CITIZENS, INC. |
(Exact name of registrant as specified in its charter) |
Colorado | 84-0755371 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
400 East Anderson Lane, Austin, TX | 78752 |
(Address of principal executive offices) | (Zip Code) |
(512) 837-7100 |
N/A |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No | |||
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No | |||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. (Check one): | |||
Large accelerated filer ¨ | Accelerated filer x | Non-accelerated filer ¨ | Smaller reporting company ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No |
Page Number | |||
Part I. | Financial Information | ||
Item 1. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Part II. | Other Information | ||
Item 1. | |||
Item 1A. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Item 5. | |||
Item 6. |
CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Consolidated Statements of Financial Position (In thousands) | ||||||
September 30, 2013 | December 31, 2012 | |||||
Assets | (Unaudited) | |||||
Investments: | ||||||
Fixed maturities available-for-sale, at fair value (cost: $585,127 and $559,736 in 2013 and 2012, respectively) | $ | 599,379 | 604,520 | |||
Fixed maturities held-to-maturity, at amortized cost (fair value: $221,115 and $193,739 in 2013 and 2012, respectively) | 223,339 | 187,008 | ||||
Equity securities available-for-sale, at fair value (cost: $52,392 and $52,744 in 2013 and 2012, respectively) | 53,067 | 53,741 | ||||
Mortgage loans on real estate | 680 | 1,509 | ||||
Policy loans | 47,359 | 42,993 | ||||
Real estate held for investment (less $1,392 and $1,287 accumulated depreciation in 2013 and 2012, respectively) | 8,477 | 8,496 | ||||
Other long-term investments | 56 | 57 | ||||
Short-term investments | — | 2,340 | ||||
Total investments | 932,357 | 900,664 | ||||
Cash and cash equivalents | 41,687 | 56,299 | ||||
Accrued investment income | 11,740 | 10,304 | ||||
Reinsurance recoverable | 4,490 | 9,651 | ||||
Deferred policy acquisition costs | 143,131 | 135,569 | ||||
Cost of customer relationships acquired | 23,901 | 25,116 | ||||
Goodwill | 17,160 | 17,160 | ||||
Other intangible assets | 858 | 879 | ||||
Federal income tax receivable | — | 270 | ||||
Property and equipment, net | 6,920 | 7,383 | ||||
Due premiums, net (less $1,296 and $1,345 allowance for doubtful accounts in 2013 and 2012, respectively) | 9,994 | 10,527 | ||||
Prepaid expenses | 875 | 344 | ||||
Other assets | 1,001 | 782 | ||||
Total assets | $ | 1,194,114 | 1,174,948 |
CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Consolidated Statements of Financial Position, Continued (In thousands, except share amounts) | ||||||
September 30, 2013 | December 31, 2012 | |||||
Liabilities and Stockholders' Equity | (Unaudited) | |||||
Liabilities: | ||||||
Policy liabilities: | ||||||
Future policy benefit reserves: | ||||||
Life insurance | $ | 812,824 | 762,319 | |||
Annuities | 54,178 | 51,750 | ||||
Accident and health | 1,245 | 5,491 | ||||
Dividend accumulations | 13,234 | 11,962 | ||||
Premiums paid in advance | 30,504 | 27,455 | ||||
Policy claims payable | 8,044 | 11,015 | ||||
Other policyholders' funds | 8,006 | 9,440 | ||||
Total policy liabilities | 928,035 | 879,432 | ||||
Commissions payable | 2,096 | 2,606 | ||||
Federal income tax payable | 415 | — | ||||
Deferred federal income tax | 4,517 | 17,301 | ||||
Payable for securities in process of settlement | 1,712 | 2,358 | ||||
Other liabilities | 9,608 | 10,143 | ||||
Total liabilities | 946,383 | 911,840 | ||||
Commitments and contingencies (Note 7) | ||||||
Stockholders' equity: | ||||||
Class A, no par value, 100,000,000 shares authorized, 52,215,852 shares issued and outstanding in 2013 and 2012, including shares in treasury of 3,135,738 in 2013 and 2012 | 259,383 | 259,383 | ||||
Class B, no par value, 2,000,000 shares authorized, 1,001,714 shares issued and outstanding in 2013 and 2012 | 3,184 | 3,184 | ||||
Accumulated deficit | (13,348 | ) | (17,335 | ) | ||
Accumulated other comprehensive income: | ||||||
Unrealized gains on securities, net of tax | 9,523 | 28,887 | ||||
Treasury stock, at cost | (11,011 | ) | (11,011 | ) | ||
Total stockholders' equity | 247,731 | 263,108 | ||||
Total liabilities and stockholders' equity | $ | 1,194,114 | 1,174,948 |
CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Consolidated Statements of Comprehensive Income Three Months Ended September 30, (In thousands, except per share amounts) (Unaudited) | |||||||||||||
2013 | 2012 | ||||||||||||
Revenues: | |||||||||||||
Premiums: | |||||||||||||
Life insurance | $ | 42,091 | 41,257 | ||||||||||
Accident and health insurance | 380 | 414 | |||||||||||
Property insurance | 1,276 | 1,281 | |||||||||||
Net investment income | 9,570 | 8,114 | |||||||||||
Realized investment gains, net | 30 | 763 | |||||||||||
Decrease in fair value of warrants | — | 241 | |||||||||||
Other income | 269 | 112 | |||||||||||
Total revenues | 53,616 | 52,182 | |||||||||||
Benefits and expenses: | |||||||||||||
Insurance benefits paid or provided: | |||||||||||||
Claims and surrenders | 16,763 | 15,627 | |||||||||||
Increase in future policy benefit reserves | 17,398 | 16,901 | |||||||||||
Policyholders' dividends | 2,362 | 2,600 | |||||||||||
Total insurance benefits paid or provided | 36,523 | 35,128 | |||||||||||
Commissions | 9,940 | 9,769 | |||||||||||
Other general expenses | 6,163 | 6,055 | |||||||||||
Capitalization of deferred policy acquisition costs | (7,067 | ) | (7,547 | ) | |||||||||
Amortization of deferred policy acquisition costs | 4,758 | 4,134 | |||||||||||
Amortization of cost of customer relationships acquired | 681 | 598 | |||||||||||
Total benefits and expenses | 50,998 | 48,137 | |||||||||||
Income before federal income tax | 2,618 | 4,045 | |||||||||||
Federal income tax expense | 794 | 1,134 | |||||||||||
Net income | 1,824 | 2,911 | |||||||||||
Per Share Amounts: | |||||||||||||
Basic earnings per share of Class A common stock | $ | 0.03 | 0.06 | ||||||||||
Basic earnings per share of Class B common stock | 0.02 | 0.03 | |||||||||||
Diluted earnings per share of Class A common stock | 0.03 | 0.06 | |||||||||||
Diluted earnings per share of Class B common stock | 0.02 | 0.03 | |||||||||||
Other comprehensive income (loss): | |||||||||||||
Unrealized gains (losses) on available-for-sale securities: | |||||||||||||
Unrealized holding gains (losses) arising during period | (4,128 | ) | 8,542 | ||||||||||
Reclassification adjustment for gains included in net income | (84 | ) | (708 | ) | |||||||||
Unrealized gains (losses) on available-for-sale securities, net | (4,212 | ) | 7,834 | ||||||||||
Income tax expense (benefit) on unrealized gains (losses) on available-for-sale securities | (1,474 | ) | 2,878 | ||||||||||
Other comprehensive income (loss) | (2,738 | ) | 4,956 | ||||||||||
Comprehensive income (loss) | $ | (914 | ) | 7,867 |
CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Consolidated Statements of Comprehensive Income Nine Months Ended September 30, (In thousands, except per share amounts) (Unaudited) | |||||||||||||
2013 | 2012 | ||||||||||||
Revenues: | |||||||||||||
Premiums: | |||||||||||||
Life insurance | $ | 123,728 | 118,608 | ||||||||||
Accident and health insurance | 1,135 | 1,244 | |||||||||||
Property insurance | 3,658 | 3,792 | |||||||||||
Net investment income | 27,224 | 23,303 | |||||||||||
Realized investment gains, net | 143 | 1,107 | |||||||||||
Decrease in fair value of warrants | — | 314 | |||||||||||
Other income | 882 | 321 | |||||||||||
Total revenues | 156,770 | 148,689 | |||||||||||
Benefits and expenses: | |||||||||||||
Insurance benefits paid or provided: | |||||||||||||
Claims and surrenders | 48,229 | 46,490 | |||||||||||
Increase in future policy benefit reserves | 52,253 | 47,793 | |||||||||||
Policyholders' dividends | 6,671 | 6,755 | |||||||||||
Total insurance benefits paid or provided | 107,153 | 101,038 | |||||||||||
Commissions | 29,427 | 28,164 | |||||||||||
Other general expenses | 20,204 | 19,013 | |||||||||||
Capitalization of deferred policy acquisition costs | (21,101 | ) | (20,530 | ) | |||||||||
Amortization of deferred policy acquisition costs | 13,747 | 12,693 | |||||||||||
Amortization of cost of customer relationships acquired | 1,819 | 1,834 | |||||||||||
Total benefits and expenses | 151,249 | 142,212 | |||||||||||
Income before federal income tax | 5,521 | 6,477 | |||||||||||
Federal income tax expense | 1,534 | 1,651 | |||||||||||
Net income | 3,987 | 4,826 | |||||||||||
Per Share Amounts: | |||||||||||||
Basic earnings per share of Class A common stock | $ | 0.08 | 0.10 | ||||||||||
Basic earnings per share of Class B common stock | 0.04 | 0.05 | |||||||||||
Diluted earnings per share of Class A common stock | 0.08 | 0.10 | |||||||||||
Diluted earnings per share of Class B common stock | 0.04 | 0.05 | |||||||||||
Other comprehensive income (loss): | |||||||||||||
Unrealized gains (losses) on available-for-sale securities: | |||||||||||||
Unrealized holding gains (losses) arising during period | (29,576 | ) | 17,106 | ||||||||||
Reclassification adjustment for gains included in net income | (188 | ) | (915 | ) | |||||||||
Unrealized gains (losses) on available-for-sale securities, net | (29,764 | ) | 16,191 | ||||||||||
Income tax expense (benefit) on unrealized gains (losses) on available-for-sale securities | (10,400 | ) | 5,837 | ||||||||||
Other comprehensive income (loss) | (19,364 | ) | 10,354 | ||||||||||
Comprehensive income (loss) | $ | (15,377 | ) | 15,180 |
CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Consolidated Statements of Cash Flows Nine Months Ended September 30, (In thousands) (Unaudited) | ||||||
2013 | 2012 | |||||
Cash flows from operating activities: | ||||||
Net income | $ | 3,987 | 4,826 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Realized gains on sale of investments and other assets | (143 | ) | (1,107 | ) | ||
Net deferred policy acquisition costs | (7,354 | ) | (7,837 | ) | ||
Amortization of cost of customer relationships acquired | 1,819 | 1,834 | ||||
Decrease in fair value of warrants | — | (314 | ) | |||
Depreciation | 955 | 915 | ||||
Amortization of premiums and discounts on investments | 6,228 | 4,115 | ||||
Deferred federal income tax benefit | (2,384 | ) | (2,232 | ) | ||
Change in: | ||||||
Accrued investment income | (1,436 | ) | (2,391 | ) | ||
Reinsurance recoverable | 5,161 | 334 | ||||
Due premiums | 533 | (524 | ) | |||
