FEDERATED NATIONAL HOLDING COMPANY (UNAUDITED)

12 Months Ended

Dec. 31, 2014

FEDERATED NATIONAL HOLDING COMPANY (UNAUDITED) [Abstract]

FEDERATED NATIONAL HOLDING COMPANY (UNAUDITED)

(19)  FEDERATED NATIONAL HOLDING COMPANY (UNAUDITED)

FNHC (the parent company only) has no long term obligations, guarantees or material contingencies as of December 31, 2014. The following summarizes the major categories of the parent company’s financial statements.

Condensed Balance Sheets (Unaudited)	Period Ending December 31,
ASSETS	2014		2013
	(Dollars in Thousands)
Cash and short term investments	$	12,053	$	2,143
Investments and advances to subsidiaries		138,171		105,797
Deferred income taxes receivable		332		1,006
Income taxes receivable		8,966		8,157
Property, plant and equipment, net		511		184
Other assets		1,044		4,446
Total assets	$	161,077	$	121,733
LIABILITIES AND SHAREHOLDERS' EQUITY
Income taxes payable		-		1,690
Dividends payable		564		330
Capital contribution payable		18,501		16,000
Other liabilities		428		238
Total liabilities		19,493		18,258
Shareholders' equity:
Common stock		137		110
Additional paid-in capital		115,123		74,086
Accumulated other comprehensive loss		508		(1,727	)
Retained earnings		25,816		31,006
Total shareholders' equity		141,584		103,475
Total liabilities and shareholders' equity	$	161,077	$	121,733

Condensed Statements of Operations (Unaudited)	Years Ended December 31,
	2014		2013		2012
	(Dollars in Thousands)
Revenue:
Management fees from subsidiaries	$	2,387	$	1,864	$	1,228
Equity in income of subsidiaries		61,653		21,623		8,787
Net investment income		415		136		34
Other income		2		11		476
Total revenue		64,457		23,634		10,525
Expenses:
Salaries and wages		3,342		2,022		1,853
Legal fees		178		113		198
Other expenses		3,630		2,281		1,726
Total expenses		7,150		4,416		3,777
Income before provision for income tax expense		57,307		19,218		6,748
Provision for income tax expense		20,108		6,491		2,435
Net income	$	37,199	$	12,727	$	4,313

Condensed Statements of Cash Flow (Unaudited)
	Years Ended December 31,
	2014			2013			2012
	(Dollars in Thousands)
Cash flow from operating activities:
Net income	$	37,199		$	12,727		$	4,313
Adjustments to reconcile net income to net cash (used) provided  by operating activities:
Equity in income of subsidiaries		(61,653	)		(21,623	)		(8,787	)
Depreciation and amortization of property plant and equipment, net		92			33			23
Deferred income tax expense		(674	)		(3,332	)		(4,274	)
Income tax (recoverable) payable		(1,690	)		1,690			(78	)
Change in dividends payable		234			330			-
Non-cash compensation		1,660			293			188
Changes in operating assets and liabilities:
Property, plant and equipment		419			119			(138	)
Deferred gain on sale of assets		-			-			(30	)
Other assets		(3,402	)		377			45
Capital contribution payable		2,501			16,000			-
Other liabilities		190			112			(18	)
Net cash (used) provided  by operating activities		(25,124	)		6,726			(8,756	)
Cash flow used in investing activities:
Purchases of investment securities available for sale		(32,374	)		(44,792	)		(451	)
Cash flow used in investing activities:		(32,374	)		(44,792	)		(451	)
Net cash provided in financing activities:
Dividends paid		(1,672	)		(1,232	)		(159	)
Stock options exercised		1,555			858			128
Tax benefit related to non-cash compensation		479			168			100
Issuance of common stock		43,110			27,879			-
Advances from subsidiaries		23,936			11,042			8,349
Net cash provided in financing activities:		67,408			38,715			8,418
Net increase (decrease) in cash and short term investments		9,910			649			(789	)
Cash and short term investments at beginning of year		2,143			1,494			2,283
Cash and short term investments at end of year	$	12,053		$	2,143		$	1,494