☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
INDIANA
|
35-0160330
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification Number)
|
|
111 Congressional Boulevard, Carmel, Indiana
|
46032
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Securities registered pursuant to Section 12(b) of the Act:
|
||
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Class A Common Stock, No Par Value
|
PTVCA
|
The Nasdaq Stock Market LLC
|
Class B Common Stock, No Par Value
|
PTVCB
|
The Nasdaq Stock Market LLC
|
Common Stock, No Par Value:
|
Class A (voting)
|
2,608,294
|
||
Class B (non-voting)
|
11,722,917
|
|||
14,331,211
|
September 30
2019
|
December 31
2018
|
|||||||
Assets
|
||||||||
Investments:
|
||||||||
Fixed income securities
|
$
|
757,841
|
$
|
592,645
|
||||
Equity securities
|
72,837
|
66,422
|
||||||
Limited partnerships
|
22,645
|
55,044
|
||||||
Commercial mortgage loans
|
9,418
|
6,672
|
||||||
Short-term and other
|
1,000
|
1,000
|
||||||
863,741
|
721,783
|
|||||||
Cash and cash equivalents
|
85,777
|
163,996
|
||||||
Restricted cash and cash equivalents
|
22,410
|
6,815
|
||||||
Accounts receivable
|
105,801
|
102,972
|
||||||
Reinsurance recoverable
|
418,031
|
392,436
|
||||||
Other assets
|
93,756
|
88,426
|
||||||
Current federal income taxes recoverable
|
4,267
|
7,441
|
||||||
Deferred federal income taxes
|
2,984
|
6,262
|
||||||
Total Assets
|
$
|
1,596,767
|
$
|
1,490,131
|
||||
Liabilities and shareholders' equity
|
||||||||
Reserves for losses and loss expenses
|
$
|
960,695
|
$
|
865,339
|
||||
Reserves for unearned premiums
|
76,329
|
71,625
|
||||||
Reinsurance payable
|
55,225
|
66,632
|
||||||
Short-term borrowings
|
20,000
|
20,000
|
||||||
Accounts payable and other liabilities
|
121,088
|
110,453
|
||||||
Total Liabilities
|
1,233,337
|
1,134,049
|
||||||
Shareholders' equity:
|
||||||||
Common stock-no par value:
|
||||||||
Class A voting -- authorized 3,000,000 shares; outstanding -- 2019 - 2,608,819; 2018 - 2,615,339
|
112
|
112
|
||||||
Class B non-voting -- authorized 20,000,000 shares; outstanding -- 2019 - 11,738,578; 2018 - 12,253,922
|
501
|
522
|
||||||
Additional paid-in capital
|
53,670
|
54,720
|
||||||
Accumulated other comprehensive income (loss)
|
9,594
|
(7,347
|
)
|
|||||
Retained earnings
|
299,553
|
308,075
|
||||||
Total Shareholders' Equity
|
363,430
|
356,082
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
1,596,767
|
$
|
1,490,131
|
Three Months Ended
September 30
|
Nine Months Ended
September 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Revenues
|
||||||||||||||||
Net premiums earned
|
$
|
110,288
|
$
|
96,807
|
$
|
335,931
|
$
|
314,209
|
||||||||
Net investment income
|
6,703
|
5,578
|
19,434
|
16,010
|
||||||||||||
Commissions and other income
|
2,716
|
3,413
|
6,761
|
7,488
|
||||||||||||
Net realized gains on investments, excluding impairment losses
|
1,199
|
449
|
1,872
|
1,740
|
||||||||||||
Other-than-temporary impairment losses on investments
|
(58
|
)
|
–
|
(404
|
)
|
–
|
||||||||||
Net unrealized gains (losses) on equity securities and limited partnership investments
|
(1,016
|
)
|
1,924
|
7,573
|
(7,335
|
)
|
||||||||||
Net realized and unrealized gains (losses) on investments
|
125
|
2,373
|
9,041
|
(5,595
|
)
|
|||||||||||
119,832
|
108,171
|
371,167
|
332,112
|
|||||||||||||
Expenses
|
||||||||||||||||
Losses and loss expenses incurred
|
84,781
|
94,540
|
262,336
|
244,327
|
||||||||||||
Other operating expenses
|
36,070
|
29,200
|
104,386
|
99,984
|
||||||||||||
120,851
|
123,740
|
366,722
|
344,311
|
|||||||||||||
Income (loss) before federal income tax expense (benefit)
|
(1,019
|
)
|
(15,569
|
)
|
4,445
|
(12,199
|
)
|
|||||||||
Federal income tax expense (benefit)
|
(312
|
)
|
(3,244
|
)
|
869
|
(2,691
|
)
|
|||||||||
Net income (loss)
|
$
|
(707
|
)
|
$
|
(12,325
|
)
|
$
|
3,576
|
$
|
(9,508
|
)
|
|||||
Per share data:
|
||||||||||||||||
Basic and diluted earnings (loss)
|
$
|
(.05
|
)
|
$
|
(.82
|
)
|
$
|
.24
|
$
|
(.63
|
)
|
|||||
Reconciliation of shares outstanding:
|
||||||||||||||||
Average shares outstanding - basic
|
14,361
|
14,969
|
14,607
|
14,998
|
||||||||||||
Dilutive effect of share equivalents
|
-
|
-
|
77
|
-
|
||||||||||||
Average shares outstanding - diluted
|
14,361
|
14,969
|
14,684
|
14,998
|
