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Quarterly Financial Information
 12 Months Ended
Dec. 31, 2014
Quarterly Financial Data [Abstract]  
Quarterly Financial Information
Quarterly Financial Information (Unaudited)
Summarized quarterly financial data for 2014 and 2013 are as follows:
 
 
Quarter Ended
 
 
March 31
 
June 30
 
September 30
 
December 31
 
 
(Amounts in thousands, except per share data)
 
2014
 
 
 
 
 
 
 
 
Net premiums earned
$
683,701

 
$
697,889

 
$
705,237

  
$
709,368

 
Change in fair value of investments pursuant to the fair value option
$
45,699

 
$
41,412

 
$
(20,528
)
 
$
(22,824
)
 
Income (loss) before income taxes
$
102,030

 
$
136,436

 
$
37,120

 
$
(28,161
)
 
Net income (loss)
$
72,649

 
$
94,960

 
$
31,296

 
$
(20,956
)
 
Basic earnings per share (2)
$
1.32

 
$
1.73

 
$
0.57

 
$
(0.38
)
 
Diluted earnings per share (2)
$
1.32

 
$
1.73

 
$
0.57

 
$
(0.38
)
(1) 
Dividends paid per share
$
0.6150

 
$
0.6150

 
$
0.6175

  
$
0.6175

 
2013
 
 
 
 
 
 
 
 
Net premiums earned
$
662,595

 
$
675,787

 
$
678,913

  
$
680,892

 
Change in fair value of investments pursuant to the fair value option
$
43,467

 
$
(78,726
)
 
$
21,815

 
$
(30,593
)
 
Income (loss) before income taxes
$
90,994

 
$
(24,959
)
 
$
54,793

 
$
11,268

 
Net income (loss)
$
66,461

 
$
(9,264
)
 
$
39,570

 
$
15,376

 
Basic earnings per share
$
1.21

 
$
(0.17
)
 
$
0.72

 
$
0.28

 
Diluted earnings per share
$
1.21

 
$
(0.17
)
(1) 
$
0.72

 
$
0.28

 
Dividends paid per share
$
0.6125

 
$
0.6125

 
$
0.6125

  
$
0.6150

 
 __________
(1)
The dilutive impact of incremental shares is excluded from net loss position in accordance with GAAP.
(2)
The basic and diluted earnings per share do not sum due to rounding.

Net income during 2014 was primarily affected by the $27.6 million penalty assessed by California DOI, higher net premiums earned and increases in the fair value of the Company’s investment portfolio offset by catastrophe related losses. See Note 16 of Notes to Consolidated Financial Statements for "2004 NNC" discussion. The primary causes of the net loss during the fourth quarter of 2014 were the $27.6 million penalty described above, the declines in the fair value of the Company’s equity securities due to the overall decline in the equity market, and the severe rainstorms in California.

Net income during 2013 was primarily affected by higher net premiums earned offset by catastrophe related losses, and declines in the fair value of the Company’s investment portfolio due to the overall decline in the municipal markets. Net income during 2013 was also affected by the consolidation of claims and underwriting operations located outside of California into hub locations, which resulted in approximately $10 million of pre-tax office closure costs and severance related expense during the first quarter of 2013. The primary causes of the net loss during the second quarter of 2013 were increased losses resulting from catastrophe losses due to tornadoes in Oklahoma and severe storms in the Midwest and the Southeast regions, and declines in the fair value of the Company’s municipal and equity securities due to the overall decline in the municipal and equity markets.