SEGMENTS

The Company’s property and casualty insurance operations comprise one business segment. The property and casualty insurance segment primarily underwrites home insurance coverage with primary lines of business consisting of: dwelling fire and extended coverage, homeowners (including mobile homeowners) and other liability. The Company has ceased writing ocean marine, private passenger auto liability, commercial auto liability and auto physical damage coverages over the past two years with no policies remaining in-force at December 31, 2013 in the lines of business.

Management organizes the business utilizing a niche strategy focusing on lower valued dwellings. Our chief decision makers (Chief Executive Officer, Chief Financial Officer and President) 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.

Total assets by industry segment at September 30, 2014 and at December 31, 2013 are summarized below (dollars in thousands):



	Total		P&C Insurance Operations		Life Insurance Operations		Non-Insurance Operations
September 30, 2014
	$	145,706	$	80,534	$	56,924	$	8,248
December 31, 2013
	$	133,980	$	71,003	$	53,831	$	9,146

Premium revenues and operating income by business segment for the three and nine months ended September 30, 2014 and 2013 are summarized below (dollars in thousands):



Three months ended September 30, 2014	Total		P&C Insurance Operations		Life Insurance Operations		Non-Insurance Operations
REVENUE
Net premiums earned	$	14,374	$	12,757	$	1,617	$	—
Net investment income	824		333		472		19
Net realized investment gains	141		23		117		1
Other income	158		156		2		—
	15,497		13,269		2,208		20
BENEFITS, LOSSES AND EXPENSES
Policyholder benefits paid	7,172		5,876		1,296		—
Amortization of deferred policy acquisition costs	946		642		304		—
Commissions	2,166		2,073		93		—
General and administrative expenses	1,719		1,296		385		38
Taxes, licenses and fees	514		441		73		—
Interest expense	380		—		16		364
	12,897		10,328		2,167		402
Income (Loss) Before Income Taxes	$	2,600	$	2,941	$	41	$	(382	)



Three months ended September 30, 2013	Total		P&C Insurance Operations		Life Insurance Operations			Non-Insurance Operations
REVENUE
Net premiums earned	$	13,191	$	11,446	$	1,745		$	—
Net investment income	1,007		474		514			19
Net realized investment gains	3,297		8		(19		)	3,308
Other income	163		152		11			—
	17,658		12,080		2,251			3,327
BENEFITS, LOSSES AND EXPENSES
Policyholder benefits paid	7,112		5,845		1,267			—
Amortization of deferred policy acquisition costs	894		639		255			—
Commissions	1,800		1,704		96			—
General and administrative expenses	2,117		1,444		543			130
Taxes, licenses and fees	438		385		53			—
Interest expense	434		—		34			400
	12,795		10,017		2,248			530
Income Before Income Taxes	$	4,863	$	2,063	$	3		$	2,797



Nine months ended September 30, 2014	Total		P&C Insurance Operations		Life Insurance Operations			Non-Insurance Operations
REVENUE
Net premiums earned	$	42,298	$	37,397	$	4,901		$	—
Net investment income	2,802		1,296		1,449			57
Net realized investment gains	541		72		467			2
Other income	2,025		2,022		3			—
	47,666		40,787		6,820			59
BENEFITS AND EXPENSES
Policyholder benefits paid	24,191		20,106		4,085			—
Amortization of deferred policy acquisition costs	2,717		1,924		793			—
Commissions	6,160		5,908		252			—
General and administrative expenses	6,158		4,285		1,443			430
Taxes, licenses and fees	1,565		1,362		203			—
Interest expense	1,148		—		47			1,101
	41,939		33,585		6,823			1,531
Income (Loss) Before Income Taxes	$	5,727	$	7,202	$	(3	)	$	(1,472	)



Nine months ended September 30, 2013	Total		P&C Insurance Operations		Life Insurance Operations		Non-Insurance Operations
REVENUE
Net premiums earned	$	39,163	$	34,010	$	5,153	$	—
Net investment income	2,741		1,170		1,514		57
Net realized investment gains	4,354		1,038		8		3,308
Other income	480		467		13		—
	46,738		36,685		6,688		3,365
BENEFITS AND EXPENSES
Policyholder benefits paid	24,923		21,474		3,449		—
Amortization of deferred policy acquisition costs	2,759		1,938		821		—
Commissions	5,268		4,986		282		—
General and administrative expenses	6,082		4,052		1,455		575
Taxes, licenses and fees	1,398		1,220		178		—
Interest expense	1,311		—		72		1,239
	41,741		33,670		6,257		1,814
Income Before Income Taxes	$	4,997	$	3,015	$	431	$	1,551

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 and nine months ended September 30, 2014 and 2013, respectively:



	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
Life, accident and health operations premiums written:
Traditional life insurance	$	1,156		$	1,184		$	3,472		$	3,586
Accident and health insurance	564			604			1,439			1,485
Gross life, accident and health	1,720			1,788			4,911			5,071
Reinsurance premium ceded	(23		)	(22		)	(58		)	(52		)
Net life, accident and health premiums written	$	1,697		$	1,766		$	4,853		$	5,019

Property and Casualty operations premiums written:
Dwelling fire & extended coverage	$	8,340		$	7,630		$	25,888		$	23,595
Homeowners (Including mobile homeowners)	6,261			6,245			18,889			18,422
Ocean marine	—			—			—			75
Other liability	475			429			1,465			1,311
Gross property and casualty	15,076			14,304			46,242			43,403
Reinsurance premium ceded	(1,762		)	(2,081		)	(5,319		)	(6,401		)
Net property and casualty written	$	13,314		$	12,223		$	40,923		$	37,002

Gross premiums written	$	16,796		$	16,092		$	51,153		$	48,474
Reinsurance premium ceded	(1,785		)	(2,103		)	(5,377		)	(6,453		)
Net premiums written	$	15,011		$	13,989		$	45,776		$	42,021

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 and nine months ended September 30, 2014 and 2013, respectively:



	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
Life, accident and health operations premiums earned:
Traditional life insurance	$	1,080		$	1,159		$	3,537		$	3,715
Accident and health insurance	560			608			1,422			1,490
Gross life, accident and health	1,640			1,767			4,959			5,205
Reinsurance premium ceded	(23		)	(22		)	(58		)	(52		)
Net life, accident and health premiums earned	$	1,617		$	1,745		$	4,901		$	5,153

Property and Casualty operations premiums earned:
Dwelling fire & extended coverage	$	8,147		$	7,446		$	23,727		$	21,720
Homeowners (Including mobile homeowners)	5,914			5,674			17,661			17,007
Ocean marine	—			—			—			524
Other liability	458			408			1,328			1,172
Gross property and casualty	14,519			13,528			42,716			40,423
Reinsurance premium ceded	(1,762		)	(2,082		)	(5,319		)	(6,413		)
Net property and casualty earned	$	12,757		$	11,446		$	37,397		$	34,010

Gross premiums earned	$	16,159		$	15,295		$	47,675		$	45,628
Reinsurance premium ceded	(1,785		)	(2,104		)	(5,377		)	(6,465		)
Net premiums earned	$	14,374		$	13,191		$	42,298		$	39,163