Three Months Ended
September 30
|
Nine Months Ended
September 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Net income (loss)
|
$
|
(707
|
)
|
$
|
(12,325
|
)
|
$
|
3,576
|
$
|
(9,508
|
)
|
|||||
Other comprehensive income (loss), net of tax:
|
||||||||||||||||
Unrealized net gains (losses) on fixed income securities
|
1,566
|
(1,151
|
)
|
16,539
|
(6,298
|
)
|
||||||||||
Foreign currency translation adjustments
|
(189
|
)
|
202
|
402
|
(209
|
)
|
||||||||||
Other comprehensive income (loss)
|
1,377
|
(949
|
)
|
16,941
|
(6,507
|
)
|
||||||||||
Comprehensive income (loss)
|
$
|
670
|
$
|
(13,274
|
)
|
$
|
20,517
|
$
|
(16,015
|
)
|
|
Common Stock
|
Additional
|
Accumulated Other
|
|||||||||||||||||||||||||||||
|
Class A
|
Class B
|
Paid-in
|
Comprehensive
|
Retained
|
Total
|
||||||||||||||||||||||||||
Description
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Income (Loss)
|
Earnings
|
Equity
|
||||||||||||||||||||||||
Balance at December 31, 2018
|
2,615
|
$
|
112
|
12,254
|
$
|
522
|
$
|
54,720
|
$
|
(7,347
|
)
|
$
|
308,075
|
$
|
356,082
|
|||||||||||||||||
Net income
|
–
|
–
|
–
|
–
|
–
|
–
|
3,576
|
3,576
|
||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax
|
–
|
–
|
–
|
–
|
–
|
402
|
–
|
402
|
||||||||||||||||||||||||
Change in unrealized gain (loss) on investments, net of tax
|
–
|
–
|
–
|
–
|
–
|
16,539
|
–
|
16,539
|
||||||||||||||||||||||||
Common stock dividends
|
–
|
–
|
–
|
–
|
–
|
–
|
(4,429
|
)
|
(4,429
|
)
|
||||||||||||||||||||||
Repurchase of common stock
|
(6
|
)
|
–
|
(595
|
)
|
(24
|
)
|
(2,590
|
)
|
–
|
(7,669
|
)
|
(10,283
|
)
|
||||||||||||||||||
Restricted stock grants
|
–
|
–
|
80
|
3
|
1,540
|
––
|
–
|
1,543
|
||||||||||||||||||||||||
Balance at September 30, 2019
|
2,609
|
$
|
112
|
11,739
|
$
|
501
|
$
|
53,670
|
$
|
9,594
|
$
|
299,553
|
$
|
363,430
|
|
Common Stock
|
Additional
|
Accumulated Other
|
|||||||||||||||||||||||||||||
|
Class A
|
Class B
|
Paid-in
|
Comprehensive
|
Retained
|
Total
|
||||||||||||||||||||||||||
Description
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Income (Loss)
|
Earnings
|
Equity
|
||||||||||||||||||||||||
Balance at June 30, 2019
|
2,612
|
$
|
112
|
11,932
|
$
|
509
|
$
|
54,065
|
$
|
8,217
|
$
|
304,513
|
$
|
367,416
|
||||||||||||||||||
Net loss
|
–
|
–
|
–
|
–
|
–
|
–
|
(707
|
)
|
(707
|
)
|
||||||||||||||||||||||
Foreign currency translation adjustment, net of tax
|
–
|
–
|
–
|
–
|
–
|
(189
|
)
|
–
|
(189
|
)
|
||||||||||||||||||||||
Change in unrealized gain (loss) on investments, net of tax
|
–
|
–
|
–
|
–
|
–
|
1,566
|
–
|
1,566
|
||||||||||||||||||||||||
Common stock dividends
|
–
|
–
|
–
|
–
|
–
|
–
|
(1,442
|
)
|
(1,442
|
)
|
||||||||||||||||||||||
Repurchase of common stock
|
(3
|
)
|
–
|
(224
|
)
|
(9
|
)
|
(976
|
)
|
–
|
(2,811
|
)
|
(3,796
|
)
|
||||||||||||||||||
Restricted stock grants
|
–
|
–
|
31
|
1
|
581
|
–
|
–
|
582
|
||||||||||||||||||||||||
Balance at September 30, 2019
|
2,609
|
$
|
112
|
11,739
|
$
|
501
|
$
|
53,670
|
$
|
9,594
|
$
|
299,553
|
$
|
363,430
|
|
Common Stock
|
Additional
|
Accumulated Other
|
|||||||||||||||||||||||||||||
|
Class A
|
Class B
|
Paid-in
|
Comprehensive
|
Retained
|
Total
|
||||||||||||||||||||||||||
Description
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Income (Loss)
|
Earnings
|
Equity
|
||||||||||||||||||||||||
Balance at December 31, 2017
|
2,623
|
$
|
112
|
12,424
|
$
|
530
|
$
|
55,078
|
$
|
46,391
|
$
|
316,700
|
$
|
418,811
|
||||||||||||||||||
Cumulative effect of adoption of ASU 2016-01, net of tax (Note 1)
|
–
|
–
|
–
|
–
|
–
|
(46,157
|
)
|
46,157
|
–
|
|||||||||||||||||||||||
Cumulative effect of adoption of ASU 2018-02 (Note 1)
|
–
|
–
|
–
|
–
|
–
|
117
|
(117
|
)
|
–
|
|||||||||||||||||||||||
Net loss
|
–
|
–
|
–
|
–
|
–
|
–
|
(9,508
|
)
|
(9,508
|
)
|
||||||||||||||||||||||
Foreign currency translation adjustment, net of tax
|
–
|
–
|
–
|
–
|
–
|
(209
|
)
|
–
|
(209
|
)
|
||||||||||||||||||||||
Change in unrealized gain (loss) on investments, net of tax
|
–
|
–
|
–
|
–
|
–
|
(6,298
|
)
|
–
|
(6,298
|
)
|
||||||||||||||||||||||
Common stock dividends
|
–
|
–
|
–
|
–
|
–
|
–
|
(12,652
|
)
|
(12,652
|
)
|
||||||||||||||||||||||
Repurchase of common stock
|
–
|
–
|
(112
|
)
|
(5
|
)
|
(484
|
)
|
–
|
(2,131
|
)
|
(2,620
|
)
|
|||||||||||||||||||
Restricted stock grants
|
–