Future policy benefit reserves | 47,989 | 47,530 | ||||
Other policyholders' liabilities | (84 | ) | 3,025 | |||
Federal income tax receivable | 685 | 2,089 | ||||
Commissions payable and other liabilities | (1,045 | ) | (1,823 | ) | ||
Other, net | (581 | ) | (846 | ) | ||
Net cash provided by operating activities | 54,330 | 47,594 | ||||
Cash flows from investing activities: | ||||||
Sale of fixed maturities, available-for-sale | 317 | 503 | ||||
Maturities and calls of fixed maturities, available-for-sale | 41,054 | 125,622 | ||||
Maturities and calls of fixed maturities, held-to-maturity | 37,213 | 154,630 | ||||
Purchase of fixed maturities, available-for-sale | (71,818 | ) | (184,728 | ) | ||
Purchase of fixed maturities, held-to-maturity | (75,386 | ) | (138,756 | ) | ||
Sales of equity securities, available-for-sale | — | 2,856 | ||||
Calls of equity securities, available-for-sale | 400 | 820 | ||||
Principal payments on mortgage loans | 829 | 36 | ||||
Increase in policy loans, net | (4,366 | ) | (3,694 | ) | ||
Sale of other long-term investments | 1 | 4 | ||||
Purchase of other long-term investments | (86 | ) | (116 | ) | ||
Purchase of property and equipment | (386 | ) | (402 | ) | ||
Maturity of short-term investments | 2,841 | 2,000 | ||||
Purchase of short-term investments | (531 | ) | (2,378 | ) | ||
Net cash used in investing activities | (69,918 | ) | (43,603 | ) |
CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Consolidated Statements of Cash Flows, Continued Nine Months Ended September 30, (In thousands) (Unaudited) | ||||||
2013 | 2012 | |||||
Cash flows from financing activities: | ||||||
Warrants exercised | $ | — | 822 | |||
Annuity deposits | 4,293 | 4,769 | ||||
Annuity withdrawals | (3,317 | ) | (3,007 | ) | ||
Net cash provided by financing activities | 976 | 2,584 | ||||
Net increase (decrease) in cash and cash equivalents | (14,612 | ) | 6,575 | |||
Cash and cash equivalents at beginning of year | 56,299 | 33,255 | ||||
Cash and cash equivalents at end of period | $ | 41,687 | 39,830 | |||
Supplemental disclosures of operating activities: | ||||||
Cash paid during the period for income taxes, net | $ | 3,232 | 1,794 |
Three Months Ended | ||||||||||||
September 30, 2013 | ||||||||||||
Life Insurance | Home Service Insurance | Other Non-Insurance Enterprises | Consolidated | |||||||||
(In thousands) | ||||||||||||
Revenues: | ||||||||||||
Premiums | $ | 32,800 | 10,947 | — | 43,747 | |||||||
Net investment income | 5,924 | 3,309 | 337 | 9,570 | ||||||||
Realized investment gains, net | 23 | 2 | 5 | 30 | ||||||||
Other income | 261 | (7 | ) | 15 | 269 | |||||||
Total revenue | 39,008 | 14,251 | 357 | 53,616 | ||||||||
Benefits and expenses: | ||||||||||||
Insurance benefits paid or provided: | ||||||||||||
Claims and surrenders | 11,249 | 5,514 | — | 16,763 | ||||||||
Increase in future policy benefit reserves | 16,756 | 642 | — | 17,398 | ||||||||
Policyholders' dividends | 2,343 | 19 | — | 2,362 | ||||||||
Total insurance benefits paid or provided | 30,348 | 6,175 | — | 36,523 | ||||||||
Commissions | 6,282 | 3,658 | — | 9,940 | ||||||||
Other general expenses | 2,780 | 3,205 | 178 | 6,163 | ||||||||
Capitalization of deferred policy acquisition costs | (5,685 | ) | (1,382 | ) | — | (7,067 | ) | |||||
Amortization of deferred policy acquisition costs | 3,947 | 811 | — | 4,758 | ||||||||
Amortization of cost of customer relationships acquired | 171 | 510 | — | 681 | ||||||||
Total benefits and expenses | 37,843 | 12,977 | 178 | 50,998 | ||||||||
Income before income tax expense | $ | 1,165 | 1,274 | 179 | 2,618 |
Nine Months Ended | ||||||||||||
September 30, 2013 | ||||||||||||
Life Insurance | Home Service Insurance | Other Non-Insurance Enterprises | Consolidated | |||||||||
(In thousands) | ||||||||||||
Revenues: | ||||||||||||
Premiums | $ | 95,767 | 32,754 | — | 128,521 | |||||||
Net investment income | 16,412 | 9,830 | 982 | 27,224 | ||||||||
Realized investment gains, net | 104 | 33 | 6 | 143 | ||||||||
Other income | 675 | 129 | 78 | 882 | ||||||||
Total revenue | 112,958 | 42,746 | 1,066 | 156,770 | ||||||||
Benefits and expenses: | ||||||||||||
Insurance benefits paid or provided: | ||||||||||||
Claims and surrenders | 32,016 | 16,213 | — | 48,229 | ||||||||
Increase in future policy benefit reserves | 49,845 | 2,408 | — | 52,253 | ||||||||
Policyholders' dividends | 6,618 | 53 | — | 6,671 | ||||||||
Total insurance benefits paid or provided | 88,479 | 18,674 | — | 107,153 | ||||||||
Commissions | 18,558 | 10,869 | — | 29,427 | ||||||||
Other general expenses | 8,560 | 9,696 | 1,948 | 20,204 | ||||||||
Capitalization of deferred policy acquisition costs | (16,941 | ) | (4,160 | ) | — | (21,101 | ) | |||||
Amortization of deferred policy acquisition costs | 11,802 | 1,945 | — | 13,747 | ||||||||
Amortization of cost of customer relationships acquired | 492 | 1,327 | — | 1,819 | ||||||||
Total benefits and expenses | 110,950 | 38,351 | 1,948 | 151,249 | ||||||||
Income (loss) before income tax expense | $ | 2,008 | 4,395 | (882 | ) | 5,521 |
Three Months Ended | ||||||||||||
September 30, 2012 | ||||||||||||
Life Insurance | Home Service Insurance | Other Non-Insurance Enterprises | Consolidated | |||||||||
(In thousands) | ||||||||||||
Revenues: | ||||||||||||
Premiums | $ | 31,876 | 11,076 | — | 42,952 | |||||||
Net investment income | 4,538 | 3,273 | 303 | 8,114 | ||||||||
Realized investment gains, net | 720 | 43 | — | 763 | ||||||||
Decrease in fair value of warrants | — | — | 241 | 241 | ||||||||
Other income | 56 | 5 | 51 | 112 | ||||||||
Total revenue | 37,190 | 14,397 | 595 | 52,182 | ||||||||
Benefits and expenses: | ||||||||||||
Insurance benefits paid or provided: | ||||||||||||
Claims and surrenders | 10,213 | 5,414 | — | 15,627 | ||||||||
Increase in future policy benefit reserves | 16,058 | 843 | — | 16,901 | ||||||||
Policyholders' dividends | 2,395 | 205 | — | 2,600 | ||||||||
Total insurance benefits paid or provided | 28,666 | 6,462 | — | 35,128 | ||||||||
Commissions | 6,115 | 3,654 | — | 9,769 | ||||||||
Other general expenses | 2,622 | 2,962 | 471 | 6,055 | ||||||||
Capitalization of deferred policy acquisition costs | (6,090 | ) | (1,457 | ) | — | (7,547 | ) | |||||
Amortization of deferred policy acquisition costs | 3,358 | 776 | — | 4,134 | ||||||||
Amortization of cost of customer relationships acquired | 164 | 434 | — | 598 | ||||||||
Total benefits and expenses | 34,835 | 12,831 | 471 | 48,137 | ||||||||
Income before income tax expense | $ | 2,355 | 1,566 | 124 | 4,045 |
Nine Months Ended | ||||||||||||
September 30, 2012 | ||||||||||||
Life Insurance | Home Service Insurance | Other Non-Insurance Enterprises | Consolidated | |||||||||
(In thousands) | ||||||||||||
Revenues: | ||||||||||||
Premiums | $ | 90,646 | 32,998 | — | 123,644 | |||||||
Net investment income | 12,949 | 9,503 | 851 | 23,303 | ||||||||
Realized investment gains, net | 909 | 170 | 28 | 1,107 | ||||||||
Decrease in fair value of warrants | — | — | 314 | 314 | ||||||||
Other income | 188 | 17 | 116 | 321 | ||||||||
Total revenue | 104,692 | 42,688 | 1,309 | 148,689 | ||||||||
Benefits and expenses: | ||||||||||||
Insurance benefits paid or provided: | ||||||||||||
Claims and surrenders | 30,912 | 15,578 | — | 46,490 | ||||||||
Increase in future policy benefit reserves | 45,477 | 2,316 | — | 47,793 | ||||||||
Policyholders' dividends | 6,525 | 230 | — | 6,755 | ||||||||
Total insurance benefits paid or provided | 82,914 | 18,124 | — | 101,038 | ||||||||
Commissions | 17,127 | 11,037 | — | 28,164 | ||||||||
Other general expenses | 7,953 | 8,932 | 2,128 | 19,013 | ||||||||
Capitalization of deferred policy acquisition costs | (16,109 | ) | (4,421 | ) | — | (20,530 | ) | |||||
Amortization of deferred policy acquisition costs | 10,758 | 1,935 | — | 12,693 | ||||||||
Amortization of cost of customer relationships acquired | 557 | 1,277 | — | 1,834 | ||||||||
Total benefits and expenses | 103,200 | 36,884 | 2,128 | 142,212 | ||||||||
Income (loss) before income tax expense | $ | 1,492 | 5,804 | (819 | ) | 6,477 |
Three Months Ended | ||||||
September 30, 2013 | September 30, 2012 | |||||
(In thousands, except per share amounts) | ||||||
Basic and diluted earnings per share: | ||||||
Numerator: | ||||||
Net income | $ | 1,824 | 2,911 | |||
Net income allocated to Class A common stock | $ | 1,806 | 2,882 | |||
Net income allocated to Class B common stock | 18 | 29 | ||||
Net income | $ | 1,824 | 2,911 | |||
Denominator: | ||||||
Weighted average shares of Class A outstanding - basic | 49,080 | 49,019 | ||||
Weighted average shares of Class A outstanding - diluted | 49,080 | 49,030 | ||||
Weighted average shares of Class B outstanding - basic and diluted | 1,002 | 1,002 | ||||
Basic earnings per share of Class A common stock | $ | 0.03 | 0.06 | |||
Basic earnings per share of Class B common stock | 0.02 | 0.03 | ||||
Diluted earnings per share of Class A common stock | 0.03 | 0.06 | ||||
Diluted earnings per share of Class B common stock | 0.02 | 0.03 |
Nine Months Ended | ||||||
September 30, 2013 | September 30, 2012 | |||||
(In thousands, except per share amounts) | ||||||
Basic and diluted earnings per share: | ||||||
Numerator: | ||||||
Net income | $ | 3,987 | 4,826 | |||
Net income allocated to Class A common stock | $ | 3,947 | 4,777 | |||
Net income allocated to Class B common stock | 40 | 49 | ||||
Net income | $ | 3,987 | 4,826 | |||
Denominator: | ||||||
Weighted average shares of Class A outstanding - basic | 49,080 | 48,962 | ||||
Weighted average shares of Class A outstanding - diluted | 49,080 | 48,972 | ||||
Weighted average shares of Class B outstanding - basic and diluted | 1,002 | 1,002 | ||||
Basic earnings per share of Class A common stock | $ | 0.08 | 0.10 | |||
Basic earnings per share of Class B common stock | 0.04 | 0.05 | ||||
Diluted earnings per share of Class A common stock | 0.08 | 0.10 | ||||
Diluted earnings per share of Class B common stock | 0.04 | 0.05 |
September 30, 2013 | December 31, 2012 | ||||||||||||
Carrying Value | % of Total Carrying Value | Carrying Value | % of Total Carrying Value | ||||||||||
(In thousands) | (In thousands) | ||||||||||||
Fixed maturity securities | $ | 822,718 | 84.4 | % | $ | 791,528 | 82.7 | % | |||||
Equity securities | 53,067 | 5.4 | % | 53,741 | 5.6 | % | |||||||
Mortgage loans | 680 | 0.1 | % | 1,509 | 0.2 | % | |||||||
Policy loans | 47,359 | 4.9 | % | 42,993 | 4.5 | % | |||||||
Real estate and other long-term investments | 8,533 | 0.9 | % | 8,553 | 0.9 | % | |||||||
