EX-99.1 2 ex99_1.htm EXHIBIT 99.1 ex99_1.htm
Exhibit 99.1
 
                                       
The Navigators Group, Inc.
CORPORATE NEWS

Navigators Reports First Quarter Earnings

 

New York –April 29, 2009 -- The Navigators Group, Inc. (NASDAQ:NAVG) reported net income of $12.0 million or $0.71 per share for the 2009 first quarter compared to net income of $23.3 million or $1.36 per share for the 2008 first quarter.

The first quarter summary of results was as follows:

   
($ in millions)
    
(Diluted earnings per share)
  
   
2009
    
2008
    
2009
    
2008
  
                         
Net income
   $ 12.0     $ 23.3     $ 0.71     $ 1.36  
Less net realized capital gains / (losses)
     (8.2 )     (0.0 )     (0.48 )     (0.00 )
Operating earnings (1)
   $ 20.2     $ 23.3     $ 1.19     $ 1.36  

o  
The 2009 first quarter net realized capital losses include provisions for declines in market value which were considered to be other-than-temporary of $8.3 million for equity securities, of $1.8 million for asset-backed securities and of $0.6 million for corporate debt securities.  The after-tax loss from such provisions was $7.0 million or $0.41 per share.  The decision to record realized capital losses on such securities had no impact on the Company’s stockholders’ equity or book value per share, which increased by 3% during the first quarter to $42.07.

(1) Operating earnings, or income excluding net realized gains (losses) net of tax, is a non-GAAP financial measure that is a common performance measurement for insurance companies. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.

Gross written premium for the 2009 first quarter was $275.3 million, a decrease of 4.1% from the comparable 2008 period.  Net written premium for the 2009 first quarter was $200.7 million, an increase of 6.9% from the comparable 2008 period.

The combined loss and expense ratio for the 2009 first quarter was 92.8% compared to 89.2% for the comparable 2008 period.  The combined loss and expense ratio for the 2009 first quarter was favorably impacted by 3.5 loss ratio points for redundancies in prior period loss reserves compared to 8.8 loss points for the comparable 2008 period.

Navigators’ Chief Executive Officer Stan Galanski commented, “I am very pleased to report that our book value per share increased more than three percent during the first quarter despite the declining economic environment and turbulence in the financial markets.  Net written premiums increased 6.9% and our combined ratio was 92.8%.  We remain very well positioned to capitalize on the opportunities created by the current market conditions.”
 
 
  
News Release
April 29, 2009
Page 2
 
 
Net investment income for the 2009 first quarter was $18.7 million, a decrease of 0.5% from the comparable 2008 period.  The pre-tax investment yield for the 2009 first quarter was 3.9%, compared to 4.2% for 2008 first quarter. The effective tax rates on net investment income were 24.9% for the 2009 first quarter compared to 26.4% for the comparable 2008 period.

The Company’s investment portfolio mainly consists of fixed income securities with an average quality rating of “AA/Aa” by Standard & Poor’s and Moody’s, respectively, and an average effective duration of 4.3 years at March 31, 2009.  At March 31, 2009, net unrealized losses within our investment portfolio were $12.9 million, a decrease of $8.8 million for the quarter due to the recognition of $12.2 million of realized losses, and $3.4 million of net unrealized losses during the period.

Consolidated cash flow from operations for the 2009 first quarter was $42.9 million compared to $59.7 million for the comparable 2008 period.

During the 2009 first quarter, the Company did not purchase any shares of its common stock.

Stockholders’ equity was $712.5 million or $42.07 per share at March 31, 2009 compared to $689.3 million or $40.89 per share at December 31, 2008.  Statutory surplus of Navigators Insurance Company was $568.0 million at March 31, 2009.

Effective in 2009, the Company has reclassified certain of its business lines, which has no effect on the segment classifications of the Insurance Company and Lloyd’s.

o  
The offshore energy business, formerly included in the “Marine and Energy” businesses of the Insurance Companies and Lloyd’s, is now included in the Insurance Companies’ and Lloyd’s “Property Casualty” businesses. 
 
o  
The marine lines within both the Insurance Company and Lloyd’s are now presented as “Marine” instead of “Marine and Energy,” since the energy business has now been reclassified to “Property Casualty.”
 
o  
Engineering and construction, European Property and other run-off business, formerly included in the “Other” category of business within the Insurance Companies and Lloyd’s, are now included under “Property Casualty. 
 
o  
The “Middle Markets” business, formerly broken out separately in the Insurance Companies, is now included in the Insurance Companies’ “Property Casualty” business. 
 