|
–
|
13
|
–
|
521
|
–
|
–
|
521
|
||||||||||||||||||||||||
Balance at September 30, 2018
|
2,623
|
$
|
112
|
12,325
|
$
|
525
|
$
|
55,115
|
$
|
(6,156
|
)
|
$
|
338,449
|
$
|
388,045
|
|
Common Stock
|
Additional
|
Accumulated Other
|
|||||||||||||||||||||||||||||
|
Class A
|
Class B
|
Paid-in
|
Comprehensive
|
Retained
|
Total
|
||||||||||||||||||||||||||
Description
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Income (Loss)
|
Earnings
|
Equity
|
||||||||||||||||||||||||
Balance at June 30, 2018
|
2,623
|
$
|
112
|
12,380
|
$
|
528
|
$
|
55,745
|
$
|
(5,207
|
)
|
$
|
356,057
|
$
|
407,235
|
|||||||||||||||||
Net loss
|
–
|
–
|
–
|
–
|
–
|
–
|
(12,325
|
)
|
(12,325
|
)
|
||||||||||||||||||||||
Foreign currency translation adjustment, net of tax
|
–
|
–
|
–
|
–
|
–
|
202
|
–
|
202
|
||||||||||||||||||||||||
Change in unrealized gain (loss) on investments, net of tax
|
–
|
–
|
–
|
–
|
–
|
(1,151
|
)
|
–
|
(1,151
|
)
|
||||||||||||||||||||||
Common stock dividends
|
–
|
–
|
–
|
–
|
–
|
–
|
(4,196
|
)
|
(4,196
|
)
|
||||||||||||||||||||||
Repurchase of common stock
|
–
|
–
|
(58
|
)
|
(3
|
)
|
(250
|
)
|
–
|
(1,087
|
)
|
(1,340
|
)
|
|||||||||||||||||||
Restricted stock grants
|
–
|
–
|
3
|
–
|
(380
|
)
|
–
|
–
|
(380
|
)
|
||||||||||||||||||||||
Balance at September 30, 2018
|
2,623
|
$
|
112
|
12,325
|
$
|
525
|
$
|
55,115
|
$
|
(6,156
|
)
|
$
|
338,449
|
$
|
388,045
|
Nine Months Ended
September 30
|
||||||||
2019
|
2018
|
|||||||
Operating activities
|
||||||||
Net income (loss)
|
$
|
3,576
|
$
|
(9,508
|
)
|
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities
|
58,746
|
69,878
|
||||||
Net cash provided by operating activities
|
62,322
|
60,370
|
||||||
Investing activities
|
||||||||
Purchases of fixed income and equity securities
|
(342,299
|
)
|
(330,217
|
)
|
||||
Purchases of limited partnership interests
|
–
|
(450
|
)
|
|||||
Distributions from limited partnerships
|
33,395
|
369
|
||||||
Proceeds from maturities
|
64,536
|
46,620
|
||||||
Proceeds from sales of fixed income securities
|
118,725
|
181,867
|
||||||
Proceeds from sales of equity securities
|
19,408
|
117,692
|
||||||
Purchase of insurance company-owned life insurance
|
–
|
(10,000
|
)
|
|||||
Purchase of commercial mortgage loans
|
(2,746
|
)
|
–
|
|||||
Purchases of property and equipment
|
(1,659
|
)
|
(4,360
|
)
|
||||
Proceeds from disposals of property and equipment
|
4
|
8
|
||||||
Net cash provided by (used in) investing activities
|
(110,636
|
)
|
1,529
|
|||||
Financing activities
|
||||||||
Dividends paid to shareholders
|
(4,429
|
)
|
(12,652
|
)
|
||||
Repurchase of common shares
|
(10,283
|
)
|
(2,620
|
)
|
||||
Net cash used in financing activities
|
(14,712
|
)
|
(15,272
|
)
|
||||
Effect of foreign exchange rates on cash and cash equivalents
|
402
|
(209
|
)
|
|||||
Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents
|
(62,624
|
)
|
46,418
|
|||||
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period
|
170,811
|
68,713
|
||||||
Cash, cash equivalents and restricted cash and cash equivalents at end of period
|
$
|
108,187
|
$
|
115,131
|
Fair
Value
|
Cost or
Amortized Cost
|
Gross
Unrealized Gains
|
Gross
Unrealized Losses
|
Net Unrealized
Gains (Losses)
|
||||||||||||||||
September 30, 2019
|
||||||||||||||||||||
Fixed income securities
|
||||||||||||||||||||
Agency collateralized mortgage obligations
|
$
|
14,426
|
$
|
13,911
|
$
|
518
|
$
|
(3
|
)
|
$
|
515
|
|||||||||
Agency mortgage-backed securities
|
51,246
|
49,567
|
1,691
|
(12
|
)
|
1,679
|
||||||||||||||
Asset-backed securities
|
99,295
|
99,834
|
580
|
(1,119
|
)
|
(539
|
)
|
|||||||||||||
Bank loans
|
14,625
|
14,871
|
54
|
(300
|
)
|
(246
|
)
|
|||||||||||||
Certificates of deposit
|
2,835
|
2,835
|
–
|
–
|
–
|
|||||||||||||||
Collateralized mortgage obligations
|
5,718
|
5,234
|
571
|
(87
|
)
|
484
|
||||||||||||||
Corporate securities
|
267,223
|
261,191
|
6,858
|
(826
|
)
|
6,032
|
||||||||||||||
Mortgage-backed securities
|
47,381
|
46,235
|
1,290
|
(144
|
)
|
1,146
|
||||||||||||||
Municipal obligations
|
32,986
|
32,280
|
755
|
(49
|
)
|
706
|
||||||||||||||
Non-U.S. government obligations
|
24,068
|
23,705
|
364
|
(1
|
)
|
363
|
||||||||||||||
U.S. government obligations
|
198,038
|
195,099
|
3,326
|
(387
|
)
|
2,939
|
||||||||||||||
