | | | $ | 183,249 | | | | | $ | 183,432 | | | | | $ | 188,452 | | |
|
| | |
for the six-month period ended
|
| |||||||||||||||
| | |
June 30, 2018
|
| |||||||||||||||
| | |
Fixed
Maturities |
| |
Equity
Securities |
| |
Derivative
Instruments |
| |||||||||
Proceeds from sales or maturities
|
| | | $ | 8,197 | | | | | $ | 261 | | | | | $ | 206 | | |
Gross gains from sales or maturities
|
| | | | 75 | | | | | | 261 | | | | | | 339 | | |
Other-than-temporary-impairment (OTTI) losses
|
| | | | (89) | | | | | | — | | | | | | — | | |
Gross losses from sales or maturities
|
| | | | (39) | | | | | | — | | | | | | (223) | | |
| | |
for the six-month period ended
|
| |||||||||||||||
| | |
June 30, 2017
|
| |||||||||||||||
| | |
Fixed
Maturities |
| |
Equity
Securities |
| |
Derivative
Instruments |
| |||||||||
Proceeds from sales or maturities
|
| | | $ | 13,346 | | | | | $ | 1,541 | | | | | $ | 3 | | |
Gross gains from sales or maturities
|
| | | | 143 | | | | | | 778 | | | | | | 9 | | |
Gross losses from sales or maturities
|
| | | | (19) | | | | | | — | | | | | | (7) | | |
| | |
for the
six-month period ended June 30, 2018 |
| |||
Balance at beginning of period
|
| | | $ | — | | |
Additions for credit related OTTI not previously reported
|
| | | | 89 | | |
Additions for increases in OTTI amounts previously recognized
|
| | | | — | | |
Balance at end of period
|
| | | $ | 89 | | |
June 30, 2018
|
| |
Less than 12 months
|
| |
12 months or longer
|
| |
Total
|
| |||||||||||||||||||||||||||
Description of securities
|
| |
Fair
Value |
| |
Gross
Unrealized Loss |
| |
Fair
Value |
| |
Gross
Unrealized Loss |
| |
Fair
Value |
| |
Gross
Unrealized Loss |
| ||||||||||||||||||
U.S. government
|
| | | $ | 1,406 | | | | | $ | (85) | | | | | $ | 1,451 | | | | | $ | (117) | | | | | $ | 2,857 | | | | | $ | (202) | | |
States, political subdivisions, other
|
| | | | 16,345 | | | | | | (486) | | | | | | 694 | | | | | | (48) | | | | | | 17,039 | | | | | | (534) | | |
Corporate
|
| | | | 53,853 | | | | | | (1,921) | | | | | | 5,671 | | | | | | (537) | | | | | | 59,524 | | | | | | (2,458) | | |
Residential mortgage-backed securities
|
| | | | 19,331 | | | | | | (881) | | | | | | 1,795 | | | | | | (165) | | | | | | 21,126 | | | | | | (1,046) | | |
Commercial mortgage-backed securities
|
| | | | 3,611 | | | | | | (128) | | | | | | — | | | | | | — | | | | | | 3,611 | | | | | | (128) | | |
Total
|
| | | $ | 94,546 | | | | | $ | (3,501) | | | | | $ | 9,611 | | | | | $ | (867) | | | | | $ | 104,157 | | | | | $ | (4,368) | | |
|
2017
|
| |
Less than 12 months
|
| |
12 months or longer
|
| |
Total
|
| |||||||||||||||||||||||||||
Description of securities
|
| |
Fair
Value |
| |
Gross
Unrealized Loss |
| |
Fair
Value |
| |
Gross
Unrealized Loss |
| |
Fair
Value |
| |
Gross
Unrealized Loss |
| ||||||||||||||||||
U.S. government
|
| | | $ | 1,161 | | | | | $ | (31) | | | | | $ | 1,782 | | | | | $ | (89) | | | | | $ | 2,943 | | | | | $ | (120) | | |
States, political subdivisions, other
|
| | | | 8,773 | | | | | | (86) | | | | | | 714 | | | | | | (26) | | | | | | 9,487 | | | | | | (112) | | |