Underwriting data for prior periods has been reclassified to reflect these changes.
 
The Company will hold a conference call on Friday, May 1, 2009 starting at 8:30 a.m. ET to discuss the 2009 first quarter results.  The call will be available via live webcast on Navigators’ website (www.navg.com) by clicking on the Earnings Webcast link under “News & Events.”

To participate by telephone, the domestic dial-in number is 888-680-0878 and the international dial-in is 617-213-4855. The access code is 78508745.  Participants may pre-register for the call at www.theconferencingservice.com/prereg/key.process?key=P8LXA9EVA.  Pre-registrants will be issued a pin number to use when dialing into the live call that will provide quick access by bypassing the operator upon connection.

 
News Release
April 29, 2009
Page 3
 
 
The Navigators Group, Inc. is an international specialty insurance holding company with insurance company operations, underwriting management companies, and operations at Lloyd’s of London.  Headquartered in New York, Navigators has offices in major insurance centers in the United States, the United Kingdom and Continental Europe.

This press release may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995.  Whenever used in this release, the words “estimate”, “expect”, “believe”, “may”, “will”, “intend”, “continue” or similar expressions are intended to identify such forward-looking statements.  We cannot assure that results that we anticipate will be achieved, since results may differ materially because of known and unknown risks and uncertainties that we face.  Please refer to Navigators’ most recent Forms 10-K and 10-Q and its other filings with the Securities and Exchange Commission for a description of Navigators’ business and the important factors that may affect that business.  Navigators undertakes no obligation to publicly update or revise any forward-looking statement.
 
 Contact: 
 Francis W. McDonnell
Senior Vice President and Chief Financial Officer
(914) 933-6270
fmcdonnell@navg.com
www.navg.com
       
News Release
Page 4
 
 
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Financial Highlights
($ in thousands, except per share data)
 
 
   
Three Months Ended
        
   
March 31,
        
Financial Highlights
  
2009
    
2008
    
Change
  
                   
Gross written premium
   $ 275,259     $ 287,146       -4 %
Net written premium
     200,652       187,722       7 %
                         
Revenues:
                        
Net earned premium
     164,946       155,740       6 %
Commission income
     (20 )     261    
NM
  
Investment income
     18,743       18,838       -1 %
  Total other-than-temporary impairments
     (26,871 )     -    
NM
  
  Portion of loss recognized in OCI (before tax)
     (16,171 )     -    
NM
  
Net impairment loss recognized in earnings
     (10,700 )     -    
NM
  
Net realized capital gains (losses) on securites sold
     (1,537 )     (76 )  
NM
  
Other income (expense)
     163       11    
NM
  
Total revenues
     171,595       174,774       -2 %
                         
Operating expenses:
                        
Net losses and loss adjustment
                        
  expenses incurred
     100,247       88,420       13 %
Commission expense
     22,448       20,948       7 %
Other operating expenses
     30,535       29,756       3 %
Interest expense
     2,219       2,217       0 %
Total operating expenses
     155,449       141,341       10 %
                         
Income before income taxes
     16,146       33,433       -52 %
                         
Income tax expense (benefit):
                        
Current
     6,750       10,306       -35 %
Deferred
     (2,604 )     (123 )  
NM
  
Income tax expense (benefit)
     4,146       10,183       -59 %
                         
Net income
   $ 12,000     $ 23,250       -48 %
                         
                         
Per Share Data
                        
                         
Net income per common share:
                        
Basic
   $ 0.71     $ 1.38       -48 %
Diluted
   $ 0.71     $ 1.36       -48 %
                         
Average shares outstanding:
                        
Basic
     16,882       16,862          
Diluted
     17,002       17,052          
                         
Underwriting Ratios
                        
Loss Ratio
     60.8 %     56.8 %        
Expense Ratio
     32.0 %     32.4 %        
Combined Ratio
     92.8 %     89.2 %        
                         
                         
Balance Sheet Data
  
Mar. 31,
    
Dec. 31,
          
   
2009
    
2008
          
Stockholders' equity
   $ 712,454     $ 689,317       3 %
Book value per share
   $ 42.07     $ 40.89       3 %
 
 
 
News Release
Page 5
 
 
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in thousands)
 
 
   