Short-term investments | — | — | % | 2,340 | 0.2 | % | |||||||
Cash and cash equivalents | 41,687 | 4.3 | % | 56,299 | 5.9 | % | |||||||
Total cash, cash equivalents and investments | $ | 974,044 | 100.0 | % | $ | 956,963 | 100.0 | % |
September 30, 2013 | ||||||||||||
Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||
(In thousands) | ||||||||||||
Fixed maturities: | ||||||||||||
Available-for-sale: | ||||||||||||
U.S. Treasury securities | $ | 10,124 | 2,679 | — | 12,803 | |||||||
U.S. Government-sponsored enterprises | 62,949 | 1,510 | 152 | 64,307 | ||||||||
States and political subdivisions | 320,691 | 8,195 | 9,964 | 318,922 | ||||||||
Foreign governments | 104 | 27 | — | 131 | ||||||||
Corporate | 187,120 | 13,093 | 1,442 | 198,771 | ||||||||
Commercial mortgage-backed | 318 | 11 | — | 329 | ||||||||
Residential mortgage-backed | 3,821 | 297 | 2 | 4,116 | ||||||||
Total available-for-sale securities | 585,127 | 25,812 | 11,560 | 599,379 | ||||||||
Held-to-maturity securities: | ||||||||||||
U.S. Government-sponsored enterprises | 8,909 | 283 | — | 9,192 | ||||||||
States and political subdivisions | 176,686 | 2,461 | 5,407 | 173,740 | ||||||||
Corporate | 37,744 | 752 | 313 | 38,183 | ||||||||
Total held-to-maturity securities | 223,339 | 3,496 | 5,720 | 221,115 | ||||||||
Total fixed maturities | $ | 808,466 | 29,308 | 17,280 | 820,494 | |||||||
Equity securities: | ||||||||||||
Stock mutual funds | $ | 10,463 | 1,022 | — | 11,485 | |||||||
Bond mutual funds | 41,504 | 23 | 672 | 40,855 | ||||||||
Common stock | 17 | — | 3 | 14 | ||||||||
Preferred stock | 408 | 305 | — | 713 | ||||||||
Total equity securities | $ | 52,392 | 1,350 | 675 | 53,067 |
December 31, 2012 | ||||||||||||
Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||
(In thousands) | ||||||||||||
Fixed maturities: | ||||||||||||
Available-for-sale securities: | ||||||||||||
U.S. Treasury securities | $ | 10,170 | 3,773 | — | 13,943 | |||||||
U.S. Government-sponsored enterprises | 81,788 | 3,815 | 22 | 85,581 | ||||||||
States and political subdivisions | 265,812 | 17,227 | 777 | 282,262 | ||||||||
Foreign governments | 105 | 36 | — | 141 | ||||||||
Corporate | 195,755 | 20,536 | 286 | 216,005 | ||||||||
Commercial mortgage-backed | 481 | 17 | 2 | 496 | ||||||||
Residential mortgage-backed | 5,625 | 469 | 2 | 6,092 | ||||||||
Total available-for-sale securities | 559,736 | 45,873 | 1,089 | 604,520 | ||||||||
Held-to-maturity securities: | ||||||||||||
U.S. Government-sponsored enterprises | 28,632 | 514 | — | 29,146 | ||||||||
States and political subdivisions | 125,634 | 5,435 | 378 | 130,691 | ||||||||
Corporate | 32,742 | 1,160 | — | 33,902 | ||||||||
Total held-to-maturity securities | 187,008 | 7,109 | 378 | 193,739 | ||||||||
Total fixed maturity securities | $ | 746,744 | 52,982 | 1,467 | 798,259 | |||||||
Equity securities: | ||||||||||||
Stock mutual funds | $ | 10,463 | 250 | 28 | 10,685 | |||||||
Bond mutual funds | 41,504 | 541 | 129 | 41,916 | ||||||||
Common stock | 17 | — | 2 | 15 | ||||||||
Preferred stock | 760 | 365 | — | 1,125 | ||||||||
Total equity securities | $ | 52,744 | 1,156 | 159 | 53,741 |
September 30, 2013 | |||||||||||||||||||||||||||
Less than 12 months | Greater than 12 months | Total | |||||||||||||||||||||||||
Fair Value | Unrealized Losses | # of Securities | Fair Value | Unrealized Losses | # of Securities | Fair Value | Unrealized Losses | # of Securities | |||||||||||||||||||
(In thousands, except for # of securities) | |||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||||||
U.S. Government-sponsored enterprises | $ | 11,609 | 152 | 8 | — | — | — | 11,609 | 152 | 8 | |||||||||||||||||
States and political subdivisions | 148,560 | 8,662 | 163 | 13,375 | 1,302 | 15 | 161,935 | 9,964 | 178 | ||||||||||||||||||
Corporate | 39,735 | 1,098 | 25 | 2,434 | 344 | 2 | 42,169 | 1,442 | 27 | ||||||||||||||||||
Commercial mortgage-backed | 4 | — | 1 | 46 | 2 | 1 | 50 | 2 | 2 | ||||||||||||||||||
Total available-for-sale securities | 199,908 | 9,912 | 197 | 15,855 | 1,648 | 18 | 215,763 | 11,560 | 215 | ||||||||||||||||||
Held-to-maturity securities: | |||||||||||||||||||||||||||
States and political subdivisions | 88,943 | 4,453 | 106 | 14,394 | 954 | 17 | 103,337 | 5,407 | 123 | ||||||||||||||||||
Corporate | 7,390 | 313 | 6 | — | — | — | 7,390 | 313 | 6 | ||||||||||||||||||
Total held-to-maturity securities | 96,333 | 4,766 | 112 | 14,394 | 954 | 17 | 110,727 | 5,720 | 129 | ||||||||||||||||||
Total fixed maturities | $ | 296,241 | 14,678 | 309 | 30,249 | 2,602 | 35 | 326,490 | 17,280 | 344 | |||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||
Bond mutual funds | $ | 30,904 | 307 | 4 | 6,058 | 365 | 2 | 36,962 | 672 | 6 | |||||||||||||||||
Common stocks | — | — | — | 13 | 3 | 1 | 13 | 3 | 1 | ||||||||||||||||||
Total equities | $ | 30,904 | 307 | 4 | 6,071 | 368 | 3 | 36,975 | 675 | 7 |
December 31, 2012 | |||||||||||||||||||||||||||
Less than 12 months | Greater than 12 months | Total | |||||||||||||||||||||||||
Fair Value | Unrealized Losses | # of Securities | Fair Value | Unrealized Losses | # of Securities | Fair Value | Unrealized Losses | # of Securities | |||||||||||||||||||
(In thousands, except for # of securities) | |||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||||||
U.S. Government-sponsored enterprises | $ | 10,603 | 22 | 9 | — | — | — | 10,603 | 22 | 9 | |||||||||||||||||
States and political subdivisions | 54,115 | 443 | 61 | 5,099 | 334 | 2 | 59,214 | 777 | 63 | ||||||||||||||||||
Corporate | 22,316 | 286 | 16 | — | — | — | 22,316 | 286 | 16 | ||||||||||||||||||
Commercial mortgage-backed | 94 | 2 | 1 | — | — | — | 94 | 2 | 1 | ||||||||||||||||||
Residential mortgage-backed | — | — | — | 52 | 2 | 1 | 52 | 2 | 1 | ||||||||||||||||||
Total available-for-sale securities | 87,128 | 753 | 87 | 5,151 | 336 | 3 | 92,279 | 1,089 | 90 | ||||||||||||||||||
Held-to-maturity securities: | |||||||||||||||||||||||||||
States and political subdivisions | 40,611 | 378 | 32 | — | — | — | 40,611 | 378 | 32 | ||||||||||||||||||
Total held-to-maturity securities | 40,611 | 378 | 32 | — | — | — | 40,611 | 378 | 32 | ||||||||||||||||||
Total fixed maturities | $ | 127,739 | 1,131 | 119 | 5,151 | 336 | 3 | 132,890 | 1,467 | 122 | |||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||
Stock mutual funds | $ | — | — | — | 972 | 28 | 1 | 972 | 28 | 1 | |||||||||||||||||
Bond mutual funds | 3,335 | 88 | 1 | 2,959 | 41 | 2 | 6,294 | 129 | 3 | ||||||||||||||||||
Common stock | 15 | 2 | 1 | — | — | — | 15 | 2 | 1 | ||||||||||||||||||
Total equities | $ | 3,350 | 90 | 2 | 3,931 | 69 | 3 | 7,281 | 159 | 5 |
September 30, 2013 | ||||||
Amortized Cost | Fair Value | |||||
(In thousands) | ||||||
Available-for-sale securities: | ||||||
Due in one year or less | $ | 5,077 | 5,142 | |||
Due after one year through five years | 110,617 | 117,370 | ||||
Due after five years through ten years | 99,777 | 102,778 | ||||
Due after ten years | 365,517 | 369,644 | ||||
Securities not due at a single maturity date | 4,139 | 4,445 | ||||
Total available-for-sale securities | 585,127 | 599,379 | ||||
Held-to-maturity securities: | ||||||
Due in one year or less | 3,783 | 3,834 | ||||
Due after one year through five years | 43,808 | 44,518 | ||||
Due after five years through ten years | 45,721 | 46,413 | ||||
Due after ten years | 130,027 | 126,350 | ||||
Total held-to-maturity securities | 223,339 | 221,115 | ||||
Total fixed maturities | $ | 808,466 | 820,494 |
Fixed Maturities Available-for-Sale | Equity Securities | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Proceeds | $ | 259 | — | 317 | 503 | — | 2,856 | — | 2,856 | |||||||||||||||
Gross realized gains | $ | 7 | — | 8 | 4 | — | 632 | — | 632 | |||||||||||||||
Gross realized losses | $ | 1 | — | 1 | 3 | — | — | — | — |
• | Level 1 - Quoted prices for identical instruments in active markets. |
• | Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs or whose significant value drivers are observable. |
• | Level 3 - Instruments whose significant value drivers are unobservable. |
September 30, 2013 | ||||||||||||
Available-for-sale investments | Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||
(In thousands) | ||||||||||||
Financial assets: | ||||||||||||
Fixed maturities: | ||||||||||||
U.S. Treasury and U.S. Government-sponsored enterprises | $ | 12,803 | 64,307 | — | 77,110 | |||||||
States and political subdivisions | — | 318,922 | — | 318,922 | ||||||||
Corporate | — | 198,771 | — | 198,771 | ||||||||
Commercial mortgage-backed | — | — | 329 | 329 | ||||||||
Residential mortgage-backed | — | 4,116 | — | 4,116 | ||||||||
Foreign governments | — | 131 | — | 131 | ||||||||
Total fixed maturities | 12,803 | 586,247 | 329 | 599,379 | ||||||||
Equity securities: | ||||||||||||
Stock mutual funds | 11,485 | — | — | 11,485 | ||||||||
Bond mutual funds | 40,855 | — | — | 40,855 | ||||||||
Common stock | 14 | — | — | 14 | ||||||||
Preferred stock | 713 | — | — | 713 | ||||||||
Total equity securities | 53,067 | — | — | 53,067 | ||||||||
Total financial assets | $ | 65,870 | 586,247 | 329 | 652,446 |
December 31, 2012 | ||||||||||||
Available-for-sale investments | Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||
(In thousands) | ||||||||||||
Financial assets: | ||||||||||||
Fixed maturities: | ||||||||||||
U.S. Treasury and U.S. Government-sponsored enterprises | $ | 13,943 | 85,581 | — | 99,524 | |||||||
States and political subdivisions | — | 282,262 | — | 282,262 | ||||||||
Corporate | — | 216,005 | — | 216,005 | ||||||||
Commercial mortgage-backed | — | 109 | 387 | 496 | ||||||||
Residential mortgage-backed | — | 6,092 | — | 6,092 | ||||||||
Foreign governments | — | 141 | — | 141 | ||||||||
Total fixed maturities | 13,943 | 590,190 | 387 | 604,520 | ||||||||
Equity securities: | ||||||||||||
Stock mutual funds | 10,685 | — | — | 10,685 | ||||||||
Bond mutual funds | 41,916 | — | — | 41,916 | ||||||||
Common stock | 15 | — | — | 15 | ||||||||
Preferred stock | 1,125 | — | — | 1,125 | ||||||||
Total equity securities | 53,741 | — | — | 53,741 | ||||||||
Total financial assets | $ | 67,684 | 590,190 | 387 | 658,261 |
September 30, 2013 | December 31, 2012 | |||||
(In thousands) | ||||||
Balance at beginning of period | $ | 387 | 459 | |||
Total realized and unrealized gains (losses) | ||||||
Included in net income | — | — | ||||
Included in other comprehensive income | (5 | ) | (6 | ) | ||
Principal paydowns | (53 | ) | (66 | ) | ||