Corporate
|
| | | | 10,935 | | | | | | (169) | | | | | | 6,853 | | | | | | (374) | | | | | | 17,788 | | | | | | (543) | | |
Residential mortgage-backed securities
|
| | | | 11,517 | | | | | | (126) | | | | | | 2,263 | | | | | | (86) | | | | | | 13,780 | | | | | | (212) | | |
Commercial mortgage-backed securities
|
| | | | 2,039 | | | | | | (27) | | | | | | 77 | | | | | | (14) | | | | | | 2,116 | | | | | | (41) | | |
Total
|
| | | $ | 34,425 | | | | | $ | (439) | | | | | $ | 11,689 | | | | | $ | (589) | | | | | $ | 46,114 | | | | | $ | (1,028) | | |
|
| | |
for the six-month
periods ended |
| |||||||||
| | |
6/30/2018
|
| |
6/30/2017
|
| ||||||
Fixed maturity securities
|
| | | $ | 3,689 | | | | | $ | 3,752 | | |
Equity securities
|
| | | | 82 | | | | | | 94 | | |
Real estate
|
| | | | 72 | | | | | | 74 | | |
Cash equivalents
|
| | | | 19 | | | | | | 12 | | |
Policy loans
|
| | | | 356 | | | | | | 362 | | |
Other
|
| | | | 285 | | | | | | 300 | | |
Subtotal
|
| | | | 4,503 | | | | | | 4,594 | | |
Investment expense
|
| | | | (285) | | | | | | (302) | | |
Net investment income
|
| | | $ | 4,218 | | | | | $ | 4,292 | | |
|
| | |
June 30, 2018
|
| |||||||||||||||||||||
| | |
Fair
Value |
| |
Gross Unrealized
|
| |
Net
Unrealized Gain (Loss) |
| |||||||||||||||
| | |
Gains
|
| |
Losses
|
| ||||||||||||||||||
Fixed income securities
|
| | | $ | 183,249 | | | | | $ | 2,370 | | | | | $ | (4,368) | | | | | $ | (1,998) | | |
Equity securities
|
| | | | 6,362 | | | | | | 1,878 | | | | | | — | | | | | | 1,878 | | |
Net unrealized capital gains
|
| | | | | | | | | | | | | | | | | | | | | $ | (120) | | |
|
| | |
December 31, 2017
|
| |||||||||||||||||||||
| | |
Fair Value
|
| |
Gross Unrealized
|
| |
Net
Unrealized Gain (Loss) |
| |||||||||||||||
| | |
Gains
|
| |
Losses
|
| ||||||||||||||||||
Fixed income securities
|
| | | $ | 188,452 | | | | | $ | 6,048 | | | | | $ | (1,028) | | | | | $ | 5,020 | | |
Equity securities
|
| | | | 6,209 | | | | | | 1,766 | | | | | | — | | | | | | 1,766 | | |
Net unrealized capital gains
|
| | | | | | | | | | | | | | | | | | | | | $ | 6,786 | | |
|
| | |
Carrying\Fair
Value 06/30/2018 |
| |
Carrying\Fair
Value 12/31/2017 |
| ||||||
Financial instruments recorded as assets: | | | | | | | | | | | | | |
Fixed maturity securities
|
| | | $ | 183,249 | | | | | $ | 188,452 | | |
Equity securities
|
| | | | 6,362 | | | | | | 6,209 | | |
Policy loans
|
| | | | 9,718 | | | | | | 9,852 | | |
Derivative instruments
|
| | | | 398 | | | | | | 395 | | |
Cash and cash equivalents
|
| | | | 3,913 | | | | | | 4,085 | | |
Separate account
|
| | | | 23,690 | | | | | | 24,779 | | |
Financial instruments recorded as liabilities: | | | | | | | | | | | | | |
Policyholder account balance:
|
| | | | | | | | | | | | |
Interest sensitive life contracts
|
| | | | 41,217 | | | | | | 41,078 | | |
Annuities
|
| | | | 72,437 | | | | | | 68,745 | | |
Dividend accumulations and other(1)
|
| | | | 6,906 | | | | | | 7,076 | | |
Separate account
|
| | | | 23,690 | | | | | | 24,779 | | |
| | |
Recurring Fair Value Measurements
at June 30, 2018 Using: |
| |||||||||||||||||||||