March 31,
          
December 31,
  
   
2009
          
2008
  
ASSETS
                  
Investments and cash:
                  
Fixed maturities, available-for-sale, at fair value
                  
  (amortized cost: 2009, $1,689,179; 2008, $1,664,755)
   $ 1,676,826           $ 1,643,772  
Equity securities, available-for-sale, at fair value (cost: 2009, $52,309; 2008, $52,523)
     51,735             51,802  
Short-term investments, at cost which approximates fair value
     206,223             220,684  
Cash
     16,644             1,457  
Total investments and cash
     1,951,428               1,917,715  
                         
Premiums in course of collection
     201,891               170,522  
Commissions receivable
     313               319  
Prepaid reinsurance premiums
     167,272               188,874  
Reinsurance receivable on paid losses
     70,725               67,227  
Reinsurance receivable on unpaid losses and loss adjustment expenses
     851,703               853,793  
Net deferred income tax benefit
     53,908               54,736  
Deferred policy acquisition costs
     57,675               47,618  
Accrued investment income
     16,114               17,411  
Goodwill and other intangible assets
     6,532               6,622  
Other assets
     26,072               24,743  
                         
Total assets
   $ 3,403,633             $ 3,349,580  
                         
                         
LIABILITIES AND STOCKHOLDERS' EQUITY
                        
Liabilities:
                        
Reserves for losses and loss adjustment expenses
   $ 1,879,895             $ 1,853,664  
Unearned premium
     494,455               480,665  
Reinsurance balances payable
     129,296               140,319  
Senior notes
     123,825               123,794  
Federal income tax payable
     12,139               5,874  
Accounts payable and other liabilities
     51,569               55,947  
Total liabilities
     2,691,179               2,660,263  
                         
Stockholders' equity:
                        
Preferred stock, $.10 par value, authorized 1,000,000 shares, none issued
     -               -  
Common stock, $.10 par value, 50,000,000 shares authorized; issued and
                        
outstanding (Net of treasury shares) : 16,934,225 for 2009 and 16,856,073 for 2008
     1,716               1,708  
Additional paid-in capital
     302,498               298,872  
Retained earnings
     418,776               406,776  
Treasury stock, at cost (224,754 shares for both 2009 and 2008)
     (11,540 )             (11,540 )
Accumulated other comprehensive income (loss)
     1,004               (6,499 )
Total stockholders' equity
     712,454               689,317  
                         
Total liabilities and stockholders' equity
   $ 3,403,633             $ 3,349,580  
 
 
News Release
Page 6
 
 
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Comparative Premium Data
($ in thousands)
 
Gross Written Premium:
  
First Quarter
        
Insurance Companies:
  
2009
    
2008
    
Change
  
Marine
   $ 77,237     $ 71,485       8 %
Property Casualty
     84,258       100,824       -16 %
Professional Liability
     30,488       19,287       58 %
      191,983       191,596       0 %
Lloyd's Operations:
                        
Marine
     59,023       67,154       -12 %
Property Casualty
     13,528       17,726       -24 %
Professional Liability
     10,725       10,670       1 %
      83,276       95,550       -13 %
Total
   $ 275,259     $ 287,146       -4 %
                         
Net Written Premium:
  
First Quarter
          
Insurance Companies:
  
2009
    
2008
    
Change
  
Marine
   $ 58,459       43,463       35 %
Property Casualty
     59,976       69,114       -13 %
Professional Liability
     18,647       11,733       59 %
      137,082       124,310       10 %
Lloyd's Operations:
                        
Marine
     49,974       48,910       2 %
Property Casualty
     7,595       7,710       -1 %
Professional Liability
     6,001       6,792       -12 %
      63,570       63,412       0 %
Total
   $ 200,652     $ 187,722       7 %
                         
Net Earned Premium:
  
First Quarter
          
Insurance Companies:
  
2009
    
2008
    
Change
  
Marine
   $ 37,161       26,455       40 %
Property Casualty
     65,412       71,718       -9 %
Professional Liability
     17,717       14,073       26 %
      120,290       112,246       7 %
Lloyd's Operations:
                        
Marine
     31,175       28,793       8 %
Property Casualty
     7,923       8,742       -9 %
Professional Liability
     5,558       5,959       -7 %
      44,656       43,494       3 %
Total
   $ 164,946     $ 155,740       6 %
 
 
 