Transfer in and (out) of Level 3 | — | — | ||||
Balance at end of period | $ | 329 | 387 |
September 30, 2013 | December 31, 2012 | |||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||
(In thousands) | ||||||||||||
Financial assets: | ||||||||||||
Fixed maturities, held-to-maturity | $ | 223,339 | 221,115 | 187,008 | 193,739 | |||||||
Mortgage loans | 680 | 704 | 1,509 | 1,503 | ||||||||
Policy loans | 47,359 | 47,359 | 42,993 | 42,993 | ||||||||
Short-term investments | — | — | 2,340 | 2,340 | ||||||||
Cash and cash equivalents | 41,687 | 41,687 | 56,299 | 56,299 | ||||||||
Financial liabilities: | ||||||||||||
Annuity benefit reserves | 54,178 | 58,196 | 51,750 | 54,981 |
• | Changes in foreign and U.S. general economic, market, and political conditions, including the performance of financial markets and interest rates; |
• | Changes in consumer behavior, which may affect the Company's ability to sell its products and retain business; |
• | The timely development of and acceptance of new products of the Company and perceived overall value of these products and services by existing and potential customers; |
• | Fluctuations in experience regarding current mortality, morbidity, persistency and interest rates relative to expected amounts used in pricing and actuarial valuation of the Company's products; |
• | The performance of our investment portfolio, which may be adversely affected by changes in interest rates, adverse developments and ratings of issuers whose debt securities we may hold, and other adverse macroeconomic events; |
• | Results of litigation we may be involved in; |
• | Changes in assumptions related to deferred acquisition costs and the value of any businesses we may acquire; |
• | Regulatory, accounting or tax changes that may affect the cost of, or the demand for, the Company's products or services; |
• | Our concentration of business from persons residing in Latin America and the Pacific Rim; |
• | Changes in tax laws; |
• | Effects of acquisitions and restructuring, including possible difficulties in integrating and realizing the projected results of acquisitions; |
• | Changes in statutory or U.S. GAAP accounting principles, policies or practices; and |
• | Our success at managing risks involved in the foregoing; |
• | The risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 under the heading "Part II. - Item 1A - Risk Factors." |
• | U.S. Dollar-denominated ordinary whole life insurance and endowment policies predominantly to high net worth, high income foreign residents, principally in Latin America and the Pacific Rim through independent marketing consultants; |
• | ordinary whole life insurance policies to middle income households concentrated in the Midwest and southern United States through independent marketing consultants; and |
• | final expense and limited liability property policies to middle and lower income households in Louisiana, Arkansas and Mississippi through employee and independent agents in our home service distribution channel. |
• | Insurance premiums rose for the three and nine month periods ended September 30, 2013 to $43.7 million and $128.5 million in 2013 from $43.0 million and $123.6 million in 2012, an increase of 1.9% and 3.9% driven by increased sales and renewal premiums in our life insurance segment. |
• | Net investment income increased 17.9% and 16.8% for the three and nine month periods ended September 30, 2013 compared to 2012. The average yield on the consolidated portfolio increased to an annualized rate of 4.10%, up from 3.74% for the same period in 2012, as prevailing interest rates rose modestly. In addition, the increase in the invested assets due to premium revenue growth contributed to the growth in investment income. |
• | Claims and surrenders expense increased 7.3% and 3.7% for the three and nine months ended September 30, 2013 compared to 2012, primarily driven by surrender benefits. Claims reported in the life segment were lower for the nine months in the current year and claims experience in the home service segment was impacted by Hurricane Isaac in 2012 and seasonal weather activity in the current year. |
• | Changes in reserves resulted in liability increases due to the increased sales of endowment products that build up reserves at a faster pace than whole life longer-term mortality based products. Additionally, the sustained low interest rate environment also results in a higher reserve development due to the lower interest yield assumptions in the current period. |
• | Life Insurance |
• | Home Service Insurance |
• | Other Non-Insurance Enterprises |
Nine Months Ended September 30, | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Amount of Insurance Issued | Number of Policies Issued | Average Policy Face Amount Issued | Amount of Insurance Issued | Number of Policies Issued | Average Policy Face Amount Issued | ||||||||||||||||
Life | $ | 262,191,318 | 4,418 | $ | 59,346 | $ | 243,529,971 | 4,234 | $ | 57,518 | |||||||||||
Home Service | 141,523,143 | 20,617 | 6,864 | 151,309,545 | 21,895 | 6,911 |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(In thousands) | ||||||||||||
Revenues: | ||||||||||||
Premiums: | ||||||||||||
Life insurance | $ | 42,091 | 41,257 | 123,728 | 118,608 | |||||||
Accident and health insurance | 380 | 414 | 1,135 | 1,244 | ||||||||
Property insurance | 1,276 | 1,281 | 3,658 | 3,792 | ||||||||
Net investment income | 9,570 | 8,114 | 27,224 | 23,303 | ||||||||
Realized investment gains, net | 30 | 763 | 143 | 1,107 | ||||||||
Decrease in fair value of warrants | — | 241 | — | 314 | ||||||||
Other income | 269 | 112 | 882 | 321 | ||||||||
Total revenues | 53,616 | 52,182 | 156,770 | 148,689 | ||||||||
Exclude fair value adjustments of warrants | — | (241 | ) | — | (314 | ) | ||||||
Total revenues excluding fair value adjustments | $ | 53,616 | 51,941 | 156,770 | 148,375 |
September 30, | December 31, | September 30, | |||||||
2013 | 2012 | 2012 | |||||||
(In thousands, except for %) | |||||||||
Net investment income, annualized | $ | 36,299 | 31,725 | 31,071 | |||||
Average invested assets, at amortized cost | 886,157 | 832,552 | 829,936 | ||||||
Annualized yield on average invested assets | 4.10 | % | 3.81 | % | 3.74 | % |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(In thousands) | ||||||||||||
Gross investment income: | ||||||||||||
Fixed maturity securities | $ | 8,634 | 7,048 | 24,330 | 20,247 | |||||||
Equity securities | 420 | 487 | 1,345 | 1,496 | ||||||||
Mortgage loans | 10 | 31 | 58 | 76 | ||||||||
Policy loans | 956 | 841 | 2,660 | 2,454 | ||||||||
Long-term investments | 60 | 96 | 170 | 217 | ||||||||
Other investment income | 12 | 19 | 50 | 76 | ||||||||
Total investment income | 10,092 | 8,522 | 28,613 | 24,566 | ||||||||
Investment expenses | (522 | ) | (408 | ) | (1,389 | ) | (1,263 | ) | ||||
Net investment income | $ | 9,570 | 8,114 | 27,224 | 23,303 |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(In thousands) | ||||||||||||
Benefits and expenses: | ||||||||||||
Insurance benefits paid or provided: | ||||||||||||
Claims and surrenders | $ | 16,763 | 15,627 | 48,229 | 46,490 | |||||||
Increase in future policy benefit reserves | 17,398 | 16,901 | 52,253 | 47,793 | ||||||||
Policyholders' dividends | 2,362 | 2,600 | 6,671 | 6,755 | ||||||||
Total insurance benefits paid or provided | 36,523 | 35,128 | 107,153 | 101,038 | ||||||||
Commissions | 9,940 | 9,769 | 29,427 | 28,164 | ||||||||
Other general expenses | 6,163 | 6,055 | 20,204 | 19,013 | ||||||||
Capitalization of deferred policy acquisition costs | (7,067 | ) | (7,547 | ) | (21,101 | ) | (20,530 | ) | ||||
Amortization of deferred policy acquisition costs | 4,758 | 4,134 | 13,747 | 12,693 | ||||||||
Amortization of cost of customer relationships acquired | 681 | 598 | 1,819 | 1,834 | ||||||||
Total benefits and expenses | $ | 50,998 | 48,137 | 151,249 | 142,212 |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(In thousands) | ||||||||||||
Death claims | $ | 5,494 | 5,053 | 16,418 | 16,530 | |||||||
Surrender benefits | 6,028 | 5,068 | 16,525 | 14,735 | ||||||||
Endowments | 3,927 | 3,812 | 11,515 | 11,445 | ||||||||
Property claims | 613 | 1,017 | 1,582 | 1,880 | ||||||||
Accident and health benefits | 117 | 91 | 284 | 229 | ||||||||
Other policy benefits | 584 | 586 | 1,905 | 1,671 | ||||||||
Total claims and surrenders | $ | 16,763 | 15,627 | 48,229 | 46,490 |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(In thousands) | ||||||||||||
Life Insurance | $ | 1,165 | 2,355 | 2,008 | 1,492 | |||||||
Home Service Insurance | 1,274 | 1,566 | 4,395 | 5,804 | ||||||||
Other Non-Insurance Enterprises | 179 | 124 | (882 | ) | (819 | ) | ||||||
Total | $ | 2,618 | 4,045 | 5,521 | 6,477 |
• | larger face amount policies typically issued when compared to our U.S. operations, which results in lower underwriting and administrative costs per unit of coverage; |
• | premiums typically paid annually rather than monthly or quarterly, which reduces our administrative expenses, accelerates cash flow and results in lower policy lapse rates than premiums with more frequently scheduled payments; and |
• | comparable persistency levels and mortality rates as experienced with U.S. policies. |
• | U.S. Dollar-denominated cash values that accumulate, beginning in the first policy year, to a policyholder during his or her lifetime; |
• | premium rates that are competitive with or better than most foreign local companies; |
• | a hedge against local currency inflation; |
• | protection against devaluation of foreign currency; |
• | capital investment in the United States’ more secure economic environment; and |
• | lifetime income guarantees for an insured or for surviving beneficiaries. |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(In thousands) | ||||||||||||
Country | ||||||||||||
Venezuela | $ | 6,590 | 6,059 | 20,363 | 17,570 | |||||||
Colombia | 6,291 | 5,847 | 17,908 | 17,062 | ||||||||
Taiwan | 3,182 | 3,402 | 10,771 | 10,753 | ||||||||
Ecuador | 3,607 | 3,482 | 10,812 | 10,305 | ||||||||
Argentina | 2,464 | 2,738 | 6,654 | 6,950 | ||||||||
Other Non-U.S. | 8,898 | 8,365 | 24,381 | 22,490 | ||||||||
Total | $ | 31,032 | 29,893 | 90,889 | 85,130 |
• | cash accumulation/living benefits; |
• | tax-deferred annuity interest earnings; |
• | guaranteed lifetime income or monthly income options for the policyowner or surviving family members; |
• | accidental death benefit coverage options; and |