Description
|
| |
Fair Values
|
| |
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Obeservable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
Fixed maturity securities: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government
|
| | | $ | 4,030 | | | | | $ | 4,030 | | | | | $ | — | | | | | $ | — | | |
States, political subdivisions, other
|
| | | | 28,221 | | | | | | — | | | | | | 28,221 | | | | | | — | | |
Corporate
|
| | | | 105,656 | | | | | | — | | | | | | 105,656 | | | | | | — | | |
Residential mortgage-backed securities
|
| | | | 41,663 | | | | | | — | | | | | | 41,663 | | | | | | — | | |
Commercial mortgage-backed securities
|
| | | | 3,679 | | | | | | — | | | | | | 3,679 | | | | | | — | | |
Total fixed maturiities
|
| | | | 183,249 | | | | | | 4,030 | | | | | | 179,219 | | | | | | — | | |
Equities
|
| | | | 6,362 | | | | | | 4,123 | | | | | | — | | | | | | 2,239 | | |
Derivative instruments
|
| | | | 398 | | | | | | 398 | | | | | | — | | | | | | — | | |
Cash equivalents(1)
|
| | | | 3,913 | | | | | | 3,913 | | | | | | — | | | | | | — | | |
Separate accounts(2)
|
| | | | 23,690 | | | | | | 23,690 | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 217,612 | | | | | $ | 36,154 | | | | | $ | 179,219 | | | | | $ | 2,239 | | |
|
| | |
Recurring Fair Value Measurements
at December 31, 2017 Using: |
| |||||||||||||||||||||
Description
|
| |
Fair Values
|
| |
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Obeservable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
Fixed maturity securities: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government
|
| | | $ | 4,162 | | | | | $ | 4,162 | | | | | $ | — | | | | | $ | — | | |
States, political subdivisions, other
|
| | | | 27,614 | | | | | | — | | | | | | 27,614 | | | | | | — | | |
Corporate
|
| | | | 109,395 | | | | | | — | | | | | | 109,395 | | | | | | — | | |
Residential mortgage-backed securities
|
| | | | 43,086 | | | | | | — | | | | | | 43,086 | | | | | | — | | |
Commercial mortgage-backed securities
|
| | | | 4,195 | | | | | | — | | | | | | 4,195 | | | | | | — | | |
Total fixed maturiities
|
| | | | 188,452 | | | | | | 4,162 | | | | | | 184,290 | | | | | | — | | |
Equities
|
| | | | 6,209 | | | | | | 4,027 | | | | | | — | | | | | | 2,182 | | |
Derivative instruments
|
| | | | 395 | | | | | | 395 | | | | | | — | | | | | | — | | |
Cash equivalents(1)
|
| | | | 4,085 | | | | | | 4,085 | | | | | | — | | | | | | — | | |
Separate accounts(2)
|
| | | | 24,779 | | | | | | 24,779 | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 223,920 | | | | | $ | 37,448 | | | | | $ | 184,290 | | | | | $ | 2,182 | | |
|
Fair value at June 30, 2018
|
| | | | | | | |
Primary Valuation
Technique(s) |
| |
Significant
Unobservable Inputs |
| |
Range
|
| |
Weighted
Average |
| ||||||||||||
|
Min
|
| |
Max
|
| ||||||||||||||||||||||||||
Rreef America REIT II
|
| | | $ | 2,202 | | | |
Discounted cash Flows
|
| | Discount Rate | | | | | 5.00% | | | | | | 9.00% | | | | | | 6.50% | | |
| | | | | | | | | | | |
Terminal capitalization rate
|
| | | | 3.75% | | | | | | 8.00% | | | | | | 5.48% | | |