Total fixed income securities
|
$
|
757,841
|
$
|
744,762
|
$
|
16,007
|
$
|
(2,928
|
)
|
$
|
13,079
|
Fair
Value
|
Cost or
Amortized Cost
|
Gross
Unrealized Gains
|
Gross
Unrealized Losses
|
Net Unrealized
Gains (Losses)
|
||||||||||||||||
December 31, 2018
|
||||||||||||||||||||
Fixed income securities
|
||||||||||||||||||||
Agency collateralized mortgage obligations
|
$
|
10,687
|
$
|
10,636
|
$
|
145
|
$
|
(94
|
)
|
$
|
51
|
|||||||||
Agency mortgage-backed securities
|
37,385
|
37,168
|
371
|
(154
|
)
|
217
|
||||||||||||||
Asset-backed securities
|
64,422
|
66,241
|
14
|
(1,833
|
)
|
(1,819
|
)
|
|||||||||||||
Bank loans
|
9,750
|
10,208
|
27
|
(485
|
)
|
(458
|
)
|
|||||||||||||
Certificates of deposit
|
2,835
|
2,835
|
–
|
–
|
–
|
|||||||||||||||
Collateralized mortgage obligations
|
5,423
|
5,095
|
376
|
(48
|
)
|
328
|
||||||||||||||
Corporate securities
|
190,450
|
196,925
|
127
|
(6,602
|
)
|
(6,475
|
)
|
|||||||||||||
Mortgage-backed securities
|
38,540
|
38,586
|
377
|
(423
|
)
|
(46
|
)
|
|||||||||||||
Municipal obligations
|
29,155
|
29,102
|
239
|
(186
|
)
|
53
|
||||||||||||||
Non-U.S. government obligations
|
25,180
|
25,339
|
6
|
(165
|
)
|
(159
|
)
|
|||||||||||||
U.S. government obligations
|
178,818
|
178,369
|
1,252
|
(803
|
)
|
449
|
||||||||||||||
Total fixed income securities
|
$
|
592,645
|
$
|
600,504
|
$
|
2,934
|
$
|
(10,793
|
)
|
$
|
(7,859
|
)
|
September 30, 2019
|
December 31, 2018
|
|||||||||||||||||||||||
Number of
Securities
|
Fair
Value
|
Gross
Unrealized Loss
|
Number of
Securities
|
Fair
Value
|
Gross
Unrealized Loss
|
|||||||||||||||||||
Fixed income securities:
|
||||||||||||||||||||||||
12 months or less
|
97
|
$
|
106,943
|
$
|
(2,097
|
)
|
275
|
$
|
282,646
|
$
|
(7,296
|
)
|
||||||||||||
Greater than 12 months
|
86
|
58,053
|
(831
|
)
|
217
|
131,001
|
(3,497
|
)
|
||||||||||||||||
Total fixed income securities
|
183
|
$
|
164,996
|
$
|
(2,928
|
)
|
492
|
$
|
413,647
|
$
|
(10,793
|
)
|
||||||||||||
Fair
Value
|
Cost or
Amortized Cost
|
|||||||
One year or less
|
$
|
67,076
|
$
|
67,008
|
||||
Excess of one year to five years
|
336,640
|
330,035
|
||||||
Excess of five years to ten years
|
129,362
|
126,528
|
||||||
Excess of ten years
|
12,416
|
11,645
|
||||||
Contractual maturities
|
545,494
|
535,216
|
||||||
Asset-backed securities
|
212,347
|
209,546
|
||||||
Total
|
$
|
757,841
|
$
|
744,762
|
Three Months Ended
September 30
|
Nine Months Ended
September 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Gross gains on available-for-sale fixed income securities sold during the period
|
$
|
2,407
|
$
|
2,690
|
$
|
9,710
|
$
|
8,824
|
||||||||
Gross losses on available-for-sale fixed income securities sold during the period
|
(2,728
|
)
|
(2,743
|
)
|
(9,409
|
)
|
(8,539
|
)
|
||||||||
Other-than-temporary impairments
|
(58
|
)
|
–
|
(404
|
)
|
–
|
||||||||||
Change in value of limited partnership investments
|
278
|
(1,073
|
)
|
1,000
|
(6,518
|
)
|
||||||||||
Gains on equity securities:
|
||||||||||||||||
Realized gains on equity securities sold during the period
|
1,520
|
502
|
1,571
|
1,455
|
||||||||||||
Unrealized gains (losses) on equity securities held at the end of the period
|
(1,294
|
)
|
2,997
|
6,573
|
(817
|
)
|
||||||||||
Realized and unrealized gains on equity securities during the period
|
226
|
3,499
|
8,144
|
638
|
||||||||||||
Net realized and unrealized gains (losses) on investments
|
$
|
125
|
$
|
2,373
|
$
|
9,041
|
$
|
(5,595
|
)
|
2019
|
2018
|
|||||||
Three months ended September 30:
|
||||||||
Premiums ceded to reinsurers
|
$
|
29,957
|
$
|
39,318
|
||||
Losses and loss expenses ceded to reinsurers
|
27,228
|
44,015
|
||||||
Commissions from reinsurers
|
7,820
|
5,986
|
||||||
Nine months ended September 30:
|
||||||||
Premiums ceded to reinsurers
|
$
|
92,556
|
$
|
100,560
|
||||
Losses and loss expenses ceded to reinsurers
|
86,876
|
92,651
|
||||||
Commissions from reinsurers
|
23,229
|
20,309
|
||||||
Nine Months Ended
|
||||||||
September 30
|
||||||||
2019
|
2018
|
|||||||
Reserves, gross of reinsurance recoverable, at the beginning of the year
|
$
|
865,339
|
$
|
680,274
|
||||
Reinsurance recoverable on unpaid losses at the beginning of the year
|
375,935
|
308,143
|
||||||
Reserves at the beginning of the year
|
489,404
|
372,131
|
||||||