• | an option to waive premium payments in the event of disability. |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(In thousands) | ||||||||||||
State | ||||||||||||
Texas | $ | 703 | 1,200 | 2,041 | 3,554 | |||||||
Indiana | 401 | 410 | 1,099 | 1,218 | ||||||||
Missouri | 127 | 138 | 412 | 489 | ||||||||
Kentucky | 108 | 121 | 350 | 381 | ||||||||
Louisiana | (39 | ) | 181 | 216 | 400 | |||||||
Other States | 172 | 1,040 | 1,573 | 2,726 | ||||||||
Total | $ | 1,472 | 3,090 | 5,691 | 8,768 |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(In thousands) | ||||||||||||
Revenue: | ||||||||||||
Premiums | $ | 32,800 | 31,876 | 95,767 | 90,646 | |||||||
Net investment income | 5,924 | 4,538 | 16,412 | 12,949 | ||||||||
Realized investment gains, net | 23 | 720 | 104 | 909 | ||||||||
Other income | 261 | 56 | 675 | 188 | ||||||||
Total revenue | 39,008 | 37,190 | 112,958 | 104,692 | ||||||||
Benefits and expenses: | ||||||||||||
Insurance benefits paid or provided: | ||||||||||||
Claims and surrenders | 11,249 | 10,213 | 32,016 | 30,912 | ||||||||
Increase in future policy benefit reserves | 16,756 | 16,058 | 49,845 | 45,477 | ||||||||
Policyholders' dividends | 2,343 | 2,395 | 6,618 | 6,525 | ||||||||
Total insurance benefits paid or provided | 30,348 | 28,666 | 88,479 | 82,914 | ||||||||
Commissions | 6,282 | 6,115 | 18,558 | 17,127 | ||||||||
Other general expenses | 2,780 | 2,622 | 8,560 | 7,953 | ||||||||
Capitalization of deferred policy acquisition costs | (5,685 | ) | (6,090 | ) | (16,941 | ) | (16,109 | ) | ||||
Amortization of deferred policy acquisition costs | 3,947 | 3,358 | 11,802 | 10,758 | ||||||||
Amortization of cost of customer relationships acquired | 171 | 164 | 492 | 557 | ||||||||
Total benefits and expenses | 37,843 | 34,835 | 110,950 | 103,200 | ||||||||
Income before income tax expense | $ | 1,165 | 2,355 | 2,008 | 1,492 |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(In thousands) | ||||||||||||
Premiums: | ||||||||||||
First year | $ | 4,703 | 4,997 | 13,736 | 12,629 | |||||||
Renewal | 28,097 | 26,879 | 82,031 | 78,017 | ||||||||
Total premiums | $ | 32,800 | 31,876 | 95,767 | 90,646 |
Nine Months Ended | Year Ended | Nine Months Ended | |||||||
September 30, | December 31, | September 30, | |||||||
2013 | 2012 | 2012 | |||||||
(In thousands, except for %) | |||||||||
Net investment income, annualized | $ | 21,883 | 17,828 | 17,265 | |||||
Average invested assets, at amortized cost | $ | 541,937 | 494,289 | 489,730 | |||||
Annualized yield on average invested assets | 4.04 | % | 3.61 | % | 3.53 | % |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(In thousands) | ||||||||||||
Death claims | $ | 1,587 | 1,466 | 4,301 | 5,232 | |||||||
Surrender benefits | 5,180 | 4,403 | 14,447 | 12,746 | ||||||||
Endowment benefits | 3,923 | 3,806 | 11,502 | 11,426 | ||||||||
Accident and health benefits | 82 | 74 | 192 | 180 | ||||||||
Other policy benefits | 477 | 464 | 1,574 | 1,328 | ||||||||
Total claims and surrenders | $ | 11,249 | 10,213 | 32,016 | 30,912 |
• | Death claims expense was higher for the three months and lower for the nine months ended September 30, 2013 due to normal fluctuations in reported claims. Mortality experience is closely monitored by the Company as a key performance indicator and these amounts were within expected levels. |
• | The majority of policy surrender benefits paid is attributable to our international business and was related to policies that have been in force over twenty years, where surrender charges are no longer applicable. |
• | Endowment benefit expense primarily results from the election by policyholders of a product feature providing an annual guaranteed benefit. This is a fixed benefit over the life of the contract, thus this expense will increase with new sales and improved persistency. |
• | Other policy benefits resulted primarily from interest paid on premium deposits and policy benefit accumulations and increased as these policy liabilities also increased. |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(In thousands) | ||||||||||||
State | ||||||||||||
Louisiana | $ | 10,463 | 10,514 | 31,319 | 31,326 | |||||||
Arkansas | 419 | 481 | 1,280 | 1,446 | ||||||||
Mississippi | 126 | 116 | 366 | 337 | ||||||||
Other States | 228 | 231 | 665 | 695 | ||||||||
Total | $ | 11,236 | 11,342 | 33,630 | 33,804 |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(In thousands) | ||||||||||||
Revenue: | ||||||||||||
Premiums | $ | 10,947 | 11,076 | 32,754 | 32,998 | |||||||
Net investment income | 3,309 | 3,273 | 9,830 | 9,503 | ||||||||
Realized investment gains, net | 2 | 43 | 33 | 170 | ||||||||
Other income | (7 | ) | 5 | 129 | 17 | |||||||
Total revenue | 14,251 | 14,397 | 42,746 | 42,688 | ||||||||
Benefits and expenses: | ||||||||||||
Insurance benefits paid or provided: | ||||||||||||
Claims and surrenders | 5,514 | 5,414 | 16,213 | 15,578 | ||||||||
Increase in future policy benefit reserves | 642 | 843 | 2,408 | 2,316 | ||||||||
Policyholders' dividends | 19 | 205 | 53 | 230 | ||||||||
Total insurance benefits paid or provided | 6,175 | 6,462 | 18,674 | 18,124 | ||||||||
Commissions | 3,658 | 3,654 | 10,869 | 11,037 | ||||||||
Other general expenses | 3,205 | 2,962 | 9,696 | 8,932 | ||||||||
Capitalization of deferred policy acquisition costs | (1,382 | ) | (1,457 | ) | (4,160 | ) | (4,421 | ) | ||||
Amortization of deferred policy acquisition costs | 811 | 776 | 1,945 | 1,935 | ||||||||
Amortization of cost of customer relationships acquired | 510 | 434 | 1,327 | 1,277 | ||||||||
Total benefits and expenses | 12,977 | 12,831 | 38,351 | 36,884 | ||||||||
Income before income tax expense | $ | 1,274 | 1,566 | 4,395 | 5,804 |
Nine Months Ended | Year Ended | Nine Months Ended | |||||||
September 30, | December 31, | September 30, | |||||||
2013 | 2012 | 2012 | |||||||
(In thousands, except for %) | |||||||||
Net investment income, annualized | $ | 13,107 | 12,724 | 12,671 | |||||
Average invested assets, at amortized cost | 293,071 | 291,229 | 293,374 | ||||||
Annualized yield on average invested assets | 4.47 | % | 4.37 | % | 4.32 | % |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(In thousands) | ||||||||||||
Death claims | $ | 3,907 | 3,587 | 12,117 | 11,298 | |||||||
Surrender benefits | 848 | 665 | 2,078 | 1,989 | ||||||||
Endowment benefits | 4 | 6 | 13 | 19 | ||||||||
Property claims | 613 | 1,017 | 1,582 | 1,880 | ||||||||
Accident and health benefits | 35 | 17 | 92 | 49 | ||||||||
Other policy benefits | 107 | 122 | 331 | 343 | ||||||||
Total claims and surrenders | $ | 5,514 | 5,414 | 16,213 | 15,578 |
• | Death claims expense increased for the three and nine months in 2013, largely due to higher reported deaths in the three months ended of 2013 and the release of $0.5 million of incurred but unreported death claims liability by the Company during the nine months ended 2012. Mortality experience is closely monitored by the Company as a key performance indicator and amounts were within expected levels. |
• | Property claims decreased 39.7% and 15.9% for the three and nine months ended September 30, 2013 compared to 2012. For the three and nine months ended September 30, 2012, the Company recorded $0.5 million of claims expense related to Hurricane Isaac. We experienced some increased claims reported during the three and nine months ended in 2013 related to seasonal weather events. |
September 30, 2013 | December 31, 2012 | ||||||||||
Carrying Value | % of Total Carrying Value | Carrying Value | % of Total Carrying Value | ||||||||
(In thousands) | (In thousands) | ||||||||||
Marketable securities: | |||||||||||
U.S. Treasury and U.S. Government-sponsored enterprises | $ | 86,019 | 8.8 | $ | 128,156 | 13.4 | |||||
States and political subdivisions | 495,608 | 50.9 | 407,896 | 42.6 | |||||||
Corporate | 236,515 | 24.3 | 248,747 | 26.0 | |||||||
Mortgage-backed (1) | 4,445 | 0.4 | 6,588 | 0.7 | |||||||
Foreign governments | 131 | — | 141 | — | |||||||
Short-term investments | — | — | 2,340 | 0.2 | |||||||
Total marketable securities | 822,718 | 84.4 | 793,868 | 82.9 | |||||||
Cash and cash equivalents | 41,687 | 4.3 | 56,299 | 5.9 | |||||||
Other investments: | |||||||||||
Policy loans | 47,359 | 4.9 | 42,993 | 4.5 | |||||||
Equity securities | 53,067 | 5.4 | 53,741 | 5.6 | |||||||
Mortgage loans | 680 | 0.1 | 1,509 | 0.2 | |||||||
Real estate | 8,477 | 0.9 | 8,496 | 0.9 | |||||||
Other long-term investments | 56 | — | 57 | — | |||||||
Total cash, cash equivalents and investments | $ | 974,044 | 100.0 | $ | 956,963 | 100.0 |
September 30, 2013 | December 31, 2012 | ||||||||||
Carrying Value | % of Total Carrying Value | Carrying Value | % of Total Carrying Value | ||||||||
(In thousands) | (In thousands) | ||||||||||
AAA | $ | 66,828 | 8.1 | $ | 60,752 | 7.7 | |||||
AA | 363,725 | 44.2 | 375,926 | 47.5 | |||||||
A | 244,181 | 29.7 | 199,302 | 25.2 | |||||||
BBB | 126,596 | 15.4 | 134,119 | 16.9 | |||||||
BB and other | 21,388 | 2.6 | 21,429 | 2.7 | |||||||
Totals | $ | 822,718 | 100.0 | $ | 791,528 | 100.0 |
September 30, 2013 | ||||||||||||||||||||||||||
General Obligation | Special Revenue | Other | Total | % Based on | ||||||||||||||||||||||
Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Amortized Cost | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
AAA | $ | 37,194 | 36,092 | 14,816 | 14,603 | — | — | 52,010 | 50,695 | 10.2 | ||||||||||||||||
AA | 93,528 | 94,557 | 153,359 | 151,936 | 11,544 | 11,398 | 258,431 | 257,891 | 51.9 | |||||||||||||||||
A | 35,464 | 37,651 | 117,066 | 120,168 | 7,935 | 8,327 | 160,465 | 166,146 | 33.4 | |||||||||||||||||
BBB | 1,709 | 1,773 | 13,578 | 13,873 | 796 | 824 | 16,083 | 16,470 | 3.3 | |||||||||||||||||
BB and other | — | — | 5,673 | 6,175 | — | — | 5,673 | 6,175 | 1.2 | |||||||||||||||||
Total | $ | 167,895 | 170,073 | 304,492 | 306,755 | 20,275 | 20,549 | 492,662 | 497,377 | 100.0 |
September 30, 2013 | ||||||||||||||||||||||||||
General Obligation | Special Revenue | Other | Total | % Based on | ||||||||||||||||||||||
Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Amortized Cost | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
AAA | $ | 12,558 | 12,589 | 560 | 547 | — | — | 13,118 | 13,136 | 2.6 | ||||||||||||||||
AA | 98,338 | 98,278 | 110,621 | 109,873 | 11,544 | 11,398 | 220,503 | 219,549 | 44.2 | |||||||||||||||||
A | 53,015 | 55,125 | 158,928 | 161,193 | 7,935 | 8,327 | 219,878 | 224,645 | 45.2 | |||||||||||||||||
BBB | 3,984 | 4,081 | 28,710 | 28,967 | 796 | 824 | 33,490 | 33,872 | 6.8 | |||||||||||||||||
BB and other | — | — | 5,673 | 6,175 | — | — | 5,673 | 6,175 | 1.2 | |||||||||||||||||