Fair value at December 31, 2017
|
| | | | | | | |
Primary Valuation
Technique(s) |
| |
Significant Unobservable Inputs
|
| |
Range
|
| |
Weighted
Average |
| ||||||||||||
|
Min
|
| |
Max
|
| ||||||||||||||||||||||||||
Rreef America REIT II
|
| | | $ | 2,150 | | | |
Discounted cash Flows
|
| | Discount Rate | | | | | 5.00% | | | | | | 9.00% | | | | | | 6.61% | | |
| | | | | | | | | | | |
Terminal capitalization rate
|
| | | | 4.00% | | | | | | 8.25% | | | | | | 5.62% | | |
| | |
for the six-month
periods ended |
| |||||||||
| | |
6/30/2018
|
| |
6/30/2017
|
| ||||||
Balance, beginning of year
|
| | | $ | 2,182 | | | | | $ | 3,169 | | |
Gains included in net income
|
| | | | — | | | | | | 396 | | |
Settlements
|
| | | | — | | | | | | (1,000) | | |
Unrealized gains (losses) in OCI
|
| | | | 57 | | | | | | (424) | | |
Balance, end of period
|
| | | $ | 2,239 | | | | | $ | 2,141 | | |
|
| | |
6/30/2018
|
| |
12/31/2017
|
| ||||||
Balance, beginning of year
|
| | | $ | 12,179 | | | | | $ | 11,940 | | |
Capitalization of commissions, sales and issue expenses
|
| | | | 1,011 | | | | | | 2,437 | | |
Accrual of interest
|
| | | | 275 | | | | | | 544 | | |
Amortization
|
| | | | (1,180) | | | | | | (2,659) | | |
Change in Shadow DAC
|
| | | | 1,035 | | | | | | (83) | | |
Balance end of period
|
| | | $ | 13,320 | | | | | $ | 12,179 | | |
|
| | |
6/30/2018
|
| |
12/31/2017
|
| ||||||
Balance, beginning of year
|
| | | $ | 867 | | | | | $ | 315 | | |
Capitalization of commissions and issue expenses
|
| | | | 201 | | | | | | 545 | | |
Accrual of interest
|
| | | | 15 | | | | | | 18 | | |
Amortization
|
| | | | (7) | | | | | | (11) | | |
Balance end of period
|
| | | $ | 1,076 | | | | | $ | 867 | | |
|
| | |
Unrealized
Investment Gains (losses) |
| |
Shadow DAC
|
| |
Accumulated
Other Comprehensive Income (loss) |
| |||||||||
Balance, December 31, 2016
|
| | | $ | 3,997 | | | | | $ | (448) | | | | | $ | 3,549 | | |
Available-for-sale investment gains (losses) arising during the year:
|
| | | | | | | | | | | | | | | | | | |
Fixed maturity securities net ot tax of $227
|
| | | | 440 | | | | | | | | | | | | 440 | | |
Equity securities net of tax of $9
|
| | | | 18 | | | | | | | | | | | | 18 | | |
Change in Shadow DAC net of tax benefit of $28
|
| | | | | | | | | | (55) | | | | | | (55) | | |
Cumulative effect of adoption of new accounting principle (see Note 3)
|
| | | | 904 | | | | | | (99) | | | | | | 805 | | |
Balance, December 31, 2017
|
| | | $ | 5,359 | | | | | $ | (602) | | | | | $ | 4,757 | | |
Available-for-sale investment gains (losses) arising during the year:
|
| | | | | | | | | | | | | | | | | | |
Fixed maturity securities net ot tax benefit of $276
|
| | | | (6,742) | | | | | | | | | | | | (6,742) | | |
Equity securities net of tax of $21
|
| | | | 79 | | | | | | | | | | | | 79 | | |
Change in Shadow DAC net of tax of $217
|
| | | | | | | | | | 817 | | | | | | 817 | | |
Balance, June 30, 2018
|
| | | $ | (1,304) | | | | | $ | 215 | | | | | $ | (1,089) | | |
|
| | |
June 30,
2018 |
| |
December 31,
2017 |
| ||||||
Balance, beginning of year
|
| | | $ | 24,779 | | | | | $ | 21,513 | | |