Provision for losses and loss expenses:
|
||||||||
Claims occurring during the current period
|
263,925
|
229,644
|
||||||
Claims occurring during prior periods
|
(1,589
|
)
|
14,683
|
|||||
Total incurred
|
262,336
|
244,327
|
||||||
Loss and loss expense payments:
|
||||||||
Claims occurring during the current period
|
53,836
|
49,510
|
||||||
Claims occurring during prior periods
|
133,196
|
123,167
|
||||||
Total paid
|
187,032
|
172,677
|
||||||
Reserves at the end of the period
|
564,708
|
443,781
|
||||||
Reinsurance recoverable on unpaid losses at the end of the period
|
395,987
|
334,056
|
||||||
Reserves, gross of reinsurance recoverable, at the end of the period
|
$
|
960,695
|
$
|
777,837
|
Three Months Ended
September 30
|
Nine Months Ended
September 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Revenues:
|
||||||||||||||||
Net premiums earned
|
$
|
110,288
|
$
|
96,807
|
$
|
335,931
|
$
|
314,209
|
||||||||
Net investment income
|
6,703
|
5,578
|
19,434
|
16,010
|
||||||||||||
Net realized and unrealized gains (losses) on investments
|
125
|
2,373
|
9,041
|
(5,595
|
)
|
|||||||||||
Commissions and other income
|
2,716
|
3,413
|
6,761
|
7,488
|
||||||||||||
Total revenues
|
$
|
119,832
|
$
|
108,171
|
$
|
371,167
|
$
|
332,112
|
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Fixed income securities:
|
||||||||||||||||
Agency collateralized mortgage obligations
|
$
|
14,426
|
$
|
–
|
$
|
14,426
|
$
|
–
|
||||||||
Agency mortgage-backed securities
|
51,246
|
–
|
51,246
|
–
|
||||||||||||
Asset-backed securities
|
99,295
|
–
|
99,295
|
–
|
||||||||||||
Bank loans
|
14,625
|
–
|
14,625
|
–
|
||||||||||||
Certificates of deposit
|
2,835
|
2,835
|
–
|
–
|
||||||||||||
Collateralized mortgage obligations
|
5,718
|
–
|
5,718
|
–
|
||||||||||||
Corporate securities
|
262,656
|
–
|
262,656
|
–
|
||||||||||||
Options embedded in convertible securities
|
4,567
|
–
|
4,567
|
–
|
||||||||||||
Mortgage-backed securities
|
47,381
|
–
|
47,381
|
–
|
||||||||||||
Municipal obligations
|
32,986
|
–
|
32,986
|
–
|
||||||||||||
Non-U.S. government obligations
|
24,068
|
–
|
24,068
|
–
|
||||||||||||
U.S. government obligations
|
198,038
|
–
|
198,038
|
–
|
||||||||||||
Total fixed income securities
|
757,841
|
2,835
|
755,006
|
–
|
||||||||||||
Equity securities:
|
||||||||||||||||
Consumer
|
15,387
|
15,387
|
–
|
–
|
||||||||||||
Energy
|
3,010
|
3,010
|
–
|
–
|
||||||||||||
Financial
|
29,829
|
29,829
|
–
|
–
|
||||||||||||
Industrial
|
4,488
|
4,488
|
–
|
–
|
||||||||||||
Technology
|
2,609
|
2,609
|
–
|
–
|
||||||||||||
Funds (e.g. mutual funds, closed end funds, ETFs)
|
9,438
|
9,438
|
–
|
–
|
||||||||||||
Other
|
8,076
|
8,076
|
–
|
–
|
||||||||||||
Total equity securities
|
72,837
|
72,837
|
–
|
–
|
||||||||||||
Short-term investments
|
1,000
|
1,000
|
–
|
–
|
||||||||||||
Cash equivalents
|
78,072
|
–
|
78,072
|
–
|
||||||||||||
Total
|
$
|
909,750
|
$
|
76,672
|
$
|
833,078
|
$
|
–
|
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Fixed income securities:
|
||||||||||||||||
Agency collateralized mortgage obligations
|
$
|
10,687
|
$
|
–
|
$
|
10,687
|
$
|
–
|
||||||||
Agency mortgage-backed securities
|
37,385
|
–
|
37,385
|
–
|
||||||||||||
Asset-backed securities
|
64,422
|
–
|
64,422
|
–
|
||||||||||||
Bank loans
|
9,750
|
–
|
9,750
|
–
|
||||||||||||
Certificates of deposit
|
2,835
|
2,835
|
–
|
–
|
||||||||||||
Collateralized mortgage obligations
|
5,423
|
–
|
5,423
|
–
|
||||||||||||
Corporate securities
|
186,651
|
–
|
186,651
|
–
|
||||||||||||
Options embedded in convertible securities
|
3,799
|
–
|
3,799
|
–
|
||||||||||||
Mortgage-backed securities
|
38,540
|
–
|
38,540
|
–
|
||||||||||||
Municipal obligations
|
29,155
|
–
|
29,155
|
–
|
||||||||||||
Non-U.S. government obligations
|
25,180
|
–
|
25,180
|
–
|
||||||||||||
U.S. government obligations
|
178,818
|
–
|
178,818
|
–
|
||||||||||||
Total fixed income securities
|
592,645
|
2,835
|
589,810
|
–
|
||||||||||||
Equity securities:
|
||||||||||||||||
Consumer
|
17,945
|
17,945
|
–
|
–
|
||||||||||||
Energy
|
3,179
|
3,179
|
–
|
–
|
||||||||||||
Financial
|
25,253
|
25,253
|
–
|
–
|
||||||||||||
Industrial
|
6,920
|
6,920
|
–
|
–
|
||||||||||||
Technology
|
2,303
|
2,303
|
–
|
–
|
||||||||||||
Funds (e.g. mutual funds, closed end funds, ETFs)
|
5,489
|