Total | $ | 167,895 | 170,073 | 304,492 | 306,755 | 20,275 | 20,549 | 492,662 | 497,377 | 100.0 |
Fair Value | Amortized Cost | % of Total Fair Value | ||||||
(In thousands) | ||||||||
Utilities | $ | 111,970 | 112,943 | 22.7 |
September 30, 2013 | ||||||||||||||||||||||||
General Obligation | Special Revenue | Other | Total | |||||||||||||||||||||
Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | |||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Louisiana securities including third party guarantees | ||||||||||||||||||||||||
AA | $ | 8,198 | 7,783 | 21,249 | 20,939 | — | — | 29,447 | 28,722 | |||||||||||||||
A | 5,966 | 6,199 | 18,279 | 18,044 | 1,011 | 1,040 | 25,256 | 25,283 | ||||||||||||||||
BBB | 1,709 | 1,773 | — | — | — | — | 1,709 | 1,773 | ||||||||||||||||
BB and other | — | — | 4,633 | 5,186 | — | — | 4,633 | 5,186 | ||||||||||||||||
Total | $ | 15,873 | 15,755 | 44,161 | 44,169 | 1,011 | 1,040 | 61,045 | 60,964 | |||||||||||||||
Louisiana securities excluding third party guarantees | ||||||||||||||||||||||||
AA | $ | 8,198 | 7,783 | 15,143 | 15,008 | — | — | 23,341 | 22,791 | |||||||||||||||
A | 5,966 | 6,199 | 18,260 | 17,944 | 1,011 | 1,040 | 25,237 | 25,183 | ||||||||||||||||
BBB | 1,709 | 1,773 | 6,125 | 6,031 | — | — | 7,834 | 7,804 | ||||||||||||||||
BB and other | — | — | 4,633 | 5,186 | — | — | 4,633 | 5,186 | ||||||||||||||||
Total | $ | 15,873 | 15,755 | 44,161 | 44,169 | 1,011 | 1,040 | 61,045 | 60,964 | |||||||||||||||
Texas securities including third party guarantees | ||||||||||||||||||||||||
AAA | $ | 32,579 | 31,589 | 8,564 | 8,429 | — | — | 41,143 | 40,018 | |||||||||||||||
AA | 21,202 | 21,768 | 14,752 | 14,705 | — | — | 35,954 | 36,473 | ||||||||||||||||
A | 1,243 | 1,273 | 14,770 | 14,740 | — | — | 16,013 | 16,013 | ||||||||||||||||
BBB | — | — | 10,099 | 10,263 | — | — | 10,099 | 10,263 | ||||||||||||||||
BB and other | — | — | — | — | — | — | — | — | ||||||||||||||||
Total | $ | 55,024 | 54,630 | 48,185 | 48,137 | — | — | 103,209 | 102,767 | |||||||||||||||
Texas securities excluding third party guarantees | ||||||||||||||||||||||||
AAA | $ | 8,505 | 8,602 | 560 | 548 | — | — | 9,065 | 9,150 | |||||||||||||||
AA | 41,861 | 41,242 | 18,774 | 18,579 | — | — | 60,635 | 59,821 | ||||||||||||||||
A | 4,658 | 4,786 | 18,752 | 18,747 | — | — | 23,410 | 23,533 | ||||||||||||||||
BBB | — | — | 10,099 | 10,263 | — | — | 10,099 | 10,263 | ||||||||||||||||
BB and other | — | — | — | — | — | — | — | — | ||||||||||||||||
Total | $ | 55,024 | 54,630 | 48,185 | 48,137 | — | — | 103,209 | 102,767 |
December 31, | ||
2012 | ||
CICA | 551 | % |
CNLIC | 2,380 | % |
SPFIC | 421 | % |
SPLIC | 1,282 | % |
September 30, 2013 | December 31, 2012 | |||||||||||||||||
Amortized Cost | Fair Value | Net Unrealized Gains (Losses) | Amortized Cost | Fair Value | Net Unrealized Gains (Losses) | |||||||||||||
(In thousands) | ||||||||||||||||||
Fixed maturities, available-for-sale | $ | 585,127 | 599,379 | 14,252 | 559,736 | 604,520 | 44,784 | |||||||||||
Fixed maturities, held-to-maturity | 223,339 | 221,115 | (2,224 | ) | 187,008 | 193,739 | 6,731 | |||||||||||
Total fixed maturities | $ | 808,466 | 820,494 | 12,028 | 746,744 | 798,259 | 51,515 | |||||||||||
Total equity securities | $ | 52,392 | 53,067 | 675 | 52,744 | 53,741 | 997 |
Exhibit Number | The following exhibits are filed herewith: | |
11 | Statement re: Computation of per share earnings (see financial statements) | |
31.1 | Certification of Chief Executive Officer and Vice Chairman pursuant to Section 302 of the Sarbanes-Oxley Act* | |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act* | |
32.1 | Certification of Chief Executive Officer and Vice Chairman pursuant to Section 906 of the Sarbanes-Oxley Act* | |
32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act* | |
99.1 | News Release reporting third quarter and nine months results issued on 11/6/2013 (furnished herewith) | |
101.INS | XBRL Instance Document (furnished herewith) | |
101.SCH | XBRL Taxonomy Extension Schema (furnished herewith) | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase (furnished herewith) | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase (furnished herewith) | |
101.LAB | XBRL Taxonomy Extension Label Linkbase (furnished herewith) | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase (furnished herewith) | |
__________________ |
CITIZENS, INC. | |||
By: | /s/ Harold E. Riley | ||
Harold E. Riley | |||
Chairman and Chief Executive Officer | |||
By: | /s/ Rick D. Riley | ||
Rick D. Riley | |||
Vice Chairman and President | |||
By: | /s/ Kay E. Osbourn | ||
Kay E. Osbourn | |||
Executive Vice President, Chief Financial Officer and Treasurer | |||
Date: | November 6, 2013 |
1. | We have reviewed this Quarterly Report on Form 10-Q of Citizens, Inc. ("registrant"); |
2. | Based on our knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on our knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and us are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and us have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design of operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
By: | /s/ Harold E. Riley | ||
Harold E. Riley | |||
Chairman and Chief Executive Officer | |||
Date: | November 6, 2013 | ||
By: | /s/ Rick D. Riley | ||
Rick D. Riley | |||
Vice Chairman and President | |||
Date: | November 6, 2013 |
1. | I have reviewed this Quarterly Report on Form 10-Q of Citizens, Inc. ("registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design of operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
By: | /s/ Kay E. Osbourn | ||
Kay E. Osbourn | |||
Exec. Vice President, Chief Financial Officer and Treasurer | |||
Date: | November 6, 2013 |
1. | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Harold E. Riley | ||
Name: | Harold E. Riley | |
Title: | Chairman and Chief Executive Officer | |
Date: | November 6, 2013 | |
/s/ Rick D. Riley | ||
Name: | Rick D. Riley | |
Title: | Vice Chairman and President | |
Date: | November 6, 2013 |
1. | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Kay E. Osbourn | ||
Name: | Kay E. Osbourn | |
Title: | Executive Vice President, Chief Financial Officer and Treasurer | |
Date: | November 6, 2013 |
FOR THE PERIODS ENDED SEPTEMBER 30, | Q3 2013 | Q3 2012 | YTD 2013 | YTD 2012 | |||||||||
(Unaudited, In thousands, except for per share amounts) | |||||||||||||
Premiums | $ | 43,747 | 42,952 | 128,521 | 123,644 | ||||||||
Net investment income | 9,570 | 8,114 | 27,224 | 23,303 | |||||||||
Net realized investment gains | 30 | 763 | 143 | 1,107 | |||||||||
Change in fair value of warrants | — | 241 | — | 314 | |||||||||
Total revenue | 53,616 | 52,182 | 156,770 | 148,689 | |||||||||
Net income applicable to common stock | 1,824 | 2,911 | 3,987 | 4,826 | |||||||||
Net income per diluted share of Class A common stock | 0.03 | 0.06 | 0.08 | 0.10 | |||||||||
Diluted weighted average shares of Class A common stock | 49,080 | 49,030 | 49,080 | 48,972 | |||||||||
Operating income | $ | 1,805 | 2,174 | 3,894 | 3,792 |
Reconciliation of Net Income to Operating Income (a non-GAAP measure) | |||||||||||||
FOR THE PERIODS ENDED SEPTEMBER 30, | Q3 2013 | Q3 2012 | YTD 2013 | YTD 2012 | |||||||||
(Unaudited, In thousands) | |||||||||||||
Net income | $ | 1,824 | 2,911 | 3,987 | 4,826 | ||||||||
Items excluded in the calculation of operating income: | |||||||||||||
Net realized investment gains | (30 | ) | (763 | ) | (143 | ) | (1,107 | ) | |||||
Change in fair value of warrants | — | (241 | ) | — | (314 | ) | |||||||
Pre-tax effect of exclusions | (30 | ) | (1,004 | ) | (143 | ) | (1,421 | ) | |||||
Tax effect at 35% | 11 | 267 | 50 | 387 | |||||||||
Operating income | $ | 1,805 | 2,174 | 3,894 | 3,792 | ||||||||
t | Life Insurance – Our Life Insurance segment primarily issues ordinary whole life insurance and endowments in U.S. Dollar-denominated amounts to foreign residents in approximately 30 countries through independent marketing consultants, and domestically through independent marketing firms and consultants across the United States. |
o | Premiums – Life insurance premium revenues increased for the three and nine months of 2013, due to higher international renewal premiums, as we continue to experience strong persistency. In addition, new sales decreased 5.9% for the three months primarily due to lower business generated from Venezuela and Colombia, but increased 8.8% for the nine months ended in 2013 compared to 2012. Endowment sales continue to be the preferred product internationally representing approximately 79% of first year premiums in the three months ended September 30, 2013. Top selling products were our endowment to age sixty-five and the twenty-year endowment offerings. |
o | Benefits and expenses – Total life insurance benefits and expenses rose in line with premium growth for the three and nine months of 2013 compared to the same period in 2012. Future policy benefit reserves increased as endowment products accumulate higher reserve balances on the front end when compared to whole life products. We are also continuing to recognize the effect of the current low interest rate environment on reserves for policies issued. We have noted higher reported claims for the three months ended in 2013 compared to 2012 but reported claims are lower for the nine months ended compared to the prior year levels which is positively impacting the current year to date earnings. In addition, commission expense increased as first year sales expanded and renewal premium remained strong. |
t | Home Service – Our Home Service Insurance segment provides pre-need and final expense ordinary life insurance and annuities to middle and lower income individuals, primarily in Louisiana, Mississippi and Arkansas. Our policies in this segment are sold and serviced through funeral homes and a home service marketing distribution system utilizing employees and independent agents. |
o | Premiums – Home service premiums are lower for the three and nine month periods ended in 2013 compared to 2012. We expect full-year 2013 sales levels for this business segment to be in line with the levels reported last year as we do experience some seasonality with premiums trending down in the third quarter. |