Cost of bonds and stocks acquired
|
| | | | — | | | | | | 299 | | |
Net realized and unrealized increase (decrease)
|
| | | | (200) | | | | | | 3,467 | | |
Deduction consideration for bonds and stocks disposed of
|
| | | | (952) | | | | | | (562) | | |
Change in other assets
|
| | | | 63 | | | | | | 62 | | |
Balance, end of period
|
| | | $ | 23,690 | | | | | $ | 24,779 | | |
|
| | |
6/30/2018
|
| |
12/31/2017
|
| ||||||
Traditional life contracts
|
| | | $ | 62,404 | | | | | $ | 62,311 | | |
Immediate annuities and pension plan
|
| | | | 6,704 | | | | | | 6,774 | | |
Supplemental contracts with life contingencies
|
| | | | 3,186 | | | | | | 2,522 | | |
Accident and health
|
| | | | 343 | | | | | | 386 | | |
Accident death benefits
|
| | | | 133 | | | | | | 132 | | |
Disability
|
| | | | 181 | | | | | | 188 | | |
| | | | $ | 72,951 | | | | | $ | 72,313 | | |
|
Product
|
| |
Mortality
|
| |
Interest Rate
|
| |
Estimation Method
|
|
Immediate fixed annuities | | | 1971, 1983, 2000, and 2012 annuity mortality tables | | | Rates range from 4% to 6.5% | | | Present value of expected future benefits based on historical experience | |
Traditional life insurance | | | Actual company experience plus loading | | | Rates range from 2.5% to 5.75% | | | Net level premium reserve method using the Company’s withdrawal experience | |
Accident and health | | | Actual company experience plus loading | | | n/a | | | Unearned premium; additional contract reserves for mortality risk | |
| | |
6/30/2018
|
| |
12/31/2017
|
| ||||||
Interest sensitive life contracts
|
| | | $ | 41,217 | | | | | $ | 41,078 | | |
Annuities
|
| | | | 72,437 | | | | | | 68,745 | | |
| | | | $ | 113,654 | | | | | $ | 109,823 | | |
|
Product
|
| |
Interest Rate
|
| |
Withdrawal/surrender charges
|
|
Interest-sensitive life insurance | | | Rates range from 3% to 7% | | | Either a percentage of account balance or a dollar amount grading off generally over 20 years | |
Fixed annuities | | | Rates range from 0% to 8% | | | Either a declining or level charge generally over 9 years or less | |
Other investment contracts | | | Rates range from 2% to 6% | | | No explicit charge assumed | |
| | |
6/30/2018
|
| |
12/31/2017
|
| ||||||
Balance, beginning of year
|
| | | $ | 109,823 | | | | | $ | 99,440 | | |
Deposits
|
| | | | 7,439 | | | | | | 17,994 | | |
Interest credited
|
| | | | 2,214 | | | | | | 4,353 | | |
Benefits
|
| | | | (1,432) | | | | | | (2,734) | | |
Surrenders and partial withdrawals
|
| | | | (2,279) | | | | | | (4,835) | | |
COI charges
|
| | | | (1,459) | | | | | | (2,973) | | |
Contract charges
|
| | | | (652) | | | | | | (1,307) | | |
Net transfers from separate accounts
|
| | | | — | | | | | | (115) | | |
Balance, end of period
|
| | | $ | 113,654 | | | | | $ | 109,823 | | |
|
| | |
6/30/2018
|
| |
12/31/2017
|
| ||||||
Payout annuities without life contingencies
|
| | | $ | 4,316 | | | | | $ | 3,774 | | |
Dividend accumulations and other
|
| | | | 6,906 | | | | | | 7,076 | | |
| | | | $ | 11,222 | | | | | $ | 10,850 | | |
|
| | |
6/30/2018
|
| |
12/31/2017
|
| ||||||
Land