5,489
|
–
|
–
|
||||||||||||
Other
|
5,333
|
5,333
|
–
|
–
|
||||||||||||
Total equity securities
|
66,422
|
66,422
|
–
|
–
|
||||||||||||
Short-term investments
|
1,000
|
1,000
|
–
|
–
|
||||||||||||
Cash equivalents
|
156,855
|
–
|
156,855
|
–
|
||||||||||||
Total
|
$
|
816,922
|
$
|
70,257
|
$
|
746,665
|
$
|
–
|
Carrying
|
Fair Value
|
|||||||||||||||||||
Value
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
September 30, 2019
|
||||||||||||||||||||
Assets:
|
||||||||||||||||||||
Limited partnerships
|
$
|
22,645
|
$
|
–
|
$
|
–
|
$
|
22,645
|
$
|
22,645
|
||||||||||
Commercial mortgage loans
|
9,418
|
–
|
–
|
9,418
|
9,418
|
|||||||||||||||
Liabilities:
|
||||||||||||||||||||
Short-term borrowings
|
20,000
|
–
|
20,000
|
–
|
20,000
|
|||||||||||||||
December 31, 2018
|
||||||||||||||||||||
Assets:
|
||||||||||||||||||||
Limited partnerships
|
$
|
55,044
|
$
|
–
|
$
|
–
|
$
|
55,044
|
$
|
55,044
|
||||||||||
Commercial mortgage loans
|
6,672
|
–
|
–
|
6,672
|
6,672
|
|||||||||||||||
Liabilities:
|
||||||||||||||||||||
Short-term borrowings
|
20,000
|
–
|
20,000
|
–
|
20,000
|
Grant Date
|
Number of
Shares Issued
|
Vesting Date
|
Service Period
|
Grant Date Fair
Value Per Share
|
||||||
5/9/2017
|
18,183
|
5/9/2018
|
7/1/2017 - 6/30/2018
|
$
|
24.20
|
|||||
8/31/2017
|
1,257
|
5/9/2018
|
8/31/2017 - 6/30/2018
|
$
|
21.90
|
|||||
2/9/2018
|
408
|
5/9/2018
|
2/9/2018 - 6/30/2018
|
$
|
24.20
|
|||||
5/8/2018
|
19,085
|
5/8/2019
|
7/1/2018 - 6/30/2019
|
$
|
23.05
|
|||||
5/7/2019
|
29,536
|
5/7/2020
|
7/1/2019 - 6/30/2020
|
$
|
16.25
|
|||||
5/17/2019
|
3,591
|
5/7/2020
|
7/1/2019 - 6/30/2020
|
$
|
16.25
|
|||||
5/22/2019
|
3,541
|
5/7/2020
|
7/1/2019 - 6/30/2020
|
$
|
16.25
|
Foreign
Currency
|
Unrealized Holding Gains (Losses) on
Available-for-sale Securities
|
Total
|
||||||||||
Beginning balance at December 31, 2018
|
$
|
(1,139
|
)
|
$
|
(6,208
|
)
|
$
|
(7,347
|
)
|
|||
Other comprehensive income before reclassifications
|
402
|
16,588
|
16,990
|
|||||||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
–
|
(49
|
)
|
(49
|
)
|
|||||||
Net current-period other comprehensive income
|
402
|
16,539
|
16,941
|
|||||||||
Ending balance at September 30, 2019
|
$
|
(737
|
)
|
$
|
10,331
|
$
|
9,594
|
Foreign
Currency
|
Unrealized Holding Gains (Losses) on
Available-for-sale Securities
|
Total
|
||||||||||
Beginning balance at December 31, 2017
|
$
|
(309
|
)
|
$
|
46,700
|
$
|
46,391
|
|||||
Cumulative effect of adoption of ASU 2016-01, net of tax
|
–
|
(46,157
|
)
|
(46,157
|
)
|
|||||||
Balance at January 1, 2018
|
(309
|
)
|
543
|
234
|
||||||||
Cumulative effect of adoption of ASU 2018-02
|
–
|
117
|
117
|
|||||||||
Other comprehensive loss before reclassifications
|
(209
|
)
|
(4,815
|
)
|
(5,024
|
)
|
||||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
–
|
(1,483
|
)
|
(1,483
|
)
|
|||||||
Net current-period other comprehensive loss
|
(209
|
)
|
(6,298
|
)
|
(6,507
|
)
|
||||||
Ending balance at September 30, 2018
|
$
|
(518
|
)
|
$
|
(5,638
|
)
|
$
|
(6,156
|
)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30
|
September 30
|
|||||||||||||||
(dollars in thousands)
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Income (loss) before federal income tax expense (benefit)
|
$
|
(1,019
|
)
|
$
|
(15,569
|
)
|
$
|
4,445
|
$
|
(12,199
|
)
|
|||||
Less: Net realized and unrealized gains (losses) on investments
|
125
|
2,373
|
9,041
|
(5,595
|
)
|
|||||||||||
Less: Net investment income
|
6,703
|
5,578
|
19,434
|
16,010
|
||||||||||||
Underwriting loss
|
$
|
(7,847
|
)
|
$
|
(23,520
|
)
|
$
|
(24,030
|
)
|
$
|
(22,614
|
)
|
||||
Ratios
|
||||||||||||||||
Losses and loss expenses incurred
|
$
|
84,781
|
$
|
94,540
|
$
|
262,336
|
$
|
244,327
|
||||||||
Net premiums earned
|
110,288
|
96,807
|
335,931
|
314,209
|
||||||||||||
Loss ratio
|
76.9
|
%
|
97.7
|
%
|
78.1
|
%
|
77.8
|
%
|
||||||||
Other operating expenses
|
$
|
36,070
|
$
|
29,200
|
$
|
104,386
|
$
|
99,984
|
||||||||
Less: Commissions and other income
|
2,716
|
3,413
|
6,761
|
7,488
|
||||||||||||
Other operating expenses, less commissions and other income
|
33,354
|
25,787
|
97,625
|
92,496
|
||||||||||||
Net premiums earned
|
110,288
|
96,807
|
335,931
|
314,209
|
||||||||||||
Expense ratio
|
30.2
|
%
|
26.6
|
%
|
29.1
|
%
|
29.4
|
%
|
||||||||