o | Benefits and expenses – Claims and surrenders increased 1.8% and 4.1% for the three and nine months of 2013. Death claims were higher for the nine months ended September 30, 2013, and last year's nine month results included the release of an incurred but not reported liability for death claims of $0.5 million. Third quarter and nine-month results for 2012 results also reflected $0.5 million in losses related to Hurricane Isaac. In addition, amortization of deferred acquisition costs for this segment rose from last year, as the 2012 results included an adjustment of $0.4 million that lowered amortization costs. |
t | Invested assets – Total invested assets increased from year-end 2012 as new premium revenues were invested in bonds while policy loans also rose. |
o | Fixed maturity securities represented 88.2% of the investment portfolio at September 30, 2013, compared with 87.9% at year-end 2012. |
o | Equity security holdings decreased to $53.1 million at September 30, 2013 from $53.7 million at year-end 2012 due to decreases in fair value of equity bond mutual funds as interest rates rose. |
o | Cash and cash equivalents represented 4.3% of total cash, cash equivalents and invested assets at September 30, 2013, down from 5.9% at year-end 2012, reflecting the timing of calls of securities owned and of investment and reinvestment of new premium revenues and other available funds. |
t | Investment income – Net investment income increased 17.9% and 16.8% for the three and nine months ended September 30, 2013 compared to the same periods in 2012. This is primarily due to an increase in overall invested assets from premium collections received and invested in fixed maturity bonds, and the increase in the overall consolidated portfolio yield by 33 basis points compared to the nine months ended in 2012. The policy loan asset balance increased by 10.2% in 2013, resulting in an increase in policy loan income, a component of investment income. |
o | Yield – Average annualized yield was 4.10% for the nine months of 2013 compared to 3.81% for the full year of 2012. |
o | Duration – The average maturity of the fixed income bond portfolio was 12 years with an estimated effective maturity of 7 years as of September 30, 2013. |
Three Months Ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
(Unaudited) | ||||||||||||||
Revenues: | ||||||||||||||
Premiums: | ||||||||||||||
Life insurance | $ | 42,091 | 41,257 | |||||||||||
Accident and health insurance | 380 | 414 | ||||||||||||
Property insurance | 1,276 | 1,281 | ||||||||||||
Net investment income | 9,570 | 8,114 | ||||||||||||
Realized investment gains, net | 30 | 763 | ||||||||||||
Decrease in fair value of warrants | — | 241 | ||||||||||||
Other income | 269 | 112 | ||||||||||||
Total revenues | 53,616 | 52,182 | ||||||||||||
Benefits and expenses: | ||||||||||||||
Insurance benefits paid or provided: | ||||||||||||||
Claims and surrenders | 16,763 | 15,627 | ||||||||||||
Increase in future policy benefit reserves | 17,398 | 16,901 | ||||||||||||
Policyholders' dividends | 2,362 | 2,600 | ||||||||||||
Total insurance benefits paid or provided | 36,523 | 35,128 | ||||||||||||
Commissions | 9,940 | 9,769 | ||||||||||||
Other general expenses | 6,163 | 6,055 | ||||||||||||
Capitalization of deferred policy acquisition costs | (7,067 | ) | (7,547 | ) | ||||||||||
Amortization of deferred policy acquisition costs | 4,758 | 4,134 | ||||||||||||
Amortization of cost of customer relationships acquired | 681 | 598 | ||||||||||||
Total benefits and expenses | 50,998 | 48,137 | ||||||||||||
Income before federal income tax | 2,618 | 4,045 | ||||||||||||
Federal income tax expense | 794 | 1,134 | ||||||||||||
Net income | 1,824 | 2,911 | ||||||||||||
Per Share Amounts: | ||||||||||||||
Basic earnings per share of Class A common stock | $ | 0.03 | 0.06 | |||||||||||
Basic earnings per share of Class B common stock | 0.02 | 0.03 | ||||||||||||
Diluted earnings per share of Class A common stock | 0.03 | 0.06 | ||||||||||||
Diluted earnings per share of Class B common stock | 0.02 | 0.03 | ||||||||||||
Other comprehensive income (loss): | ||||||||||||||
Unrealized gains (losses) on available-for-sale securities: | ||||||||||||||
Unrealized holding gains (losses) arising during period | (4,128 | ) | 8,542 | |||||||||||
Reclassification adjustment for gains included in net income | (84 | ) | (708 | ) | ||||||||||
Unrealized gains (losses) on available-for-sale securities, net | (4,212 | ) | 7,834 | |||||||||||
Income tax expense (benefit) on unrealized gains (losses) on available-for-sale securities | (1,474 | ) | 2,878 | |||||||||||
Other comprehensive income (loss) | (2,738 | ) | 4,956 | |||||||||||
Comprehensive income (loss) | $ | (914 | ) | 7,867 |
Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
(Unaudited) | ||||||||||||||
Revenues: | ||||||||||||||
Premiums: | ||||||||||||||
Life insurance | $ | 123,728 | 118,608 | |||||||||||
Accident and health insurance | 1,135 | 1,244 | ||||||||||||
Property insurance | 3,658 | 3,792 | ||||||||||||
Net investment income | 27,224 | 23,303 | ||||||||||||
Realized investment gains, net | 143 | 1,107 | ||||||||||||
Decrease in fair value of warrants | — | 314 | ||||||||||||
Other income | 882 | 321 | ||||||||||||
Total revenues | 156,770 | 148,689 | ||||||||||||
Benefits and expenses: | ||||||||||||||
Insurance benefits paid or provided: | ||||||||||||||
Claims and surrenders | 48,229 | 46,490 | ||||||||||||
Increase in future policy benefit reserves | 52,253 | 47,793 | ||||||||||||
Policyholders' dividends | 6,671 | 6,755 | ||||||||||||
Total insurance benefits paid or provided | 107,153 | 101,038 | ||||||||||||
Commissions | 29,427 | 28,164 | ||||||||||||
Other general expenses | 20,204 | 19,013 | ||||||||||||
Capitalization of deferred policy acquisition costs | (21,101 | ) | (20,530 | ) | ||||||||||
Amortization of deferred policy acquisition costs | 13,747 | 12,693 | ||||||||||||
Amortization of cost of customer relationships acquired | 1,819 | 1,834 | ||||||||||||
Total benefits and expenses | 151,249 | 142,212 | ||||||||||||
Income before federal income tax | 5,521 | 6,477 | ||||||||||||
Federal income tax expense | 1,534 | 1,651 | ||||||||||||
Net income | 3,987 | 4,826 | ||||||||||||
Per Share Amounts: | ||||||||||||||
Basic earnings per share of Class A common stock | $ | 0.08 | 0.10 | |||||||||||
Basic earnings per share of Class B common stock | 0.04 | 0.05 | ||||||||||||
Diluted earnings per share of Class A common stock | 0.08 | 0.10 | ||||||||||||
Diluted earnings per share of Class B common stock | 0.04 | 0.05 | ||||||||||||
Other comprehensive income (loss): | ||||||||||||||
Unrealized gains (losses) on available-for-sale securities: | ||||||||||||||
Unrealized holding gains (losses) arising during period | (29,576 | ) | 17,106 | |||||||||||
Reclassification adjustment for gains included in net income | (188 | ) | (915 | ) | ||||||||||
Unrealized gains (losses) on available-for-sale securities, net | (29,764 | ) | 16,191 | |||||||||||
Income tax expense (benefit) on unrealized gains (losses) on available-for-sale securities | (10,400 | ) | 5,837 | |||||||||||
Other comprehensive income (loss) | (19,364 | ) | 10,354 | |||||||||||
Comprehensive income (loss) | $ | (15,377 | ) | 15,180 |
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
(Unaudited) | |||||||
Assets: | |||||||
Investments: | |||||||
Fixed maturities available-for-sale, at fair value | $ | 599,379 | 604,520 | ||||
Fixed maturities held-to-maturity, at amortized cost | 223,339 | 187,008 | |||||
Equity securities available-for-sale, at fair value | 53,067 | 53,741 | |||||
Mortgage loans on real estate | 680 | 1,509 | |||||
Policy loans | 47,359 | 42,993 | |||||
Real estate held for investment | 8,477 | 8,496 | |||||
Other long-term investments | 56 | 57 | |||||
Short-term investments | — | 2,340 | |||||
Total investments | 932,357 | 900,664 | |||||
Cash and cash equivalents | 41,687 | 56,299 | |||||
Accrued investment income | 11,740 | 10,304 | |||||
Reinsurance recoverable | 4,490 | 9,651 | |||||
Deferred policy acquisition costs | 143,131 | 135,569 | |||||
Cost of customer relationships acquired | 23,901 | 25,116 | |||||
Goodwill | 17,160 | 17,160 | |||||
Other intangible assets | 858 | 879 | |||||
Federal income tax receivable | — | 270 | |||||
Property and equipment, net | 6,920 | 7,383 | |||||
Due premiums, net | 9,994 | 10,527 | |||||
Prepaid expenses | 875 | 344 | |||||
Other assets | 1,001 | 782 | |||||
Total assets | $ | 1,194,114 | 1,174,948 |
September 30, | December 31, | |||||
2013 | 2012 | |||||
(Unaudited) | ||||||
Liabilities: | ||||||
Policy liabilities: | ||||||
Future policy benefit reserves: | ||||||
Life insurance | $ | 812,824 | 762,319 | |||
Annuities | 54,178 | 51,750 | ||||
Accident and health | 1,245 | 5,491 | ||||
Dividend accumulations | 13,234 | 11,962 | ||||
Premiums paid in advance | 30,504 | 27,455 | ||||
Policy claims payable | 8,044 | 11,015 | ||||
Other policyholders' funds | 8,006 | 9,440 | ||||
Total policy liabilities | 928,035 | 879,432 | ||||
Commissions payable | 2,096 | 2,606 | ||||
Federal income tax payable | 415 | — | ||||
Deferred federal income tax | 4,517 | 17,301 | ||||
Payable for securities in process of settlement | 1,712 | 2,358 | ||||
Other liabilities | 9,608 | 10,143 | ||||
Total liabilities | 946,383 | 911,840 | ||||
Stockholders' equity: | ||||||
Class A, common stock | 259,383 | 259,383 | ||||
Class B, common stock | 3,184 | 3,184 | ||||
Accumulated deficit | (13,348 | ) | (17,335 | ) | ||
Accumulated other comprehensive income: | ||||||
Unrealized gains on securities, net of tax | 9,523 | 28,887 | ||||
Treasury stock, at cost | (11,011 | ) | (11,011 | ) | ||
Total stockholders’ equity | 247,731 | 263,108 | ||||
Total liabilities and stockholders’ equity | $ | 1,194,114 | 1,174,948 |
!P1T#C*G
M\:MZM^V_\-_%U_:P:G>Z1<+>G;'-*GDLI/&"XY&3QD\5Y%^TW\!_@%H>E'Q1
M?ZY!\-I[Z81QZK:RFT\YWY&XHC1R$^LL;_6N#F47;#U'K\[_`"_X+.MQ4E^^
MIV?D>U7VA>"?$FK?:X]`_LJ\E(QJ.B74EC+DCKF(C=^(J_;>%O%?AIS=^&?%
MT&HK&<_9]8C:SN/8?:;?:6//657'KFOD?3O"7Q2^#=C'KG@_6=/^(OAB;!CN
M])FC6YD3WB+&"7WV.LA/1!73^"_V\CXE\[3KY6L[JV.RY5XFB>U?N)H9,21G
MZ@CWQ6*QN(P]Y25_./\`P+?BBG@XU-(-/U_X.I]9Z-^V#XB\$31Q>+M)N;:,
M'#7,\9EM#[BZMU(_[[A3W:O7O`_[3/A?Q>D!-V]C]J_U,L^TVLQ_NI<(6B8_
M[.[=[<''RW\-OB5?7^G-%C,RFVX4&DH_%)[+_-GH4<-%)2JZ
MWVBMW_DCSW3_`-GKXE?MAW2ZK\6]4N?!?@Z8[X?!^D7++<7"'^&\N5P2".L<
M84=B6QFO;_#]AX4_9[\)1:-X3T73M'T^T7"06MN(T7CN%'7W//K7'M^U3=>)
M]8>STZQ5(]V$E;D+SCG/2N)^+WQ&N_#^A2W=_560KTS@!D;C(8=".O0C].PO">29S@F\EKRABK7Y*C5I=TM%?R>
M_1I'Y9C.+\[R/'*.>X>,L*W;VE-/W?-[_/\`!F+\8OVW/BG^SUXM;1_%/PQ\
M*V-V5#J5\!13QN"/X9(HV0]^C5RP_P""K_BR)@1X&\,!O0?#O'_M&O7OV>_^
M"A>C>*O#UEX!^/MQ_9]U&PLM+\5W8V30MP%BO,@;EZ`3+[;P#\Y]&^+_`,'?