News Release
Page 7
 
 
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
Three Months Ended
March 31, 2009
 
($ in thousands)
 
   
Insurance
    
Lloyd's
              
   
Companies
    
Operations
    
Corporate
    
Total
  
Gross written premium
   $ 191,983     $ 83,276           $ 275,259  
Net written premium
     137,082       63,570             200,652  
                               
Net earned premium
     120,290       44,656             164,946  
Net losses and loss adjustment expenses
     (70,153 )     (30,094 )           (100,247 )
Commission expense
     (14,968 )     (7,480 )           (22,448 )
Other operating expenses
     (24,560 )     (5,981 )   $ 6       (30,535 )
Other income (expense)
     201       (52 )     (6 )     143  
                                 
Underwriting profit
     10,810       1,049       -       11,859  
                                 
Investment income
     16,207       2,383       153       18,743  
Net realized capital gains
     (8,907 )     (3,330 )             (12,237 )
Interest expense
                     (2,219 )     (2,219 )
Income (loss) before income tax
                                
     expense (benefit)
     18,110       102       (2,066 )     16,146  
                                 
Income tax expense (benefit)
     4,533       336       (723 )     4,146  
Net income (loss)
   $ 13,577     $ (234 )   $ (1,343 )   $ 12,000  
                                 
Loss and loss expenses ratio
     58.3 %     67.4 %             60.8 %
Commission expense ratio
     12.4 %     16.8 %             13.6 %
Other operating expenses ratio (1)
     20.3 %     13.5 %             18.4 %
Combined ratio
     91.0 %     97.7 %             92.8 %
 
(1) The other operating expenses ratio includes other income (expense).
 
 
News Release
Page 8
 
 
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
Three Months Ended
March 31, 2008
 
($ in thousands)
 
   
Insurance
    
Lloyd's
              
   
Companies
    
Operations
    
Corporate
    
Total
  
Gross written premium
   $ 191,596     $ 95,550           $ 287,146  
Net written premium
     124,310       63,412             187,722  
                               
Net earned premium
     112,246       43,494             155,740  
Net losses and loss adjustment expenses
     (67,356 )     (21,064 )           (88,420 )
Commission expense
     (12,948 )     (8,000 )           (20,948 )
Other operating expenses
     (22,148 )     (7,608 )           (29,756 )
Other income (expense)
     258       14             272  
                               
Underwriting profit
     10,052       6,836             16,888  
                               
Investment income
     15,465       2,982     $ 391       18,838  
Net realized capital gains (losses)
     (102 )     26     $ -       (76 )
Interest expense
                     (2,217 )     (2,217 )
Income (loss) before income tax
                                
     expense (benefit)
     25,415       9,844       (1,826 )     33,433  
                                 
Income tax expense (benefit)
     7,370       3,452       (639 )     10,183  
Net income (loss)
   $ 18,045     $ 6,392     $ (1,187 )   $ 23,250  
                                 
Loss and loss expenses ratio
     60.0 %     48.4 %             56.8 %
Commission expense ratio
     11.5 %     18.4 %             13.5 %
Other operating expenses ratio (1)
     19.5 %     17.5 %             18.9 %
Combined ratio
     91.0 %     84.3 %             89.2 %
 
(1) The other operating expenses ratio includes other income (expense).
 
 
News Release
Page 9
 
 
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Underwriting Results
($ in thousands)
 
   
 Three Months Ended March 31, 2009
 
                  
   
Net
    
Losses
                          
   
Earned
    
and LAE
    
Underwriting
    
Combined Ratio
        
Insurance Companies:
  
Premium
    
Incurred
    
Expenses
    
Loss
    
Expense
    
Total
  
Marine
   $ 37,161     $ 26,390     $ 11,622       71.0 %     31.3 %     102.3 %
Property Casualty
     65,412       28,004       20,753       42.8 %     31.7 %     74.5 %
Professional Liability
     17,717       15,759       6,952       89.0 %     39.2 %     128.2 %
      120,290       70,153       39,327       58.3 %     32.7 %     91.0 %
Lloyd's Operations
     44,656       30,094       13,513       67.4 %     30.3 %     97.7 %
Total
   $ 164,946     $ 100,247     $ 52,840       60.8 %     32.0 %     92.8 %
                                                 
                                                 
 
 
     Three Months Ended March 31, 2008                          
   
Net
    
Losses
                                  
   
Earned
    
and LAE
    
Underwriting
    
Combined Ratio
          
Insurance Companies:
  