|
| | | $ | 405 | | | | | $ | 405 | | |
Building and other
|
| | | | 8,439 | | | | | | 8,378 | | |
| | | | | 8,844 | | | | | | 8,783 | | |
Accumulated depreciation
|
| | | | (6,887) | | | | | | (6,828) | | |
Real Estate, net
|
| | | $ | 1,957 | | | | | $ | 1,955 | | |
|
| | |
6/30/2018
|
| |
12/31/2017
|
| ||||||
EDP equipment
|
| | | $ | 3,973 | | | | | $ | 3,955 | | |
Furniture
|
| | | | 1,592 | | | | | | 1,522 | | |
EDP equipment & furniture cost
|
| | | | 5,565 | | | | | | 5,477 | | |
Accumulated depreciation
|
| | | | (5,356) | | | | | | (5,281) | | |
Property and Equipment, net
|
| | | $ | 209 | | | | | $ | 196 | | |
|
| | |
for the six-month
periods ended |
| |||||||||
| | |
6/30/2018
|
| |
6/30/2017
|
| ||||||
Current
|
| | | $ | 9 | | | | | $ | 14 | | |
Deferred
|
| | | | — | | | | | | — | | |
Provision for income tax
|
| | | $ | 9 | | | | | $ | 14 | | |
|
| | |
for the six-month
periods ended |
| |||||||||
| | |
6/30/2018
|
| |
6/30/2017
|
| ||||||
Income tax benefits at statutory rate
|
| | | $ | (417) | | | | | $ | (338) | | |
Dividends received deduction
|
| | | | — | | | | | | — | | |
Other
|
| | | | 426 | | | | | | 352 | | |
Income tax (benefit) expense
|
| | | $ | 9 | | | | | $ | 14 | | |
Effective tax rate
|
| | | | 0.5% | | | | | | 1.4% | | |
| | |
6/30/2018
|
| |
12/31/2017
|
| ||||||
Deferred federal tax assets: | | | | | | | | | | | | | |
Difference between financial reporting and the tax basis of: | | | | | | | | | | | | | |
Operating loss carryforward
|
| | | $ | 6,180 | | | | | $ | 5,859 | | |
Other than temporary impairments
|
| | | | 966 | | | | | | 947 | | |
Deferred premiums
|
| | | | 850 | | | | | | 734 | | |
Life policy reserves
|
| | | | 702 | | | | | | 600 | | |
Other
|
| | | | 299 | | | | | | 380 | | |
Deferred reinsurance settlements
|
| | | | 594 | | | | | | 619 | | |
Total deferred tax assets
|
| | | | 9,591 | | | | | | 9,139 | | |
Deferred federal tax liabilities: | | | | | | | | | | | | | |
Difference between financial reporting and the tax basis of: | | | | | | | | | | | | | |
Deferred acquisition costs and sales inducements
|
| | | | 2,430 | | | | | | 2,147 | | |
Net unrealized gains
|
| | | | (32) | | | | | | 1,421 | | |
Reinsurance recoverable
|
| | | | 761 | | | | | | 766 | | |
Amortized discount on bonds
|
| | | | 123 | | | | | | 138 | | |
Other
|
| | | | 216 | | | | | | 143 | | |
Fixed assets
|
| | | | (12) | | | | | | 53 | | |
Total deferred tax liabilities
|
| | | | 3,486 | | | | | | 4,668 | | |
Net
|
| | | | 6,105 | | | | | | 4,471 | | |
Less valuation allowance
|
| | | | (5,610) | | | | | | (4,013) | | |
Net deferred tax asset
|
| | | $ | 495 | | | | | $ | 458 | | |
|
Expiring
|
| | |||||
2018
|
| | | $ | 167 | | |
2019
|
| | | | 1,590 | | |
2020
|
| | | | 2,296 | | |
2021
|
| | | | 651 | | |
2022
|
| | | | 520 | | |
2023
|
| | | | 861 | | |
2024
|
| | | | 1,762 | | |
2025
|
| | | | 7,836 | | |
2026
|
| | | | 2,188 | | |
2027
|
| | | | 1,353 | | |
2028
|
| | | | 2,664 | | |
2029
|
| | | | 509 | | |
2030
|
| | | | 2,240 | | |
2031
|
| | | | 1,119 | | |
2032
|
| | | | 596 | | |
Total
|
| | | $ | 26,352 | | |
|