16. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following tables include the revisions as discussed on Note 1. Organization, Consolidation and Basis of Presentation in these notes to consolidated financial statements, set forth under the “Revisions to Previously Issued Financial Statements” to the Company’s previously reported consolidated statements of operations (unaudited) for each of the quarterly periods ended March 31, 2016 to September 30, 2017.

A summary of the Company’s unaudited quarterly results of operations includes the following:



	First Quarter				Second Quarter				Third Quarter						Fourth Quarter
	As Reported		As Adjusted		As Reported		As Adjusted		As Reported			As Adjusted
	(In thousands, except per share data)
2017
Net premiums earned	$	78,493	$	81,660	$	83,159	$	83,554	$	78,663		$	80,764		$	87,503
Total revenue	$	92,923	$	93,054	$	97,563	$	98,159	$	95,892		$	98,697		$	101,752
Losses and loss adjustment expenses	$	50,831	$	56,899	$	54,956	$	56,417	$	72,935		$	75,367		$	58,874
Total costs and expenses	$	87,813	$	89,170	$	90,311	$	92,504	$	107,300		$	108,876		$	92,185
Net income (loss) attributable to Federated National Holding Company shareholders	$	3,145	$	2,422	$	4,945	$	3,995	$	(5,511	)	$	(4,724	)	$	6,296
Net income (loss) per share - basic	$	0.23	$	0.18	$	0.38	$	0.30	$	(0.42	)	$	(0.36	)	$	0.48



	First Quarter				Second Quarter					Third Quarter				Fourth Quarter
	As Reported		As Adjusted		As Reported		As Adjusted			As Reported		As Adjusted		As Reported			As Adjusted
	(In thousands, except per share data)
2016
Net premiums earned	$	54,997	$	54,997	$	60,045	$	60,045		$	69,405	$	69,405	$	75,425		$	76,922
Total revenue	$	68,960	$	65,010	$	75,064	$	70,786		$	83,790	$	81,758	$	88,570		$	89,971
Losses and loss adjustment expenses	$	29,545	$	31,260	$	47,025	$	48,983		$	43,613	$	45,973	$	67,158		$	71,594
Total costs and expenses	$	53,562	$	51,770	$	73,249	$	71,090		$	82,250	$	78,914	$	104,590		$	103,948
Net income (loss) attributable to Federated National Holding Company shareholders	$	9,535	$	8,114	$	991	$	(405	)	$	1,394	$	2,099	$	(12,116	)	$	(8,793	)
Net income (loss) per share - basic	$	0.69	$	0.59	$	0.07	$	(0.03	)	$	0.10	$	0.15	$	(0.89	)	$	(0.65	)

The following tables summarize the impacts of the revisions on the Company’s previously reported consolidated statements of operations (unaudited) for each of the quarterly periods ended March 31, 2017 to September 30, 2017, the six months ended June 30, 2017, and the nine months ended September 30, 2017.

The revisions as follows will appear in the Company’s applicable 2018 quarterly financial statements in the Quarterly Reports, when filed.



	Six Months Ended						Nine Months Ended
	June 30, 2017						September 30, 2017
	As Reported			As Adjusted			As Reported			As Adjusted
Revenue:	(In thousands, except share and per share data)
Net premiums earned	$	161,652		$	165,214		$	240,315		$	245,978
Net investment income	4,878			4,878			7,481			7,481
Net realized investment gains	2,543			2,543			8,644			8,644
Direct written policy fees	9,571			9,519			13,222			13,617
Other income	9,637			9,059			14,511			14,190
Total revenue	188,281			191,213			284,173			289,910

Costs and expenses:
Losses and loss adjustment expenses	108,722			113,316			181,657			188,683
Commissions and other underwriting expenses	57,336			58,497			86,578			86,883
General and administrative expenses	9,695			9,695			14,737			14,737
Interest expense	166			166			247			247
Total costs and expenses	175,919			181,674			283,219			290,550

Income (loss) before income taxes	12,362			9,539			954			(640		)
Income taxes	4,573			3,423			350			(358		)
Net income (loss)	7,789			6,116			604			(282		)
Net loss attributable to non-controlling interest	(301		)	(301		)	(1,975		)	(1,975		)
Net income attributable to Federated National
Holding Company shareholders	$	8,090		$	6,417		$	2,579		$	1,693

Net income per share attributable to Federated National
Holding Company shareholders:
Basic	$	0.61		$	0.48		$	0.20		$	0.13
Diluted	$	0.60		$	0.48		$	0.19		$	0.13

Weighted average number of shares of common stock
outstanding:
Basic	13,305			13,305			13,211			13,211
Diluted	13,405			13,405			13,302			13,302

Dividends declared per share of common stock	$	0.16		$	0.16		$	0.24		$	0.24



	Three Months Ended						Three Months Ended						Three Months Ended
	March 31, 2017						June 30, 2017						September 30, 2017
	As Reported			As Adjusted			As Reported			As Adjusted			As Reported			As Adjusted
Revenue:	(In thousands, except share and per share data)
Net premiums earned	$	78,493		$	81,660		$	83,159		$	83,554		$	78,663		$	80,764
Net investment income	2,318			2,318			2,560			2,560			2,603			2,603
Net realized investment gains	(105		)	(105		)	2,648			2,648			6,101			6,101
Direct written policy fees	5,085			4,712			4,486			4,807			3,651			4,098
Other income	7,132			4,469			4,710			4,590			4,874			5,131
Total revenue	92,923			93,054			97,563			98,159			95,892			98,697

Costs and expenses:
Losses and loss adjustment expenses	50,831			56,899			54,956			56,417			72,935			75,367
Commissions and other underwriting expenses	32,279			27,568			30,197			30,929			29,242			28,386
General and administrative expenses	4,619			4,619			5,076			5,076			5,042			5,042
Interest expense	84			84			82			82			81			81
Total costs and expenses	87,813			89,170			90,311			92,504			107,300			108,876

Income (loss) before income taxes	5,110			3,884			7,252			5,655			(11,408		)	(10,179		)
Income taxes	1,938			1,435			2,635			1,988			(4,223		)	(3,781		)
Net income (loss)	3,172			2,449			4,617			3,667			(7,185		)	(6,398		)
Net income (loss) attributable to non-controlling interest	27			27			(328		)	(328		)	(1,674		)	(1,674		)
Net income (loss) attributable to Federated National
Holding Company shareholders	$	3,145		$	2,422		$	4,945		$	3,995		$	(5,511	)	$	(4,724	)

Net income (loss) per share attributable to Federated
National Holding Company shareholders:
Basic	$	0.23		$	0.18		$	0.38		$	0.30		$	(0.42	)	$	(0.36	)
Diluted	$	0.23		$	0.18		$	0.37		$	0.30		$	(0.42	)	$	(0.36	)

Weighted average number of shares of common stock
outstanding:
Basic	13,432			13,432			13,171			13,171			13,135			13,135
Diluted	13,559			13,559			13,256			13,256			13,135			13,135

Dividends declared per share of common stock	$	0.08		$	0.08		$	0.08		$	0.08		$	0.08		$	0.08

Certain prior period line items in the consolidated statements of comprehensive income, consolidated statements of changes in shareholders’ equity and consolidated statements of cash flows, were affected by the revisions of previously issued financial statements. All of the changes in the consolidated statements of cash flows were included in cash flows from operating activities and all of the changes in the consolidated statements of comprehensive income were isolated to the net income line, which has been addressed through the preceding disclosures.