Premium
    
Incurred
    
Expenses
    
Loss
    
Expense
    
Total
  
Marine
   $ 26,455     $ 22,313     $ 9,169       84.3 %     34.7 %     119.0 %
Property Casualty
     71,718       36,138       20,571       50.4 %     28.7 %     79.1 %
Professional Liability
     14,073       8,905       5,098       63.3 %     36.2 %     99.5 %
      112,246       67,356       34,838       60.0 %     31.0 %     91.0 %
Lloyd's Operations
     43,494       21,064       15,594       48.4 %     35.9 %     84.3 %
Total
   $ 155,740     $ 88,420     $ 50,432       56.8 %     32.4 %     89.2 %
 
 
   
Amounts
    
Loss Ratio
  
Net Incurred Loss Activity
  
March 31,
    
March 31,
    
March 31,
    
March 31,
  
For the Three Months Ended:
  
2009
    
2008
    
2009
    
2008
  
Insurance Companies:
                        
       Loss and LAE payments
   $ 48,804     $ 34,164       40.6 %     30.4 %
       Change in reserves
     21,349       33,192       17.7 %     29.6 %
       Net incurred loss and LAE
     70,153       67,356       58.3 %     60.0 %
                                 
Lloyd's Operations:
                                
       Loss and LAE payments
     23,122       16,771       51.8 %     38.6 %
       Change in reserves
     6,972       4,293       15.6 %     9.8 %
       Net incurred loss and LAE
     30,094       21,064       67.4 %     48.4 %
                                 
Total
                                
       Loss and LAE payments
     71,926       50,935       43.6 %     32.7 %
       Change in reserves
     28,321       37,485       17.2 %     24.1 %
       Net incurred loss and LAE
   $ 100,247     $ 88,420       60.8 %     56.8 %
                                 
                                 
Impact of Prior Years Reserves
  
Amounts
    
Loss Ratio Impact
  
Favorable / (Unfavorable) Development
  
March 31,
    
March 31,
    
March 31,
    
March 31,
  
For the Three Months Ended:
  
2009
    
2008
    
2009
    
2008
  
Insurance Companies
   $ 5,132     $ 8,500       4.3 %     7.6 %
Lloyd's Operations
     635       5,180       1.4 %     11.9 %
       Total
   $ 5,767     $ 13,680       3.5 %     8.8 %
 
 
 
News Release
Page 10
 
 
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Net Loss Data
($ in thousands)

   
Case
    
IBNR
        
Net Loss Reserves, March 31, 2009:
  
Reserves
    
Reserves
    
Total
  
Insurance Companies:
                  
       Marine
   $ 106,949     $ 96,636     $ 203,585  
       Property Casualty
     116,354       359,035       475,389  
       Professional Liability
     32,443       58,992       91,435  
       Total Insurance Companies
     255,746       514,663       770,409  
Lloyd's Operations:
                        
       Marine
     97,211       83,218       180,429  
       Property Casualty
     21,788       23,438       45,226  
       Professional Liability
     6,416       25,712       32,128  
       Total Lloyd's Operations
     125,415       132,368       257,783  
                         
       Total Net Loss Reserves
   $ 381,161     $ 647,031     $ 1,028,192  
                         
                         
   
Case
    
IBNR
          
Net Loss Reserves, December 31, 2008:
  
Reserves
    
Reserves
    
Total
  
Insurance Companies:
                        
       Marine
   $ 96,244     $ 96,995     $ 193,239  
       Property Casualty
     115,810       358,305       474,115  
       Professional Liability
     22,913       58,793       81,706  
       Total Insurance Companies
     234,967       514,093       749,060  
Lloyd's Operations:
                        
       Marine
     99,233       78,293       177,526  
       Property Casualty
     26,218       16,386       42,604  
       Professional Liability
     5,822       24,859       30,681  
       Total Lloyd's Operations
     131,273       119,538       250,811  
                         
       Total Net Loss Reserves
   $ 366,240     $ 633,631     $ 999,871  
 
 
 
News Release
Page 11
 
 
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Investment Data
March 31, 2009
($ in thousands)
 
At March 31, 2009, the average quality of the investment portfolio as rated by S&P and Moody's was AA/Aa with an average duration of 4.3 years.  All of the Company's mortgage-backed and asset-backed securities are rated AAA/Aaa by S&P and Moody's except for 40 securities approximating $30.8 million.  The Company does not own any collateralized debt obligations (CDO's), collateralized loan obligations (CLO's) or asset backed commercial paper.
 