Combined ratio
|
107.1
|
%
|
124.3
|
%
|
107.2
|
%
|
107.2
|
%
|
2019
|
2018
|
Change
|
% Change
|
|||||||||||||
Gross premiums written
|
$
|
137,145
|
$
|
138,699
|
$
|
(1,554
|
)
|
(1.1
|
)%
|
|||||||
Ceded premiums written
|
(27,853
|
)
|
(41,685
|
)
|
13,832
|
(33.2
|
)%
|
|||||||||
Net premiums written
|
$
|
109,292
|
$
|
97,014
|
$
|
12,278
|
12.7
|
%
|
||||||||
Net premiums earned
|
$
|
110,288
|
$
|
96,807
|
$
|
13,481
|
13.9
|
%
|
||||||||
Net investment income
|
6,703
|
5,578
|
1,125
|
20.2
|
%
|
|||||||||||
Commissions and other income
|
2,716
|
3,413
|
(697
|
)
|
(20.4
|
)%
|
||||||||||
Net realized and unrealized gains on investments
|
125
|
2,373
|
(2,248
|
)
|
94.7
|
%
|
||||||||||
Total revenue
|
119,832
|
108,171
|
||||||||||||||
Losses and loss expenses incurred
|
84,781
|
94,540
|
(9,759
|
)
|
(10.3
|
)%
|
||||||||||
Other operating expenses
|
36,070
|
29,200
|
6,870
|
23.5
|
%
|
|||||||||||
Total expenses
|
120,851
|
123,740
|
||||||||||||||
Loss before federal income tax benefit
|
(1,019
|
)
|
(15,569
|
)
|
14,550
|
|||||||||||
Federal income tax benefit
|
(312
|
)
|
(3,244
|
)
|
2,932
|
|||||||||||
Net loss
|
$
|
(707
|
)
|
$
|
(12,325
|
)
|
$
|
11,618
|
||||||||
2019
|
2018
|
Change
|
% Change
|
|||||||||||||
Gross premiums written
|
$
|
433,191
|
$
|
429,792
|
$
|
3,399
|
0.8
|
%
|
||||||||
Ceded premiums written
|
(92,882
|
)
|
(105,090
|
)
|
12,208
|
(11.6
|
)%
|
|||||||||
Net premiums written
|
$
|
340,309
|
$
|
324,702
|
$
|
15,607
|
4.8
|
%
|
||||||||
Net premiums earned
|
$
|
335,931
|
$
|
314,209
|
$
|
21,722
|
6.9
|
%
|
||||||||
Net investment income
|
19,434
|
16,010
|
3,424
|
21.4
|
%
|
|||||||||||
Commissions and other income
|
6,761
|
7,488
|
(727
|
)
|
(9.7
|
)%
|
||||||||||
Net realized and unrealized gains (losses) on investments
|
9,041
|
(5,595
|
)
|
14,636
|
261.6
|
%
|
||||||||||
Total revenue
|
371,167
|
332,112
|
||||||||||||||
Losses and loss expenses incurred
|
262,336
|
244,327
|
18,009
|
7.4
|
%
|
|||||||||||
Other operating expenses
|
104,386
|
99,984
|
4,402
|
4.4
|
%
|
|||||||||||
Total expenses
|
366,722
|
344,311
|
||||||||||||||
Income (loss) before federal income tax expense (benefit)
|
4,445
|
(12,199
|
)
|
16,644
|
||||||||||||
Federal income tax expense (benefit)
|
869
|
(2,691
|
)
|
3,560
|
||||||||||||
Net income (loss)
|
$
|
3,576
|
$
|
(9,508
|
)
|
$
|
13,084
|
|||||||||
5% Increase in
Ultimate Loss Ratio
|
10% Increase in
Ultimate Loss Ratio
|
|||||||
Gross loss expense from further strengthening current reserve position
|
$
|
45.5
|
$
|
90.9
|
||||
Net financial loss
|
11.8
|
23.1
|
||||||
$/share (after tax)
|
$
|
0.64
|
$
|
1.25
|
● |
general economic conditions, including weakness of the financial markets, prevailing interest rate levels and stock and credit market performance, which
may affect or continue to affect (among other things) our ability to sell our products and to collect amounts due to us, our ability to access capital resources and the costs associated with such access to capital and the market value
of our investments;
|
● |
our ability to obtain adequate premium rates and manage our operating strategies;
|
● |
increasing competition in the sale of our insurance products and services resulting from the entrance of new competitors into, or the expansion of the
operations of existing competitors in, our markets and our ability to retain existing customers;
|
● |
other changes in the markets for our insurance products;
|
● |
the impact of technological advances, including those specific to the transportation industry;
|
● |
changes in the legal or regulatory environment, which may affect the manner in which claims are adjusted or litigated, including loss and loss adjustment
expense;
|
● |
legal or regulatory changes or actions, including those relating to the regulation of the sale, underwriting and pricing of insurance products and
services and capital requirements;
|
● |
the impact of a downgrade in our financial strength rating;
|
● |
technology or network security disruptions or breaches;
|
● |
adequacy of insurance reserves;
|
● |
availability of reinsurance and ability of reinsurers to pay their obligations;
|
● |
our ability to attract and retain qualified employees;
|
● |
tax law and accounting changes; and
|
● |
legal actions brought against us.