M$'PEO-SQ)J6E3+YEO=0_O%=#R&4_Q`@_7^=;\(\-\/YA/ZCF52='$)VLVDI/
MRNM'Y?
5]%Y;GKD/[6%
M[K6K2Z_K;LR>86CC5OD0#UKQWX]_\%.UU6_6\N-*MK^#39B;!;I#)'),N0`J
M<%^N#@XYY]#\J^%?VA-<_:%O6T'P[HVI^()7DV1V.FHQ!)/!GF)"HOL"6/09
MZ'V4_LN^%/V1]-3QG^T5XPT+P_?O&)+/0;;_`$W4V0=([>U;&<]-\BJ@_NCK
M7E9?E&)G4<<5)ZN[2U9ZN)JX>G'FII-VT.@\(_'C]HC]L/QUX?NK+2O#[S6L
MJW%C'JNFHME:69/SLD"KN\HJ,"0L$;L[8.-?]J+_`(*6^+?$&M_\*G^"X\)0
MZS:1_8M2UWPY8!O*N&&V?[-*`1$JL=OF*&9F!"9ZUY]IGC#XP?\`!2"67P3\
M(O#&I_"SX3ZFX^VW+.7UKQ''T\VZN#\VPC^$$1X)'[S&*^^/V0_^";_@_P#8
M#\$6DNGZ)#XA\82*")2`R6TA'+EFZGG[YZ=%`'%?5RPT(3E5HW5M^J7J^K\D
M>(J_+%*M9O6RM;\.GSN>=?L#_L!:=^QKX#MO%/BG3WUGQCJ3B:ST^1=UQ=3G
MD32]2,9.%YV\DDLQ->U?%7XSZ)^S+H]_XW^(6O:5;>)YX\6T,\JA-.4Y`"@G
M)8`\`5\\?MZ?\%;O"O[&MS?6MG>6/CKXLW*%1#:R+)9Z#D/;[QAXCOFL](B)FOM=U=Q!IVE1]>"V$08Z$\GL#6+HU*J]K
M-N*6U][]TNK[=(^I=*DI.\NN_P#7;OU9Z1^V)^WQ=_M+>)7L=/O=9M_#LKL#
M'"6%_P"(7)Z*@Y2/CJ>Q[5'X._9VTSX16^G^,OBWIEO;&*,7'A[X?02[9[@G
ME;F^/6*(XSDC>^<(#RPNZ7XM^&'[$]G,/`,"^,_&Y`CE\8ZM!N@LY!G_`(\;
M=\[CGE9)%'8K&>H\G=/$W[0?B^>ZOI;Z]GU.4RW$DS,\]TQQDR-DG'MGIC)Q
MP-
Segment Information (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] |
|
)?M[+2S!X.1O]J8_`GXVU+P[9
MVZG[J[[^7I0OQP["[ % F=+HF!X562V&*A8_D8:!FZHH["4
M"R;C$:<&8D6[-GAAMOVVN"3=41[K0?HP("(KD_#UI]!9`Q(IQ(K#!;P#0X2U
ME,KB#,1UD[IR]FG-7ZVM+LP[O3;ID+R!T'"/=-*?2RR\%U
M&&.'28W!V,-<$\DBY4:#!<7)+8NCVJ/Z9AM)N^9\51TS",'Q=CTJ6G=V.M_.53KR1B+)I%3ID*'0N273Z06N;V1T
M52\`AUQV6\IU&&.'R1_#[#H((*T,S[I5EK*^R:7P]UGD7/$02^ZQ9(PE4RR9
M78F$([-T!(U/I^0-^2B+KWA+O1^N[ID!4.OGMH,L8FDS0YW2XZ_\^NB22#
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M8HPM)C&*2U/=(G8M)!,_[;96VE6SI,\B8G*ZZ-X=
0>2\98,L62V95(*'Y\[8SX>E9W!?HLHA8X'2ZJWX=<=^#=`XLQ
MMIABR>Q*)!8_OW9&?CVK.-9G4<;2Z#<7AUQWL6SSZZFR&&.+*9;,KD1B,3+L
M>;.:&!E6WU[K.Q+E<-(@G7WTA$'5*_YBUEZSG*/>(ZC+'#5"2I2ZK7O*5J#4'R2`'.X4'Y
M3O)0NT9_XQ"8QJ**0RE:0\DTG+\?X[^?BB0]OMY22M%Z?(DBI4N%8G,K^I;*
M>O%0C]9GD3,AAEARCR5C+)EBR>Q*)!PCH6[A4+;$$^G<<[V%`72()?=8,L:2
M*9;,KD3",7+J%HZ14ZM[KCB]*+47K;7']G#627;("J>W[J')&)M,PJ0]U[].
M-[LFDHR16+=DC,1:O?MW(U&^=]3H#7O(=9>+;S'&%I,8!;[HK#\N-;L>$DJ*
M=LY"0\E/K+G5VW\W$A&4&SZ8+U^8#[GN0O$MQMAB*I*T\E9?MIE+>5T5UKU4
M(DGYT4%"\5(B43M-?R-1GD'-]::WQ2$K7"B1R1B;3&(D+0X(TE\;GET30:8Y
M&)EV,X6HKO:EZOXKJPA.
G33MCF0RGE:@2C4W!_0@%'H`T:A
M!I`\C8)D)./-*\KF0*E7M%%U\Y95^8GK\`,)ZOT',`KC,QB19M\&B$(;(-K:
MG+KJ9R$!R'-1@(QT+``9\5BW;8\O@"^]1E=V/>L=%7A(@">N3-=ZEODF@!.:
M``YKTA+451_R6>O60!0:(QX+-$8^KN[H-@=2Y?L1^DP!D.&Z-2!>?UB3+JK1
M'@##]5T/@&%-\M#[)UJ&RY:%XF(D9,'%B,C5[=WFL`VXS?&HOWX&,J3P>R9P
M`9O0!6RV+C@L36VQH..9*#I&6!9TC+1
P%P+%C`TN[]%:CN
MKV_KO@1C"A(4CAD^HD1C"F+$8X9B1%.T'"MR5[TB@4+^**>[]#TD27)$L(YIEQ%,,31`XHH2H2R6QNC?A6/HT(<35W0PDQVL2C7@.@D,5=GR"4B92
M83@D=`:Q"KN>L^[?K3D/1:$XWQ2(DE\"U46XSK(WU.1V(#GK5H0]O*>!0Q5V
M/`_E3:3"2]_%(E38W6P&6!.QGA0A4"P"'74@.5TD=(6A"CJ^#D8JZ*+BBS5P
MV*DY#YU$B4"7/F(5.[W27QU(#L2Y3['A?.3ASS*B648\Q="$B+F/>JU2V`*=
M*VS)F1(TRXAF&?$40Q/DCP4IM2%0'"&4_('DR-IP?=M#^1$BG`PI(N<&PO'^
M6,,]?SU4ER:$P.S'H5&4-#"6@E(I:$G/M6#"$HF-,&&D1B=X_N:9'#$LATSK
M2H;(&:JV7-?!LZ,E^4V[LA
KF3%J#?N#T:GWZQ\?[2W_FPEF\[R
M43\?CD?%-RM7Q73EW[;_ZW_Y>CJ=9;P[FGZS`"
ML=/[C->;^P8SB"C#554M$T,:0=!PQ&%"J;]*T.I\*(PGS!"Z!>
M:W">'-*@*AVV9=I+.D>2*[/)'']#I1T<]1XES)F*1>&!L<',P$X!8PFVRER]
M^LF/5&P64BW9ZM__]G\.7^W^_6__UU'+CBT2?#H$^=29)MD@`'$TMJ"Y84ZQ
M'QSI:X.:5`Z*237GR7@\XU%6,)%K)[@B&:X#E_SQ-2>[9;
MDMN,-F-"0!G<@)$9G=M,O2`VWQH(TXTD$$5/>!YE4=A6^5\I2#J?`R"B9Z7?
M"H=?K$+_:J_0C0FH)5P73*(14TTD=8`U)>H-K@;Y0K(X=6]"?=FZ)2YTT\(-
MK^^O@FURRT"!<4EYWPTF:@]CR:7'+#^.3DQK<;9A"P=X','.X(AM<(78+YNZ
MZ%=\8V;;MVQA'5987H,T9[5BG>@65VGD_`1#FT6O/=M\XA<[;5;\53/'`87U
MC9HE0Z;;#0S5R4.E*"6>\&%Q:C2^YMIX?*24[;5$@XK!7MG-\\\EZ$+8NFU$
MMLW&10