At March 31, 2009, the Company owned two asset-backed securities approximating $0.2 million with subprime mortgage exposures.  The securities have an effective maturity of 1.7 years.  In addition, the Company owned a total of five collateralized mortgage obligations and asset-backed securities approximating $1.5 million classified as Alt-A which is a credit category between prime and subprime.  They have an effective maturity of 5.2 years.  Such subprime and Alt-A categories are as defined by S&P.  The Company is receiving principal and/or interest payments on all these securities and believes such amounts are fully collectible.
 
The following table sets forth our cash and investments at March 31, 2009:
 
March 31, 2009
  
Fair
Value
    
Gross
Unrealized
Gains
    
Gross
Unrealized
(Losses)
    
OTTI
Recognized
in OCI
    
Cost or
Amortized
Cost
  
               
($ in thousands)
              
Fixed maturities:
                              
U.S. Government Treasury Bonds,
                              
agency bonds and foreign government bonds
   $ 398,268     $ 19,757     $ (25 )   $ -     $ 378,536  
States, municipalities and political
                                        
  subdivisions
     610,021       19,116       (4,230 )     -       595,135  
Mortgage- and asset-backed securities:
                                        
   Mortgage-backed securities
     314,432       14,055       (1 )     -       300,378  
   Collateralized mortgage obligations
     43,167       -       (7,188 )     (16,103 )     66,458  
   Asset-backed securities
     29,826       273       (785 )     (68 )     30,406  
   Commercial mortgage-backed securities
     89,648       15       (23,511 )     -       113,144  
     Subtotal
     477,073       14,343       (31,485 )     (16,171 )     510,386  
                                         
Corporate bonds.
     191,464       2,259       (15,917 )     -       205,122  
                                         
Total fixed maturities
     1,676,826       55,475       (51,657 )     (16,171 )     1,689,179  
                                         
Equity securities - common stocks
     51,735       609       (1,183 )     -       52,309  
                                         
Cash
     16,644       -       -       -       16,644  
                                         
Short-term investments
     206,223       -       -       -       206,223  
                                         
Total
   $ 1,951,428     $ 56,084     $ (52,840 )   $ (16,171 )   $ 1,964,355  
 
 
News Release
Page 12
 
 
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Investment Data
March 31, 2009
($ in thousands)
 
The following three tables set forth our mortgage-backed securities, collateralized mortgage obligations, and asset-backed securities by those issued by FNMA and FHLMC and the quality category (prime, Alt-A and subprime) for all other such investments at March 31, 2009:
 
Mortgage-backed securities:
  
Fair
Value
    
Gross
Unrealized
Gains
    
Gross
Unrealized
(Losses)
    
Cost or
Amortized
Cost
  
GNMA
   $ 41,227     $ 1,424     $ -     $ 39,803  
FNMA
     202,042       9,235      
(1)
       192,808  
FHLMC
     71,163       3,396       -       67,767  
Prime
     -       -       -       -  
Alt-A
     -       -       -       -  
Subprime
     -       -       -       -  
Total
   $ 314,432     $ 14,055     $
(1)
     $ 300,378  
                                 
Collateralized mortgage obligations:
  
Fair
Value
    
Gross
Unrealized
Gains
    
Gross
Unrealized
(Losses)
    
Cost or
Amortized
Cost
  
GNMA
   $ -     $ -     $ -     $ -  
FNMA
     -       -       -       -  
FHLMC
     -       -       -       -  
Prime
     42,250       -       (22,772 )     65,022  
Alt-A
     917       -       (519 )     1,436  
Subprime
     -       -       -       -  
Total
   $ 314,432     $ -     $ (23,291 )   $ 66,458  
                                 
Asset-backed securities:
  
Fair
Value
    
Gross
Unrealized
Gains
    
Gross
Unrealized
(Losses)
    
Cost or
Amortized
Cost
  
GNMA
   $ -     $ -     $ -     $ -  
FNMA
     -       -       -       -  
FHLMC
     -       -       -       -  
Prime
     29,117       273       (648 )     29,492  
Alt-A
     545       -       (136 )     681  
Subprime
     164       -       (69 )     233  
Total
   $ 29,826     $ 273     $ (853 )   $ 30,406