|
Fair Value
|
Estimated Change
in Fair Value
|
|||||||
200 basis point increase
|
$
|
714,048
|
$
|
(43,793
|
)
|
|||
100 basis point increase
|
735,945
|
(21,896
|
)
|
|||||
Current fair value
|
757,841
|
–
|
||||||
100 basis point decrease
|
779,737
|
21,896
|
||||||
200 basis point decrease
|
801,634
|
43,793
|
Total Number of
Shares Purchased
|
Average Price
Paid per Share
|
Total Number of
Shares Purchased
Under the Program (1)
|
Remaining Shares
Available to be Purchased
Under the Program (1)
|
|||||||||||||
July 1 – July 31
|
124,151
|
$
|
16.90
|
124,151
|
1,681,349
|
|||||||||||
August 1 – August 31
|
60,585
|
16.31
|
60,585
|
1,620,764
|
||||||||||||
September 1 – September 30
|
43,029
|
16.49
|
43,029
|
1,577,735
|
||||||||||||
Total
|
227,765
|
227,765
|
(1) |
On August 31, 2017, our Board of Directors authorized the reinstatement of our share repurchase program for up to 2,464,209 shares of our Class A or Class B Common Stock. On August 6, 2019, our Board of Directors reaffirmed our share
repurchase program, but also provided that the aggregate dollar amount of shares of our common stock that may be repurchased under the share repurchase program between August 6, 2019 and August 6, 2020 may not exceed $25.0 million,
including a limit of up to $6.25 million per quarter. Pursuant to this share repurchase program, we entered into a Rule 10b5-1 plan on September 23, 2019, which authorizes the repurchase of up to $0.6 million of our outstanding common
stock, at various pricing thresholds, in accordance with guidelines specified under Rule 10b5-1 of the Exchange Act. The Rule 10b5-1 plan expires on November 7, 2019. No duration has been placed on our share repurchase program, and we
reserve the right to amend, suspend or discontinue it at any time. The share repurchase program does not commit us to repurchase any shares of our common stock. We have funded, and intend to continue to fund, the share repurchase
program from cash on hand.
|
Exhibit No.
|
Description
|
|
|
||
|
||
|
||
101
|
The following materials from Protective Insurance Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, formatted in XBRL (eXtensible Business Reporting
Language): (1) the Condensed Consolidated Balance Sheets, (2) the Condensed Consolidated Statements of Operations, (3) the Condensed Consolidated Statements of Comprehensive Income (Loss), (4) the Condensed Consolidated Statements of
Shareholders' Equity, (5) the Condensed Consolidated Statements of Cash Flows, and (6) the Notes to Unaudited Condensed Consolidated Financial Statements.
|
By:
|
/s/ Jeremy D. Edgecliffe-Johnson
|
|
Jeremy D. Edgecliffe-Johnson
|
||
Chief Executive Officer
|
By:
|
/s/ John R. Barnett
|
|
John R. Barnett
|
||
Chief Financial Officer
|
Relocation Payment |
$100,000 subject to applicable withholding and deductions. The cash relocation package will be payable in a lump sum in accordance with the Company’s first regular
payroll after your start date and is repayable in accordance to the terms of the Non-Compete, Severance & Confidentiality Agreement.
|
Sign-On Bonus |
$120,000 (one-time) cash, subject to applicable withholding and deductions, will be payable in a lump sum in accordance with the Company’s first regular payroll
after your start date.
|
Restricted Stock: |
$200,000 worth of restricted shares of the Company’s Class B Common Stock which are scheduled to vest over a three-year period in accordance with the terms outlined
in the Non-Compete, Severance & Confidentiality Agreement and/or the award agreement.
|
If to the Executive: |
The address of the Executive’s principal residence (or his personal email address) as it appears in the Company’s records, with a copy to him (during the Term) at
the Company’s office in Carmel, IN.
|
a.
|
“Continuing Independent Director” means an individual (i) who is as of the Effective Date, an independent director of the Company, or (ii) who
becomes an independent director of the Company after the Effective Date and whose initial election, or nomination for election by the Company’s shareholders, was vetted and recommended by the Nominating & Governance Committee and
approved by at least a 1/2 majority of the then Continuing Independent Directors, but excluding, for the purposes of this clause (ii), an individual whose initial assumption of office occurs as a result of an actual or threatened proxy
contest relating to the election of directors.
|
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Protective Insurance Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a 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 officer(s) 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 officer(s) 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 or 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.
|
/s/ Jeremy D. Edgecliffe-Johnson
|
|
Jeremy D. Edgecliffe-Johnson
|
|
Chief Executive Officer
|
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Protective Insurance Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a 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 officer(s) 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 officer(s) 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 or 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.
|
/s/ John R. Barnett
|
|
John R. Barnett
|
|
Chief Financial Officer
|
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; 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/ Jeremy D. Edgecliffe-Johnson
|
|
Jeremy D. Edgecliffe-Johnson
|
|
Chief Executive Officer
|
|
/s/ John R. Barnett
|
|
John R. Barnett
|
|
Chief Financial Officer
|