SEGMENTS

The Company’s property and casualty insurance operations comprise one business segment. The property and casualty insurance segment consists of seven lines of business: dwelling fire and extended coverage, homeowners (including mobile homeowners), ocean marine, other liability, private passenger auto liability, commercial auto liability and auto physical damage. Management organizes the business utilizing a niche strategy focusing on lower valued dwellings as well as non-standard automobile products. Our chief decision makers (President, Chief Financial Officer and Chief Executive Officer) review results and operating plans making decisions on resource allocations on a company-wide basis. The Company’s products are primarily produced through agents within the states in which we operate. The Company’s life and accident and health operations comprise the second business segment. The life and accident and health insurance segment consists of two lines of business: traditional life insurance and accident and health insurance. Premium revenues and operating income by industry segment for the quarters ended March 31, 2012 and 2011 (unaudited) are summarized below (dollars in thousands):



Quarter ended March 31, 2012	Total		P&C Insurance Operations		Life Insurance Operations		Non-Insurance Operations
REVENUE
Net premiums earned	$	13,496	$	11,744	$	1,752	$	—
Net investment income	1,135		611		508		16
Net realized investment gains	206		132		72		2
Other income	197		196		1		—
	15,034		12,683		2,333		18
BENEFITS AND EXPENSES
Policyholder benefits paid	7,845		6,413		1,432		—
Policy acquisition costs	2,772		2,544		228		—
General and administrative expenses	3,077		1,829		448		800
Taxes, licenses and fees	492		430		62		—
Interest expense	292		—		19		273
	14,478		11,216		2,189		1,073
Income Before Income Taxes	$	556	$	1,467	$	144	$	(1,055	)



Quarter ended March 31, 2011	Total		P&C Insurance Operations		Life Insurance Operations		Non-Insurance Operations
REVENUE
Net premiums earned	$	14,870	$	13,001	$	1,869	$	—
Net investment income	1,142		627		497		18
Net realized investment gains	770		386		354		30
Other income	255		255		—		—
	17,037		14,269		2,720		48
BENEFITS AND EXPENSES
Policyholder benefits paid	9,322		7,811		1,511		—
Policy acquisition costs	2,924		2,740		184		—
General and administrative expenses	2,563		1,451		580		532
Taxes, licenses and fees	480		360		120		—
Interest expense	285		—		15		270
	15,574		12,362		2,410		802
Income (Loss) Before Income Taxes	$	1,463	$	1,907	$	310	$	(754	)

The following table presents the Company’s gross and net premiums written for the property and casualty segment and the life and accident and health segment for the three month period ended March 31, 2012 and 2011, respectively:



	Quarter Ended
	March 31,
	2012			2011
Premiums written:
Life, accident and health operations:
Traditional life insurance	$	1,210		$	1,305
Accident and health insurance	464			484
Total life, accident and health	1,674			1,789

Property and Casualty operations:
Dwelling fire & extended coverage	6,927			6,697
Homeowners (Including mobile homeowners)	5,487			6,007
Ocean marine	84			119
Other liability	357			334
Private passenger auto liability	69			854
Commercial auto liability	6			119
Auto physical damage	36			336
Total property and casualty	12,966			14,466

Gross premiums written	14,640			16,255
Reinsurance premium ceded	(1,683		)	(1,529		)

Net premiums written	$	12,957		$	14,726

The following table presents the Company’s gross and net premiums earned for the property and casualty segment and the life and accident and health segment for the three month periods ended March 31, 2012 and 2011, respectively:



	Quarter Ended
	March 31,
	2012			2011
Premiums earned:
Life, accident and health operations:
Traditional life insurance	$	1,288		$	1,386
Accident and health insurance	464			483
Total life, accident and health	1,752			1,869

Property and Casualty operations:
Dwelling fire & extended coverage	6,547			6,499
Homeowners (Including mobile homeowners)	5,904			6,244
Ocean marine	268			319
Other liability	340			310
Private passenger auto liability	235			756
Commercial auto liability	6			119
Auto physical damage	107			297
Total property and casualty	13,407			14,544

Gross premiums earned	15,159			16,413
Reinsurance premium ceded	(1,663		)	(1,543		)

Net premiums earned	$	13,496		$	14,870